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Oral Answers to Questions
(7 years, 8 months ago)
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Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
Margaret Ferrier (Rutherglen and Hamilton West) (SNP)
The Secretary of State for Exiting the European Union (Mr David Davis)
I will group this question with questions 11 and 16.
Mr Speaker
Order. I believe that the Secretary of State seeks to group it with questions 10 and 15.
Mr Speaker
It is now questions 10 and 15. That will assist the Secretary of State. We have to keep up with the development of events.
Mr Davis
When you get to my age, Mr Speaker, it is so difficult.
As the Prime Minister said in Glasgow last week, as we bring powers and control back to the United Kingdom we must ensure that they are the right powers, at the right level, so that the UK can operate effectively in the interests of all its citizens, including the people of Scotland. Where powers should best sit will be a matter for further consultation and discussion across the United Kingdom.
Drew Hendry
I remind the Secretary of State that on 27 November, in The Sunday Times, the Secretary of State for Scotland stated:
“Whatever the circumstances, no powers will be re-reserved to Westminster.”
In Scotland, we know that such vows are not worth the paper they are printed on. Will the Secretary of State give the House a guarantee that powers currently exercised by the European Union will be devolved to the Scottish Parliament?
Mr Davis
Those are two different questions, if I may say so. It is unfortunate that the right hon. Member for Gordon (Alex Salmond) is not present, because he would have been able to tell his colleagues in the Scottish National party that for many years I have been a strong advocate of devolution. Indeed, I was the first Conservative Member, and probably the only Member outside the SNP, to call for fiscal autonomy for Scotland back in the days of the first devolution Bill. I take this issue very seriously indeed, but there is a distinction between the current exercise of powers over matters such as agriculture, fisheries and the environment by the Scottish Parliament and matters that are dealt with by the United Kingdom Government in the EU on behalf of the whole United Kingdom, with heavy consultation.
Gavin Newlands
Talking of devolved powers, last month the Prime Minister ventured north to tell Scotland just how poor the Scottish NHS is, despite all evidence to the contrary, including information about public satisfaction and A&E waiting times. If the situation is so bad, will the Secretary of State tell us when we will receive our share of the £350 million a week so that we can fix it?
Mr Davis
I have generally exercised a self-denying ordinance about not attacking the domestic policies of the Scottish Government, because I think that those are matters for them to worry about, and their day job should be their main interest. The aim here will be to secure the best outcome for the whole United Kingdom, including Scotland, and for Scotland not to lose in any way.
Margaret Ferrier
Because we are so generous on these Benches, I shall give the Secretary of State another chance to answer the question. Notwithstanding the key principle of the Scotland Act 1998 and what he said that the Prime Minister had said at the Scottish Tory conference on 3 March, will he please assure us categorically that when non-reserved powers are repatriated from Brussels, they will come directly to Scotland?
Mr Davis
I think that the Scottish National party needs a bit more originality in its questions as well.
The simple fact is that no powers that are currently exercised by the Scottish Government will be removed from the Scottish Government. As for other powers coming back from the EU, we will consider—in conjunction with representatives of the Scottish Government, the Welsh Government and the Northern Ireland Executive, when they are back in place—what is best for the United Kingdom and the constituent nations thereof. It is very important for us to have as much devolution as possible, but it is also very important for us not to damage the United Kingdom single market, which is four times as valuable to the Scots as the EU single market.
Mr Iain Duncan Smith (Chingford and Woodford Green) (Con)
I wonder whether, during the discussions and negotiations, my right hon. Friend raises an issue that the Scottish National party is constantly putting on the table, namely a special arrangement for being in the single market. Recently, the Partido Popular in Spain made it absolutely clear—I wonder whether my right hon. Friend has translated this for the Scottish National party and its leader in particular—that its policy, and that of the other parties in Spain, was that there would be no special arrangement for the SNP, and that, should the SNP seek to leave the United Kingdom and rejoin the European Union, it would be vetoed by Spain on both counts.
Mr Davis
My right hon. Friend has made his point as well as ever. I believe that this issue will arise again in a later question on the Order Paper. The simple truth is that it is not solely a technical matter within the United Kingdom; it is also something that we must deliver diplomatically.
Mr Peter Lilley (Hitchin and Harpenden) (Con)
Is my right hon. Friend as puzzled as I am that the Scottish nationalists appear to oppose any devolution of powers from Europe back to the United Kingdom and Scotland? It seems that they would rather be governed entirely from Brussels than see some of those powers returned to this place, where they have a great influence, and others returned to Holyrood, where, temporarily, they have a near majority.
Sir Desmond Swayne (New Forest West) (Con)
Given the huge identity of mutual interests that Scotland shares with the rest of the United Kingdom, will not a good deal for the United Kingdom shower all sorts of benefits that can be devolved on Scotland?
Mr Davis
My right hon. Friend highlights an important point: what matters in this negotiation is the outcome, not the mechanism. The Scottish Government have laid a great deal of emphasis on their own preferred policy of separate membership of the single market, but the simple truth is that what we want is a good outcome in terms of access to the single market for everybody in the United Kingdom, and that will achieve exactly the same aim in a different way.
Stephen Gethins (North East Fife) (SNP)
In terms of powers for the Scottish Parliament, the people of Scotland were promised a week before the vote that Scotland would decide its own immigration policy in the event of Brexit. Next week we have a crucial vote on EU nationals—we have another opportunity. If this Government will not use their powers to give EU nationals the certainty they require, will they give those powers to the Scottish Parliament?
Mr Davis
Again, we are talking about aims, ends and means. On the Joint Ministerial Committee, the Scottish Government have raised the very important issue of the immigration needs of Scotland. I have relayed their questions to the Home Secretary and I expect that when we come to a UK immigration policy, it will reflect the needs of every part of the United Kingdom.
Stephen Gethins
I look forward to having the Secretary of State’s support for his leave campaign’s promises on immigration power being given to Scotland. As part of that and on the issue of EU nationals, will he consider the 2012 European Court of Justice judgment in the case of Zambrano v. Office national de l’emploi, which gave EU nationals with primary caring responsibilities the right to reside in the member state of which their dependent child or adult is a national?
Mr Davis
I am not familiar with the individual case the hon. Gentleman raises. I will look at it in detail and come back to him, as is my normal approach. I say this, however: the European Court of Justice will not rule over the United Kingdom after the date of Brexit. That does not mean that we will not have a very humane, sensible and straightforward policy with respect to things such as family relationships, which the hon. Gentleman talks about.
Daniel Zeichner (Cambridge) (Lab)
Nick Smith (Blaenau Gwent) (Lab)
The Secretary of State for Exiting the European Union (Mr David Davis)
We will want to have reached agreement on our future partnership within two years of the article 50 process. Article 50 is clear—we did not write it—that it should take two years to negotiate the withdrawal, and any deal must take into account the new relationship. We recognise that a cliff edge for business or a threat to stability would be in neither side’s interest. A phased process of implementation in which both Britain and the EU institutions and member states prepare for the new relationship is likely to be in our mutual interest, and that will be to everyone’s benefit if that is what we agree.
Daniel Zeichner
The tech sector is clear that the UK needs a watertight legal agreement on international data flows from the day we leave the EU; transitional arrangements just will not do. The best route will be an adequacy agreement, as other means are currently under legal challenge. As it took seven years to negotiate an adequacy agreement with Bermuda, what is the Secretary of State doing, with colleagues, to ensure that we avoid a cliff edge on data flows?
Mr Davis
The hon. Gentleman raises a very important point, because that is central not just to IT and database industries, but to every industry now. The difference with Bermuda is that it was not at a point of identity of data standards when it started its negotiations. We will be at a point of identity at the point of departure, and we will undoubtedly have to agree some regime whereby we maintain equivalence—not identity, but equivalence—thereafter. It is unlikely that we will need transitional arrangements on that; it is much more likely that we will need an ongoing relationship on it.
Nick Smith
Blaenau Gwent has relied on EU structural funding in recent years and, though we are leaving the EU, the need for infrastructure investment remains really high. Infrastructure has a long lead-in, so will the Secretary of State tell me what transitional arrangements will be in place to ensure that Blaenau Gwent gets the best deal to boost its economy after 2020?
Mr Davis
The Treasury made it clear, very rapidly at the beginning of this process, that it would underwrite agreements made with the European Union that carried on beyond the point of Brexit as long as they met value-for-money requirements. The responsibility for making that judgment in the case of the hon. Gentleman’s constituency will lie with the Welsh Government, so I do not see that there is a risk there. Beyond 2020, the EU will have its own budget arrangements anyway, and we will be in the same position.
Sir Oliver Letwin (West Dorset) (Con)
Will my right hon. Friend guarantee that the very last thing he is going to do is to accept any blandishments from those on the other side of the House, and that he is going to start discussing in detail—in this House or elsewhere—the transitional arrangements with the EU?
Mr Davis
Of course my right hon. Friend is right. This is not about some arrangement to extend the discussions or the negotiations; it is about practical implementation issues that may well turn out to be in the interests of both sides, and it is in those circumstances that we would achieve them.
Mrs Theresa Villiers (Chipping Barnet) (Con)
Does my right hon. Friend agree that it will be important to encourage co-operation between the regulators during any transition period for financial services, to ensure that we have an orderly transition to the new arrangements with Europe?
Mr Davis
My right hon. Friend is absolutely right. One of the ongoing streams of work in Whitehall involves arranging to talk to the regulators, and some of those discussions have already happened. The Governor of the Bank of England has commented on the need to maintain stability after Brexit, and that will be an important part of our negotiations.
Hilary Benn (Leeds Central) (Lab)
Because of the Government’s decision to leave the single market, lots of agreements will cease to have effect the day after we leave. One of those is the agreement that allows British airlines to fly to any airport in the European Union. Given that airlines sell tickets up to 11 months in advance, what assurance can the Secretary of State give to passengers that the tickets they buy before we leave the European Union will still be valid after we leave?
Mr Davis
The right hon. Gentleman is partly right. Many of the arrangements for European routes are partly dependent on the EU, but there are also bilateral and other arrangements. He is exactly right to suggest that we will be setting out to ensure that those forward contracts stand.
Jeremy Lefroy (Stafford) (Con)
Further to what the Chair of the Select Committee, the right hon. Member for Leeds Central (Hilary Benn), has just said, will the Secretary of State tell us whether the transitional arrangements will be discussed right from the beginning of the negotiations? Transitional arrangements cannot be left until the last moment; they need to be hard-wired into negotiations from the very beginning.
Mr Davis
They will undoubtedly be part of the early discussions, but the need for transitional arrangements will depend on what the final arrangements will be. If we do not know where we are going to end up, we cannot have a transitional arrangement. Also, our overarching offer of a comprehensive free trade arrangement will remove the need for transition in some areas, although not in the highly regulated ones. The Chairman of the Select Committee was exactly right to suggest that aviation is one of those areas, and it is not the only one. The original questioner, the hon. Member for Cambridge (Daniel Zeichner), mentioned data, which is another area in which regulation will matter. In many cases, however, such arrangements will not be necessary.
Matthew Pennycook (Greenwich and Woolwich) (Lab)
Will the Secretary of State tell the House what he sees as the main differences between agreed interim arrangements as part of a phased process of implementing our future relationship with the EU, as sought by the Government, and a negotiated transitional deal?
Mr Davis
The reason that we have specified this in detail was that the term “transitional arrangements” meant several different things to different people. For example, some thought that it would be good to have a departure deal and then to spend years in a transitional arrangement carrying on the negotiations. We have specifically differentiated that from what we are talking about; that is not what we want. We want the decisions to be concluded within two years, but implementation might take longer in a whole series of areas, including customs and financial services regulations.
Nigel Mills (Amber Valley) (Con)
Daniel Kawczynski (Shrewsbury and Atcham) (Con)
Robert Neill (Bromley and Chislehurst) (Con)
The Parliamentary Under-Secretary of State for Exiting the European Union (Mr Robin Walker)
One of the core principles guiding our approach to the exit negotiations is to protect our historic ties with Ireland and maintain the common travel area. There is a strong joint commitment from the Irish Government, the Northern Ireland Executive, and the UK Government to deliver a practical solution that allows for the maintenance of the common travel area. I welcome President Juncker’s recent statement that the EU does not want hard borders between Northern Ireland and the Republic.
Nigel Mills
I thank the Minister for that answer. Does he believe that the EU recognises the serious impact that trying to force Ireland to reimpose a hard border would have not only on the tens of thousands of people who cross the border every day for work or healthcare or to study, but on the peace process, in which the EU has been heavily involved?
Mr Walker
My hon. Friend is absolutely right, but we have seen some welcome comments from the other side in the negotiations. Following a recent meeting with the Taoiseach, President Juncker said:
“During the Brexit negotiations, the EU and Ireland must look to minimise the impact”.
Michel Barnier has also said that the EU must do its utmost to uphold the success of the Good Friday agreement. We remain fully committed to preserving and maintaining the Belfast agreement and its successors, and we will continue to work hard on that with our allies.
Daniel Kawczynski
I welcome the strong commitment to the CTA in the White Paper. Shrewsbury has benefited for many generations from Irish citizens coming to work in our community. Will the Minister give them an assurance that their rights will be protected in UK law, much of which predates our membership of the EU?
Mr Walker
Absolutely. I assure my hon. Friend that we remain committed to preserving the rights of Irish citizens within the UK. Irish citizens have had special status within the UK since well before the establishment of the EU, and that is rooted in the Ireland Act 1949 and reflected in British Nationality Acts. That status provides Irish citizens in the UK with additional rights beyond those associated with common membership of the EU. The family ties and bonds of affection that unite our two countries mean that there will be always be a special relationship between us.
Robert Neill
The Crown dependency of the Isle of Man has strong links with Northern Ireland, the Republic, and the rest of the United Kingdom, and when the Justice Committee met representatives of its Government, their No. 1 ask was to ensure that it remains a part of the common travel area between the three. Will the Minister reassure them and us on that point?
Mr Walker
Absolutely. We greatly value the work of my hon. Friend and his Committee on such issues and look forward to reading the report of his inquiry into the implications of Brexit for the Crown dependencies. The Crown dependencies, including the Isle of Man, have been part of the common travel area for nearly 100 years, and we are committed to preserving that arrangement. We set out in the White Paper that we will work with the Crown dependencies, as well as with Ireland, on improving the CTA.
Mr Pat McFadden (Wolverhampton South East) (Lab)
Do the Government appreciate that the Good Friday agreement was not a single event, signed, sealed and put on a shelf 20 years ago, but a process of normalisation of relations and of free movement of goods, people, and so on? If the Government do realise that, will they ensure that they respond to the real fears in Ireland that Brexit represents a turning back of the clock on the precious new normality that has developed over the last 20 years?
Mr Walker
The right hon. Gentleman is right about the importance of such issues and that the Good Friday agreement was certainly not just a moment in time—we talk about the Belfast agreement and its successors. We recognise the need to work continually on such issues and to work on them jointly with our friends and allies in the Republic and with the Northern Ireland Executive.
Joanna Cherry (Edinburgh South West) (SNP)
If the common travel area can continue to operate between the UK and the Republic of Ireland, which is a member of the EU and has its own rules on immigration, why could it not operate between Scotland and the rest of the UK if Scotland stays in the single market when the rest of the UK leaves?
Jenny Chapman (Darlington) (Lab)
It is reassuring to hear the Minister’s words on this issue. He will know the level of concern across this House and out there in the country. If he has not read it, I recommend to him the recent House of Lords report, page 63 in particular, which states that we cannot assume that this matter will become part of the article 50 negotiations. If that does not happen, he must act quickly to reassure the people of Ireland and the UK and ensure that it is done either as part of the article 50 negotiations, or that it happens in time, because certainty is needed more than anything in Northern Ireland.
Mr Walker
The hon. Lady is right that we need to do everything we can to provide certainty, and we will take on board the suggestions of the House of Lords report. However, I welcome the statements we have seen from the Commission showing that it is taking a strong interest in this subject.
Alistair Burt (North East Bedfordshire) (Con)
When the Brexit Select Committee visited Dublin recently, we were told that a United Kingdom default to World Trade Organisation rules would be catastrophic for the island of Ireland, with the re-imposition of a border. Can the Minister reassure the House that he will continue to resist siren calls to move towards WTO rules, if for no other reason than the effect on Ireland?
Jim Shannon (Strangford) (DUP)
Will the Minister further outline how the election of the Northern Ireland Assembly has affected firming up the common travel area? How does he intend to take that forward in the interim while waiting for the Assembly to reconvene? Further, what role does he envisage the reconvened Assembly having in that process?
Mr Walker
We are fully committed to ensuring that as we establish our negotiating position, the unique interests of Northern Ireland are protected and advanced. The UK Government have a clear role in providing political stability in Northern Ireland, and the Secretary of State for Northern Ireland is doing everything he can to secure the resumption of devolved government. It is important that everyone engages constructively to reach a positive conclusion as quickly as possible. We are not contemplating anything other than the return of devolved government.
Mark Durkan (Foyle) (SDLP)
Would it not help enormously if the UK Government made it clear that they want to make both the common travel area and the Good Friday agreement, and all its strands, explicitly named features of the framework for future relations between the UK and the EU?
Victoria Atkins (Louth and Horncastle) (Con)
Antoinette Sandbach (Eddisbury) (Con)
The Minister of State, Department for Exiting the European Union (Mr David Jones)
We are listening and speaking to as many farming organisations and institutions as possible as we develop our negotiating position. I have met a range of representatives of the agricultural sector, including all the UK farming unions, and have attended the stakeholder roundtables of the Department for Environment, Food and Rural Affairs, one of which focused on farming and horticulture.
Victoria Atkins
Louth and Horncastle boasts highly productive farms that produce excellent food. Will my right hon. Friend reassure our farmers that encouraging British food production and maintaining high-quality standards will be uppermost in his mind during the exit process?
Mr Jones
The British farming industry is noted throughout the world for the quality of its produce. Outside the European Union, we have an unprecedented opportunity to redesign our policies to make them work for us and to ensure that our agriculture industry is competitive, productive and profitable, and also that our environment continues to improve.
Antoinette Sandbach
Farmers in Eddisbury apply the highest standards of welfare to their livestock and the produce deriving from that livestock. What safeguards will be put in place to ensure that produce that does not meet those high standards does not affect the competitiveness of our farmers?
Mr Jones
Again, my hon. Friend makes an important point because animal welfare and traceability are important elements of British agricultural production. We are committed to high animal welfare standards and will continue to push for those standards to be maintained in international trade arrangements.
Mary Creagh (Wakefield) (Lab)
British farmers face a triple threat from the vote to leave the European Union: the loss of the common agricultural policy subsidy; cheap imports from countries with lower animal welfare and traceability standards; and potential tariffs on exports to the single market. What is the Minister doing in particular to mitigate that third threat, as we could see tariffs of up to 40% on lamb?
Mr Jones
The hon. Lady makes very important points, but this Government have already demonstrated their commitment to supporting the agriculture industry by supporting common agricultural policy pillar 1 until 2020 and giving support for pillar 2. On tariffs, as she will know, this Government aim to achieve the best possible free trade agreement with the continuing European Union and to ensure that whatever customs arrangements are put in place are frictionless and for the benefit of both Britain and the EU.
Dr Alasdair McDonnell (Belfast South) (SDLP)
Mr Jones
The hon. Gentleman raises an extremely important point that is at the forefront of the Government’s mind—in fact, the Prime Minister has discussed this very issue with the Taoiseach. Indeed, all the Ministers in the DEXEU team have had similar discussions, and I have had very recent discussions with representatives of the Irish Government too.
Mary Glindon (North Tyneside) (Lab)
Jo Stevens (Cardiff Central) (Lab)
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
The Minister of State, Department for Exiting the European Union (Mr David Jones)
The UK manufacturing sector is world leading, and we are determined to secure the best deal for it which enables it to go from strength to strength. We are aiming to agree a bold and ambitious free trade agreement with the EU, including zero tariffs, that is more ambitious than any other trade deal agreed with the EU to date.
Mary Glindon
In North Tyneside, Smulders, a Belgian company, has filled a void in the manufacturing market left when this Government failed to back OGN. The company hopes to create up to 400 new jobs and expand even further. What guarantees can the Minister give that will allow it the same benefits it currently gets with access to the single market and customs union after Brexit?
Mr Jones
I had a discussion just this week with the Flanders chamber of commerce, and it recognised the important issue of bilateral trade between Belgium and the UK. I am pleased to say that it fully realised the need for frictionless agreements once we leave the EU, and of course this Government are committed to that.
Jo Stevens
The Prime Minister has said that Britain will not remain a full member of the customs union, but this morning the Chancellor said it is
“clear that we can’t stay in the customs union”.
Which of them should we believe?
Mr Jones
It is clear that if we are to seek free trade agreements around the world, we will not be able to remain in the customs union as it currently stands. Having said that, we seek arrangements with our EU partners that will enable us to construct customs arrangements that are as frictionless as possible, for the benefit of both the EU and the UK.
Tom Blenkinsop
The post-Brexit fall in the pound has led to a boost in manufacturing exports, with 45% of north-east manufacturers expecting orders to rise over the coming year, but it has also led to an increase in import costs. These costs will only increase if customs checks are required at borders. What is the Secretary of State planning to do for north-east manufacturers to make sure that costs at borders are not being increased for products they are making?
Mr Jones
Of course, north-east manufacturing is at the forefront of the Government’s mind; the hon. Gentleman will know that with Nissan we arranged a state of affairs that will allow it to continue to manufacture in the north-east. He is right to say that we do not want to see customs arrangements that impede trade with the EU, and we are looking to agree arrangements, for our mutual benefit, that are as frictionless as possible.
Michael Fabricant (Lichfield) (Con)
But is it not the case that when the UK leaves the EU we will be its largest export market? Does the Minister not agree with my favourite politician at the moment, Wolfgang Schäuble, Germany’s Finance Minister, who says that if the Germans or the EU were to cause any damage to the UK, it would be increased tenfold for the EU?
Mr Speaker
I am sure the Finance Minister in question will be uncontrollably excited to discover that the hon. Gentleman is such a staunch fan.
Mr Jones
My hon. Friend makes an extremely good point: the UK market will be the biggest export market for the continuing European Union after we leave. I am glad to say that that is recognised not only by Herr Schäuble but by the Belgian chamber of commerce, with which I spoke earlier this week.
Mr Peter Bone (Wellingborough) (Con)
Does the excellent Minister agree that it is much more in the EU’s interest for it to do a deal with us than it is in ours, because it has a £60 billion trade surplus with us?
Charlie Elphicke (Dover) (Con)
Does the Minister agree that, although we hope for the best, the chaotic patchwork of EU institutions and election cycles may mean that a deal is not done in two years? If that is the case, will he consider the case for investing in the roads to the channel ports and, indeed, in frictionless and modern borders, to ensure that we have a seamless flow of trade in future?
Mr Jones
I agree with my hon. Friend about frictionless agreements. We have a huge advantage in that Britain is, of course, currently a member of the European Union, so our standards and regulations are in complete alignment. I was heartened to see that Michel Barnier, the chief negotiator for the European Union, has recognised that a deal is doable in two years.
Stuart Blair Donaldson (West Aberdeenshire and Kincardine) (SNP)
Mr Jones
Although we will not continue to be a member of the single market, as I indicated previously we are looking to achieve a very good free trade agreement with the continuing European Union, which would be very much to the mutual benefit of the UK and the European Union.
Rishi Sunak (Richmond (Yorks)) (Con)
As my right hon. Friend considers the customs union, may I urge him to look at the experience of close trading partners around the world? The US and Canada trade half a trillion dollars of goods annually, Norway does 70% of its trade with the EU, and China buys 30% of Australia’s exports; none of them has seen fit to form customs unions with each other.
Alan Brown (Kilmarnock and Loudoun) (SNP)
Mr Jones
The fact that the oil and gas industry is a high priority for the Government was shown by the Chancellor’s announcement yesterday. Frankly, rather than talking bleakly about the future of the industry, the hon. Gentleman should urge his colleagues in the Scottish Government to work strongly with the United Kingdom Government to ensure that arrangements can be made that are satisfactory for the industry.
Tom Pursglove (Corby) (Con)
One of the advantages of our leaving the European Union is that we will be in a position to design our own package of trade defence instruments, which I would think Opposition Members would welcome. Will my right hon. Friend update the House on the ongoing cross-Government work on that?
Mr Jones
Clearly, any arrangements we strike will have to be WTO-compliant, but my hon. Friend is entirely right. British industry has recently experienced many difficulties, not least in the steel industry, in which he has a particular interest. He will know about the support the Government have given to that industry.
Paul Blomfield (Sheffield Central) (Lab)
This week, a report by the American Chamber of Commerce to the European Union concluded that
“America’s significant commercial and financial presence in the UK has been premised in large part on UK membership in the European Union—the largest, wealthiest and most important foreign market in the world to U.S. companies.”
Do the Secretary of State and the Minister recognise the importance of our relationship with the single market to those non-EU countries with which the Government are keen to build trade and investment?
Paul Blomfield
Well, the significance of that and the “America First” policy is yet to be demonstrated.
On 24 January, the Secretary of State told the House that he is seeking
“a comprehensive free trade agreement and a comprehensive customs agreement that will deliver the exact same benefits as we have”.—[Official Report, 24 January 2017; Vol. 620, c. 169.]
Will the Minister confirm that that is still the Government’s aim?
Mr David Nuttall (Bury North) (Con)
Thanks to the new opportunities that will open up for the UK after we leave the EU, the accountancy firm PricewaterhouseCoopers has said that the UK will have the fastest growing economy in the G7 over the next 30 years. Does my right hon. Friend agree that that demonstrates that manufacturing has nothing to fear from our leaving the EU?
Mr Jim Cunningham (Coventry South) (Lab)
The Secretary of State for Exiting the European Union (Mr David Davis)
The UK has a long-standing tradition of ensuring that our rights and traditional liberties are protected domestically and of fulfilling our international human rights obligations. The decision to leave the European Union does not change any of that. That is the approach we will take as we enter negotiations, and I can confirm that the Government have no plans to withdraw from the European convention on human rights.
Mr Cunningham
Given that answer, will the Secretary of State set out a full and detailed list of all fundamental rights currently guaranteed under EU law and what approach the Government intend to take towards them?
Mr Davis
We will be putting the great repeal Bill in front of the House at some point in the near future. That will carry into British law the existing law of the European Union and the case law that goes with it. But British human rights have not depended on the European Union; they have been intrinsic to our history and our tradition, and we—I most of all—will continue to defend them.
Dame Rosie Winterton (Doncaster Central) (Lab)
I very much welcome what the Secretary of State said about the Council of Europe and the European Court of Human Rights. With that in mind, will he consider giving his support to a fourth summit of the Council of Europe to look at the way forward for the Council and how human rights could be strengthened through the European Court of Human Rights?
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
Is it not a human right to have some certainty about the future? Is the Secretary of State not aware of how many talented, hard-working and entrepreneurial people who have come to this country have no idea whether they can stay here? The Government are now demanding that to be able to stay, people must have full health insurance for life.
Mr Speaker
Order. I am not sure whether we should have all these hairist remarks—they are rather unseemly. The hon. Member for Huddersfield (Mr Sheerman) is a distinguished senior statesman in the House.
Mr Davis
As I was saying, Mr Speaker, I am not sure whether certainty about the future is a human right, and I am certainly not sure whether the House would necessarily extend it to the hon. Gentleman. The simple truth is that we have a large group of people—some of them European citizens and some of them British citizens abroad—to whom we want to give certainty across the board about their right to remain, their right to healthcare, their right to welfare, and so on. I have now seen, one way or another, representatives of around half the member states, and it is plain to me that they all treat this issue seriously and want to see it dealt with early in the negotiations. That is the Government’s policy—to ensure certainty for everybody.
Roger Mullin (Kirkcaldy and Cowdenbeath) (SNP)
Hannah Bardell (Livingston) (SNP)
The Secretary of State for Exiting the European Union (Mr David Davis)
I am going to get the hang of this, Mr Speaker. I ask to group questions 11 and 14. In a few years, I will get used to this place—then I will retire.
Mr Davis
I said retire, not resign.
We are working closely with the Scottish Government to ensure the best deal for Scotland and the rest of the UK as we leave the European Union. We share many objectives, including having an open and outward-looking country, ensuring access to labour, collaborating on science and research, protecting workers’ rights, having a smooth and orderly exit process, and guaranteeing the rights of EU nationals in the UK and of UK nationals in the European Union. We should also agree that there should be no new barriers to living and doing business within our own Union. They should not be created.
Roger Mullin
Who knows what the Scottish people will think of such an imprecise answer to a specific question? Let me try something else that may help the Secretary of State. How many trade negotiators have been recruited to deal with matters such as the very specific and unique needs of some sectors of the Scottish economy?
Mr Davis
Many trade negotiators have been recruited, particularly by the Department for International Trade. I recommend that the hon. Gentleman raises the question with that Department, because it has been very busy at that in recent months. The simple truth is that the British Government share the hon. Gentleman’s aims for his constituents and for the people of Scotland—namely, we want the best possible deal, which will be best for the Scottish economy, for Scottish business and, most of all, for Scottish people.
Hannah Bardell
Following on from the question of my hon. Friend the Member for Kirkcaldy and Cowdenbeath (Roger Mullin), I am glad to inform the Secretary of State and, indeed, the House that an STV poll shows that support for independence has gone up to 50:50. Given the Secretary of State’s intransigence and his Government’s determination for a hard right-wing Tory Brexit, which way does he think that poll will tip as he continues in his intransigence?
Mr Davis
First, I do not recognise the phrase “hard Brexit” or, for that matter, “right-wing Tory Brexit”. Secondly, I am not a great believer in polls when it comes to referendums; they do not exactly work very well. If the hon. Lady wants to go with polls, perhaps she should go with the poll of the Scottish people, who say they do not want another referendum.
Andrew Stephenson (Pendle) (Con)
I respect the desire of the Scottish Government to contribute to the Brexit process, and that of the Welsh, Northern Irish and some English regions. May I urge the Government to reflect on all representations made and proceed with a policy that works for the whole United Kingdom?
Mr Davis
My hon. Friend is exactly right, and that is the intention of the Government, which is why we are going for a comprehensive, overarching free trade agreement that will deliver extremely beneficial results for Britain and—I stress this point—for the European Union as well.
Patricia Gibson (North Ayrshire and Arran) (SNP)
The Parliamentary Under-Secretary of State for Exiting the European Union (Mr Robin Walker)
The Prime Minister, supported by my Department, will agree the format of negotiations with our counterparts once negotiations have begun. In the meantime, she will be informed by the Joint Ministerial Committee (EU Negotiations), which will ensure that we negotiate the best possible future for the United Kingdom, representing all its constituent parts.
Patricia Gibson
Regarding Scotland’s role in the article 50 process, Supreme Court president, David Neuberger, said on 24 January that it was a political decision whether formally to involve the devolved Administrations in the process of leaving the EU. Will the Minister tell us what role the devolved Parliaments will have in the passing of the great repeal Bill?
Mr Walker
Of course, we have formally involved the devolved Administrations in our preparations through the JMC process, and we continue to engage in that process. With regard to the great repeal Bill, a White Paper will be published and the devolved Administrations will have their opportunities to respond to that, as will hon. Members across the House.
Wayne David (Caerphilly) (Lab)
When the Government devolve powers that have been repatriated, will they consider allocating extra resources to ensure that those policies are implemented properly?
Mr Walker
As we have said, we have not made the final decisions about repatriation. That is something we will want to discuss with the devolved Administrations, as I think the Welsh Government have suggested. The Treasury has already made important guarantees that cover devolved Administrations as well as Government Departments.
Tom Brake (Carshalton and Wallington) (LD)
In devising plans for Brexit and involving the devolved Administrations, Ministers will have drawn on the advice of a large number of UK and foreign consultancy firms such as Accenture. The Press Association and others want to know how much this has cost. Will the Minister confirm the spend to date on the likes of Accenture, PwC, City legal firms and others in supporting the Government on Brexit?
Mr Philip Hollobone (Kettering) (Con)
The Minister of State, Department for Exiting the European Union (Mr David Jones)
Neither the United Kingdom, nor the European Union, publishes an aggregate audited figure representing the total net financial contribution since the UK joined the EEC, but details of annual UK public sector contributions to the EU are published in a document entitled “European Union Finances”, the latest edition of which was published in February in 2016.
Mr Hollobone
A one-word answer with a figure would have been more helpful than the answer the Minister has given me. I suspect that the answer is that a massive amount of money is being handed over by British taxpayers to the European Union. As in any good divorce, that will entitle us to a huge share of the EU’s assets or to massive financial compensation if we do not get that.
Mr Jones
My hon. Friend is right—it is rather a lot; but the issue is to what extent the United Kingdom is liable for payment of anything, and if so, how much. The point is this: the United Kingdom has always adhered to its international treaty obligations, and it will continue to do so. It will adhere to those obligations, but, similarly, it will insist on the rights it has pursuant to those treaties, and that is the basis on which it will approach these negotiations.
Kerry McCarthy (Bristol East) (Lab)
The Parliamentary Under-Secretary of State for Exiting the European Union (Mr Robin Walker)
As the Secretary of State has reiterated, and as we have repeatedly made clear, we want to secure the status of EU nationals in the UK, and UK nationals living in other member states, as early as we can. We know from my right hon. Friend’s visits around the EU that many member states agree with us on this, but we can protect the status of UK nationals in the EU only through formal negotiations.
Kerry McCarthy
I have had constituents come into my surgeries in tears because of the uncertainty about their future. They cannot apply for new jobs, they are worried that they do not know what their status will be if they apply for a university course, and they cannot apply for mortgages. These are not itinerant migrant workers—these are people who have made their homes and lives in Bristol—and they need assurances now from the Government.
Ben Howlett (Bath) (Con)
The Parliamentary Under-Secretary of State for Exiting the European Union (Mr Robin Walker)
I congratulate my hon. Friend, who is always a champion for the universities and students in his patch. The UK is already a leading destination for science and innovation, with some of the world’s best universities, three of which are in the world’s top 10. We intend to secure the best possible outcome for UK research and innovation as we exit the European Union.
Ben Howlett
I thank the Minister for his response. International collaboration and access to European research funding drive the efficiency, excellence and impact of UK research, and our country’s university sector is renowned for its high levels of international and European collaboration. Will he confirm that continued research collaboration will be a priority for the Government, particularly in relation to the Erasmus+ scheme, as we negotiate our exit from the European Union?
Mr Walker
The Prime Minister has been clear that Britain will remain truly global—a best friend and neighbour to our European partners—but reach beyond the borders of Europe as well. We recognise the value of international exchange and collaboration in education and training as part of our vision for the UK to be a truly global nation.
Several hon. Members rose—
Mr Speaker
Order. I remind colleagues that topical questions need to be extremely brief if I am to be able to maximise the number of contributors.
Nigel Mills (Amber Valley) (Con)
The Secretary of State for Exiting the European Union (Mr David Davis)
The Prime Minister is today meeting other EU leaders at the European Council in Brussels. They will be discussing issues such as migration, jobs and competitiveness. The Prime Minister will be telling them that we remain strong advocates for free trade, and I expect her also to take the opportunity to underline our desire to see a strong and stable European Union even after we leave. Indeed, that has been a centrepiece of my message during my recent trips to meet counterparts in Europe. We want to see a strong UK and a strong EU. Rather than aiming to divide and conquer, as some have suggested, we want the EU to be strong and successful. That is why we are aiming for a comprehensive new partnership between the UK and the EU, which we are clear will be beneficial to all.
Nigel Mills
Can the Secretary of State update the House on what response he has had from across Europe to the Government’s recent Brexit White Paper?
Mr Davis
Yes, I can. I went to—I think—nine of our fellow member states in three weeks, and others have come to see me. The overarching response has been a positive one; it has been one of support for the general approach, and it has been one that seeks a constructive outcome, not the penalty outcome that was talked about by some earlier. It is certainly true that they also think of our approach as very logical, so I think that gives us great cause for optimism in the negotiations.
Keir Starmer (Holborn and St Pancras) (Lab)
Clearly, the Government want to trigger article 50 next Wednesday or next Thursday. They will then have to set out their proposals in detail so that the EU can respond. For months, they have hidden behind the bland phrases “frictionless borders” and “frictionless trade”. This is the last opportunity before triggering for the Secretary of State to spell out what those phrases actually mean.
Keir Starmer
The Prime Minister has said that the approval of Parliament will be required for the final terms of our withdrawal agreement with the EU. She has also promised that that will occur before the withdrawal agreement is sent to the European Parliament for its consent. The House of Lords has now voted by a large majority to amend the article 50 Bill to reflect those commitments. All very straightforward. If the Prime Minister intends to keep to her commitments, why would the Government not support that amendment when it returns to this House on Monday?
Edward Argar (Charnwood) (Con)
Ruth Cadbury (Brentford and Isleworth) (Lab)
Mr Davis
It is pretty straightforward. If we have a comprehensive free trade agreement, then there will be no tariffs, one hopes, and very few non-tariff barriers, certainly no new ones. That makes it easier for the customs arrangements—the administrative arrangements —to be straightforward and simple.
Rebecca Pow (Taunton Deane) (Con)
I am sure that my right hon. Friend will agree that reform of the common agricultural policy represents a positive opportunity for the farming industry. Does he agree that, among other measures, rewarding farmers with payment for acting for the public good—for example, storing water on land as a flood resilience measure, which would be very beneficial in Somerset—would be very helpful?
The Minister of State, Department for Exiting the European Union (Mr David Jones)
My hon. Friend has highlighted how much of an advantage it will be to the UK to be in a position to design its own agricultural and environmental policies.
Dr Alasdair McDonnell (Belfast South) (SDLP)
The Parliamentary Under-Secretary of State for Exiting the European Union (Mr Robin Walker)
I thank the hon. Gentleman for inviting me to speak to the London Irish Construction Network, which is an opportunity to stand alongside a Republic of Ireland Minister and show the commitment from both sides to the Belfast agreement and the common travel area. We remain absolutely committed to the Belfast agreement and all its successors, including the principle of consent.
Tim Loughton (East Worthing and Shoreham) (Con)
The new owners of Vauxhall have suggested that the takeover will be good news for the UK motor parts supply chain post-Brexit. Is it not the case that far from multinationals being deterred from using the UK as a springboard into Europe within the EU, European multinationals will be using the UK as a springboard for exports to the rest of the world?
Mr David Davis
My hon. Friend is exactly right. The comments from the head of Peugeot were fascinating in what they show about what a business that is seeking opportunity can do. We are seeking to create the maximum possible opportunities for our own companies domestically and European countries that want to come here.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
Mr Davis
I certainly will do that. I have not read the report yet, but if the hon. Lady will send it to me or give me the contact details, I will read it. She is dead right; the departure from the European Union does open up opportunities for stronger relationships with Africa, both economic and otherwise.
James Berry (Kingston and Surbiton) (Con)
The EU Commissioner for Security and the head of Europol have both made it clear in evidence to the Select Committee on Home Affairs how important it is to maintain our current policing and security co-operation with Europe. I know that my right hon. Friend is committed to continuing that co-operation. Are his counterparts in Europe as committed as he is?
Mr Davis
After the issue of European migrants—European citizens—in the UK, that is the second issue that has come up among the Nordic and Baltic groups in particular, and with Germany and the eastern Europeans. It seems to me that we have a great deal to continue to offer the European Union, and we absolutely intend to do so, because we intend to meet our responsibilities as a global citizen and country.
Paula Sherriff (Dewsbury) (Lab)
Mr Davis
We have not yet seen an end to the tampon tax, but the moment we leave, I am sure it will be one of the first things I have on the agenda for talking to the Chancellor about. The hon. Lady should bear in mind that we are using the funding from the tampon tax for all sorts of incredibly important causes, which she will know better than I do. We will continue with that until the moment we can repeal it.
Sir Oliver Letwin (West Dorset) (Con)
Will my right hon. Friend ensure that the Government tread warily regarding the possibility of any resurrection of the merger between the London stock exchange and Deutsche Börse while we are engaged in complex negotiations about equivalence regimes in financial services?
Mr Alistair Carmichael (Orkney and Shetland) (LD)
Mr David Jones
We have had such discussions. The right hon. Gentleman is right to say that we need an adequate supply of skilled labour in this country, and the Home Office is working on policies that will achieve just that.
Robert Neill (Bromley and Chislehurst) (Con)
The UK legal services sector is worth some £21 billion to our economy. A good percentage of that comes from legal services provided into the European Union. Will my right hon. Friend meet the Bar Council and the Law Society to discuss what they need to retain access to that key market?
Mr David Davis
The short answer is that the Under-Secretary of State for Exiting the European Union, my hon. Friend the Member for Worcester (Mr Walker), has already met them, but we will do so again. This is a very important sector. People sometimes underestimate the size of the general services sector, which is as big as the City. We have to keep that in mind.
Wes Streeting (Ilford North) (Lab)
Mr Davis
Not at all. I cannot see how one can make the economy more of a priority than to make it a centrepiece of the negotiation. We seek a comprehensive free trade agreement, and the purpose of that is nothing but economic. Of course, out of it will flow other things, but it is economic first and centre.
Mr Peter Bone (Wellingborough) (Con)
Following on from that question, is it not a fact that the Office for Budget Responsibility has increased the growth forecast for this year by nearly 50%? Surely, that is a vote in favour of coming out of the EU, and not what the hon. Member for Ilford North (Wes Streeting) said.
Mr Davis
I think, frankly, the whole economics profession is beginning to take a lesson in predictions about the effects of Brexit. My hon. Friend is right. There has been a dramatic uptick in the current year’s growth, and in the forecasts for ’19, ’20 and ’21, as it turns out. The simple point is that many companies are coming here now, such as McDonald’s, WhatsApp, Google—I could go through a whole list—[Interruption.] I will not do that, Mr Speaker. Those companies are showing what they believe by voting with their feet.
Mary Glindon (North Tyneside) (Lab)
Mr Davis
These concerns have been met pre-Brexit by the Treasury underwriting the commitments up to and through Brexit. Of course, the hon. Lady has to remember that the European Union will have a complete budgetary review in 2020. We will be giving clear attention to priorities such as this when we come to write our own budgets after 2019.
Jeremy Lefroy (Stafford) (Con)
While all EU regulation will be transferred into UK law at the outset, divergence will inevitably begin over the years. What is my right hon. Friend doing to prepare British businesses so that they are aware of all the changes that will be made and can continue to export to and trade with the European Union?
Mr Robin Walker
My hon. Friend is absolutely right about the approach of the great repeal Bill, which is to ensure stability and continuity. We are of course engaging with British business and we will continue to do so throughout the process across the country and in every sector.
Tommy Sheppard (Edinburgh East) (SNP)
Mr David Davis
I repeat to the hon. Gentleman what I said earlier: no powers exercised by the Scottish Parliament or the Scottish Government will be taken away. We will debate with all the devolved Administrations—not simply Scotland—the level at which it is appropriate to exercise these powers after exit.
Andrew Stephenson (Pendle) (Con)
What discussions has the Department had with representatives of the tourism sector on the implications of the UK leaving the EU?
Mr David Jones
We regularly engage with the tourism industry, and we will continue to do so. Tourism is an important part of the British economy, and we fully recognise its particular concerns.
Clive Efford (Eltham) (Lab)
The Government have said that they want to secure the rights of British nationals living in Europe, but what about British nationals living in this country who are married to European nationals whose futures have been thrown into doubt by the repugnant position that the Government have adopted? Is it not time to end the doubt for those people?
Mr David Davis
Of course we do not want any doubt on the part of any citizen in Europe, British or otherwise, in Britain or on the continent. The simple truth is that most of the people I have seen in the decision-making tier, as it were, of European Governments agree with us: the issue of British citizens and European citizens has to be dealt with together, and will be dealt with as a matter of priority.
Mr David Nuttall (Bury North) (Con)
Does my right hon. Friend agree that the huge investment by Dyson in research and development facilities in the UK is a sign of confidence in the UK economy outside the EU?
Mr David Jones
Yes, it certainly is. That is only the latest in a long line of new investments in the British economy, showing the huge confidence that the international business community has in our country.
Rachael Maskell (York Central) (Lab/Co-op)
May I push the Secretary of State further on the answer he gave my hon. and learned Friend the Member for Holborn and St Pancras (Keir Starmer) regarding frictionless trade? Is the Secretary of State saying that trade tariffs remain on the negotiating table?
Mr David Davis
No, what I am saying—or what I was saying to the hon. Lady’s hon. and learned Friend—is that plenty of countries around the world have very light-touch customs arrangements, which would be consistent with a comprehensive free trade agreement.
Several hon. Members rose—
Mr Speaker
I will take the two colleagues who have not spoken to date, if they are extremely brief.
Stephen Timms (East Ham) (Lab)
From my recent discussions with senior Members of the German Parliament, it is very clear that we are not going to get barrier-free access to the single market if we no longer operate free movement. Do Ministers yet recognise that reality?
Chris Bryant (Rhondda) (Lab)
Under the common agricultural policy, some of the richest people in this country get millions of pounds in handouts from the taxpayer, which must surely be wrong. When we are in charge of our own agricultural policy, would it not be a good idea to put a cap on how much people get, just as we have a benefits cap?
Mr Speaker
Before we come to the business question, I want to mention that today is the birthday of the hon. Member for Perth and North Perthshire (Pete Wishart). I am sure there will be veritable rejoicing in the streets on this happy occasion—at any rate, at least in Perth and North Perthshire. Happy birthday to the hon. Gentleman.
Business of the House
(7 years, 8 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Valerie Vaz (Walsall South) (Lab)
Will the Leader of the House please give us the forthcoming business?
The Leader of the House of Commons (Mr David Lidington)
The business for next week is as follows:
Monday 13 March—Consideration of Lords amendments to the European Union (Notification of Withdrawal) Bill followed by continuation of the Budget debate.
Tuesday 14 March—If necessary, consideration of Lords amendments followed by conclusion of the Budget debate.
Wednesday 15 March—If necessary, consideration of Lords amendments, followed by consideration of Lords amendments to the Health Services Medical Supplies (Costs) Bill, followed by remaining stages of the National Citizen Service Bill [Lords], followed by motion relating the appointment of lay members to the Committee on Standards, followed by, if necessary, consideration of Lords amendments.
Thursday 16 March—Statement on the publication of the 10th report of the Public Administration and Constitutional Affairs Committee entitled “Lessons still to be learned from the Chilcot inquiry”, followed by a statement on the publication of the sixth report of the Health Committee on suicide prevention, followed by a debate on a motion relating to energy prices. The Select Committee statements and the subject for debate were determined by the Backbench Business Committee.
Friday 17 March—The House will not be sitting.
The provisional business for the week commencing 20 March will include:
Monday 20 March—Second Reading of the Prisons and Courts Bill.
I should also like to inform the House that the business in Westminster Hall for 20 and 23 March will be:
Monday 20 March—Debate on an e-petition relating to the cost of car insurance for young people.
Thursday 23 March—Debate on the first and second reports of the International Development Committee entitled “Syrian refugee crisis and DFID’s programme in Nigeria”.
Finally, I inform the House that, because of diary commitments on Monday, the Prime Minister expects to update the House on this week’s European Council on Tuesday next week.
Valerie Vaz
I thank the Leader of the House for the forthcoming business and add my congratulations to the hon. Member for Perth and North Perthshire (Pete Wishart). Perhaps it will be a case of him singing to us, rather than us singing to him.
Are we any nearer to having a date for the Queen’s Speech? I am sure that the person delivering it would like to know when it is.
I gave the inaugural Emily Wilding Davison memorial lecture at Bedford College and Royal Holloway yesterday. As you know, Mr Speaker, she broke into the House of Commons a few times, most memorably on census night. It was said that she knew the House’s maze of pipes and hidey-holes far better than all the other suffragettes. She therefore had a lot in common with my hon. Friend the Member for Rhondda (Chris Bryant).
May I press the Leader of the House on a date for the debate on restoration and renewal? Members need to know that and need to have their say. It might be helpful, at the time of the debate, to have a display so that Members can see what is at stake and have an informed debate, rather than one based on speculation. I know that a date has been mentioned, but perhaps that was just a gentleman’s agreement and ladies are not allowed to know.
I note that the European Union (Notification of Withdrawal) Bill is coming back to the Commons on Monday. Once the Bill goes through, it will truly be the end of the Thatcher legacy, because the former Prime Minister signed up in 1981 to EU enlargement through the accession of Greece, in 1983 to the declaration on more European integration, in 1986 to EU enlargement through the accession of Spain and Portugal, and in 1987 to the Single European Act to create a single internal market. Yet she was also able to say no: she renegotiated the EU budget in 1984, said no to the 1985 Schengen agreement, and said no to the 1989 social charter—wrongly, in my view. Margaret Thatcher was a remainer and a reformer; the same cannot be said of this Government.
And so to the Budget. It is not so much “Spreadsheet Phil” as Punxsutawney Phil from “Groundhog Day”. He is being chased back down his hole by the self-employed and the Brexiteers. There was no mention of the most challenging events that will happen to this country in the next few years. He did not use the word “Brexit” once—not verbally, not in his speech, not in the Official Report. What he did say was that he
“will not saddle our children with ever-increasing debts.”—[Official Report, 8 March 2017; Vol. 622, c. 811.]
Will the Leader of the House clarify whether that means tuition fees will be abolished? The Chancellor talks about Germany’s productivity being better than ours. Germany abolished tuition fees. Maybe that is something we can learn from Germany.
The Chancellor said that money was available for investment in school condition. Given that the right hon. Member for Surrey Heath (Michael Gove) said he regretted cancelling the Building Schools for the Future programme, will the Leader of the House make representations to the Chancellor to enable all schools allocated funds under the scheme to receive them without having to make bids that take money away from frontline services?
Will the Leader of the House confirm whether the money for research for 1,000 PhDs is a grant or a loan? I thought I heard the Chancellor say “loan”, but I cannot find it in the Official Report. [Interruption.] If hon. Members do not want to hear they should just leave the Chamber.
Valerie Vaz
You think it’s rubbish; we don’t think it’s rubbish.
Was the Leader of the House aware of the discussions around the gentleman's agreement in Surrey? Will he launch an inquiry or make a statement to the House? An MP was involved “who has worked really hard behind the scenes”, and there is a reference to a Member whom we both know very well. May we have a statement on what exactly is on offer under this deal? Step one: councils threaten to increase council tax. Step two: they make a phone call to the Communities Secretary, who then pops over to No. 11 in his car. Then, lo and behold, there is a deal—a gentleman’s agreement that is not transparent and is just for Tory councils.
Will the Leader of the House ensure a breakdown of all business rates goes to each council when the transition is made, so hon. Members do not have to make freedom of information requests of their councils? The council tax burden will now shift totally and utterly to local taxpayers. Oxford Street in my constituency does not have any businesses. This will have a direct effect on many of our constituencies.
The Prime Minister said, when she first stood in Downing Street:
“When it comes to opportunity, we won’t entrench the advantages of the fortunate few”.
Yet the Prime Minister made it clear the Government are promoting selective schools. Can the Leader of the House confirm that children who cannot afford tutors, who will enable them to get into selective schools, will be given help? Schools are good because of the hard work of the pupils and their teachers. The Government cannot take credit for that.
The Chancellor talked about the “last Labour Government” but we are thinking about the next Labour Government. It is the next Labour Government who will have the last laugh.
Finally, it was a male-dominated International Women’s Day. Maybe next year there will be no “Spreadsheet Phil”, but “Spreadsheet Justine”. I want to bring women back to the centre. Gandhi said that if you educate the mother you educate society. How can we forget what was said about Ginger Rogers: she did everything Fred Astaire did, but backwards and in high heels? There is the Chinese proverb that women hold up half the sky. Finally, there is the new hashtag: #neverthelessshepersisted. That is what we all have to do to get true equality. A belated happy International Women’s Day to everyone.
Mr Speaker
Colleagues, I am also advised that today is a significant birthday for the hon. Member for Lewisham, Deptford (Vicky Foxcroft), who I feel sure is celebrating suitably somewhere. We congratulate her on that milestone birthday.
Mr Lidington
May I first deal with the questions from the hon. Member for Walsall South (Valerie Vaz) about two items of business? I cannot yet give a date for the Queen’s Speech. As the House will know, this depends to some extent on the exchange of amendments between the two Houses. We are not in a position to make an announcement yet.
I cannot be specific about a date for a debate on restoration and renewal. However, the Government’s position remains that we intend to hold it before the Easter recess, as I said in answer to the business question a few weeks ago.
I disagree with the hon. Lady that we should get rid of tuition fees. It is not unreasonable to expect students to make a contribution towards the cost of that university education when their income in later working lives reaches above a certain threshold. I would have hoped that, rather than revisit the argument about tuition fees, she welcomes the Chancellor’s announcement yesterday of the Government’s drive to improve the opportunities provided by, and the quality of, technical and vocational education in this country. That is key to giving the maximum possible chance in life to those children who are unable to go to university or who choose not to do so. It is an absolutely essential part of tackling some of this country’s long-term structural economic problems to do with the lack of competitiveness in a very fast-changing international economy.
I do not know how many times Ministers will repeat from the Dispatch Box that there is no special sweetheart deal. I was astonished that the hon. Lady claimed that there is something available to Conservative councils that is not available to Labour councils. I was sitting on the Front Bench yesterday when I heard the Prime Minister say in terms that the local authorities that would be first in the pilots for 100% return of business rates in the 2017-18 financial year were Labour authorities. Those Labour authorities have welcomed that opportunity to be in the first set of pilots. We are saying to Surrey and every other council not included in that first round that, if they meet the criteria, they can apply for participation in the second round in 2019-20. That has always been and remains the position.
On grammar schools, the Government said in the Green Paper that was published shortly before Christmas that we would consider and consult on ways in which the admissions system to selective schools might be altered to try to give the maximum possible opportunity to children from poorer families and families that do not have a history of sending people on to further and higher education of getting those places at selective schools. The problem with the Labour party is that its views on education are stuck in the past. It seems extraordinary, and an increasing anomaly, that, at a time of great diversity in the provision of secondary schools of various types, including specialist schools of the type the Prime Minister described yesterday, there should be an arbitrary legal ban on the creation of new selective schools as part of that broader mix. That is the challenge the Government are seeking to address.
I am more than happy to join the hon. Lady in welcoming International Women’s Day in the way she described, and in paying tribute to all of those in this country who have played a part in advancing opportunities for women. Women and men from all political traditions in this country have supported them. We might also pause and reflect on the fact that women in some countries around the world can be put at great personal risk by standing up publicly and pressing for the type of civil rights and opportunities women have in this country. In celebrating what has been achieved here and in other countries, we should remember that the real heroines are those who fight for equal rights in those countries where there is real danger.
Bob Blackman (Harrow East) (Con)
Last week, I hosted a celebration on 25 years of Dr Sodha’s chiropractic—I understand that my right hon. Friend the Leader of the House piloted a private Member’s Bill through the House promoting chiropractic. May we have a debate in Government time on the use of chiropractic in the national health service as an alternative to giving people medicine?
While I am on my feet, Mr Speaker, may I gently remind my right hon. Friend that the House rose early again on Monday? The Backbench Business Committee has a queue of debates that could fill those slots were they made available by the Government.
Mr Lidington
We do try to ensure that the Backbench Business Committee has its full allocation of slots. It is not entirely for Ministers to determine how many Members participate in any debate, or for how long they speak. Sometimes Members in all parts of the House speak for far longer than their Whips may wish them to, and at other times the debate finishes early, but that is not entirely in the Government’s gift.
My hon. Friend’s point about chiropractic was well made. Looking back on the growth of the profession over the last 25 years, I think that the increasing availability of chiropractic treatment as a complement to traditional medicine has brought huge benefit to patients in all parts of the country, and I hope that my hon. Friend will be lucky enough to secure an Adjournment debate to celebrate that achievement further.
Pete Wishart (Perth and North Perthshire) (SNP)
I thank you for your birthday wishes, Mr Speaker. I shall always be a year older than you.
As well as being my birthday, today is Budget Boxing day, and, if anything, Budget Boxing day is more interesting and more revealing than Budget day itself. It is on Budget Boxing day that we start to hear the useful clarifications, the climbdowns and the justifications for broken manifesto promises, which usually involves the Chancellor of the Exchequer scurrying around the broadcasters and trying to do all those things at once. May I suggest that a statement on Budget Boxing day would be a way of resolving that? The Chancellor of the Exchequer could come to the House and provide all the useful clarifications, start all the climbdowns, and justify all the broken manifesto promises.
We in Scotland are grateful for the £350 million that we are to secure in Barnett consequentials as a result of the Budget, but we note that Scotland will receive exactly the same amount in a year as the NHS is supposed to receive in one week after Brexit. That is hardly going to offset the £4 billion-worth of cuts that we will face over the next 10 years.
I note that three days have been set aside for consideration of Lords amendments “if necessary”, as the Government attempt to ping that pong from the heroes in ermine who continue to stand up to them. What will happen if the paddles are still out on Wednesday, and we are still at the table? Will the Government enforce the Parliament Act? What impact will that have on the article 50 process? And may we encourage the people’s aristocrats to persist in the remain cause?
Lastly, may I ask whether the Leader of the House has any explanation for the behaviour of the Prime Minister on the Front Bench yesterday? She looked as though she was swallowing a fish. It was almost like Mike Yarwood doing an impersonation of Ted Heath. Will the Leader of the House go back to No. 10, and tell the Prime Minister that this is no “plaice” for such behaviour?
Mr Lidington
First, let me wholeheartedly wish the hon. Gentleman many happy returns of the day. It is obvious that the first thing he did this morning was unwrap his birthday socks and tie, and I am sure that they were just what he had always wanted.
The hon. Gentleman asks about the article 50 Bill. It is entirely routine for the Government to announce provisional business in case there is a need to debate Lords amendments. The House of Lords has a perfectly proper role as a revising Chamber, but it also knows that it is an unelected House. I hope that it will want to give very careful consideration to the views that this House takes on its amendments next week, and will accept that, ultimately, the view not just of the elected House but of the British people, expressed in a referendum, should prevail.
The hon. Gentleman also asked about the impact of yesterday’s Budget statement on Scotland. I would have thought, particularly on his birthday, that he might have had a cheery word for the fact that, because of my right hon. Friend the Chancellor’s announcement, the Scottish Government’s resource budget will increase by £260 million through to 2020 and its capital budget by almost £90 million through to 2021. This builds on the £800 million increase to the Scottish Government’s capital budget that was delivered via last year’s autumn statement. Scotland, like all parts of the United Kingdom, is benefiting because of the action that the United Kingdom Government are taking to ensure a stable economy, economic growth and sustainable public finances.
Several hon. Members rose—
Mr Speaker
Order. I gently point out that so far we have got through the three Front Benches and one Back Bencher, so progress is a little slow. If we could try to speed up a little bit, that would be much appreciated.
Mr Stewart Jackson (Peterborough) (Con)
As has been said, yesterday was International Women’s Day, yet my constituents were shocked to learn, via the National Society for the Prevention of Cruelty to Children this week, that no fewer than 55 cases of female genital mutilation took place in Peterborough in the final three months of 2016. May we have a debate on prosecutions of the perpetrators of this evil trade, so that we can protect our young girls and women? FGM is not culturally acceptable, and it is time that we tackled it and drove this abominable practice from our country forever.
Mr Lidington
I agree with my hon. Friend: FGM is a crime, and it is child abuse as well. There have been a number of changes to the law, including in particular the Serious Crime Act 2015, that have extended both powers and penalties to deal with FGM. As he knows, the majority of cases recorded by the NHS are crimes that were committed overseas on non-UK citizens, where probably the right priority is to give help and support to those women who have been abused. However, he is right that we must not hesitate to bring people before the court where there is evidence.
Dame Rosie Winterton (Doncaster Central) (Lab)
May we have a debate to update the House on the Government’s plans for the rail industry, especially in the light of Brexit, including plans for the rail freight sector, for ordering new rolling stock, and for refurbishing rolling stock, which is crucial to companies such as Wabtec in my constituency which specialises in the refurbishment of rolling stock?
Mr Lidington
The right hon. Lady makes a good point. It is important not just in the context of Brexit, but in terms of getting the right mix of transport services in this country, that we continue to modernise our rail system. The autumn statement’s focus on additional infrastructure spending will indeed deliver rail improvements in all parts of the country.
Mr Charles Walker (Broxbourne) (Con)
May we have an urgent debate on the conduct of Veolia, an organisation full of sharp suits and sharp practices? This company is promoting an incinerator in my constituency on a floodplain that just 18 months ago it was arguing before the planning inspector was unsuitable for such a site. This is disgraceful and, dare I say, dishonest behaviour on the part of this company.
Mr Lidington
My hon. Friend makes his points powerfully, and I am sure on behalf of his constituents. This is obviously a matter for the local planning authorities, and for the Environment Agency as the custodian of environmental regulations. He may wish to seek an Adjournment debate on it.
Alex Salmond (Gordon) (SNP)
Thinking about Monday’s business, two weeks ago at business questions the Leader of the House broke with his established procedure of a lifetime in politics by giving me what he described as a straight answer when I asked whether it was possible, roughly speaking, to say what the process of negotiation with Europe would yield. Amazingly, and by an extraordinary coincidence, it turns out that I was quoting the leader of the leave campaign, Dominic Cummings, when he said last year:
“No-one in their right mind would begin a legally defined two-year maximum period to conduct negotiations before they actually knew, roughly speaking, what this process was going to yield.”
Is the Prime Minister of sound mind? [Interruption.]
Mr Lidington
One of my hon. Friends says, “I don’t recall the Prime Minister leading the leave campaign.” Nor was she responsible for its statements. The Prime Minister’s view—and the view of the Government—was spelled out in detail in the recent White Paper, in which we describe our negotiating objectives of securing the best possible access to, and freedom to operate within, the single market for British business, a fair deal for our citizens in Europe and for European citizens here, and so on. However, this negotiation will involve 27 other countries as well, and they are clear that the process of negotiation can start only when article 50 has been triggered.
Amanda Milling (Cannock Chase) (Con)
Staffordshire fire and rescue service has been involved in two high-profile waste fires, including one on an illegal waste site near Rugeley. This has been a horrendous experience for local residents, and the fire service has faced significant costs in managing these incidents over the past six months. The dumping of illegal waste is a problem not just in Staffordshire. May we have a debate in Government time on this increasingly national issue?
Mr Lidington
My hon. Friend raises an important point on behalf of her constituents. I cannot offer an immediate debate in Government time, but she might find an opportunity through the Back-Bench business process or through an Adjournment debate.
Paul Flynn (Newport West) (Lab)
When can we debate the call made in the Daily Mirror yesterday by my hon. Friend the Member for Barnsley Central (Dan Jarvis) that we should learn the lessons of the Afghan war if we are to avoid any repetition of what happened? In 2006, after only six of our soldiers had died in Afghanistan, the decision was taken to go into Helmand province on the basis that not a shot would be fired. The result of that was that 450 more soldiers lost their lives. We cannot turn lies into the truth by carving them on war memorials or by putting them into the mouths of dignitaries. When can we face up to the truth about the Helmand disaster by having an inquiry?
Mr Lidington
It is right that we should have a public memorial to those, both military and civilian, who served so valiantly in Afghanistan and Iraq, and also that we should learn the lessons from both those conflicts. The forthcoming debate on the Select Committee report on the Chilcot inquiry will clearly relate primarily to Iraq, but I would have thought that the lessons to be learned from that conflict and the Afghanistan conflict could be debated during that time.
David T. C. Davies (Monmouth) (Con)
May we have a debate on the efficiency with which we prosecute white collar crime? We are very good at chasing benefit cheats, and rightly so, but I do not believe that we are doing enough to investigate what my hon. Friend the Member for Broxbourne (Mr Walker) calls the sharp-suited spivs who get away with misappropriating millions of pounds, sometimes involving public money.
Mr Lidington
I can assure my hon. Friend that Her Majesty’s Revenue and Customs, which is an independent prosecuting authority, takes this matter very seriously and has secured a big increase in the amount of money recovered for the Treasury through compliance activities, but I am sure that there is always more to be done.
Nick Smith (Blaenau Gwent) (Lab)
May we have a debate on helping people into work? Blaenau Gwent still has stubbornly high unemployment, yet the Department for Work and Pensions wants to shut the Tredegar jobcentre. If the Government truly want to support people, they must take on board the burden that this proposal will put on jobseekers by making them pay for expensive public transport or walk for miles over the mountain, whatever the weather.
Mr Lidington
After 20 years, the contract that covers many DWP offices is nearing an end. It expires on 31 March 2018. The DWP is redesigning its estate so that it delivers better value for taxpayers while also delivering support to people. This is not about reducing services; it is about trying to stop spending taxpayers’ money on renting empty space so that we can give more through counselling and support to those who need it to get back into employment.
Mark Pritchard (The Wrekin) (Con)
In his statement, the Leader of the House said that there would be a debate on the Department for International Development’s programme in Nigeria. He will know that there is an impending famine in eastern Nigeria. I wonder whether we could have a wider debate on the famines in Yemen and Somalia, and the famine in South Sudan that the World Food Programme has just announced, and on how DFID’s programme could do more to prevent conflict rather than just resolving it, given that conflict is a driver of those famines.
Mr Lidington
That sounds like an ideal subject for one of the longer debates in Westminster Hall. I am sure that my hon. Friend would be the first to agree that DFID is devoting a lot of resource to help bring relief to South Sudan.
Margaret Ferrier (Rutherglen and Hamilton West) (SNP)
Yesterday, the Foreign Office updated its current foreign travel advice for Israel with the following information:
“The Israeli Parliament passed a law on 6 March 2017, which gives authority to deny entry to foreign nationals who have publicly called for a boycott of Israel and/or settlements, or who belong to an organisation which has called for a boycott.”
Given the impact that the new law will have on British passport holders, including Members of both Houses, and given that no other guidance has been issued by our Government beyond that information, may we have a statement from the Foreign Office on how the application of the law will affect UK passport holders and UK foreign policy?
Mr Lidington
At the risk of stating the obvious, Israel, like every other country, is ultimately responsible for determining its own rules on immigration and on visits, but we are seeking urgent clarification from the Israeli authorities as to what the application of the new policy might be. In the meantime, we have updated the travel advice in order to give people as much information as we have at present. If any British citizen feels uncertain about a possible visit to Israel, we suggest that they contact the embassy. We will give clearer advice as soon as we get it from the Israelis.
Steve Double (St Austell and Newquay) (Con)
Fowey community hospital in my constituency has been closed since last summer despite the fact that the Royal Cornwall hospital has been on black alert more often than not during that time. Yesterday, I received a letter from the senior emergency consultant in Cornwall, who said:
“It is, therefore, inexplicable and unjustifiable, that we continue to have closed community hospital beds whilst patients queue in corridors in ED.”
Will the Leader of the House arrange for a statement from the Health Secretary on the important role that community hospitals play, particularly in rural communities such as Cornwall?
Mr Lidington
My hon. Friend is right to stress the importance of community hospitals, particularly as a step when people no longer need intensive care in an acute facility. The exact configuration of local health services in Cornwall or anywhere else is a decision that needs to be taken by local health bosses, not imposed centrally from London.
Karl Turner (Kingston upon Hull East) (Lab)
Yesterday, I had the privilege of meeting the school council of Ings Primary School in my constituency. Young Charlie White, 10 years of age, raised the issue of the WASPI women after seeing them protesting outside the Palace. He asked me why the Chancellor had completely ignored them in his Budget and asked me to raise that at the earliest opportunity. On behalf of Charlie White, can we please have a debate in Government time on the WASPI women?
Mr Lidington
May I say that I am genuinely delighted that among the hon. Gentleman’s constituents, as among mine, there are school council members who are taking an active interest in politics? Whatever views we hold, we should welcome that. My answer to Charlie, through the hon. Gentleman, is that the Government have put in place transitional arrangements, costing taxpayers £1 billion, to cushion the impact of the change in the state pension age for women. To reverse the Pensions Act 2011 would cost more than £30 billion, which cannot be justified.
Antoinette Sandbach (Eddisbury) (Con)
Pupils in my constituency, including those from the community high school in Winsford who are visiting this place today, are deeply concerned about the impending cuts to school funding. May we timetable a debate in Government time to cover the changes to the formula after the consultation has closed on 22 March?
Mr Lidington
I stress that the consultation on the proposed new funding formula has not yet closed. When the results are in, my right hon. Friend the Secretary of State for Education will want to consider them before deciding on the way forward.
Tom Brake (Carshalton and Wallington) (LD)
Last week there was speculation about your showering habits, Mr Speaker. Today, I would like to query your shopping habits. I do not know whether you have been to the supermarket recently, but if you have, you will have noticed that food prices are rising sharply and that “buy one get one free” offers and own-brand products are disappearing from the shelves. Will the Leader of the House make time available for a debate on those price rises and their impact on low and middle-income families, many of whom have just been hard hit by the Government dumping their pledge not to increase national insurance?
Mr Lidington
On that last point, if the right hon. Gentleman looks at what the Chancellor actually announced, he will see that people on low incomes will not be affected at all. Sixty per cent. of self-employed people will be better off, taking account of the abolition of class 2 contributions and the changes to class 4 contributions that were announced in the Budget yesterday.
The prices in supermarkets clearly vary depending on market prices, which depend in part on things such as currency movements. The price of certain vegetables depends on the weather in vegetable-producing areas this winter. The most important thing for the Government is that we maintain an economy with low inflation, high employment and vigorous economic growth, which is the best way to ensure good living standards for the right hon. Gentleman’s constituents.
Martin Vickers (Cleethorpes) (Con)
I am doing what I can to help some constituents obtain a life-saving drug for their young son. Members on both sides of the House will have had similar cases over the years. These are difficult decisions for health trusts and the National Institute for Health and Care Excellence, but it would be helpful if we could have a debate on how they go about making those decisions. Will the Leader of the House find Government time for such a debate?
Mr Lidington
I cannot promise Government time, but there may be other opportunities. These are always very difficult decisions, and the right principle has to be that access to a drug is determined by clinical effectiveness, which has to be measured by doctors, not by politicians.
Clive Efford (Eltham) (Lab)
It is now clear that self-employed people were given a false promise at the last election. The Conservative manifesto said no less than four times that a Conservative Government would not increase national insurance. Can we have a statement from the Government going through the pledges they made in that manifesto line by line so that we have a fighting chance of knowing what we are holding them to account for?
Mr Lidington
When the National Insurance Contributions (Rate Ceilings) Bill was debated in November 2015, it was said that
“this Bill enacts the Conservatives’ manifesto pledge not to increase NICs in this Parliament. It is part of their wider pledge to cap income tax, VAT and national insurance contributions.”—[Official Report, 3 November 2015; Vol. 601, c. 914.]
That Bill delivered on the manifesto pledge, and those are not my words; they are the words of the hon. Member for Salford and Eccles (Rebecca Long Bailey), who was shadow Exchequer Secretary to the Treasury at the time.
Tim Loughton (East Worthing and Shoreham) (Con)
Last month, the Court of Appeal ruled in the case of Rebecca Steinfeld and Charles Keidan that the Government’s failure to extend civil partnerships to opposite-sex couples constituted a potential violation of human rights and that the “wait and see” policy of the Minister for Women and Equalities is unsustainable—the ruling also referred to my private Member’s Bill. Has the Leader of the House had any indication from the Minister for Women and Equalities about an impending announcement? If not, can we have a debate in Government time on equality of civil partnerships?
Mr Lidington
My hon. Friend has consistently championed that cause for quite a period of time. I am not aware of an imminent announcement, but I will remind the Minister for Women and Equalities of his persistence on the subject.
Jim Shannon (Strangford) (DUP)
Given the timely reminder of the plight of the Yazidis on the BBC News on Tuesday past—when Amal Clooney spoke at UN headquarters about how 1,200 Yazidi women and girls are still being held hostage by Islamic State in Mosul, in which Mr Speaker and everyone in this Chamber is particularly interested—will the Leader of the House agree to a debate or a statement on expanding the Syrian vulnerable persons relocation scheme to make the most vulnerable individuals from that Iraqi religious minority eligible for resettlement? They have been able to flee persecution but are unable to return home.
Mr Lidington
The hon. Gentleman is right to highlight this challenge and the appalling abuses of human rights that have been taking place in Iraq and Syria. Victims of abuse and religious minorities are among the categories that we have identified as the highest priorities under the scheme to admit 20,000 people to the UK, which the previous Prime Minister announced; that will also apply in respect of the 3,000 children we are taking in from the region, in addition to those 20,000.
Craig Tracey (North Warwickshire) (Con)
Following the point raised by my hon. Friend the Member for Cannock Chase (Amanda Milling), I wish to highlight the huge increase in fly-tipping across North Warwickshire and Bedworth in recent months. A recent episode near the village of Austrey led to an entire road being blocked by the rubbish deposited on it. The clear-up costs for just one council are estimated at £650,000, so may we have an urgent debate on this issue to see what more can be done to protect our countryside from this terrible scourge, which sadly seems to be on the increase across the country as a whole?
Mr Lidington
Many of us will have experience of what my hon. Friend rightly terms this “scourge” in our constituencies, and he is right to speak out today. Where fly-tipping involves hazardous waste or organised crime the Environment Agency has a role to play, so he might want to make representations to it. The Government last year gave councils the power to issue fixed penalty notices for small-scale fly-tipping incidents, and his local council might wish to explore that.
Alan Brown (Kilmarnock and Loudoun) (SNP)
In yesterday’s Budget, the Chancellor made a welcome move to clear up a VAT anomaly by pledging to collect VAT on telecoms abroad. As that is going to bring some money, is it not now time to clear up another VAT anomaly: VAT being applied to Police Scotland and to the Scottish Fire and Rescue Service? Will the Leader of the House make a statement confirming he agrees that that should be the case and committing the Government to agreeing to amendments to the Finance Bill?
Mr Lidington
I cannot make the commitment the hon. Gentleman wants me to make, but I will make sure the Chancellor is aware of the point he has just made.
Mark Menzies (Fylde) (Con)
In August 2015, 300,000 households in Lancashire were affected by the loss of drinking water as a result of the cryptosporidium outbreak, yet 18 months on the Drinking Water Inspectorate still refuses to publish the report or to say when it will be published. In fact, the response has been, “We will publish when we are good and ready.” Will the Leader of the House set aside time for a debate on the responsibility of organisations such as the DWI to the constituents I represent?
Mr Lidington
I have to say I am surprised that this report has not yet been published, and I shall draw my hon. Friend’s representations to the attention of the Secretary of State for Environment, Food and Rural Affairs.
Wes Streeting (Ilford North) (Lab)
Yesterday’s national insurance rise was not only a breach of the Conservative party manifesto, but an attack on small businesspeople, entrepreneurs, taxi drivers and others who take the risk to start a business and go it alone. Given the Leader of the House’s answer to my hon. Friend the Member for Eltham (Clive Efford), may I ask the right hon. Gentleman by which parliamentary mechanism this rise will be enacted? Will it be through a national insurance Bill, a statutory instrument or another measure?
Mr Lidington
Legislation will be brought forward at the appropriate time later this year. I simply say to the hon. Gentleman that he and others from right across the House have rightly been calling for more money to be spent on the NHS and on social care, and that money has to be raised in revenue. We have seen that the introduction of the new state pension system has removed the greater part of the disadvantage that previously applied to people who were self-employed rather than employed and which had justified the very significant difference between the national insurance contributions paid by self-employed people as against employees. The important narrowing of that difference in pension and other benefits, coupled with the Government’s further pledge to look at parental benefits, justifies the measure the Chancellor announced yesterday.
Mr David Burrowes (Enfield, Southgate) (Con)
Today, knife possession sentencing statistics have been published, and they reveal that in the last three months of 2016 around 300 repeat offenders were let off going to prison, despite Parliament’s introduction of mandatory sentencing following the campaign for what became known as Enfield’s law. May we have a statement to reaffirm that it was and still is Parliament’s clear will that persistent knife offenders should and must be locked up, because they cause carnage on our streets?
Mr Lidington
We certainly want to see people who are convicted of knife crimes being sentenced severely, because they not only cause actual harm to fellow citizens but breed a culture of fear that poisons whole neighbourhoods. Ultimately, though, it has to be for the judge in an individual case to hear all the evidence and decide the appropriate sentence.
Graham Jones (Hyndburn) (Lab)
The northern powerhouse is supposedly a cornerstone of Government policy, but it was not mentioned in yesterday’s Budget statement. When are the Government going to facilitate a debate on the northern powerhouse, so that we can talk about the most significant project that needs to be completed: the M65 east-west extension between Preston and Leeds?
Mr Lidington
I am glad the hon. Gentleman has raised the issue of the northern powerhouse, because the Government have set out a northern powerhouse strategy to boost productivity throughout the north of England. The next steps include moves on the northern powerhouse schools strategy; more than half a billion pounds of local growth fund allocation; the upgrading of transport infrastructure in the north; and further science and innovation audits. I thought the hon. Gentleman would have welcomed those steps.
Mr Peter Bone (Wellingborough) (Con)
Yesterday was International Women’s Day. One of the great disappointments on both sides of the House is the fact that we have never had a woman leader of the Labour party, although the shadow Leader of the House made a clear bid for the position today. I will do anything I can to help her in that regard, but can she please resist spreading fake news? The suggestion that Mrs Thatcher would have been a remainer is absolutely outrageous. May we have a debate next week on fake news?
Mr Speaker
No. Points of order come later; the hon. Gentleman can ventilate his thoughts at that time.
Mr Lidington
My hon. Friend the Member for Wellingborough (Mr Bone) was, uncharacteristically, slightly unfair, because we should pay tribute to what the right hon. Member for Derby South (Margaret Beckett) and the right hon. and learned Member for Camberwell and Peckham (Ms Harman) did when they were acting leaders of the Labour party. Government Members might hope that, one day, the Labour party will summon up the courage to allow a woman to take over full time.
Paula Sherriff (Dewsbury) (Lab)
In recent weeks I have been contacted by a number of distressed and vulnerable constituents who have been turned down for employment and support allowance. The clear injustice in some of the cases is stomach-churning, even by Tory standards. They have had their benefits stopped and are reliant on food banks and handouts. This issue is raised frequently in the House, but the recent increase is alarming. Will the Leader of the House allow a debate in Government time to revisit the issue?
Mr Lidington
I am sure the hon. Lady will be taking up any particular cases with Ministers from the Department for Work and Pensions. The principle has to be right that if somebody has a condition that means they are able to work, as so many disabled people and people living with long-term medical conditions wish and are able to do—3.5 million today, which is a record number—they should be given help and support to do so. They should not be written off and consigned to a lifetime on benefits.
Rebecca Pow (Taunton Deane) (Con)
I welcome the Government’s positive move to ban the use of plastic microbeads in cosmetics and care products by October. It will make a real difference to the cleaning up of our marine environment, but there is still so much more to be done on plastic pollution. Will my right hon. Friend find a time for the House to debate the issue? It really is critical if we are to leave the environment in a better state than we found it.
Mr Lidington
My hon. Friend is indefatigable in raising this subject. I cannot promise an immediate Government debate, but she will know that, from the Prime Minister downwards, the entire Government are committed to delivering on our promise.
Diana Johnson (Kingston upon Hull North) (Lab)
In a written statement on Monday, the Government announced that they are scaling back their financial support for people who received contaminated blood products. On the same day, the chief executive of the trust that administers the money that currently goes to that group of people refused to meet the all-party parliamentary group on haemophilia and contaminated blood to discuss what is happening. I am sure that the Leader of the House agrees that transparency and openness is very much the best policy, so may we please have a statement from a Minister about the Government’s intentions so that MPs can raise their constituents’ concerns about what the Government are doing?
Mr Lidington
The hon. Lady makes a perfectly serious point. I will ask the relevant Health Minister to write to her.
Chris Green (Bolton West) (Con)
Exercise, especially jogging, can be a lonely pursuit, so may we have a debate on the value of running clubs, such as the Atherton running club in my constituency, which provide a fun and motivating environment for that healthy activity?
Mr Lidington
I am delighted to be able to pay tribute to my hon. Friend’s local running club. I do not know whether he is a participant as well as a champion.
Mr Lidington
My hon. Friend nods—that is an even better sign. Perhaps another year he will join my hon. Friends the Members for Weaver Vale (Graham Evans) and for Crewe and Nantwich (Edward Timpson), who will take part in this year’s London marathon. We wish them well.
Mark Durkan (Foyle) (SDLP)
Will the Leader of the House tell us about the role and locus of his office in the preparation and passage of the great repeal Bill? Given that that office steered English votes for English laws, what assurance can he give us that that Bill will not be a vehicle for English votes over devolved competences?
Mr Lidington
My office will be involved, and I will be involved in the Cabinet Committee that reviews that legislation before its introduction in the same way as we review all legislation. I assure the hon. Gentleman that the impact of the whole Brexit process on devolved competences is one of the key issues we are considering. Many EU-level competences cut across devolved matters, although they also include some reserved matters—fisheries is one example—so we will continue to engage very closely with all three devolved Administrations to ensure that we get the right outcome and that there is no question at any stage of taking away powers that have been devolved under the three devolution Acts.
James Berry (Kingston and Surbiton) (Con)
In February 2014, 14-year-old Breck Bednar was brutally murdered by a man he met via an online video gaming platform. Breck’s mum, Lorin, who bravely came to talk to teachers and parents in Kingston, is calling for a law to tackle that kind of online grooming to be brought into force urgently. May we have a debate on how all stakeholders —the Government, police and, particularly, internet companies—deal with online grooming and abuse to avoid tragic cases like the murder of Breck?
Mr Lidington
The whole House will have been shocked by the account that my hon. Friend gave and will want to express condolences to Breck’s family. There are laws in place to enable us to take action against online grooming, as we can against other types of grooming and abuse. There is sometimes difficulty in assembling sufficient evidence to put before a court, and I am sure that the police and prosecuting authorities constantly review the adequacy of current arrangements and practices, but I will certainty draw his particular concern to the Home Secretary’s attention.
Mrs Madeleine Moon (Bridgend) (Lab)
Today is World Kidney Day. May I ask the Leader of the House to do two things? First, will he join me in commending all the kidney support groups that raise funds for research? Last week, my group in Porthcawl gave more than £2,000 for psychological support for children with kidney failure. Secondly, three people die every day because of the lack of available transplants, so may we have a debate on the need to increase their availability for people who otherwise would die?
Mr Lidington
Although I cannot offer the debate in Government time, at least in the short term, there may be other opportunities of which the hon. Lady will be well aware. I am happy to endorse her tribute to the Porthcawl group and to other kidney support groups throughout the country, and to emphasise, as she did, the importance of ensuring that more transplants are available, and that donors are available to help people in need.
Jeremy Lefroy (Stafford) (Con)
I chair the all-party parliamentary group on Tanzania. Last week, my hon. Friend the Member for Ribble Valley (Mr Evans) and I met Tanzanian business leaders in Dar es Salaam. One issue they raised was the length of time it takes them to get visas to come to the United Kingdom on business trips. By contrast, it takes us two or three days to get a visa from the Tanzanian high commission in London for a similar trip. May we have a debate on ensuring that the process is sped up for all those countries with which we will do increasing business over the coming years as we come out of the European Union?
Mr Lidington
When we are looking at visa policy, it is important that we get the balance right between giving potential visitors and business visitors the kind of swift service that my hon. Friend rightly wants to see and, at the same time, ensuring that we have an effective system of border control, including running the necessary background checks to guard against the risk of terrorism or other organised crime. I will draw my hon. Friend’s concerns about the Tanzanian experience in particular to the attention of the Immigration Minister.
Joanna Cherry (Edinburgh South West) (SNP)
On a connected matter, in preparation for Fairtrade fortnight, I have had to make representations to the Home Office to overturn arbitrary decisions refusing visas to Palestinians wishing to visit Fairtrade organisations in my constituency. Organisations such as Palcrafts, Hadeel, Zaytoun and the Scottish Fair Trade Forum have all invited Palestinians involved in the production of Fairtrade products to the UK for Fairtrade fortnight. Unfortunately, some—including representatives of Canaan Fair Trade, which I visited on the west bank last year—have had their visas refused. Given that the Government and the Department for International Development are eager to improve British-Palestinian trade links, may we have a debate about how the Home Office’s intransigence in dealing with visas is hampering fair trade with Palestine?
Mr Lidington
No one would want to see genuine business visitors delayed or having a visa application refused but, as I said in answer to my hon. Friend the Member for Stafford (Jeremy Lefroy), there are checks that we expect the immigration service to carry out to ensure that our immigration rules are properly observed and that we are protected against the real risk of terrorism. Potential visitors coming from an area where terrorism is rife will clearly be subjected to those checks. I do not know what happened in the individual cases described by the hon. and learned Member for Edinburgh South West (Joanna Cherry), but if she has concerns about them, she is right to take them up with the Immigration Minister directly.
Andrew Stephenson (Pendle) (Con)
The current political composition of Pendle Borough Council is 24 Conservatives, 15 Labour members, nine Liberal Democrats and one British National party member—the last BNP councillor in the country. That means that the Labour-Lib Dem coalition that runs the council currently has to rely on the support of that BNP councillor to get things through. Yesterday, the Lancashire Telegraph reported on the shabby deal done between the local Lib Dems and the Labour party, and the BNP for securing support for their budget. May we have a debate on racism, and how the Pendle Labour party and Liberal Democrats are happy to turn a blind eye to it in order to cling on to their position and expenses?
Mr Lidington
The one crumb of good news in what my hon. Friend said is that there is now only a solitary BNP councillor left in England. I would hope that all democratic political parties in Pendle and at national level would unite to say that doing deals with the BNP is utterly repugnant and unacceptable, whether at local council level or anywhere else.
Jeff Smith (Manchester, Withington) (Lab)
A recent study by Time to Change found that almost a third of men said that they would feel embarrassed to seek help for a mental health issue. Last week, it launched the “In Your Corner” campaign to encourage men to support one another’s mental health. Will the Leader of the House join me in welcoming the campaign, and may we have a statement or debate on how we can best improve men’s attitudes to mental health issues?
Mr Lidington
I strongly associate myself with what the hon. Gentleman has said. He is right to highlight the fact that men sometimes find it much more difficult to be open about mental health problems than do women. That is generalising, but I think that that generalisation is true, and I am delighted that work is going on in his constituency to try to change that.
Tom Pursglove (Corby) (Con)
The Chancellor’s announcement of £100 million for new NHS triaging projects is very welcome. In north Northamptonshire, there is a real desire to see a new urgent care hub open at Kettering general hospital, which fits perfectly with that agenda, and the Corby urgent care centre is a beacon of best practice. May we therefore have a statement next week on the Chancellor’s announcement?
Mr Lidington
My hon. Friend has the opportunity to raise that issue during the Budget debate, as this was a Budget announcement. We are looking at providing an additional £100 million to the NHS in 2017-18 for capital investment in A&E departments to help manage pressure on A&E services. Those localities that achieve some of the best results in A&E care are often those that have managed to get GPs and minor injuries units operating alongside A&Es, so I wish my hon. Friend’s health authorities in Northamptonshire well in trying to get access to this new fund.
Peter Grant (Glenrothes) (SNP)
Earlier this week, the Brexit Committee unanimously recommended that there should be an end to the practice whereby the Home Office sometimes writes to EU nationals who have established a legal right of permanent residence in the United Kingdom telling them to prepare to leave and threatening to deport them if they do not leave voluntarily. May we have an urgent statement from the Home Secretary confirming that she will act immediately to end this odious treatment of our residents?
Mr Lidington
The law is quite clear on this matter: we are still a full member of the European Union, and that means that all rights deriving from the free movement directive still apply in this country, and will do so until the date of exit. It is also the Government’s oft-repeated objective to ensure at the earliest possible stage of negotiations that we have a reciprocal agreement that guarantees the rights of EU citizens in this country and of British citizens in the other 27 member states.
Rachael Maskell (York Central) (Lab/Co-op)
May we have an urgent debate in Government time about the prospects of the 4.6 million people who are now self-employed and about those working in the gig economy? As we know, they have poor access to benefits, and they bounce along on very low incomes indeed.
Mr Lidington
All self-employed people who earn less than £16,250 will see a cut in their total national insurance contributions after the announcements made by the Chancellor yesterday. I would have thought that the hon. Lady would also welcome the fact that the new state pension will, for the first time, give self-employed people the right to accrue state pension rights that were denied to them previously.
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
On 16 February, I wrote to the Secretary of State for Defence in relation to ammunition technicians and ammunition technical officers serving in Northern Ireland and assisting the Police Service of Northern Ireland, by dealing with bomb scares, for example. The Army wanted to award these soldiers—our troops—General Service Medals for their part in Operation Helvetic. May we have a statement from a Minister on whether armed forces personnel will receive GSMs for assisting civil authorities in Northern Ireland as part of Operation Helvetic?
Mr Lidington
As I am sure the hon. Gentleman will know, there are long-standing rules in place that govern the award of medals, but I will ask the Secretary of State to attend to his letter at the earliest possible opportunity.
Patricia Gibson (North Ayrshire and Arran) (SNP)
Workers in the nuclear decommissioning industry face a very real threat to their pensions, despite cast-iron guarantees provided by Mrs Thatcher following the privatisation of the nuclear estate. That is of great concern to the workers at the Hunterston A site in my constituency. May we have a debate to fully discuss those concerns and the broken promises that are causing so much distress and alarm to workers across the United Kingdom?
Mr Lidington
I suggest to the hon. Lady that she might wish to question the Secretary of State for Business, Energy and Industrial Strategy on that at the oral questions session coming up next week.
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
Following the unfortunate comments made by Peter Duthie, the chief executive of Scottish Events Campus, in which he appeared to defend ticket touts and said that any recent issues were down to just
“a bit of…bad press”,
can we have a debate on the secondary ticket market to ensure that our constituents do not continue to be ripped off?
Mr Lidington
I think we are all well aware of how aggrieved genuine fans of musicians and sports feel when they are denied the opportunity to get tickets to their chosen event because of the activities of touts. Passing a new Act of Parliament will not necessarily guarantee an answer of the type that the hon. Gentleman wants, but it is something that the Under-Secretary of State for Culture, Media and Sport, my hon. Friend the Member for Chatham and Aylesford (Tracey Crouch), continues to keep under review.
Points of Order
Mr Charles Walker (Broxbourne) (Con)
On a point of order, Mr Speaker. How best can I advise colleagues to sup with a long spoon when dealing with a company called Veolia? Perhaps I could write to all colleagues setting out Veolia’s modus operandi, or do you have an even better suggestion?
Mr Speaker
I think the hon. Gentleman has found his own salvation. He has leapt to his feet and contrived to raise an entirely bogus point of order in order to register his concern about the company in question, of which, I confess, I know nothing, and in which dispute it would not be proper for me in any way to involve myself. I simply note, en passant, that the hon. Gentleman is indefatigable and remorseless in pursuit of his chosen campaigns and objectives.
Sir Desmond Swayne (New Forest West) (Con)
Further to that point of order, Mr Speaker.
Mr Speaker
I am not sure that it is, but we will indulge the right hon. Gentleman.
Sir Desmond Swayne
My hon. Friend cannot be allowed just to leave it like that, Mr Speaker, having whetted our appetite—we want to know what the complaint is.
Mr Speaker
May I very gently suggest, in the hope that such a practice has not been altogether discontinued in modern politics, that two hon. Members, especially when one hon. Member and the other right hon. Member are members of the same party, and obviously joined by an insatiable interest in this important matter, might consider partaking of a cup of tea in the Tea Room with each other in order courteously, and doubtless fully, to discuss it?
Sir Peter Bottomley (Worthing West) (Con)
Further to that point of order, Mr Speaker. Times have changed. If more than one person is talking to each other in this place, it is a conspiracy.
Mr Speaker
Why did I not appreciate that? I should have done and I now do so. We will leave it there for now. I am glad that colleagues are in such a good mood: at least, they are at 11.47 am; we do not know how long it will last.
Ways and Means
Budget Resolutions
(7 years, 8 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
John McDonnell (Hayes and Harlington) (Lab)
I hope that the good humour continues, Mr Speaker, but we will see. I admire the hon. Member for Broxbourne (Mr Walker) for his creativity at all times in raising matters.
You and I, Mr Speaker, have watched Budget debates in this Chamber for more than 20 years now. As you probably know, I have referred to the iron law of Budgets: the louder the cheers for the Chancellor on Budget day, the greater the disappointment three days later at the weekend. I am revising that iron law—this Budget did not last three days; it lasted less than three hours.
I will address some of the main policy announcements in the Budget, but I believe that overall the Chancellor’s statement evidenced a fundamental difference between the values of our two parties. What we saw yesterday was a Conservative Chancellor boasting about tax cuts to corporations and the rich while refusing to effectively tackle the crisis in social care for the elderly, refusing to properly fund the NHS, and increasing the national insurance burden on many middle and low-income self-employed earners, while at the same time breaking a clear manifesto promise.
Our values are these: we believe in a fair taxation system, in which everybody, no matter how rich and powerful they may be, pays their way; and we believe that through a fair taxation system and collective endeavour, the elderly and the disabled should be cared for, the sick should be treated and children should be educated to develop their talents to the full. That was not what we saw in yesterday’s Budget statement. In addition, we adhere to manifesto promises.
On the state of the economy, I saw from the Chancellor’s press briefings that all the talk before the Budget was about the aim of providing a positive backdrop for Brexit. That is not the real-world experience of millions of people. Yesterday the Chancellor boasted about economic growth, but what is positive about Britain being the only large developed economy in which wages fell when economic growth returned? What is positive about rising GDP if most people are worse off? What is positive about the national living wage being revised down again? What is positive about yet more downward revisions to wage forecasts?
How can anyone describe an economy as “match fit”, as the Chancellor did, when people in that economy are seeing their standard of living fall and fall again? Wages are still worth less than they were nine years ago. The disposable incomes of non-retired households are less than they were before the financial crisis. The official forecasts are clear: working people, as a result of the Government’s choices and this year’s Budget, will be worse off. According to official forecasts, they will be £500 a year worse off in 2021 than was predicted in the autumn statement. Average earnings are expected to be £200 lower by 2022 than they were before yesterday’s Budget. According to the Resolution Foundation, average earnings are set to return to their pre-crisis peak only by 2022 at best.
The Chancellor claimed in one press release that ours is an economy built on resilience; it is, to be frank, an economy built on sand. The fact that unsecured borrowing by households has shot up to levels not seen since before the financial crisis should be a warning sign to us all. Office for Budget Responsibility forecasts show unsecured household lending rising to a shocking 47% of household income by the end of the decade. For many people, such extra borrowing will be done out of desperation—as prices rise but wages fail to keep up, many people dig themselves deeper into debt just to get by. The Chancellor says that he does not want to put the economy on a credit card, but that is exactly what he and his policies are doing—forcing ordinary people into dependence on their credit card.
There is no resilience in an economy that is failing in its fundamentals. Business investment fell over the past year for the first time since the depths of the last recession. Companies are cancelling planned investments because they are so terrified of what the future holds under this Government, particularly with the risk of Brexit. They have seen seven wasted years pass without the investment or industrial strategy that they need from the Government, and they are now fearful of the Government’s plans for Brexit.
Productivity growth—the engine of prosperity—has stagnated. We now lag far behind similar economies. A typical British worker takes five days to produce what their German or French counterpart produces in four. The Chancellor, in a moment of lucidity, recognised the scale of the problem, but he failed to provide any new funding to deal with it. Worse than that, public sector investment will be £2.3 billion less over the next five years than was planned in the autumn statement.
Yes, people celebrated International Women’s Day, but while there were calls for a Budget that works for women, they have been ignored. Women are still bearing the brunt of this Tory Government’s failed austerity agenda, with 86% of cuts falling on women—that figure is unchanged since last year—and the Government have yet again ignored the hundreds of WASPI women who turned up yesterday to lobby Parliament. Things are just as bad as ever for women under this Government. Labour calls on the Government to publish urgently an analysis of the true impact on women of their Budgets and spending announcements, and to explain how they intend to reverse this disproportionate impact. Under a Labour Government, all economic policies will be gender-audited to ensure that we have an economy that works for all.
Let me turn to some of the policy announcements in the Budget, such as on self-employment. The Chancellor’s decision to push a £2 billion tax rise on to low and middle earners who are self-employed makes little sense.
Sir Desmond Swayne (New Forest West) (Con)
I would be the first to say that we need to find new ways to reward entrepreneurs and risk takers in our tax system, but does the right hon. Gentleman accept that the difficulty is that at present there is no way of distinguishing between such a person and a professional such as a journalist who has sought an arrangement with their editor to be paid as self-employed? On the low-paid, 60% of people who are self-employed will see a reduction if we take into account the change in class 2 contributions.
John McDonnell
The right hon. Gentleman raises a valid point about bogus self-employment. We thought that the Chancellor might have mentioned that in his statement, but he never referred to it. That needs to be addressed, because many people are forced or manipulated into self-employment. Bogus self-employment needs to be tackled, and we have campaigned for that along with a number of organisations, including several trade unions and the Federation of Small Businesses.
We saw middle and low earners hit yesterday. Someone on £20,000 will lose about £250 a year, while someone on £40,000 will lose nearly £650 a year—those are the consequences. I do not think that those people are high earners; they are middle to low earners. They should be protected, particularly at a time when, to be honest, there is frailty in the economy, with consumer spending just dipping on the latest figures. Those at the forefront of the impact of the dip in consumer spending are largely existing sole traders and small traders—the window cleaners, drivers and others—and they will be hit. The policy is wrong, and this is also the wrong time to put their careers and jobs in jeopardy.
The justification for yesterday’s policy just does not stand up. The Government cannot demand more taxes from people without offering something in return. The Labour party are fully behind looking at how the labour market is changing—the right hon. Gentleman is right about that—and the shadow Secretary of State for Work and Pensions, my hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams), spoke last year about the principles that should guide such changes. We have regularly raised the problem of bogus self-employment.
Norman Lamb (North Norfolk) (LD)
Does the right hon. Gentleman share my view that a lot of the people on low pay in self-employment get no paid holiday and no paid sickness absence, and have no protection against termination of employment?
John McDonnell
I will tell a quick anecdote. I was on the tube a month ago when a worker got on and sat down next to me. He was in his overalls as he was on the night shift. He had worked for Tube Lines before the company went bust. He is a rail maintenance worker, which is a skilled job, but he is now employed by an agency and does not know whether he will have work tomorrow, the next day or whenever. He has no sick pay and no holiday pay, and if he does not turn up for work, he does not get paid. He has to pay an accountant to deal with the tax on his salary payments. At the same time, he can be exploited by being sold on from agency to agency. That is not real self-employment; that is the exploitation of someone who has been forced into self-employment. Such issues must be addressed. This insecurity is not just because of the gig economy, but because of what has happened in recent years, with people being forced into self-employment. Those issues were not even addressed yesterday. There is a problem of employers shirking their responsibilities by forcing staff into self-employment.
Yesterday, we got not a package of measures designed to address the problems of the modern world of work, but a single, unilateral tax hike for the self-employed. People earning over £8,000 will be hit. The Chancellor tried to disguise that by bundling the measure in with the re-announcement of abolishing class 2 national insurance payments, but yesterday’s Budget documents are clear that this is a tax hike of £2 billion, targeted at the self-employed. Increasing the taxes paid by self-employed people does not move them to parity with the employed, because they do not receive the same benefits as the employed. The Chancellor says that he is concerned about the gap between different contribution rates, but the Labour party does not believe that the burden of closing that gap should fall on some of the lowest paid workers who are also those in the most precarious position in our society.
Mr Steve Reed (Croydon North) (Lab)
Does my right hon. Friend agree with the Conservative Croydon councillor, James Thompson, who tweets:
“Disgusted by this so-called Conservative government hitting the self-employed”.
John McDonnell
I find it interesting that the response to yesterday’s statement has been anxiety right across the political spectrum. I hope that the Chancellor is listening. I hope that the Labour party and others in the House will combine with some Conservatives who are concerned and that we will force the Chancellor to think again.
The Chancellor says that he is concerned about the gap between different contribution rates. We do not believe that the burden of closing the gap should fall on some of the lowest paid workers, but that is the consequence of yesterday’s decision. The Government are making minicab drivers pay more. They are taxing Uber drivers while at the same time cutting the taxes of Uber itself. A hairdresser earning £15,000 a year will be £137 worse off as a result of yesterday’s measures. That cannot be fair—it just cannot be right.
And, yes, this is a manifesto betrayal. There was a promise in the manifesto and it read like this:
“This means that we can commit to no increases in VAT, Income Tax or National Insurance. Tax rises on working people would harm our economy, reduce living standards and cost jobs.”
That was not me or Labour MPs, but the Tory manifesto. The Government have been trying to muddy the waters by talking about a Bill they brought forward in 2015. That Bill sought to cap class 1 contributions—Labour supported it—but it did not even allude to the idea that any other classes would see increases. To quote the current Chief Secretary to the Treasury speaking in Committee:
“we do not have further proposals other than those that we previously set out”.––[Official Report, National Insurance Contributions (Rate Ceilings) Public Bill Committee, 27 October 2015; c. 16.]
Some have tried to portray yesterday’s announcement as progressive, but what is progressive about raising taxes for low-paid drivers while the Government go ahead with cuts to capital gains tax for a tiny few? What is progressive about raising taxes for low-paid self-employed cleaners while the wealthiest families in the country get an inheritance tax cut? What is progressive about raising taxes for plumbers while multinational corporations see their tax bills slashed year after year? What is not fair is £70 billion of tax giveaways for the wealthiest and the corporations while taxes are hiked for middle and low earners. Just because the higher paid will pay a bit more, that does not make it right for the Government to clobber those on low incomes to plug a gap in their finances.
Interestingly, the Government have promised a review, but the tax hike is already scheduled. It may be that there is jam tomorrow on benefits, if one chooses to believe the Government, but who would believe them after they have broken a clear manifesto promise? The Government could not have made their interests more clear in hiking taxes for the self-employed while slashing taxes for the corporations. I quote the Federation of Small Businesses:
“Increasing this tax burden, effectively funded by a reduction in corporation tax over the same period, is the wrong way to go”—
I agree.
Meanwhile, the Government’s small, incremental reforms to business rates fall far short of the radical long-term reform that is needed. They are just trying delaying tactics. Business rates are a ticking time bomb that threatens to destroy many of our town centres. To be frank, this is a Government of the giant corporations and tax avoiders. It is not a Government for workers, not a Government for the self-employed and not a Government for small businesses.
Let me turn to the social care system and yesterday’s announcements. Our social care system is in crisis. I have an anecdote about a constituent I visited last week. She is a young woman who looks after her father, who has had seven strokes, and a mother with dementia. She is trying to hold down a job, but cannot get the care. As a result, she has cut her hours, rendering the income into her family and for her own children extremely tight. It is a difficult situation. That one example from my constituency exemplifies what is happening right across the country. People are suffering in that way in virtually every constituency.
According to the King’s Fund, social care needs £2 billion now just to cope with the emergency. The Chancellor failed to grasp the scale of the crisis. The money announced yesterday amounts to less than a third of what is needed. What I resented yesterday was that it had been trailed in the media that £2 billion was coming, but we were not told until the last minute that it would be over three years. That is nowhere near enough to meet the crisis that people are enduring at the moment. There are now more than a million people, mainly older people and frail people, who are desperate for social care but still cannot get it as a result of the failure to address the emergency we are facing.
Mr Peter Bone (Wellingborough) (Con)
The right hon. Gentleman is, as usual, making a very clever speech. I understand that the Budget debate is a political moment, but does he think that at some time down the road both sides can work together, not on this model but on a new model for social care?
John McDonnell
I always respect the hon. Gentleman’s interventions because he seeks to find solutions.
John McDonnell
Exactly. It is exactly as my hon. Friend says from a sedentary position. The Labour party tried the bipartisan approach. Hon. Members worked in good faith to seek a long-term resolution to this matter. They looked at a range of options, but halfway through the discussions we were, to be frank, betrayed. Instead of a bipartisan approach, it became a political campaign of the worst order. That was a betrayal of confidence. It will take a lot, to be frank, to regain that confidence to enable us to take a bipartisan approach. We are willing to have discussions with anybody anywhere, but the treatment last time went beyond political knockabout. It was an undermining and a betrayal not just of the Labour party but of frail elderly people and their families who desperately need a solution.
Families are imploding as a result of the lack of social care, because of the burden they are suffering. The Women’s Budget Group conducted an analysis of the Budget last year and this year. It identified two groups of people who have been hit hardest by austerity measures: younger women with children, and older women. Initially, I could not understand why, but the WBG explained that unfortunately in our culture the burden of care still falls on women. Retired women fill the gap when social care is no longer provided. We are always willing to talk to anyone to find a practical solution, but it is against the backdrop of betrayal and bad faith in the past.
Norman Lamb
I welcome the right hon. Gentleman’s commitment to talk to anyone to try to find solutions. He may be aware that we have launched an initiative with Labour, Conservative and Liberal Democrat MPs to try to establish an NHS and care convention. Will he back that bid? It is essential that we set up a process to establish a long-term settlement.
John McDonnell
That is a process of bringing MPs together as individuals, not as party representatives—let us be absolutely clear about that. We look forward to any proposals that come forward for consideration from any source. If we can find a practical way forward, we certainly will.
The most important thing is that we have an emergency at the moment. We need £2 billion now, not over three years, because people are suffering now. Families are imploding. I felt a sense of relief when it was trailed that we were going to get £2 billion. I then felt extreme disappointment when we were then told it would be £2 billion over three years. That was never mentioned in the press releases before the announcement.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
Does my right hon. Gentleman agree that the January figures for those waiting more than four hours for accident and emergency, which at 86% are the worst on record, are another example of how our health and social care systems are at crisis point?
John McDonnell
As always, my hon. Friend has pre-empted my remarks. Not only did the Government fail to address social care yesterday, but they failed to address in any way the crisis in our NHS. It was completely ignored.
Ahead of the autumn statement, Labour and others were warning that the NHS was in crisis. It was in crisis before the winter, but the Chancellor could not find a single penny for the NHS in the autumn statement. The Royal College of Nursing now says that the NHS is in its worst crisis ever. Ahead of the Budget, the British Medical Association called for another £10 billion for the NHS. As my hon. Friend has just said, A&E waiting times have today got worse again—more people are waiting longer. It is astonishing that there was a complete failure on the part of the Chancellor in the Budget to recognise the scale of the crisis that our hospitals and doctors face. It is a crisis that the Government created by cuts.
Instead, we have a £100 million fund to enable GPs to triage in accident and emergency. The capital spend will build rooms for GPs in hospitals with no GPs to staff them, because no revenue funding is associated with the proposal.
Keith Vaz (Leicester East) (Lab)
The issue is not just the immediate crisis in the NHS, but the preventable future crises that will come from long-term conditions such as diabetes. There seems to be no planning for the future. Does the shadow Chancellor agree that we have missed an opportunity to invest in prevention to save the taxpayer an enormous amount of money in future?
John McDonnell
I congratulate my right hon. Friend on his campaign, which he has stuck with for a number of years. I remember him saying that some years ago under a previous Secretary of State. Assurances were given about investment in preventive medicine and so on, but then what happened? We had an unnecessary £3 billion reorganisation imposed from the top and the money was lost. I regret that my right hon. Friend has had to continue his campaign. We need investment in preventive health, but we also need emergency funding now for the NHS.
This shows the difference in values. Labour says we need investment in the NHS, but the Government believe we need tax giveaways of £70 billion over the next five years to those who need it least. People are suffering in the NHS and they need social care. People are dying because of the Government’s decisions. They have failed to address them, but have also prioritised tax cuts for big corporations and the wealthiest few rather than investment in our NHS.
On education and skills, the Chancellor claimed in his speech that the Budget was for the young and for skills. He waxed lyrical about the need to provide decent chances in life for all. We share those sentiments—extra funding for training is welcome—but the £500 million of additional skills funding is nowhere near enough to undo the damage of seven years under this Government. Adult skills funding has fallen by 54% since 2010, which is a cut of £1.36 billion. That £500 million does not even come close to reversing the damage already done.
The Chancellor is providing £1 billion for the vanity project of free schools. That is more money for the ludicrous throwback of grammar schools. Thousands of Whitehall hours have been wasted on schemes for a tiny handful of privileged children, leaving the rest to fail. It is the same old Tories, isn’t it? There are real-terms funding cuts for the state schools that 95% of our children use. They are the first cuts since the last Conservative Government. Fifties throwbacks and fantasies are not how we should run a modern education system.
Finally, the Chancellor never spoke the word “Brexit” in his speech yesterday. Shocking. The Chancellor was silent on the greatest challenge facing this country. The word “Brexit” never passed his lips once during his speech. As Britain prepares to begin the process of leaving the European Union, the Chancellor had nothing to say on the matter. It should be clear why. I do not think he agrees with the position of his Government. The Prime Minister claims that no deal is better than a bad deal, which is absurd—no deal would be the worst possible deal. The Chancellor knows that very well. He knows it is a risk, because the warnings come not just from Labour but from manufacturers, business leaders, employers organisations, trade unions and a wide range of civil society organisations. They come from economists and international organisations as well. The Chancellor is being told from every part of our economy that to crash out of the European Union without a trade deal will be disastrous. We will be cut off from investment and our biggest trading partner. We will be cut off from the skills of EU nationals, who have made so much of a contribution to our economy and society. It is a disgrace that those EU nationals live with insecurity still because the Government will not give them the assurances they need, but that is where the Conservative party is setting its course.
Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
Given that Brexit is the greatest economic challenge facing the country, I agree that it was shocking that there was so little mention of it in the statement and the Red Book. Does my right hon. Friend agree that it was also shocking that there was a complete absence of any commitments on regional funding, which we are set to lose in places like Wales as a result of leaving the European Union? The Government have repeatedly failed to guarantee that we will not be a penny worse off as a result of leaving the EU.
John McDonnell
In a past life, as chief executive of the Association of London Government, I was responsible for managing European funds for London, including the European regional development fund, the European social fund and a range of other funds. I know what contribution those funds make. I also know how much investment they prise in from elsewhere, what match funding is required and how to build transnational partners into the creative development of ideas. All that will be lost to us because the Government will not give the assurances we need.
Ms Angela Eagle
In the Liverpool city region, we are meant to welcome £30 million a year over the next 30 years, which is £900 million. We have lost more than £1 billion in direct funding cuts to our five local authorities. Half a billion pounds in European funding has been granted for the last two rounds, but there is no guarantee of anything in future. Does my right hon. Friend agree that that is a problem for our regional development and funding in trying to grow our economies from the bottom up?
John McDonnell
I know how hard my hon. Friend has fought on these issues, and I congratulate her. She has a grassroots understanding of the consequences of that lack of funding, and of the implications for her region and city. The consequences of the lack of investment are staggering, but it also undermines confidence in the private sector to match fund and invest. That is what we are seeing, even at the first stage, and yet, as my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty) said, we heard in the Chancellor’s statement not a word of assurance to anybody, whether council leaders, business investors or workers. I found that disgraceful.
It is interesting that, prior to the Budget, the Chancellor and allies floated the idea that he was garnering a £60 billion fighting fund to deal with Brexit. It is not a fighting fund; it is a failure fund. He is having to put aside cash to deal with the consequences of what he knows will be a Tory Brexit failure. That is what the failure fund is for.
Keith Vaz
On Brexit, I wonder whether my right hon. Friend shares my concern that no provision has been given to the Home Office for processing the applications of 3.2 million EU citizens. The Home Office has suffered enormous cuts over the past few years and will simply be unable to deal with the applications that will be made. Currently, there is a seven-month wait to get a certificate to remain. Does he believe that provision should have been made for that?
John McDonnell
It is not just that provision should be made, but that the cuts have established that situation. Whatever system is introduced, that organisation will not be fit for purpose because of a lack of investment over the recent period, which my right hon. Friend has consistently pointed out.
We understand the vote in the referendum. People voted to leave, but we repeat time and again that they did not vote to trash their jobs, their livelihoods or the economy. A responsible Government would ensure that jobs and the economy were protected. A responsible Budget ahead of article 50 would have shown how the Government would protect both. The Chancellor had a responsibility and failed to deliver on it.
The Chancellor has dared to talk elsewhere about the difficult decisions he had to make. It is not he who is making the difficult decisions; it is the NHS manager in a hospital deciding whether someone will have a bed or a trolley; a police commissioner deciding which streets will be patrolled; or a council leader deciding which children’s centre will be closed. They are the ones with difficult decisions, not the Chancellor. He is passing the buck to others for his cuts.
I think that the Chancellor lives in a world in which he is completely insulated from the consequences of his decisions. He can sit in No. 11 and delete lines from his spreadsheet without a thought for the consequences. For him, it is all in a day’s work, and it is the rest of our society who must deal with the results. We have had seven long years of austerity from this Conservative Government, and the spending cuts have dragged our economy and society to the brink.
The suffering has been immense, and it is not the Chancellor or his colleagues who have been on the receiving end. It is their victims: those parents who cannot get a school place at the moment, those young people who cannot get a decent home because of a housing shortage, those families who cannot get care for their parents. We have seen public services shredded and basic standards in public life torn up, and for what? So that this Government can add three quarters of a trillion pounds to the national debt. After seven years of austerity, and two years after it was supposed to have ended, what can we look forward to? Continual cuts in public services for the rest of the decade.
This was a Budget of complacency. We need a Government who will introduce a fair taxation system, who will use public resources for long-term, patient investment in our economy, who will tackle tax evasion and avoidance at the same time, and who will grow our economy but, as we build a prosperous economy, will ensure that that prosperity is shared by all rather than being given away in tax cuts for the rich and the corporations. Yesterday’s Budget was not just complacent; it was arrogant, and it was cruel.
The Secretary of State for Communities and Local Government (Sajid Javid)
Yesterday the Leader of the Opposition gave a response that sounded as though it had been written a week ago, regardless of what was actually in the Budget, and now the shadow Chancellor has just done the same. That shows us all, once again, that the Labour party never learns.
There has been no recognition of the state in which the right hon. Gentleman’s party left the country’s finances, no awareness of the millions of lives devastated by Labour’s record-breaking recession, and absolutely no understanding of the most basic rule of any responsible Government: if you want to spend money, you have to raise it. If the right hon. Gentleman had been standing on the steps of No. 11 yesterday, holding up his little red book—I mean box—he would have come here and announced half a trillion pounds of additional borrowing, and every last penny of that, every last penny, would have had to be serviced and paid off by our children and our children’s children for decades to come. [Interruption.]
Let me explain to the hon. Member for Newcastle upon Tyne Central (Chi Onwurah), who is speaking from a sedentary position, how finance actually works. If you borrow money, you have to pay it back. Tens of millions of hard-working Britons know that. They do it every month, with their mortgages, their loans and their credit card bills. That concept, however, seems to elude the right hon. Gentleman. Well, let us hope that he learns something today: after all, I have always been a great believer in workplace learning.
Ms Angela Eagle
Obviously it is important to get the deficit down. The Government said that they would eliminate it by 2015, two years ago, and now the Budget document makes it clear that it may not be eliminated by 2025. Is that the Secretary of State’s definition of success—being 10 years late with a five-year plan?
Sajid Javid
We have heard no apology from the hon. Lady for the fact that during the 13 years in which Labour was in power, there was an almost threefold increase in the national debt and the country was left with a larger budget deficit than any other major advanced economy.
Seema Malhotra
Can the Secretary of State name a promise that the Government have actually kept in relation to the economy?
Sajid Javid
One kept promise on which the hon. Lady could have focused is the creation of 2.7 million jobs in our economy since 2010. They call themselves the Labour party, Madam Deputy Speaker, but they could not care less.
Oliver Dowden (Hertsmere) (Con)
Does my right hon. Friend think that the £500 billion-worth of additional spending proposed by the Labour party would do anything to increase or reduce the deficit?
Sajid Javid
As always, my hon. Friend makes a good point. Conservative Members know that, if implemented, Labour’s plans would result in not only more spending but more debt. Labour Members would increase the deficit and return us to another Labour record-breaking recession if they ever had the chance.
Several hon. Members rose—
Sajid Javid
I will plough on, but I will give way again shortly.
Figures released since the autumn statement have provided further evidence of the fundamental strength and resilience of the UK economy. Growth is forecast to hit 2% this year, the deficit is on course to reach its lowest level in two decades, and debt as a proportion of national income is forecast to begin falling in 2018-19 for the first time in more than 15 years.
Stephen Doughty
If we borrow money, of course we must pay it back. Why was there no mention of Brexit in the Budget, given that, according to the Office for Budget Responsibility, the cost of Brexit to the public finances could be an extra £58 billion? That is a huge sum, which we would have to repay.
Sajid Javid
My right hon. Friend the Chancellor talked about leaving the European Union. In fact, I think that that was one of the first things that he mentioned in his Budget statement. It is a shame that the hon. Gentleman was not listening.
Most important, the success that I have described is being felt in the pockets of ordinary working people, with real wages forecast to rise in every year up to 2020-21. Britain is home to more private sector businesses than ever before, and that is providing more jobs than ever before. We have gone from record-breaking recession to record levels of employment. But of course we are not complacent: there is much more to do. Going on a wild spending spree simply because of improved growth forecasts would be like going down the pub to celebrate the extension of an overdraft. Our focus on sustainable, stable public finances must continue, and the Budget provides for exactly that.
Mr Reed
The Secretary of State is lecturing the House on how finance works, but we would like to know more about how it works in his Department. He has denied offering Surrey County Council a sweetheart deal, but the BBC has now published a letter from officials in the Department for Communities and Local Government which shows that they did, in fact, offer Surrey more cash in a unique deal. Did the Secretary of State know about that letter when he issued his denial?
Sajid Javid
If the hon. Gentleman had cared to look at a written ministerial statement published on 9 February, he would have seen that it states very clearly that Surrey approached the Department, as do many other councils before a financial statement, asking for more money. It made a request for a business rates retention plan, which was firmly rejected.
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. If Members want to intervene, they can stand up and intervene, but we must not have chuntering from a sedentary position; or rather—let us be honest about it—when you are sitting down, you do not speak in here. Otherwise, we cannot hear who is actually speaking. We must hear one person at a time, and now it is Mr Charles Walker.
Mr Walker
Thank you very much for that protection, Madam Deputy Speaker. It is much appreciated.
I thank my right hon. Friend the Secretary of State for visiting Broxbourne last week. May I divert him from Surrey to Hertfordshire, where a much bigger problem relates to an incinerator application? The awarding local authority, Hertfordshire, is also the planning authority in this instance, which strikes me as a conflict of interests. I suspect that my right hon. Friend cannot focus on that now, but will he take into consideration such conflicts of interest in local authorities?
Sajid Javid
I think my hon. Friend will understand that it would not be appropriate for me to comment on a particular planning application, but if he would care to furnish me with more information, I am sure that officials in the Department will take a look at it.
Sajid Javid
I will in a moment.
By maintaining a robust, growing economy, we will be well placed to make the most of the opportunities that Brexit will bring. The Budget also allows us to make additional commitments in a number of areas without putting our hard-won economic recovery at risk. The first of those areas is adult social care. The true measure of any society is how it cares for its most vulnerable citizens. Given advances in medical care and an ageing population, many councils have found it increasingly difficult to meet the costs of care in their communities.
Mr Reed
I am grateful, because social care was the subject of the correspondence with Surrey County Council. When the Secretary of State issued his denial, was he aware that his own director of local government finance, Matthew Style, had sent a letter to the council offering it a unique financial deal?
Sajid Javid
I think I have already answered that question for the hon. Gentleman: there was no deal available to Surrey that is not available to any other local authority.
I have been working on adult social care with my right hon. Friends the Secretary of State for Health and the Chancellor of the Exchequer. The result is a Budget that delivers £2 billion of additional funding for adult social care. Let me be very clear: every single council in England responsible for adult social care will benefit from this additional funding, rural or urban, north or south, Labour or Conservative. To allow councils to move fast so that they can put in place extra social care packages as soon as possible, we will publish the allocations later today. This additional money, front-loaded for 2017-18, will make an immediate difference to people in our communities who need care and support, and it will bring the total dedicated funding available for adult social care in England to £9.6 billion over the course of this Parliament.
I know that this is a novel concept for the Labour party, but more money is not the only answer. This Government are not just dedicated to sustainable economic growth; we also believe in sustainable public services. Demand for adult social care is not about to stop rising, and the challenge of paying for it is not going to go away. The £2 billion announced in this Budget will make a significant difference over the next three years, but the challenge will not suddenly vanish in 2020.
The funding model for the adult social care system is clearly in need of substantial reform and improvement; it has to be made fairer and more sustainable, and we are absolutely committed to doing just that. We are looking at all the options, and later this year we will be publishing a Green Paper setting out a long-term plan that will ensure that proper care is provided to everyone who needs it.
Bob Blackman (Harrow East) (Con)
The announcement of money now will be warmly welcomed across the country, but before my right hon. Friend announces the details of the long-term plan, which we welcome as well, the short-term issue is whether the money is new money or money being brought forward from later years, and whether it will be added to baseline budgets so that local authorities can expect to receive that funding each year, rather than being just one-off funding. Finally, the formula by which this is distributed is key, because different local authorities are under different levels of pressure.
Sajid Javid
I am pleased that my hon. Friend asks that question as it allows me to say more on this issue. First, I can confirm that the £2 billion is all new money; it is new grant from central Government. Secondly, I can confirm that it will be added to every local authority’s baseline over the next three years as that money is distributed. My hon. Friend also rightly asked about how it will be allocated. The vast majority of the money will be allocated using the improved better care formula that already exists and is transparent and open, which will mean that account can be taken of not just the needs of every local authority but of their ability to raise money through council taxes. A small portion—10%—will be allocated using the existing relative needs formula, and the purpose of that is to make sure that every local authority in the country that has responsibility for adult social care is able to access new funding.
Barbara Keeley (Worsley and Eccles South) (Lab)
The Secretary of State tells us that the vast majority of the money will be allocated via the better care fund. We know that the settlement before Christmas caused problems and that a third of councils lost out, including mine which lost out because of the adult social care bill. Will he say how the rest of the money will be allocated?
Sajid Javid
I thought I had just made that clear, but I will repeat it and be a little more specific: 90% will be allocated using the improved better care fund formula and 10% will be allocated using the relative needs formula. These are two existing formulae already in place and, as I said, further details will be published this afternoon, with the allocations and a description of those formulae. I hope that is helpful to the hon. Lady.
We also need to make sure that councils deliver the best possible local care services. There are many excellent examples of best practice around the country, but there is a big difference between the best-performing and worst-performing areas. There is clearly room for improvement across the sector, so alongside the additional funding announced in the Budget my right hon. Friend the Health Secretary and I will shortly announce measures to help ensure that those areas facing the greatest challenges can make rapid improvement.
Looking at health more widely, we are already committed to a £10 billion annual increase in NHS funding by 2020. This Budget goes further still: there is £325 million to allow the first NHS sustainability and transformation plans to go ahead, meaning more efficient and more effective healthcare for local people; and there is another £100 million to fund improvements in accident and emergency departments for next winter, including better on-site triage and GP facilities. That is enough to fund up to 100 new triage projects, taking some of the strain off our A&E departments.
Norman Lamb
The Secretary of State mentions the £325 million, but does he acknowledge that £1.2 billion was taken out of capital spending in the current financial year, and that this money will only go to about six STP areas, leaving the rest of the country without extra capital spending at all?
Sajid Javid
I know the right hon. Gentleman cares about this issue and was deeply involved in it when he was a Minister. I am sure he knows that when the Government set out their plans for the additional £10 billion per annum by 2020, the NHS five-year plan was calling for £8 billion. This goes over and above that. The announcement made in yesterday’s Budget of the additional £325 million plus the £100 million is on top of the £10 billion per annum.
Keith Vaz
Does the Secretary of State share my concern that there is not enough emphasis on prevention for long-term conditions such as diabetes? His ministerial colleague sitting on his left, the hon. Member for Battersea (Jane Ellison), was probably the best diabetes Minister we have ever had, and a lot of what she did was on prevention. Why has more money not been made available for investing in the future and cutting the taxpayers’ contribution in years to come by setting up prevention centres for conditions such as diabetes?
Sajid Javid
The right hon. Gentleman makes a good point about the importance of public health, and he is absolutely right to pay tribute to the former Health Minister, who is now the Financial Secretary to the Treasury, for the work she did. I hope he will agree with me that the work that my hon. Friend and others did shows that they have taken this issue seriously. Some of the measures that the Chancellor talked about in his Budget statement—the so-called sugar tax, for example—will help in the long term with prevention, especially in the case of diabetes.
Health and social care are not the only public services that we are investing in. The Budget funds a further 110 new free schools. It funds free school transport to include all children on free school meals who attend a selective school. It also provides an additional £216 million of investment in existing schools.
When I was a teenager, my comprehensive school refused to let me study the A-levels of my choice; the people there said that it would be a waste of time and that I should leave school and just go and get a job instead. What I did was get on the bus and go to the other side of Bristol to sign up at Filton Technical College. I am proud to call myself a graduate of FTC. The education I received there was second to none. Without Filton, I certainly would not be standing here today—so you can blame them if you wish I wasn’t.
Many opportunities were opened up by my time at Filton, but for years afterwards I would still see eyebrows raised and sneers barely supressed when I said that I had been to a technical college. For too long in this country there has simply not been parity of esteem between valuable technical education and more academic study. As Business Secretary, I began the process of changing that, including by creating the Institute of Apprenticeships. I am very pleased that the introduction of T-levels announced yesterday will continue that process.
We are following the work carried out by Lord Sainsbury, Baroness Wolf and other experts in this field to radically improve technical education, and in doing so we are investing an additional £500 million a year in our 16 to 19-year-olds. We will also be offering maintenance loans for those undertaking higher level technical qualifications at the new institutes of technology and national colleges.
Seema Malhotra
Notwithstanding the challenges Labour has posed on the Budget, I welcome the T-levels and the emphasis on technical education. I think the Secretary of State will acknowledge that Labour Members have also argued for an increase in vocational education. This sends a very important message to the young people in my constituency who I talked to yesterday that there is great value in having this alternative. The challenge will be to integrate it well enough in the workplace so that it leads to real, skilled jobs in the future.
Sajid Javid
The hon. Lady rightly points to the challenge of ensuring that employers recognise the changes. Initiatives such as the new Institute of Apprenticeships, which is employer-led, will help to set the standards for the technical training. That will make a difference in ensuring that employers welcome the new qualifications.
The measures I have talked about so far will improve lives right across the country, but we recognise that local areas across Britain want greater control of their own services and infrastructure. The Government, the Greater London Authority and London Councils have reached an agreement on further devolution for our great capital city. This includes exploring a pilot for a development rights auction model and joint work to identify what elements of the criminal justice services can be delivered locally. We will also be agreeing a second health and social care memorandum of understanding to support work on prevention, integration and estates reform.
However, there is more to this country than its capital city. I should know: I was born in the north, raised in the south-west and elected in the midlands. Today, the Chancellor is in Dudley, launching our midlands engine strategy. This follows the northern powerhouse strategy published after the autumn statement.
Richard Burden (Birmingham, Northfield) (Lab)
The Secretary of State and I are both midlands Members of Parliament. I welcome the focus on the midlands in the Budget. There are some useful initiatives in it. Would he care to comment on the strategy being brought forward today by Midlands Connect? It is charged with looking at the transport infrastructure side of delivering the midlands engine, and in particular at east-west connectivity, and it makes it clear that, for the midlands engine to work and deliver its potential, it will need a long-term perspective and investment of £1 billion per annum over a 30-year period. What confidence can we have that that long-term commitment will be given?
Sajid Javid
As a midlands MP, the hon. Gentleman will understand that the devolution deal for the region will lead to additional funding of more than £1 billion over the next 30 years, which can be invested in priorities such as transport infrastructure. I believe that the right leadership is in place, and that that is exactly what will happen. That is why I am supporting Andy Street to become the next Mayor, and I hope that the hon. Gentleman will join me in expressing his support for him. Perhaps that is what he was just doing.
The hon. Gentleman will also be pleased to hear that this morning we published details of £392 million of additional funding for the midlands, allocated through the third local growth fund. That money will further unlock the region’s potential, funding infrastructure and creating jobs. Much of it will go to Birmingham, for example. The Budget includes £90 million for the north and £23 million for the midlands from a £220 million fund that addresses pinch points on the national road network. The Chancellor has launched a £690 million competition for local authorities across England to tackle urban congestion and get local transport networks moving again. That is a serious investment in our communities that will make a real difference to the daily lives of millions of people and countless businesses. We can make that investment precisely because of the fair, progressive changes that we are making to the tax system. We are levelling the playing field between employees and the self-employed, and 60% of the self-employed—the lowest earners—will gain from these reforms. We are also continuing to reduce corporation tax on all profitable companies, large and small, so that hard-working entrepreneurs keep most of the fruits of their labours.
We are taking a number of steps to make business rates fairer. I have never made any secret of my support for business, and for small businesses in particular. Seeing my dad’s shop struggle was one of the reasons I came into politics in the first place. From the biggest cities to the smallest villages, the local high street and the local pub form the heart of countless communities across our country. That is why the Chancellor and I listened closely when concerns were raised over this year’s business rate revaluation, and why I was happy to work with colleagues across Government to secure action.
The majority of business will see no increase or even a fall in their business rates, but I know that if someone’s rates are going up, it is no consolation to hear that someone else’s will be going down. The bigger picture will not pay their bills, so the Budget introduces three new schemes that will help businesses facing steep rises. The first involves additional support aimed specifically at small and rural businesses that are losing some or all of their rate relief and are facing large percentage increases in their bills as a result. The additional relief will limit the annual increase in the bill for an eligible business to the greater of either £600 or the cap in increase for small properties in the existing transitional relief scheme. That is 5% in real terms in 2017-18. No small business losing some or all of its relief as a result of the revaluation should see its bills rise by more than £50 a month in 2017-18.
The second measure is the establishment of a £300 million discretionary fund for local authorities to use over the next four years. Each billing authority will receive a share of this funding and will be able to use it to deliver targeted support to the most hard-pressed ratepayers in its area. This will allow local authorities to more than double the amount they spend on discretionary relief in 2017-18. Finally, there is a new relief for pubs. This will provide a flat £1,000 discount in 2017-18 on bills for all pubs with a rateable value below £100,000. My Department will be publishing full details later, but up to 36,000 pubs—that is approximately 90% of them— could benefit from the relief. The cost of all three models will be met in full with new money allocated by central Government.
Recent consultations have shown little appetite for wholesale reform of the business rate system. However, there is scope to reform the revaluation process, making it smoother and more frequent to avoid the dramatic increases that the present system can deliver. We will set out our preferred approach to delivering this in due course, and will consult on it before the next revaluation is due. In the medium term, we need to find a better way of taxing the digital part of the economy so that online businesses do not enjoy an unfair advantage. This is another example of the way in which this Government deliver lasting reform alongside immediate investment. It is the difference between a sticking plaster and long-term cure.
Sir Peter Bottomley (Worthing West) (Con)
The Chancellor has announced that there is to be a Green Paper on dealing with unfair clauses and terms in consumer contracts. I do not know whether the Secretary of State has been paying attention to the difficulties that leaseholders are facing, but will he ensure that, one way or another—preferably one way and another—those are taken into account, if necessary through a super-complaint, so that unfair terms can be struck out and those who exploit leaseholders can be dealt with firmly?
Sajid Javid
I commend my hon. Friend on the work that he has done on leasehold abuses. That Green Paper is being led by my right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy, and we are considering whether leasehold abuses could be included in it.
We are not just putting billions of pounds more into adult social care; we are developing a whole new strategy to safeguard it for the long term. We are not just tackling the short-term problems created by the business rates revaluation; we are looking at ways to improve the system for many years to come. We are not just continuing to invest in world-class public services; we have also asked Sir Michael Barber to look at ways of making government more efficient so that we get maximum value for taxpayers’ money.
As we debate the Budget, let us not forget that every last penny invested by any Government ultimately comes from taxpayers—from hard-working employees and fast-growing businesses—and they can succeed only if we have a strong, stable, sustainable economy. Without that, there would be no NHS, no outstanding schools, no social care for the vulnerable and no support for small businesses. We have all seen what it looks like when Governments forget that. After 13 years of Labour rule, their Chief Secretary to the Treasury said that there was no money left.
The Leader of the Opposition stood at the Dispatch Box yesterday and made promise after promise. It was fantasy economics, with billions upon billions of pounds in unfunded and unaffordable measures that would undo in an instant everything the people of this country have worked so hard to achieve over the past seven years. We are cutting the tax burden on businesses; he wants to increase it. We are reducing the deficit; he wants to raise it. We want to borrow less; he wants to saddle our children with the bill for another reckless spending spree. Government Budgets are big, complicated things, but they are simple at their heart: if we want to spend more, we have to borrow more, tax more, or cut spending elsewhere. Anyone who says otherwise is not being straight with the British people. There is no such thing as a magic money tree. Sustainable public services can be funded only by sustainable growth. This Budget delivers both. The Opposition would give us neither.
Roger Mullin (Kirkcaldy and Cowdenbeath) (SNP)
During the heated interchanges that took place a short time ago, I was wondering whether this was merely a private fight or if anybody could join in—I will take this opportunity to join in. Let me declare first of all that my approach to understanding economics is different from that of the Front-Bench spokesmen, so if the House will forgive me, I will take a couple of minutes to set out why I see things slightly differently so that Members can better understand my critique of particular aspects of this Budget.
I am highly critical of an approach to economics that seeks to mimic the physical sciences and imagines that it can predict the future through statistical means. Great economists of the past of different traditions, ranging from Adam Smith to Karl Marx, would have rightly scoffed at that notion. When I picked up the Office for Budget Responsibility’s “Economic and fiscal outlook” yesterday, it fell open at page 45, which Members will recall contains chart 3.8, on effective exchange rate assumptions. If we look at that chart—some hon. Members are doing so—we can see that the OBR is able to accurately plot the past, which contains wild variations in the exchange rate, and that the biggest variations are often due to not economic decisions, but political ones, such as the EU referendum. The OBR’s prediction for the future, however, is a perfect straight line parallel to the horizontal. The only thing we know is that that is the least likely thing to happen to the exchange rate but, owing to that approach, built-in assumptions make us highly vulnerable to misreading the actions that need to be taken. Straight lines rarely predict human activity.
It was therefore with genuine concern that I heard the Chancellor deem it important in the opening section of yesterday’s statement to read out spreadsheets and forecasts as though they were going out of fashion while entirely failing to mention in any depth the key issues challenging the future economics of this country. As has been said, he failed adequately to address the challenges of Brexit, for example, but I will come to that in a moment.
Allow me to reflect a little on different ways of looking at the economy and to make three key observations. First, an economy is not a machine but a network of relationships among human beings. What do these networks do? They are built upon myriad individual and collective decisions that are affected by an almost infinite array of influences. Not only do we not know the future with any degree of precision, but we cannot know the future with any degree of precision, yet that is what such detailed forecasts pretend, and they are provided without even any margins of error.
We know that decisions are critical, so I thought about how I could highlight the importance of that and some of the things that the Government could do. The best example came to me yesterday when, along with many Members, I attended the WASPI women demonstration. Those people face having to make key decisions about their future, but this Government utterly disrupted the way in which they were able to make rational decisions, because they were given no proper notice about the huge changes being made to their pensions. Rather than helping to give some coherence to the economy to enable people to make as rational a decision as possible, the Government’s actions have caused disruption. The effective operation of the marketplace is being disrupted, not helped.
Secondly, we cannot ignore the influence of politics on economic activity and vice versa. By entirely ignoring the effect of Brexit in his speech, the Chancellor ignored the influence of such a political decision, but some of the effects of Brexit should have been tackled. The failure to guarantee the rights of EU citizens in this country will lead to disruption in the labour market. I am sure that I am not alone in knowing constituents who either have already left or are preparing to leave the country, including people who run small businesses, a German couple, someone in the creative sector, and one or two university researchers.
Keith Vaz
The hon. Gentleman and the SNP should be commended for raising this issue on so many occasions. It is the practicalities that worry me. EU citizens are extremely worried and distressed about their current position, so they need their applications to be processed, but there is no provision in the Budget to allow for those applications to be processed efficiently. Millions of people will have to go through the system.
Roger Mullin
I entirely agree with the right hon. Gentleman. Indeed, that is a great worry to me, as it is to him and to many others. It is about not only the system’s efficiency, but its effectiveness and ability to make the right kinds of decisions in complex individual cases. I have constituents who have been here for many years but are finding it difficult to get various applications through.
Mike Weir (Angus) (SNP)
My hon. Friend is making a good point, as did the right hon. Member for Leicester East (Keith Vaz). This is not just about individuals. There will be an impact on the local economy of areas such as mine that rely on migrant labour for fruit picking and will face great difficulties if that labour is not available. There are huge economic consequences in addition to the personal consequences.
Roger Mullin
That is precisely my point. What was seen as a political decision to exit the EU immediately has consequences for individuals whom we value in our communities. That has implications for the labour market, and the disruption of the labour market has economic consequences. We cannot get away from the fact that an array of influences are coming to bear due to Brexit, but the Chancellor thought that the sensible approach was to utterly ignore them. We also need to pay attention to other matters connected to Brexit. As far as I am aware, the Chancellor said absolutely nothing about how he was going to fill the funding gaps for rural communities, the agricultural sector or university research. Everybody is uncertain about those gaps. How will the Government address them in general? They have already said that they will fill the gap in one or two small instances, but there is no general response. That is another disruption that the Government are not addressing.
Thirdly, whereas the Treasury and the OBR can offer only snapshots of the economy at different times, people who may call themselves part of the classical economic tradition would say that an important feature of the real world is how the market economy operates, which is based on a process of incessant change and growth. Although the Government talk about some aspects of that, such as the importance of research and development and of stimulating innovation, not nearly enough regard has been paid to the importance of how we are to stimulate innovation and, through that process, stimulate growth in the economy.
There are practical implications of that view of looking at things. Policies in recent years—near-zero interest rates from central banks and austerity from Governments—have specifically protected one group of people while harming everyone else. They have boosted the asset prices of the wealthy while destroying the savings pool of those with modest amounts in the bank. The policies harm pensions and penalise savers. They represent everything that classical economists have opposed. Paradoxically, they are the antithesis of the free market and a further illustration of what David Stockman calls “crony capitalism”. It is not hard to find the human embodiment of crony capitalism in this House.
I will now comment on some of the measures. I read an article in the Financial Times by Sir Nicholas Macpherson a few days ago—[Interruption.] He is a friend of the hon. Member for Bootle (Peter Dowd). Sir Nicholas said that Budgets were supposed to be about tax. For perfectly reasonable historical reasons, the United Kingdom has developed an enormously complicated tax system over hundreds of years. When I talked to a Treasury official some weeks ago, he told me that, so far, he had found more than 1,100 tax reliefs in the system. Every tax relief provides an opportunity for a loophole, so it is perhaps not surprising that estimates of the tax gap vary between £36 billion and £70 billion.
Given the changing nature of society, should our tax system and some of our approaches to tax rely on what happened 150 years ago or more? Surely the time will soon come when we have to look systematically at the entire tax system with a view of not just simplifying it, but making it fit for purpose for the type of economy and labour market that we have today. I am therefore disappointed that there was no reference to that in the Budget.
We have already heard excellent points about the problem facing the self-employed, so I will not dwell too long on that, but there is one area in which the Government could help. For 30-odd years before I entered Parliament, I ran small research companies and the like. In the last few years before I entered Parliament, I decided that I was going to take life a bit easier—some chance—so I stopped running a limited company and simply proceeded, with associates and individuals, by picking the jobs that I found interesting and wanted to do. I applied for a job with the Government, but they said that I could not be considered for it unless I became a limited company. The UK Government’s procurement processes therefore encourage people to do what the Budget says the Government do not want them to do. If we are to move down the route of sorting out this part of the economy, as the Government would see it, might it be a good idea for them to practise what they preach by sorting out their own procurement policy?
Too often in this House we hear the Government making policy changes and announcements in which they almost assume that every labour market is like an inner city. When I heard what the Government were doing on self-employment, my thoughts did not immediately go to how labour markets operate in Glasgow or the City of London; I thought about my friend in Skye and some of my friends in the highlands who have no choice but to rely on self-employment. They cannot choose to work for corporations that do not exist. They are what might be called “necessity entrepreneurs”, and they do not work in just one sector. They have to job around and they undertake lengthy travel. They also have absolutely none of the security that people in employment have. The Government think it is a good idea to burden those people all of a sudden, but I cannot see how on earth their chosen proposal will give any support to local economies the length and breadth of this country. We need much more effective analysis of those matters.
Of course, being a Scot, I am particularly concerned about the duty on whisky. Given the state that the Government are in, and given what we face in the future, if there was ever a bad time to make it more expensive to buy whisky, this is it. Surely we do not want to start by penalising one of the most effective products produced in this land that is not only essential to the Scottish economy, but makes a massive contribution to the economy of the whole United Kingdom.
Many Members want to take part in this debate, so I will finish by returning to a group I mentioned earlier. At its heart, the economy is a collective human endeavour. We cannot understand economics abstractly; we have to understand it in terms of its effect on individuals, families and communities. If ever there was an example of how the Government have departed from the genuine concern for humanity that should be at the centre of our concerns about the economy, it is surely their malicious treatment of the WASPI women. We have a long way to go.
Rishi Sunak (Richmond (Yorks)) (Con)
It is a privilege to speak in this debate. In all the excitement from Fleet Street, it would be easy to forget who yesterday’s Budget is really about, so I will share with the House how many of my constituents will feel about it. Whether it is the schoolboy with a first-rate technical education who will now have the chance of a better job and a solid wage, the small business owner who knows that when she speaks up her Government listen, or the mother who knows there is a Conservative Chancellor at the helm making the difficult decisions so that her children have well-funded public services and a country that lives within its means, for the hard-working people of North Yorkshire this is a Budget that delivers where they need it most.
Norman Lamb
How does that schoolboy or schoolgirl feel about an 8% cut in funding per student by 2020 under this Government?
Rishi Sunak
I am not sure that I recognise the right hon. Gentleman’s figure. The schools budget has been protected, and the Government are rightly consulting on the iniquity in the current funding system which means that constituents in my rural area are worse off to the tune of hundreds of pounds per pupil compared with very similar pupils in other parts of the country. I am delighted that the Government are addressing those iniquities in their consultation.
Rishi Sunak
If the hon. Lady does not mind, I will make some progress and come back to her.
I begin with small businesses. My predecessor, Lord Hague, has a well-documented enthusiasm for beer, so it will come as no surprise to Members that pubs are a cornerstone of my rural constituency’s economy. Following in his footsteps is difficult enough, but it is impossible for me to visit a pub in my constituency without seeing a picture on the wall of William pulling a pint with the landlord. Not only is my constituency home to more than 200 pubs, but I am proud to say that it hosts the Campaign for Real Ale’s 2017 pub of the year: the community-owned George & Dragon in Hudswell. I was delighted to be in Hudswell just last Friday when the landlord Stu Miller, his family and team received their award in the loud company of everybody from the village.
In recent months I, like many other hon. Members, raised concerns that the revaluation of business rates risks penalising such small, enterprising businesses. I am delighted to say that this was the Budget of a Chancellor who, like any good barman, listens to our concerns. For the landlords who run them, the jobs that depend on them and the communities that enjoy them, this Budget’s £1,000 business rate discount will make a real difference to many pubs at a time when money is still tight.
But pubs are not the only rural businesses that the Budget will help. Auction marts and livery yards across North Yorkshire have seen particularly steep rises in their business rates because the idiosyncrasies of such companies are not well understood by officials and because the last revaluation coincided with the disastrous foot and mouth epidemic. Such idiosyncrasies are more than even the most ingenious civil servant could be expected to foresee. Auction marts, livery yards and riding schools are particularly important to the fabric of our rural community, so I thank the Chancellor for the extremely welcome creation of the new £300 million discretionary business rates fund, which will put decision making back in the hands of communities and allow businesses in constituencies such as mine to benefit from the local knowledge of councils in ensuring a smooth transition to the new schedule.
Stephen Doughty
The hon. Gentleman was talking about pubs, and he will know that I am a keen pub goer. Indeed, I was in a pub in his constituency the other day, enjoying a pint with my cousins. What does he have to say to customers in pubs, who are going to face a 3% increase in the price of a pint?
Rishi Sunak
What I say to customers and to the hon. Gentleman is that I am sure that the Minister doing the wind-up will be able to say how much better off customers are from having benefited from several years of freezes in beer duty that would otherwise have been put in place. I am sure they would also like to hear that this Government will be consulting on new duty rates for white cider and still wine to see what more could be done to help customers who drink those alcoholic beverages. Lastly, let me say that I would welcome him back to my constituency any time and will be happy to share a pint with him next time he is there.
Seema Malhotra
I have not yet been to a pub in the hon. Gentleman’s constituency, but I recognise the benefits for pubs in my constituency. May I extend the question about customers in pubs, many of whom may be self-employed? Have they reflected with him on their concerns about the proposed rise in national insurance?
Rishi Sunak
I thank the hon. Lady for raising that issue. If she will allow me, I will deal with that exact point later in my speech.
The last measure in support of local businesses that I wish to highlight is the £690 million fund available for local authorities to address urban congestion. Congestion is not something one would ordinarily associate with the rural idyll of North Yorkshire’s villages and market towns, but the residents and community of Northallerton are relentlessly frustrated by the level crossing near our vibrant and diverse high street, as its impact on local business is substantial. I have convened meetings of local authorities and Network Rail to discuss plans to alleviate the congestion, and I very much hope the Chancellor’s new fund can help us.
As the Chancellor so rightly pointed out in his Budget speech, supporting our businesses is a means to an end, not an end in itself. If our children are to benefit from the more than 2 million new jobs created since 2010, they will need the right skills. The 2.4 million apprenticeships created in the last Parliament are a momentous achievement, but we must also recognise that although most of us think of apprentices as young people, 16 to 19-year-olds—school leavers—account for less than 10% of the increase in new apprentices. That means that too many school leavers are still sticking with an inappropriate classroom education rather than a first-class technical one. The Chancellor’s announcement of new T-levels is a crucial step in redressing the balance and closing for good the gap between the classroom and the factory floor, for which our economy has paid a high price for too long. I therefore welcome the new half a billion pound investment in increasing training hours, the streamlining of technical qualifications, the provision of high-quality work placements and the introduction of maintenance loans. Taken together, that is a powerful package to help to ensure parity of esteem between technical and academic education.
Yet I also urge Ministers to continue to look carefully at my campaign, supported in the recent industrial strategy, to create a UCAS-style system for apprenticeships. This branded, one-stop-shop portal would not only end the classroom divide between those applying to university and those applying for apprenticeships, but, by bringing everything together in one place, help businesses to connect more easily with young apprentices in schools.
Turning to national insurance, I, like many Conservative Members, have always believed in low taxes as a spur to economic growth, but when a Government inherit a deficit of £100 billion the greatest priority must be returning to sound finances and doing so in a way that is fair. I believe it is right that those who benefit from public services make an appropriate contribution to paying for them, and that is what this Budget’s changes to national insurance will ensure. Sixty per cent. of self-employed workers—those earning less than £16,000—will see a decrease in their national insurance contributions as a result of the removal of the regressive class 2 band. Workers earning up to almost £33,000 will be no worse off when these changes are taken together with the increases to the personal allowance, and for those earning more the average increase in contributions will be a few hundred pounds. It is right to ask: is this fair? I believe that it is.
Historically, different rates of national insurance for the self-employed and the employed reflected significantly different benefits and access to public benefits, but that difference is no longer there. Indeed, changes to the state pension, which is partly funded by national insurance, mean that self-employed workers now benefit from an extra £1,800 annually in pension—this is something they would need to save up to £50,000 for to receive in the private sector. Similarly, self-employed couples starting a family can now benefit from almost £5,000 in tax-free childcare support.
In this House, I always hear calls for investment in public services, such as this Budget has provided for in social care, but those investments need to be paid for. Her Majesty’s Revenue and Customs has estimated that it is losing about £5 billion a year from the increasing trend of self-employment, so it is right that we make small changes to ensure that everybody contributes to the public services and benefits we value. It is important to recognise that even after these changes the tax system will still recognise the particular issues faced by self-employed workers and will favour them in its tax rates and treatment. They will benefit from a lower rate of national insurance than employees; they will still not bear the cost of employers’ national insurance, which is levied at a substantial 13.8%; they will still have the ability to offset losses and gains over years; and they will still benefit from a more generous treatment of tax-deductable expenses. I am also encouraged that in the longer term the Government are committed to looking at the whole issue of the increasing trend towards self-employment, and to ensuring that we reflect those changes in the economy in our tax system and ensure that everybody is treated fairly. This small change is thus necessary to protect the things we value, and it is fair and proportionate.
In conclusion, we have all learned to be a little cautious of economic forecasts, but if the Office for Budget Responsibility is right, the first students to sit their T-levels will do so in a country with 1 million new jobs, double today’s productivity growth and, for the first time in two decades, national debt falling as a percentage of GDP. This Budget, like the ones that came before it, is building a country where our businesses will not have to pay for the profligacy of the past and our children can look forward to a bright future. Nothing could be more important than that, so I commend this Budget to the House.
Graham Jones (Hyndburn) (Lab)
On a point of order, Madam Deputy Speaker. Yesterday in regional newspapers, there was a malicious and false report that the Labour party had somehow entered into an arrangement with the British National party in the seat of Pendle. This matter was raised in business questions by the hon. Member for Pendle (Andrew Stephenson). Having just spoken to the leader of the council in Pendle, I am absolutely assured that no such deal has taken place. In fact, the leader of the council has never spoken to the BNP in eight years, and the Labour party does not speak to the BNP in Pendle unless it is absolutely necessary to do so in committee. These reports should be corrected and I wondered how best to go about doing that, Madam Deputy Speaker.
Madam Deputy Speaker (Mrs Eleanor Laing)
I can quite understand why the hon. Gentleman wishes to make his point of order, but, as he knows and as the House appreciates, it is not a point that can be dealt with by the Chair. However, he asks how he can set the record straight, and my simple answer is: he has done so, and I am sure his setting straight of the record will be properly recorded in Hansard.
Ms Angela Eagle (Wallasey) (Lab)
It is a pleasure to follow the hon. Member for Richmond (Yorks) (Rishi Sunak), whose constituency is in my home county, Yorkshire. The last time I was in his neck of the woods, it was not to go to a pub—as many of my hon. Friends seem to have done—but to fight the by-election that his predecessor fought and won. I remember wandering forlornly through a village in the constituency, door-knocking with my much-missed colleague, Mo Mowlam. We did the entire village and found not a single Labour voter, so I think the hon. Gentleman is probably fairly safely ensconced in Richmond (Yorks), pending an electoral earthquake—although, of course, they do happen.
I was disappointed by the Chancellor’s statement yesterday. His first Budget did not rise nearly seriously enough to the challenges faced by our country in these times of great volatility and change, which we must now confront together. We needed a wider and bolder vision. We needed radical reform to rebuild our prosperity in a post-Brexit world and a sustainable plan to deal with our ageing population and all the pressure that that brings. We needed a recognition that we must recast our tax and benefit systems to deal with the world to come, rather than the world as it was when Beveridge produced his blueprint for a welfare state, 75 years ago.
Instead, we got a Budget that made no mention of the greatest challenges facing us today. There was no mention whatsoever of climate change. There was no mention of rising poverty and inequality, or of public expenditure cuts stretching to the far horizon. Perhaps most surprisingly of all, there was no serious mention of Brexit. This was an occasion on which the Chancellor ought to have set out a bold reforming vision for the UK. But he did not. He left the grimmest news unspoken; perhaps he hoped that nobody would notice.
On living standards, the Office for Budget Responsibility revealed something that millions of people in this country already know: real pay levels have not yet returned to their pre-2008 peak. The autumn statement revised down the forecast for real earnings by £1,000 by 2020, and the Budget will do nothing to change that. That means that workers are facing 13 wasted years of lost earnings and stagnating pay under this Government. To make matters worse, the Government’s flagship promise of a £9 so-called living wage, which in itself was never going to be enough, has been revised down to £8.75.
The modest growth in our economy, which is at historic lows, has translated into real earnings stagnation for the vast majority of people. The fact that more than half the 13.5 million people in this country who are now living in poverty are in work is not a problem the Chancellor was troubled enough to mention in his speech, but it is an indictment of his Government’s record, and it is one of the most serious social problems facing Britain today.
The Budget papers reveal that consumer debt is once more exceeding its pre-crisis peak; it is this unsecured debt that is driving what modest growth there is in the economy. The Bank of England is right to be worried about it, but it did not trouble our Chancellor enough for him to refer to it at all in his Budget statement. These facts alone show just how much the Prime Minister’s just about managing families are being made to shoulder the burden of a painfully slow recovery from the financial crash, yet there was simply not enough help announced for them yesterday.
On infrastructure and investment, the perfunctory re-announcement of the £23 billion in the rather grandly named national productivity investment fund is to be welcomed, although it has been announced many times before. But, at 2.6% of GDP, it remains far lower than the levels of infrastructure investment achieved by the previous Labour Government, and well below the OECD average. That is going to put us at a continuing long-term disadvantage in a global race in which we are more isolated and at risk than ever before, after the Brexit vote.
On investment generally, the OBR forecasts that Brexit and the uncertainties surrounding it are likely to depress private investment going forward, and uncertainty about trade arrangements will hit exports and inward investment, too, offsetting any beneficial trading effect of the depreciation of sterling. This is not a credible platform from which to launch any serious attempt to prepare our economy for the challenges of a post-Brexit world and enable us to secure our prosperity for the future.
This is a Budget that continues to hit the poorest the hardest. The Red Book demonstrates that the cuts to public services just go on and on into the future. We are told that the target for eliminating the deficit, which was originally meant to be achieved in 2015, might now not be accomplished until 2025—a 10-year delay on the original five-year plan. The Budget documents reveal a massive 20% cut in the funding allocated to local government next year, down from £8.2 billion to £6.5 billion. That puts at risk services for the most vulnerable and threatens to rip our social fabric apart.
There is an 8% per-head cut in education funding, which will threaten to bankrupt some schools—certainly in my constituency—while the extra funds announced for education are ring-fenced for the Prime Minister’s grammar schools vanity project. Once again, some people are being left behind while a chosen few, in certain chosen areas, get all the advantages. Also unmentioned by the Chancellor in his statement yesterday was a 6% real-terms cut in non-pension-related spending on social security, which will hit the most vulnerable the hardest.
The pressures of our changing demography make it clear that there must be urgent and radical reform of our system of social care, and in social justice more broadly. The changes to our labour market, which are happening on a global, national and local level, along with the profound implications of rapid technological change, make it imperative that we reform our tax and benefit system to make it fit for the future. We must be willing to look again at the tax base in order to guarantee real security for everyone in our society.
In both those areas, though, the Government have been caught out by their cynical electioneering attacks on Labour and their even more cynical election promises to the people. After participating in cross-party talks following the Dilnot report on adult social care and agreeing a joint approach to the challenges we face, in 2010 the Tories cynically produced propaganda posters condemning what they called “Labour’s death tax”. Thus, for short-term, cynical electoral gain, they equally cynically ruled out the changes we need to make as a nation so that social care can be put on a sustainable footing for the future.
The Tories did the same with what they called “Labour’s tax on jobs”—proposed changes to national insurance contributions. In 2015, they even produced the Tory “tax lock”, a pledge that it has since emerged was manufactured to fill a hole in the general election grid. It was described by the No. 10 adviser who thought it up as
“the dumbest economic policy that anyone could make”.
Stephen Doughty
My hon. Friend mentioned previous claims by the Conservatives. I have the advert that they put out during the last election, which made clear that any rise in national insurance would be
“costing jobs and hitting hardworking taxpayers”.
What has changed?
Ms Eagle
Exactly. My hon. Friend will agree that, with their cynical use of short-term advantage and the way they have electioneered on it, their pledges and the way they have campaigned, the Conservatives have actually made it much harder for us to make the reforms that we as a society need to make to our tax and benefit system and our social care system. That is the ultimate in irresponsibility.
Yesterday, the Chancellor tore up the tax lock. He can dance on the head of a pin and claim that the lock did not apply to class 4 national insurance contributions all he likes, but that was not on the side of the bus and no one will believe a Tory election promise ever again. The Chancellor has learned a tough lesson: if he wants to be for the just about managing, he needs all the tools of government available to him. He cannot tax-lock himself out of all his options and end up having to plug the gap in social care by taxing the self-employed. The Government have been hoist by their own cynical petard.
We are willing to work with the Government on both the challenges that I have mentioned—social care and how to arrest the alarming rise in self-employment, which brings precariousness for far too many people. Self-employment is often just apparent self-employment, and it is quite often very low paid and precarious. We need to ensure that the self-employed are properly protected and have proper access to the protections that employees take for granted.
Seema Malhotra
As usual, my hon. Friend is holding us spellbound with an excellent speech. The former Secretary of State for Work and Pensions, the right hon. Member for Chingford and Woodford Green (Mr Duncan Smith), in a sense blamed the Tory manifesto for being wrong more than he blamed the policy that the Government introduced yesterday and the way that they did so. Does she agree that those are both problems that the Government clearly need to learn from?
Ms Eagle
I agree. We saw a cynical dash from the Conservatives to make short-term promises to get elected, and we saw them campaign even more cynically on those promises in the hope that when they had to be broken nobody would notice. But the Government’s actions are making it much harder for us to have cross-party support on anything, and they have also made it very difficult for anyone to believe any single one of their manifesto pledges again. The Government have increased distrust of politics. That is the legacy of their behaviour on social reform and tax reform, which are vital if we are to prosper in the future.
Stephen Doughty
My hon. Friend is being generous in giving way. She talks about mistrust having been created. Does she agree that people out there often say to us that they do not feel that politicians in this place—the Government—actually understand the realities of life? Life for the self-employed, in particular, is often very difficult. They have many costs on top of those we would normally expect. They need increased insurance, find it difficult to get a mortgage and have to pay out for additional things. This Government simply do not understand the reality of life for self-employed people.
Ms Eagle
That may be the generous interpretation, but there are other interpretations that involve the cynicism I have talked about. This is the issue: if the Government really wanted to make a reasonable reform to the tax system and national insurance contributions to take away the current tax incentive for people to self-incorporate or real employers to force people into becoming apparently self-employed, they would not have made such a reform. They would have said, “We’re going to introduce these new benefits for the self-employed and take away the tax advantages and disadvantages of being self-employed, and finally we will bring forward a much more stable tax base and tax system.” That could be supported, but it looks like the Government have changed national insurance contributions to fill a fiscal hole in social policy. That is a grubby way to behave, and it is in breach of the Conservatives’ election manifesto. That is not the way in which the Chancellor should have made this change. He may learn, but in this Budget all we got was green Hammond rotten eggs.
Mr Dominic Raab (Esher and Walton) (Con)
It is a pleasure to follow other hon. Members. I hope that the hon. Member for Wallasey (Ms Eagle) will not be too offended if I say that I agree with more of what my hon. Friend the Member for Richmond (Yorks) (Rishi Sunak) said than what she said, but I find that the Budget debate always produces insightful contributions from both sides.
Ms Angela Eagle
Just to reassure the hon. Gentleman, I suspect that I would have been even more offended if he had agreed more with me than with his hon. Friend.
Mr Raab
It is good to at least start on a point of consensus.
When I hear the leader of the Labour party or the shadow Chancellor talking about the economy, I sometimes feel that there is a parallel universe. I listened carefully to the right hon. Member for Hayes and Harlington (John McDonnell) on “The Andrew Marr Show”. He explained that the economy was not growing fast enough. In fact, the British economy was the second fastest growing in the G7 last year, as it is this year, despite all the doom and gloom around Brexit. He needs to look at the economic facts.
The right hon. Gentleman went on to say that real wages are falling, which hon. Members have returned to on several occasions. I will talk about cost of living pressures, but the official figures are crystal clear. Real wages have been rising since September 2014 and, according to official data, are set to continue rising. [Interruption.] If the hon. Member for Heywood and Middleton (Liz McInnes) wants to intervene, I would welcome that, but otherwise she should go and check the facts. The raw truth is that employment is at a record level, real wages have been rising since 2014, income inequality—I know that she, like me, cares about that—is at its lowest in 30 years, the FTSE is at a record level, and there has been a fresh wave of investment since the referendum, including, most recently, the commitment by James Dyson.
Seema Malhotra
Does the hon. Gentleman agree that although he may be able selectively to cite headline statistics, there is a reality in our constituencies that comes through in our casework? Schools and parents tell me about people not being able to afford school uniforms, and people are relying on food banks. Does he acknowledge that we need to face that reality and that our economy and economic policy should deal with those things?
Mr Raab
I welcome the acceptance of the official figures at least, which was implicit in what the hon. Lady said. I accept that there are cost of living pressures, not least given that inflation is creeping up, but let us face it: inflation is still well below the Bank of England’s headline 2% target. I will address cost of living challenges and what we should do about them, but we live in the real world and we should not chase the Labour party leadership’s socialist pipe dreams, because they will do nothing to deal with cost of living pressures other than precipitate a lack of confidence and investment in the economy and falling living standards as a result of increasing unemployment.
I thought that the hon. Lady was going to intervene to welcome Dyson’s investment in a new 517-acre research facility in Wiltshire. Jaguar Land Rover is investing in creating the new Velar model, which will be exclusively manufactured in Solihull. The wave of investment is coming right across the country. There is a resilience and strength in the British economy, and fresh investment and enthusiasm about the opportunities that lie ahead. Having said that, I want to be careful not to allow any sense of complacency to creep in.
This Budget is all about the whole package. In what I like to think is my still relatively limited time in this place, I have never known a Budget that has not involved compromise. Trying to put together a package is the serious business of government. Hon. Members of all parties can be quite quick to allow the positive stuff that we like, whether that is taxation cuts or extra investment—I have been guilty of that in the past—but we also have to ’fess up and face up to the difficult decisions that have to be made. That is the serious business not just of politics, but of government. Look at what the leader of the Labour party said yesterday; he and his party are so unfit to govern because they are not willing to face up to those difficult decisions.
Stephen Doughty
The hon. Gentleman talks about not being positive enough about different things but, a moment ago, he tried to present quite a false impression of the inflation rate. The PriceStats indicator, which is actually a much more accurate indicator of the inflation rate, suggests that inflation has potentially risen to 3.3% in recent weeks. As my hon. Friend the Member for Wallasey (Ms Eagle) pointed out, that is certainly being reflected in the sorts of pressures that constituents come to us with. Does the hon. Gentleman not recognise that inflation is, in fact, potentially much higher than he suggests?
Mr Raab
I love to have a good haggle over stats, but the fact that the hon. Gentleman said that the situation is “potentially” worse than I indicated suggests that he does not have full confidence in his intervention. The raw truth is that I am citing the consumer prices index for inflation, which is the one that everyone uses, from economic forecasters to the Treasury and Ministers. If the hon. Gentleman wants to use a different one, it may, in fairness, be him who is trying to be selective.
Let us look at what the Government proposed and brought forward for the economy in this Budget. We continue to cut corporation tax, which is critical for encouraging businesses to come here and invest, and, from looking at the report from the Centre for Policy Studies, is also a good way of generating additional revenue because it is a dynamic tax cut. We want to create more revenue not just to spur business growth, but to pay for the precious things such as social care that we want in our society and in our public services. We need a strong economy to ensure that we remain at the most cutting edge of our competitiveness. I am afraid that the Achilles heel of the current Opposition is that they have no sense of what credible economics look like.
On top of corporation tax, I was delighted to see the Government address the issue of business rates, and to see the £400 million package to ease the transition towards reform of the wider business rates system particularly to ensure that smaller businesses on the high street are not unduly affected or penalised by the changes. I know from my own experience—particularly in a constituency such as Esher and Walton, which is really a constellation of towns and villages with a strong high street, but with a disproportionate number of smaller business—that the measures to ease the business rates transition will be well received. We want to ensure that the high street is able to compete with online businesses, and I was pleased that the Chancellor directly addressed that in the Budget yesterday.
As well as the measures to stimulate the economy and to ensure that we are at our most competitive, the Budget includes significant investment in skills. There has been a record level of investment in schools under this Government, and we have seen fresh money allocated to new schools and existing schools. I listened very carefully to the hon. Member for Wallasey. The truth is that 1.8 million more children are studying in state schools that are deemed good or outstanding than in 2010, when the last Labour Government were in office. That is probably the accomplishment of this Government of which I am most proud. The question now is not how we rest on our laurels, but how we build on that accomplishment.
Yes, we want to ensure that with a new wave of grammar schools the academically gifted—whether they come from the humble background of a council estate or a rural backwater—have the opportunity to make the very best of their talents. We also want to ensure that the bright but not necessarily bookish have a vocational route, through technical training or otherwise, so that every child who has talent, works hard, grafts and has something about them—no matter what their disposition—can make the very best of their individual abilities. That is what is so positive about the package brought forward by the Government yesterday, with T-levels as well as the new money going into grammar schools and existing schools.
Aside from schools and education, which are important for skilling up our economy, driving forward social mobility and ensuring that we build the vision of the meritocratic society as well as the enterprise economy, money has been allocated to social care because we have a Government who are willing and able to take difficult decisions. An extra £2 billion will go into social care on top of the £10 billion we will invest in the NHS by 2020. My constituency of Esher and Walton is a classic Surrey constituency in the sense that we have an ageing population, which is good news because people are living longer, but we need to ensure that we can cater for conditions and healthcare needs. Although there are many longer-term questions about financing and what model of social care we have, the extra money going into social care will be a crucial first step. I know, from looking around at the pockets of elderly poverty even in a relatively affluent constituency in Surrey, how important it is to ensure that we have that support, but that support is only there because we have a Government who are willing to make difficult decisions.
The hon. Member for Feltham and Heston (Seema Malhotra) made an intervention about the cost of living, which is a critical issue to address. The reality is that this Government are raising the national living wage to £7.50 an hour and have taken 3 million of the lowest paid out of income tax. Let us be very clear that for the average taxpayer, that is now the equivalent of £1,000 extra in their pockets each year as a result of the difficult decisions that a responsible Government are able and willing to make. Further measures in the Budget deal with tax-free childcare, and the doubling of free childcare for working parents with three and four-year-olds. I am not sure that I am eligible, but I do have a two-year-old and a four-year-old. As a member of a two-salary couple and team, I know the importance of such support, and I welcome it.
Difficult decisions are made in Budgets. There are issues and points in this Budget that I did not like much, but the truth is that we have to look at Budgets in the round and as packages. I will be honest that I struggle with the changes to national insurance for the self-employed. I am in the business of cutting taxes, not raising them, particularly for the entrepreneurial classes, but we need to know how we are going to fund everything we want to do in the Budget. That is the challenge that any responsible Government and, indeed, any credible Opposition, have to face. The advantage we have is that we will have a separate free-standing piece of national insurance legislation. The Minister, who is incredibly assiduous and very attentive to the concerns raised by hon. Members in this Chamber, will want to ensure that we get the package for national insurance right.
The Chancellor has raised the issue of the lack of parity between the way in which the employed and self-employed are treated. Of course, there are advantages and disadvantages to both statuses, and it is absolutely right to ensure the right, equitable treatment for both. I do not want us to penalise to entrepreneurial people in our society but, at the same time, I want to ensure that we have a system that is fair. Conservative Members must be extremely mindful that we satisfy not only the letter, but the spirit of our manifesto commitments. The advantage of having this free-standing legislation—I can see the Minister scribbling away—is to ensure that we get the right balance on this sensitive issue.
Mr Raab
I want to make one more point about the other aspect of the Budget that I struggled with a little bit—cutting the dividend-free income for savers. We have talked a lot in this Chamber and in the Government about the importance of encouraging people to save, given the challenges of debt, credit and household debt more generally. I want to ensure that we are not sending the wrong message with this change, when we actually want to incentivise and encourage savers.
I am therefore very honest and upfront about the challenges. The problem is that all the things we want—from the extra money for social care for the vulnerable, to the extra money for skills to drive forward social mobility, to extending the personal allowance to cut income tax—have to be paid for. I welcome, support and reinforce the Government’s inclination to face difficult decisions head-on and to make sure that we get the balance right, rather than just having a Budget that satisfies newspaper headlines but does not stand the test of time. The Government therefore have my support, and I know that they will want to look at the nuances of some of these measures.
In contrast, I was very struck by the speech from the leader of the Labour party yesterday, because it did not put forward any credible alternative. It rather felt like he was tilting at socialist windmills—like he was somehow lost in a field ranting at the wind. The tragedy for the Labour party is that, on some of these issues, where there are genuinely choices to be made, it has no credible alternative. That is what I think the public will see: a Government bracing themselves and taking difficult decisions, and a Labour party, under its current leadership, that has talked about £500 billion of extra spending that it cannot fund.
I pay tribute to the hon. Member for Nottingham East (Chris Leslie), the former shadow Chancellor, who rightly pointed out that satisfying those spending commitments would require us to double income tax, double national insurance—there was no mention of that from Labour Members—double council tax and double VAT as well. I am not sure, therefore, that Labour Members are really in a position, in the absence of a credible alternative, to start picking holes in one or another aspect of the Budget put forward by the Government.
Mr Raab
Let me give the hon. Gentleman my three points; I will look forward to hearing his intervention after that.
There is also the whole concept of people’s quantitative easing—the idea that the Bank of England should print more money to spend on some of these ivory-tower, socialist-pipedream projects. That is the Mugabe school of economics; it is deeply irresponsible. Again, if we are talking about difficult decisions, that would be far worse for savers than any of the difficult decisions that have had to be made in this Budget.
Finally on the alternatives put forward by the Labour party, the leader of the Labour party is actually on record as being amused about the possibility of raising the basic rate of income tax by 5%—I have the quote here, but I will not embarrass Labour Members by reading it. Honestly, of all the tax rises in the world to contemplate, a rise in the basic rate is deeply irresponsible, not just economically but socially.
Peter Dowd (Bootle) (Lab)
Why do you not talk about your manifesto instead of our manifesto? Why do you not talk about the promises in your manifesto that you have broken?
Madam Deputy Speaker (Natascha Engel)
Order. The hon. Gentleman should remember that he is speaking through the Chair. It is not my manifesto—it is the manifesto of the hon. Member for Esher and Walton (Mr Raab).
Mr Raab
Madam Deputy Speaker, I thought for a moment that you were going to adopt the Conservative manifesto. Fortunately, you have resisted that temptation.
The shadow Minister makes his point, but I have addressed in the round the Budget that the Government have put forward. I have explained the bits I enthusiastically embrace and talked about the difficult decisions we have had to make. However, the truth is that the Labour party is incapable of putting forward a credible package.
Several hon. Members rose—
Peter Dowd
I beg your pardon, Madam Deputy Speaker.
The bottom line is that we should be talking about the broken promises from the Conservative party manifesto. However, the national infrastructure plan involves £500 billion of expenditure—some public expenditure and some private—so I would ask how the Government are going to fund that.
Mr Raab
I am not sure that it is incumbent on me to fund the commitments that the Labour party may or may not be willing to make.
The truth is that we have a properly funded Budget in which difficult decisions have been made. Investment is being made in the right things, such as skills and social care, but—
Mr Raab
No, I will not. The hon. Gentleman has had plenty of opportunity. I have allowed him to intervene on me and I am looking forward to hearing his speech. However, the truth is that he is unable to answer the question of how it can possibly be right to raise the basic rate of income tax. I would just point out that, as a result of the extension of the personal allowance, the average taxpayer will receive £1,000 a year extra.
Mr Raab
No, these figures have been properly costed. From the Institute for Fiscal Studies to the official figures, it is clear that, by raising the personal allowance, we are putting £1,000 back into the average taxpayer’s pocket. At the same time, the Labour party—[Interruption.] Not just the uber-rich—we are used to hearing about that predictable bugbear from the Labour party.
Mr Raab
Having taken two interventions from the hon. Gentleman, I have to say that the suggestion that I am frit is a bit silly.
The truth is that the Labour party will want to put up taxes on not just the super-rich, but low and middle-income families. Frankly, that is fantasyland.
Mr Stewart Jackson (Peterborough) (Con)
Does my hon. Friend agree that the Budget statement is about not just arcane statistics and numbers, but societal change for the better? Did he notice, as I did last week, that the number of families in which no one works is at an all-time low under this Government? We have therefore delivered economic stability and positive societal change.
Mr Raab
My hon. Friend hits the nail on the head. The key thing the Government can do is to create the conditions for record levels of employment, with real wages rising, and with inflation—yes, it needs to be looked at—stable and under careful control. Even on the worst-case scenarios that have been forecast, inflation would rise above 2%, but come back down shortly thereafter.
The reality of this Budget is that we have a Chancellor and a team of Ministers grappling with difficult decisions at a sensitive time, when there is a degree of uncertainty because of the referendum result, and coming up with a sensible, measured package. We have the Labour party talking about printing money and £500 billion of spending commitments when it has no idea where it can fund them from, and we have a Government who are committed not to tilting at socialist windmills, unlike the leader of the Labour party, but to building a better Britain—not only an enterprise economy but a meritocratic society for our children—and to making sure that the most vulnerable, and particularly the elderly, have the social care they need. [Interruption.] If the hon. Member for Bootle (Peter Dowd) would like to intervene on me rather than chuntering in frustration—more in frustration at his own party, I suspect, than at me—I will give way.
Peter Dowd
The hon. Gentleman can make up as many false “facts” as he would like, but the fact of the matter is that he is making them up. He should concentrate on his own manifesto. He still has not answered the question about the £500 billion in the Government’s national infrastructure plan. Where are the Tories getting the money for that from?
Madam Deputy Speaker (Natascha Engel)
Order. We are mulling over making up false facts. I think we are starting to get quite close to language that is not really acceptable in Parliament. We should just be aware of it.
Mr Raab
As ever, Madam Deputy Speaker, I will be very mindful of your advice, and I will curtail my speech.
The truth is that Budget week is the week for difficult decisions. The Government set out their priorities—the media will always pick apart whichever bits they want to—but they have to put in place a package that strikes the right balance, and I commend them for doing so. I know the Minister will have taken on board the concerns that I and other hon. Members have raised. However, the contrast between a credible, serious Government and a leader of the Labour party and an Opposition who have abdicated responsibility for coming up with a credible alternative is palpable for all to see—everyone inside this House, but also the public at large.
Mr Steve Reed (Croydon North) (Lab)
We are here to consider the Budget that the Government have put forward for the country. I want to speak about its impact on my constituents.
Like the rest of the country, Croydon is experiencing a social care crisis. Older and disabled people regularly visit my office to say they cannot get home care and that they do not get adequate support when they leave hospital. Local charities are telling me that the funding that they need has dried up as well.
After the Chancellor ignored the social care crisis in his autumn statement, we were hoping for better this time. Although £2 billion extra over three years is a welcome start, it goes absolutely nowhere near resolving this crisis. These services have already been cut by £5 billion since 2010. Some 26% fewer people receive help today, even though there are more older people needing such help. The King’s Fund projects a £2.8 billion funding gap every year by the end of this decade, but only £2 billion is being made available over three years, so all I can say to my older constituents and the disabled people who come to ask me what the Government are doing to help them is that the Chancellor has responded to their plight by imposing yet more cuts.
It is galling to see the Department for Communities and Local Government offering Surrey County Council a sweetheart deal that is denied to Croydon and people living in every other part of the country. It is not only Surrey that has this problem to deal with, but every local authority. Every community is struggling with it. I regret immensely that the Secretary of State failed to answer my question about whether he knew in advance about the letter that was sent from his Department to Surrey County Council offering it a sweetheart deal. We need to know whether he knew about that in advance of its being withdrawn. If he was party to it, the House needs to know that that is how he is attempting to operate within his Department and, if he did not know about it, the House needs to know that he has no grip on what his officials are up to. His constant evasion of the question will not suffice. We need answers from the Secretary of State; I am sure that in time we will get them.
Particularly painful to my constituents will be the planned hike in national insurance contributions for the self-employed. Croydon North is one of the most ethnically diverse constituencies in the country. Unfortunately, unemployment is particularly high among many minority communities. Their desire to work and their strong enterprising spirit means that many people from these communities set up their own businesses. Self-employed people work as taxi drivers, van drivers, hairdressers, plumbers, decorators, childminders—all sorts of jobs. They work very long hours, often for very modest pay. In Croydon, well over one in 10 workers are self-employed. It makes no sense whatsoever to clobber them with new tax rises. They need help and support, not further barriers to work.
Mr Jackson
So what does the hon. Gentleman say to the respected Institute for Fiscal Studies and the much respected Resolution Foundation, which are today stating specifically that the measures that he identifies are progressive and ameliorate inequality in the tax system between people on pay-as-you-earn and those who are self-employed?
Mr Reed
Perhaps Conservative Members, including the hon. Gentleman himself, should have thought about that before they stood for election on a manifesto that said absolutely categorically that there would be
“no increases in...National Insurance contributions”.
It does nothing for trust in politics when politicians say one thing to persuade people to vote for them but then, once they are elected, do the polar opposite. They are helping to further break trust in this House and trust in politics. This is not down to the IFS; it is down to Tory Central Office, the Prime Minister, the Chancellor of the Exchequer and—dare I say it?—the hon. Gentleman himself, if he is going to vote for the proposal. Given all the uncertainty about Brexit—it is shocking that the Chancellor had so little to say about Brexit in his statement—small businesses and the self-employed need reassurances, not broken promises.
I now turn to those in employment, because this Budget has very little to offer them either. Low pay and stagnant wages have become endemic. Most people have seen no growth in household incomes in the 10 years since the global financial crash; indeed, many have seen a real-terms cut. The British economy might be getting richer, but British working people are getting poorer. Ours is the only advanced economy in which wages fell while the economy grew between 2007 and 2015. In Croydon, average earnings have fallen by 7.6% in real terms, and today more than one third of my constituents earn less than a real living wage. So where has the money gone? Who has taken the proceeds of that growth? It is not the vast majority of people in Croydon or across Britain who work around the clock to pay the bills and put food on the table, but the shrinkingly small number of the super-rich whose interests this Government really represent. Wages are stuck and household debt is soaring, but the Chancellor had absolutely nothing to say about any of it.
Peter Dowd
Is my hon. Friend aware of today’s Resolution Foundation report that says that the UK is set for the worst decade for pay growth in 200 years?
Mr Reed
That is absolutely shocking, but it reflects what we are seeing in our constituencies and what our constituents are telling us.
Once upon a time in this country, there was a covenant between people and Government. People gave their consent to the system in return for a fair reward for the work they put in. There was an understanding that if people worked hard, they would do well. They could expect a decent home, security for their family, and healthcare when they fell ill or grew old, and that if they could not work, they would be looked after with dignity and respect. But today that covenant is broken. The unfairness and inequality that this Government stoke has bred resentment that has catapulted us out of the European Union and over a cliff edge into uncertainty.
Mr Jackson
I cannot allow the hon. Gentleman to propagate this myth. The gap between the poorest and richest 10% of our population was the highest that it has ever been under a Labour Government. This Government, I am proud to say, have delivered something that was never delivered in 13 years of a Labour Government: a national living wage to assist the poorest members of our community who are in work.
Mr Reed
This Government have absolutely divided the country. They have divided different parts of the country and communities from each other. I will give a statistic that shows how they have done it. Since they came to power in 2010, the 10 poorest councils in the country have experienced cuts 17 times bigger than those faced by the 10 richest. If that is not divisive, I do not know what is. This is happening on top of the fact that jobs have been lost to automation, factories have moved abroad, British people are denied the investment, skills and training that they need to compete in a global economy, and wages are stagnating. The Tories have made all this worse by targeting the poorest communities for the biggest scale of cuts. They have put the greatest burden on the weakest shoulders, and they have done so as a deliberate political tactic.
Adam Afriyie (Windsor) (Con)
The picture of doom and gloom that the hon. Gentleman paints is completely disconnected from the reality for people overall. Will he at least acknowledge that those in the lowest quartile have had a bigger tax cut than those in the highest quartile?
Mr Reed
We do not need to hear anything about tax cuts from Conservative Members, given that they have just broken their solemn electoral promise not to raise taxes if elected back into government. Only yesterday we saw the Chancellor standing at the Dispatch Box proposing to raise taxes. Conservative Members will have to vote on that, and it will be very interesting to see how many follow it through and how many do not.
The truth is that the Government have divided our country. With this Budget, they are doing absolutely nothing to bring it back together again.
Bob Blackman (Harrow East) (Con)
It is a pleasure to follow the hon. Member for Croydon North (Mr Reed). First, I place on record my declaration in the Register of Members’ Financial Interests as a vice-president of the Local Government Association, given that many of my remarks will be about local government funding and the services provided.
When Chancellors stand up at the Dispatch Box, they have a real challenge on their hands to balance the books in terms of taxes to be raised and money to be spent. In looking forward to the year ahead, we must take into account not only the Budget announced yesterday but the autumn statement, which led to large elements of Government spending being brought forward. There is a Budget that is announced at the Dispatch Box, and then there is a Budget that appears in the newspapers in the days and weeks beyond.
The test of a Budget is often how long it lasts before people start to pick at the finer points. It cannot be said that the Chancellor did not address national insurance increases: he spent a large proportion of his statement speaking about national insurance and the importance of balancing the overall position. We need to look at the matter very carefully, however, because a solemn promise was made in the manifesto not to increase national insurance, and I worry that the Government could be accused of signing a contract and failing to look at the small print. Across the country, many people who have entered self-employment are on relatively low rates of pay. They are taking all the risks on themselves, and we want to encourage them to be entrepreneurs and to invest in their businesses and livelihoods.
There has been a dramatic reduction in national insurance for many low-paid people, but I think the point at which people will pay more is far too low. I trust that the Treasury will look at introducing appropriate tapers to ensure that those contributions fall on highly paid people who would appear to be abusing the opportunity to be self-employed, rather than on the lower paid.
Jim Shannon (Strangford) (DUP)
The hon. Gentleman has clearly outlined the issue concerning the Conservative party manifesto. The media—the radio, the TV and the papers—have today given many illustrations of why people are unhappy with the Government’s intention to raise national insurance contributions. It is an issue in my constituency, and many of my people are telling me that they do not want it to happen. Those people have operated under the existing system for several years, and they want it to continue. Does he feel that the Government should review their decision? I think that that is what he is saying, but will he confirm that?
Bob Blackman
The Government have to look at the matter very carefully and review the point at which someone will pay more national insurance as a result of the abolition of class 2 contributions and the increase in class 4 contributions. I do not think that the balance, as announced yesterday, is right.
Norman Lamb
The hon. Gentleman rightly highlighted the concern that this may be a case of having to look at the small print. Is the situation not worse than that, however? The small print actually came in the legislation that was introduced after the election; when the commitment was made in the manifesto, there was no small print. It was a very clear promise, which has been broken.
Bob Blackman
The right hon. Gentleman and his party are experts in broken promises. It is important that we are seen to be fair and reasonable in this process, and that we encourage people to become entrepreneurs. That is the key element.
I now move on to funding for social care. The Communities and Local Government Committee, on which I have the honour of serving, recommended that the Chancellor make available £1.5 billion to fund adult social care. I am delighted that the Chancellor announced an extra £1 billion for adult social care. I am also pleased that the Secretary of State for Communities and Local Government confirmed today at the Dispatch Box that that money will be added to local authorities’ baseline budgets, and that he confirmed the formula by which it will be distributed. I think that that will be warmly welcomed by local authorities up and down the country, and it is a continuation of much needed funding.
I hope that the Economic Secretary to the Treasury will be able to clarify in his winding-up speech one or two points in the Red Book that are slightly confusing for me and may be so for other Members, if they have looked at them. Line 9 of table 2.1 on page 26 mentions a spend of £1.2 billion on adult social care in 2017-18, which is more than the Chancellor announced yesterday in his speech. I hope that that can be clarified. However, the extra £1.2 billion does not appear to have been added to the CLG items in the table on page 21. It is not clear whether the money is ring-fenced for adult social care—I hope it is—and how the Government will ensure that it is spent in the intended manner. The funding was clearly needed, and I am delighted that it has been announced. It shows that the Chancellor and the Treasury are listening to concerns raised by hon. Members from right across the House.
I am equally pleased to see the additional funding that has been introduced for the national health service, particularly capital funding to provide much needed A&E improvements. Those improvements will take some pressure off A&E departments by allowing for the triaging of individuals who turn up at A&E when they should have gone to their GPs in the first place. That will clearly take the pressure off our health service, and it will be warmly welcomed across the country. I trust that we can get on with implementing those capital schemes as fast as possible, so that next winter A&E will not face the problems that it has experienced over the last couple of years.
I note that the Chancellor has allocated an extra £325 million of funding for sustainability and transformation plans. However, the estimated requirement is £9.5 billion. I just wonder where the extra money will come from to support that. The extra money for that in the Budget is welcome, but there seems to be rather a shortfall by comparison with the demand created by the various STPs.
On business rates, we all welcome the relief for pubs and the reinstatement of a three-year revaluation cycle. If we have learned nothing else from the process, we have learned that a seven-year revaluation period is ridiculous. Although many businesses across the country will be warmly happy about the fact that their business rates were effectively frozen for seven years, after the businesses are revalued they will almost face a cliff-edge. The implementation of a three-year revaluation period has to be the right approach.
I warmly welcome the £300 million given to local authorities to grant discretionary relief on business rates. My only concern is that we know that a large number of appeals will be lodged against the revaluations, and some local authorities may therefore be hesitant about granting relief while appeals are going on. In London and other parts of the country where 100% of business rates are devolved, that may have a huge impact on local authorities’ income. That is my one concern.
We need absolute clarity on what will happen about the billing of business rates and the reliefs that will be offered thereafter. Businesses up and down the country will receive their bills without necessarily knowing what reliefs they will get. In terms of cash flow, that will be a serious concern. The additional money to provide businesses with relief from the increase in business rates is extremely welcome, but the devil is in the detail, and we must resolve businesses’ uncertainty as quickly as possible.
Mr Jackson
My hon. Friend is, as I am, a vice-president of the Local Government Association. Does he agree that there is probably a case to be made for introducing a regional aspect to non-domestic or business rates? The potential difficulties in Greater London and the south-east are not replicated throughout the rest of the country, where bills are being reduced. That speaks to a need to look at London as a unique entity.
Bob Blackman
As we move forward, and before we get to 100% devolution of business rates across the country, we must resolve the conundrums that have arisen in relation to business rates. Equally, we have to recognise that business rates raise in the order of £25 billion a year as a tax, so changing its basis could be extremely cumbersome and might lead to hikes for some businesses, which would not be welcome, as well as reductions for others. We should look at that in the round and make sure, following the consultation that we are going to embark on, that the new policy works for all businesses and business people.
On education, the funding for the 500 free schools, including the new free schools, will be extremely welcome. Certainly in my constituency and across my borough, the reality is that we need an additional four new schools immediately. We have expanded every single primary school to its capacity and built on every piece of land available to provide new school places—all with Government funding, allocated under the coalition Government, which was extremely welcome—but we still need additional schools. I am delighted that a new faith school will be opening soon in my constituency, which will be the first state-sponsored all-through faith school in the country for the Hindu community. We will still need additional schools, however.
I have real concern about the principles of the fairer funding formula. The reality is that if the money coming into the formula is flat, then when some people are gaining, others will be losing. The current estimate is that 75% of the schools in my constituency will have not just a reduction in real terms, but a real cash-terms reduction in the funding available to them per pupil. They cannot increase the number of pupils, because the schools are full, so the only alternative is to cut staff and implement a worse service for the children in my constituency. I place it on the record right now that that is unacceptable.
I welcome the investment being made in skills and vocational studies. For far too long, academic skills have been recognised and applauded in this country, while vocational skills have not received the investment they deserve. I welcome what the Chancellor is doing to make that happen, using the funding to drive forward such a process, which must be the right way to encourage young people to develop their skills. If they have academic capabilities, that is wonderful, but if they have vocational skills, we desperately need them in the construction industry, our services industries and right across the board. This is one of the areas in which, for far too long, we have not had such investment, so I welcome the change that is taking place.
I also welcome the new deal on London devolution. I note that the Labour Mayor of London has welcomed the Chancellor’s decision to devolve such money. I have not heard that from Labour Front Benchers, but there is clearly always a disconnect between the Labour Mayor of London and his own Front Benchers in this House. We warmly welcome such a devolution. Local authorities in London, as well as in other parts of the country, will keep their business rates and have the opportunity to make local decisions for local people.
There is, however, a gap in that the Chancellor did not talk about the funding needed to replace the EU regional funding schemes. The schemes have been used for particular purposes right across the country. We clearly do not need to make such a decision now, but the Chancellor must consider this in the future, because these funds are vital right across our regions.
I welcome the provisions on alcohol duty in the main, but it would have been sensible for the Chancellor to maintain the policy of not increasing beer duty. [Interruption.] I am sure that is warmly welcomed among Conservative Members, and I declare an interest in that it is my favourite drink. The cuts in beer duty in previous Budgets have been an appropriate way to encourage people to drink lower-strength beers rather than higher-strength alcohols, which is important.
On tobacco duty, which is significant, I welcome the changes that the Chancellor has made, but I think he could have gone further. If he and my hon. Friend the Economic Secretary want to increase duties on something, let us increase them on tobacco. The fact is that there is a straightforward translation: the less people smoke, the less demand they will make on the national health service.
Adam Afriyie
My hon. Friend is making a very powerful speech, and I agree wholeheartedly with him on tobacco duty. In fact, I would go further and urge the Chancellor, as well as everyone in the House, not only to increase the duty on cigarettes significantly, but, conversely, to ensure that vaping and heat-not-burn devices get a better hearing, because switching to such devices will actually save lives and improve the health of so many millions of people.
Bob Blackman
Quite clearly, anything we can do to encourage people to give up smoking has to be good for their health and for the national health service overall.
Mr Jackson
Before my hon. Friend moves on from vices, does he agree that the Red Book shows that there is only a commitment to consult on white cider and other high-strength ciders? Given the argument that they cause disproportionate harm—with policing, health and so on—is there a case for increasing the duties on such high-strength alcoholic products?
Bob Blackman
The position is quite clear. In particular, I want the Treasury to look at the differential duties on licensed premises compared with those involving off-sales, because such an approach could make a quite massive difference.
My one concern about what is proposed for tobacco duty is the possibility of driving individuals away from normal standard cigarettes to hand-rolled tobacco. Young people might be encouraged to switch to hand-rolled tobacco, which is even more harmful to their health than smoking cigarettes. The duty on hand-rolled tobacco should be looked at, so that we can discourage that.
I was disappointed—my hon. Friend the Economic Secretary will know what I am about to say—not to see further compensation for the victims of the Equitable Life scandal. The Treasury believes that the scheme is closed. It is quite clearly closed to new applicants, but there is still the burning injustice that people who saved for their future and their future pensions have not received the full compensation due to them. I am very proud to say that the Government allocated funding in early 2010, which has helped to compensate some of the victims of the scandal, but a total of £2.8 billion or £2.5 billion—it depends which figures one looks at—is still owed to the victims of the scandal. Those individuals are getting older and more vulnerable, and if we give them any money, it will go straight into the economy because they desperately need it for their old age.
I hope my hon. Friend will look at that again in the round. I understand how difficult it is to balance the books, particularly at the moment, but this is clearly a debt of honour. As the economy recovers, we should look at increasing the compensation, not saying to individuals, “That’s it. That’s all you’re going to get.” If we do that, we will suffer the consequence of people’s mistrust.
The housing White Paper has demonstrated large elements of what we need to do to increase the volume of housing. There was a great deal of comment in the autumn statement on funds for housing, but there was no mention of that, or of the further measures we need to undertake, in the Budget yesterday.
As you will know, Madam Deputy Speaker, my private Member’s Bill is progressing through Parliament. It is in the other place at the moment and, I hope, will become law very soon. It aims to reduce homelessness in this country, but the most important impact we can have on homelessness is to build more homes. I trust that the Economic Secretary will consider measures to encourage local authorities, housing associations and private builders to build low-cost housing that is relatively easily affordable for the people of this country, so that we can combat homelessness once and for all in our civilised society.
The Budget must be looked at in the round. I have been critical of certain areas. It is our duty as Back Benchers to be critical friends of our Front Benchers to make sure that they keep abreast of what is going on, particularly when the Opposition do not seem able to critique the Budget. I welcome the overall thrust of the Budget and trust that we can look at ameliorating some of the areas I have mentioned. I commend it to the House.
Kerry McCarthy (Bristol East) (Lab)
I did not agree with everything the hon. Member for Harrow East (Bob Blackman) said, but he did make some very thoughtful points. I hope that the Economic Secretary was paying more attention than he appeared to be and has taken them on board.
I was disappointed by the lack of ambition in yesterday’s Budget. I suppose that we should take some consolation from the Chancellor’s acknowledgement that the Government still have a lot of work to do. Perhaps when we have the combined autumn statement and Budget we will see more ambition from him.
The Chancellor talked about improving productivity and ensuring that young people have the skills they need. I agree with that. He identified some of the challenges, but he singularly failed to address Brexit—the elephant in the room that is in danger of trampling everything else underfoot.
The Budget failed to offer any comfort for Bristol in terms of city governance or for my constituents. Bristol is a prosperous city with thriving industries. It is the only city outside London that makes a positive contribution to GDP. That sometimes means that we are seen as having everything sorted and having everything going for us, but not everyone in the city is able to share in its success. Our mayor, Marvin Rees, is working to make Bristol a more equal city and to share the prosperity beyond the wealthy and the recently gentrified parts of the city, so that it works for people who have lived in Bristol all their lives, as well as for people who have been attracted to move there because it is such a thriving place. I fear that yesterday’s Budget made his task that bit more difficult.
According to the Children’s Society, more than 5,000 children were living in poverty in my constituency of Bristol East last year. The Chancellor spoke yesterday of the “dignity of work”, but the majority of those children are in working families. The issue of in-work poverty has been raised frequently in this House and needs to be tackled. It is not enough simply to suggest that moving people into work from welfare is the only solution. Universal credit cuts will only make the situation worse.
There was nothing yesterday in response to the Resolution Foundation’s warning that incomes will rise for high-income households, stagnate for the middle and fall at the bottom. In my constituency of Bristol East, there are very few who fall into the high income category, but very many who fall into the middle or the bottom and who will not benefit. The Resolution Foundation said that the result will be
“the biggest rise in inequality since the late 1980s.”
I do not know how the Chancellor can lecture low-paid workers about the dignity of work, when he is watching their living standards fall.
The Chancellor is increasing the taxes of self-employed workers, despite the fact that they earn half as much as employees and have fewer rights. I grew up with a stepfather who was a self-employed demolition contractor. My sisters took over his business when he died. He was not quite a white van man—he had a lorry instead—but in all other respects he fitted that definition, as did virtually all the family friends who came round our house. They were all builders, electricians, plumbers or window cleaners. They did pretty well for themselves, but they did it by working incredibly hard.
My dad did not take a day off sick, not least because he would not have earned any money if he had done so. When we went on family holidays, he had to calculate not only the cost of taking a family of eight abroad, which was pretty extortionate, but how much he would lose in earnings and whether he would have to pay other people to keep his salvage yard open. Three of my five sisters are now self-employed. I know how they have to grapple with the fluctuations in income. It is not easy to plan, because they do not know from one moment to the next when the money will come in. They have additional burdens.
According to the FSB, 6,500 self-employed people in my constituency have to make the same calculations. They will now have the added responsibility of extra national insurance contributions, without the security of employment. I had an email from a constituent today, who wrote on behalf of her son who is a construction worker. She pointed out that he has to buy his own tools, his own work safety gear and his third-party liability insurance. He has to have something called a CSCS card and has to pay to travel to jobs. Quite often at the end of one job, there is a break when he does not know whether another job is in the pipeline. Clearly, some of that is tax deductible, but not all of it is. We have to acknowledge that self-employed people are not the same as employed workers, with the security that they have.
Stephen Doughty
My hon. Friend is making an excellent point. I, too, know many people in self-employment in the types of jobs she is talking about, including among my family and friends back home in Wales. She mentions insurance. Is it not the case that people find it difficult to get insurance against loss of earnings, as well as insurance for high-priced items such as tools? The Government have not dealt with all those additional costs that come with self-employment in this Budget.
Kerry McCarthy
As I said, we have to acknowledge that the self-employed are in a very different situation from people who have an employer who takes care of all their needs. The Chancellor has singularly failed to recognise that. He seems to be blaming the self-employed for not reading the non-existent small print in the Conservative manifesto. He cannot get away with saying that this is not a broken promise, given what the Conservatives said in 2015.
Seema Malhotra
My hon. Friend makes a point about her family. My father was self-employed when I grew up, also in a family of eight. I was in a similar situation. We never had a holiday when we grew up. Our summer holiday was a daytrip to the seaside with food that we took for ourselves. That is the reality of the struggle it can be to make ends meet when people take that risk. Does she agree that this added pressure, when there are already pressures on family budgets, could be what turns those who are just about managing into those who are no longer managing?
Kerry McCarthy
I very much agree with my hon. Friend and recognise the points she makes about the family she grew up in.
Surely we want to encourage more people to become entrepreneurs—to strike out on their own and create the thriving businesses of the future. Some of our most successful entrepreneurs started out as self-employed, then set up small and medium-sized enterprises, and went on from there. I think that this short-sighted tax grab by the Chancellor will deter people from doing that.
Bob Stewart (Beckenham) (Con)
Forgive me for not being here earlier, Madam Deputy Speaker. I thank the hon. Lady for letting me intervene on her. As I understand it, this measure will be tapered, so someone who is earning below £16,250 a year will be better off. It is only as people get to the top end of earnings that it will apply. Moreover, it will not come in until the summer, when we look at the national insurance Bill.
Kerry McCarthy
As the Bill goes through Parliament, we will have to scrutinise the detail. All I know at the moment is that I have constituents who are extremely worried about this proposal and it is making them think twice about whether they should continue as self-employed or look for jobs that are potentially less lucrative, but that have more security.
Peter Dowd
Does my hon. Friend agree that if the Government get away with this proposal, it will be a down payment on more NIC and tax increases?
Kerry McCarthy
That is certainly the concern. As has been said by several hon. Members, if people cannot trust the Government on this matter, they will think that they cannot trust the Government on anything in respect of their future economic security.
Mr Jackson
The hon. Lady is making typically lucid points, but is it not incumbent on her party, given that there is a broad consensus that we need to fund social care better—the Chancellor announced an extra £2 billion —to identify where that money would come from? If she does not want it to be raised through national insurance contributions, where else will it come from?
Kerry McCarthy
That leads me very nicely on to my next point, which is that the Chancellor claims the Government have no choice but to raise national insurance contributions. However, he has somehow managed to find £70 billion in tax cuts for the rich and for corporations, including £1 billion for the Government’s pet concern, inheritance tax. I pay tribute to my hon. Friend the Member for Leeds West (Rachel Reeves) for her work on this. From next month, the inheritance tax threshold for a couple will start to rise from the current £650,000 to £1 million. Over the past two years in my Bristol East constituency just 17 homes sold for more than £650,000, and not all of them would have been subject to inheritance tax. My constituents are paying the price for a tax cut that will benefit only 0.04% of the people, many of whom live in the far more affluent constituencies of Cabinet Ministers.
The Chancellor also managed to find funding for the Prime Minister’s grammar school project, despite a dearth of evidence to support the policy. It baffles me why he thinks this is more important than helping the schools we have at the moment, which face a £3 billion shortfall. What good will new grammar schools do for children and teachers at Bristol Met, where half of all pupils are on free school meals but their funding is being cut by 21%, or at Begbrook Primary, which has seen a 16% cut in per pupil funding between 2013-14 and 2019-20? West Town Lane academy has seen a 16% cut and Waycroft academy a 14% cut. I could go on. The Government’s chaotic approach to children’s education is emblematic of a Budget incapable of joined-up thinking or long-term planning. The funding is there when the Government want it to be, but not when people need it to be.
The Government seem incapable of looking beyond the short term and of recognising that cuts have consequences. Ministers are denying 18 to 21-year-olds housing benefit, but if just 140 young people are pushed on to the streets the policy will cost the Government more than it saves. Centrepoint estimates that about 9,000 young people will be put at risk of homelessness by the policy. That is not just short-sighted; it is—if you will permit me to say so, Madam Deputy Speaker—gross stupidity on the part of the Government. It is too high a cost for the sake of making very short-term savings.
I referred to the success of Bristol as a city, but that success comes at the price of a booming housing market that means homes are increasingly out of reach for Bristolians. On average, tenants are having to spend 64% of their disposable income on rent. Our Mayor has created a multi-disciplinary housing delivery team and a city office that has been working hard to try to get more affordable housing built and to find temporary beds for the homeless. They will not be helped by cuts to housing benefit and Ministers’ preoccupation with £1 million houses. I urge the Government to consider our Mayor’s request for the power and support necessary to tackle the housing crisis. It is not enough just to devolve the responsibility; the resources and the money have to go with that if he is to do what he is being asked to do.
On housing, just as on social care, public health, funding cuts and tax increases, the Government’s instinct is to pass the buck to local authorities. Bristol’s funding has fallen by £170 million over the past six years. Over the next five years, we face a £104 million funding gap as costs rise. The further 30% cut to the Department for Communities and Local Government’s budget suggests Ministers are oblivious to the difficult decisions councils are having to make. There is no recognition of the long-term costs of neglecting our infrastructure and key services. A temporary sticking plaster next year will not rescue our social care system or relieve the burden on council services.
The situation will only get worse with Brexit. Bristol City Council received £22 million of EU funding in the 10 years to 2015. The city’s two universities receive over £20 million a year from EU sources. I pay tribute to all the work my hon. Friend the Member for Bristol West (Thangam Debbonaire) is doing with universities on Brexit. The European Investment Bank facilitated initiatives such as Bristol Energy, the council’s energy company. Two thirds of exports from Bristol, Exeter and Plymouth go to the EU, which is far higher than the average for UK cities.
The Chancellor claimed there would be no complacency, but neither is there any strategy. The Government have no clue about what will replace that EU investment or how to guarantee our exports market. Blithely pretending everything will be fine and dandy is not a legitimate plan. Ministers are rushing headlong into a hard Brexit and abandoning the single market, ignoring how trade with the EU is a major driving force for our economy. Turning us into a bargain basement tax haven may be what some Ministers have always wanted, but it is not what Bristol or the country needs.
The Chancellor boasted of infrastructure projects, but my constituents are fed up with broken promises and bad management. We have endured disruption because of the electrification of the Great Western line and the taxpayer has had to cope with the spiralling cost. Now the programme has been delayed indefinitely—at a cost of £330 million. The people of Bristol do not know if they will ever see the benefit, but we have already paid the price.
Time and again, Ministers do not bother to consider the bigger picture. Environmental regulation, for example, is dismissed as red tape. I have given up hoping that some Conservative Members will see the environmental necessity of so-called green crap—apologies again, Madam Deputy Speaker—but I had hoped that some would see the economic potential. The Government have chosen not to engage, or to take a very half-hearted approach, with the EU’s circular economy work, despite its potential to create half a million jobs and support a genuinely forward-thinking industrial strategy that is fit for the future. The Chancellor promised us skilled jobs and meaningful training, so I hope he will go back to his colleagues at the Department for Environment, Food and Rural Affairs and look at how a genuine focus on the green economy can support that and ensure Britain really is world-leading. That would reassure me and my constituents that the Government are capable of working with cities like Bristol to help everyone to achieve their full potential.
Wes Streeting (Ilford North) (Lab)
It is a pleasure to follow my hon. Friend the Member for Bristol East (Kerry McCarthy). Given the remarks I am about to make I should declare that I am still an elected councillor in the London Borough of Redbridge, and, as seems to be the case with many other hon. Members in the Chamber, I am an honorary vice-president of the Local Government Association. Perhaps we should declare if we are not honorary vice-presidents of the LGA. I should also say that I am sorry I was not able to be here at the beginning to hear all of the speeches made by the shadow Chancellor and the Secretary of State for Business. Unfortunately, I had to attend an extraordinary meeting of the Treasury Committee. I am grateful to you, Madam Deputy Speaker, and to your predecessors in the Chair, for indulging me.
Yesterday we learned that the Chancellor has a sense of humour, but by the time he sat down my constituents and the country at large had very little to laugh about. In fact, I would wager that the Chancellor himself was not laughing when he read this morning’s newspapers. It is striking that there have been more Opposition Members than Government Members speaking in the Budget debate this afternoon. Presumably, this is because so few Tory MPs are willing to turn up to defend the Chancellor’s Budget: a Budget balanced on the backs of the self-employed; a Budget that failed to address the big challenges facing our schools and hospitals; and a Budget that failed to prepare Britain for Brexit.
This was a Budget that was bad for business: the high street business clobbered by a rise in business rates; the small businesses burdened by quarterly reporting to HMRC, even where they are not liable for VAT; and the self-employed saddled with higher national insurance, even where they earn as little as £16,250 a year. These are the people I was sent to Parliament to represent: the shopkeepers in Barkingside, Woodford, Hainault and Gants Hill who kept their businesses going even as other shops on the high streets were boarded up during the recession; and those who were brave enough to take the plunge and start a business even as the high street was still plagued by recession. I was sent to represent the family businesses wondering whether they will be able to pass on their firms to the next generation, because times are increasingly tough and they worry about the long-term future of the family trade; and the self-employed, who take the risk by taking the plunge and going it alone, taking an idea and turning it into a profit. This was a Budget that hit the traditional economy of the high street and the gig economy of the entrepreneurs. It was good for accountants and bad for small businesses. No wonder that, this morning, so many people woke to read the papers asking why on earth a Tory Chancellor would want to attack enterprise, entrepreneurialism and aspiration.
The Chancellor has said that this is an issue of fairness. Policy wonks in the Treasury and elsewhere in the world of think-tanks will argue that a class 4 national insurance increase is progressive. That is a powerful reminder of what happens when people who understand spreadsheets fail to understand the real economy.
The National Careers Service website suggests that London taxi drivers can earn between £14,000 and £20,000 a year. In a good year, if they are willing to put in excessive hours working the streets, as they often do these days, they may earn slightly more. A triple whammy of rising costs, increased congestion and unfair competition has driven down their wages. Is it progressive to ask taxi drivers, who are already struggling to pay the bills, to pay an extra £240 a year in national insurance? Is it progressive to ask the young tech entrepreneur starting out to find an extra £20, £30 or £45 a month in their early careers? Is it fair to ask people who receive no holiday pay, and who have little job security and the everyday pressures to bring home the bacon, to pay more to the Chancellor when it is small change for him and a big deal for them?
Jeremy Quin (Horsham) (Con)
Does the hon. Gentleman welcome, as I do, the improvement in the pension scenario for the people about whom he is speaking, which is worth about £1,800 a year, and which if bought could be worth about £50,000? It is not all one way.
Wes Streeting
There have been improvements at the margins, but that does not compensate for the loss of earnings that those on low to medium incomes will feel as a result of the decision taken by the Chancellor in the Budget.
Stephen Doughty
I wholeheartedly endorse my hon. Friend’s point about taxi drivers. I commend him for his work with the all-party parliamentary group on taxis and for standing up for his constituents. I have had similar experiences speaking to taxi drivers in my constituency. Does he agree that the problem is not only the costs he mentioned, but additional charges—they are often subject to differences in regulation—and the rise in the price at the pump?
Wes Streeting
I wholeheartedly agree with my hon. Friend. It is not just taxi drivers. More than 10,000 people in my constituency are self-employed. As my hon. Friend the Member for Bristol East rightly pointed out, those people do a range of trades with a range of challenges and additional costs, and very few employment rights and protections. Why have they been targeted by the Chancellor in this Budget?
While I am asking about priorities, why can a Tory Chancellor always find tax giveaways such as the cut to inheritance tax for the 26,000 wealthiest estates in the country, at the expense of the strivers, the makers, the builders and the creators, who account for Britain’s 5 million self-employed people?
Mr Jackson
While we are asking questions, is the hon. Gentleman embarrassed about the fact that a Conservative Government have brought about a situation in which 1% of taxpayers fund 27% of tax revenues? At the same time, £140 billion in uncollected taxes that the Labour Government did nothing about have been collected in the past seven years to fund our public services.
Mr Streeter
We are one of the richest economies in the world. The distributional analysis published alongside the Budget by the Treasury is embarrassing. The picture that plays out across this Parliament as a result of the tax, spending and welfare decisions made by the Chancellor and his predecessors is very clear. The poorest households and, on an unprogressive gradient, those from lower income households, are absolutely clobbered by this Government.
Only the very richest decile are worse affected than the very worst paid and the least well-off. Someone who is paying the very highest rate of tax will pay more than the very poorest as a percentage of their income, but for some of those people, a tax increase of thousands of pounds a year is relatively small change compared with a £20, £40 or £50 increase for the very poorest. What would be marginal increases for hon. Members are huge for people who are just about managing to pay the bills or, more likely, people who are among the millions turning to credit cards and fuelling a record boom in unsecured household debt. That is what Tory Chancellors always fail to understand. They have no understanding and no conception of what it is like to go without, or of having to cut corners between either heating or eating. That is why, for the past seven years of Tory Budgets, those are the people who have been most left behind.
Norman Lamb
Did the hon. Gentleman pick up the comments of Charlie Bean, formerly of the Bank of England and now of the Office for Budget Responsibility, who said that consumer spending is unsustainable and based on record debt that is going back to the levels we saw before the crash?
Wes Streeting
The right hon. Gentleman makes a powerful and important point. Unless we get to grips with that, not only will those people suffer as they fall below the line and can no longer keep their heads above water, but the economy itself will suffer. Even the sluggish growth over which the Government have presided since they took office has been driven by an increase in household debt. What happens to those families, and what happens to the economy, when the money dries up—when there can be no more lending, or when families can no longer service their debt? Of course, it is not just national insurance or, indeed, income tax that the poorest pay. Other forms of taxation have a disproportionate and regrettable impact on them: VAT, council tax, and other unprogressive tax measures are causing them to become the very worst off.
If that were not bad enough in itself, it was explicitly ruled out in the Conservative manifesto, not just once but four times. It is a bit rich for the Chancellor to come to the House and talk about the small print produced by companies, and for his Ministers to tidy up the mess the next day at the Dispatch Box by talking about the small print in the National Insurance Contributions Bill. This is a broken promise, plain and simple. Not only was it in the manifesto; it was a central line of Tory attack. The Tories were wrong to warn at the last election that a Labour Government would somehow cause chaos and instability. Look at the mess they are presiding over now, and look at what they have done to the country in the short time since that election!
Mike Gapes (Ilford South) (Lab/Co-op)
My hon. Friend has referred to the Conservative manifesto. That was the same manifesto that committed the Government to staying in the single market. The lesson, surely, is that Conservative manifestos are worth nothing, not even the paper they are written on.
Wes Streeting
I am grateful to my hon. Friend and parliamentary neighbour for making that point. He will be pleased to know that I shall return shortly to the issue of Europe and the future of our economy.
Wes Streeting
I shall return to the subject of Europe, and the hon. Gentleman may want to intervene later. I am conscious that other Members are waiting to speak. There are still a number of them on the Labour Benches, even if there are none on the other side of the House.
This is a case of all pain and no gain. If it were not bad enough that the Conservative Chancellor arrived yesterday to clobber the self-employed, he is also failing to put right the public services on which people depend. We were told that the crisis in the NHS and social care required an additional £6 billion by 2019. While the £2 billion announced yesterday may be welcome, it is wholly insufficient to meet the demands of our rising population, our ageing population, and the people who want to be able to rely on the NHS and social care when they need it most.
Having been a local councillor for nearly seven years—I will stand down next year—I have to say that the situation facing local authorities is dire. When faced with a choice between child protection and adult social care, councils will of course prioritise keeping children safe, along with keeping the elderly and disabled alive and well. However, such choices have consequences: increased council tax for people who can ill afford it, and cuts that affect the services on which people rely and for which they pay their council tax. I only wish that the Government would have the courage to accept, 75 years on from the Beveridge report, that the model for health and social care in this country is no longer fit for purpose and no longer sustainable unless it receives the funding that is so badly needed. I cannot understand why Ministers have not had the courage to ask Members on both sides of the House to help the Government come up with a plan to make the NHS sustainable for the 21st century.
Peter Dowd
Was my hon. Friend as shocked as I was to find that it was being trailed today by the Government that unless Tory MPs backed down, social care funding would be under threat?
Wes Streeting
I entirely agree. I am not sure how many experienced, wise leaders of the NHS and local councils could come forward and warn the Government about not just an impending crisis, but a crisis that is affecting hospitals and care services in each of our constituencies today. What more will it take for the Government to show the courage, and find the money, to fund social care? Imagine what a cross-party commission led by the likes of my hon. Friend the Member for Leicester West (Liz Kendall), the right hon. Member for North Norfolk (Norman Lamb) or the hon. Member for Totnes (Dr Wollaston) could do to build a health and social care model for the 21st century.
Was it not a travesty that, as schools in our constituencies faced cuts in their budgets, the Chancellor chose to arrive yesterday with a funding package that would benefit a small number of pupils at a few selective schools? What do Ministers have to say to headteachers and parents in my constituency, or to the pupils who attend the vast majority of schools in my constituency, about the fact that they face on average a funding cut of £188 per pupil per year? I do not need an opinion poll to tell me that there are a few things that people, whether they vote Labour or Conservative, expect the Government to do, and among them are to make sure that we have decent hospitals and well-funded schools. It is a scandal that so much of the educational progress made in my city and across the country, led by the last Labour Government and following on since then, is being put at risk because of swingeing budget cuts to schools. What sort of Government choose to cut education for the next generation while also cutting the tax bill for the very wealthiest?
The flimsiness of the Budget Red Book—for once it did not take long to get through—betrays the fragility of our economy. In the long list of supposed good news the Chancellor arrived with yesterday, a few facts were missing. This was the ninth Budget by a Conservative Chancellor since 2010, and what do we have to show for it? We have the only developed economy that has a growing economy but falling real wages; rising costs of living, but wages still at pre-crash levels; a widening productivity gap holding back growth and depressing wages; a weaker currency fuelling inflation that households and businesses can ill afford; a failure to meet the Tories’ own targets for debt and deficit reduction because they have never understood the need to balance spending cuts with investment for growth; and a failure to meet their own welfare cap because of their failure to tackle unemployment, under-employment, casualisation of the labour market and exploitation by unscrupulous employers, which leaves a welfare system that lacks the confidence of the majority of the public but also fails the people who need it most. That is the very worst of all worlds, and even now, in the wake of a Brexit vote driven in large part by the votes of people who have been left behind, we have a Government willing to preside over rising child poverty, public services at breaking point, and an economy ill equipped for the challenges that lie ahead.
It should not take dragging a former—Conservative—Prime Minister out of retirement to tell this Government that the way they are handling the single biggest issue facing our country, the departure from the EU, and the path they have set us on is putting the economy at risk. What John Major said was very straightforward:
“There is a choice to be made, a price to be paid; we cannot move to a radical enterprise economy without moving away from a welfare state. Such a direction of policy, once understood by the public, would never command support. It would make all previous rows over social policy seem a minor distraction.”
Sir John Major could have been reading from the Labour party script on this issue. There we have it: a former Conservative Prime Minister holding up the truth that we on the Labour Benches know, which is that unless the Government negotiate a smooth and sensible exit from the EU, they will consign this country to being a small tax haven off the north-west coast of Europe, unable to meet the needs of their people and unable to make sure that prosperity is shared.
Of course, it is not just John Major who has concerns: the former Chancellor, the right hon. Member for Tatton (Mr Osborne), told the House that this Government have chosen not to make the economy the priority. When so much of this country’s economic success relies on trade abroad, when we have the largest single market in the world on our doorstep, and when being a member of the customs union gives us access to more trade agreements than are enjoyed by any leading economy in the world, for a Government to decide not to make the economy the priority is reckless and irresponsible.
Mike Gapes
My hon. Friend is making a very powerful speech. He mentioned the former Chancellor’s remarks, and the Government’s position is clearly that immigration is the priority. The Government’s target of a reduction to 100,000 seems a bit strange, however, given that the forecasts in the Red Book are based on the assumption that 185,000 migrants will come into this country in 2021; that is the Office for Budget Responsibility statistic on which the forecasts are based. How can the Government reconcile the 100,000 and the 185,000 figures, and surely the economy will be in a worse position based on those facts?
Wes Streeting
I agree with my hon. Friend. I have lost count of the number of times I have heard calls for a real debate on immigration, but a real debate requires an argument. There are undoubtedly real sensitivities and concerns about immigration in communities across the country, not least when people feel that their own wages have been depressed because employers are able to bring in cheaper labour from abroad to undercut the pay, terms and conditions of local workers. For me, that is an issue of social injustice that Governments need to tackle. However, we have an ageing population and a shrinking working-age population, and we can barely afford the pensions bill. We need a greater working-age population to come to this country, do their work and pay their taxes. Any politician who says that immigration is a price that this country cannot afford must also come to the House and tell us how they plan to pay for the public services on which every citizen in this country relies.
We must grasp the reality of the immigration debate. If we continue to fail to address the genuine and well-founded concerns about immigration while pandering to the myths about it, we will set this country on a course that will make us poorer, and that would be the worst possible response to the EU referendum. If people went to the ballot box and voted to leave the European Union because they felt left behind by globalisation in a world that was changing around them, imagine the betrayal they would feel if, having been sold the promise of a brighter future, they found that jobs were drying up, the economy had been left behind and the public services on which they relied were being decimated. That is the real risk of a botched Brexit.
In the context of a rapidly changing global economy in which jobs are changing, huge digitalisation is taking place and a new industrial revolution is sweeping the country at a pace and scale that we have never seen before, the purpose of the Labour party has never been more relevant or more urgently needed. More than 100 years ago, the party was founded to champion the interests of labour over the interests of capital. In a future of deregulation and a loss of jobs because they no longer exist in huge sectors of the economy, it is the job of the Labour party to protect the interests of labour.
When we look at what this Budget does to the self-employed, the strivers and the people across the private sector who make up the backbone of the economy and at what it does to public services, and when we look at how the Government are botching Brexit, we can see that it is long past time for the Labour party to take this lot apart. People across the country are counting on us to be an effective Opposition and an alternative Government. That is the job that we must face up to, and we need to start doing it sooner rather than later.
Norman Lamb (North Norfolk) (LD)
Madam Deputy Speaker, I should like to make an apology straightaway. I alerted Mr Speaker earlier to the fact that I have a long-standing engagement at the University of East Anglia this evening, and I hope that it will be okay with the Front Benchers if I miss the end of the debate.
I agreed with an awful lot of what the hon. Member for Ilford North (Wes Streeting) said, other than his assertion that it was the role of the Labour party to confront the issues set out in the Budget. I shall focus on the aspects of the Budget that relate to social care and to the health service, and I want to make it clear that the £1 billion announced for social care for the next financial year is wholly inadequate to meet the needs of the social care system and the people who rely on it.
The Health Foundation has estimated that the gap in social care is in the region of £2 billion a year. That is partly due to the increase in the national minimum wage, which will cost the social care system about £900 million in the next financial year. That means that there will be no real-terms increase in the amount available to the system.
As the Care Quality Commission recently confirmed, the social care system is close to tipping point—that comes not from politicians, but from the regulator. Many providers are now considering whether to withdraw from this country’s publicly funded social care market, while other providers are at risk of going out of business. It is alarming that there is little investment, if any, in new social care facilities in the north of England because the finances simply do not stack up. The only parts of the country in which investment in new social care facilities makes sense is where providers can cross-subsidise from wealthy self-funders, who are paying for the provision of care to those who rely on the state.
We are witnessing an increasing and simply unacceptable divide across our country in the quality of social care. It is estimated that the care needs of more than a million older people are not being met, either wholly or in part, as a result of the reduction in the availability of publicly funded social care. That is disastrous for those people, but it is also stupid, because it inevitably means that in the next financial year—from April—more older people will end up in hospital unnecessarily because there is no care package available to keep them in good health at home. More people in hospital unnecessarily means more pressure on the NHS. We have seen considerable increases in the income of acute NHS hospitals over the past five or six years, but demand has increased even more due to the inadequacies of the social care system. We are lurching from one crisis to another, and there must be a better approach.
The Government say that there will be a Green Paper to address the funding of social care, but it was in 1999 that the previous Labour Government set up a royal commission to look into social care, so the issue has been pushed into the long grass for far too long. The coalition Government actually went out and sought the advice of a leading expert, Andrew Dilnot. We consulted on his advice, and then implemented through the Care Act 2014 a cap on care costs, which would have introduced greater fairness into the funding of social care. The Conservative party’s manifesto contained a commitment to introduce a cap on care costs, but it abandoned that commitment within weeks of its re-election, just as it is now abandoning the commitment not to increase tax. The Government said that the cap would be delayed until 2020, but no one believes that it will be introduced then and it has quite clearly been abandoned. A Green Paper—a discussion document—is not what is needed; we need a greater sense of urgency.
We were told about a £325 million boost for capital spending in the NHS, but capital spending has been cut in this financial year by £1.2 billion, which has been raided to fund the clearing of deficits. However, we were told that only between six and 10 pioneer sustainability and transformation plan areas will benefit from that £325 million, meaning that the rest of the country will see no increase at all in capital investment. The Health Service Journal indicates that there is likely to be another raid on capital budgets in the next financial year, making the situation even worse for the rest of the country. During the referendum campaign, those advocating Brexit argued that leaving would give this country £350 million a week to spend on the NHS. Instead of £350 million a week, the Budget offers this country £2.7 million a week in capital funding—a wholly inadequate figure. Provider deficits across the country stood at £886 million at the end of quarter 3, after the injection of £1.8 billion to clear the deficits from last year. The Institute for Government confirmed today that 90% of hospitals in this country face deficits, which are now endemic across the system.
The Budget is inadequate for social care and disastrous for the NHS. There will be a 1% increase in NHS funding in 2017-18, but that compares with an increase in demand of about 4%. In the next financial year, there will be a reduction in real-terms spend per head in the NHS. Wherever we are on the political spectrum, this makes absolutely no sense at all. At a time when demand is rising rapidly, it is nonsensical to reduce spending per head on healthcare in this country, and it amounts to a reduction in the proportion of national income that we are choosing to spend on health and social care.
James Berry (Kingston and Surbiton) (Con)
The right hon. Gentleman brings a lot of experience from his time in office. Before the Budget, his party was advocating £2 billion of immediate spending on adult social care and £2 billion of immediate spending on the NHS. The sum of £4 billion is a lot of money. I have no doubt that he has arguments for why that amount is needed, but will he enlighten the House as to how the money would be raised?
Norman Lamb
Our spring conference is approaching and we will be coming up with proposals.
Norman Lamb
I would be delighted to invite the hon. Member for Kingston and Surbiton (James Berry) to our conference—I am sure that he would have a wonderful time. He will find out more about our proposals very soon but, to take up his challenge, I share his view that we have to be responsible by arguing how spending should be paid for. We intend to be fully responsible, and I hope that that reassures him.
I will focus for a moment on the consequences for ordinary people of the state of our NHS and care system. The right hon. Member for Leicester East (Keith Vaz) has talked a lot about support for people with long-term conditions, and the NHS now has to cope with a dramatic increase in the number of people living with long-term chronic conditions. The NHS estimates that the number of people living with three or more conditions will increase by 50% over 10 years. What we are now witnessing is completely unprecedented, but failure to meet their care needs will have disastrous consequences for many of those individuals.
In the past few weeks I have taken up the case of an adult in my constituency who suffers from attention deficit hyperactivity disorder. He has been referred by his GP to an adult ADHD clinic, so I wrote to the mental health trust to ask what the waiting time for his treatment is. I was told that the current waiting time in Norfolk is two years. What on earth is that individual supposed to do in the meantime? I am afraid that there is still complete inequality between access to mental health treatment and access to physical health treatment. There is discrimination at the heart of the NHS, and we will never address it with the current inadequate levels of funding.
A nine-year-old boy in my constituency has been referred for a possible diagnosis of autism. His family was told that the waiting time for that diagnosis is up to three years. I just assumed that something appalling was happening in Norfolk, but when I asked the National Autistic Society for more information, I was told that such waiting times are very much the case across the entire country. What are we doing to our children? We know that with early help we can make a massive difference to their life chances, yet we are telling them that they are supposed to wait two to three years for a diagnosis, let alone treatment. This is scandalous. We are letting down some of the most vulnerable people in our country. The really awful thing is that people who have money can circumvent these awful waiting times—they can get a diagnosis for autism, and they can get help for their son or daughter—yet people who do not have money are just left waiting. That is unjust and unacceptable, but it is happening in this country.
Wes Streeting
Not only is this a grave injustice to young people, but it is hugely costly to the taxpayer. If we fail young people in their formative years and fail to break down the barriers that prevent them from getting a good education, we pay more in the longer term in terms of unemployment, further mental ill health and the breakdown of social life later on.
Norman Lamb
I totally agree with the hon. Gentleman—this is an absolute false economy. We know that 75% of mental ill health starts before the age of 18. In the coalition’s final Budget, we secured £1.25 billion over a five-year period for children’s and young people’s mental health, yet a YoungMinds survey from just before Christmas shows that in 50% of clinical commissioning group areas, not all that money is getting through to be spent on children’s mental health because it is being diverted to other parts of the NHS that are under impossible strain. That is scandalous. It is outrageous that children with mental ill health are being let down in this way.
Bob Stewart
I have some experience of autism in my family, and I have always thought it does not take much to diagnose autism—it is not a costly affair and it can be done quickly—so I do not understand why there is a three-year waiting list, but perhaps the right hon. Gentleman has more experience than me on this.
Norman Lamb
I am grateful to the hon. Gentleman for that point. He rightly says that through better organisation, in part, we could help to sort out this problem. An 11-year-old girl in my constituency was referred to the mental health trust, but the mental health team is not trained in the diagnosis of autism and she has been referred to another trust to go on to a waiting list for diagnosis. That shows a hopeless silo mentality in the NHS. While this is in part about a failure to invest sufficiently in good diagnostic services, it is also about a failure of organisation.
Let me give further examples of the extent to which the system is now under impossible pressure. On delayed discharges, we had 197,100 delayed days this January, which is an increase of 23% on the previous January’s figure. The delays in mental health discharges are even worse, with the number of bed days lost through delayed discharges having increased by 56% in the year to October 2016. Ambulances have a target of responding to 75% of cases in which the person’s life is at risk within eight minutes, yet that target has been missed since May 2015—for 20 months. We all know that someone’s chances of surviving a stroke and avoiding long-term disability depend on their getting to a specialist unit within 60 minutes—the “golden hour”. In the past year, only 18% of stroke patients in my constituency got to the specialist unit within that golden hour. Again, that is a scandalous failure of a health system in this day and age. Some 85% of patients attending accident and emergency were seen within four hours in January, which is way below the standard national target of 95%. In cancer services, there is a target on starting treatment within 62 days of referral, but that is being missed in too many cases. Instead of 85% of patients starting treatment within this period, the figure has gone down to 79.7%.
All that leads to a concern that if someone, or their loved one, has suspected cancer, and they are worried about whether they are going to be seen on time and start their treatment on time, if they have money, they will choose to opt out of the waiting times by getting treatment privately. The debate about privatisation often takes us into a ridiculous cul-de-sac. The actual privatisation that is happening is that increasing numbers of people with money are choosing to opt out of long waiting times and are getting their treatment privately. I find that intolerable and insidious, because it means that people who have money will get access to treatment quickly and people who do not will be left waiting.
NHS England has established the sustainability and transformation plan process. The King’s Fund takes the view that without heroic assumptions about efficiency savings between now and 2020, each STP footprint is likely to be hundreds of millions of pounds short of the money required. STPs are a good and sensible process for bringing together health and social care, but they are sadly based on a fantasy, because insufficient resources are available.
From all the examples I have given, it seems to me that failures of care are becoming endemic throughout the system, in stark contrast to the Secretary of State for Health’s commitment to make the NHS the safest healthcare system in the world. It is impossible to achieve that, given the extent to which failures of care are becoming commonplace.
There is an alternative to this sense of a Government lurching from crisis to crisis and using sticking plasters to avert total collapse in the system. The approach the Government should take is to be prepared to work with others—as suggested by other Members, including the hon. Member for Ilford North—to come up with a long-term, sustainable settlement. The NHS and the care system were designed in the 1940s, when the needs of this country were wholly different from today. There is an overwhelming need for the whole approach to be refreshed.
I got together a group of Conservative, Labour and Liberal Democrat MPs to make the case to the Prime Minister for establishing an NHS and care convention to engage with the public and NHS and care staff, so that we can have a mature debate in this country about how we can achieve a sustainable, efficient and effective health and care system to meet the needs of our loved ones in their hour of need. The Prime Minister has met the group and sanctioned the start of a dialogue about our proposal. We are due to meet her health adviser, James Kent, and I welcome that, but the fact that the Government have announced a social care Green Paper, and will thereby continue the silo mentality of looking at one side of the divide or the other, leaves me with the sense that they do not appear to be wholly serious about engaging with our group on something that is absolutely necessary.
The truth is that partisan politics has failed to come up with a solution to the country’s health and care needs. That is in part because all the solutions are rather difficult. As the hon. Member for Kingston and Surbiton indicated, it probably involves us all being prepared to pay a bit more tax to ensure that we have a health and care system that we can rely on, and one that we can be confident will respond in our hour of need.
Bob Stewart
Is the right hon. Gentleman’s group of MPs from different parties looking at other models, such as how the Germans provide healthcare through their equivalent of the NHS via a combination of private and national means? It seems to me that we are going to have to consider that seriously if we are to get a really first-class national health service.
Norman Lamb
I thank the hon. Gentleman for that intervention. Interestingly, the Germans spend about a third more than us on their health and care system, and it is effective as a result. We all acknowledge that this is a difficult issue that involves acute politics, and there is an enormous risk of people just shouting at each other. Instead of that, our group has come together—I invite him to join us—to say that we should opt for a more rational approach and all agree that we should be bound into a process, perhaps lasting up to a year, of engaging with the public in the sort of debate that he raises. We have said, “Let’s have an open discussion about how to sustain the health and care system.” I want to ensure that what emerges from that is a system that is accessible to anyone in this country, irrespective of their ability to pay. That was the founding principle of the NHS, and it remains true to this day.
As well as advocating the case for parties to work together to resolve this intractable problem, my party, the Liberal Democrats, continues to develop its own ideas. Last autumn, I established an independent expert panel to look specifically at the case for a hypothecated NHS and care tax. I was fascinated that the leading Conservative thinker Lord Finkelstein advocated in yesterday’s Times exactly what I have proposed. It seems to me that there is growing interest in that sort of solution. If we had an OBR for health—a process of making an independent assessment of the health and care system’s funding needs over a given period—that informed the level of the dedicated health and care tax that people were expected to pay, and if that was shown in their pay packets, we could rebuild trust among the public and they would have confidence that the amount they were asked to pay was what was necessary.
It is interesting that the German system, with its social insurance premiums, has actually kept pace with demand better than our tax-funded system. Having a hypothecated tax to enable people to see exactly what was going into the health and care system would allow us to achieve the benefits of the German system but stay true to our idea of a tax-funded health and care system.
People are anxious and nervous about the Government misusing their hard-earned taxes, so having an independent assessment process would make an awful lot of sense. If the Government cannot rise to the challenge of reviewing a system that was designed in the 1940s, when needs were wholly different, we in this Parliament, collectively, will badly let down the people of this country. We are the sixth largest economy in the world, yet our health and care system is on its knees and is too often dysfunctional. We are capable of better than that.
People’s faith in the ability of politics to resolve the big challenges of our age has been undermined, and if the Government simply persist in going it alone without properly addressing this issue, they will increase people’s belief that they have a hidden agenda and want to run the NHS down in order to destroy it. My plea to the Government is this: do not allow that belief to grow; engage with us, have a mature discussion with the public and demonstrate a commitment to renewing that great institution, because the people of this country depend on us meeting this challenge.
Several hon. Members rose—
Madam Deputy Speaker (Mrs Eleanor Laing)
Order Believe it or not, although we started off with a lot of time for this debate, speeches tend to expand to fill the time available. Therefore, I now ask that colleagues—being honourable and decent to other colleagues—take no more than 12 minutes each. Twelve minutes is a very long time. I know that I can rely on Mr Keith Vaz, who can count and will know when 12 minutes have expired.
Keith Vaz (Leicester East) (Lab)
Thank you, Madam Deputy Speaker, for the endorsement that I can count; I am most grateful. It is a pleasure to follow the right hon. Member for North Norfolk (Norman Lamb), who is widely respected in the House as someone who knows a huge amount about social care and the health service. His project is, I think, welcomed by all parties. We do need an independent assessment of health spending.
The Times today contains a marvellous cartoon of the Chancellor dressed up as Marilyn Monroe, showing his NICs. I do not know whether Ms Monroe could sue for that cartoon, although she has been dead for some years. I want to take the debate away from national insurance contributions, which have dominated the discussion, to other areas. It is important to remember that the Budget is about funding the whole of Government, not just one aspect, although it is, of course, important to raise the money before spending it.
I begin with the Government’s international aid commitment, which was reiterated by the Prime Minister and confirmed by the Chancellor. I was pleased to note that 0.7% of gross national income for aid remains a strong commitment of this Government, even though less time in the Budget statement was spent on international development than the Chancellor spent praising his Parliamentary Private Secretary, the very worthy hon. Member for Salisbury (John Glen). The Chancellor went past the development commitment very quickly, and, rightly, lavished praised on the hon. Gentleman for all the work he has done. However, I shall talk about the importance of maintaining and increasing the aid budget, especially at a time when there is a great deal of media pressure and scrutiny over what we do with our aid. It is right that there should be that scrutiny, although some sections of the media have an obsession with challenging every single bit of expenditure as if it in some way undermines the important principle that our Government provide aid to countries in need.
In particular, I highlight the aid given by the Treasury to Yemen through the Department for International Development. We heard only today that there is now a famine warning in Yemen. Of the aid that we give in the overall DFID budget, £100 million has been committed to the people of Yemen. However, although contributions have been made at a local level, a lot of the money can sadly not be delivered because of the current situation. My message to Treasury Ministers is to keep up with the commitment to fund DFID and to ensure it delivers to countries in need, such as Yemen. The aid should not just sit in a bank, but actually be spent. Until there is a ceasefire in Yemen, we will not be able to spend that money and therefore will not be able to alleviate that poverty.
Stephen Doughty
I concur with my right hon. Friend’s comments about the importance of DFID’s work and the support that it is providing in Yemen. That work has been praised by the Select Committee on International Development, as he well knows. Does he share my concerns that while we are providing that aid, Amnesty International has today said that there is new evidence that the Saudi-led coalition is using cluster munitions?
Keith Vaz
My hon. Friend is an amazing campaigner on these matters and has worked hard on the Yemen issue. He is right to raise this point, which is part of the overall debate and discussion. We cannot get the aid through unless the bombing stops. We need the ceasefire so that the £100 million that has been committed is spent. I bumped into the Secretary of State for International Development in Central Lobby yesterday, and she said that she is focused on and committed to increasing the amount of aid to Yemen. I am grateful for that, but that aid cannot get through, as my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty) says, unless the bombing stops.
Bob Stewart
The right hon. Gentleman and I have a great interest in Yemen, both of us having lived there. My concern is that if we do not keep the aid in the bank, it might end up on some quayside in some dodgy port, where we do not want it to be and where it can be rifled by the mafia. We have to find a balance when we talk about delivering aid, particularly to somewhere like Yemen, because although we may be able to put the aid into the country, there it will sit until someone steals it.
Keith Vaz
The hon. Gentleman has served in Yemen, so he knows how lovely that country is when it is fully functioning. He is absolutely right that the aid needs to get to the people who actually need it, if they are to avoid the famine that is coming their way very shortly.
The second point I want to make is about the midlands engine. We have heard a lot about Birmingham and the west midlands—I am sure that has nothing to do with the fact that there is an election for Mayor in the area—but the Government need to remember that there is more to the midlands than Birmingham and other parts of the west midlands. There is, of course, Leicester and the east midlands. There is also Sherwood, and I see the Government Whip, the hon. Member for Sherwood (Mark Spencer), sitting on the other side of the House. I received a letter from the Secretary of State for Communities and Local Government just now on my iPad, and Sherwood is not even mentioned—I hope the hon. Gentleman will make representations about that. If we talk about the midlands engine only in respect of Birmingham and the west midlands, we will lose out in terms of a part of the midlands that has been a driving force for business. There are huge amounts of talent, enterprise and expertise, and many small businesses, in places such as Leicester, so it is important that we spread the money evenly throughout the whole of the midlands.
Earlier, I mentioned that the Financial Secretary to the Treasury, who is sitting near the Dispatch Box, was my favourite diabetes Minister, and I pay tribute to all the work she did in the years she served in the Department of Health, along with the right hon. Member for North Norfolk. Last year’s Budget gave us the sugar tax, which was resisted by some in the Government. As a result of that tax, manufacturers are now changing their formulas to ensure, yes, that the tax yields less when it comes into effect, but also that our young people in particular will be able to eat products with less sugar in them.
The latest such product—commended by me in an early-day motion—is, of course, the breakfast cereal Honey Monster Puffs, whose sugar content has been reduced by 25%. Nestlé announced yesterday, just before the Budget, that it would reduce the sugar content of KitKats and other products by 10%. Those of us who frequently have to go to the Tea Room, and who are met by all the KitKats there—I am sure you are not seduced by those who run the Tea Room, Madam Deputy Speaker—will be pleased to know that we probably will not even taste the difference once 10% of the sugar is removed.
However, it remains the case that I would have liked to see more focus on prevention—prevention, prevention, prevention. If we spend money now, we will save money in the future. As we know, £10 billion was spent last year on dealing with diabetes and diabetes-related issues. Some 80% of complications are avoidable. The only people who appear to be benefiting from that expenditure are the drugs companies.
Only two weeks ago, on my way back from Yemen, I stopped in Doha. I was taken—the Financial Secretary will be fascinated by this, because she has always wanted to create something like it—to a wellness centre. It had not just a GP, a pharmacy, a podiatrist and an ophthalmologist, but a swimming pool and a gym. When people go to see their doctor and are diagnosed with diabetes, instead of having to have their Metformin, they are prescribed a session in the gym or, if they can swim—sadly, I cannot, but if I could, I would be prescribed one—a session in the swimming pool. That is how to deal with diabetes—through prevention expenditure. I would very much like to hear a commitment from the Minister that prevention will be at the top of the health agenda.
I was surprised that the Chancellor did not suggest an increase in Home Office funding, which faces two very difficult challenges. Last week, Her Majesty’s inspectorate of constabulary released a report on British policing, stating that it is in a “potentially perilous state” due to “dangerous” and “disturbing” practices. The report is pretty damning, but unfair in that it places the burden of blame on police forces themselves. They have sustained enormous cuts to their budgets over the past few years, with the result that we have 19,000 fewer police officers on our streets today. This, together with other cuts, means that the police cannot deliver on the kind of agenda that the Government, and certainly the Opposition, want them to deliver on. We are constantly told that crime is coming down. Well, it is, but the nature of crime has changed: it has gone from the high street into cyberspace. Hundreds of thousands of crimes are now being committed on the internet. Unless we give the police more money to fund training, we will not be able to deal with the crimes that will be inherent in our system over the next few years.
The second aspect of Home Office funding is that the Government will, in the end, have to give a guarantee about the right of EU citizens to remain in this country. Some 3.2 million people will have to be processed. Someone who has been here for five years has a right to remain and become a permanent citizen, but they still have to apply and to get their letter confirming it. The current waiting time is between four and seven months. People have to fill in a huge number of documents to confirm that they have been living in this country over the past five years and record every single absence. A unit needs to be set up in the Home Office, properly funded, to deal with the registration of EU citizens. Ministers may grimace at that prospect, but I am afraid that we are going to have to spend money to make sure that this happens.
We need to get the police funding formula in place. In Essex, Madam Deputy Speaker, which is run by your chief constable, Stephen Kavanagh, and in Leicestershire, which is run superbly by my chief constable, Simon Cole, we need a definitive statement on what the police funding formula is going to be. Without it, we simply do not know how much money is available at a local level to spend on local matters. It is therefore essential to make sure that this happens.
The great feature of the previous Chancellor’s Budgets was that he always had a surprise concerning culture. On the last occasion, he funded a commitment to Hull because it had become the city of culture. I hope that the Minister will look carefully at what can be done for Leicester. Given the incredible achievement of Leicester City football club in winning the English premier league and becoming the current holders of the premier league trophy, it would be nice to see some kind of commitment from the Government to cultural and sporting achievement. The previous Chancellor has done it before, and I hope that the Minister will consider doing something for Leicester in future.
Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)
I think it is fair to comment that this Budget has not met with unalloyed joy and enthusiasm across the country and in the media. It may come as a surprise to the House that I am going to demonstrate a degree of enthusiasm for one piece of the Budget that I think is highly commendable.
I am, of course, talking about paragraph 5.10 on page 48 of the Red Book, in which the Chancellor commits himself to reducing the burden on small co-operatives. I am enthusiastic about it because I have been a lifelong supporter of co-operatives, but also, and very personally, because the proposal was in the ten-minute rule Bill that I introduced on 8 November. May I put on record my appreciation to the Economic Secretary to the Treasury, who is in his place, for discussing the implications of the proposal with me afterwards, and may I say how much I welcome and appreciate its incorporation into the Budget?
I gently remind the Economic Secretary that I made a couple of other recommendations in the same ten-minute rule Bill, which have yet to appear in the Budget. I hope that following further consultation I will be able to praise him in future Budget debates for implementing them as well. As a general point, I hope that this will set a precedent for the Government, and the Treasury in particular, listening to Opposition Members and implementing some of their recommendations. I am sure that doing so will benefit future Budgets greatly.
The second thing I want to do—again, I am not being totally critical of the Government—is to put on record my appreciation for the report on the so-called midlands engine, which has been published today. Not only does it recognise the role of the west midlands in the national economy—and our phenomenal, high-quality manufacturing base, which is driving the economy and above all driving our exports—but it identifies the long-standing issues prevalent in the economy that need to be addressed if we in the west midlands are to reach our potential. Those issues are low productivity, skills, and difficulties with connectivity and transport infrastructure.
Although I welcome the proposal and the money that is being invested, may I make a couple of qualifying points? I think there is a very real danger that the potential benefit that accrues from the project will be undermined by some of the proposals in the Budget. My first point is that skills in construction, in particular, must be sustained if we are to improve our transport infrastructure. At the moment, about 10% of the construction workforce consists of employees from outside the country. If the ensuing Brexit negotiations affect their position and construction firms’ ability to employ others to sustain the policies and extra investment in the west midlands, that could undermine the ability of the midlands engine to reach its full potential. I emphasise that provision must be made in the Brexit negotiations for the construction industry to recruit the appropriate level of skilled personnel to fulfil such projects.
My second point, about education and skills, is particularly relevant in my constituency and the Black country. On 24 March, I am due to meet local headteachers to discuss funding problems in their schools, notwith-standing all the fine words that have been spoken about the pupil premium and so on. While the midlands engine will make provision for promoting skills, vocational education and science-based education, there is absolutely no point in putting in that money if we are not providing adequate funding for the original primary and secondary school education to ensure that people have the literacy, numeracy and other qualifications necessary to make the most of such money. There is a grave question mark over that at the moment.
When I meet the headteachers, I guess that one of the things annoying them—this annoys me and a lot of people in the Black country—will be the Government’s preoccupation with investing in unloved, unwanted, selective schools while they neglect to invest appropriately in our existing school estate. I would point to a National Audit Office report saying that there is a £1 billion need for investment in our existing school estate to deal with the immediate problems. There are certainly schools in my constituency that need immediate investment. If such money is used to promote new selective schools, the Government will, quite frankly, be distorting the existing state school system and estate, and failing to realise the potential of the pupils attending such schools. This is totally unacceptable. It is unwanted, and it really sticks in the craw of the people who, day in and day out, try to give our children the best possible education within the existing system.
I have worked out, on the basis of the figures in the Budget, that the £320 million going into the 110 new schools means that there is an average of £3 million for each of them, while the £210 million for the 10,000 state schools in the existing estate means that each will get an extra £21,000 over the course of three years. That huge disparity is bound to prejudice the life opportunities of the many millions of students going to our existing state schools.
Whatever fine words the Chancellor used and however well he packaged the statistics on which the Budget is based—he can, shall we say, tell a good story—the reality is that the previous Tory-led Government and this Government have so far failed. The public sector deficit, which we must remember was supposed to be eliminated by 2015, will certainly not be eliminated by 2021 and may well still be with us in 2025. Whatever happened to the long-term plan that was the mantra of the Tory-led Government up to 2015 and was used in the carefully choreographed comments made by every supporter of that Government to demonstrate the effectiveness—or otherwise—of their economic policy? The fact is that I do not recall anybody saying that the long-term plan might actually last only until 2015. It has now disappeared, or evaporated, from the political lexicon of the House. It would be laughable were it not for the fact that so many millions of people have endured cuts in their wages, cuts in their public services and, in some cases, very real hardship indeed. As a result, we face the perfect storm: the cumulative failure of austerity policies that have failed to generate the necessary tax receipts to pay off an adequate amount of our public debt; the increased demand placed on our public services—particularly social services and health, but also education—that have to be met one way or another over the next few years; and, of course, the uncertainty generated by Brexit.
I could not help but be amazed by the phraseology used by the Chancellor over his decision to waive the fiscal targets in order to make available more money for what has loosely been called a “fighting fund” or “war chest” for Brexit. My understanding of a fighting fund or a war chest is that it is money that is put away out of existing consumption to be used for problems that arise in the future; it is not about heaping debts on future generations to pay for mistakes made in the present, such as the results of Brexit arising from this Government’s policy.
I would like to have gone on, but I will try to stick to the 12-minute limit. The Government are failing to address the big issues that have arisen from their failure to deal with public spending and the economy over the past seven years. I concur with the disappointment expressed by my hon. Friend the Member for Wallasey (Ms Eagle) at the Government’s failure to recognise that and to take the necessary big steps to address it. I think that the Budget is a major failure. It is a sticking-plaster Budget that spends money just to avert a crisis, without examining the underlying crises and the policies needed to address them for the benefit of everybody in the long run.
Madam Deputy Speaker (Mrs Eleanor Laing)
I appreciate that some hon. Members have been sitting here all afternoon. There is something a little unfair about this but, c’est la vie, I am afraid that I have to limit Members to 10 minutes.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
Thank you for giving me the opportunity to contribute to today’s Budget debate, Madam Deputy Speaker.
It is fair to say that today’s headlines are not what the Chancellor might have planned: “Spite Van Man”, “Tories break tax vow”, “Phil Picks a Pocket or Two”, “Rob the Builder! White Van Man gets battered by Budget”, and that is just to name a few. It is a good example of how, when one does things in a hurry, one gets things wrong. The Chancellor got it wrong yesterday. If he takes anything away from the last 24 hours, it will be that he made the wrong choice at the wrong time and in the wrong way. That is why Labour, along with many Government Members, will oppose the increase in national insurance for the self-employed. It is a broken promise and the Chancellor is rightly in for a rocky ride.
The Chancellor has used his first Budget to continue with tax giveaways to those at the top, while hitting self-employed low and middle earners for £2 billion to fill his own black hole. The Association of Independent Professionals and the Self-Employed describes this tax hike as an additional burden upon individuals who are already subjected to costly excessive bureaucracy. Anyone who is self-employed and earns more than £16,250 a year will have to pay more tax. Under the proposals, a self-employed person earning £20,000 will pay almost £100 more in national insurance from next year and a self-employed person earning £30,000 will pay almost £300 more. Up to 8,000 self-employed small businesses in my constituency could be affected by the change. For a self-employed earner bringing up a family on about £25,000, that could be about £15 to £20 a month out of money used to pay for school trips, school uniforms or putting food on the table. At the same time as inflation is going up and average wage growth is being revised down, this measure, implemented in this way, will lead to yet another squeeze on household incomes. The last thing we want is for families to be borrowing more just to make ends meet. The just about managing could become the just about managing no longer.
The self-employed are the engine of the UK economy. I have twice had periods of self-employment and I know the challenges they face. There is not the back-up and security of an employer to fund their pension, pay for a training course, cover them with another member of staff if they are off sick, or provide statutory holiday pay. It is hard and it is stressful, alongside the rewards of being independent and entrepreneurial. Due to income fluctuations, it can be harder to get a mortgage or a rental agreement.
The Budget should have been a chance for the Government to show the self-employed that they are on their side. Indeed, the biggest difference in tax take between self-employment and employment lies in the 13.8% employer national insurance, not the national insurance paid by individuals. If the Government are serious about equalising tax treatment, they should focus on how to work in partnership with the self-employed to balance and share the risk for those who are doing the right thing. The small and medium enterprise community is the backbone of our economy, and the Government should bring forward such proposals only after proper dialogue and consultation with it.
I want to focus on a few other points. Productivity growth is set to be revised down again, even after the UK productivity gap widened last year to the worst levels since records began. After seven years of Tory Government, we still lag behind Germany and the US by more than 30%. As the Chancellor said at the time of the autumn statement, the productivity gap is well known, but it is shocking none the less. The downward revision of productivity is not just due to Brexit. It is a reflection of the Government’s strategy and investment record: their lack of achievement, rather than their recycled infrastructure plans. At some point, the Government will have to take responsibility for their poor record. They now have no one else to blame.
When the Government came to power, they stopped the Building Schools for the Future programme, and two schools in my constituency were affected. We can now see the outcome of the Government’s neglect in favour of a blind ideological pursuit of, and almost exclusive support for, free schools and grammar schools. The National Audit Office calculates that £6.7 billion is needed to bring existing school buildings in England and Wales to a satisfactory standard. Ministers are choosing to give billions of pounds to fund new free schools, while existing schools are crumbling into disrepair. That is not my view, but the conclusion of the Whitehall spending watchdog. The Chair of the Public Accounts Committee called for the money to be reassigned and diverted to existing buildings, arguing that taxpayers’ money could be used to fund much-needed improvements.
Another challenge is 4G coverage. The UK is 54th out of 80 countries surveyed for 4G coverage, with levels here lower than in Bulgaria, Albania and Romania. This is the fifth time the Government have announced this highly limited roll-out of fibre broadband. Once the roll-out is complete, only 7% of homes and businesses will have benefited.
This Budget and previous Budgets have cut corporation tax, which will be 19% this year, 18% next year and 17% the year after, removing £15 billion from public finances in this Parliament. This is a direct cost to the taxpayer. The irony is that not a single business, large or small, that I have talked to, and I talk to many, has put corporation tax levels at the top of their wish list. They have raised infrastructure; affordable housing, so that employees can live and work near where they work; education and skills; and public transport and its affordability. The decision to go ahead with those corporation tax cuts is a self-dug black hole that the Government need to fill. They are plugging the gap with the earnings of the self-employed and cutting the amount spent on children’s education.
In recent weeks and months, teachers have told me about growing parental poverty, and about kids coming to school hungry or without clean school uniforms. Parents are sometimes unable to afford school trips. Schools are having to cut teaching posts and non-teaching welfare and support staff, curriculum teaching time is being reduced and the school day is being shortened. As pupil numbers increase, teachers face increasing class sizes. Increasing numbers of children face mental health conditions but are unable to get the support they need. How can the Government be proud of that record, which is the reality of what our wonderful schools face—the worst they have known in a generation?
The Government should delay or abandon their corporation tax cuts and support schools, which work hard to ensure that the children of our country get the education they need. Indeed, at a minimum, they should delay the application of the apprenticeship levy to schools.
It is worth mentioning one other lost opportunity. In the 2015 Budget, the former Chancellor announced that he had hiked the tax take on dividend income by 7.5%. That change took effect only in April 2016, meaning that people could bring their dividends forward by a year to avoid it. The OBR estimates that, once other factors are taken into account, pre-announcing the policy cost the Treasury £800 million and handed shareholders that same amount; and that each of those individuals withdrew an average of £30 million in dividends and avoided £1.1 million in tax. That is a devastating conclusion and another example of how the Government continue to give to those who already have and take away from those who need the most.
We need better than this. We need a strategy that addresses the needs and challenges that businesses and families in our constituencies face. We need a proper plan for funding public services, an economic plan that suggests a clear sense of direction, an honest assessment of the risks of Brexit, and a sensible response to those risks. What was missing from the Budget was a proper vision of our future and a pathway to get there. It was an unfair Budget, it made the wrong choices and is set to leave us poorer and less prosperous as a nation.
Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
After the spin around the Budget, which has not exactly gone to plan, let us look at the actual facts. According to the Resolution Foundation, we have had the worst decade for pay growth in two centuries of earnings data. GDP growth is overplayed and inflation is underplayed. GDP growth is expected to flatten as increasing inflation, which has sped up in the past few weeks according to much of the data, squeezes living standards, and as consumer spending, which as we have heard has been largely driven by a credit card boom, dries up. Again, that creates a false impression. Borrowing continues to rise and is expected to rise further. The OBR has made it absolutely clear that the
“government does not appear to be on track…to return the public finances to balance at the earliest possible date in the next parliament”
as they had promised.
On productivity, the Chancellor did a very good job of outlining what a bad job the two successive Conservative-led Governments have done. He said:
“The stats are well known: we are 35% behind Germany and 18% behind the G7 average”.—[Official Report, 8 March 2017; Vol. 622, c. 818.]
What on earth have they been doing for the past seven years if we are in that position? Small businesses are hit not only by the NICs issue, which I will come to, but by the reduction in the dividend allowance, which we have heard about, and the additional red tape and burdens of things such as quarterly reporting.
We can talk about statistics and the real things going on in the economy, but the impact I am interested in is the impact on my constituents in Cardiff, Penarth and the Vale of Glamorgan. I am proud that the Welsh Labour Government are investing in our schools and hospitals. New schools and hospitals are being built in my constituency, and more is being spent on NHS and social care together than the average spent in England. Indeed, councils in Cardiff and the Vale of Glamorgan are doing their best to invest in local services and to protect people who are suffering as a result of the policies of the Tory Government in Westminster. The fact remains, however, that by 2020, according to the Joseph Rowntree Foundation, ordinary working families will be worse off than they were in 2015. The income of a couple with two children, working full time and receiving the so-called national living wage, will fall by £1,051, while that of a lone parent with two kids, working full time on the national living wage, will fall by £3,363. My constituents tell me about the real challenges and hardships that they face, as opposed to the spin that we get from the Government.
Let me say something about self-employment and the increase in national insurance contributions. I think that the Government’s approach has been a huge mistake. It is clear that those in the self-employed sector face huge additional fixed costs and risks. I speak to many self-employed people every week in my surgeries—for example, I have spoken to a number of taxi drivers recently; I shall say more about them shortly—and I know about their lack of benefits, their higher insurance premiums, and their difficulty in obtaining mortgages. There is clearly some abuse on the margins of self-employment, and we must address the issue of bogus self-employment, but hitting a whole swathe of self-employed people is a crude measure which can have hugely differential and damaging impacts on some sectors and groups.
Peter Dowd
My hon. Friend said that the Government’s approach had been a mistake. Today, on Radio Cymru, the Under-Secretary of State for Wales, the hon. Member for Aberconwy (Guto Bebb), said:
“I believe we should apologise. I will apologise to every voter in Wales that read the Conservative manifesto in the 2015 election.”
Well, he was the Minister, but I am not sure whether he still is. Does my hon. Friend know?
Stephen Doughty
I was not aware of those comments, but, as someone who listens to Radio Cymru occasionally, and to Newyddion, I shall listen carefully to what the Minister said, whether it was in Cymraeg or in English. I hope that his ministerial colleagues will listen as well, because it is clear that there is much disquiet on the Government Benches. Perhaps that is why so few Conservative Members are present today, and why those who have spoken have been quite critical of the decisions in the Budget.
There are 4.8 million self-employed people in the country, and nearly 5,000 in my constituency. It is all very well to say that this measure will not affect the very poorest, and, at the other end of the spectrum, that it will ensure that the very richest are brought into line. However, as we heard from my hon. Friend the Member for Ilford North (Wes Streeting), no amount of distributional analysis and charts can reflect the reality and the impact on those in the middle deciles: people who are just about managing, and the strivers who the Government were so keen to say that they were trying to support, but who have been shafted. The Government are not helping those people; they are doing exactly the opposite.
The Federation of Small Businesses has described the measure as
“a tax grab on middle-income self-employed people who are just about managing”.
The Musicians Union—I work closely with that union, and with many other unions representing the creative industries in my constituency—has said:
“This Conservative Government…have done nothing but cut funding for the arts and for music, and they are now penalising musicians further by increasing their tax contributions.”
Those are the real facts. The Federation of Small Businesses at one end of the spectrum, and representatives of those in the creative industries at the other, have decried this measure.
I want to say a little about the reality of life for one group of workers who are self-employed at present, although many of them would argue that they are actually employed, and, indeed, that is the subject of many current legal cases. I am talking about taxi drivers. As a member of the GMB, I am proud to have been working with its members locally, and hearing about the concerns of many taxi drivers in Cardiff, the Vale of Glamorgan and south Wales as a whole.
Taxi drivers are hard-working people. They work every hour that God sends. They are striving to make a difference for their families, but they are struggling with the costs that they face from the companies that engage them. There are the fines, the administration fees, the cost of fuel, and the cost of replacing windows when they do not accord with regulations which vary so much across the country. They are often trapped in low-paid account work, receiving wages that do not reflect the effort and time that they put in. They have differential insurance costs. Drivers from other local authorities, or indeed from London, where different rates are paid under different regulations, come to Cardiff and undercut the industry there. Antiquated legislation allows private hire licences to continue to rise without any cap; that is a simple matter of supply and demand. These national insurance rises will hit people who are striving on the margins. They can barely afford the additional £20, £30 or £40 that this measure is going to bring in. They are the ones who are going to be hardest hit, and they are already hit hard by many other measures.
This is just one measure hitting those in self-employment. I have been speaking to a number of companies in Cardiff that are using the self-employed in the ways I have mentioned. I am concerned that companies such as Dragon and Veezu, who operate taxi firms, are not willing to meet drivers to discuss their concerns or to meet the GMB. That is of great concern to me. Fundamentally, what are the Government doing to help such people who are striving and working hard, and who just want a level playing field and enough money to be able to support their families?
I mentioned the impact on the creative industries. We have lots of start-up creatives in my constituency, including small design, music, production and technology firms. They are also going to be hit badly by these changes. What are the Government doing to support them?
Finally, I will make a few further points. Where on earth was the mention of Brexit? That is the biggest economic challenge facing this country in generations, but it was not mentioned. There were no answers on the question of the additional debt that the OBR has predicted is going to be added to the national debt; no answers on whether Wales is going to be left a penny worse off as a result of the potential changes to regional finance and structural funds; no answers to the exchange rate volatility that is causing the prices at the pump to go up; and no answers on the single market, or the impact of tariffs if we end up in the “deal or no deal” situation that the Prime Minister seems to be leading us towards. Where was the mention of those things? That was utterly irresponsible.
We should consider what else was missing, too. Where was mention of climate change, or further support for the steel industry, or support for veterans—including younger veterans who are leaving but are struggling with their housing costs and are discriminated against in housing benefit? Where was action to right the injustices for women pensioners? The WASPI campaigners were here yesterday; thousands from across the country, including hundreds from Wales, were here speaking out. Where was the help for the Allied Steel and Wire pensioners who were let down in my constituency, and are still let down today? Where was the money to address the police cuts—the police are suffering huge pressures, as the former Chair of the Home Affairs Committee, my right hon. Friend the Member for Leicester East (Keith Vaz), pointed out? Where was the help on energy prices when people are seeing their bills go up?
This Red Book is one of the thinnest Budget books we have seen, certainly since I have been in this House. That is because there is a whole lot missing from it, and, frankly, the Chancellor is going to have to do a lot of rethinking on the bits that are in it.
Mr Stewart Jackson (Peterborough) (Con)
It is a pleasure to follow the hon. Member for Cardiff South and Penarth (Stephen Doughty).
The Labour party clearly has a rich vein of irony, as it is masquerading as the friend of the entrepreneur and the self-employed. Perhaps the white van man taskforce will be headed up by the right hon. Member for Islington South and Finsbury (Emily Thornberry), who has great affinity with white van man.
The fact of the matter is that Labour Members must be living on a different plant from the rest of us, because this Budget was actually a consolidation of seven years’ work to rescue this country’s fiscal credibility from the disastrous mess left by the Labour party, including the record peacetime debt that we had in 2010. I also have to say that in my 12 years in the House, I have rarely seen a poorer Budget response than that from the Leader of the Opposition—no wonder his own MPs had their heads in their hands.
Mr Jackson
I will not give way, if the hon. Gentleman will forgive me, as I have to make progress.
If we are talking about honesty and being upfront, even today the shadow Chancellor is quoted as saying that within 100 days of a Labour Government, we would see the end of nuclear power. That is rather different from what was being said two weeks ago in Copeland, when the Leader of the Opposition was saying that nuclear power was safe under Labour.
The Budget also consolidates this Government’s industrial strategy, which is a recognition that many people across our country, particularly outside London, felt that the benefits of globalisation were not flowing to them, and to their communities, infrastructure, towns and cities. It is right that we address that, and this Budget does so. Those people feel that some of the forces of globalisation had passed them by. That is a wider context of Brexit, but because of my departmental responsibilities, I will not go any further into that.
We have also witnessed a jobs miracle over the past seven years. In my constituency there has been record growth in private sector jobs, a drop in the number of NEETs—those not in education, employment or training—and youth unemployment, and an unemployment rate of 1.9% on the last figures, which is the lowest in eight years. We have also seen the highest increase in living standards in 14 years, and an increase in real wages over the last quarter or so. We have cut the deficit by two thirds—it was 10.1% of GDP under the previous Labour Government; it is now 4%. The Government have also tackled key issues relating to the skills agenda, with £500 million for skills. In my constituency, a university technical college is attracting new students. More money—£40 million—is being made available for reskilling and retraining the workforce. The Chancellor is also considering important issues such as infrastructure spending on roads and broadband.
Welfare is certainly an issue that transcends party politics, but I am proud that this Government have worked on the basis that the No. 1 priority for getting people out of the miserable cycle of poverty and welfare dependency is to get them into work. Taking people from workless households and giving them work is massively important if we are to change their lives. It does not help when Labour Members propagate the myth about zero-hours contracts. In any case, people who are on those contracts sometimes make the decision to work in that way themselves. That affects their lives, but it is their choice. In fact, 97.1% of people are not on zero-hours contracts, but we would not know that from listening to Labour Members.
I agree that the social care funding is vital. It builds on the precept that we have already put in place, and on the better care fund. However, in 13 years of benign economic circumstances, the Labour Government did nothing at all about social care. They sold the gold, they ruined our private pension schemes and they racked up record levels of debt.
We are spending serious money—£10 billion by the end of this Parliament—on schools improvement. Labour adopt a levelling-down approach, attacking people who are aspirational and ambitious for their children. They say that grammar schools are awful—that they are what the rich and the middle classes do. Actually, they are about equality, improving people’s lives and reducing those differences. It is about taking people from modest backgrounds and giving them a real stake in their future. Labour Members have always been against that. They have been against share ownership, against the right to buy and against grammar schools. For them, it is all about levelling down and sharing the misery among everyone. That is what socialism is all about.
We are dedicated to improving the living standards of all our people. As Disraeli said, the aim of the Conservative party is the enervation of the condition of the working class, and that is our watchword. This is about social progress. That is why 1 million people will get a £500 pay rise this year as the national living wage goes up to £7.50. The personal allowance has risen seven years in a row. We have frozen fuel duty for working people who need their cars to go to work. We have provided free childcare—[Interruption.] The hon. Member for Cardiff South and Penarth says that we have not, but we are also putting serious money into research and development, broadband and tackling traffic congestion at pinch points.
Of course we have had to make difficult choices. On the specific issue of national insurance contributions, this is about the regularisation and simplification of the tax system, but it is also about social equity and fairness. The hon. Member for Cardiff South and Penarth shakes his head, but the Resolution Foundation has not always supported a Conservative Government’s fiscal measures and yet it is doing so today, as is the Institute for Fiscal Studies. It is interesting that Labour Members should be against fiscal fairness. They are against us making the necessary changes to fund things like social care. I have asked questions to which I have not had an answer from their Front Bench, or from “continuity Blair” on the Back Benches. I like to see the dynamic duo from Ilford, the hon. Members for Ilford South (Mike Gapes) and for Ilford North (Wes Streeting). What we do not have from Labour is a coherent, comprehensive, plausible policy on tax or spending. It is just more tax, more borrowing, and more spending—more debt millstones for our children. That is the Labour party for you.
There are certain things that I would have liked to see in this Budget that I did not, such as more tax on high-strength cider and a higher tax on tobacco. I support the sugar tax. I am not a libertarian—I am a social conservative—and we should reflect the health impact caused by sugar in our diet. Like my hon. Friend the Member for Harrow East (Bob Blackman), I would like more help in the autumn statement on affordable housing to get younger people on the housing ladder. We need to do more on tax advantages for brownfield remediation. We need to put in place extra care facilities for older people, such as through real estate investment trusts. We need more smaller niche house builders to get back into the market and build more homes.
Some schools in my constituency are concerned about the impact of the new education funding formula on their baseline funding. It would be remiss of me not to say that the King’s School and Arthur Mellows Village College are worried about that, and I will be speaking quietly and privately to the Chancellor.
My party is proud of its achievements over the past seven years in turning this country around after we inherited the Labour party’s disastrous legacy. My party believes in social progress, prudent government and fiscal responsibility, and it falls to the Conservative party, as ever throughout history, to build a country that works for everyone.
Barbara Keeley (Worsley and Eccles South) (Lab)
We have heard a wide range of speeches this afternoon, including from the hon. Members for Kirkcaldy and Cowdenbeath (Roger Mullin), for Richmond (Yorks) (Rishi Sunak), for Esher and Walton (Mr Raab), for Harrow East (Bob Blackman) and for Peterborough (Mr Jackson), and from the right hon. Member for North Norfolk (Norman Lamb), who is no longer here. We also heard excellent speeches from my hon. Friends the Members for Wallasey (Ms Eagle), for Croydon North (Mr Reed), for Bristol East (Kerry McCarthy), for Ilford North (Wes Streeting), for West Bromwich West (Mr Bailey), for Feltham and Heston (Seema Malhotra) and for Cardiff South and Penarth (Stephen Doughty) and from my right hon. Friend the Member for Leicester East (Keith Vaz).
I shall mainly talk about social care, but I want to mention the absence of any Budget help for the 1950s-born women struggling without their state pensions owing to the 1995 and 2011 Pensions Acts. Their demonstration and lobbying here yesterday were wonderful. I am also sad that the Chancellor could not find £10 million for the children’s funeral fund, which was campaigned for so ably by my hon. Friend the Member for Swansea East (Carolyn Harris). Despite cuts from central Government, my local authority has recently announced that it will waive fees for child burials, but all the weight of that should not be put on councils.
I had hoped that this Budget would finally announce a Government funding commitment to start to put the social care sector on a stable footing. The Chancellor said that everyone should be able to
“enjoy security and dignity in old age.”—[Official Report, 8 March 2017; Vol. 622, c. 820.]
However, despite his rhetoric, it is clear that his Budget did not match up to that aim. As we have heard, the King’s Fund has put the current funding gap for social care at around £2 billion. Yesterday, the Chancellor announced additional funding of £2 billion over three years, of which only £1 billion will be available this year. That is half of what is needed to deal with the immediate crisis. The Care and Support Alliance commented that that the funding will
“keep the wolf from the door”
but no more. There has been much discussion about the future and what will happen to that extra funding, but we must bear it in mind that post-Budget figures for adult social care show a 2.1% cut between 2016-17 and 2019-20, showing that funding is still being cut in this Parliament.
Along with council leaders, social care providers and health leaders, the Opposition have been warning this Government for many months about the perilous state of the social care sector. Indeed, the King’s Fund recently said that adult social care is
“rapidly becoming little more than a threadbare safety net for the poorest and most needy older and disabled people.”
Last week, the care company Mitie offloaded its two homecare businesses for £2, which is a clear demonstration of the fragility of the current care market. That company, which had provided care and support to 10,000 people and employed 6,000 staff, was reduced to being worth only £2. It has taken until now for the Government to heed the many warnings, and they were wrong to wait so long to act, just as they were wrong to cut local government budgets by around 40% since 2010, which has led to cuts of £5.5 billion from adult social care budgets by the end of this financial year.
Ms Angela Eagle
Does my hon. Friend also recognise that the cuts to benefits, particularly to housing benefit, will have a huge effect on extra care? Large numbers of people are very happy, well looked after and protected in those arrangements, but they cannot pay for them if housing benefit goes. Moving those people into nursing care will cost far more a week. That is another ticking time bomb.
Barbara Keeley
My hon. Friend is right about extra care housing.
The Chancellor was wrong not to make any extra funding available for social care in the autumn statement. Instead, Ministers chose to continue putting the burden of funding social care on councils and council tax payers. The local government finance settlement compounded the mess by recycling money from the new homes bonus to create the adult social care grant. That rather inept settlement made a third of councils worse off, including my own Salford City Council, which loses an extra £2 million from budgets this year.
One council that did not lose out from the settlement was Surrey County Council, which will gain £9 million extra from the adult social care grant. Perhaps that should not surprise us, given that the settlement was made when Surrey was in the middle of a long, drawn out and clearly highly successful lobby of Ministers to get more funding for just that council’s social care.
Last night, Surrey County Council released many documents and texts revealing the extraordinary level of access that that one council enjoyed with Ministers and their advisers. My local authority recently asked for a meeting with the Secretary of State for Communities and Local Government to discuss our difficult financial situation and the loss of funding for social care. We were given a 30-minute meeting with one of the Under-Secretaries of State. However, the leader of Surrey County Council was given meetings with the Secretary of State on 12 October, 19 October and 9 January. There were a number of further meetings with the Secretary of State to discuss Surrey County Council’s funding situation involving the Chancellor, the Secretary of State for Health and other Surrey MPs. There was also a substantial stream of letters, emails and texts, some of which may make surprising reading. Some frustration was expressed about the Communities Secretary, with one Surrey MP saying:
“Sajid led me to understand before Christmas that he would be trying very hard…to help Surrey out with the worst of its (Government-dictated) financial dilemma.”
And he said that if the Secretary of State was
“imprudent enough not to have £40m hidden under the Department sofa for just this sort of emergency/problem”
and if all the Secretary of State’s local government money really is allocated, he
“still has the option of adjusting all other Council settlements down very slightly in order to accommodate the £31m needed for Surrey—and I think he should be encouraged to do this.”
In January that Surrey MP wrote that he was
“losing hope re getting help from Government this time, we still need to kick up such a fuss that Ministers and Civil Servants really do remember at the very least ‘they will need to treat us better next time.’”
I think that refers to the new funding formula. All this about a council that the Chancellor himself told in a letter in December:
“Surrey’s core spending power in 2016/17 decreased by 1% compared to an average reduction of 2% for shire counties as a whole”.
And the Chancellor said that over the lifetime of this Parliament
“Surrey’s spending power is forecast to increase by 1.5% compared to a flat cash settlement for local government as a whole”.
It seems that Ministers were not ready to listen to most council leaders, care providers, local authorities and their own regulator about the fragile state of social care funding, but it is clear from all the correspondence—I recommend that hon. Members read that correspondence, as it is very interesting—that relying on council tax and business rates to fund social care will never give us the fair and stable funding system that we need.
As I said earlier, there will still be cuts of 2.1% to social care up to 2019-20, so what we have in this Budget is a sticking plaster or a stopgap announcement that will not give older and vulnerable people the “security and dignity” in old age that the Chancellor claims. And it will not enable us to deal with the continuing demographic challenges that we face. The number of people aged 75 and over is projected to nearly double by 2039. That ought to be something to celebrate, but instead the Government have created fear and uncertainty for older people by failing to address the health and care challenges raised by those demographic changes. The Chancellor said that the Government intend to produce a Green Paper in the autumn on long-term funding options, and there has been some discussion of that in this debate, but given that we have already had the Barker review and the Dilnot commission, there are fears that the Government could be kicking this issue, once again, into the long grass.
I hope that the Government are not doing that, because cuts to social care budgets hit not only people who need care, but the 6.5 million unpaid family carers. Carers UK tells us that an estimated 1.6 million people currently provide 50 hours or more of care per week, which is an increase of a third since 2001. Some 2 million people have given up work at some point to care for loved ones, and 3 million carers have had to reduce their working hours. That is not good for their finances, with many falling into poverty as time goes on.
As people live longer with disabilities and long-term health conditions, more of us will find ourselves having to take on a caring role. Sadly, this Budget offered nothing to carers, just as it offered nothing to women born in the 1950s and nothing to families who were bereaved after losing children. There was nothing in it for carers, no extra support and no sign that this Government value the important work that they do. I say to the Minister that £120 million would deliver a three-hour respite break each week for 40,000 carers who are providing full-time care; instead, as we know, the Government have chosen to prioritise cuts to inheritance tax and corporation tax, and to ignore the increased burden on unpaid family carers.
The Government have also failed to recognise that the social care crisis is not just about older people. The Chancellor talked about the impact that the £2 billion over three years will have on delayed discharges, but, as councils have reminded us this week, other groups of people need social care, including those with learning disabilities. About a third of councils’ annual social care spending—some £5 billion—goes on supporting adults with learning disabilities. Surrey MPs must now understand that fact, after all the correspondence from their council leader, who spent a lot of time trying to make clear to them what an issue that was for councils.
We had an excellent debate in Westminster Hall earlier in the week on social care in Liverpool, when we heard that Liverpool had lost almost 60% of its grant since 2010 and that that will reach cuts of 68% by 2020. Cuts to social care there have meant that funding for care packages had to be cut, so whereas 14,000 people were receiving one now only 9,000 are—5,000 people are no longer getting a care package. Surrey, which has had so much attention, did not have cuts at that level; its cuts were only 28%. Indeed, social care spending in Surrey has increased from £273 million to £367 million.
I want to make an observation about the new allocations for the £2 billion that the Government have announced. I observe—that is all I can do, because the figures have only just arrived—that the allocations are £1 billion for year one, two thirds of a billion for year two, and one third of a billion for year three. In that, Surrey’s allocation goes up in year two; it is one of only six councils on the whole list that gets a bigger allocation out of a smaller amount of money. I do not know, and it is impossible to see here in the Chamber, what the formula is, but that position is very worrying.
Disturbingly, this important matter of funding social care has been tarnished by the offering of sweetheart deals and the making of gentlemen’s agreements. It seems, from reading the correspondence, that all of that was done to escape the political heat for some right hon. and hon. Members facing the reality of what cuts to council funding have done to social care in their local authority area. That is what this is all about: threats of what will happen to constituencies and areas if the cuts go on.
Social care should not ever be consigned to becoming a threadbare safety net. We also should not have a Communities Secretary who can hold more than seven meetings with Surrey County Council or Surrey MPs to discuss their funding, yet who will not meet a cross-party delegation from Salford City Council and has no time in his diary to meet the leader of Hull City Council. I hope the Communities Secretary will start to listen to councils other than Surrey County Council, whose leader emphasised in letters that we have seen that it has the largest Conservative group in the country. He should also listen to leaders from Hull, Croydon, Salford, Manchester, Liverpool, Durham and Newcastle. He needs to understand from them what is needed throughout the country to save social care from crisis.
The Financial Secretary to the Treasury (Jane Ellison)
We certainly have covered a lot of ground in today’s debate; indeed, we have strayed internationally, as well as covering an awful lot of domestic policy. Before I address some of the key themes, I wish to stress again the central point made by my right hon. Friend the Secretary of State for Communities and Local Government when he opened the debate. Our ability to provide public services is entirely dependent on our ability to pay for them. Indeed, the right hon. Member for Leicester East (Keith Vaz) said in his speech that before we talk about spending, it is important to talk about how we would raise the money. That is the last thing we have heard from the Opposition today.
Key to this debate is the fact that if we do not live within our means, deal with the deficit and get debt falling, we simply will not be able to continue to fund the public services that we all care about on both sides of the House; of course, the generations to follow will then suffer. We have seen how debt has been left for others to deal with, which is why at the heart of the Budget and our economic policy is our continued resolve to restore the public finances to health, increase our economic resilience and secure our public services for the future. At the heart of our aims is the work to bring down the deficit. We have made great strides, and in doing so we have been able to bring what we spend and what we raise further into line. That is how we can afford public services.
We have already cut the deficit by almost two thirds, but the work is not done. We are also on course to get debt falling as a share of GDP by 2018-19. We are, though, the first to acknowledge that there is no quick fix, no silver bullet and, contrary to assertions by Opposition Members, no magic money tree. That is why we are sticking to the spending plans we have set out and why we are taking a systematic look at how we can become ever smarter in how we spend taxpayers’ money, including by conducting an efficiency review that aims to get more value for money and to save £3.5 billion. As my right hon. Friend the Secretary of State said earlier, we are looking forward to benefiting from the insight and expertise that Sir Michael Barber can bring to bear on the process.
We all have to acknowledge that this work is part of a longer-term challenge. There are many pressures on services in advanced economies around the world, and if we do not grapple with the issue of how we pay for things, we just cannot tackle them. We heard quite a lot from the shadow Minister, the hon. Member for Worsley and Eccles South (Barbara Keeley), about social care. We made a significant announcement in the Budget statement about a £2 billion injection of extra cash—[Interruption.] Opposition Members say from a sedentary position that it is not enough; I return to my previous point: we have heard so much from them about where they would spend more, but we have heard absolutely nothing about how they would pay for it. They have a few gimmicky ideas, to which I shall come—I am going to address one of them head on—but their answer really is the magic money tree. We have made new money available, and further details have been announced today about how it will be allocated. That is real money made available very quickly—£1 billion is being made available for the new financial year starting in just a few weeks—and it is really important that we do that.
Nevertheless, we acknowledge that there is a longer-term challenge. As I said, all advanced economies face pressures as populations become older and the rise in complex and chronic conditions continues. As well as offering some kind words about me relating to my previous role, the right hon. Member for Leicester East rightly drew our attention to the Government’s work on prevention. I shall not be drawn into talking about that too much—as a former public health Minister, I could talk on that for some time—but I remind him of the national diabetes prevention fund and the related work, and the £16 billion a year from the public health budget that we give to local government.[Official Report, 13 March 2017, Vol. 623, c. 1-2MC.] All Members have acknowledged what the sugar levy and other work are doing to turn the sugar tide.
I also draw the right hon. Gentleman’s attention to page 35 of the Budget book—our consultation on the damage that white cider can do. We are consulting on the alcohol by volume duty rates because we have heard from many charities, particularly those working with the homeless, about the impact of the abuse of white cider, in particular, on the health of homeless people and many young drinkers and the increase that it provokes in the frequency of visits to A&E.
Barbara Keeley
Surely the key point is that we are almost abandoning prevention. Some 1.2 million older people live every single day with unmet care needs. There is no prevention when a frail older person who needs care does not get it, and this money goes nowhere to helping with that.
Jane Ellison
I disagree with the hon. Lady about prevention. We can do a lot on prevention, particularly with older people. With this new money, we can have more care packages. For example, falls prevention, which is delivered in the community or at home, is one of the most valuable ways to keep people out of accident and emergency. But we are not in any way downplaying the challenges of dealing with these pressures. We are not burying our heads in the sand. It is a matter not just of common sense but of responsible government that we must face up to the question of how to secure our social care system for the long term. He is not in his place, but the right hon. Member for North Norfolk (Norman Lamb), my former colleague in the Department of Health, talked about that, and there are areas of great agreement across the House about some of those challenges. That is why we announced that we will publish a Green Paper by the end of the year in which we will set out our proposals to put spending on a sustainable footing.
The hon. Member for Worsley and Eccles South said from the Opposition Front Bench that this was about the long grass. I will not embarrass her by reading out the very long list of times that the last Labour Government attempted to grapple with this issue over 13 years.
Jane Ellison
No, I am not going to take another intervention—I will take the same time that the hon. Lady took.
The list is very long. Labour said in its 1997 manifesto that it would tackle this issue; there was a royal commission in 1999, a Green Paper in 2005 and the Wanless review; it was said that the issue would be resolved by the 2007 comprehensive spending review, and there was another Green Paper in 2009—13 wasted years. I am afraid that Opposition Members provoked me to embarrass them. Their long grass was very long indeed.
We are injecting not just new money into social care but an extra £425 million into the NHS to help A&E departments triage patients more effectively and to support local NHS organisations as they reform and improve for the long term the way services are provided to patients. By putting more money into social care and those specific parts of the NHS—triage and capital for A&E—we are addressing some of the very issues that Simon Stevens has talked about recently as immediate challenges of dealing with pressures in the system.
My hon. Friend the Member for Harrow East (Bob Blackman) asked about STPs. The investment that we set out will make a real difference by supporting regions with the strongest plans that are ready now to deliver their long-term visions. We will revisit STPs in the autumn to see whether there are further areas with strong cases for investment, but the NHS obviously also has a part to play in looking at how it can, for example, dispose of unused land and reinvest that money. I give my hon. Friend that assurance.
Let me talk a little about education and skills. We have already taken action to fundamentally reform and improve school education, with the result—this is never acknowledged by the Opposition—that 1.8 million more children are in good and outstanding schools compared with 2010. The simple fact is that vastly more children are getting a good or outstanding education. In this Budget, we further galvanised our schools with £320 million of investment in new schools and £216 million for the maintenance of existing schools.
My right hon. Friend the Secretary of State for Communities and Local Government spoke compellingly about the sweeping reforms that we have introduced to put technical skills at the heart of our education system. I sense great cross-party consensus that that has been an undervalued part of our education system. That will give young adults a chance to develop new talents that will stand them and, of course, our country and economy in good stead as we work towards the high-skill, high-wage and hi-tech economy that will help us to be competitive in a global marketplace.
I have spoken about the importance of controlling our public finances, investing carefully in our public services and ensuring that our spending is sustainable. Alongside that, I want to make a few remarks about the importance of ensuring that our tax system is sustainable. We cannot talk about one side without talking about the other. The flipside of how we invest in public services is how we fund them. Let me address two issues.
First, a number of hon. Members have mentioned business rates. It is right that we update them to reflect today’s property values, but we recognise that this has meant a sudden jump for some. I thank my hon. Friend the Member for Richmond (Yorks) (Rishi Sunak) for his excellent speech. I am familiar with some of the pubs in his beautiful constituency. He mentioned the importance of supporting pubs. That was part of the £435 million package of support that the Chancellor outlined yesterday. He has been working on that with the Secretary of State for Communities and Local Government to help businesses manage the steepest increases following the business rates revaluation.
Secondly, there has been much discussion in this debate of the changes we have made to national insurance contributions, and I will respond directly to some of the points made. Let us be clear that the contributory benefits funded by national insurance contributions are very different from employment rights. Much of this debate and the public discourse has criss-crossed between those two important, but distinct, subjects. National insurance pays into a fund that pays out to the NHS and contributory benefits—principally the state pension, but also parental pay. We have announced that we are looking carefully at maternity and paternity rights.
Jane Ellison
No, we have said that it is 20% of the fund, but the vast majority of the national insurance fund pays towards the state pension, which, as has been made clear, is now available to the employed and the self-employed. That is part of an important and necessary step to level up what benefits people get. It is also important and necessary to level the playing field when it comes to what people pay in.
The Prime Minister has asked Matthew Taylor to look at the important issue of employment rights. We will get the Taylor review later this year and will return to look at those important issues. Whether people are self-employed or an employee, if they do a similar job, get a similar wage and receive similar benefits, they should pay a similar tax. That is actually recognised by Labour’s shadow Work and Pensions Secretary, the hon. Member for Oldham East and Saddleworth (Debbie Abrahams).
I really hope that the hon. Members for Ilford North (Wes Streeting), for Bristol East (Kerry McCarthy), for Bootle (Peter Dowd), for Cardiff South and Penarth (Stephen Doughty) and for Feltham and Heston (Seema Malhotra) are not disowning the self-employment review and commission that was launched last November by the hon. Member for Oldham East and Saddleworth, who said that one of the five principles of Labour’s self-employment commission was that self-employed NICs should rise towards employee levels. She went on to say:
“We cannot expect employees to continue to pay more into the system while offering equality of entitlements across employment status.”
I realise that Labour’s Front Bench rotates with dizzying speed—[Interruption.]
Jane Ellison
Thank you, Madam Deputy Speaker. They don’t like it up ’em!
I realise that the Labour Front Benchers rotate with dizzying speed, but I suggest that Labour Members look at the self-employment commission that they launched only last November. The majority of people who are affected by the change will be better off from the combined changes to national insurance contributions. Only someone with profits of more than £16,250 will have to pay more and, as some hon. Members have remarked, the new state pension is worth an extra £1,800 of pension entitlement to those who will now be on it. That is something that the Federation of Small Businesses, among others, has campaigned for.
It is obvious from the critique we have been offered by those on the Opposition Benches that, while they have a plethora of suggestions about how to raise taxes and raise spending, they have absolutely no coherent alternative economic policy. That was clearly in evidence yesterday, in the response we heard from the Leader of the Opposition, and the fact that there are so many former Front Benchers sat behind today’s Front Benchers is also testimony to it. We need to get spending and revenue-raising in balance; that is the mark of a responsible Government, and that balance is what allows us to safeguard the services we all value for the future.
Rothbury Community Hospital
(7 years, 8 months ago)
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Mrs Anne-Marie Trevelyan (Berwick-upon-Tweed) (Con)
It is an honour to have finally been successful in the debate ballot and to bring the issue of the proposed closure of in-patient care beds at Rothbury community hospital to the House and to the Minister today.
Rothbury is a thriving small town at the heart of the Coquet valley community in my constituency, in Northumberland. The valley is a large, very rural and sparse community of over 5,000 people across hundreds of square miles, and it runs from the A697 at its eastern edge across to the Cheviot hills and the Scottish border to the west. Small villages and hamlets are dotted across traditional agricultural territory with mainly upland sheep farms, some of which are within the Northumberland national park and the Otterburn Ranges—the Army’s largest training base in England.
Families’ commitment to living in this idyllically beautiful but quite challenging day-to-day environment is vital to the land management necessary for our tourism, our farming and our military needs as a nation. Over 30% of those living in the valley are over the age of 65—a figure that will only grow, as Rothbury and the surrounding villages are wonderful places to retire to or for people to stay in long after their children have flown the nest. Therefore, we must plan for the right long-term, sustainable healthcare offer for this close-knit community of families and businesses and for the unique challenges they face.
The local community hospital has, until now, provided 12 in-patient beds, primarily for palliative, post-operative recovery and respite care. The clinical commissioning group reviewed activity data last year as it brought in a system-wide approach to discharging patients home, and average bed occupancy in Rothbury was 50% through 2015-16. The CCG declared that to be too low to be sustainable.
As a result of nursing workforce challenges across the Northumbria healthcare trust—albeit that we face fewer challenges than the rest of the UK, thanks to our excellent forward-thinking trust, doctors and managers—the reality is that we do not have the nursing capacity adequately to cover the 12 in-patient beds at Rothbury at present. A combination of those workforce challenges, and the under-occupancy concerns cited by the CCG, meant that the use of those in-patient beds was suspended temporarily in September 2016.
Where I part company from our hard-working CCG on this issue is that I believe that those beds have been empty not because of a lack of demand, but because decisions have been taken to send people home to receive community care, or to Alnwick infirmary to receive in-patient care. As a result, Alnwick infirmary has been running near to capacity for some time, and those in the north and east of my constituency who might otherwise have been sent there have been forced to remain in the urgent care beds at the UK’s first specialist emergency care hospital at Cramlington— our new specialist care hospital for the whole of Northumberland and north Tyneside—for longer, placing greater strain and expense on our healthcare system than necessary.
If this in-patient ward is permanently closed, that will have negative impacts on my Coquetdale community and greater financial implications for our NHS across Northumberland. In particular, the challenge is that we do not have anything like enough community nurses and carers adequately to support those older patients who are sent straight home with their transition back to independent living. It has always been a challenge for our community teams, working across rural Northumberland, to see anything like the number of patients in one day that they would see if they were based in a town or a city, because our CCG is not funded to commission enough community nurses to genuinely provide the amount of care to meet the extra challenges that this sparse and disparate community generates. If a community nurse needs to visit someone three times a day but her other patients are 30 miles away, she will make three or four visits a day rather than the 10 or so that an urban-based community nurse would be able to make. Many of our older people who have received medical interventions live alone or have elderly partners who are no longer able to be full-time carers themselves. The value of a step-down care transition provided by a few days of recuperation at Rothbury community hospital would have medical as well as psychological value for these communities.
Dr Andrew Murrison (South West Wiltshire) (Con)
I congratulate my hon. Friend on the powerful case she is making for her rural constituency. Has she been able to compare and contrast the cost of a community hospital bed with the cost of a bed in the district general hospital to which she referred? I suspect that she has done so and will have found that there is a yawning difference between the two—a very good argument for community hospital beds.
Mrs Trevelyan
I thank my hon. Friend for making that point. This issue is critical, and it has brought some confusion to the community, who felt that the financial model did not seem to make sense. Why keep someone in a very expensive acute bed for longer than necessary if there is the capacity to have a local relationship with nurses who know the community very well? This is part of the CCG’s work, obviously, but we need to be very clear about it to be sure that we are not making a bad financial decision in the longer term.
As a result of this consultation, residents across the Coquet valley who have needed admission to an acute ward may well now find themselves staying longer than necessary on that acute ward; being re-admitted to an acute ward for lack of adequate rehabilitation care at home; sent home with inadequate support from an over-stretched community nursing service; or, at best, sent to recuperate in a different community hospital much further from friends and family, placing extra pressure on alternative populations needing to use that provision.
When, back in September, the decision was taken to temporarily suspend admissions to Rothbury community hospital for a period of three months, I wrote to every household across the valley calling on them to share with me their own experiences and concerns about the proposed threatened closure of the in-patient beds. The message came back loud and clear that being near family and their own community while they recuperated, or ending their days with dignity and privacy in the valley they have lived and worked in rather than dying at home alone, is invaluable. I know that this Government want our world-class NHS to provide not only the best medical interventions but the respect and provision of dignity for every patient while they are under its care.
The Coquet valley is frequently cut off during winter months, making travel to Alnwick infirmary to see loved ones receiving care especially difficult and sometimes not possible at all. Even during the summer months, there is little public transport to connect the valley and Rothbury to Alnwick. The ability of loved ones to visit patients receiving care at Rothbury community hospital was cited time and again to me as one of the primary reasons the in-patient beds are so vital to my constituents. The value of our community hospitals is often overlooked and certainly cannot be quantified when, too often, consultants have not been made aware of their option to transfer patients to receive care in Rothbury.
My constituents have come together in an extraordinary show of unity to speak in one voice under the banner of the Save Rothbury Hospital Campaign—4,500 people have signed the petition calling for the reopening of the ward. Our CCG has worked closely with the campaign team, for which I thank them, particularly Dr Alistair Blair, who has so many pressures on him and his team at this challenging time, and has invited us to bring forward a proposal that would see the beds made available for step-down and end-of-life care. I am concerned, however, that the CCG is telling me that because it does not commission respite or palliative care services, these cannot be part of a sustainable solution, as the valley residents would hope.
Northumbria Healthcare NHS Foundation Trust is one of NHS England’s vanguard trusts with its sustainability and transformation plan, and it will be the first accountable care organisation in England in the coming months, so surely we should be able to ensure that integrated care can work in one of our most challenging geographical locations. The University of Leeds is currently conducting a study called, “Cost Structure and Efficiency in Community Hospitals in the NHS in England”. The Public Accounts Committee, of which I am a member, regularly challenges NHS England on how it spends taxpayers’ money to deliver the best integrated health and social care provision. I know that the Minister is working hard to drive this forward, and we encourage him to go further, but until the results from the University of Leeds are published, the Minister has little economic evidence of the value of the intermediate care provided by community hospitals with which to work on the sort of sustainable solution that I want to see for our community hospital in Rothbury.
Dr Murrison
My hon. Friend is being generous in taking interventions. I am interested in the study to which she refers. Does she agree that a likely outcome of the configuration of healthcare in the longer term will be increasing specialisation at really quite large district general hospitals? If that is the case, there will be an even greater need for community hospital beds—step-down, step-up care—otherwise people’s only access to in-patient care will be at one of the huge regional or sub-regional centres that I suspect our NHS will be developing in the years to come.
Mrs Trevelyan
I thank my hon. Friend for his comments. We are unwittingly seeing what he suggests already. In Northumberland, we have an extraordinary specialist A&E hospital, with which we have led the way in England. It has drawn much more attention and patient focus than perhaps any of us expected, because there in one place are all the specialisms, with the best maternity care. The result is that patient needs have migrated to it.
However, we now rely much more than we should on sending patients straight home, whereas we should be using community hospital beds to provide the best step-down care for our older people, in particular, who really need that support to get back home. Getting home, getting up and about, making their own cups of tea, moving around and avoiding the risk of muscle wastage caused by staying in a hospital bed are real issues for them. As medical science moves on and that becomes more and more clear, in-patient bed units in community hospitals should probably adapt to reflect that. Such units must help to preserve the mobility of people who are taking that step-down approach to going back home; the term “in-patient bed” should not mean that they are stuck in their beds. We understand that continued movement and redevelopment of muscle are important in rehabilitation, and we must absolutely make sure that patients are not left in the wrong part of the NHS when they are trying to get back home after extraordinary medical interventions. Those interventions are now developing very quickly and giving us the opportunity to live much longer.
I therefore call on the Minister to pause the CCG’s consultation and the plans to close permanently the in-patient beds until the results from the University of Leeds have been published. Northumbria Healthcare NHS Foundation Trust is leading the way in establishing an accountable care organisation—a model that many people buy into and understand the value of. We all instinctively assume that the NHS is one block, but of course it is not; it has always been made up of separate parts, which work better or less well depending on where they are. The accountable care organisation offers a real opportunity for streamlining and making the flows work much better. We will be the first to do that in Northumberland, so we should be the beacon for fully integrated community care—making the best use of our taxpayers’ money and ensuring that my constituents have the most appropriate and supportive care framework —rather than being a victim of the short-term workforce challenges with which the NHS is struggling.
The Minister of State, Department of Health (Mr Philip Dunne)
I congratulate my hon. Friend the Member for Berwick-upon-Tweed (Mrs Trevelyan) on securing the debate. She is a doughty champion of her constituents’ interests and, particularly in relation to Rothbury community hospital, she has played a leading role in championing their interests in achieving the best outcome for patient care in the valley of Coquet—this was the first time I have heard that pronounced properly and I am sure I have not done it justice. She gave a thoughtful and considered speech, to which I shall endeavour to respond.
I will first rehearse the facts that have led NHS Northumberland clinical commissioning group to undertake the current consultation. In July last year, it set up a steering group to consider the use and function of community hospital beds in Northumberland. That group studied activity data and considered a model of care that reflected a drive set out by the NHS chief executive Simon Stevens in the five year forward view, which my hon. Friend will be aware of, to encourage the delivery of as much care as possible as close to the patient as possible—preferably in their homes, or at least out of hospitals, where appropriate.
We have had a geography lesson, with an interesting description of some of the challenges of living in the part of Northumberland centred on Rothbury, including the fact that the valley gets cut off from other parts of the county from time to time during the winter. Local factors undoubtedly need to be taken into account by the local commissioning group both when it sets out a consultation and when it responds to the results, and I am sure it will do so. Frankly, that is why we think the people best placed to plan the patient experience of care for the future are those who have direct responsibility for that community. As my hon. Friend knows, that is very much the direction of travel of this Government in supporting the five year forward view and the move to more local determination.
The steering group agreed that any new model should avoid any unnecessary or avoidable hospital admissions, and ensure that patients are discharged home in a timely manner once medically fit. The challenge for the Rothbury community hospital has been the relatively low use of its in-patient beds. Having discussed the issue with the CCG, Northumbria Healthcare NHS Foundation Trust, which runs the hospital, decided for operational reasons to suspend in-patient admissions from 2 September 2016, initially on a temporary basis. The staff were redeployed to ensure that nursing skills were used to support other parts of the Northumberland healthcare system, in which nursing vacancies were running at a high level and there were difficulties with recruitment.
I understand that, following the announcement, a comprehensive review of activity was initiated last autumn and a series of local engagement sessions was arranged. The review looked at the activity rate of the 12 in-patient beds at the hospital. It found that there had been a steady reduction in the number of beds used from 2013 to 2016. The overall bed occupancy at the hospital fell from an average of some 66% of beds in 2014-15 to 53% in 2015-16 and 49% in 2016-17. I am told that, at times, the rate was closer to 35%, meaning that only three or four of the beds were used although the ward was staffed to cope with a higher occupancy rate.
During that time, the trust has provided an increasing level of care outside hospital and in people’s homes, for example through services provided by community nurses and the short-term support service. There has also been an increase in the number of people receiving long-term care packages in their own homes. The ambition to encourage people to lead independent lives as much as possible and to stay out of hospital when possible, because in that way they have a better prospect of maintaining independent living, is working in Northumberland. Regrettably from that perspective, the community hospital is seeing the consequence of such success: fewer patients need in-bed care in the community hospital.
The decision was subsequently taken to close the ward and to undertake a three-month public consultation, which began on 31 January. The consultation asked for views on whether to close the ward permanently, and on whether to change the services undertaken there, so that a health and wellbeing centre on the hospital site could offer a range of services in addition to those currently available and provide treatments for a wider range of patients than are presently served by the in-patient beds alone.
My hon. Friend asked whether the current consultation, which is running to 25 April, could be extended. It is not for me to direct the CCG how to undertake its consultation, but she referred to interest in the locality about the future of the hospital. That does not surprise me at all, although I am impressed that as many as 4,500 local people have signed the petition. I strongly encourage as many of them as possible to participate actively in the consultation so that the decision makers are aware of the views of the local people whom they serve.
I also encourage local people to suggest what other services they might find beneficial. My hon. Friend suggested palliative and respite care as possibilities. She is right to say that those services are not currently provided by the trust, as they are not within its mandate, but in the event that Northumberland becomes one of the pilot areas for the new type of accountable care organisation, it will be up to all the organisations that are providing care in the area to work together, and the existing palliative and respite care providers could work with the commissioners and other providers to look at all the options. I very much hope that she will encourage those organisations to participate in the consultation as well so that that is factored into the decision making.
At present, I can give my hon. Friend one piece of reassurance: we in the Department of Health have very high regard for Northumbria Healthcare NHS Foundation Trust. It is one of only six non-specialist acute trusts in England rated as outstanding. It has some of the best performance data on treating patients and local residents of anywhere in the UK. It is meeting all three of its key cancer targets and exceeding the 18-week waiting time targets. The numbers of operations and treatments provided are much higher than they were, and they are happening more or less within target. The number of operations at the trust has gone up from 71,000 to 80,000 in the past six years, and the number of diagnostic tests increased from 98,000 to 164,000 between 2009-10 and 2015-16. That all demonstrates that the trust is coping with increased demand remarkably well.
As my hon. Friend rightly said, the new hospital at Cramlington, which I have driven past in a former life but have yet to visit with my present responsibilities, is an exemplar of how concentrating specialist hospital services in one place can lead to better quality outcomes for patients. It is hard for me, at this distance, to judge what direct impact that is having on the community hospital, but it might be a contributory reason to why fewer in-patients need to go to the community hospital for their rehabilitation.
I encourage my hon. Friend to focus on the choices that are being considered across Northumberland, as they affect Rothbury, but also to look at the way in which Rothbury patients can help themselves by encouraging Northumberland’s highly regarded health leadership to reshape services to provide a facility that serves more of the local community than has been the case. Indeed, one reason why that leadership is highly regarded is that it has a reputation for listening to what local opinion formers are saying, as she pointed out. Whether or not those changes should include the continuing use of in-patient beds is something that will have to come out of the consultation.
My hon. Friend asked about the study by the University of Leeds. I will be very interested to see what that study reveals. Like my hon. Friend the Member for South West Wiltshire (Dr Murrison), I represent a rural area, so I know that these issues are not unique to Northumberland, as he rightly said.
The results of the consultation are expected in April. I cannot give my hon. Friend the undertaking on extending it that she is looking for, but there will be a period during which the CCG reviews its response. Hopefully the study to which she refers will have concluded and it will be possible to take it into account before the CCG responds formally. I am not familiar with the timetable, so I cannot make an absolute commitment on that, but it seems to me to be a relevant consideration. I shall encourage the CCG to at least investigate whether that would be possible.
I conclude my remarks by encouraging my hon. Friend to continue to engage with the CCG.
Question put and agreed to.
Draft Collection of Fines etc. (Northern Ireland Consequential Amendments) Order 2017
(7 years, 8 months ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Minister for Courts and Justice (Sir Oliver Heald)
I beg to move,
That the Committee has considered the draft Collection of Fines etc. (Northern Ireland Consequential Amendments) Order 2017.
May I say what a pleasure it is to serve under your chairmanship, Ms Buck? I welcome the hon. Member for Blaydon to his responsibilities.
The draft order, which was laid before the House on 6 February, is made under section 84(2) of the Northern Ireland Act 1998, which allows changes to be made to legislation that are necessary because of an Act of the Northern Ireland Assembly—in this case, the Justice Act (Northern Ireland) 2016, which was passed by the Assembly on 14 March 2016 and received Royal Assent on 12 May 2016. The 2016 Act reforms the collection and enforcement of fines in Northern Ireland by creating a new regime that provides additional ways for offenders to pay their fines. It includes powers for collection officers to secure payment through an attachment of earnings order, which is a court order made in Northern Ireland that requires a debtor’s employer to deduct specified amounts from wages and pay them to the court to discharge the outstanding amount.
The draft order will amend schedule 5 to the Courts Act 2003, which deals with fine collection, to allow courts in Northern Ireland to obtain or verify information from Her Majesty’s Revenue and Customs, such as the name and address of the employer and details of earnings and other income. This will allow fine collection officers in Northern Ireland to determine whether an attachment of earnings order should be pursued.
Schedule 5 to the 2003 Act already enables HMRC to make such disclosures in England and Wales; the amendments made under the draft order will allow it to do so in Northern Ireland as well. Such amendments could not be made by the Department of Justice in Northern Ireland through the 2016 Act because the underpinning tax legislation is the Commissioners for Revenue and Customs Act 2005, which is UK legislation that cannot be amended by an Act of the Northern Ireland Assembly. However, section 84(2) of the 1998 Act allows such amendments to be made by an Order in Council, such as this draft order, if “necessary or expedient”. I consider that the amendments we propose are necessary.
I am happy to confirm that Ministers and officials of the UK Government and the Northern Ireland Department of Justice have worked closely together on this matter. I do not believe that the amendments are controversial. I commend the draft order to the Committee.
Mr David Anderson (Blaydon) (Lab)
It is a privilege to serve under your chairmanship, Ms Buck. The draft order is a sensible and reasonable way of dealing with the matter. It has been agreed by the Northern Ireland Assembly and we certainly do not oppose it.
Sir Oliver Heald
I thank the hon. Gentleman for that succinct speech—one of the best speeches I have heard in such a Committee.
Question put and agreed to.
Draft Reporting on Payment Practices and Performance Regulations 2017
Draft Limited Liability Partnerships (reporting on Payment Practices and Performance) Regulations 2017
(7 years, 8 months ago)
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The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Margot James)
I beg to move,
That the Committee has considered the draft Reporting on Payment Practices and Performance Regulations 2017.
The Chair
With this it will be convenient to consider the draft Limited Liability Partnerships (Reporting on Payment Practices and Performance) Regulations 2017.
Margot James
It is a pleasure to serve under your chairmanship, Mr Turner. Late payment is a significant issue for small businesses. It is estimated that small and medium-sized businesses are owed £26 billion in late payments. That can cause serious cash-flow issues for small businesses and, in the worst cases, cause them to go out of business. It can be difficult for small businesses to know who has a good reputation for payment and who has a poor reputation. They have no choice but to take it on faith that they will be paid in line with the agreed terms and conditions.
The Government are taking several steps to tackle the issue of late payments, one of which we are in Committee to discuss. Other measures include a Small Business Commissioner, whom we are recruiting at the moment, and the prompt payment code, which is an industry-led code of conduct setting out best practice. Today we are debating two statutory instruments that will introduce a requirement on large businesses to report on their payment practices and performance. The first instrument applies the requirement to large companies and the second to large limited liability partnerships. We are debating them together as the requirement is the same for companies and partnerships.
The reporting requirement will increase transparency, making it easier for suppliers to find information about large businesses’ payment practices and performance. The improved transparency should help suppliers to make better-informed business decisions based on reliable information. The public nature of the data will highlight large businesses that are leading by example and engaging in good payment practice, and will shine a light on poor practice that is potentially damaging to suppliers, in particular small businesses. Late payment will become a boardroom issue for many large companies.
Even a small reduction in overall late payment can benefit suppliers, smaller ones in particular. Last year I met suppliers who had been able to grow and innovate as a result of the reduction in late payment that we have already seen from the voluntary prompt payment code. Taken in the round, less late payment will boost our economy and help it to grow. We have already begun to see steps in the right direction, but there is much more to be done. The Government are committed to building on the prompt payment code by implementing the draft regulations.
The reporting requirement introduced by the draft regulations will mean that large companies must disclose information on a number of metrics about their payment practice and performance, including their standard payment terms, the average amount of days it took them to pay and the percentage of invoices that were not paid within the agreed terms. Businesses will need to report on those metrics, among others, for their first financial year starting once the regulations have come into force on 6 April 2017.
Each business in scope will be required to publish its individual and non-consolidated reports. That gives a greater level of transparency for suppliers looking to contract with reporting businesses. As part of the consultation process and in conversation with interested parties since, we have received a wide range of opinions about which metrics were most important. Throughout that process, we have sought to find a balance between the needs of small and large companies.
For example, the requirement is that businesses publish a report twice per financial year on the Government web service. We changed reporting from quarterly to twice a year in response to concerns that the reporting would be disproportionately burdensome on large companies. That maintains the balance between providing relevant information to suppliers with the need to minimise the burden on large business.
Smaller stakeholders have told us that up-to-date information is important. Stakeholders also told us it was important that information was easy to access. That is why information will be available on the Government web service as soon as a business publishes it, for suppliers to search and download. The web service is currently being developed with input from future users. That input has shaped the service, making it more user-friendly for both those who are required to report and those seeking the information. We will continue to seek input from users as we finalise the Government web service, which will be available from April this year.
In 2014, the Department for Business, Innovation and Skills published a consultation impact assessment that estimated the annual net cost to business of these regulations to be £3.2 million. Further research showed that the annual net cost to business is likely to be higher than that, estimated in our recently published impact assessment to be £17.7 million. However, that has to be considered against the savings to business that a reduction in late payments will bring. The impact assessment estimates that even a 0.25% reduction in the cost of chasing late payment could lead to a £22.9 million benefit for UK businesses.
The regulations have been welcomed by representative bodies, including the Federation of Small Businesses and the Chartered Institute of Credit Management, as a positive step towards a culture where businesses are paid on time for the goods and services they provide. Successful businesses create jobs and are essential to economic growth. To support small businesses and other suppliers, we need to take action to give them more information about the larger companies and limited liability partnerships they do business with and their records on payment. We need to tackle late payment, and the reporting requirement is an important part of the Government’s plan to do so.
Throughout the consultation process and the development of the policy, we have sought to strike a balance between the need for suppliers to have useful information and the need to minimise the burden on large companies. That has informed the development of the web service and the guidance that was recently published. We will continue to develop the web service in line with feedback from potential users. I commend the regulations to the Committee.
Bill Esterson (Sefton Central) (Lab)
It is a pleasure to serve under your chairmanship, Mr Turner. The Minister quite rightly said that it is important that we do all we can to support business in this country, and in particular smaller businesses. That is exactly what improving payment practices should achieve. There is, of course, a big irony here, the day after the Budget, when many people who run small firms and are self-employed are scratching their heads, comparing the Prime Minister’s previous comments about the UK being the best place to start and grow a business with the broken promise on not increasing national insurance contributions.
Michael Tomlinson (Mid Dorset and North Poole) (Con)
On that point, it would be very helpful if the hon. Gentleman could inform us of the Labour party’s policy.
Bill Esterson
The Conservatives are in government. It is a shame that they promised in their manifesto not to put up national insurance contributions and then went and did exactly that.
We have better news today. As the Minister rightly said, according to the Bacs report, £26 billion is owed in late payments. She mentioned the importance of attacking that, which the regulations will contribute to. She also mentioned the potential cost to business of the regulations of £17.7 million. The latest Bacs report cited a figure of £2.5 billion a year for the cost to business of late payments, and said that 50,000 business deaths will result if we do not do something about it. She quite rightly said that the investment of £17.7 million will reap an extremely positive return to the UK economy and businesses. That is why we broadly support the proposals and will not oppose the regulations.
There has been a delay in bringing forward the regulations, but I am glad they are now here. This is not a silver bullet; it is one of a number of tools needed to change a UK business culture where it has been seen as acceptable to pay small firms late. There has been systematic poor practice in the day-to-day business approach of some larger firms, which use it for their own credit management and to their own benefit, to the detriment of their smaller suppliers.
We need two things to address the imbalance of power in supply chains. First, the regulations must be robustly enforced, with substantial fines and consistent sanctions against businesses that pay late and/or fail to report fully. Secondly, we need the published reports to be accessible and easily searchable, which would follow through on the “name and shame” element behind the regulations, as well as allowing small businesses to review potential clients’ payment practices.
We also want more robust, wide-ranging action on late payments that goes far beyond the encouragement or very veiled threats to late-paying large firms that have typified the approach of Conservative Governments —not just this one, but in previous years. That includes having the right person appointed to the role of Small Business Commissioner, which the Minister mentioned—someone with a background in small business and an expertise in the supplier side of business contracts. The Government also need to push forward with the corporate governance Green Paper, which has been discussed, ensuring that small business suppliers are represented at board level in large firms. That is a crucial element in making sure that the kind of level playing field hinted at can be achieved.
Who and what do the regulations affect? Companies and partnerships fall within scope of the two sets of regulations if they are medium-sized or above, which means having more than 250 employees. Contracts fall within scope if they are for goods, services or intangible assets—although I think I am right in saying that they do not include financial services—and if they are covered by the law of any part of the United Kingdom, unless they are specifically excluded from that by both parties. What happens if a firm falls below or goes above the threshold of 250 employees during the reporting period? Will that firm have to report on their payment practices for the whole or part of the period?
The regulations mean that qualifying companies and partnerships will have to report descriptions of their standard payment terms and of their dispute resolution process, where there is a payment issue with a supplier. What will happen in the event of some of the sharp practices that have led us to need these regulations—for example, where a company queries an invoice on the last day before payment is due and then the clock starts to run again, which is a well-known tactic used by some larger companies? What will the impact of such challenges be? How will the regulations affect the reporting in that kind of example? How will the reporting be policed? Without proper teeth, who is to say whether the reporting by companies is accurate? Will it be policed through the audit process, and how detailed will that policing be?
The regulations also require statements about payment practices and policies, including the availability of electronic invoicing, supply chain finance and whether businesses are members of a payment code of conduct—the Minister mentioned the prompt payment code, which I shall return to later—and statistics about performance for each reporting period, including the proportion of payments due in the reporting period that were not paid within the contractual payment period. Again, what is the mechanism for ascertaining whether that is happening? There will also be statements about the proportion of payments made in the reporting period that were made within the timeframes of one to 30 days late, 31 to 60 days late and more than 60 days late. I will come back to the point about more than 60 days, as there is a potential inconsistency with existing regulations.
Another reporting requirement is the average number of days taken to make payments, which is calculated by adding the number of days it took to make all the relevant payments and dividing it by the number of payments. Successive Governments have tried and failed to tackle the problem. Various approaches have been tried, from praising good payment practices, creating intra-industry codes, setting up a Small Business Commissioner and introducing the innovation of a right to interest on late-paid bills. The latest initiative is to require large firms to disclose their payment practice and performance.
Conservative Governments in the 1990s opted for what was described as moral encouragement—naming and shaming—and shied away from more concrete steps, such as statutory rights to interest on unpaid bills. In the 1990s, businesses were able to claim interest only if a term to that effect was included in the contract or if the courts decided to award interest in their favour in the course of the recovery proceedings. When the Labour Government came to power in 1997, they introduced the Late Payment of Commercial Debts (Interest) Act 1998 to give companies legal remedies beyond those of the normal commercial courts. EU legislation followed that approach and extended creditors’ rights further. However, none of those changes, whether voluntary or on a statutory footing, changed the tide on late payments. Will the measures that are being finalised today change the situation?
In 1993, the Forum of Private Business estimated that 89% of small and medium-sized businesses were paid late. On average, they were paid 51 days after the due date. Twenty three years later, the Federation of Small Business, in “Time to Act: the economic impact of poor payment practice”, reported that 61% of small businesses are paid late, with an average payment delay of six weeks. Moreover, in 2016 the Federation of Small Business found that 30% of payments are typically late. That number was up from 2011, when it was only 28%. Hon. Members who are paying attention will have noticed that some of those figures say slightly different things. That is because different organisations use different data and baselines.
The 2011 EU directive on combating late payment in commercial transactions already states that the period for payment in a business-to-business contract should never exceed 60 calendar days—I said I would come back to that point. In these regulations, the Government are asking businesses and partnerships to report what percentage of their payments are made after 60 days. Is it not inconsistent merely to ask businesses about their payment practice after 60 days when the legal framework already says it is illegal to go beyond that 60-day period? It does not sound like a very good sign to me.
Another example of where more needs to be done is the prompt payment code. Although the total number of signatories is 1,936, according to the Government website, very few of them are medium-sized or large private sector firms. When NHS trusts, councils, Government Departments and so on are taken out, there are just 184 signatories with a turnover of more than £500 million a year, a further 84 with a turnover of between £100 million and £500 million year, and 110 with a turnover of between £25 million and £100 million. That means that only 378 firms with a turnover of more than £25 million have signed up to the prompt payment code. According to figures from the Department for Business, Energy and Industrial Strategy, there are 7,000 large firms in the United Kingdom. How will the regulations help us to move from the 378 that have signed up to the prompt payment code to all 7,000 carrying out the practices in the regulations, which is what we all want to see?
Is the duty to change what we need? While we are supportive of any measures to tackle late payment, in particular requiring larger firms to lay out their payment practices, all this prompts the question whether we are throwing another policy at a problem that has persistently withstood the “moral encouragement” approach. The duty in the regulations has the potential to do a lot more than that, but only if specific actions are taken. The reports will be published, to use the Minister’s words, on a Government web-based service, and they are due to be published within 30 days after the last day of the reporting period, which I assume means the tax-reporting period.
How will simply saying, “It will be published online,” help the smaller companies, which need to understand their potential customers’ payment practices before deciding whether to contract with them? The web-based service needs to be easily searchable. It needs to show how different companies compare with each other and to show what the industry standard is. For small businesses to benefit from the regulations and for us to create the kind of balance between large and small firms that the Minister rightly referred to, the system needs to operate effectively. How the web-based service is run will be crucial, so can she say more about how it will work? If it works properly, we could see a step change in the way that smaller firms are treated by their larger customers.
This is not just fine detail. The danger, as we have seen, is that attempted actions on late payment amount to just moral grandstanding, rather than creating effective tools to tackle this scourge, which, as the Minister and I have both said, delays payments amounting to £26 billion at any one time. The regulations require companies to provide a statement on whether their payment practices and policies allow them to deduct money from payments as a charge to a supplier to remain on the qualifying company’s list of suppliers or potential suppliers. That is clearly a step forward, but there is another problem, which has not been addressed in these regulations, namely the ability of companies to award themselves a discount for early payment. That has been excluded from the regulations, and I will come on to what the Government response to the consultation said on that point.
The courts have a fairly broad take on what standard payment terms are, and obviously they will be the terms used in the vast majority of contracts. It would be for the company to prove in dispute that tweaks such as discounts are standard and known to all their contracting partners. I would be surprised if deductions for paying on time were considered to be so standard as to be not worth recording, but we can be reasonably certain that where there is wooliness, some of those most likely to cut corners will do just that. If we are going down the route of closing off loopholes, as the stipulation on deductions for remaining on a supplier’s list suggests, we ought to go the full way and explicitly include deductions that allow companies to pay less for paying early.
The draft regulations were going to include a requirement to report on interest owed for late payments. However, that requirement has been dropped. The Government response to the consultation says:
“Several issues emerged through further engagement with businesses. Feedback suggested that most businesses do not routinely record how much late payment interest they may be liable for, and would therefore require costly upgrades to software in order to report the total liability. Linked to this is the fact that a claim for interest under the Late Payment Act may be brought up to six years later. Businesses felt that requiring reporting to cover the previous six years would be particularly difficult because the data may not have been recorded in a way that allowed extraction. The costs associated could be substantial and could result in a figure that would be difficult for users of the data to interpret, as it would cover a different time period to other metrics which are limited to the six month reporting period.
We believe that businesses should focus their efforts on not incurring interest by paying on time, rather than calculating potential interest. This will be kept under review. We will also take into account the lessons that the introduction of reporting on interest liable in the public sector can teach us, once it has been introduced in April 2017.”
Perhaps the Minister will give us some more information on what is meant by “kept under review”.
The business response to the consultation was, “We don’t record that”, but that is a pretty poor excuse. Previously we have made the case, including during the Committee stage of what became the Small Business, Enterprise and Employment Act 2015, that interest should be applied automatically to late payments, because it is too onerous for small businesses to go after much bigger clients themselves. First, they do not have the internal resources to do so or to take legal action. Secondly, and probably more to the point, such action could damage a major contract, which might represent the majority of the supplier’s revenue. That has always been one of the problems, but the commercial reality is that a supplier challenging its big customers runs the risk of losing them for future business. That is one of the key challenges in dealing with the problem.
The Government response, quoting business submissions to the consultation, drives that point home. Businesses do not record such matters and they do not have the software to manage interest on late payments, because the threat of a small supplier slapping interest on their late payments is so remote that there is no incentive for them to do so. Perhaps the Government should consider such an incentive. After all, records have to be kept for seven years for audit purposes—I think it is 10 years for plcs; the Minister can correct me if I am wrong—so that kind of recording would sit naturally alongside existing requirements to record account information.
The good thing about the draft regulations is that they start to recognise that, because of the deep imbalance of power in supply chains, we cannot simply leave the problem to suppliers to fix. Obviously, automatically applying interest to late payments would be preferable, but a decent first step would be to require the recording and reporting of interest owed. That would serve as a wake-up call for large firms about how much they might find themselves out of pocket because of their behaviour, and as an easy way for suppliers to see how much they could collectively be entitled to, in particular from persistent late payers.
We broadly support the aims of the draft regulations. I have posed a number of questions. My sense is that this is the start of the process and not the end, and that there is room for improvement, adaptation and addition to the regulations, not least when the Small Business Commissioner is in post. Will the Minister tell us when that will be? I look forward to her response.
Alan Brown (Kilmarnock and Loudoun) (SNP)
It is a pleasure to serve under your chairmanship, Mr Turner.
I agree with the Minister that the draft regulations are needed because of the effect that late payment can have on businesses. Before I came to this House, I worked as a civil engineering consultant. One aspect of the job that I certainly do not miss is the accounts department phoning me to ask why payments had not been made, and getting me to call clients and pressure them to release money and clear up why the payments were late. Not only did that have a cost in terms of performance, but it was not part of my day job, so I had to work extra hours to do the chasing up. I am sure that many other companies have the same experience. One can only imagine the stress of working for a small company or supplier that is in debt, owes money to creditors and has to chase that money up. It clearly has an impact on performance and productivity.
My one slight concern is whether the measures will be enough. They should allow for more transparency, but will that transparency be enough to change behaviour? Big companies clearly process thousands of invoices; the statistics might look good, but behind them there might be another story of the impact on small companies. As the hon. Member for Sefton Central said, companies may also still use the dispute resolution mechanism as an excuse for late payments.
What proposals are in place to review the success of the measures with regard to improved performance and the release of payments? If there is a review, further measures might need to be considered in the future. Finally, will the measures capture the release of cash retentions in the construction industry? That is a big issue in the industry and I have raised it before. Will the measures pick up on the industry’s performance in releasing cash retentions, and are the Government developing plans to phase out the use of cash retentions overall?
Mr Edward Vaizey (Wantage) (Con)
It is a great pleasure to speak to these important regulations, and to follow the hon. Member for Sefton Central, who covered many issues during his trenchant analysis of the regulations. I will also pick up on some of the points made by the hon. Member for Kilmarnock and Loudoun. May I say what a pleasure it is to be here to support the Minister? I am sure many Members know that she ran a highly successful small business; if anyone is well-placed to know the impact of late payments on small businesses and the myriad issues that true entrepreneurs who start a small businesses from scratch have to face, it is her. I know she will take the regulations seriously, both in their passing and in their implementation.
I know that the Minister shares my reluctance to regulate in this area; as a party and a successful Government, we are reluctant to regulate small businesses. Of course, when we leave the European Union I am sure we will be able to reduce a great many of the regulations that burden our small businesses—at least, that is what the leave campaign promised and I know that the leave campaigners will see through on their promises. I know that the Minister only regulates with a heavy heart and where she sees it as essential. [Interruption.] I could not hear the hon. Member for Bristol West comment from a sedentary position, because I was talking so loudly, but I know it was pertinent.
I have a number of questions. I may have misheard, but I think the Minister said that the transition costs are £27 million and the ongoing annual costs are about £15 million, affecting about 15,000 businesses. Does she feel that might be an underestimate, because it works out at roughly £1,000 a business? It seems to me that reporting on payment practices across a large business on a six-monthly basis might cost slightly more than that. In any event, I was struck by her saying that her Department’s estimates had increased from something like £3 million to £15 million, which seems a very large increase. Will she shed light on that? Is she confident that that is what the cost will be to businesses?
Picking up on what the hon. Member for Kilmarnock and Loudoun said, and to use business terminology, what does success look like? What will the Minister think success is when we review the impact of the regulations in a year or two? Does she expect perhaps a 1% or 5% reduction in late payment? Will some of the 15,000 businesses subject to the regulations go on a journey that results in the improvement of their payment practices? It was a mantra of the last Government—I am sure that the same is true of this Government—that every time we imposed a regulation on business, we would seek to abolish one. In fact, I think we got to the position where we would abolish two. Will the Minister highlight which regulations will be abolished in order to make way for these very important regulations? Indeed, perhaps some are being consolidated.
We have discussed sanctions for late payers and whether fines should be imposed. I am surprised that it will be a criminal offence not to publish. I wonder whether the Government might pause to consider whether that could be held in reserve. It seems to me that this is part of the nudge agenda: we are trying to encourage good behaviour. The criminal statute book is replete with offences, so I wonder whether almost arbitrarily making failure to publish a criminal offence is the right approach.
In terms of stick and carrot, I hope that the people who rise to the challenge presented by the regulations—the big businesses that comply with them promptly and show improvement—will be lauded by the Government. Perhaps we can think of an award for the most prompt paying business as the regulations come into play.
I may not have listened as carefully as I should have to the Minister’s excellent introduction of the regulations, but I did not hear—mea culpa if she did mention this —whether the Government are a prompt payer and what our current record is. I said “our”; I probably still think I am a Minister—pathetic, really. I would like to know what the Government’s record is. I know that the Government have made a huge effort to allow small businesses to contract with them, and the Government are obviously hugely well placed to lead by example, so I assume that the Government are the promptest payer of all.
As I have said, we are all reluctant to introduce regulations, and I notice from the explanatory memorandum that in this context the Brits operate true to form: the average contract says that we will pay in 29 days, and we do pay in 29 days. Every other European country pays later than they contract for, showing that British businesses are truly businesses of their word. We are very high up the table for prompt payment. Obviously, the Germans beat us—they beat us at quite a lot of things—but we are very much prompt payers, apart from, also, the Scandinavian countries, which in my view are the most ideal countries on the planet, although that is another matter. We are doing very well, so although this measure will make a difference, I do not think we should beat ourselves up or beat up British businesses too much as outliers in terms of not supporting small businesses through prompt payments.
I look forward to the Minister answering some of the points I have raised, after she has dealt with the excellent points made by Opposition Members.
Margot James
I thank hon. Members for their pertinent comments, questions and observations—I have learned quite a bit in the process. I shall deal first with the shadow Minister’s speech and questions. He referenced the prompt payment code and some of the efforts that have been made to date to improve what I think we all agree is a serious problem facing small businesses. He said that not many companies abide by the prompt payment code or have signed up to it—it has limitations—and he gave some numbers. Almost 2,000 big companies have signed up to the code and, anecdotally, it is having an effect.
The good news is that we accept that the prompt payment code does not go far enough. That is why we are setting in stone the regulations under discussion today. As my right hon. Friend the Member for Wantage pointed out, approximately 15,000 of the large companies are likely to come within the scope of the regulations. That puts its likely impact on a much more secure footing.
The hon. Member for Sefton Central rightly pointed out that the measure is not a silver bullet and that it has to be seen as part of a package of measures, not the least of which is the appointment of the Small Business Commissioner. He asked when that measure was likely to be implemented. We anticipate having the Small Business Commissioner in post, with the resources needed to undertake inquiries and deal with complaints, by October this year.
The hon. Gentleman said that companies sometimes use late payment almost as a systematic policy, and I could not agree more. There is no doubt that some companies use small enterprises almost like a bank, which is immoral and unacceptable. The measures are of course designed to tighten the net, so that it will not be possible for the larger companies that fall within the regulations’ scope to continue with that approach.
The hon. Gentleman talked about the Late Payment of Commercial Debts (Interest) Act 1998, implemented by the Labour Government to make it a legal requirement for companies to abide by better payment terms. I agree that those were laudable aims. He implied that Conservative Governments are a bit too cautious, noting that we rely on culture change and shy away from statutory intervention. I agree about that, but we follow those instincts for a good reason: we want to arrive at a workable solution to the problem of late payment.
Unfortunately, the 1998 Act is not at all widely used, for the very reason the hon. Gentleman set out in his speech: smaller companies do not want to press home the situation they are in with their bigger customers because they fear losing the contract or the opportunity to bid for further work. That is the problem with using the 1998 Act, and it would be the problem with any overly legislative and punitive approach. Ultimately it would rely on small companies coming out into the open and challenging their big customers, which is very difficult.
The consultation phase on the corporate governance Green Paper is finished, and I agree with what the hon. Gentleman said about it being one way to get the suppliers’ voice heard more loudly in the boardroom. That is what we anticipate and I am glad he supports that element of the regulations.
The hon. Gentleman also mentioned companies going in and out of scope, as it were. In theory that could be an issue, but we have set three criteria, at least two of which should be met by companies if they are to be considered in scope. It is not just a question of the 250 employees; it is also a question of whether they have a turnover of £36 million or more, and whether the net asset value on their balance sheet is in excess of £18 million. Companies need to satisfy two of the three criteria to be in scope, to guard against the concern he raised.
I heartily agree that some companies tend to try to game the system—I hasten to add that most do not, but a good number do. That will be at the top of my mind when, in consultation with the Secretary of State, I appoint the Small Business Commissioner. He or she will need eyes in the back of their head to apprehend and anticipate the sorts of ruses that some large companies might get up to in trying to get around the reporting system.
That brings me neatly to the policing of the reporting, which the hon. Gentleman raised as a concern. Within five years there will have to be a formal review of the effectiveness of the regulations. I hope that answers to an extent the concerns raised by my right hon. Friend the Member for Wantage. In the meantime, the large companies that are in scope will have a legal obligation to report in the way I outlined. If they fail to report twice a year, or if they misreport on any occasion, they will have committed a criminal offence and, in the worst cases, my Department will resort to prosecution.
The hon. Gentleman asked about the web-based reporting system. We anticipate that it will be in place on the gov.uk site from April. We will keep that under constant review and consult stakeholders, particularly small businesses and their representative bodies, to ensure that the format is user-friendly and that they see value in having a simple way of identifying large companies’ payment practices. Come October, that will be backed up by the Small Business Commissioner himself or herself.
The hon. Gentleman asked about the effect of the regulations on early payment discounts. I will investigate that in the Department and get back to him if there is anything to say. He is right that companies sometimes offer that or suppliers negotiate it. It is another area that I am not yet sure will be covered by the regulations, but I will look into it and let him know.
There was some debate about interest charges. The hon. Gentleman answered his own question by reading the Government’s consultation response—I have read it and think it is correct. Our focus is on getting earlier payment. We are using transparency and the weight of the law to require that reporting in order to achieve prompter, earlier payments. Interest charges are not widely used, for the reasons he set out. We will keep it under review, but I think it is too dependent on SMEs coming out into the open and charging interest on their customers, which few are prepared to do. We want to change the balance of power in the relationship through the means proposed in the regulations. For the time being, we will look to enforce the regulations before looking at further regulations for imposing interest rate charges.
The hon. Member for Kilmarnock and Loudoun asked whether transparency will be enough. It is a good question, and one to which clearly I do not yet have an answer. We will probably only know once the regulations have been in place for two years. In answer to the question from my right hon. Friend the Member for Wantage, we believe that transparency will have the desired effect of ensuring that payment is made earlier and more promptly in the majority of cases.
However, will transparency alone be enough? I am also responsible for the national minimum wage, and I see that transparency there, through the naming and shaming of companies that do not comply, is starting to have an effect. I think the regulations will have an effect as well. They will not have that effect on large companies that go through quite serious trouble and have to take measures that even the best-governed companies would prefer not to take, so I can see that there will be examples when transparency alone will not be enough. However, I hope and believe that those will be a minority of cases, and that the vast majority will register a considerable improvement.
The hon. Member for Kilmarnock and Loudoun also mentioned cash retention in the construction industry. I am very concerned by that issue and am working on it at the moment with officials. We have commissioned independent research to better understand the costs and benefits of retentions and the alternatives. It has taken longer than we hoped, because this is a real issue that has been going on for far too long and needs to be tackled vigorously. We will look at ways of perhaps applying the regulations to that, but if it needs more than that, I hope that we will be able to deliver an effective means of preventing what is an unscrupulous exploitation of legitimate circumstances in which construction works have not gone right and it is the customer’s entitlement to hold some money back. I appreciate that it is too widely abused at the moment.
I thank my right hon. Friend the Member for Wantage for his kind remarks about my role in business. I agree with him that we are reluctant to regulate. We are trying to strike a balance between the legislative approach favoured by the previous Labour Government in 1997, which did not really work, and relying on just a nudge and setting an example. I think the regulations strike that balance. I think they will have an effect without having the unintended consequences that a more heavy-handed, legislative approach would have.
My right hon. Friend questioned the impact assessment. The cost currently stands at £15 million for large companies. There were further re-workings of the figures and further evidence supported an increase from the original estimate, which was an underestimate. He pointed out that that is not much per company. We cannot really look at it on a per company basis, because some companies are already behaving well and are already paying within a reasonable timeframe, so it will not cost them anything more.
Regrettably, a large number of companies do not pay on time, so I will not call them outliers. I do not think the actual cost of paying people on time is necessarily administratively a great deal more than the cost of keeping people waiting. That is why the cost per company in the impact assessment is quite small. My right hon. Friend asked whether I feel that is an underestimate. In fact, I feel the opposite: I think the impact assessment does not take any account of the savings that the myriad small companies will enjoy as a result of being paid on time. Those savings are real, as I outlined in my opening remarks. A small employer told me that they were able to divert a whole person from their accounts department to make more productive use of their time, which should assist our industrial strategy of making companies in this country more competitive and productive. The regulations will go some way towards achieving that happy state.
Finally, the vast majority of the Government’s strategic suppliers are now adhering to the prompt payment code, although there is another issue further down the supply chain. The prompt payment code deals only with tier 1 suppliers. I hope the regulations will improve what happens further down the supply chain. In conclusion, I am in favour of the regulations. I think they are important. I hope the Committee agrees.
Question put and agreed to.
Resolved,
That the Committee has considered the draft Reporting on Payment Practices and Performance Regulations 2017.
DRAFT LIMITED LIABILITY PARTNERSHIPS (REPORTING ON PAYMENT PRACTICES AND PERFORMANCE) REGULATIONS 2017
Resolved,
That the Committee has considered the draft Limited Liability Partnerships (Reporting on Payment Practices and Performance) Regulations 2017.—(Margot James.)
Petition
Construction of a A36-46 link road, east of Bath
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Scotland: Demography and Devolution
(7 years, 8 months ago)
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Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
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Pete Wishart (Perth and North Perthshire) (SNP)
I beg to move,
That this House has considered the Second Report of the Scottish Affairs Committee, Demography of Scotland and the implications for devolution, HC 82, and the Government response, HC 938.
It is a pleasure to serve with you chairing this short debate, Mr McCabe.
Back in February 2016, the Select Committee on Scottish Affairs launched our inquiry into the demography of Scotland, to better understand the issues concerning our populations and the impact those trends will have on devolved services in Scotland. We had four sessions here in Westminster and one in Edinburgh, and we were delighted to visit the Isle of Skye, where we visited the Gaelic college Sabhal Mòr Ostaig and held an evidence session there. As always, we are grateful to all those who contributed to the inquiry.
May I start with the good news? It is very good news. Scotland’s population is stable and growing. We say in the report that that is good news. Something that differentiates us in Scotland so much from the rest of the United Kingdom is that we welcome population growth in our nation. When we get news of population growth, Ministers put out press releases saying that it is a good thing; when they get similar news down here in the UK, it could not make Ministers more miserable. That says everything about the respective attitudes in Scotland and the United Kingdom.
Only 15 years ago, Scotland was suffering what can only be called structural depopulation, and there was real concern that the population might actually dip below the iconic 5 million mark. Scotland’s population has been turned round and is now at its highest ever level, standing at 5.37 million people resident in Scotland. That population growth—not dramatic, but steady and good—is owed to increased fertility among the indigenous population and, more than anything else, immigration, particularly immigration from the European Union following the accession of nations in the early 2000s. After a century of sluggish population growth punctuated by periods of decline, and following centuries of emigration, Scotland’s population is now stable, and that is good news.
I mentioned our history because we as a nation are probably more familiar with historical issues of emigration than we are with immigration. That flavours and shapes Scotland’s response to the current debate about immigration that is raging throughout the United Kingdom—a debate that probably hijacked the whole conversation about exiting the European Union. There are concerns about immigration in Scotland—we find that in social attitude surveys and opinion polls—but it is absolutely clear to me and other members of the Scottish Affairs Committee that there does not seem to be the same heat in that debate in Scotland as there is in the rest of the United Kingdom. There is a healthy understanding of our immigration requirements as a nation and our need to sustain a healthy population and demography.
That is the good news, and it is welcome. The not so good news is that our population increase is lagging way behind that of the United Kingdom as a whole. That is a critical part of this equation and a critical relationship. The UK’s population is projected to increase to 70 million in 2027 and reach 74.3 million by 2039. That is an increase of 15% over a 25-year period. I know that we are ending free movement, that there are going to be new immigration policies in place and that the UK Government are confident that there will be some sort of Brexitised Canute to stand against this tide of an ever-increasing movement of people throughout the world. That is their ambition and what they intend to do, but according to current figures the population growth of the UK is expected to be 15% over 25 years. In the same period, Scotland’s population is expected to grow by 6%.
That population growth gap will have a huge implication for Scotland’s economy and our ability to support and sustain an increasingly elderly population. That is because Scotland is predominantly funded on the basis of its population in the form of a block grant that we receive and is calculated on the percentage-based Barnett formula. Increasingly, the distribution of resources throughout the United Kingdom will be on a per capita basis. The main concern, therefore, is that Scotland’s revenues will not keep pace with those in the rest of the United Kingdom. That could be increasingly acute as we come to renegotiate the fiscal framework in 2020, where population concerns will once again be factored in, possibly to Scotland’s deficit.
The other issue the Committee found is that population growth is variable across Scotland as a whole. That is why the Committee visited the Isle of Skye to try to better understand the regional variations and the issues in Scotland’s rural areas, in particular the highlands and islands. We found pockets of success, particularly in the highlands, but an otherwise ongoing story of decline in Scotland’s rural areas. For example, most of the new population growth happens in Scotland’s cities and conurbations close to them. In my constituency, in Perth and Kinross, we have solid population growth of around 15%; in Edinburgh, where my hon. Friend the Member for Edinburgh North and Leith (Deidre Brock) is resident, it is in the region of 20%; and in Midlothian it is 26%. That contrasts with areas of the highlands and islands that have experienced net population decline, the worst example being the Western Isles, which is expecting a population decline of some 14%.
Scotland has one of the lowest population densities in the whole of Europe. During the inquiry we heard that Sutherland in north-east Scotland has lower population density than Mali in northern Africa—a nation that is entirely covered by Sahara desert. More than anything, that suggests that Scotland is not full up and that we can accommodate many more immigrants to help us to address some of the issues in our economy.
Lurking underneath the statistics are demographic issues that really need to be tackled. The age profile of Scotland’s population is rising at a faster rate than that of the UK as a whole. Several witnesses we spoke to in the course of the inquiry identified the combination of Scotland’s lower population growth, ageing population and lower life expectancy as one of the key challenges it will face in the delivery of public services in the coming years and decades. Over the next 25 years, Scotland’s population will have a lower proportion of working-age people than it does now, and they will be expected to support an even bigger number of dependants. That is referred to as the “dependency ratio”—several groups took exception to that phrase when we visited Edinburgh, as my colleagues will remember. In the next 25 years, the dependency ratio will increase from 58 dependants to every 100 working-age people to 67 dependants to every 100 working-age people. That has serious implications for the delivery of public services.
The Committee found two particular areas where the dependency ratio might have an impact. The first is the size of the tax base and the ability to service through that tax base an ageing population. Secondly, it will be much more difficult to fill some vacancies in a number of sectors, including health and social care. An ageing population will increase demand for those services without there being a commensurate increase in the pool of working-age people available to fill those vacancies. That will have to be factored in to the planning and developing of Scotland’s public services over the coming years and decades.
Another thing the Committee found during our inquiry is that life expectancy and healthy life expectancy, especially for men, are lower in Scotland than in other parts of the UK. A new report, which we did not have the opportunity to take into account, has emerged in the past few weeks. That report, produced by the University of Glasgow, suggests that for the first time in 150 years life expectancy is not increasing in Scotland. It found a spike of more deaths in 2014 than at any time in Scotland since the second world war. We are not in a position to assess that, but it would be particularly worrying if that was a trend that is beginning in Scotland and was a reflection of some of the social policies that have been carried out not only in the name of this Government, but across both Governments in the United Kingdom. That is something we very much want to keep an eye on over the next few years.
The health inequalities are what concern the Committee more than anything else, and again we saw a disparity not only in the United Kingdom but in Scotland. The most revealing example was given by Professor David Bell, who talked about the train journey from Jordanhill in Glasgow to Bridgeton in Glasgow and how life expectancy declines by 15 years in the course of it. Professor Bell also told us that Jordanhill’s people have the same life expectancy as those of Canning Town here in London. Canning Town is a tube journey away from Westminster, where life expectancy is seven years higher. The disparity across the United Kingdom is 21 years, which surely should set off all sorts of alarm bells when we are planning services and considering how to reduce health inequalities.
The Committee considered what would be required to resolve some of the difficulties that we identified in our inquiry. First, we note the Scottish Government’s target of matching population growth with the EU15, which was set in 2007 to be completed by 2017. The Scottish Government have been relatively successful in ensuring that we have achieved the EU25 mean. Some witnesses praised the Scottish Government for setting the population target, saying that it was in the interests of the nation to aspire to be population healthy and demographically healthy. However, some—primarily those in the UK Government, who did not see much value in it at all—felt that there was no need for a population target and questioned the whole idea.
None of our witnesses could tell us the optimum population size for Scotland, although a few gave valid examples of their efforts to do so. Professor Jim Hunter, emeritus professor of history at the University of the Highlands and Islands, told us that it is difficult to establish Scotland’s optimum population. When we were on Skye, he told us about some of the reasons given for the clearances, including that the population in the particular area was unable to sustain itself, but he also said to the Committee, revealingly, that
“the population of London exceeded the capacity of the London area to grow potatoes and turnips a heck of a long time ago, so it depends entirely what sort of economy you are looking to create here.”
I thought that those were particularly wise words.
We found, unsurprisingly, that what is required to keep a healthy demography and a stable and competitive rate of population growth is an obvious equation between emigration and immigration. We must retain more people in Scotland and do more to attract working-age migrants to Scotland, but that will be a lot harder to achieve with the end of free movement of people from the European Union.
To give an example of the sort of figures that we are talking about, in 2014-15, net inward migration to Scotland was 27,968, while net migration to England was 298,882. That is a huge disparity in our ability to attract immigrants. We must do more to attract migrants to Scotland, but it is particularly difficult to achieve when the legislative levers remain in the gift of a UK Government resistant to immigration and concerned to the point of obsession with immigrant numbers. The UK Government, in their response to the report, defiantly refused to give the Scottish Government responsibility and opportunities to address their immigration concerns, and they have ended schemes such as the Fresh Talent initiative, which allowed us, at least in relation to the student population, to try to increase our population by giving incentives to stay in Scotland.
I mention that because something important and alarming came out in the statistics given to us by National Records of Scotland. There has been a positive spike in Scotland’s immigration figures: the number of people coming to Scotland in the critical 19-to-23 age bracket has risen. That suggests that people are coming to Scotland attracted by the offer from our excellent, world-class universities. However, there is an almost commensurate spike in emigration among those aged 23 to 27. That suggests to me that people are leaving Scotland once they have been educated, because they do not have the opportunity to stay there.
Steven Paterson (Stirling) (SNP)
As my hon. Friend might be aware, in 2015-16, Stirling University had 930 EU students and 1,350 overseas students; 20% of the student population came from overseas. It clarifies how important immigration is to solving the problem not just of the skills base, which he correctly identified, but to the universities’ health in the future. What are his views on that?
Pete Wishart
That is exactly what we found in the course of our inquiry. One of the report’s recommendations was that the Government reconsider their approach and attitude to the post-study work scheme offer. That would address the issues that my hon. Friend raises, but to me the problem is much more fundamental. It is beyond absurd that we attract all those talented young people to Scotland with the quality of our world-class universities and train and educate them to a high standard simply to watch them sail away, when we need those people to help grow and contribute to our community.
Natalie McGarry (Glasgow East) (Ind)
I wish the hon. Gentleman a happy birthday and congratulate him on securing this debate. He is making an important point. One of the few issues that unites political parties in Scotland is the need to reintroduce the post-study work visa. Does he share my concern about the 80% drop in non-EU students remaining in the UK after graduation since the scrapping of that vital scheme? We must continue to press the Government to stop the brain drain of global talent from Scotland.
Pete Wishart
The hon. Lady is absolutely spot on. I wish we could do more to convince this Government that they need to reconsider and help us to ensure that we keep those talented people. Our statistics show that we require these people to remain in Scotland; they are welcome in Scotland, but there has been absolutely nothing from the Government in response. They have run some pilots on a post-study work visa scheme, but none of them in Scotland. We saw in the Government’s response why Scotland was not included. All of that is totally unsatisfactory. It is one thing that this Government can do that is straightforward, simple and easy to administer. Give us a break; give us a chance. Do something to help us address one of the pressing issues facing our community. We want it, we are ready to do it, the universities want it and it is in the gift of the Government to make that simple little change to help our higher education sector.
The Government say in their response that Scotland should use its range of devolved powers to attract immigrants, and they highlight powers that we could use to achieve it, talking about things such as health and education. I remember the former Chief Secretary to the Treasury sitting across from us in Committee and telling us that the one thing we could use to attract immigrants to Scotland was our planning powers. That was the sum total of what we had at our disposal. How we are supposed to attract immigrants without the levers of immigration powers is totally beyond me.
What I am hearing from the Government—it is a strange proposal and a sustained one, too, because we hear it practically every day—is that apparently Scotland’s offer for immigrants has been diminished because we now have powers over income tax. Somehow, we are disincentivising people because we have a differential rate of income tax in Scotland. I do not know about you, Mr McCabe, but I do not imagine potential immigrants in town squares in Krakow and Budapest being put off coming to Scotland because the higher rate of income tax kicks in at £40,000 instead of £43,000. I suspect that that would be the last thing on their minds.
The Minister for Immigration (Mr Robert Goodwill)
It might not have crossed the hon. Gentleman’s mind, but employers considering where to locate might look at the rate of income tax for their new investment.
Pete Wishart
I am grateful to the Minister. I suggest that although that argument is always convenient, the evidence for it is flimsy, verging on non-existent. Nobody has presented us with anything to support that view.
Yes, income tax is a feature and a factor when it comes to the suite of taxation that people have to pay, but it is just one part of it. England, for example, has higher rates of council tax and higher house prices. We have free education for our young people and free prescriptions. Taxation comes in many forms. The ludicrous suggestion that Scotland is uniquely the highest-taxed part of the United Kingdom does not bear any scrutiny at all. To suggest that it disincentivises people from coming to Scotland is beyond absurd and almost ridiculous. What changes people’s decision whether to come to a nation is powers over immigration and the ability to incentivise people to come through means such as a post-study work scheme, available jobs and a growing economy, and a growing economy needs a healthy working-age population. Those are the very factors we have considered and tried to address in our report.
Emigration from Scotland is an issue. Scotland is still an emigrant country; it is a feature that has characterised our nation throughout the centuries, and we are still losing far too many young people rather than retaining them. The Scottish Government have put in place a number of measures to hold on to young people in Scotland, and we wish them well in those endeavours, but as long as we remain a dependent nation within the United Kingdom, there will always be other attractions, particularly in huge centres such as London. We cannot build that capacity to retain people in our capital and other cities, so for as long as we remain a dependent nation, it will probably always be likely that our young people will be attracted to the bright lights of London. For example, when my son finished at Glasgow University, he came down here to look for work opportunities that he could not find in Scotland, because we have not been able to put in the resources there to develop our economy and give our young people those chances. As long as we remain part of the United Kingdom, I believe that we will always have difficulties.
Mr David Anderson (Blaydon) (Lab)
I congratulate the hon. Gentleman on his Committee’s important report. He knows as well as I do that one of the reasons we are having this debate is the UK Government’s paranoia about getting immigration numbers down to below 100,000. Have he and his Committee given any consideration to addressing some of the concerns that I have heard, particularly in the Irish situation, that if we allow Scotland to have its own immigration policy and bring in as many people as possible, we will not be able to prevent those people from going to Scotland for a fortnight and then coming down to England and completely upsetting the balance that people want to see? I think that is nonsense, but it is one of the reasons behind the Government’s refusal to let Scotland handle immigration. We have to work together to find an answer to that, because it is one of the reasons that the Government will use to prevent Scotland from addressing its genuine needs and achieving what the hon. Gentleman and I want to see happening in Scotland.
Pete Wishart
It was not within the scope of our inquiry to look at such solutions; we just wanted to get a snapshot of the quality of Scotland’s population growth and some of the demographic issues, and to suggest ways in which they could be addressed—but the hon. Gentleman is right about what the Government say. They say it all the time, but they are totally ignoring the fact that other nations throughout the world are able to manage sub-national immigration policies quite successfully, particularly Canada and Australia, whose policies work perfectly well and have none of the impacts that the hon. Gentleman mentions.
There is another solution, which has just come on the table in the last year. As a result of the Scotland Act 2016, there is now a Scottish rate of income tax set by the Scottish Parliament. We now know where Scottish income tax payers are resident, so if there is any breach, we know where they are. If someone came to Scotland from Krakow or Budapest, for example, with the sole intention of abusing the job opportunities we gave them by then disappearing to London, they would immediately disappear into a black market. They would not be able to work because they would be officially resident in Scotland. Why on earth would somebody want to disappear from a legitimate market, in which they have every opportunity to find a job and contribute to the economy, and go to a black market, in which they will be pursued relentlessly by the Minister’s Home Office team? That is my answer to the hon. Gentleman’s question, but it was a good question and I am pretty certain that we will hear more on it from the Minister.
Pete Wishart
The Minister is giving me a thumbs up, so we can expect him to address the matter in his reply.
I will finish my speech because I know that other hon. Members want to speak. We will always be fighting a losing battle if we cannot grow our population through immigration. Our report calls for the Government to give us a chance, give us a break, and consider devolving some immigration powers to Scotland to let us grow our population. If the Minister and the UK Government do not do so, they will be holding Scotland’s hands behind its back, because the population gap between us and the rest of the United Kingdom will have massive implications for our economy and our ability to provide proper social services in Scotland. Population and demographic issues will be central to social planning, healthy economic outcomes and growth over the next decade, but Scotland has a UK-wide immigration policy designed by the Minister and his colleagues that practically works against our vital national interests. If there is one thing that the Government can do to help us to address those issues, it is to give us the levers to address them.
Steve McCabe (in the Chair)
I am sure that we all wish the hon. Gentleman a very happy birthday.
Deidre Brock (Edinburgh North and Leith) (SNP)
It is a great pleasure to serve under your chairpersonship, Mr McCabe.
At the risk of being confused with a ray of sunshine, may I lay out some of the grievances rightly held by Scots about population and demographics and put them in some kind of historical context? Not all of them are directly the fault of this place—some of them might even be someone else’s fault—but hear me out. At the beginning of the 18th century, Scotland’s population was 1 million, while England’s was 5 million. That ratio of roughly 1:5 stayed the same throughout the 18th century and into the beginning of the 19th, but Scotland’s relative population shrank during the 19th century until the ratio was 1:7.
It was really the clearances that set Scotland’s population growth back on its heels. Private greed played a part, but so did Government decisions. The British Fisheries Board established fishing stations at Wick, Tobermory and Ullapool, dragging people from the land and the industry that they were familiar with and making them cling to the edges of Scotland, as someone once put it, in a barren and unfamiliar area. The Government were also determined to end the clan system; its organisation seemed all too militaristic and people’s loyalty to a clan chief, rather than to the Crown, could not be tolerated.
The clearances were the biggest drag on Scotland’s population growth until the de-industrial revolution of the Thatcher years, when the crushing of communities echoed the crushing of communities during the clearances. Scotland’s population shrank under Thatcher as young Scots were forced out and sought opportunity elsewhere, which removed a breeding population as well as an economically active population. It took until 2010 for Scotland’s population to recover to pre-Thatcher levels, and today it stands at less than a tenth of England’s.
There is now another Tory threat to Scotland’s population and prosperity: Brexit. The UK’s population growth from 2000 to 2015 was roughly a third native-born, a third EU-born and a third born elsewhere, whereas half of Scotland’s population growth was from EU nationals and only 14% was native-born. Scotland needs those people—those workers. Only 4% of EU nationals in Scotland are over 65, and 16% are under 16. The working-age population of EU immigrants is 80% of the total, with a 79% employment rate—six points ahead of the Scottish average. As I think my hon. Friend the Member for Perth and North Perthshire (Pete Wishart) alluded to, almost a fifth of Scotland’s population is over retirement age. We need the supply of young, energetic workers from the EU, which is now under threat from a Brexit that might only mean Brexit to the Prime Minister, but means a potential major economic threat to Scotland.
From the clearances, through Margaret Thatcher, to Brexit, Scotland’s population has been getting a raw deal. Scotland needs to get out from under that and create a welcoming and entrepreneurial environment to grow our economy and provide a secure future. As my hon. Friend said, we need an open door for immigrants, and we need immigration policies that are clearly very unlike the policies touted in this place by this Government.
We cannot be left subject to this frankly xenophobic regime if we are to build the population and the economy that Scotland needs. I would prefer it if we agreed to be friendly neighbours and if Scottish independence created a new relationship, but it is possible to do it before then. My hon. Friend alluded to the examples of Australia and Canada, but it is possible for the UK to have different immigration systems for different areas. We know that that is possible because it already happens; the UK runs different immigration regimes for Gibraltar, the Channel Islands and the Isle of Man, for example. No, the circumstances are not the same—I am aware of that—but the precedent is there, and that example shows that it is possible. There is no reason why Scotland cannot have an immigration regime tailored to our needs even while we are stuck in the UK. We need to keep the door open for the free movement of the peoples of the European Union. Of the four pillars of EU membership, that is the one that I believe Scotland needs to keep most of all.
Chris Law (Dundee West) (SNP)
It is a pleasure to serve under your chairmanship, Mr McCabe, and to follow two wonderful and detailed speeches.
I said in this Chamber only three months ago that
“the Government’s current immigration policy is completely failing Scotland.”—[Official Report, 8 December 2016; Vol. 618, c. 164WH.]
The Scottish Affairs Committee is now leading another debate based on a report that has concluded, yet again, that a different immigration system is needed for Scotland, rather than a one-size-fits-all UK policy. Hon. Members may ask why. Well, our report examined the different population trends in Scotland and why the challenges presented by those trends should be reflected in the UK Government’s policy making. One of the key challenges we found was that over the next 25 years, the average age of the Scottish population will increase dramatically, resulting in far fewer people paying taxes and fewer people being available to work in health and social care to support an ageing population.
The good news is that after years of decline, the population of Scotland is now gradually increasing, mainly due to the decrease in outward migration. However, if a hard Tory Brexit has a negative economic impact on Scotland, it is highly likely that outward migration will increase again. Over the next 25 years, the population of Scotland is predicted to increase by 7%, but London’s population is predicted to increase by more than triple that rate, meaning that the economy of the UK will be even more dominated by the needs of London and the south-east of England.
Steven Paterson
It strikes me that we have had debates in the House of Commons recently on boundary changes, during which the Government argued that those changes had to be based upon population. Based on the point that my hon. Friend has just made, does it not signal the failure of the current policy that according to the Government, Scotland’s number of MPs relative to England will be decreased again and again and again, as it has been over the last 20 or 230 years?
Chris Law
My hon. Friend makes a valuable point. In fact, if the number of MPs in one area, the north-west of Scotland highlands, is reduced, the area covered by one MP will be larger than Belgium. That is completely unacceptable, particularly in the face of Brexit and the amount of work that will result from it, which is likely to be a burden for all MPs.
Scotland’s recent population increase is partly due to inward migration. However, UK Government policies will undoubtedly have a negative impact on Scotland’s population growth. Those policies include barriers to immigration resulting from Brexit, which I have already mentioned; the scrapping of post-study work visas, which is already causing considerable damage; and the continuing uncertainty about whether EU citizens will be allowed to remain in the UK.
Our Committee’s report also found that population is a key issue in rural areas in Scotland that already have extremely low levels of population density and a pattern of younger people leaving to look for work elsewhere. On a Committee visit to Dumfries quite recently, we heard that in rural areas it is already hard to fill posts in social and health care, and it is predicted that that situation will get worse.
While Scotland’s land reform and rural broadband schemes are intended to boost economic activity in rural areas, which can only be a good thing, achieving that aim will not be possible if there are not enough people living in those areas to develop the economy. Again, the situation will become even worse if our exit from the EU reduces immigration and leads to more young people leaving Scotland to find work elsewhere.
I will give a more detailed example from my own constituency in Dundee. There are many issues in the demography report that have particularly serious implications for my city. To put things into perspective, Dundee has the highest proportion of students in higher education of anywhere in Scotland. The university sector is vital to the economic health of our city. Indeed, a quarter of University of Dundee students come from outside the UK and, as was set out in a report last week, more than 175 jobs in Dundee are fully or partially funded by EU grants. If Brexit leads to a reduction in the number of international students and a loss of EU nationals working in our universities, without doubt that will have a significant negative effect on the economic wellbeing of my city.
As many Members will know, Dundee is currently undergoing a £1 billion regeneration of its waterfront, at the heart of which is the new V&A Museum of Design. Immigration and population growth have the effect of enhancing economic activity and creating jobs. Therefore, any threat to immigration will hinder the positive transformation that Dundee is currently undertaking.
I will focus on one sector for a moment, because Abertay University was the world’s first university to have a degree in designing video games. I chair the all-party group on video games, so I will touch on that sector briefly. My constituency is a cluster for game designers. To give people a flavour of the kind of games that come out of Dundee, one of them—“Grand Theft Auto”—has already broken six Guinness world records. Within the video games industry, talent is the No. 1 priority for businesses, and it is vital that the industry is able to recruit highly skilled international talent without there being immigration barriers to their working here.
A UK-wide survey by the video games industry body UK Interactive Entertainment, which was published just yesterday, showed that more than 98% of respondents—we might as well say 100%, as we are just about there—believe that EU nationals with skills needed in the games industry should have a blanket right to live and work in the UK.
I turn to a sector that is important in my neighbouring constituencies, in particular that of my hon. Friend the Member for Perth and North Perthshire (Pete Wishart). Each year, large numbers of temporary migrants from the EU come to work in the fruit picking industry in the constituency next to mine. If that flow of workers is cut off by Brexit, that will have a hugely negative impact on this vital part of our local economy.
Pete Wishart
I am grateful to my hon. Friend for mentioning my constituency, and he is absolutely right that we have great concerns about what will happen in our world-class berry fruit sector. However, the situation is even worse than that. I am sure that he will have heard examples similar to those I have heard of European nationals in our constituencies who, just because of the current climate, are thinking about leaving, because there is a sense that they are not welcome here any more. They are feeling the chill wind blowing from the UK Government, which is putting their very existence here at risk, as they are used as bargaining chips. Has he come across anybody like that in his constituency?
Chris Law
Yes indeed. In fact, tomorrow, which is my constituency day, I have four surgery appointments with EU nationals who are similarly concerned about the future. The biggest issue that we have is in social and health care, particularly in our care homes, where there is a large percentage of EU nationals among the staff. As Dundee is growing to meet the needs placed on it to be a creative hub for Scotland, we also have a growing hospitality sector, which is again largely served by EU nationals.
However, despite all the evidence that the UK Government received though the Scottish Affairs Committee report, they have once again completely disregarded calls to ensure that any new immigration policies meet the needs of Scotland’s demography. Not only that, but they have once again completely rejected calls for a more flexible post-study work visa system for international students in Scotland. Therefore, it is crystal clear that Scotland has different immigration needs from other parts of the UK, and a one-size-fits-all approach simply is not working.
In 2014, the UK Government told Scotland to lead the UK and not leave it, claiming that it would be treated as an equal partner within the UK. Last weekend, however, the Prime Minister said that control over policy areas that have already been devolved, such as fishing and agriculture, may not go to Holyrood in the wake of Brexit, further raising fears that devolution will be undermined rather than enhanced. That is nothing short of a scandal and flies in the face of the devolution settlement of 1998.
If anyone is in any doubt about how difficult the UK Government have made our immigration system, they only have to look at a tweet put out by Faisal Islam the other night. It pointed out that under the same EU law a permanent residence form in Ireland is five pages long and free; in Germany, it is two pages long and costs eight euros; and in the UK, it is 85 pages long and costs £65.
Scotland is not full up. As I have said, our demographic and workforce needs are different to those of the rest of the UK. With the UK Government’s current rhetoric signalling a move towards a hard Tory Brexit, it is becoming increasingly obvious that their polices will seriously damage Scotland’s population growth. The UK Government’s immigration policy in no way recognises Scotland’s needs or serves our economic and societal interests. The UK Government continue to resist pragmatic change that would not only reduce the impact of Scotland’s ageing demographic but help Scotland to attract international students. What would really benefit Scotland would be the full devolvement of immigration power, so that we can ensure our country’s prosperous future. If the UK Government are unable to tailor their immigration needs for Scotland, then Scotland’s independence will be the only solution.
Brendan O'Hara (Argyll and Bute) (SNP)
As always, Mr McCabe, it is a pleasure to serve under your chairmanship.
I begin by commending the report of the Scottish Affairs Committee. It is a significant contribution to the debate and it is supported by numerous experts. It makes it very clear that Scotland’s population needs to grow and that Scotland requires immigration in order to make that happen.
As my hon. Friend the Member for Perth and North Perthshire (Pete Wishart) rightly said, the United Kingdom’s population is projected to increase by 15%, while it is reckoned that the population of my constituency of Argyll and Bute will fall by 8%. That situation is unsustainable and unworkable, because despite being an exceptionally beautiful part of the world, my constituency is—almost uniquely—suffering depopulation. We have an ageing and increasingly non-economically active population, and our young people are leaving to spend their economically productive years outside Argyll and Bute.
We desperately need people to come to work in our rural communities. We need EU nationals and others to be able to come to Argyll and Bute, and we welcome the overwhelmingly positive contribution they make day in and day out to Argyll and Bute and to Scotland generally. We need that to continue, so we need a system that will allow Scotland to find a bespoke immigration policy, one in which Scotland’s needs are met, rather than simply being subsumed into the needs of the rest of the United Kingdom, and—
Ian Murray (Edinburgh South) (Lab)
I apologise for interrupting the hon. Gentleman; he was in full flow and I perhaps should have waited. Nevertheless, I am delighted to be able to intervene now.
In this report, we have concentrated a lot on migration. I agree with the report, which says there should be a much more flexible approach to immigration, right across the country—in all parts of the UK and not just in Scotland. Indeed, there is maybe even an argument for internal Scottish-type different approaches to immigration. One of the key recommendations of the report was about the number of young people in particular who leave Scotland to live in the rest of the United Kingdom. We need to find ways of making sure that those young people not only stay but are able to contribute to the economy. That is not about migration, because I am talking about young Scots who are moving. How does he suggest that we should deal with that issue?
Brendan O'Hara
I take on board what the hon. Gentleman is saying, but I think there are two strands to it. In Argyll and Bute, we need to keep our young people and attract young people back into the constituency. That is about physical connectivity, digital connectivity and making Argyll and Bute an attractive place for young people to come back to and to not leave in the first place, but that in itself will not be enough. We have to be able to attract EU nationals and others to Argyll and Bute and make them stay. It is not an either/or situation; we should be able to keep our young folk and at the same time attract people into Argyll and Bute to live and work and to make it home.
Part of that is having a bespoke Scottish solution. If Australia, Canada and Switzerland can have immigration policies that differentiate between the different needs of the different parts of the country, surely there is no reason, other than political will, why that cannot happen here. Argyll and Bute Council’s plan for economic regeneration was predicated on it continuing to be able to attract EU nationals into the area. I am afraid to say that that plan seems to have been holed below the waterline since last June.
When I was first elected to this place almost two years ago, I came here knowing that I would fight austerity and oppose Trident renewal and that we would seek to deliver the vow in full, as was promised after the 2014 referendum. Never in my wildest dreams did I think that my colleagues and I would have to stand in this place to defend the right of the almost 200,000 EU nationals living in Scotland to remain in the country they have chosen to call home. I did not imagine a scenario where I would have to stand in this place and argue that 1,800 of my constituents—EU nationals in Argyll and Bute—should have the basic right to remain in the country in which they have chosen to settle, raise their family and contribute.
What have we become? How in the 21st century are we debating whether 1,800 of my constituents—mums, dads, husbands, wives, brothers, sisters, employers and employees—have to choose whether to stay or go? They are genuinely fearful for the future. I put it to the Minister that that is because the Government have chosen not to guarantee their future status within the United Kingdom. As my hon. Friend the Member for Dundee West (Chris Law) said, that policy, coupled with the Government’s immigration policy, is holding Scotland back.
In the past week, five families from my constituency have contacted me, all deeply concerned. Last weekend, Rita Windham-Wright, a Hungarian national living in Oban with her Scottish husband and children, informed me that because of the uncertainty, they were thinking of leaving Scotland. Celia Krezdorn from Helensburgh—she is a Swiss national married to a German, and she has brought her children up in Scotland—said she was deeply worried about what the future holds and what the lack of clarity will mean for her family. Jean Michel Voinot, a French national living in Lochgilphead with his wife and young children, asked, “Will my family be allowed to stay?”
On Wednesday, another Hungarian woman, Edit Makai, asked me whether it would be okay to take her child to meet her Hungarian grandmother in Budapest. She was worried they might have problems getting back into the country. Just yesterday, Josianne, a French national who has lived and worked in Rosneath for more than 20 years—she is a highly active member of the community —contacted me to say that she is fearful she may have to leave her home and her family post-Brexit. The Minister may well dismiss those cases, but he has to accept that those are the genuinely held fears of constituents who have approached me as their Member of Parliament asking questions that I would never have expected to have to answer.
Mr Goodwill
Does the hon. Gentleman think that Scottish or British people living elsewhere in Europe deserve similar assurances, or is he prepared to move ahead unilaterally to guarantee the rights of EU nationals living here without getting the same guarantees for the status of Scottish people living abroad?
Brendan O'Hara
I will come on to that point in just a moment, because it is a vital question, and I will answer it. As I was saying, those are the genuine concerns of real people, and I have to ask: what kind of Government know they are causing such fear and alarm, yet refuse to act on it? I raised many of those cases at Home Office questions on Monday, and I was told by the Home Secretary that it was up to me to reassure them of how valued they are. I have done that; I have written to every single EU national in my constituency telling them how valued they are, but it is not in my gift to make the problem go away. The only people who can give that cast-iron guarantee and reassurance are the Government, and sadly they have refused to do it—they have chosen not to do it.
Steven Paterson
My hon. Friend is making a powerful case on one of the most important points. I have many similar stories. For example, in Tyndrum—it is just next to his constituency and on the edge of my constituency—I met with the staff of the Real Food Café, most of whom are workers who have come from the European Union. They were extremely distressed about what the future held for them and what the rules were. My frustration was that I could not give them any real answers to most of the questions that came up because the Government have not given us any real answers. Does he agree that the Government need to get their skates on and give us some idea of how this is supposed to look, so that we can reassure these people about their futures?
Brendan O'Hara
Sadly, it is a familiar tale. People are genuinely worried about the future, and the Government have to do something. They have to say to these folk that their future is guaranteed, come what may. It is not too late for the Government to do the right thing. Indeed, I implore them to do the right thing. I have heard the Government make the argument many times that only when other countries guarantee the position of UK citizens living in the European Union will they do the same. In direct response to the Minister’s question, I do not think that is good enough. I do not think that is doing the right thing. It is playing politics with people’s lives.
Doing the right thing is saying unequivocally—regardless of what others do—to those EU citizens living, working and contributing economically and socially to the wellbeing of this country, “We guarantee your status will not change with Brexit and you are welcome here.” If the Government choose not to guarantee European nationals the right to remain, history will judge it a national disgrace. I am proud and delighted that history will show that my colleagues and I had no part in that and opposed it every step of the way. So far as we are concerned, every single EU national living in Scotland is very welcome, and we thank them all for the positive contribution they have made, making our country a better place for all of us.
Finally, in my maiden speech in May 2015, I said that the Government had to recognise that the four constituent parts of this United Kingdom had, for the first time ever, voted four different ways and that as a result there could be no more one-size-fits-all policies covering everyone and everything from Truro to Thurso. That includes immigration. Our needs are not necessarily the rest of the country’s needs. If the Government are genuine about the respect agenda, they have to respect that and guarantee that our country can grow economically, culturally and politically into something different, if it chooses so to do, and that is with our EU nationals. I urge the Government to act accordingly and change their policy immediately.
Margaret Ferrier (Rutherglen and Hamilton West) (SNP)
It is a honour to serve under your chairmanship, Mr McCabe. I thank my hon. Friends the Members for Edinburgh North and Leith (Deidre Brock), for Dundee West (Chris Law) and for Argyll and Bute (Brendan O'Hara) for taking part in today’s debate, as well as those who made interventions—my hon. Friends the Members for Stirling (Steven Paterson) and for Glasgow East (Natalie McGarry) and the hon. Member for Edinburgh South (Ian Murray).
I am grateful to the Liaison Committee for selecting the report for debate, and to the very accomplished Chair of the Select Committee on Scottish Affairs, my hon. Friend the Member for Perth and North Perthshire (Pete Wishart). I wish him a very happy birthday. He shares his birthday with Yuri Gagarin and today also marks 31 years since the space station Mir was launched. Whatever his plans are after today’s debate, I hope he has a truly stellar day.
Pete Wishart
I did not know that—I am genuinely surprised. I am always told that I share a birthday with Martin Fry from ABC, who had much greater success than I did in music, selling many more albums than I did in his illustrious career.
Margaret Ferrier
I thank my hon. Friend for that informative intervention, which will now be in Hansard. Mir was succeeded, of course, by the international space station—arguably one of humankind’s greatest achievements, and a reminder that we achieve more working together than we do apart. That is an important thing to bear in mind, particularly as we enter an ugly, post-Brexit, insular, isolationist, anti-immigrant phase in British politics.
We are often referred to in this place simply as “the nationalists” but, in truth, we have more than proven ourselves to be the largest group of internationalists in the House. Of late, I and my colleagues have received what can only be described as a barrage of pro-EU and internationalist correspondence from all corners of the UK. It is, in fact, a lovefest for our strong, principled stances on the EU and immigration. What is very clear from those reaching out to us is that many people feel unrepresented in this place as we go through the process of exiting the European Union. The people of Scotland are being ably represented by a strong team of SNP MPs here and an incredibly effective SNP Government in Holyrood. We will continue to push for solutions that will help to solve the unique challenges that we face.
The UK Government cannot simply continue with their one-size-fits-all approach to policy. In their response to the Scottish Affairs Committee report, the Government state:
“Our immigration system is designed for the whole of the UK, taking account of Scotland’s needs.”
That is demonstrably not the case. It is completely at odds with the views of Scottish businesses and universities and of civic society in general. Scotland faces demographic challenges in the coming years. We are not unique in that respect, but our needs are not the same as those of other nations in the UK, and, despite the UK Government’s protestations, they are not being taken account of by the Home Office. While the UK Government continue with their increasingly bitter and nasty narrative on immigration, the SNP Scottish Government are focused on increasing population growth, which has been historically slow in Scotland compared with England, while also making Scotland an attractive place to work and live.
Pete Wishart
My hon. Friend attended the same sessions as I did and she would have heard from a swathe of Scottish public opinion—from business leaders, to trade unions, to higher education, to everybody involved in business and academia—that we require a differentiated type of immigration system. Does she therefore believe that, as we approach leaving the European Union, it is much more important and pressing that Scotland now has some sort of bespoke immigration system, in order to deal with the challenges we face as a nation?
Margaret Ferrier
I completely concur—I will come on to that point later in my speech. Population growth is a vital contributor to a more dynamic society, and it is crucial if we are to ensure our economy is fit for the challenges of the future. With an ageing population, Scotland will undergo a significant demographic shift in the coming decades, which will present us with challenges that we must be prepared for.
The Scottish Government want to address Scotland’s changing demography through population growth, which will provide a larger tax base to pay for services, as well as ensure that we have more people to carry out essential jobs. Immigration policy obviously plays a huge part in that. As we have heard again and again today, EU and international citizens play a crucial role in making Scotland’s economy successful. They and the contribution they make to our society are valued. It is utterly shameful that the UK Government have failed to guarantee the rights of EU citizens to remain in the UK almost a year on from the Brexit referendum.
It cannot be repeated often enough how much we respect those who have chosen to live and work in Scotland. In the words of our First Minister:
“You’re not bargaining chips, you are human beings with families, jobs, friends and lives here. I believe you have a right to certainty and peace of mind.”
We have heard it already today, but let us just stop this nonsense about speaking up for people who live abroad. Let us take the first step today and tell EU nationals who are living here that they are valued and that they can stay; then we can move on, because it is just going to be repeated again and again. We need action from the Government now before the issue causes any more distress to families and damage to Scotland and across the UK. One thing is abundantly clear: UK immigration policy is at odds with the values of the Scottish people. It does not meet our needs and the UK Government need to listen to those legitimate concerns.
The Government’s response to the report is disappointing in many ways. The report clearly sets out that, based on the evidence we received, there is a case for further consideration of sub-national migration powers for Scotland. The report calls for closer co-operation between the UK and Scottish Government on that. Simply put, the UK Government must deliver an immigration system that meets Scotland’s needs and they should allow Holyrood to have more say. By insisting that the immigration system is designed for the whole of the UK, the Government fail to take into account that Scotland’s demographic needs are different from those of other parts of the UK.
The UK Government remain absolutely committed to reducing migration to the UK to tens of thousands, as we heard from the hon. Member for Blaydon (Mr Anderson). Growth in our population is crucial to the growth of our economy. Scotland’s people, including those who have chosen to live and work there, are key to our future prosperity and a strong economy.
Mr Anderson
The hon. Lady is making a very powerful speech, as always, but she is being too kind to the Government when she says that the UK immigration system is designed to do that. The Government’s UK immigration policy is for one thing and one thing only: to try and knock back UKIP from their right-wing backwoodsmen in their heartlands. That is what it is about and nothing more.
Margaret Ferrier
The hon. Gentleman has made his point and I do not need to reply; I am sure the Minister will have taken that point on board.
I appreciate that in his response the Minister will probably wish to highlight the fact that immigration policy is not some population panacea. That is very true. In order to grow the population, the Scottish Government are working on a combination of measures, including creating a fair and inclusive jobs market that attracts the type of skilled individuals we need, investing to create a supportive business environment that attracts inward investment, improving the education, skills and health of Scotland’s population, and creating a fairer, more equal society through the delivery of key public services. The UK Government must acknowledge why immigration is essential in that mix as a key driver of population growth. As we have heard, the population of Scotland is projected to increase by 7% between 2014 and 2039, and 90% of the increase over the next 10 years is projected to come from migration. However, projections for the UK as a whole show 49% due to migration. Scotland is different, and one immigration policy for the whole of the UK is simply not workable.
The damage caused by a single UK-wide policy can perhaps be seen in the withdrawal of the post-study work visa. Initially a pilot scheme that worked for Scotland, which was then rolled out across the UK, it was removed due to concerns it was not working for the rest of Britain. In our report, the Scottish Affairs Committee restated our call for the UK Government to work constructively with the Scottish Government to explore the possibility of introducing a formal scheme to allow international higher education students graduating from Scottish further and higher education institutions to remain in Scotland and contribute to economic activity for a defined period of time, as set out in the Smith Commission report. It is hugely disappointing that the Government do not intend to reintroduce a general post-study work scheme for Scotland, despite calls from across the political spectrum, our universities and civic society in Scotland.
Deidre Brock
Universities Scotland’s website states very clearly that it feels that the UK’s current student immigration policy is detrimental to Scotland’s businesses and industry, as there are high skills shortages across a number of sectors that are not being met by UK and EU-domiciled people. What does my hon. Friend make of that comment?
Margaret Ferrier
I am confounded by the fact that the Government are not listening to those people. We heard that in all of our Committee’s sessions, and we are now hearing it from all universities and businesses. I am not sure why their pleas are falling on deaf ears.
Margaret Ferrier
I am not going to take another intervention, because I am aware that we have hit the time for the Front-Bench spokesmen.
The Minister must surely realise that the trialling of the new tier 4 scheme in universities in England will be seen as a kick in the teeth for Scottish universities. It may very well be that
“There was no agenda to limit those involved to universities in any region of the UK”—[Official Report, 8 December 2016; Vol. 618, c. 182WH.]
but given the repeated and sustained calls from Scotland for the reintroduction of the visa scheme, it is in poor taste that the Government are acting in this manner.
I hope the Minister will take my points and those of other hon. Members on board. It has been fantastic to have the opportunity to debate the issues raised by the report. I ask that the Government revisit their poor response to the report and acknowledge that they have got this very wrong.
Mr David Anderson (Blaydon) (Lab)
I thank the Scottish Affairs Committee for doing such a thorough job. It did the job that we expect Select Committees to do, and it did so very well. I thank everyone who contributed to the debate for bringing to this place the voice of what is happening on the ground. The hon. Member for Argyll and Bute (Brendan O’Hara) talked about the real-life stories of human beings and the effect that policies will have on their lives. It is sad that the Government’s response is so dull and negative, but it is hardly unexpected because, as I have already said, the one thing driving their approach to immigration is their desire to get the numbers down below an imaginary figure of 100,000 a year. They have failed miserably to do so, but they are continuing to plough that furrow.
We have to accept the reality that the different nations, regions, countries and cities of the United Kingdom have different immigration needs. The needs of the north of Scotland are different from those of the central belt. I recently visited the north of Scotland, and I was told about the example of Walkers Shortbread. It has a factory in Moray, where there is essentially no unemployment. As a result, it buses two full coaches of EU nationals from Inverness to work in its factory every day. If those workers were not available, that factory could close. Can we imagine Scotland without Walkers Shortbread?
This is not just about places like that. Last autumn, we were told that there was a 14% reduction in the number of EU immigrants available to work in East Anglia, because they are worried about what will happen post-Brexit. If that carries on, we could see crops rot in the fields of East Anglia because of a lack of an available workforce. The Government have to look again at that.
As hon. Members have said clearly, the Government also have to look at the post-study work scheme. Sir Timothy O’Shea, the principal and vice-chancellor of the University of Edinburgh, said in evidence to the Committee that his concern is that a world-class university such as Edinburgh may no longer be able to compete with the best in the world. That is a frightening scenario. We also heard from other hon. Members about the impact on other universities in Scotland and the fact that they have lost millions of pounds as a result of the scheme’s closure. Let us be realistic about the different needs that exist and address them as adults, and not be driven by the fear of hard right-wing ideologues.
Deidre Brock
I expect the hon. Gentleman will not be surprised to hear that Universities Scotland considers the UK to have one of the least competitive post-study work policies in the English-speaking developed world.
Mr Anderson
I am not surprised at all. As I said, our immigration policy, if it can be called a policy, is being driven by people who make you wonder if they went to school, let alone university—it is so ludicrously inadequate.
This time last year, we were being driven into a referendum by the ludicrous nonsense that if we did not pull up the Brexit drawbridge, 76 million Turks would flood into this country. That was how ridiculous the debate got in this country—the Conservative party is working within those terms. We need realism, pragmatism and good old-fashioned common sense to put in place an immigration system that benefits everyone’s economic and social wellbeing, not the narrow-minded view that all that matters is getting immigration numbers down to tens of thousands, no matter what harm is done to the economy, our public services and the great people who have made their homes in this nation. I suggest humbly to the Minister that working with the Committee in an open and positive manner would be a great way to start.
There is one benefit to leaving the EU: we now have a chance to shape our immigration policy ourselves for the future. We can link it to an industrial strategy, with proper training and apprenticeship schemes, but that will be much harder to do if we carry on with the lunacy that the Conservative party is putting forward. It will not give guarantees to the millions of EU nationals living in the UK and Scotland. We need to understand the vital role they play in Scottish society. Some 80% of EU nationals in Scotland are of working age, compared with 65% of the overall population, and 20,000 EU nationals work in accommodation and food services. We were told last week in the Chamber that that is the fastest-growing industry in Scotland. The health and social work sector employs 12,000 EU nationals, and a fifth of EU nationals working in Scotland are managers, directors, senior officials or in other professional occupations. We can ill afford to lose those people, so it is time to stop playing political football with them. It is wrong to do so.
The Minister intervened on the hon. Member for Argyll and Bute and asked him whether he is prepared to give a unilateral guarantee to EU nationals here if the British people living in Europe are not allowed to stay. I want to put it the other way round. What is the Government’s policy? If the EU says to us when we reach the end of the negotiations, “We are not prepared to give UK nationals living in Europe the right to stay,” what are they going to say to the EU nationals in this country? They have a right to know that. If the Government were to say, “We might throw you out,” or even, “We will throw you out”, although I do not want to hear that and nor does anybody else in this Chamber, at least that would be fair to those people and would enable them to plan their lives. But if they say, “If they call our bluff, we will throw you out anyway,” it is not a bluff worth having. The Government need to come clean.
Beyond all that, this is a moral issue. It is about human beings, and it is completely and utterly wrong that they are being used as bargaining chips. People have come here and contributed to society, and they deserve the decency and respect that they have earned. We should be good to them, and we should tell them now, “Yes, you are stopping here, in the same way as everyone else is.”
A smaller but equally important part of the debate, which the hon. Member for Perth and North Perthshire (Pete Wishart) touched on, is life expectancy. He went through the stats. It is worrying that Scottish male life expectancy is lower than that of people in England. It is even worse when compared with the UK average. That is something that none of us can be proud of, and we have to work at it together. It is even worse when we dig down into the figures. It is bad enough that life expectancy is lower, but those living in deprived communities are 40% more likely to die from a stroke than those living in the least deprived areas. Amazingly, people living in the most deprived areas are 98% more likely to die from cancer than those living in the least deprived areas. I am not saying that to point out that it is bleak, but it is a moral issue for all of us to tackle. We need to get to the bottom of it collectively and do all we can to right that wrong.
The report suggests that the Government should work with the Scottish Government to ensure that we use the new welfare powers that have been given to the Scottish Government in an innovative way. I am glad those powers have gone to Scotland, and I would like to see them used to relieve the pressure on the people of Scotland. There is a continual attack not only on those at the vulnerable end but on those right across society who are affected by the benefit changes. I hope that the Scottish Parliament will take new powers and use the ones it already has in a way that achieves that. I hope that the Scottish Government will do exactly what is indicated in the concluding sentence of the Government response to the report, so that we can “look forward” to the use of “substantial new powers” for the benefit of all in Scotland, but in particular those most in need.
The Minister for Immigration (Mr Robert Goodwill)
I join everyone in wishing the hon. Member for Perth and North Perthshire (Pete Wishart) a very happy birthday. I am informed by my Parliamentary Private Secretary that the hon. Gentleman’s birthday is shared by our former colleague, David Willetts, famed for having one more brain than the rest of us.
I, too, want Scotland to continue to be a prosperous nation whose citizens are able to take full advantage of the opportunities available to them. I disagree with the Scottish National party in that I see Scotland’s future sustainability coming as part of the United Kingdom. We have heard several references to Brexit—I will come on to that issue—but, to be clear, for the time being the most important Union for Scotland is the one with England and the rest of the United Kingdom.
Being part of the UK single market presents tremendous social and economic opportunities for people and businesses in Scotland, as it does for us all throughout the UK. The lack of internal borders means absolute freedom for people and goods to move between Scotland and the rest of the UK, so there is a steady turnover of people moving to and from Scotland. The Scottish Government’s own global connections survey shows that the rest of the UK continues to be Scotland’s largest market for exports. Scotland’s exports to the rest of the UK are four times greater than those to the European Union.
I fully accept that Scotland needs immigration to continue to prosper, and I recognise the great contribution that generations of migrants from other parts of the UK and from beyond the UK have made to the socioeconomic wellbeing of Scotland. For our part, the UK Government remain committed to working with the Scottish Government on specific issues and on areas of common concern to harness the resources and talent available to encourage and support those who can contribute to the future vitality of our nation.
Migration is a reserved issue. We will, however, work closely with the Scottish Government as we develop future arrangements, and I welcome the recent publication of their paper “Scotland’s Place in Europe”, which has already been discussed at the joint ministerial committee on EU negotiations and is the subject of intense engagement between officials from both Administrations. The truth is this: people will migrate to Scotland if the conditions are right and there are good job opportunities.
The Scottish Government now have significant policy levers to shape and secure their economy. They have the power to make Scotland the most competitive part of the UK, and to encourage and support more people to move to Scotland from other parts of the UK, the EU or, indeed, the rest of the world. They have levers for economic development and support for enterprise, for education and workforce training, for health and social care, and for digital connectivity and transport.
In addition, the Scottish Parliament has recently taken on new tax-raising powers, which have the potential to be used to make Scotland more competitive and a more attractive place to live—or, potentially, the opposite. I do not agree with how such powers are being used at the moment, but that is a matter for the Scottish Government. That is what devolution is all about.
We have heard repeatedly about the needs of the Scottish economy. For non-EU migrants, there is already a Scotland-only shortage occupation list for tier 2 of the points-based system, which is specifically designed to reflect any skilled labour market needs that are peculiar to Scotland. The independent Migration Advisory Committee consults extensively with employers and other organisations in Scotland when recommending changes to the Scotland-only shortage occupation list.
For the most part, since its introduction in 2007, the Scottish list has matched the UK-wide shortage occupation list. I therefore ask the SNP, where is the evidence that Scotland has a different set of needs from the rest of the UK? However inconvenient it is for the SNP, the evidence shows that Scotland’s skills needs are largely aligned with those of the rest of the UK.
I have a question for those who deem the existing levels of migration in Scotland to be too low. Given the significant powers that the Scottish Government have at their disposal and the high levels of migration we continue to experience in the UK, why is Scotland not attracting a higher share of migrants than other parts of the UK?
Deidre Brock
Will the Minister go on to outline exactly why Canada and Australia can have differential immigration policies, but not Scotland?
Mr Goodwill
The evidence from the past about post-study opportunities is that large numbers of people participating in such schemes moved south to England. There is not evidence that those people would stay put. Where is the evidence to support the need for a differentiated migration policy for Scotland?
Mr Goodwill
I will make some progress, if I may. On post-study work visas, which I suspect are the issue to which the hon. Lady was referring, the Government’s position has been set out clearly in evidence to the Scottish Affairs Committee and in Parliament, most recently in a debate on the topic in this Chamber on 8 December. For the reasons I set out in that debate, the Government do not intend to reintroduce a general post-study work scheme for Scotland.
Pete Wishart
For clarity, will the Minister name one body or organisation, whether in Scotland or in the United Kingdom, that supports the UK Government position on a post-study work scheme? Everyone I know, everyone I speak to and everyone I have heard from wants one for Scotland. Will he name one organisation in Scotland that supports him on that?
Mr Goodwill
There are good opportunities for people who graduate in the UK to go on to graduate-level jobs, but we will not return to a situation in which people who get degrees here go into low-skilled occupations. That is not what the scheme should have been about. As I have noted, the United Kingdom has an excellent and competitive offer to international students, and there is no limit to the number of international graduates of UK universities who may move into skilled work.
The hon. Member for Perth and North Perthshire mentioned the tier 4 pilot. The four universities chosen for the pilot were selected objectively because they had the lowest visa refusal rate. There was no agenda to limit the universities involved to any particular part of the United Kingdom. If the pilot is successful, however, it will be rolled out more widely, including, potentially, to universities in Scotland.
The status of EU nationals living in Scotland and in the UK as a whole—the hon. Member for Dundee West (Chris Law) made a point about that—is an important issue for the Government. That is why the Prime Minister has made it one of her top 12 priorities for negotiation with the EU. There has, however, been no change to the rights and status of EU nationals in the UK, or of British citizens in the EU, as a result of the referendum. While the UK remains in the EU, EU nationals here and UK nationals in other EU countries continue to have the same rights and status, and are subject to the same residence requirements under EU law, as was the case before the referendum.
Incidentally, we welcome the most recently published figures showing a fall in net migration of about 50,000. It is interesting to note that the numbers of those coming from Romania and Bulgaria increased. Many of them would have been fruit-pickers and others so vital to our agricultural industry. It is encouraging that those numbers increased in the quarter after the Brexit vote.
As the Prime Minister said, it remains an important priority for the UK, and for many other member states, to resolve the challenge of the status of EU nationals as soon as possible. However, the fact remains that there also needs to be an agreement with the EU to ensure the fair treatment of British citizens living in other member states, including those from Scotland.
Margaret Ferrier
Why is the Minister so reticent about guaranteeing EU nationals leave to remain in the UK? Would that not be a sensible step? Let us take the first step, because we would probably then find that the 27 other EU member states followed, saying, “That’s great, you’re taking the first step to guarantee our nationals leave to remain, so we’ll do the same.” The reason we have the impasse is that the UK will not do that.
Mr Goodwill
With respect to the hon. Lady, it was not the UK Government that showed reticence; the other EU member states refused to engage in purposeful and fruitful negotiation ahead of the triggering of article 50. We were keen to get that item resolved as soon as possible. For probably the only time, on that point I will have to agree with the right hon. Member for Gordon (Alex Salmond) and take a leaf out of his book, because last week he confirmed that he did not think EU nationals’ status in the UK would be jeopardised.
I will now make one or two remarks in response to points made in the debate, but I will leave enough time for the hon. Member for Perth and North Perthshire, who initiated the debate, to make some comments at the end. The hon. Member for Dundee West talked about the permanent residency form. The form covers several different scenarios, not all of which will be relevant to a particular applicant. The average applicant does not need to complete anywhere near 85 pages—about 25 pages is the average. There is a new online application process, which is straightforward for applicants to use and means that they can complete the form in about 15 or 20 minutes. Indeed, the online form leapfrogs ahead if sections of it are irrelevant. We have introduced a system so that documents such as passports can be validated by local councils rather than having to be sent off as part of that process.
The hon. Member for Rutherglen and Hamilton West (Margaret Ferrier) made a point about student numbers. I make it clear that we remain committed to attracting the brightest and best graduates to the UK. They help make our education system one of the best of the world and return to use that education for the benefit of their own country. I repeat that there is no limit on the number of international students who can come to the UK.
The hon. Member for Blaydon (Mr Anderson) referred to some of the points made during the referendum campaign. Indeed, I think he almost abused the intelligence of those who voted to leave the European Union. I respectfully point out that in the Gateshead borough, 58,529 people voted to leave the European Union and 44,492 voted to remain. In his area a clear majority of people wanted to leave the European Union. I for one—despite having been on the remain side—am pleased to follow the instructions given to me by the British people.
Mr Anderson
I am aware of the figures. Like the Minister, I was on the remain side. I was disappointed by the figures, but I am aware of the reality and I am working to make the best job of this. The problem with what the Government are doing is that the narrow aim of getting immigration down to 100,000 a year or less is the only thing driving their immigration policy, not the impact on the economy, on social services or on real people’s lives. That is what is insulting our intelligence, and the intelligence of the Scottish people.
Mr Goodwill
Immigration was a key part of the referendum debate. Where we can control numbers—those coming to the UK from outside the European Union—we have seen falls. The Brexit negotiations give us an opportunity to control the numbers that come in in a way we have not been able to before. However, we will be committed to the needs of the UK economy and ensuring that we get the best possible deal.
A number of colleagues talked about the post-study visa scheme—indeed, the hon. Gentleman mentioned it. We remain committed to attracting the brightest and best graduates to the UK. However, the post-study provisions we have in place must strike a careful balance between providing competitive options for the brightest graduates from around the globe and maintaining standards against the type of widespread abuse that was seen in the previous Government’s post-study work scheme. Such abuse undermined our work routes and damaged the reputation of our education system. The Government welcome international students who choose to study in Scotland and are pleased to note that visa applications from international students to study at Scottish universities have increased by 10% since 2010. The most recent figures, for the year ending June 2016, showed a continued year-on-year increase. With our current post-study provisions, the number of international students switching from tier 4 to tier 2 has increased. In 2015, about 6,000 international students switched from tier 4 to tier 2 from within the UK, up from about 5,500 grants in 2014 and about 4,000 in 2013. Unlike those on the former post-study work schemes, those students will all move into skilled employment with employers, who have appropriate sponsorship duties placed on them.
I will conclude to leave a few moments for the hon. Member for Perth and North Perthshire. As the Government continue to develop their negotiating strategy for leaving the EU, we will work closely with the Scottish Government and other devolved Administrations to get the best possible deal for all parts of the United Kingdom. We are considering the options for our future immigration system carefully. As part of that, it is important that we understand the impacts of different options on different sectors of the economy and the labour market around the UK.
Access to the UK’s single market presents tremendous social and economic opportunities for people and businesses in Scotland. The people of Scotland understood that when they were asked to vote in their own referendum. As I said earlier, I want Scotland to continue to be a prosperous nation, but I see Scotland’s future sustainability coming as part of the United Kingdom. I am grateful to the Scottish Affairs Committee for its work on this issue, and we will work closely with the Scottish Government as we move forward.
Pete Wishart
I am grateful to the Minister for leaving me a few minutes to sum up what has been an important and informative debate. First, I thank my colleagues from the Scottish Affairs Committee, my hon. Friends the Members for Dundee West (Chris Law), for Rutherglen and Hamilton West (Margaret Ferrier) and for Edinburgh North and Leith (Deidre Brock), for contributing to the debate. I thank my hon. Friend the Member for Argyll and Bute (Brendan O'Hara) for contributing, too, as well as the hon. Member for Blaydon (Mr Anderson) and the Minister.
I could have written that Government response. We saw it with the woeful response we had to our report, which was an in-depth look at the demographic requirements and population needs of Scotland. We hear this again and again—it always seems to boil down to the same thing. We raise lots of important issues and facts, and we sit and take evidence across Scotland, going to places such as the Isle of Skye, and people tell us clearly that we have particular issues when it comes to the demographic quality of our community and society. They ask us as a Committee and as Members of Parliament to take that issue forward, to do a report and to look at what we could do to resolve these problems and give Scotland some sort of chance to address them properly. We bring them to the Minister and the Minister says, “We’re not interested. All we are interested in is a one-size-fits-all UK immigration policy right across the United Kingdom.”
That is a singular failure to take into account the specific requirements and difficult challenges we have. We are left in a dreadful situation by the Minister. We are leaving the European Union against our national collective will. We wanted nothing whatever to do with that. Only one Member of Parliament was returned from Scotland with a pledge to have a referendum on the European Union. We voted against that referendum when it came to Parliament. Our nation voted to remain in the European Union. We put forward the solution that would spare us the worst of the madness by keeping us in the single market, which is just about to be rejected by the Government. Again and again, they give us no opportunity and no hope to try to address the real issues, problems and concerns that we consistently raise.
I do not know what a single UK immigration policy is. I do not think even the Minister knows what a single immigration policy is as we approach Brexit. I thought it was going to be a points-based system, but the UK Independence party’s points-based system is actually too liberal for the Government, so they are looking to design something else. He talks about a single UK immigration policy, but I would like to know what that looks like. I suspect and suggest that he does not even know that himself—and he is only the Immigration Minister, bless him.
We need to say that there is something going on within our United Kingdom; something is singularly not working. A part of the United Kingdom has emerged, the nation of Scotland, which has a whole different history, culture and approach to issues of immigration and emigration, and that requires to be addressed. There is a particular difficulty with the quality of our demography, our ageing population and the shrinking of our working-age population, and that needs to be looked at and needs solutions. If the Government are not prepared to do that for Scotland—I sense they are not, because we keep bringing it to them and they keep on saying no and, to a certain extent, “Just get stuffed”—they must devolve responsibility to the Scottish Government, who are prepared to do the work. If the Minister sits complacently, just telling us that we have to go along with what the UK Government decide, that is not good enough. He must devolve these policy areas to the Scottish Government so that we can do the critical work required to address the issues identified in the report.
The requirements, problems and challenges are many, and they are manifest. If we do not start to challenge and address them, Scotland will be economically disadvantaged. We cannot proceed with a population gap to the rest of the United Kingdom, and we cannot proceed with a dependency ratio that is out of kilter with the rest of the UK. If we try to do that, there will be a cost to our economy and our community, and that will have an impact on every single constituency in Scotland.
England is different. We accept that. We know there is something particular going on when it comes to immigration in England that requires a different type of solution. However, the situation for England practically works against the interests of the nation of Scotland. That is why we require a different immigration solution. We require the powers to attack and challenge the issues we are confronted with.
If the Minister is not prepared to work with us in order to do that, he has to devolve the powers to us now. He has to give us the opportunity to address them, because if he does not there will be real issues and problems for Scotland’s economy. We have a way to deal with that if the Minister does not do it: we are at 50% for independence today—what a place to start for a new independence campaign. If he will not listen and will singularly, defiantly refuse to give us the powers, we will take them in a referendum of the Scottish people. Then we will get the powers, and then we will make progress.
Motion lapsed (Standing Order No. 10(6)).
Backbench Business
Turkey: Human Rights and the Political Situation
(7 years, 8 months ago)
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Joan Ryan (Enfield North) (Lab)
I beg to move,
That this House has considered human rights and the political situation in Turkey.
It is a pleasure to serve under your chairmanship, Mr Bone. I thank the Backbench Business Committee for making time for the debate, and I am grateful to the co-sponsors of the debate, my right hon. Friend the Member for Tottenham (Mr Lammy) and the hon. Members for Glasgow East (Natalie McGarry) and for Worthing West (Sir Peter Bottomley). I also appreciate the cross-party support for the debate, which demonstrates the deep level of interest and concern among parliamentarians regarding the current situation in Turkey. Could I just say, Mr Bone, that I believe there are a large number of people outside?
Mr Peter Bone (in the Chair)
It seems that there are a lot of people outside the room who ought to be inside; I am sure that will be attended to swiftly. I had to battle my way through to get into the room.
Joan Ryan
For context, Tukey is a NATO ally, a partner in the fight against ISIL/Daesh, a key player in helping to tackle the current migrant crisis, a guarantor power in Cyprus and a major trading partner. The UK’s bilateral relationship with Turkey is vital, but as the former shadow Foreign Secretary, my right hon. Friend the Member for Leeds Central (Hilary Benn), said last year,
“the basis of any close relationship must be that the two parties can be honest with and, where necessary, critical of one another; indeed, this is in both countries’ national interest.”
This debate provides us all with the opportunity to have an honest and open debate about Turkey and to reaffirm our strongest possible support for democracy, the rule of law and human rights in Turkey.
It has now been more than four and a half years since Members have had a full debate in Parliament on issues relating to Turkey. So much has happened in the country during that period, particularly since the attempted military coup in July 2016. In just over five weeks’ time, on Sunday 16 April, a national referendum will be held on a new draft constitution, the outcome of which could provide sweeping powers to the Turkish President. This debate could not have come at a more opportune time.
Mr David Burrowes (Enfield, Southgate) (Con)
I congratulate the right hon. Lady on securing such an important debate, which is of cross-party concern, not least within the all-party parliamentary group for Alevis. Is not freedom of religion a fundamental human right in any free country seeking to be democratic? That should be a right in Turkey—not least for Alevis to believe, and to express that belief, in Alevism.
Joan Ryan
I could not agree more with the hon. Gentleman. I thank him for his support as the vice-chair of the all-party parliamentary group for Alevis, which I chair.
I am sure Members from all parts of the House will join me in condemning last summer’s attempted coup and in offering our condolences to the Turkish people following the series of deadly attacks in the country, which have killed more than 500 people in the past 18 months. There is no place for military intervention in politics, and we stand united with the Turkish people during this turbulent time. On the night of 15 July 2016, there were scenes of mass protest as people took to the streets in defiance of the coup attempt; parties from across the political spectrum united in opposition to the overthrow of the Government. That night, more than 240 people, including 179 civilians, died resisting the failed coup. The Turkish people were rightly commended for their bravery and for the manner in which they stood in defence of their democracy.
However, in the words of Human Rights Watch, the Turkish Government’s response to the attempted coup has been “an affront” to the democracy that Turkey’s population took to the streets to defend, and the Government
“unleashed a purge that goes far beyond holding to account those involved in trying to overthrow it.”
Alongside declaring a state of emergency, which is still in place, Turkey suspended the European convention on human rights. However, article 15 of the convention, which allows for derogation from the convention in times of public emergency, does not give states the right to suspend their commitment to international human rights obligations. Freedom from Torture makes the crucial point that article 15 does not allow for derogation from article 3, “Prohibition of torture”. That prohibition is absolute.
More than 40,000 people have been imprisoned since July, with reports emerging of the mistreatment and torture of those in detention, and more than 120,000 public sector workers—school teachers, academics, prosecutors, judges, civil servants and police—are reported to have been suspended or dismissed from their jobs. That is hardly a list of extremists that one should fear.
Mr John Spellar (Warley) (Lab)
I congratulate my right hon. Friend and others on securing the debate. Is it possible that the speed of the authorities’ response to the coup indicates a premeditated plan to undertake such a purge? Does that not give rise to considerable concerns about the genuine attitudes and intentions of the current regime?
Joan Ryan
My right hon. Friend makes an important point. There are deep suspicions in the country that more was happening than has been admitted. If the coup was genuine, President Erdogan has certainly taken advantage of it in strengthening his authoritarian approach to managing the situation in Turkey.
Mr David Winnick (Walsall North) (Lab)
Following that, is it not the case that many of the people who have been held in detention, persecuted or subject to repression are the very people who were the first to condemn the attempted military coup? The defenders of democracy are now being persecuted by the regime.
Joan Ryan
My hon. Friend makes a powerful point; indeed, it is the point I am emphasising. Those people came out on to the streets of Turkey to defend their democracy, but they are now having to defend their democracy from the people who they actually protected on that night.
Helen Goodman (Bishop Auckland) (Lab)
My right hon. Friend is making an important speech on a vital issue for the people of Turkey and its neighbouring countries. Has she observed the way in which that repression also affects the media? We have heard that one journalist has been killed and 56 have been detained, and up to 118 media organisations have been closed down, which is an obvious infringement of freedom of speech.
Joan Ryan
Absolutely; my hon. Friend also makes a powerful point. It has been said that in 2016 more journalists were arrested in Turkey than in any other part of the world. I think we all know that a free press is fundamental to the operation of a democracy; I will come to that later.
As the Chair of the Select Committee on Foreign Affairs, the hon. Member for Reigate (Crispin Blunt), pointed out in July, the arrest of 3,000 members of the judiciary in just a few days following the failed coup seemed a rather strange way to uphold the rule of law, which speaks to the point made by my right hon. Friend the Member for Warley (Mr Spellar). The Committee to Protect Journalists tells us—I think my right hon. and hon. Friends have read my speech—there has been a media crackdown in Turkey that is unprecedented since the committee began keeping a record, in 1991. It states Turkey jailed,
“more journalists than any other country in 2016”,
and closed
“some 178 news outlets and publishing houses by decree in the space of five months, allowing only a handful to reopen.”
The judiciary and a free press are being undermined. Both are requirements for any operating democracy.
Human rights have been drastically curtailed, particularly in minority Kurdish and Alevi areas. There has been a clampdown on the freedom of assembly, with military curfews imposed in Kurdish and Alevi neighbourhoods. Dozens of Kurdish and Alevi newspapers and news channels have been shut down. I have been shocked by the information I have received from my Turkish, Kurdish and Alevi constituents regarding attacks on their family and friends in Turkey. Reports have included accounts of co-ordinated lynching attempts in Alevi areas following the failed coup. Members from the community have expressed grave concerns that the ongoing state of emergency is being used as an opportunity to intimidate Kurds and Alevis in their towns, villages and homes.
Civil society space has been shrunk, with non-governmental organisations such as the Rojava Association, a charitable organisation that has helped Turkish flood victims and women and refugees from Kobane in Syria, being forced to close. We can ill afford to see such organisations close down, given the circumstances.
Sadly, the slide to authoritarianism in Turkey is not a new development. Last summer’s failed coup attempt was not the starting point of this descent, but instead has served as a catalyst for anti-democratic trends that have been apparent under President Erdogan for some time. Almost three years ago, in the build-up to the country’s presidential elections, Mr Erdogan spoke of creating a new Turkey founded upon a new constitution. He promised to strengthen democracy, resolve the Kurdish issue and work towards ensuring Turkey’s accession to the European Union. Since those pledges were made, two parliamentary elections have been held in a climate of fear.
The elections may have been free, but they were not fair, with attacks on the offices and supporters of the pro-Kurdish Peoples’ Democratic party, the HDP. President Erdogan has denounced the rulings of constitutional courts and threatened their future independence. More than 2,000 people have been killed since the breakdown of the Kurdish peace process in 2015. Although Kurdish militias and civilians have shown incredible bravery at the forefront of the conflict against ISIL/Daesh, there has been widespread alarm at the Turkish military’s attacks on Kurdish fighters during Operation Euphrates Shield in northern Syria, which has intensified the already dire humanitarian situation in the region.
President Erdogan’s temporary suspension of provisions in the European convention on human rights and his support for the reintroduction of the death penalty indicate his unwillingness to engage meaningfully in accession talks with the European Union. If that is the case, it would be a tragedy for Turkey and for the EU. Both parties have much to gain by tackling together many of today’s most important international issues, from terrorism to migration and the pursuit of peace in Syria.
Mr Spellar
My right hon. Friend rightly identifies the very serious concerns about the repression taking place inside Turkey, and indeed the concerns about whether the regime saw the coup as a threat or an opportunity. Is it not also the case that in our own communities, those with Turkish citizenship from Alevi and Kurdish communities are finding that they are under attack and under surveillance from agents of the Turkish state? There is considerable concern about spying and people’s bank accounts being frozen, and about reports being sent back to Turkey and threats to people’s families. Is that not something that our Government should take very seriously? At the moment, they seem to be turning a blind eye to it.
Joan Ryan
Indeed. Like my right hon. Friend, I have had cases reported to me by constituents who feel they are being threatened and spied upon. Many constituents are fearful of going back to Turkey and are concerned about their relatives there. I agree that our Government should take the situation much more seriously.
President Erdogan and his Government are leaving little room for co-operation across the European Union. Kemal Kiliçdaroglu, the chair of Turkey’s main opposition Republican People's party, had hoped that an opportunity had been created to open a “new door of compromise” in Turkish politics, following the public’s united outcry against the coup attempt. I am afraid the door has remained firmly shut.
Figen Yüksekdag, co-leader of the HDP, has said that any hope of creating a new, more united and tolerant Turkey will fail without the active participation of Kurds, Alevis and other minority groups. Even before the attempted coup took place, parliamentary immunity from prosecution was stripped from more than 130 pro-Kurdish and other opposition MPs in 2016, and senior representatives from the HDP and other Kurdish parties have been attacked and marginalised since last July. At the behest of President Erdogan, the HDP was excluded from taking part in Turkey’s supposed democracy rallies, following the failed coup.
Selahattin Demirtas and Figen Yüksekdag, the democratically elected HDP leaders, were arrested and detained last November on alleged terrorism charges and ties to the banned Kurdistan Workers’ party, the PKK. The HDP has denied any links to the PKK. On Friday 6 January, Mr Demirtas said in his court testimony:
“I am not a manager, member, spokesperson, or a sympathiser of PKK; I'm the co-chair of HDP.”
But late last month Mr Demirtas was sentenced to five months’ imprisonment for,
“insulting the Turkish nation, the state of the Turkish Republic and public organs and institutions”,
and Ms Yüksekdag has now been stripped of her status as a Member of Parliament. The EU’s Turkey rapporteur, Kati Piri, called the indictment of the two leaders outrageous. The EU’s foreign affairs chief, Federica Mogherini, has declared that parliamentary democracy in Turkey has been compromised as a result. Aside from an EU joint statement at the end of last year expressing concerns about the judicial process in the case of Mr Demirtas and others, I note that UK Government Ministers have not set out in unambiguous terms their grave concerns about these matters, and I would be grateful for the Minister’s views when he responds.
President Erdogan’s promise in 2013 to create a new Turkey with a new constitution is not what many supporters of democracy and human rights in Turkey had in mind. The national referendum in April on the country’s new draft constitution has the potential to further undermine Turkey’s democratic character. The proposed constitution would turn Turkey from a parliamentary to a presidential republic, scrapping the office of Prime Minister and giving the President new powers to select the majority of senior judges, enact certain laws by diktat, and unilaterally declare a state of emergency or dismiss Parliament. In a political system that has already had its checks and balances, such as a free press and an independent judiciary, seriously weakened, those powers would entrench authoritarianism in Turkey.
In every meeting that I have attended in recent weeks with members of the Turkish, Kurdish and Alevi communities, not one person has said to me that they would vote yes in the referendum. They are deeply concerned at the prospect of the implementation of the new constitution. President Erdogan has accused them of “siding with the coup-plotters”. Such vilification of opposition voters is completely unacceptable. Free and fair elections and referendums are core components of any democracy, as is the protection of people’s fundamental human rights and freedoms.
Turkey is at a crucial juncture. Given the close relationship between the UK and Turkey, we need to be open and honest about and, yes, critical of, the current situation there; but is that happening? The headlines from the Prime Minister’s recent visit to Ankara related to a £100 million fighter jet deal and the development of a
“new and deeper trading relationship with Turkey.”
Valuable as our trading relationship is, human rights issues should never play second fiddle to commercial diplomacy. The Prime Minister may have stated the importance of Turkey sustaining democracy
“by maintaining the rule of law and upholding its international human rights obligations, as the government has undertaken to do”.
However, the key question must be whether that undertaking is being fulfilled. I should be very interested to hear from the Minister how the UK Government think Turkey is upholding its international human rights obligations and sustaining a genuine democracy.
Mr Winnick
The Prime Minister did make a reference to human rights, but she could not very well have said less. It was a passing reference with no emphasis, and the general impression was that, those few words having been said, the UK Government were willing to make the commercial deals in question with Turkey, and that human rights in Turkey are not really on the UK agenda.
Joan Ryan
I can do nothing but agree with my hon. Friend who has made an important and powerful point. I hope that the Minister will deal with it.
Turkey is a key member of the NATO alliance, and one of the core requirements of membership is to promote democratic values. How is it adhering to that? As a vital regional player, particularly in the humanitarian situation in Syria and the continuing negotiations in Cyprus, it has a responsibility to support peace, democracy and human rights. How are the UK Government using their influence to press Turkey to change course, strengthen democratic institutions and protect the rights of all its citizens? Human rights are universal and that includes the rights of Kurds, Alevis and other minority groups in Turkey. What steps are the UK Government prepared to take actively to monitor the treatment of Kurds, Alevis and other minority groups? What discussions is the Minister having with his Turkish and UN Human Rights Council counterparts to ensure that the Turkish Government, without delay, allow a visit by the UN special rapporteur on torture?
We must be prepared to support those progressive voices in Turkey that are calling for greater democracy, the advancement of human rights and the promotion of equality and social justice. It is incumbent on the UK Government to promote those values vigorously in our relationship with Turkey; because Turkey—and the Kurds and the Alevis—deserve better, and the UK Government must do better in supporting democracy, the rule of law and human rights in that country.
Mr Peter Bone (in the Chair)
Order. It is not my intention to impose a time limit on speeches, but I think six right hon. and hon. Members want to speak from the Back Benches, and the winding-up speeches must begin just before 4 o’clock.
I thank all the people who have come here today to follow the debate closely, but I have one bit of housekeeping: we do not allow any photography.
Sir Edward Garnier (Harborough) (Con)
I join the right hon. Member for Enfield North (Joan Ryan) in thanking you for chairing our proceedings, Mr Bone; I also congratulate her on initiating this important debate.
It is a given, I think, that Turkey is hugely important to us diplomatically and militarily as an important member of NATO, including as a listening post and airbase—particularly for the United States and Germany—and a place from which we can keep an eye on Syria and see what is going on there. Secondly, it is important to us as a country that has had to withstand huge numbers of refugees—I say “withstand”, which is to misuse the English language; it has taken in huge numbers of Syrian refugees and given them a haven. Some of those have moved through into the European Union; some of them have not. The fact that Turkey is a useful military ally and is to some extent a valuable trading and economic partner, and the fact that it has done good humanitarian work in looking after refugees does not, however, excuse its abusive behaviour towards its own citizens, its neglect of the rule of law and its wholesale abuse of human rights.
In 2015 I and two rather better lawyers, Lord Woolf, the former Lord Chief Justice, and Sir Jeffrey Jowell, who was at that stage the director of the Bingham Centre for the Rule of Law, and another member of my chambers, Sarah Palin, who is an expert in human rights law, were instructed by Turkish lawyers to write a report on abuses of human rights law and breaches of the rule of law in Turkey. I have registered that in the Register of Members’ Financial Interests. Our lay clients were an institute of Turkish journalists and a group related to or supportive of the Gülenist movement, although I never discovered whether they were actually part of it. The catalyst for their concern was the discovery in December 2013 of various telephone calls implicating the then Prime Minister, who is now the President, and a number of his cabinet Ministers and members of his family in wholesale corruption. As a consequence, the then Prime Minister and the party known as the AKP took it upon themselves to behave in a fairly repressive way in getting the police to investigate and arrest those thought to be antipathetic to their interests.
The number of those who were detained, arrested or moved—judges and police officers, for example, were moved from one part of Turkey to another, for the purpose of disruption—in 2014-15, ran into the hundreds, if not the thousands at that stage. The position got worse, of course: not only was there interference with Government officials who did not have the approval of the then Prime Minister and the Government party, the AKP; but the Government machine—it is difficult as far as I can see to draw a distinction between the Government machine and the political party, as they work in lockstep—started to interfere with the free media. It started to send in officials or police officers to take over newspapers, shut down television companies and generally interfere with rights of freedom of expression under the European convention. In any other democracy that would have led to riots on the street, I suspect. As it happened, it did not in Turkey—probably because huge numbers of the Turkish population, particularly in the eastern part of the country, have no access to the internet and no particular interest in some of the things that the professional classes, intellectuals and others in Ankara and Istanbul take an interest in.
We published our paper in the summer of 2015, and various western-based newspapers reported on it. It was alleged by the Turkish Government machine that those of us who had written the report as professional, dispassionate observers were Gülenists and part of the parallel state, whose job or intention it was to undermine the democratic Government of Turkey. That was not our intention, and certainly there is no evidence to suggest that the four of us, as English lawyers, had any interest in the matter at all as far as politics was concerned; we had every interest in the subject as far as the abuse of the rule of law and human rights were concerned.
Since the attempted coup, to which the right hon. Member for Enfield North referred, the situation in Turkey seems to have got worse. It was bad enough before, but it has got a lot worse. Tens of thousands—I think as many as 50,000—of officials, be they judges, police officers, members of the civil service or teachers, have been detained without trial. I have no knowledge of whether the attempted coup was “genuine” or a manufactured event. However, as someone has already pointed out, the President of Turkey has taken advantage in a wholly disproportionate way of the events of last summer.
We now face a position where the President wants to bring more power unto himself and is using the tactic of the referendum, which is coming up shortly, to achieve that purpose. Time does not allow me—nor would you, Mr Bone—to say all that I would like to say about the nature of that exercise or what is intended by it. However, it is fair to say that the President’s grasping of power in a personal way goes from the sublime to the ridiculous. It is sublime in the sense that all sorts of people have been arrested and detained without trial, and the prospect of the Turkish court system providing them with justice now that the President is influencing the appointment of judges strikes me as unlikely.
The European Court of Human Rights has already indicated—if it has not, the Council of Europe certainly has—that there is no rule of law in Turkey available to Turkish citizens and that emergency applications to the Court will be considered, even though technically domestic remedies have not been exhausted in the Turkish court system, because there is no Turkish court system that is recognisable as a system of law.
We now see the extraordinary conduct of the President in attacking Germany—one of the most civilised modern western democracies—for behaving like Nazi Germany. We are all used to hyperbole in political debate and to people in a hurry saying silly things, but for modern Germany, which is light-years away from the Germany of the 1930s, to be accused by this President of Turkey of behaving like Nazi Germany is beyond offensive. Indeed, the headline of yesterday’s editorial in The New York Times was “Mr. Erdogan’s Jaw-Dropping Hypocrisy”.
Journalists have been imprisoned and expelled from the country, and it seems the situation will not improve. I have seen Hansard reports from both this House and the other place in which Foreign Office Ministers say, “We constantly remind the Turkish Government or our counterparts of this, that and the other, and we are keeping the matter under review.” It is possible to exercise, as Mrs Merkel has done, proper diplomatic restraint without being guilty of pusillanimity. There is a proper distinction between pusillanimity and doing and saying very little apart from going through the form in order to preserve NATO and the help that Turkey is giving in relation to refugees, and to help the military position, as we want to keep an eye on Syria.
Let me finish by showing how ridiculous the situation currently is. It is ridiculous for an outside observer such as me, commenting in this way, but it is terrible for the innocent citizens of Turkey who may have different political or other views from the current Government and end up being imprisoned for it. As is clear now, Mr Erdogan wants to win his referendum, and no doubt he will. However, the situation has got to the ridiculous stage now where the Turkish news media have reported that the Government are worried enough about a victory for the no campaign that officials in Konya, a city in central Turkey, recently withdrew from circulation an anti-smoking pamphlet that contained the word “no”. A local Member of Parliament from Turkey’s governing party said the pamphlets had been recalled to avoid confusion, as reported by the Turkish newspaper Hürriyet Daily News. Mr Erdogan is further reported as saying to reporters that those who say no in the referendum will be siding with 15 July—the date of the attempted coup.
The situation in Turkey is very worrying, particularly for the people of Turkey. I hope the British Parliament will encourage the British Government to remember that there is a distinction between diplomatic restraint and pusillanimity.
Mr Peter Bone (in the Chair)
Five more Back-Bench Members wish to speak. We only have 20 minutes. I call Jim Shannon, who I know will keep to the time limit.
Jim Shannon (Strangford) (DUP)
I am more than happy to, Mr Bone. It is a pleasure to speak in this debate. I thank the right hon. Member for Enfield North (Joan Ryan) for presenting a very good case and giving Members the opportunity to participate.
I have families in my constituency who thankfully heeded Foreign Office advice and cancelled their holidays to Turkey; otherwise, they would have been in the middle of the coup attempt when it unfolded last year. The repercussions of the chaotic coup attempt and the actions that were then taken continue to this day. I am thankful to the Members who secured the debate for allowing us to highlight this issue and see if we can get some rights reinstated.
There remains a severe shutdown, including incarceration, on anyone deemed a threat to the President’s remaining in power. Indeed, many have referred to President Erdogan’s power grab, and it cannot be seen as anything else. Turkey is still under a state of emergency after various bombs at Istanbul airport, and the coup attempt has allowed the President to legally justify restricting human rights. The right hon. Member for Warley (Mr Spellar), who has just left the room, referred to the suspicion, which cannot be ignored, that some of the rebels who conspired in the coup were encouraged by the Turkish Government, who were the ultimate winners in what took place.
Some of the human rights under the international covenant on civil and political rights that I believe have been illegally restricted include freedom of expression; the right to peaceful assembly under article 21; the right to freedom of association with others under article 22; the right to liberty and security of person under article 9; freedom of movement under article 12; the right to equality before the court under article 14; and the right to protection of the law against arbitrary or unlawful interference with privacy under article 17. Those are clearly—I am sure the Minister is listening—infringements upon civil liberty and people’s chance to express themselves.
In addition, some churches in Turkey have been destroyed. Some Christians have been prevented from attending church, and their movements are monitored. The right hon. Member for Enfield North also referred to that. The restrictions are having an unfair impact on Christians and their right to practise their religion.
The 2016 EU enlargement report on Turkey summarised the general problems of Turkish civil society organisations. They included the closure of many non-governmental organisations after the failed 15 July coup attempt; the intimidation and detention of members of NGOs, particularly those active on human rights issues; the lack of an overall Government strategy for co-operation with civil society—there is almost a denial that there is a civil society; the fact that NGOs are rarely involved in law and policy-making processes; continuing restrictions on freedom of assembly; continuing restrictions on registration and procedures for the authorisation and functioning of associations; and the fact that current legislation, including taxation law, is not conducive to encouraging private donations to NGOs. Again, the Government seem to have closed every door possible in Turkey and infringed on the liberties of the people there.
Can the Minister confirm that when he has the opportunity to speak to the Turkish Government, he will convey to them all the comments that we are making as individuals in this Chamber? I know he will, but I ask him to do that with the passion and desire that we have shown. The reason I say that is that the right hon. Member for Enfield North tabled a written question on 7 November 2016 about the human rights situation in Turkey generally, and particularly in the predominantly Kurdish and Alevi areas of the country. On 17 November, the Minister for Europe and the Americas told her:
“We continue to encourage Turkey to work towards the full protection of fundamental rights, especially in the areas of minority rights, freedom of religion and freedom of expression.”
If the things that we are discussing have continued from last November until now, we need to know what steps will be taken to ensure that they are stopped.
As I mentioned in the debate in January, since the 15 July coup attempt the Government have postponed much-needed legal and institutional democratic reforms and taken actions that have a direct impact on people’s abilities to exercise effectively the freedoms of religion or belief, expression, association and assembly. Government measures, including state of emergency measures, have damaged Turkey’s human rights protection framework. Those measures include far-reaching changes to the justice system that started before the coup attempt, and increased religious-nationalist approaches to issues by the Government since.
I am coming to the end of my presentation, Mr Bone. Evidence of ill treatment in custody compiled by the Human Rights Foundation of Turkey among others indicates a serious need for independent monitoring of state institutions’ implementation of their human rights obligations. It is clear that they have blatantly disregarded them, and we need to make them start to understand what that means. The impact on the overall state of democracy of the swift removal of judges and other personnel in the state apparatus, along with the closure of universities, associations, television channels and newspapers under state of emergency decrees, has yet to become fully clear. The situation in Turkey is not allowing for freedom; indeed, it has impinged massively on the most basic human rights.
I urge the Foreign and Commonwealth Office and the Minister to do all that is in their power—that is clearly what hon. Members in the Chamber are saying—and apply as much pressure as possible to reinstate those rights and release the grip of emergency powers as we come up to almost a year since the coup attempt. I believe that we have some influence, and I hope that we will begin to exert it on behalf of not only Christians in Turkey but all people whose lives are still being impacted as a result of a coup attempt that they did not take part in, yet are paying the price for.
Natalie McGarry (Glasgow East) (Ind)
I offer my congratulations to the right hon. Member for Enfield North (Joan Ryan) and the co-sponsors of the debate. It is not only timeous but imperative. The relationship between the EU and Turkey is now fractious at best, given President Erdogan’s scorched-earth approach to democracy and human rights in Turkey as he pursues an executive presidency with all the fervour of a dictator, riding roughshod over democratic process and consigning Turkey’s reputation as a stable secular democracy to the annals of history, while using last summer’s coup attempt as a bloody blank cheque to suspend the rule of law and human rights.
At this point, I of course express my condolences and concern for the people in Turkey who lost their lives during the violence last summer and those who have suffered terrorist atrocities in the last few months and years. I add to that my condolences for the civilians in areas of the south-east of Turkey who lost their lives at the hands of the Turkish military, for whom no half-mast flags fly across the world, whose sufferings speak not their name.
At this point in history, as the UK prepares to leave the EU, our relationship with other nations will define the UK and who we really want to be on the world stage: insular and inward, internationalist and outward, or empire 2.0. The indications thus far send alarming signals. Immediately after announcing her intention to trigger article 50, the Prime Minister headed off to meet President Trump, immediately prior to meeting Turkish President Erdogan and signing a trade deal to supply military aircraft to Turkey with no human rights caveats, before finally inviting Benjamin Netanyahu to Downing Street—quite the triumvirate. Will concerns about demonstrable human rights abuses and the disregard for the rule of law be casualties of the UK’s desperate need to find trade allies post Brexit? I sincerely hope not, but I fear the indications are not good.
Human rights abuses in Turkey preceded the coup attempt of last summer, and while unequivocally condemning what happened, we cannot be blind to the fact that the orchestrations of what is happening now—the imprisonment of democratically elected politicians; the closing down of civil society space; the highest proportion of journalists jailed in the world; imprisonment without trial; military personnel, teachers, lecturers and judges sacked and silenced; and the mockery of fundamental freedoms of speech, expression, religion and language—all have their roots in President Erdogan’s transition from Prime Minister to autocrat.
It will be no surprise to many that I wish to concentrate the rest of my remarks on the Kurdish issue, as that is intrinsic to what is happening in Turkey as a whole. The policies that President Erdogan is now pursuing against political opponents and public leaders across Turkish society have been well trialled against the Kurds. Next month, Erdogan will hold a rigged referendum to enshrine in the law and constitution his position as executive President and bypass Turkey’s Parliament on many issues. I say “rigged” because political opponents such as democratically elected HDP MPs and the co-leaders and elected co-mayors of Kurdish areas and municipalities, such as Diyarbakir, Nusaybin and Sirnak, have been imprisoned and held without trial, with many allegations of torture having been made. The referendum’s no campaign proponents have been silenced, their premises attacked or closed down and adverts banned, and the media are wholly in the palm of Erdogan’s closed fist because of fear of imprisonment.
I will bring my remarks to a close, because there is very little time and I want to respect other speakers. The Kurds have a saying that the mountains are their only friends. I am here today to say that that is not true. There are politicians in this House and civil society organisations in the UK, such as Unite and the GMB, that stand in solidarity with the peoples of all of Turkey, but particularly those in Bakur.
I share the sentiments of the hon. Member for Strangford (Jim Shannon). I hope that the Minister will be more robust in answering some of our concerns than the Minister for Europe and the Americas was when he responded to the debate in January on the closing down of civil society space across the world.
Ann Clwyd (Cynon Valley) (Lab)
Last time I was in Turkey, it was to try to get some HDP prisoners out of jail. A Member of the Swiss Parliament and I were asked to go there by the Inter-Parliamentary Union. I am a member of its human rights committee, and we deal with the human rights of parliamentarians. We went to Turkey to try to get the HDP members out of jail, but luckily, a few days before we got there, they had all been released. However, I believe that many of them are now in jail again.
Some years before that, when I was a Member of the European Parliament, some of my colleagues and I tried to get members of the Peace Association of Turkey—the equivalent of the CND in this country—out of jail. I went to Metris prison, where they were being tried at the time in very bad circumstances. Of course, that was under military dictatorship. Eventually most of them were released, but only after they had gone through a particularly difficult time. When Leyla Zana was imprisoned some years before, the Turkish authorities allowed me to spend some time with her in prison. I talked to her about why she was there and what stand she was making, and she is a very principled person.
There is now imprisonment of MPs in Turkey once again; it is believed that about 15 of them are in jail. The HDP—the Peoples’ Democratic party—is a legitimate Turkish opposition party working for a pluralist Turkey. It advocates greater rights for Turkey’s ethnic minorities and increased autonomy for the majority Kurdish south-east of the country, but not an independent state. The two co-chairs have already been mentioned by my right hon. Friend the Member for Enfield North (Joan Ryan), and many other HDP lawmakers were detained in November. The co-chairs remain in prison on terrorism-related charges, and I understand that they face a total of 180 years in jail if found guilty on all charges.
I consider myself a friend of Turkey, but also a critic. Some of my good friends live in Turkey and I visit it fairly regularly, but four of my friends are now exiled in Wales. Two of them are actors, one is a designer and the other is a writer. They are all Turks, and very well-known Turks—one was the most important male actor in Turkey. The reason they are in exile is that Erdogan denounced them twice at a rally, pointed at the man in question and shouted, “He’s a traitor to Turkey. He should be killed.” That happened twice. In the Turkey of the moment, the best thing they could do was obviously to leave the country. They have had to leave their friends, relatives and careers and get out of the country because they are so afraid.
I know that my friends in Turkey—academics, journalists, writers—are also afraid, because they do not know who is going to be imprisoned and caught up next. They are in a dreadful situation. We have to keep highlighting that and, in particular, the attacks on the media. As my right hon. and hon. Friends have mentioned, so many journalists are in jail, and many of them have not been charged but are waiting for charges. Some 170 media organisations have been shut down since the coup. There have been physical attacks and threats against journalists, and Government pressure on the media to fire critical journalists and cancel their press accreditation. As has been said, the UN’s special rapporteur on the right to freedom of opinion and expression concluded after his visit in November:
“Across the board, the Government is imposing draconian measures that limit freedom of expression”.
As others have said, the rule of law is being seriously eroded. More than one fifth of Turkey’s judiciary has been removed, and the Government have consolidated their control over the courts. More than 100,000 civil servants, including teachers, judges and prosecutors, have been dismissed or detained without due process. Many detainees are placed in pre-trial detention despite a lack of evidence.
I look to the Minister and ask what the UK Government’s policy is on Turkey in light of the deteriorating situation and the fact that Erdogan is accumulating more and more power for himself. Are we simply going to turn a blind eye or, even worse, increase arms sales at a time when there is a real risk that those arms will ultimately be used by the Turkish Government against their own population? The international community, including the UK, who are true friends of Turkey, need to focus on helping to restart the peace process between the Turkish Government and the Kurds. The conflict between the two has plagued Turkey for years, and following the collapse of the peace talks in 2015 the situation in the south-east, which I have been to several times, has deteriorated significantly. It is time to try to bring this conflict to an end with a viable political solution. Addressing that problem could set Turkey down a different path—a path of security, prosperity and harmony so that Turkey, again, would be a beacon in the region and in the world.
Mr David Lammy (Tottenham) (Lab)
The Turkish diaspora and Alevis in my community are very worried about their homeland, so today it is important that we send a message that while Turkey may be a friend, we are a critical friend. We must not let its position in NATO and its centrality to the refugee crisis and the fight against ISIS stop us making clear our concerns about what is happening in the country. I speak on behalf of my constituents—I have the largest Turkish speaking population in the country—and I apologise that I now have only two minutes to make a contribution in this debate. I will publish my speech afterwards on my website so that they will all see it.
Mr Peter Bone (in the Chair)
Order. I want to let the House know that because I want to try to get everyone in and give them reasonable time, I am going to ask the Front-Bench speakers to restrict their speeches to eight minutes each to give the Back Benchers a bit more time.
Mr Lammy
I am grateful for that indication—I can return to my scripted speech, which is important.
The debate comes at an important time in Turkey’s history and our relationship with the country. It is a wonderful country. I have visited it on occasions—it is young, it is vibrant—and I participate in this debate very much as a friend. However, the state of emergency declared last summer has been used as a pretext for a comprehensive purge of judges, generals, civil servants, teachers, police officers, soldiers, lawyers and academics, as well as the detention of thousands of Turkish citizens opposed to the current President.
More than 100,000 people have been arrested, dismissed or suspended since last year’s failed coup, including 25,000 police officers and 3,000 judges. Some 140,000 citizens have had their passports revoked and 130,000 public sector workers are under investigation. Those figures are frankly staggering. The headquarters of an opposition party has been raided and the two joint leaders of the pro-Kurdish Peoples’ Democratic party have been arrested and detained along with 11 of their party’s MPs. That must be of tremendous concern to this country. The World Justice Project’s rule of law index put Turkey 99th out of 113 countries, just behind Iran. Reporters Without Borders ranked Turkey 150th out of 180 countries in the press freedom index—177 media outlets have been shut down, almost 400 journalists are behind bars and 10,000 people working in the media have been purged.
This is now a democracy in name only. President Erdogan is seizing total control, reinforced by a classic dictator’s trope: a nationalist, populist narrative claiming that internal agitators are fifth columnists and a risk to national security. The planned constitutional changes that Turkey will vote on in the referendum next month represent the next step on a road that will in all likelihood lead to an authoritarian, dictatorial state. It is not a fair fight; one side is shouting while the other can barely utter even a muffled whisper. All outdoor gatherings in support of the no campaign have been banned. Campaigners have been arrested and branded as terrorists or fifth columnists.
What is at stake next month? We have the introduction of an executive presidency to replace the existing parliamentary system, the abolition of the office of Prime Minister and the erosion of the separation of powers, giving Erdogan huge, unconstrained powers to appoint Ministers, prepare the budget, choose senior judges and enact laws by decree. The writing is on the wall. This is an enabling referendum, of a kind we have not seen from an ally in the continent of Europe since the 1930s.
Most of all, the writing is on the wall for the Kurdish and Alevi minorities in Turkey. Throughout history they have been massacred, deported, tortured, arrested and discriminated against, with even the word “Kurd” and the Kurdish language banned. They have had their homes and livelihoods destroyed by Government forces. At least 18 villages are currently under siege with military curfews in place.
This is a serious debate that has been attended by 17 or 18 Members of Parliament. We can feel the Public Gallery. This issue is of tremendous concern to the world and this country, and I hope Britain will do the right thing and say the right thing in the coming days, weeks and months.
Sir Peter Bottomley (Worthing West) (Con)
I will not repeat what has been said with clarity by colleagues from all parties. I first became aware of Turkey’s development when I was MP for Woolwich West, where St Agnes’s chapel is located. It was renamed the Gallipoli chapel by the Rev. Henry Hall, who had been chaplain to the 29th Division and who landed at Gallipoli in April 1915. He wanted a dedication, and his successors wanted to commemorate what happened at Gallipoli.
One thing that happened at Gallipoli was that the local commander, Atatürk, went on to become the well-known leader who dedicated Turkey to peace at home and peace in the region and internationally. It would be worthwhile for those interested in such things to watch the Guardian panel on 23 March, which will consider all the questions that I could list now but will not, as I want to give time to the Front-Bench speakers. For those who are free this evening, I suspect that there may be spare places at the British Institute at Ankara’s gathering at the British Academy, where a distinguished panel will also consider what can be done for stability nationally, regionally and internationally.
It is clear to those of us who have been involved in NATO and in issues in the middle east and wider middle east that Turkey has been carrying much of the burden of the instability around it. I pay tribute to Turkey for what it has done for refugees, and for its assistance, almost beyond cost, to those who find themselves within its borders. It is also worth recognising that when this House made the mistake, in my view, of not intervening early in Syria, we let down Turkey, which was prepared with others to take effective action that could have allowed Syria to find its own future, without the kind of regime that I hope will not emerge in Turkey now.
I will not go into what was behind the coup, as it is beyond my knowledge. If the strong man idea in politics—which we have seen, sadly, in Russia, and which we may or may not be seeing in the United States—is adopted by Turkey, the difficulty is how Turkey will get out of it again. It will take a long time before another Atatürk comes along who can create unity in a country that is an important part of Europe, an important part of Asia and an important part of the world.
Mike Weir (Angus) (SNP)
The hon. Member for Worthing West (Sir Peter Bottomley) has just reminded us of the foundation of modern Turkey by Kemal Atatürk, who sought to create a secular republic. It is sad to see what is now happening in Turkey, which is drifting toward dictatorship.
In introducing the debate, the right hon. Member for Enfield North (Joan Ryan) rightly discussed the ties between this country and Turkey. Others have mentioned that Turkey has taken 3 million refugees from other parts of the middle east. She also made the very good point that the main thing to come out of the Prime Minister’s recent trip to Turkey was a fighter jet deal worth £100 million. The right hon. Member for Enfield North said that human rights issues should never play second fiddle to trade deals, and we wholeheartedly support that position. Human rights should always be up there when we discuss such deals.
In considering that, the Minister should perhaps reflect on what has happened with sales to Saudi Arabia, the position in Yemen and the reputational damage to this Government and this country caused by the failure to take strong early action on how those weapons were used. I think that that will haunt the Government for some time to come.
Graham Jones (Hyndburn) (Lab)
I appreciate the hon. Gentleman’s point, and I generally agree with all the comments in this debate, but I was in Diyarbakir. It is absolutely dreadful what has gone on there, but that was done by munitions and weapons previously held by the Turkish, and they are also procuring equipment now from Putin in Moscow. The situation is a bit more complex than blaming the UK Government for arms sales; the Turkish Government should be held to account for what they have done in Diyarbakir.
Mike Weir
Nobody is arguing with that—the hon. Gentleman is perfectly right—but it is part of how we should approach human rights worldwide. We should not be part of supplying arms to regimes that may use them in such a way. It is about considering human rights under the regimes that we are dealing with.
The present situation in the country probably goes back well before the attempted coup in July, but the state of emergency imposed then and most recently renewed in January means that many of the normal functions of the constitution are suspended, resulting in derogations from the European convention on human rights. Since the coup, the Government have conducted a widespread campaign of media clampdowns, arrests and dismissals. More than 40,000 people have been imprisoned; more than 120,000 police, prosecutors, judges, civil servants and academics have been dismissed. It is an attack on civil society by a Government almost unprecedented in modern times, despite the fact that most in Turkey were probably opposed to the attempted military coup, as the right hon. Lady pointed out in her introduction to this debate.
Ten MPs from the pro-Kurdish Peoples’ Democratic party, including its two co-leaders, were imprisoned after Parliament voted to remove legal immunity from dozens of MPs in May 2016. The Government accuse the party of having links to the Kurdistan Workers’ party or PKK, although that is strongly denied and there is no independent evidence. Indeed, the strong suspicion remains that it is being used as an excuse to dismantle domestic opposition to the present Government. Human Rights Watch says:
“Instead of building on the cross-party unity opposed to the coup to strengthen democracy, Turkey’s Government has opted for a ruthless crackdown on critics and opponents”.
In April, a plebiscite will be held to enhance significantly the powers of the President. The Government are conducting a vigorous propaganda campaign in its favour, while the current crackdown clearly impedes opponents’ ability to campaign against it. Despite that, before the Government banned opinion polls, they showed that 45% opposed the changes while 35% supported them, suggesting that even in these difficult times, the flame of democracy remains alive in the country, as is also shown by the reaction to the coup.
We unreservedly condemn attempts such as the failed coup to overthrow democracy, but equally, we condemn any response that does not respect human rights or the rule of law, and the current Government in Turkey have clearly used the coup to target their democratic opponents. In that respect, it is also imperative that we uphold and strengthen the European convention on human rights, yet I observe in passing that some of the things that this Government say about the European convention are not helpful in pushing it in other nations that are going much further than I hope our Government would ever dream of going.
We must lead by example and show unequivocally that we support the ECHR, and we must urge Turkey to do likewise and to approach the Kurdish issue—on which my hon. Friend the Member for Glasgow East (Natalie McGarry) went into in greater detail in her fantastic speech—not with repression but by talking to those, such as the Peoples’ Democratic party, who seek a peaceful solution in Turkey: not independence, but home rule. It is a reasonable position, and one with which the Government should work, rather than continuing the oppression from which the Kurds in that region of Turkey have suffered for so long.
Fabian Hamilton (Leeds North East) (Lab)
I congratulate my right hon. Friend the Member for Enfield North (Joan Ryan) on securing this debate, and all right hon. and hon. Members who have taken part on their contributions. It shows that we need a far longer debate on the Floor of the House about our relations with Turkey and the abuse of human rights in that country. I emphasise the Labour party’s historic and current commitment to upholding human rights and democracy throughout the world wherever they are abused and wherever freedom is attacked. We are and always have been opposed to oppression and autocracy.
The shadow Foreign Secretary, my right hon. Friend the Member for Islington South and Finsbury (Emily Thornberry), said on 19 July, just following the coup:
“Turkey is of pivotal cultural, political and strategic importance to the world, straddling as it does the east-west divide with borders to eight countries. It is”,
as has been emphasised in this debate,
“a vital NATO ally and has important minorities, particularly Kurds and Armenians, as its citizens. Half a million people of Turkish or Kurdish descent live in the UK and they are desperately worried about their families. With 2 million British visitors a year, Turkey is greatly loved in this country, and the interests of our two countries cannot be separated.”—[Official Report, 19 July 2016; Vol. 613, c. 685.]
I hope you will allow me to make a couple of personal points, Mr Bone. My personal commitment to Turkey has always been very strong. I was chair of the all-party group for Turkey from 2010 to 2016; I organised our visits to Turkey and Turkish parliamentarians’ visits to London. I have a passion for the country and for its people, culture and cuisine. I have a personal reason for that: it was the Ottomans who in the 15th century allowed the Jews of southern Spain, my ancestors, to settle in parts of the Ottoman empire, including Salonika and Istanbul, where they thrived for 450 years until the Nazis destroyed that community. I believe that that makes me somewhat more Turkish than the Foreign Secretary.
Early this morning, I returned from a Front-Bench visit to Cyprus. This debate is not about Cyprus, but there is huge concern there about interference by the Turkish Government and about the interest of Mr Erdogan in stopping or at least slowing a settlement that is so near to being achieved after 43 years. That is a subject for a further debate, perhaps.
The contributions from so many right hon. and hon. Members this afternoon have emphasised that this country’s friendship with and closeness to Turkey are only being questioned by the coup and its aftermath.
Mike Gapes (Ilford South) (Lab/Co-op)
My hon. Friend stresses the importance of the UK’s relations with Turkey. The Foreign Affairs Committee is carrying out an inquiry into that subject, and I was in Ankara with other Committee members in January. I hope that when we publish our report in a few weeks’ time, we will have the opportunity to debate it in Parliament properly and at length.
Fabian Hamilton
It was with the Foreign Affairs Committee that I first visited Turkey; I enjoyed being there and seeing my own inheritance from that country. I look forward to reading the Committee’s report, to the debate on it and to the contributions of many hon. Members to that debate.
The coup of July 2016 resulted in a state of emergency enacted by Parliament that was expected to be temporary, but as we know, it was extended in January 2017 and now appears to be indefinite. The state of emergency allows for rule by decree and the temporary suspension of many rights in Turkey. Authorities have used it to target suspected political rivals and reduce the space for civil society. As a consequence, as we have heard today, checks and balances and human rights have shrunk in Turkey as it has been pushed further away from a system in which the rule of law was guaranteed.
On 18 January, just before Donald Trump was installed as President of the United States, The Guardian wrote:
“Turkey’s regime is fast degenerating into outright dictatorship, emboldened by the imminent ascent of Donald Trump”.
The irony is that before President Erdogan and his party democratically won power, they themselves were victims of human rights abuses. Erdogan was imprisoned in 1999 for reciting a religious poem, and the fiercely secular constitution and the elite consistently attempted to undermine his mildly Islamist political forces in the country. I find that deeply ironic.
As hon. Members have emphasised, more than 40,000 people have been imprisoned and more than 120,000 public sector workers—police, prosecutors, judges, civil servants and academics—have been dismissed. Turkey temporarily derogated from many of the protections in the European convention on human rights and the international covenant on civil and political rights. As Hugh Williamson, Europe and Central Asia director at Human Rights Watch, said:
“Instead of building on the cross-party unity opposed to the coup to strengthen democracy, Turkey’s government has opted for a ruthless crackdown on critics and opponents”.
We have heard some excellent speeches this afternoon. It goes without saying that my right hon. Friend the Member for Enfield North, who moved the motion, said many important things, including that the UK Government must do better in supporting human rights; I will be interested to hear the Minister’s reply to that. My right hon. Friend the Member for Tottenham (Mr Lammy) made a powerful speech. I had not realised that his constituency has the largest number of Turkish speakers in the entire United Kingdom. He made the essential point that Turkey is now a democracy in name only. I hope that the Minister will pick up on some of the issues that my right hon. Friend raised.
My right hon. Friend the Member for Cynon Valley (Ann Clwyd), who has an impeccable record on human rights, raised the subject of arms sales. Will we increase our arms sales to Turkey? Labour Members hope not, but what are the Government doing to ensure that that does not happen? The hon. Member for Strangford (Jim Shannon), as always, highlighted the persecution of Christians and other groups in countries where they are in a minority; we can always rely on him to emphasise that and to stand up for oppressed minorities. The hon. Member for Glasgow East (Natalie McGarry) said that the use of the coup as a “bloody blank cheque” to oppress opponents of the regime cannot possibly be acceptable.
I will conclude shortly, because I want to hear what the Minister has to say, as we all do. The constitutional referendum that will take place on 16 April is worrying. Many people in Cyprus talked about it when I was there this week; they are very concerned, because 100,000 people in Northern Cyprus will have a vote. The Turkish Deputy Prime Minister is currently in the north of Cyprus, canvassing support for the referendum. He is encouraging people to vote, because they believe that it is on a knife edge. The referendum is on changing the constitution to give President Erdogan huge new powers to remain as President until 2019—barring any future attempts to change the constitution to allow him to rule for any longer. That is something that Presidents in Bolivia and Burundi, for example, have attempted in the past. Is Turkey really on a par with those countries? I believe not; I believe that Turkey and the Turkish people certainly deserve better.
I will briefly mention the issue of asylum seekers. Four years ago, I went to Yayladagi, a refugee camp just on the tip of southern Hatay, almost butting into Syria, where the Turkish authorities were looking after hundreds of thousands of desperate refugees. We must take our hats off to Turkey for the work it has done for Syrian refugees, and we must give it more support, but what is currently happening makes that more difficult.
Graham Jones
My hon. Friend makes a very powerful point. I went to Harran camp—an exemplary camp run by the Turkish authorities, it has to be said. We should give credit where credit is due.
All my hon. Friend’s comments on Turkey’s internal problems and its undemocratic actions are very valid, but before he concludes, will he touch on the issues on Turkey’s border? There are 2,000 Turkish troops in Bashiqa who are almost getting into conflict with the popular mobilisation units—
Mr Peter Bone (in the Chair)
Order. Interventions have to be short. I cannot give the shadow Minister a longer speech than the Minister, so I hope you will finish very, very shortly, Mr Jones.
Fabian Hamilton
I apologise that I will not be able to take up that point, but perhaps we can come back to it when the Foreign Affairs Committee’s report comes out.
Let me briefly touch on women’s rights. President Erdogan has publicly stated that he does not believe in gender equality. He calls abortion “murder” and birth control “treason”. Yesterday was, of course, International Women’s Day. On lesbian, gay, bisexual and transgender rights, we know that those who abuse, attack and even murder people who are self-declared members of the LGBT community are getting off very lightly under the judicial system.
Finally—
Mr Peter Bone (in the Chair)
Order. The hon. Gentleman must resume his seat. It is not possible for the shadow Minister to speak for longer than the Minister.
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr Tobias Ellwood)
It is a pleasure to respond to this very important debate. I join the Opposition spokesman, the hon. Member for Leeds North East (Fabian Hamilton), in saying that it is a shame that we did not have longer. I hope that the powers that be will recognise that it is important that the matter is discussed.
I join others in congratulating the right hon. Members for Enfield North (Joan Ryan), and for Tottenham (Mr Lammy), my hon. Friend the Member for Worthing West (Sir Peter Bottomley) and the hon. Member for Glasgow East (Natalie McGarry) on their speeches. Hon. Members will have noticed that I am not my right hon. Friend the Minister for Europe and the Americas, who should be replying to this debate. He is travelling at the moment. I will do my best to respond to the big themes that have been raised today and I will ask him to write to individual Members with detailed responses to some of the questions that have been put. There simply is not time for me to go into too much detail now, due to the shortness of this debate.
As has been said, the UK has an important relationship with Turkey which stretches back over 400 years. As the Prime Minister said during her visit to Ankara in January, that relationship has long been important, but it is arguably even more important now, given the challenges we face today. Turkey is a vital strategic partner. It stands on the crossroads between Europe and the middle east, and it is a NATO ally, as many hon. Members mentioned. It stands on the frontline of some of the most serious challenges that we face. Turkey is a Muslim-majority democracy with a dynamic economy, and it has an active and important diaspora in this country.
I will talk about some of the key aspects of our relationship, the first of which is security. Turkey plays a crucial role in the region. It is a key partner in Syria, where we are working together in the global coalition to fight Daesh and in support of a political solution to the conflict. However, we are also working together to tackle challenges in Iraq, Libya, Somalia, Afghanistan and the wider region, including in support of a Cyprus settlement, which has been mentioned. Our security co-operation with Turkey is essential to ensure the safety of British tourists in Turkey—about 1.7 million Britons travel there each year—and to help us to tackle threats here in the UK.
We should not forget the significant role that Turkey plays in the migration crisis. I pay tribute to the work that Turkey has done in hosting almost 3 million Syrian refugees. The generosity of the Turkish people has been extraordinary.
Mr Ellwood
I am afraid I will not give way, simply because of the time.
During her visit to Turkey, the Prime Minister agreed a new strategic security partnership, which will ensure that we can work together even more closely on counter-terrorism, serious and organised crime, and illegal migration. Also, there were discussions about human rights, the rule of law and democracy.
The second particularly important aspect of our relationship with Turkey is trade. Bilateral trade between our countries is currently worth £16 billion. We are looking to build rapidly on that, not least with the agreement between the Turkish aerospace industry and BAE Systems to collaborate on Turkey’s new fighter jet, the TFX. Our two countries have also established a trade working group to seek further ways of boosting bilateral trade.
Consequently, it was as a partner and an ally that the UK stood shoulder to shoulder with Turkey in July last year as it defended its democracy from an attempt to seize power by force. Turkey’s Parliament was attacked by the country’s own aircraft, civilians were crushed under tanks and 241 people were killed. We condemned the attempted coup unreservedly and continue to do so, and we have expressed our sympathies and condolences for the tragic loss of life. My right hon. Friend the Minister for Europe and the Americas travelled to Turkey shortly after the attempted coup, and expressed our solidarity with the Turkish people. The way that they rallied across the political spectrum to support the constitutional order was an impressive demonstration of the strength of Turkish democracy.
In light of the attempted coup, the Turkish Government have a right and a responsibility to act against the perpetrators and against those who have committed or who plan to commit terrorist acts. The UK Government have consistently stated that it is important that measures taken following the coup should be proportionate, justified and in line with Turkey’s democratic principles and international human rights obligations. Of course, we are aware that concerns have been raised, including by the Council of Europe, and we welcome Turkey’s recent steps to address those concerns by reducing the custody period and creating a mechanism for reviewing dismissals carried out under the state of emergency. We support the dialogue between Turkey and the Council of Europe on implementation of the emergency decrees following the coup and we urge them to continue dialogue on these issues.
In addition to concerns about Turkey’s response to the attempted coup, concerns have been expressed about its broader human rights record. In this area too, we regularly emphasise the need for Turkey to meet its international obligations. The Prime Minister referred to that directly in January, emphasising the importance of Turkey sustaining its democracy by maintaining the rule of law and upholding its international human rights obligations. We regularly highlight the role that freedom of expression and freedom of the media play in supporting democracy, and we urge the Turkish Government to ensure that the upcoming referendum on constitutional reform is free, fair and in line with international norms.
Internally, Turkey faces a grave terrorist challenge on its own soil from Daesh and al-Qaeda, as well as from the PKK and affiliated groups. In the last 18 months, nearly 1,500 Turkish civilians and security personnel have been killed through terrorism, and we offer our condolences for the many lives that have been lost. In the face of this threat, we stand by Turkey and support its legitimate right to defend itself, including from the PKK, whose attacks we condemn, as we condemn all terrorism. As in any conflict, civilian casualties should be avoided and human rights should be fully protected. In the course of the counter-terrorism effort, it is important that legal processes are undertaken fairly, transparently and with full respect for the law.
Turkey is and will remain an essential trade and foreign policy partner for the UK, including as a NATO ally. We are working with Turkey to manage cross-border challenges, including migration, terrorism, and serious and organised crime, and we are building on our already significant trading relationship, which will benefit both our economies. At the same time, we have to be clear and direct about the need for Turkey to uphold its international obligations, including on human rights, and we will continue to do this. We firmly believe that the rule of law and fundamental rights, including freedom of expression and the media, are vital for a healthy democracy. As Turkey continues to confront the extraordinary challenges posed by the current turmoil in the region, and to tackle multiple security threats at home, the UK will remain a partner and a friend.
Joan Ryan
I thank the Minister for his response to this debate, and I thank all Members who have taken part in it and supported it. I was very encouraged by the response of my hon. Friend the Member for Leeds North East (Fabian Hamilton) on the Labour Front Bench. However, although I have thanked the Minister for his time and contribution, it was a very disappointing contribution, and many people in the Turkish, Kurdish and Alevi communities here will also be disappointed. Indeed, the disappointment will be even more widespread, because people in this country are very committed on human rights.
We need to say and do so much more to be a critical friend of Turkey. I do not think we are being critical enough of what is happening in that country. Just as the Kurdish people in Turkey defended their democracy and President Erdogan, only to find him then turning on them, we may come to regret not taking a much stronger line on what is happening in Turkey and with Mr Erdogan. It is not for us to tell the Turkish people how to vote in their referendum, but if it were for us to do so, I would say, “Vote no. Don’t vote for this slide into authoritarianism, for this oppression, for these detentions, for these arrests, for this loss of human rights and for this complete ignoring of the parliamentary democracy in Turkey that is valued by Turkish people.”
I do not think we are a friend to Turkey if we do not speak up loudly now, while it matters. When we do finally speak up, it may well be far too late and we may well deeply regret the fact that we are not now taking the responsibility that we should be taking. Yes, Turkey is a NATO ally and, yes, that is very important, but it does not have to be a case of trade or human rights; there needs to be both.
Mr Peter Bone (in the Chair)
I thank the right hon. Lady and all those who participated in this debate, particularly as there were so many people attending it.
Question put and agreed to.
Resolved,
That this House has considered human rights and the political situation in Turkey.
Written Statements
(7 years, 8 months ago)
Written StatementsRead Full debate Read Hansard Text
Contingency Fund
(7 years, 8 months ago)
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The Minister for the Cabinet Office and Paymaster General (Ben Gummer)
The Cabinet Office has sought a routine advance of £150 million from the Contingency Fund to cover pension benefit payments by the Principal Civil Service Pension Scheme. The amount includes £90 million to fund pension benefits and £60 million to fund payments to HMRC in respect of the tax related to these benefits.
This technical measure is simply since the costs have fallen earlier in the financial year than initially forecast by pension administrators.
Authority has already been sought in the supplementary estimate 2016-17 for these payments, but this is not due to be approved by Parliament until the end of this month. The funds will be repaid to the Contingency Fund once the Supply Bill has been authorised. There is no interest on such advances from the Contingency Fund.
[HCWS524]
National Infrastructure Commission Report: 5G Strategy
(7 years, 8 months ago)
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The Chief Secretary to the Treasury (Mr David Gauke)
My noble Friend the Commercial Secretary to the Treasury (Baroness Neville-Rolfe) has today made the following written statement.
The Chief Secretary to the Treasury deposited a copy of the National Infrastructure Commission’s report on 5G and telecommunication technology in the Libraries of both Houses on 24 January 2017. [DEP2017-0060]
Today I confirm the publication of the Government’s response to the National Infrastructure Commission’s report. This response is set out in the Government’s 5G strategy.
https://www.gov.uk/government/publications/next-generation-mobile-technologies-a-5g-strategy-for-the-uk
Copies of the document will be deposited in the Libraries of both Houses.
“Connected Future”, published on 14 December 2017, calls for Government to play an active role in ensuring that basic mobile services are available wherever we live, work and travel. The Government welcome the report as an opportunity to position the UK at the forefront of the deployment of 5G, and ensure we can take early advantage of the applications 5G networks may enable.
That is why, alongside this publication, the Government are providing £1.1 billion of funding to explore and incentivise the next generation of digital infrastructure for the UK—5G and full fibre. This will be a core part of our modern industrial strategy—helping to shape and establish an economy which is adaptive, resilient to change and fit for the demands of the 21st century.
The National Infrastructure Commission was announced in October 2015, to provide expert impartial analysis of the long-term infrastructure needs of the country. In January 2017 the commission was established on a permanent basis as an Executive agency of HM Treasury.
[HCWS522]
Local Growth
(7 years, 8 months ago)
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The Secretary of State for Communities and Local Government (Sajid Javid)
The Chancellor announced at the 2016 autumn statement that the Government would publish a strategy for the midlands engine. LEP Funding Award (£m) Black Country 55.05 Coventry and Warwickshire 42.44 Derby, Derbyshire, Nottingham and Nottinghamshire 62.99 Greater Birmingham and Solihull 54.20 Greater Lincolnshire 29.45 Leicester and Leicestershire 25.87 South East Midlands 59.04 Stoke and Staffordshire 23.30 The Marches 21.91 Worcestershire 17.51
As the ministerial champion for the midlands engine I am delighted that we have today published that strategy. I will be placing a copy in the House of Commons Library.
The midlands has a central role to play in the Government’s emerging industrial strategy—a successful midlands economy is a vital part of a successful UK economy that works for everyone. It is at the heart of the United Kingdom and has huge economic potential. Its economy is worth £217.7 billion—13% of the UK’s annual output.
Through the strategy we will focus on five key objectives:
Improving connectivity to raise productivity
Strengthening skills to make the Midlands a more attractive location for businesses
Supporting enterprise and innovation to foster a more dynamic regional economy
Promoting the Midlands nationally and internationally in order to maximise trade and investment in the region
Enhancing quality of life to attract and retain skilled workers, as well as to foster the local tourism economy.
As part of the delivery of the connectivity theme, Midlands Connect is today launching its transport strategy, “Powering the Midlands Engine”, which outlines transport investment priorities across the region.
The Government cannot deliver the midlands engine strategy alone. We will continue to work with the Midlands Engine Partnership, which brings together businesses, local authorities, academic institutions and local enterprise partnerships (LEPs). It is a unique example of local government and businesses voluntarily joining forces to deliver a shared vision for a whole region. Together with the West Midlands Combined Authority, and LEPs and local authorities across the region, it provides an excellent vehicle to support delivery of this strategy, continuing on our journey towards making the midlands an engine for growth and building an economy that works for everyone.
As part of the midlands engine strategy, I am today announcing the 10 individual awards to LEPs in the midlands.
Between them they will benefit from £392 million of Government support from the local growth fund, on top of the £1.5 billion committed in previous growth deals.
We have now awarded over £9 billion to LEPs from the local growth fund. With the home building fund and local transport majors launched in 2016 we have fulfilled our manifesto commitment to a £12 billion local growth fund. It is a crucial part of the Government’s agenda to drive growth and devolve power to local areas, with decisions being made by those who know their local area best, and supporting the Government’s commitment to build an economy that works for everyone.
This was the most competitive round yet, and awards were made based on a bidding round that took place last year.
The expanded deals will provide LEPs in the midlands with the power and funding to support local businesses, unlock housing where it is most needed and develop vital infrastructure to allow places to thrive. The funding will also be used to create jobs, equip a new generation with the skills they need for the future and attract billions of pounds of private sector investment. This investment is Government stepping up, not stepping back, building on our strengths to boost national productivity and growth.
The Government have strong ambitions to put the midlands at the heart of growth in the UK. We have already invested £1.5 billion in growth deals in the midlands and this additional investment will help to ensure that we achieve greater economic growth and productivity. We are supporting improvements in infrastructure, skills, business environment, innovation and increasing trade and investment by promoting the midlands nationally and internationally.
Attachments can be viewed online at: http://www.parliament. uk/business/publications/written-questions-answers-statements/written-statement/Commons/2017-03-09/HCWS523/
[HCWS523]
Grand Committee
Automatic Enrolment (Earnings Trigger and Qualifying Earnings Band) Order 2017
(7 years, 8 months ago)
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Lord Henley
That the Grand Committee do consider the Automatic Enrolment (Earnings Trigger and Qualifying Earnings Band) Order 2017.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Henley) (Con)
My Lords, this order was laid before the House on 2 February 2017. I give the Committee the usual assurance that the draft statutory instrument is compatible with the European Convention on Human Rights.
The order reflects the conclusions of this year’s annual review of the automatic enrolment thresholds required by the Pensions Act 2008. The review considered both the automatic enrolment trigger, which determines the point at which someone becomes eligible to be automatically enrolled into a qualifying workplace pension, and the qualifying earnings band, which determines those earnings of which the enrolled employee and their employer must pay a proportion into a workplace pension.
The order sets a new lower and upper limit for the qualifying earnings band and is effective from 6 April 2017. The earnings trigger is not changed and so no further provision is required in this order. The earnings trigger remains at the level set in the automatic enrolment threshold review order of 2014-15. Automatic enrolment continues to be a programme that works; nearly 7.3 million people have been enrolled, more than 400,000 employers have met their duties and the opt-out rate remains low at around 9%. We are now in the final year of rollout and the most challenging phase of automatic enrolment, with small and micro employers staging in peak volumes throughout 2017. Against this backdrop, it is more important than ever to maintain simplicity and consistency for employers. This year’s order will provide this through to the end of rollout in February 2018.
I am sure the Committee will share my enthusiasm about the very exciting juncture of automatic enrolment at which we find ourselves, with the review of the policy and its operation being undertaken by my department this year. With that review, it is time to reflect on the successes we have achieved so far, take stock of the current position and consider how to build on this so that automatic enrolment continues its success in helping to rebuild a culture of saving. As such, it is important that this year’s thresholds decision avoids pre-empting the outcome of the 2017 review but still delivers on the established principles of increasing the opportunity for people to make meaningful savings into a workplace pension while balancing costs for employers.
To describe the impact of the order, I turn first to the qualifying earnings band. As signalled by my honourable friend the Minister for Pensions on 12 December 2016, the order will, as previously, align both the lower and the upper limits of the qualifying earnings band with the national insurance lower and upper earnings limits of £5,876 and £45,000 respectively. By maintaining the alignment with the national insurance thresholds, both at the point where contributions start for low earners and are capped for higher earners, the overall changes to existing payroll systems are kept to a minimum. This decision therefore both ensures simplicity and minimises the administrative burden of compliance for employers in 2017-18, while maintaining consistency for hundreds of thousands of small and micro employers implementing automatic enrolment over the coming year. As I said, the order does not change the earnings trigger, which remains at £10,000, as set in the 2014-15 order.
Automatic enrolment continues to bring into its eligible target group those least likely to save for retirement. Low-paid workers and women, who are often likely to be low earners, have traditionally been underrepresented in workplace pension savings. Between 2012 and 2015 the private sector saw a 30 percentage point increase in eligible female participation in workplace pensions, and in 2014 there was no gender gap at all in participation. In fact, 2015 has seen more eligible women in the private sector participating in a workplace pension, exceeding the participation of men with 70% to 69% respectively.
Due to anticipated wage growth and with the maintenance of the existing trigger, we expect that an additional 70,000 individuals will meet the earnings criteria and be brought into the automatic enrolment population, of whom around 75% are women. Individuals earning below the £10,000 earnings trigger but above the lower earnings threshold will still be able to opt into a workplace pension and benefit from their employer contributions, should they so wish.
In conclusion, the decision to maintain the earnings trigger at £10,000 will increase the number of low earners who meet the earnings criteria and are therefore automatically enrolled in a workplace pension. The decision will increase the total number of people saving into a pension and the total savings. In addition, the decision to maintain the alignment of the lower and upper earnings qualifying bands with those for national insurance contributions maintains simplicity and consistency and minimises the burdens on employers at a crucial stage of the programme’s wider rollout. Taken together, that means that the total pensions saving is expected to increase by some £71 million. The order therefore ensures that automatic enrolment will continue to provide greater access and opportunity for individuals to save into a workplace pension and build up meaningful pension savings. I commend the order to the Committee.
Baroness Bakewell of Hardington Mandeville (LD)
My Lords, I thank the noble Lord the Minister for his instructive introduction to the order and for the fact that the number of women who are now enrolling has increased considerably. That is very good news.
I welcome the fact that the earnings trigger above which people will be automatically enrolled will remain at £10,000, which seems very reasonable. A lower threshold would bring more people into pensions, but, as the Minister indicated, with a state pension currently providing over £8,000 in retirement, there is obviously a limit to how far the Government want to be enrolling people who earn approximately £9,000, taking into account the cost to employers of setting up schemes, making payroll changes and so on. As has been indicated, the earnings trigger will undergo a fundamental review as part of the automatic enrolment review later this year. It would perhaps be better to wait for that and to look then at altering the trigger threshold.
The lower and upper limits for the band of qualifying earnings, on which contributions are due, are currently linked to the lower and upper limits for national insurance contributions. The order maintains that connection. However, I note that the Chancellor of the Exchequer raised the upper limit for national insurance contributions from £43,000 to £45,000. The order does the same and means that higher earners will be putting pension contributions in over a slightly wider band. That is welcome, but they can of course opt out if they wish to.
Although I welcome the regulations, I flag up my concern about people who have multiple jobs whose individual incomes will be below the threshold but cumulatively above it. They might earn £6,000 in one job and £5,000 in another. Such people are excluded from automatic enrolment; perhaps that can be considered on another occasion.
The Review of the Automatic Enrolment Earnings Trigger and Qualifying Earnings Band for 2017/18: Supporting Analysis report, which was published in December 2016, refers to an important point about the 280,000 people who earn between £10,000, the automatic enrolment trigger, and £11,500, the current tax threshold, who get tax relief. However, they get their tax relief only if it is administered according to the relief-at-source tax system, but not if their tax relief is administered according to another system, the net pay arrangement. That arrangement is somewhat obscure and the Government have failed to address the issue in the order. Those are minor points, however, and I generally welcome the order.
Baroness Drake (Lab)
My Lords, I remain concerned that the earnings trigger of £10,000 for auto-enrolment still excludes too many people, particularly women, from the benefit of a pot of savings supported by an employer contribution. I am also a little disappointed that the Secretary of State has not taken the opportunity of the annual review to reduce the trigger. Although it has been held at £10,000 for three years, it is still too high, although this approach is preferable to aligning it with the personal income tax threshold, as happened between 2011 and 2015, which excluded ever more women every year.
Of the 11 million workers in the eligible target population for automatic enrolment, only 36% are female, and 3.5 million workers are ineligible because they earn less than £10,000 in any one job. The impact assessment confirms the disproportionate impact on women, because it shows that simply freezing the trigger at £10,000 will bring an additional 70,000 workers into auto-enrolment, over 52,000 of whom will be women.
The impact assessment reasons that auto-enrolment is in a challenging phase with the rollout to small and micro employers, so the earnings trigger should be held at £10,000. That is an understandable argument but not one that can fairly hold over time as a reason for not lowering the trigger. DWP figures reveal that of those working for smaller employers with 10 or fewer employees, 61% meet the eligibility criteria for auto-enrolment, compared to 90% of workers for large employers with 500 or more employees, and 55% of people employed in the service sector—where there is a concentration of women workers—meet the criteria, compared to between 70% and 90% of workers in other sectors.
The DWP analysis suggests that these discrepancies between small and large employers are largely driven by workers not meeting the earnings threshold. That is a pretty predictable observation. There are nearly 15 million women in work, 42% of whom work part-time. The ONS figures show that the smaller the company, the lower the level of earnings for part-time workers. Sweepingly, anyone working 25 hours or less on the national minimum wage of £7.50 is ineligible for auto-enrolment. The DWP’s analysis also shows that reducing the trigger to the national insurance primary threshold of £8,164 would bring more than 500,000 women—and nearly 750,000 workers overall—into auto-enrolment.
An argument deployed by the Secretary of State in 2011 for excluding lower earners was that the state system itself delivered an adequate replacement rate of income. Indeed, that argument is deployed again in the current impact assessment, which states that the earnings trigger,
“should be set at a level that ensures as many people as possible are eligible for AE without disproportionately capturing those lowest earners for whom it makes little sense to save for retirement”.
Lowering the £10,000 trigger, however, would not disproportionately capture lower earners. Very often, low earners are not low-paid throughout their working lifetime. Earnings are dynamic, but persistency of savings throughout working life is very important. Many women who earn less than £10,000 will, during their lives, have periods of full-time employment on higher earnings and periods of part-time employment on lower earnings, when they are caring. Persistency of saving throughout both periods and retaining the employer contribution improves their financial outcomes in retirement. Many, or most, very low earners are women who live in households with others with higher earnings and/or receiving working tax credits. They may well be workers who should be automatically enrolled.
As to excluding lower earners because the state system delivers an adequate replacement rate of income, “freedom and choice” means that individuals are no longer required to secure even a minimum income stream, and are free to spend all their money as they wish from the age of 55. Securing a replacement income is no longer a requirement of private pensions policy. Excluding so many lower earners from a pot of long-term savings supported by an employer contribution and the tax credits system is not fair because it simply denies them the opportunity to accrue a savings pot and build financial resilience in later life.
Lord McKenzie of Luton (Lab)
My Lords, automatic enrolment has been a hugely successful example of public policy and once again I pay tribute to the role of my noble friend Lady Drake in helping to formulate its development and implementation.
The success of auto-enrolment has been built on rigorous research and assessment of the data, engagement with the industry and the building of a political consensus—legislated for by a Labour Government, implemented by the coalition Government and now sustained by the Conservative Government. Of course, that does not mean that we share an identity of view on every aspect of its implementation, as this discussion has already indicated. I will say more on this later. But it has undoubtedly been successful because it addresses a fundamental issue of chronic undersaving for pensions.
To date we are told—we have new figures today, I think—that some 7.3 million workers have been automatically enrolled by nearly 400,000 employers. The DWP review suggests, and we agree, that with all large and medium-sized firms having reached their staging times, the rollout for small and micro-sized employers is the most challenging phase. Of course, we are still in the 1%/1% contribution phase. DWP analysis suggests that by 2019-20 there will be an extra £17 billion of workplace saving per year as a result of automatic enrolment—a considerable achievement.
Of course, the success of auto-enrolment has run ahead of the necessary regulatory framework as it spawned the growth of master trusts. But this is being addressed in part by the Pensions Schemes Act, as I think it now is. Perhaps the Minister can give us an update on implementation plans for this legislation and its multitude of regulation-making powers.
The Minister will be aware that there are obligations on employers not only to automatically enrol workers but periodically—every three years—to re-enrol those who have not taken up the opportunity thus far. It is understood that there is a six-month window in which to do this. Given an October 2012 start date for automatic enrolment, employers will increasingly face this obligation. Can the Minister give us some data on how this is all going? How many workers have been re-enrolled and how many have opted out?
The order addresses the earnings trigger, which determines who is eligible to be automatically enrolled, and the qualifying earnings band, which determines the minimum level of contributions. The particular bone of contention with this order, as the Committee heard from my noble friend Lady Drake, is the earnings trigger, which is retained at this year’s level of £10,000. While it represents a modest lowering of the threshold in real terms, it does not go far enough, as my noble friend asserted. Bringing within scope a further 70,000 individuals, 75% of whom are women, is to be welcomed. But if the trigger rate were just set at the national insurance primary threshold, as the papers before us show, a further 750,000 would be in scope and 70% or more of those would be women.
My noble friend has highlighted research, some of which came from Scottish Widows. Although it shows improvement in the number of women saving for retirement, there is still a gender gap. That reflects the fact that women are more likely to be in part-time work and lower-paid jobs—it is they who bear the brunt of having an earnings trigger that is too high.
In making the judgment as to the appropriate level of the earnings trigger for 2017-18, the Government assert that the overriding factor should be ensuring that people have sufficient retirement income savings. We agree with this. However, they then use the broader upcoming 2017 review to settle for the status quo on the basis of stability and affordability, without, I suggest, any detailed analysis, at least on the latter. Perhaps the Minister will take the opportunity to expand on this justification for the record.
So far as the qualifying earnings band is concerned, we note the continued alignment of the starting point with the LEL and the retention of an overall cap on employer contributions. The Government acknowledge that using a trigger below income tax personal allowance level does not preclude the benefit of effective tax relief if net pay schemes are used. Reliance on those below the income threshold opting in ignores the key principle of inertia on which auto-enrolment is built. Can the Minister give us any data on the numbers who opt in to schemes voluntarily and obtain the benefit of the employer contribution? Nevertheless, as my noble friend said, we look forward to the upcoming review and trust that it will include a focus on such matters as mini-jobs—mentioned by the noble Baroness, Lady Bakewell—and the self-employed.
The self-employed have of course caught the attention of the Chancellor this week. So, too, have those who operate through their own companies. When the legislation was introduced, excluded from its scope were sole-director companies, generally on the basis that such individuals were officeholders rather than workers. Given the growth of such arrangements, are there any plans to review this situation?
The order represents a modest advance in expanding the reach of auto-enrolment and we will obviously not oppose it. The 2017 review is an opportunity to take stock of matters more widely to ensure that the full benefits of this policy are obtained and that there are better outcomes, in particular for women and the low-paid.
Lord Henley
I am very grateful to the noble Lord for his offer not to oppose the order. I am even more grateful for the generally constructive approach that all noble Lords have taken to it. As we know, it is very simple and deals merely with automatic enrolment and raising the lower qualifying limit and higher qualifying limit in line with the lower earnings limit and the upper earnings limit of NICs, at the same time leaving the £10,000 figure where it was.
As I made clear in my opening remarks, we are conducting the 2017 review, so I have to be fairly circumspect in what I say in response to noble Lords because I do not want to prejudge that. However, many of the speeches, in particular that of the noble Baroness, Lady Drake, will be taken into account in that review, and we will consider in due course any further comments that she wishes to put forward. I will answer one or two of the more detailed questions put to me in the course of this short debate.
Perhaps I may deal first with the question of multiple jobholders, which was raised by the noble Baroness, Lady Bakewell, by making it clear that for some multiple jobholders, one of their jobs will earn in excess of £10,000. They will therefore be automatically enrolled on that job. But it is the case that they can choose to opt into schemes if they earn under £10,000 but more than the lower earnings limit so if they have a number of jobs, one of which is paying at least £5,876 a year, they can obviously do that. We think that around 500,000 multiple jobholders meet the age criteria for automatic enrolment and that of these, some 330,000 earn more than £10,000 in at least one job, so they would be automatically enrolled in it.
This may deal with the point raised by the noble Lord, Lord McKenzie, when he asked about the numbers of those seeking to voluntarily opt in who are below the £10,000 trigger and above the upper earnings limit. I understand that the survey we conducted in 2015 suggested that some 5% of those ineligible workers had chosen to opt in, which probably shows the benefit of the whole idea behind automatic enrolment—that you are automatically opted in and have to opt out. If we compare a 9% dropout rate there with a 5% enrolment rate for those who can, we see that leaving these things to a voluntary process would have led to a very different take-up from what we have seen so far with the automatic enrolment introduced by the 2008 Act. As I think I made clear in my opening remarks, we have seen a dropout rate among those who were automatically enrolled of only 9%. That rate might go up as the contributions go up but, at the moment, it is way below what was originally estimated by the then Government who introduced this measure and in other measures by us.
The noble Baroness, Lady Drake, expressed some concern about the £10,000 limit. She would like to reduce it still further. She certainly agreed that it was preferable to keep it at £10,000, though, rather than linking it to the personal income tax threshold. I think she would also agree that the arguments are finely balanced on both sides as to whether to increase or decrease the limit. I can see the case for a degree of simplicity by aligning it with the personal income tax threshold, but that would obviously exclude many more people. There is also the argument on the other side: if one lowers it—below £10,000—yet more people who are not paying income tax will be eligible for automatic enrolment. Having listened to the noble Baroness and said that the arguments are finely balanced, these matters can be looked at in the 2017 review, which I stress will look at the overall operation of the policy in the round, including the balance between catching the lower earners and other factors that determine the overall numbers who will be subject to automatic enrolment. Again, the concerns that she has put forward will be taken into account.
The noble Lord, Lord McKenzie, also asked about the Pension Schemes Bill, which is close to my heart. It was just disappearing from this House with all its detail as I arrived back in DWP and is awaiting its Report and Third Reading in another place.
Lord McKenzie of Luton
Before the Minister sits down, may I comment on his comment on the opt-in rate, which is 5%? That means that 95% of people who could take advantage of an employer contribution, for example, are missing out. A 5% opt-in rate is not great, and reflects the fundamental architecture of the scheme. Causing people to do something generally does not work with pay and pensions: you need to do something. Inertia keeps them in. On the issue of mini-jobs and whether any of them reaches a £10,000 threshold, even if one of them did, it would not give relief or benefit on the full aggregate of a number of mini-jobs that people may have, so it is not equivalent. It is difficult: we have debated and agonised over the issue of how effectively to aggregate these disparate jobs and get the same result as if it were one job. If that came out of the review, it would be a real success.
Lord Henley
What it reflects—to use a fashionable modern word—is the power of nudge. By means of automatic enrolment, we are achieving those high rates, whereas if one asks individuals whether they wish to join, one gets the relatively low rate of 5%. That 5% compares very interestingly with what I think is a rather low rate of opt-outs: 9%, which is far lower than we originally expected.
Having said which, I would still say that one has to get the right balance between administrative simplicity and ensuring that people will ultimately benefit. It is important to remember administrative simplicity for the employer, particularly the very small and micro-employer. That said, all those factors can be taken into account in the annual review. We all have the same desire: to increase enrolment in pensions as far as possible, but in the best way. This has been working very well since the 2008 Act. There are just questions such as whether to bring the trigger lower. They are best looked at in the review, where they will be taken into account.
I think I have dealt with most matters, other than those on which I promised to write to the noble Lord, Lord McKenzie. I commend the Motion.
Reporting on Payment Practices and Performance Regulations 2017
(7 years, 8 months ago)
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Lord Prior of Brampton
That the Grand Committee do consider the Reporting on Payment Practices and Performance Regulations 2017.
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Prior of Brampton) (Con)
My Lords, the purpose of these regulations is to implement a requirement on large businesses to report on their practices and performance in paying suppliers. The first instrument on payment practices applies the requirement to large companies, while the second applies the requirement to large limited liability partnerships.
Late payment can be a significant issue for businesses, especially smaller suppliers. It is estimated that small and medium-sized businesses are owed £26 billion in late payments. This Government have several measures in place to tackle late payment. As well as the reporting requirement, which I will talk about in more detail, the Government are also currently recruiting the small business commissioner, which noble Lords discussed in this House in the last Session.
Alongside other measures, there is also the Government’s support for the Prompt Payment Code, which is an industry-led code of conduct. The code sets standards for payment practice, and the Government are committed to signing up strategic suppliers to the code. Small and medium-sized businesses often lack information about the larger businesses they supply. They have no choice but to take it on faith that they will be paid in line with the agreed terms and conditions. There are sometimes calls in the House for more prescriptive measures to support suppliers. However, in response to the 2013 discussion paper on options for tackling late payment, businesses said that they did not want to see government constraining their freedom of contract. Instead, the reporting requirement focuses on transparency.
We are not therefore banning business practices, or unduly interfering in customer- supplier relationships, but we want suppliers to have the information they need to make good business decisions, and to encourage a culture change in payment practices. When we consider new obligations such as these, we have to be careful to balance the burden on large business with the benefit to small business. That is why we have taken longer to implement this requirement than we estimated at the time of the debates on the Small Business, Enterprise and Employment Act 2015. This is the legislation enabling us to make the regulations before us today. We have taken time to ensure the requirement works in practice for large businesses, so that we can be confident that the resulting data will be robust and helpful for small businesses.
In our recently published impact assessment, we estimated the annual net cost to business at £17.7 million. That sounds like a large number—indeed, it is—but it has to be considered against the potential benefits to businesses that a reduction in late payment could bring. Even a small reduction in late payment could have a significant impact, especially for small suppliers, and especially for those for whom cash flow is of the essence. We have continued to engage with stakeholders following the public consultation on the policy. My officials have had an ongoing dialogue with stakeholders across different sectors on a wide variety of topics related to the reporting requirement. They have been listening to businesses, representative bodies and other stakeholders to make sure we get the balance right between the burden on large business and the benefits to small businesses. This has also included independent research commissioned to provide additional evidence for the impact assessment and user research to inform the development of the web service.
I now turn to the detail of the regulations. They implement an obligation on large businesses to publish information about a number of metrics relating to their payment practices. Businesses will need to report on these metrics for their first financial year, starting once the regulations come into force on 6 April 2017. Each reporting business will need to publish information twice each financial year. To ensure the information is up to date and relevant, it must be published within 30 days of the end of the reporting period. The metrics include three types of information. They require businesses to publish statistics about their payment performance, including the average time taken to pay and the percentage of invoices paid in 30 days or fewer, between 31 and 60 days, and later than 60 days. They require businesses to give narrative statements about the business’s standard payment terms and dispute resolution processes. They also require businesses to state whether the business’s payment practices and policies provide for supply-chain finance, e-invoicing and deductions for being on a supplier’s list.
These metrics were the subject of the 2014-15 consultation. We received diverse feedback about certain points and have sought to find a balance between the needs of small and large business. Specifically, we cannot require businesses to report on all pay-to-stay practices. The House was notified of this in a Written Ministerial Statement in December 2016. The metrics of interest owed and paid are not included in these regulations, but we will learn from the public sector’s introduction of a similar metric of interest owed from later this month.
The regulations require businesses to report on any deductions from payments to suppliers as a charge to remain on a supplier’s list. A broader metric to cover more types of pay-to-stay practices will be kept under review. Businesses will be required to publish their reports on a government web service and, as soon as the business publishes it, the information will be available to suppliers. The web service is being developed with input from users of the service and will be available from April 2017. To ensure that it is accurate, the information published must be approved by a named director. This will help late payment become a reputational issue. The public nature of the reporting will motivate businesses to comply. However, it is a criminal offence if a business fails to publish a report, or publishes false or misleading information.
On conviction, the business, directors or, in the case of false statement, the individual will be liable for a fine. The reporting requirement will increase transparency, making it easier for suppliers to find information about large businesses’ payment practices and performance. The improved transparency will help suppliers make better-informed business decisions and encourage large purchasers to make prompt payment. The public nature of the data will highlight good payment practice, while also shining a light on poor practice that is potentially damaging and unfair to suppliers. This measure is an important step towards a change in business culture to one where late payment is considered a reputational issue and prompt payment is valued by all sizes of business. I commend these regulations to the Committee.
Lord Foster of Bath (LD)
My Lords, I begin by saying how welcome these proposals are, as developed from the Small Business, Enterprise and Employment Act 2015. The duty to report, as the Minister said, is one in a package of measures that begins to address a problem that has existed for far too long around late payment to small businesses. As the Minister said, we have 5.5 million small businesses in this country and it is estimated that, between them, they are owed over £26 billion. The impact this has on them is incalculable. It has been estimated by a number of people that implementation of these measures—and further measures, which I will touch on in a second—could prevent the death of about 50,000 businesses per year.
The other measures that I welcome include the Prompt Payment Code, to which we have already heard reference, and there are further measures that I hope will be adopted, which are referred to within the corporate governance Green Paper. Reference is made, for example, to one board member having responsibility for representing the views of small businesses within the supply chain. I welcome, too, the increased transparency about payment in other regards, as also referred to in that Green Paper, but that is probably not directly relevant to today’s debate.
Having said that I support these proposals, I will confine my remarks to asking a few short questions. First, in reference to the duty to report, it remains unclear who is responsible for verifying the statistics contained in the report. The Minister has said—and it is clearly explained in the Explanatory Memorandum—that the figures must be approved by a named director of the company. However, as I suspect the Minister might accept, that looks rather like the company is marking its own homework. Will the Minister explain what opportunities there would be for people concerned about the statistics to draw attention to that, and to whom would they do so? Given that failure to report is a criminal offence, it is not at all clear whether failure to report accurately would be deemed a criminal offence and what the penalties would be. Again, I would be grateful for clarification on that matter.
Lord Stevenson of Balmacara (Lab)
My Lords, I will follow closely the words of the noble Lord, Lord Foster. Like him, we accept that these are good regulations. They stem from a Bill that we spent a lot of time on in 2015, talking about small businesses and their problems. It is good to see the output in terms of large companies and large limited liability partnerships, and to see the detail. I support that.
Like the noble Lord, Lord Foster, I have a number of questions, which I am sure the Minister will be able to respond to. Where the noble Lord finished is where I would like to start. There is no mention in either set of regulations about the role of the Small Business Commissioner, and I find that very surprising. From the reports that are circulating about the appointment of the Small Business Commissioner, it is clear that the department sees that as being one of a package of measures that will implement the small business Bill. However, there seems to be no mention of it and no role for the commissioner in the regulations. Perhaps the Minister has an explanation for that.
Having said that, the second question that comes to mind is: what is the role of the Small Business Commissioner? The Minister was not in post when we discussed this in 2015, but I think he will have been briefed about the general feeling there was in Committee and on Report that the move to introduce the Small Business Commissioner—it was a major change by the Government, who had previously set their mind against it—was a good thing, but that the powers were lamentable given the case that had been made by the Federation of Small Businesses in particular, which, after all, might be expected to know a bit about the problems that small businesses face.
It is brave of the department to bring the chair of the FSB on to the appointments panel—that is a good sign. However, as far as I can understand from the press comments he has made, he is still worried that even though he is on the panel, the post is not going to be sufficiently empowered or resourced to do the job it has to. He does not think that it begins to tackle the problem referred to by the noble Lord, Lord Foster, of 50,000 small businesses going broke each year because they cannot get the money they are owed out of the larger companies. There is also the question of whether or not the will is there in the department to try to help shape the culture, rather than simply shine a light on current practices.
The Explanatory Memorandum to both instruments before us gives a little context about where all this has come from. The noble Lord, Lord Foster, mentioned one of those issues, the Prompt Payment Code, which has been heavily trailed by the Government and used as their only fig-leaf when we talked about this in Committee and on Report. However, it has proved to be a completely hopeless way of trying to achieve culture change. At the time that the Prompt Payment Code was being lauded, we had examples within this very House of major companies that were not even signed up to it, and many of those that had signed up had operating practices that would have made it impossible to stay in the code, and yet there was no apparent sanction as it is a voluntary organisation. The pay-to-stay scandal and the unilateral changing of payment arrangements from 30 days to 60 days to 90 days and all sorts of other things were going on in companies that should have been adhering to much higher standards. That is a clear example that the process does not work in practice. At least we now have a transparency arrangement, and I like a lot of the things that are included.
Delays always happen but I suspect that there is a bit of a story behind the way in which this has come out and around the engagement with both the major and the smaller companies in trying to find a way to make this work. Extraordinarily, but rightly in my view, the department has decided that the only way to get this to work in practice is to run its own website. It cannot rely on companies coming forward with material because it feels that that would be too difficult to interpret. Again, that is brave. I cannot say any more than that—I think it is terrific and I am sure that it is the right thing to do. Perhaps it opens up a new, aggressive policy chapter in BEIS, and it is actually going to do things that help businesses instead of just standing back and watching as they go under. However, I may be making the point a little too strongly.
The third thing I have to say is a compliment, which I rarely pay to BEIS and its officials because they are always in default on this. However, they have at last hit a common commencement date for these arrangements, and I am so pleased by that. However, it is extraordinary, is it not, and perhaps shines a different light on this area, when you discover that, uniquely, these are time-limited regulations, which is something I have never seen before. It is not so much a sunset clause but a total eclipse. We have the situation where these will come into force on 6 April 2017, which is great, and will then close on 6 April 2024 unless they are extended. There are substantial consultation arrangements around that, but it does not exactly send the message to small businesses that the Government are here to help and are on their side. The regulations are, at the very best, a pale imitation of where they want to get to, and are time-limited and will be withdrawn unless some future act of consultation comes through.
We welcome these instruments in so far as they go—it is exactly what the Government said they would do. They are late, but at least they are here. They will start very quickly and will be accompanied by an as yet unknown, but potentially powerful, person to take up some of the issues that are left undealt with here. With that, we support the instruments as they appear before us.
Lord Prior of Brampton
I thank both noble Lords for their broad support for the general thrust of this statutory instrument.
Potentially misleading or inaccurate information is a criminal offence punishable with a fine. Who is responsible for verifying the data? Our view is that the public nature of the data will ensure their accuracy. Businesses can raise their concerns directly with BEIS or the Small Business Commissioner. The whole thrust of this instrument is culture change. It is the reputational damage that firms will suffer, rather than the prospect of a criminal conviction, that will have the biggest impact on changing behaviour.
In terms of the scope and the companies caught by this, the definition of a large business for the purpose of having to make the disclosures is two of the following three: an annual turnover of £36 million; a balance sheet total of £18 million—I assume that that means net assets; and 250 employees. The noble Lord asked about a subsidiary of an overseas company—it could be a subsidiary of a domestic company, for that matter. As I understand it, this applies to companies or LLPs that are incorporated in this country. So I do not think that a small company over here that is a subsidiary in the US is captured by the instrument, but I will double-check that.
The noble Lord said that payment terms in the US were more typically 120 days rather than net monthly or 30 days but I am not sure that that is necessarily right. Also, we should be clear that in some big contracting industries, where there is delayed payment and that is negotiated upfront by suppliers, that is entirely legitimate. In their disclosures, big companies are perfectly entitled to say in their narrative that in their industry, a different payment schedule is typical. Where you have a long-term contract, which requires a different kind of financing, again, that can be disclosed and explained, and it will be perfectly legitimate. We are not saying that a longer period is necessarily worse than a short one; it very much depends on the industry. What is important is the transparency and a narrative around it.
Both noble Lords spoke about the appointment of the Small Business Commissioner. I understand that we will be appointing that individual during 2017. We launched the recruitment campaign on 12 February, with the intention of appointing later on in the year.
Lord Foster of Bath
Since it has been made public that the commissioner will start work in October this year, I hope that it will be some time in the course of this year, or there will be a difficulty.
Lord Prior of Brampton
I just wanted to reassure the noble Lord that the process has started. As it started in February, that appointment will follow in due course.
I thank noble Lords for their contribution to the debate. The importance of transparency is clear. One economic reason that makes this statutory instrument so important is that for many small, particularly growing, companies, cash flow, rather than profit, is critical. Delayed payment terms can seriously undermine the ability of small companies to grow. I think that all parties in the Committee are apprised of that.
Lord Stevenson of Balmacara
It is true that the terms are important, but both the noble Lord, Lord Foster, and I were at pains to make the point that it is the reliance on the contract with a large company that causes the difficulty. It is difficult for individual small companies to challenge the payment terms they are first offered—particularly if, once they are in contract with the large company, it decides unilaterally to change them—because they need the business. The Minister said that he has worked in business before, and I have run small businesses. When you are waiting for that cheque to come and it does not and you cannot pay yourself, you cannot rip up the contract because you are so dependent on it. It is that defect—for which no powers are being given explicitly to the Small Business Commissioner—that lies at the heart of where we disagree with the Government’s approach. I am sure that this issue will be addressed, because the figures are now so open and clear that it has to be sorted: £26 billion is a stonkingly large figure. If we could sort that out and speed it up—although the Explanatory Memorandum does not go into this—a 0.25% reduction of the costs of organising small businesses raises something like £22 million. A small calculation of what that cash flow change would be changes the dynamics of the whole arrangement.
Lord Prior of Brampton
The noble Lord makes a very good point. There is a big distinction between overdue payments where you are supplying on, say, net monthly terms and not receiving the money—and sometimes having to wait for months for it—and the situation where you knowingly enter into a contract where the terms are 60 days or 90 days. I do not know what the breakdown of the £26 billion is—how much of that is overdue against the agreed terms and how much is just longer than 30 days. When I go back to the department I might just get an analysis of that £26 billion and share it with noble Lords. On that basis, I hope that we can all agree to go forward with this statutory instrument.
Limited Liability Partnerships (Reporting on Payment Practices and Performance) Regulations 2017
(7 years, 8 months ago)
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Lord Prior of Brampton
That the Grand Committee do consider the Limited Liability Partnerships (Reporting on Payment Practices and Performance) Regulations 2017.
Air Weapons and Licensing (Scotland) Act 2015 (Consequential Provisions) Order 2017
(7 years, 8 months ago)
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Lord Dunlop
That the Grand Committee do consider the Air Weapons and Licensing (Scotland) Act 2015 (Consequential Provisions) Order 2017.
The Parliamentary Under-Secretary of State, Northern Ireland Office and Scotland Office (Lord Dunlop)
My Lords, it may be helpful at the outset to remind the Committee of the context of this order. Its origins can be found in the tragic death in 2005 of two year-old Andrew Morton after he was shot in the head with an air rifle. His parents campaigned for “Andrew’s law” to ban air weapons in Scotland.
Such deaths are mercifully rare but attacks continue to happen. Air weapons accounted for almost half—158—of all offences allegedly involving a firearm in Scotland in 2015-16. The all-party Calman commission examined the regulation of bearing weapons as part of its wide-ranging review of the Scotland Act 1998. When the commission reported in 2009, one of its recommendations was that the regulation of certain air weapons be devolved to the Scottish Parliament. This recommendation was included in the Scotland Act 2012, which made amendments to the Scotland Act 1998. Provision to devolve the regulation of certain air weapons was set out in Section 10 of the 2012 Act.
In addition to the scrutiny that the 2012 Act had in the House, the Committee may recall that a number of noble Lords were members of the Calman commission: my noble friends Lord Selkirk and Lord Lindsay, the noble and learned Lords, Lord Boyd of Duncansby and Lord Wallace of Tankerness, and the noble Lord, Lord Elder.
The Scottish Parliament used its new powers in this area to enact the Air Weapons and Licensing (Scotland) Act 2015, which I shall refer to as the 2015 Act. It received Royal Assent on 4 August 2015, having been passed by the Scottish Parliament on 25 June 2015. Andrew Morton’s parents welcomed this new legislation. The 2015 Act introduces a new licensing regime for air weapons to maintain controls over the use, possession, purchase and acquisition of such weapons in Scotland. It broadly follows the principles and practices of existing firearms legislation that apply across Great Britain by setting out the air weapons which need to be licensed; allowing a fit person to obtain and use an air weapon in a regulated way, without compromising public safety; and setting out appropriate and proportionate enforcement powers and penalties to deal with any person who contravenes the new regime.
It is notable that, in advance of the new regime coming into force on 31 December 2016, almost 19,000 unwanted air weapons were surrendered to Police Scotland for secure destruction.
The order I present to your Lordships today is made under Section 104 of the Scotland Act 1998, which allows for necessary or expedient legislative provision in consequence of an Act of the Scottish Parliament. The order will enable Part 1 of the 2015 Act to be implemented in full by making the following consequential amendments to reserved legislation which extends across Great Britain, namely the Firearms Act 1968. It will make it an offence for a pawnbroker in Scotland to take an air weapon in pawn and it will impose penalties for this offence. It will allow a court in England and Wales to cancel, in certain circumstances, any air weapon certificate granted to a person under the 2015 Act. This extends the court’s existing powers to cancel a firearm certificate or shotgun certificate held by a person appearing before it. It will also allow a court in Scotland to order the forfeiture or disposal of any firearm—other than an air weapon—or ammunition found in the possession of a person convicted of an air weapon offence.
The UK and Scottish Governments, Ministers and officials have worked together to ensure that this order makes the necessary amendments to the Firearms Act 1968 in consequence of Part 1 of the 2015 Act. It represents the final step in the implementation of the new Scottish licensing regime for air weapons that will tighten controls over the use, possession, purchase and acquisition of such weapons in Scotland. I commend the order to the Committee.
The Earl of Kinnoull (CB)
My Lords, I thank the Minister for his customary logic and clarity in telling us about the proposed statutory instrument. I declare an interest: I have a firearm certificate from Police Scotland and I own an air gun. It is relevant to later in my short remarks that I bought it second-hand for £25. Living as I do in rural Scotland, I can tell the Committee that probably most homes in my area either own an air gun or have done so at some point.
I should make clear that everything I shall say in no way challenges the fact of the devolution of powers, or the fact that the licensing regime has been introduced. However, some people have expressed to me the opinion that the licensing regime is disproportionate, badly cast and impractical, and, having looked into, it I have some concerns.
The British Association for Shooting and Conservation has 144,000 members; I am not one of them. Around 12,000 members are Scottish. The BASC has given a briefing paper to all its members, from which I will read the concluding paragraph. I preface that by saying that at the start of this process there were an estimated 500,000 air guns in Scotland: that puts the figure of 19,000 into context. The report, Air Gun Licensing in Scotland a Costly and Bureaucratic Mistake, states:
“Currently, 60,000 people in Scotland already hold firearms licences. Increasing the licensing requirement to cover hundreds of thousands of people in Scotland plus visitors will place existing Police Scotland licensing staff under a massive administrative burden when offences have fallen significantly and the police are subject to pressure on both budgets and staffing”.
As the Minister pointed out, version 1.0 of the Guide to Air Weapon Licensing in Scotland of June 2016 states that the whole thing will broadly follow the principles and practices of existing firearms legislation. That is pretty onerous. There are seven different forms that you can fill out but the main form is number one; it is 12 pages long and includes lots of questions about health and about security in the home.
There is a warning that if you answer a health question with a problem, your GP will be contacted. The security questions at home are, of course, very similar to those in the firearms questionnaires that I fill out, which result quite rightly in visits to homes. With hundreds of thousands of people needing to apply for these licences, with warnings that GPs may be contacted and security may need to be checked in homes, and with a 12-page form that needs to be processed, my concerns reach not just to the BASC’s worries about the pressure on Police Scotland but to needless pressures on the National Health Service. GPs will not know everything and will have look in their files, as they will—I presume—have to write a report to say that a person is suitable for a licence. The cost of the licence is also quite a lot; it is £72 for someone aged over 18. Admittedly it is only £50 for a 14 year-old, but I put that against my original purchase of a £25 air gun.
The function of this House is scrutiny and the weapon we have is to ask the Government to think again. Of course, in recent days we have seen ourselves do that in a very public way. My question is: where we see something like this in the underlying legislation—something that I feel to be impractical and, in the round, bad news for the people of Scotland and disproportionate—should we just wave through a statutory instrument or should we ask the devolved Administration to think again? I have carefully reviewed the underlying Act—I have it here on my iPad—and I think it would be possible with the Act to have a much simpler system, which would be cheaper and would not use up the resources of Police Scotland or of the National Health Service in Scotland, and yet would give some element of comfort to make sure that the horrible crimes that can occur with these things are lessons. I would be very grateful for the Minister’s comments on this underlying constitutional issue.
Lord Hope of Craighead (CB)
My Lords, I have never owned an air weapon, although when I was younger I did fire one once or twice, but it was a very long time ago. I have come along to welcome this measure—not in any way to take away from the points that the noble Earl has raised—but I do so against a background for which I should declare an interest as a member of the Scottish Ornithologists’ Club.
I have been concerned for many years about the misuse of air weapons by young people, particularly in the countryside, who are tempted when they see, for example, a swan on a pond or a loch to shoot at it. I dare say it is a very tempting target for a young boy with an air gun. Of course, the injury that can be caused to these wild animals can be very disabling—not fatal, but it can considerably disable the individual bird and, if it is nesting, affect the lives of the cygnets or young birds that are being looked after.
Anything that can be done to restrict the availability of air weapons—excepting those such as the noble Earl and his family, who can no doubt be trusted to use them properly—should be done. I must confess that it never occurred to me as a little boy, or even today, to go to a pawnshop to buy one. I am quite interested as to why pawnshops have been singled out, but it may be that an example has been found of a pawnshop that had air weapons available which were of course not subject to the usual scrutiny that one would get from the reputable dealers. Closing off a loophole of that kind is welcome and I therefore applaud the instrument in that respect.
However, one question puzzles me—purely because the Explanatory Memorandum does not explain enough —which is the exclusion from new subsection (1ZB) of an air weapon. This is in the forfeiture clause, which provides for the forfeiture or disposal of any firearm, other than an air weapon, in Section 1 of the Act. I am not quite sure why that should be. If an air weapon is found, for example, in a pawnshop and the owner of the pawnshop is convicted of the offence, I would have thought that the sensible thing would be to take the air weapon into possession because the only person who has a claim to its ownership is the pawnshop owner; it has not yet been disposed of. It may be that I am missing bits of legislation elsewhere which would cover that but it would be helpful if the Minister was able to explain why air weapons are being excluded. I would be comforted if there was some other provision which enabled that forfeiture to be resorted to. But subject to that, and with very grateful thanks to the Minister for his helpful explanation of the tragic background to all these measures, I support the order.
Lord McAvoy (Lab)
My Lords, I, too, thank the Minister for his usual clear and, as has been said, logical exposition of what is entailed in this SI. It allows the Scottish Government to more effectively regulate the possession, purchase and acquisition of air weapons in Scotland, as set out in Part 1 of the Air Weapons and Licensing (Scotland) Act 2015. The tragic background to this initiative—how it all started—is well known in Scotland. Government as a whole must take credit for responding to public concern and campaigns, because when we stop reflecting public opinion, we end up in trouble.
I do not have an interest to declare now but my first job when I left school was in a pawnshop. Pawnshops were a necessary part of the economic life and survival of the working class in the west of Scotland. I enjoyed my time there but unfortunately it entailed working all day Saturday. As the pawnshop was within three-quarters of a mile of Celtic Park, I could hear every goal getting cheered while I was working away in the shop, unable to witness them. After a year and a half I left the pawnshop and went to work in a place where I could get Saturday afternoons off to go and see my favourite football team.
The order makes it an offence,
“for a pawnbroker to take in pawn an air weapon”,
and will ensure that pawnbrokers are held accountable to the law by imposing penalties of up to three months’ imprisonment, or a level 3 fine, on those who break it. When I worked in the pawnshop, we had regular visits from the police checking up on jewellery and other items that might not have been honestly acquired before being pawned. There was pressure on the manager of the pawnshop to comply with this. The noble Earl, Lord Kinnoull, mentioned administrative burdens, but my question is: has any work been done with the National Pawnbrokers Association to ensure that the new offence is widely communicated to those who will be affected? There are still pawnbrokers around and it will mean administration for them.
The provisions also allow for courts in Scotland,
“to order the forfeiture or disposal of any firearm or ammunition found in the possession”,
of a person convicted of an air weapon offence. Again, this is very welcome as it will ensure that persons convicted of air weapon offences will be covered by further measures protecting public safety. I know that the noble Earl has specific concerns about rural areas. My experience and my concerns relate to some of the abuses that were mentioned by the noble and learned Lord, Lord Hope of Craighead. I witnessed many of these when I was a boy and I always wondered why air weapons were allowed to be so easily acquired.
We commend the consequential provisions that will allow for the smooth further operation of the Scottish air weapon-licensing regime and contribute to a safer, more consistent firearms policy in Scotland. We welcome this measure.
Lord Dunlop
I thank all noble Lords who have taken part in this short debate for their general support for the order. Perhaps I could take some time to address specifically the substantive points that the noble Earl, Lord Kinnoull, has raised. He essentially raised two main points: the first relates to whether the regime is proportionate and the second to whether the Section 104 process could be used to ask the Scottish Parliament to think again about this or any other measure.
On the first point, we need to accept that responsibility for the regulation of certain air weapons in Scotland is now a matter for the Scottish Parliament and Scottish Ministers. The Scottish Government carried out detailed consultation on the main air weapon licensing proposals before the Air Weapons and Licensing (Scotland) Bill was introduced. The issue of air weapons licensing has been fully debated in the Scottish Parliament, and it is absolutely right that Scottish Ministers are held to account for the decisions they take by the elected representatives in that Parliament. Of course, UK government departments with responsibility for the relevant reserved legislation, notably the Home Office, which this order affects, were consulted during its drafting and it was approved by them.
The appropriateness of the new regime is an important issue. I understand that the Scottish Government worked closely with the Police Service of Scotland and, notwithstanding what the noble Earl said, with representatives of the main shooting organisations to ensure that the new licensing processes are as familiar as possible and appropriate to the lethality of the weapons affected. For example, there are currently more than 51,000 firearm or shotgun certificate holders in Scotland and it is expected that the majority of them, like the noble Earl, will also hold air weapons. So checks on existing firearm or shotgun certificate holders are not duplicated if they also apply for an air weapons certificate. Existing certificate holders can apply for a coterminous air weapons certificate to align with their existing licence.
The noble Earl mentioned the £72 fee for the full five-year air weapons certificate. There is also a reduced fee of £5 for firearm or shotgun holders who want to align their certificates to expire at the same time. Home visits to applicants will be required in only a small number of cases. Similarly, there will not be an automatic requirement for background medical reports on air weapons applicants; these will be required only in a small number of cases. As a result, the impact on NHS resources should be minimal. While the licensing regime is founded on the pre-existing firearms legislation, I hope that the examples I have given demonstrate the efforts that have been made to ensure the provisions are appropriate.
Turning to the noble Earl’s second point, it would not be an appropriate use of the Section 104 process to force the Scottish Parliament to think again about legislation it has passed in an area of its own competence, and which is now in force. We are today merely looking at consequential amendments to reserved legislation and were we to decline to pass this order, it would lead to gaps in the law. It would also set a very unhelpful precedent for managing intergovernmental relations—a subject in which I know the noble Earl takes a close interest—where mutual co-operation is so important, not least when it comes to reserved legislation that impacts on the devolved settlements or the devolved competence of Scottish Ministers.
The issue of pawnshops was raised. The licensing regime regulates trade in air weapons and to trade in those weapons, you must be a registered firearms dealer. Pawnshops are not registered firearms dealers, so this matches the existing Firearms Act 1968 position.
I was interested to hear the history of the noble Lord, Lord McAvoy, in relation to pawnshops. Consultation and making pawnshops aware of this legislation and their duties under it are obviously a matter for the Scottish Government. I do not have at my fingertips what work has been done to make them aware of it, but I am happy to follow up on that.
The noble and learned Lord, Lord Hope of Craighead, mentioned an exclusion. I am not sure I have the detail on this, but if I do not have it to hand I will be happy to write to him. I think it mirrors the position of other firearms in the 1968 Act, but I am happy to clarify that further.
Lord Hope of Craighead
If I may return to the point I raised earlier, if the offence is committed by the owner of the pawnshop, it seems odd that the authorities have no means of taking possession of the weapon. I would have thought it would be very sensible if they could. However, I quite understand that I am asking a question that may not be capable of being answered immediately. If the Minister could write to me later, I would be very happy with that.
Lord Dunlop
I think that issue came up when this order was debated in the House of Commons. If I have got this wrong, I will clarify it, but if the courts find that the weapon is wrongly in someone’s possession then clearly it is a matter for them to confiscate that weapon. It would be normal practice for the court to order the forfeiture or confiscation of a weapon, which would be securely destroyed by the authorities in a way that would put the weapon out of use. However, I am not sure that that is the circumstance the noble and learned Lord is referring to, so I will be happy to write to him to clarify the point.
Water Supply Licence and Sewerage Licence (Modification of Standard Conditions) Order 2017
(7 years, 8 months ago)
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Lord Gardiner of Kimble
That the Grand Committee do consider the Water Supply Licence and Sewerage Licence (Modification of Standard Conditions) Order 2017.
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Gardiner of Kimble) (Con)
My Lords, these regulations will enable the implementation of important reforms arising from the Water Act 2014 to extend competition in the retail market for water services. The three statutory instruments form part of a larger package of measures that will deliver the regulatory framework required to deliver choice in water services for non-household customers. Last year we considered affirmative regulations required to allow incumbent water companies to exit the non-household market. Last week the Government laid three negative procedure statutory instruments that include a number of protections for customers.
This new market in water and wastewater services, which opens on 1 April this year, will be the largest of its kind in the world and will allow all businesses, charities and public sector customers in England to choose a new water supply and wastewater supplier. We know that non-household customers are keen to have this choice, and the Government’s decision to expand retail competition was made in response to clear demand from business customers. Our reforms will mean that they are free to negotiate for the package that best suits their needs. They will continue to receive the same water through the same pipes but will be able to benefit from more efficient customer service, water efficiency advice and, I hope, a better deal on price.
The water codes appeals regulations will allow water companies that are materially affected by an Ofwat decision to take forward proposals to amend statutory codes designated under the regulations to apply to the Competition and Markets Authority for that decision to be reconsidered. These companies may also launch an appeal if Ofwat decides not to take forward such amendments following a consultation.
Codes form an important part of the regulatory framework because they contain the terms and conditions that must be included in agreements between incumbent water companies and new entrant companies operating within the retail market. They also include the processes that must be followed for customer switching and settlement between incumbents and new entrants. The code appeal regulations incentivise Ofwat to propose amendments that benefit the retail market and provide a transparent and predictable fast-track appeal mechanism for water companies to challenge Ofwat’s decisions.
Lord Deben (Con)
My Lords, I rise merely to pursue a continuing degree of pressure on the Government not for what is in these statutory instruments but for what ought to be in them. We in Britain have a system that enables us to regulate the charges for connection—I notice that in effect it is referred to here under “Connection charges”—but connection itself is statutory. That means that even though a water company is not a statutory consultee, it can be required to provide connections when such a connection significantly overloads the provision of sewerage or allows the building of homes in places where such building should never take place.
It is some time—two years, I think—since the Committee on Climate Change sub-committee that is dealing with preparing ourselves for the immediate effects of climate change pointed out that it is an unacceptable situation that, first, the water company is not a statutory consultee and, secondly, it has to do something that is clearly contrary to our interests when it comes to flood prevention and dealing with adaptation to climate change. I know that my noble friend the Minister will say this is neither the place nor the time to do this, but if I do not go on reminding the Government that there has to be such a place and a time then it will not be done—and it needs to be done. It is a pity to take up parliamentary time for what is, frankly, a pretty unnecessary series of crossing “t”s and dotting “i”s when there is so much more to be done if we are to make the changes that the whole world, irrespective of party, religion or any other device, believes to be necessary. I am very sorry that the department has still not come forward with proposals in this area.
Baroness Parminter (LD)
I shall come to the aid of the noble Lord and say that it is an absolutely appropriate time for this to be raised. He will be aware that Defra is undertaking a review of sustainable urban drainage, so if we cannot raise this issue now in advance of the review, when can we raise it?
We have raised this issue frequently: in the Housing and Planning Act last year, when discussing automatic connection rights; and noble Lords will know that we have been addressing this issue rather more recently in the Neighbourhood Planning Bill. It is an absolutely fundamental issue that underpins not only the building of houses that are sustainable in the future but addressing the water shortages that we will face, given the challenges of climate change and population growth in the foreseeable future.
Will the Minister say a few more words about the likely timing of the department’s review to ensure that it is in advance of the Adaptation Sub-Committee’s forthcoming review in May? If it is not, that will be a seriously detrimental step. While, as the Minister said, these are small measures pertaining to delivering better solutions for our water industry, we must look at the bigger issues around automatic connection and sustainable urban drainage and, in the future—I hope this will be in the White Paper—a Bill on abstraction. If those things are not addressed, the Government are seriously failing in looking at the water challenges of the future.
Baroness Jones of Whitchurch (Lab)
My Lords, first, I am very pleased to associate myself with the comments of both the noble Lord, Lord Deben, and the noble Baroness, Lady Parminter. They have raised a very important issue, which I know we have debated on other occasions. I would be very happy to continue to add to any pressure we can bring to get the Government to take this issue seriously. The noble Lord set out the case extremely well as to why it was such a huge urban and rural challenge in terms of planning, flood prevention, and so on. Both noble Lords made the case extremely well.
I guess it now falls to me to make some comments about the actual regulations before us, which I fear will not be as interesting. I am grateful to the Minister for setting out the purpose of the three regulations. As he made clear, they are all consequent on the Water Act 2014, which received very detailed scrutiny in your Lordships’ House. The opening up of the new non-household retail market in April 2017, and the ongoing challenges of delivering greater competition in retail water and sewerage systems, will inevitably need modification and refinement. In this context, we accept that these new regulations are both technical and necessary.
However, I have a couple of questions for the Minister. First, the water supply licence and sewerage licence orders are mainly concerned with the percentage of licensees that must agree Ofwat’s decision to amend licence conditions, as the Minister spelled out. We agree that a 20% level of objection is a reasonable requirement to trigger a referral to the CMA. However, the consultation on that regulation also flagged up some concerns about the way in which sewerage licences were to be calculated, given that there is very little metering of wastewater output from premises. I do not disagree with the rather pragmatic conclusion that in the absence of metering of sewerage, it is best to base the calculation on the clean water supply to the premises. Given that there is an overarching environmental need to encourage businesses to manage and limit wastewater, the department could do more to encourage people to manage water supply—I am talking about both clean and dirty water—and put in place more effective processes for charging for wastewater disposal in the future. There are good initiatives out there but many businesses are happy to pour very highly polluted water down the drain in large quantities.
Secondly, the water industry designated codes regulations set out the arrangements for appeals to the Competition and Markets Authority. Again, I do not disagree with the rather pragmatic approach taken in these regulations, which suggests that we need to establish a fast-track appeals process, similar to the energy code appeals. However, these are short-term pragmatic solutions that are necessary to get the new system up and running in time for the April start.
However, we need to see how the codes and appeals bed down and whether—as is often the case—their application has unforeseen consequences. I would be grateful, therefore, if the Minister indicated how the operation of these regulations, and the others to which he has referred, will be kept under review as the retail market matures. In response to the consultation on the codes, the Government said:
“It is to be expected that the regulatory structure around a healthy, well-functioning market may need to evolve when competition has become long-established”.
We agree with that, but it would be helpful if the Minister set out the process by which this evolution will be monitored and how Parliament can best be enabled to play a full role in that review. I look forward to the Minister’s response.
Lord Gardiner of Kimble
My Lords, this has turned out to be a rather more interesting debate than the one I thought I was embarking upon. As I said, however, the Government are committed to opening up the retail water market on 1 April, giving business, charity and public sector customers choice over their water company. The regulations debated today are an essential part of the framework, including primary and secondary legislation codes and licences, which will allow the market to function, evolve effectively and provide safeguards for customers.
I am most grateful to the noble Baroness, Lady Jones of Whitchurch, for her endorsement of what are pragmatic measures. She asked what steps are in hand to charge more effectively for wastewater disposal. More than 90% of non-household premises are metered for the purpose of calculating water use, but a much smaller number are metered for measuring the discharges of wastewater to which she referred. While there are currently no plans to push for more wastewater metering, we believe that the introduction of the sewerage licensing regime could lead to the development of the market for wastewater meters, with the purpose of reducing charges.
We also expect that sewerage licensees will work with their customers to provide advice on the recycling of wastewater, the collection and re-use of rainwater and surface water, and other water efficiency measures. This is primarily to reduce the demand for water and provide savings on water charges, but it would also automatically lead to lower wastewater charges for unmetered sewerage customers. I was very taken, therefore, by what the noble Baroness said, and by the essential belief that we all share in the importance of using water wisely.
The noble Baroness also asked about how the water code appeal regulations and the retail market will be kept under review. Ofwat will be implementing a market monitoring framework that will closely scrutinise the performance of the market on a range of measures. No new market will be perfect on day one—that is the human condition—but benefits will consolidate over time. Customer switching levels will be an important measure but clearly not the only one. It will be important to see that customers are able to negotiate the right deal for them and that competitive markets are fair, transparent and efficient. My department will look in particular at how these regulations contribute to supporting an effective and transparent market. We will also review the effectiveness of the CMA code appeal regulations, as new codes are added to the appeals regime.
I must applaud my noble friend Lord Deben for his customary tenacity in raising an issue that I know is close to his and many other hearts. The noble Baroness, Lady Jones of Whitchurch, assisted me slightly by saying that the measures before your Lordships relate entirely to the non-household sector, but my noble friend and the noble Baroness, Lady Parminter, have given me a sharp reminder, which I take on board. The Water Industry Act 1991 sets out the circumstances in which a water company is required to make a connection. It is a qualified duty. I could set out the circumstances in which a water company is required to make a connection, but the most important thing for today’s purposes is that I shall write to those of your Lordships who have attended and contributed to this debate.
I am confident that these regulations represent another marker in the Government’s journey to reform the water market and provide more choice to non-household customers. For those reasons, I commend the regulations to your Lordships.
Water Act 2014 (Consequential Amendments etc.) Order 2017
(7 years, 8 months ago)
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Lord Gardiner of Kimble
That the Grand Committee do consider the Water Act 2014 (Consequential Amendments etc.) Order 2017.
Water Industry Designated Codes (Appeals to the Competition and Markets Authority) Regulations 2017
(7 years, 8 months ago)
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Lord Gardiner of Kimble
That the Grand Committee do consider the Water Industry Designated Codes (Appeals to the Competition and Markets Authority) Regulations 2017.
Social Security (Contributions) (Rates, Limits and Thresholds Amendments and National Insurance Funds Payments) Regulations 2017
(7 years, 8 months ago)
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Lord Young of Cookham
That the Grand Committee do consider the Social Security (Contributions) (Rates, Limits and Thresholds Amendments and National Insurance Funds Payments) Regulations 2017.
Lord Young of Cookham (Con)
My Lords, these two Motions relate, first, to the disability elements of tax credits, as well as the guardian’s allowance; and, secondly, to the rates, limits and thresholds that govern national insurance contributions. Many of these changes are made simply to bring rates into line with inflation, as measured by the consumer prices index, which put inflation at 1% in the year to September 2016.
I speak first to the draft regulations for the uprating of disability-related tax credits and the guardian’s allowance. In short, the regulations provide for an increase in line with inflation to the disability elements of tax credits. This means that we are maintaining the value of support for both the disabled children whose parents or carers are in receipt of child tax credits and the disabled workers in receipt of working tax credits. The rise in rates also covers the new element for disabled children who were born on or after 6 April this year, regardless of the two-child limit for claims of child tax credit. The regulations also increase the guardian’s allowance in line with inflation, to sustain the level of support for children whose parents are absent or deceased. The two things I just outlined—the disability elements of tax credits and the guardian’s allowance—are exempt from the benefits freeze. This is so that we can provide support to those who face the additional cost of disability and care.
Let me turn to the other set of draft regulations we are debating: those that make changes to the rates, limits and thresholds for national insurance contributions, and make provision for a Treasury grant to be paid into the national insurance funds if required. These changes will take effect from 6 April this year. Starting with Class 1 national insurance contributions, the level of earnings at which employees start to gain access to contributory benefits, known as the lower earnings limit, will rise in line with inflation. The primary threshold, which is the level at which employees begin to pay Class 1 national insurance at 12%, will also rise with inflation. The upper earnings limit, which is the level at which employees start to pay Class 1 contributions at 2%, is being raised from £827 to £866 a week. This reflects the Government’s commitment to align this limit with the higher rate income tax threshold, which is being raised from £43,000 to £45,000 for the 2017-18 tax year.
As the Chancellor announced at the Autumn Statement, the levels at which employers and employees start to pay Class 1 national insurance are being aligned. To do this, the secondary threshold, where employers start to pay, is being increased from £156 to £157 per week. This will be the same as the primary threshold for employees from 6 April this year, and will make it easier for employers, as they will no longer have to operate two similar thresholds at slightly different rates.
Finally, for the employed, the level at which employers of people under 21 and of apprentices under 25 start to pay employer contributions will keep pace with the upper earnings limit and rise from £827 to £866 per week. This maintains our commitment to reduce the costs of employing young apprentices and young people. This is an above-inflation increase and maintains alignment with the upper earnings limit, meaning that employers pay national insurance only for the highest earning young apprentices and those under 21.
Moving on to the self-employed, the level at which they have to pay class 2 contributions will rise with inflation to £6,025 a year, and the weekly rate of class 2 contributions will also rise in line with inflation to £2.85. Self-employed people who earn above the lower profits limit, currently £8,060, also pay class 4 national insurance contributions at 9%. This threshold will rise with inflation. Above the upper profits limit, the self-employed instead pay 2%. Like the upper earnings limit for the employed, this limit for the self-employed will rise from £43,000 to £45,000 per year.
Finally, for those making voluntary class 3 contributions, the rate will increase in line with inflation from £14.10 to £14.25 a week.
I note that these regulations make provision for a Treasury grant of up to 5% of forecast annual benefit expenditure to be paid into the National Insurance Fund, if needed, during 2017-18. This is a routine measure which does not impact the Government’s overall fiscal position. A similar provision will also be made in respect of the Northern Ireland National Insurance Fund.
I hope that has been a helpful overview of the changes the Government are making to increase rates of support and contributions to the Exchequer in line with inflation. Noble Lords will of course be aware that the Chancellor announced yesterday that the main rate of class 4 national insurance will be increased to 10% in 2018-19 and 11% in 2019-20. This, alongside the abolition of class 2 NICs, is a progressive change to the self-employed NICs system. Over 60% of self-employed people who have to pay national insurance will be better off as a result of these changes. However, the rate of class 4 is not affected by these regulations and there will be an opportunity for noble Lords to discuss this measure in the Budget debate next week. I commend to the Committee the draft regulations on tax credits and the guardian’s allowance, as well as on social security contributions. I beg to move.
Baroness Wheeler (Lab)
My Lords, I thank the Minister for introducing these two instruments. The first on the agenda, the Social Security (Contributions) (Rates, Limits and Thresholds Amendments and National Insurance Funds Payments) Regulations, would enact the annual re-rating of national insurance contribution rates, limits and thresholds and allow for the payment of Treasury grant not exceeding 5% of the estimated benefit expenditure for the coming tax year to be paid into the National Insurance Fund. These come into effect in April this year. Given that we are dealing with national insurance contribution rates, I am sure the noble Lord will not be surprised by my first question, to which he has already referred. In view of the surprise announcement in yesterday’s Budget, which is attracting some controversy, is he able to clarify or provide further information on the proposed changes?
The second SI is on tax credits and guardian’s allowance upratings for the increase in working tax credits and child tax credits for individuals who are disabled or severely disabled. It would also increase the weekly rate of the guardian allowance, again with both changes taking effect in April 2017. Since 2011, the inflation measure used to determine the uprating of social security benefits is the CPI. The uprating is based on the change in level of the CPI from September 2015 to September, recorded at 1%.
A rise in support for working families, however small, is welcome, and we have no intention of opposing either of the orders this afternoon. However, although I do not want to rehearse the arguments that will be had during the Budget debate next week, it is important to consider on the record this 1% uprating in context. Inflation is rising, and indeed is expected to increase further still over the course of this Parliament. As the Resolution Foundation has recently reported, the result of that could mean that average earnings in 2020 will be only just higher in real terms than they were 15 years ago and, crucially, we could see a fall in real pay at the end of this calendar year as price increases outstrip pay rises.
The same report from the Resolution Foundation found that the Government’s benefit freeze will raise an extra £1 billion a year by 2020, or £3.6 billion over the Parliament, compared with what was expected in the 2016 Budget. My noble friend Lady Sherlock asked a question about this figure last week in Committee but was unable to get an answer, so I hope the Minister will be able to respond today. Is the figure accurate? If not, will the Minister tell the Committee the value of savings that the Chancellor expects to make?
The Resolution Foundation analysis has been supported by the Institute for Fiscal Studies, which has underlined that the Government’s approach represents,
“a shifting of risk from the Government to benefit recipients”.
The institute has also stressed that this risk is borne by low-income households and that, unless this policy changes, higher inflation will reduce their real incomes.
I have one final question regarding the Treasury grant. In what circumstances do the Government anticipate such a grant would be made; when was a grant of this nature last paid into the National Insurance Fund; and what does 5% represent in real terms? The economic outlook for working people is one of less disposable income. Although we do not oppose these instruments, it is clear from the Government’s overall approach that their priorities are not compatible with a society that truly wants to support the most vulnerable. I look forward to the Minister’s response.
Lord Young of Cookham
My Lords, I am grateful to the noble Baroness for her support for these measures. I will try to answer the three or four questions that she put to me, starting with the easiest on the provision of a Treasury grant. The provision in the estimates does not mean that it will be drawn down. Indeed, this year the provision is being made only as a precaution. The 5% provision is equivalent to £5 billion in the case of the GB National Insurance Fund, and £134 million in the case of the Northern Ireland fund. A Treasury grant was last paid into the National Insurance Fund in 2015-16. We do not anticipate a payment being made in the current year because the reserves in the fund seem at the moment to be adequate.
I turn to the question posed by the noble Baroness, Lady Sherlock, about the savings from the uprating freeze. I hope I can provide some helpful information. When we legislated for the four-year uprating freeze in the Welfare Reform and Work Act, we published an impact assessment of those rates included in the four-year uprating freeze. Both Houses debated the clauses and passed the Bill, which received Royal Assent in March last year. At Budget 2016, which was the last fiscal event before the change came into effect, the freeze was expected to save £3.5 billion in 2020-21 to help to deal with the underlying deficit. However, neither the Government nor the OBR has re-costed the freeze. The uprating freeze has already been implemented and is subsumed within the welfare spending forecast. I hope that gives the noble Baroness the information that she asked for.
On the report by the Resolution Foundation and the impact on household incomes and distribution, we considered the impact of the four-year uprating freeze when we announced the policy in the July 2015 Budget. The background was that we found that the majority of working-age benefits and tax credits had grown faster than earnings since 2008. As part of our commitment to make work pay, we introduced the four-year uprating freeze to reverse that trend of benefits rising faster than earnings. We introduced the uprating freeze alongside other measures to support work incentives such as the national living wage, and we exempted elements of benefits and tax credits that related to the additional cost of disability and care, in recognition of the additional costs that these claimants face. Indeed, the regulations today increase those elements of tax credits in line with prices.
With regard to the legitimate question the noble Baroness posed about inequality, income inequality is now lower than it was in 2010 and the share of total income tax paid by the top 1% is 27%. According to the latest data from the Office for National Statistics, income inequality in the UK is at its lowest level since 1986.
Finally, as I have said, there will of course be an opportunity to discuss yesterday’s Budget announcement in the Budget debate and when the necessary legislation comes before the House. I am not sure that I can add to what the Chancellor has said, not just in his Budget but in his many interviews during the day. The background is basically that, at the moment, self-employed people pay less in national insurance contributions than people in employment and, historically, this was because the self-employed received much less in state pension and contributory benefits. Since last year, because of the changes that we have made, self-employed workers now build up the same entitlement to the state pension as employees, which is an £1,800 a year pension boost for the self-employed. At the moment, someone who is employed and earning £32,000 will incur, with their employer, over £6,000 in national insurance contributions, while a self-employed person earning a similar amount will pay £2,300. That is why we needed to address the point of fairness in the national insurance contributions, which fund the NHS and pensions. That is the background which has given the noble Baroness, Lady Wheeler, the ammunition she needs to come back next week with her colleagues in the debate on the Budget. I welcome what she has said about these regulations and I beg to move.
Tax Credits and Guardian’s Allowance Up-rating etc. Regulations 2017
(7 years, 8 months ago)
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Lord Young of Cookham
That the Grand Committee do consider the Tax Credits and Guardian’s Allowance Up-rating etc. Regulations 2017.
Legislative Reform (Private Fund Limited Partnerships) Order 2017
(7 years, 8 months ago)
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Lord Young of Cookham
That the Grand Committee do consider the Legislative Reform (Private Fund Limited Partnerships) Order 2017.
Relevant document: 17th Report from the Regulatory Reform Committee
Lord Young of Cookham (Con)
My Lords, the venture capital and private equity industries are important parts of the UK financial services cluster, and the limited partnership structure provided by the Limited Partnerships Act 1907 is a popular vehicle for establishing investment funds in these industries. Currently, approximately 250 fund managers operate some 780 venture capital and private equity schemes in the UK under this structure. This equates to around £142 billion in assets under management, and 20 to 30 new schemes are launched each year. These businesses are important contributors to the UK economy, providing high-wage direct employment and indirect employment through the use of professional services firms, as well as contributing tax take to the Exchequer. The venture capital and private equity industries play an important role in providing funding to start-ups and small businesses and in improving the UK’s productivity.
In 2013, the Government launched their investment management strategy—their comprehensive strategy to make the UK one of the best places globally for asset managers to do business. As part of the investment management strategy, the Government committed to consulting on amendments to the Limited Partnerships Act. While limited partnerships are a popular vehicle for private equity and venture capital schemes, the legislation was not originally drafted with its use primarily as an investment vehicle in mind. Rather, it was originally drawn up to apply to trading entities. The result is that some provisions in the Act are not suitable for the needs of investment funds.
The investment management strategy came at a time when the competing jurisdiction of Luxembourg was updating its own limited partnership regime. Further to this, since 2013, France and Cyprus have also introduced structures to compete with the UK regime. With the UK’s imminent withdrawal from the EU, there is even more pressure to maintain our status as a leading global financial services hub. Therefore, it is timely and urgent that the UK looks to update its structures for the private funds sector.
The Government propose by way of this order to create a new category of limited partnership, the private fund limited partnership, which will differ from the existing structure in areas that currently create unnecessary administrative burden and legal uncertainty for partners. The existing 1890 and 1907 partnership Acts were originally designed to apply to trading businesses rather than investment funds. When an investment fund is established as a partnership, extensive legal work is necessary, using powers of variation under the legislation, to clarify the respective roles of: the general partners, who are in practice the fund management entities who have wide powers to manage the affairs of a partnership but face unlimited liability in respect of its activities; and limited partners, in practice the investors who have no general powers of management over the affairs of the partnership but have limited liability in respect of its activities, up to an amount specified in the partnership agreement.
The proposed order will introduce a list of activities that limited partners are permitted to carry out without taking part in management, to increase legal clarity for partners on the current state of the law. It will also make some other minor changes to the Act to remove unnecessary administrative burdens for private funds structured as partnerships.
Limited partners in a private fund limited partnership vehicle will not be required to contribute paid-in capital to the partnership. This will make the administration of investments simpler. All capital requirements set out in Financial Conduct Authority regulations will continue to apply. Statutory duties which are inappropriate to the role of a passive investor will be disapplied in a private fund limited partnership. These statutory duties are already generally disapplied through the partnership agreement. The partnership will not be required to advertise changes in the London Gazette, Edinburgh Gazette or Belfast Gazette, with the exception of the requirement to advertise when a general partner becomes a limited partner. Limited partners will be able to make a decision about whether to wind up the partnership where there are no general partners, and to nominate a third party to wind up the partnership on their behalf.
These reforms will reduce administrative and legal costs associated with the establishment of a fund. The updated structure will increase investor confidence in the UK as a jurisdiction for fund domicile. This order will reduce the burden for businesses and make the UK a more attractive jurisdiction for funds. I beg to move.
Baroness Wheeler (Lab)
My Lords, I thank the Minister for introducing this order. As he has outlined, this instrument would enable a limited partnership which is an investment firm to be designated as a private fund limited partnership. It also amends some of the provisions of the Limited Partnerships Act 1907 as they apply to PFLPs and to partners in PFLPs. This change has been in the pipeline for over a decade, since the Law Commission and the Scottish Law Commission published proposals in 2003. In 2008, the then Labour Government published a consultation on limited partnerships. However, in response to the stakeholder responses, the decision was taken that it was not possible to continue with those reforms.
We will not be opposing this order. However, I wish to put a number of questions to the Minister, and perhaps the most sensible place to start is with the Labour Government’s objections. The consultation response in 2009 stated that concerns were raised about particular issues in Scotland, as well as how the order was drafted. I appreciate that the order has undergone revision since then, but have stakeholders raised objections on the instrument in front of us today? Furthermore, has the draft been altered to reflect the concerns raised by funds with client interests in Scotland?
One of the changes made following the latest consultation was the removal of the strike-off procedure. The original proposal would have removed dissolved PFLPs from the partnership register. However, concerns were raised that limited partners would lose their limited liability status. We therefore now have a two-tier system for limited partnerships and PFLPs. What consideration was given to delaying introduction of this instrument until all the cracks surrounding the strike-off procedure are ironed out? The explanatory document promises that the Government will look into further steps that could be taken in relation to this issue “in due course”. Can the Minister say what further steps are being taken and when we can expect to be informed about them? There have been strong concerns raised about the burden that this two-tier system will create.
The Government’s stated aim is to,
“reduce the administrative and financial burdens that impact these funds under the current limited partnership structure”.
However, as the BLP law firm identifies, there is a chance that the reduction in the compliance and administrative burden under the new PFLP regime may be short-lived and may well be replaced by other initiatives to increase accountability for limited partnerships more generally. What measures are included in the instrument to ensure that the Government’s stated aim is achieved?
The introduction of a white list brings with it much- needed clarity on the activities of a limited partner, but there is real concern around whether the Government have achieved the right balance in the role of limited partners in the new PFLPs. The proposed changes allow a limited partner to take part in the committee and to vote on proposals by the general partner, while at the same time maintaining limited liability status. Do not the Government consider that this is an inappropriate power for a limited partner? I would certainly be interested to hear what criteria the Government have used to determine the content of the white list. Getting the balance right is vital, so do they intend to conduct a review of the white list and, if so, to what timescale?
Page 8 of the explanatory document—which I found very helpful as someone coming new to this issue—makes a forceful defence for the reforms, stating that:
“Without such changes to current legislation, the UK risks becoming a less attractive domicile for funds when compared to other jurisdictions”.
That is a strong claim, but I could not see any evidence in the document to support that contention, so I would be grateful if the Minister would address that issue. I would certainly be keen to hear his explanation of the role that PFLPs will be playing in making this a more “attractive domicile”.
Finally, I have two minor technical points. First, the impact assessment states on page 2 that 600 private equity and venture capital fund managers will be affected by this change. However, it states on page 8 that as many as 1,030 could be affected. Which of these figures is correct and what percentage of the current limited partnership landscape does that represent? Secondly, what discussions have the Government had with Companies House, which will be responsible for processing applications by firms wishing to become PFLPs, about the changes being made? Has it requested additional resources to deal with the increased administration costs of these charges? I look forward to the Minister’s response.
Lord Young of Cookham
My Lords, I am grateful to the noble Baroness for the welcome. To deal first with the typing error on page 2, it should read 250 fund managers, not 600. As I said in my opening remarks, we estimate that there are 250 fund managers managing 780 funds. I shall address some of the other issues that she raised. If I do not cover them all—some of them were quite technical—perhaps I may write to her to fill in the gaps.
She mentioned the concerns of stakeholders and Scottish funds. She is quite right: a range of stakeholders raised concerns which the Government listened to, and we amended the order in several areas in response to their feedback. We took into account the views of Scottish stakeholders, including the Law Society of Scotland, while developing the order. On the broader concern expressed about Scottish limited partnerships being used for fraud, the Government have listened to stakeholders’ concerns and the Department for Business, Energy and Industrial Strategy recently launched a call for evidence on the issue, covering all forms of limited partnerships, including these. The Government are committed to implementing any consequent reforms in respect of private fund limited partnerships, as well as other partnerships.
The noble Baroness asks why we did not postpone the order until we had the results of that survey. Strike-off procedure is an issue for wider limited partnership policy, and any process for removing partnerships from the register would need to apply to both private fund limited partnerships and other forms of partnerships. BEIS recently launched a call for evidence looking at the possibility of limited partnerships being used for criminal activity—a subject I mentioned a moment ago. The call for evidence closes on Friday 17 March, and BEIS will consider what further action is necessary. In answer to her direct question—why did we not wait?—the Government’s view was that it was important to press ahead with this package of amendments now because competing jurisdictions are acting quickly. Luxembourg updated legislation in 2013; France and Cyprus are introducing measures now; and UK withdrawal from the EU makes this reform timely. That is why we decided to go ahead now.
Transport Levying Bodies (Amendment) Regulations 2017
(7 years, 8 months ago)
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Lord Ahmad of Wimbledon
That the Grand Committee do consider the Transport Levying Bodies (Amendment) Regulations 2017.
The Parliamentary Under-Secretary of State, Department for Transport (Lord Ahmad of Wimbledon) (Con)
My Lords, the draft regulations that we are considering today, if approved, would enable the combined authorities for Tees Valley and the West Midlands to collect appropriate levies from their constituent councils to meet the costs of carrying out their transport functions.
The five constituent councils of the Tees Valley Combined Authority—Darlington, Hartlepool, Middlesbrough, Redcar and Cleveland, and Stockton-on-Tees—and the seven constituent councils of the West Midlands Combined Authority—Birmingham, Coventry, Dudley, Sandwell, Solihull, Walsall and Wolverhampton—have led a local process to improve their governance arrangements, which culminated in this House and the other place agreeing orders that saw the establishment of the Tees Valley Combined Authority on 1 April 2016 and the West Midlands Combined Authority on 17 June 2016.
These orders gave effect to the desire of the local authorities in these areas to improve their joint working, including on transport matters. Orders have since been made to provide for mayors to be elected on 4 May for both the Tees Valley Combined Authority and the West Midlands Combined Authority, and once elected the mayor will be the chair of the combined authority. Combined authorities are designated as levying bodies under the Local Government Finance Act 1988. Under that Act, the Secretary of State is able to make regulations in relation to the expenses of combined authorities that are reasonably attributable to the exercise of its functions, including those relating to transport.
The draft regulations before the Committee today would amend the Transport Levying Bodies Regulations 1992 to take account of the creation of the two combined authorities in the Tees Valley and the West Midlands. They have been drafted to reflect the proposed approach of the local areas and have been agreed by the two combined authorities. The levy could fund any of the transport functions that sit with the combined authority in question. The functions of each combined authority are set out in its establishment order, and any subsequent order that confers functions and transport functions are clearly identified. Transport functions of the two combined authorities include developing a local transport plan, as well as a range of passenger transport related functions. It will be for the combined authority to decide how to fund these transport functions in accordance with the establishment order and any subsequent orders.
The constituent councils will need to consider how they fund any levy issued by the combined authority as part of their budget process, whether by council tax, government grants or other sources of revenue. They will need to take into account the impact of council tax levels in their area, including when determining whether any council tax increase is excessive.
In the case of the West Midlands, the regulations effectively constitute a name change. On the creation of the West Midlands Combined Authority, the West Midlands Integrated Transport Authority was dissolved and its functions were transferred to the combined authority. Like the ITA before it, the West Midlands Combined Authority will continue to levy its constituent authorities for transport purposes. It will also continue to apportion this levy by agreement, or on the basis of the population of the constituent councils.
The Tees Valley Combined Authority is different because there was no integrated transport authority in place in that area. Therefore, these draft regulations have to establish how any transport levy would be apportioned between the constituent councils if the combined authority could not reach agreement. In the event that they cannot agree, the combined authority will apportion the levy by taking into account previous levels of transport expenditure by the constituent councils.
These draft regulations help to facilitate the provision of transport arrangements as part of the wider governance changes across the two areas. I commend them to the Committee.
Lord Adonis (Non-Afl)
My Lords, I strongly congratulate the Government on their move towards combined authorities and the development of the mayoral model, which will lead to the election of mayors in two months’ time. That will bring to fruition the extension of the very successful mayoral model in London to the other major conurbations. Just as it has led to a positive revolution in transport for London, I hope that it will bring about the same for the other conurbations. I know that the Minister has played a significant part in encouraging these developments.
There is, however, one issue on which I would like to hear more from the Minister: the relationship of this order, and the ability of the combined authority and mayors to raise money themselves, with the designated grant that the Government are giving to enhance spending on transport connections in some of the areas he mentioned. Yesterday, the Chancellor announced almost £400 million of funding for the Midlands engine. When I read the release, I was struck by how detailed and prescriptive the list of specific projects was that the Chancellor was seeking to fund—right down to specific sums of money for the Pershore relief road, smart ticketing technology and so on. Given that when he is elected in two months’ time the new mayor will come in with a big mandate and, one hopes, a significant plan for improving transport in the West Midlands, I wonder how far it will be open to him to decide his priorities and what he intends to do, or whether he is in fact bound by yesterday’s announcement by the Chancellor and the department to be simply the clerk who processes the list of projects. If he is not in a position to give me a specific answer, I would be very happy for the Minister to write to me on that.
Lord Kennedy of Southwark (Lab)
My Lords, I declare my usual interests as listed in the register: I am an elected councillor, although not in these areas, and a vice-president of the Local Government Association. We are happy to support the regulations before us today. I do not have a huge amount to say and so do not intend to detain the Grand Committee. I am very happy to talk when I have something to say, but there is no point in doing so when I have only one or two points to make.
By way of background, I am conscious of where these regulations originated. Back in 2012, the Greater Manchester Combined Authority was able to issue levies to meet the cost of carrying out its transport functions. In 2015, a number of other integrated transport authorities were established and, again, they were able to issue levies through the measures in regulations. Therefore, we support these regulations for the new combined authorities of Tees Valley and the West Midlands. As we have heard, they will be electing their mayors in a matter of weeks. It is certainly correct that the authorities can levy their constituent councils to raise funds so that they can go ahead with their proposals. I understand that all the councils have been consulted and are very happy with what is before us today.
I am interested in the question my noble friend raised in respect of yesterday’s Budget announcement of what are very prescriptive projects in the West Midlands. What powers will the elected mayor have to vary those or do something different? Again, if the Minister cannot answer that today, I am happy to receive a letter in due course. With that, I am content to support the order before us.
Lord Ahmad of Wimbledon
I thank the noble Lords, Lord Adonis and Lord Kennedy, for their support. In the general move towards devolution, I know that the model on transport, in particular, is close to the heart of the noble Lord, Lord Adonis.
We broadly agree that it is important for local areas to decide on priorities. To answer the noble Lord’s question generally, mayors come forward with their transport plans, and combined authority mayors will also be required to submit a draft budget to the combined authority for consideration. It is then for the combined authority to recommend any amendments to that budget. As he may be aware, specific criteria are set for each of the two authorities that I mentioned. In the West Midlands, for example, a majority of two-thirds is required, whereas three-fifths is required in Tees Valley. Combined authority mayors in both areas will also be able to set a precept to fund particular functions. The level of the precept is subject to the same combined authority challenge and amendment process as the mayor’s draft budget.
Turning to allocations, the noble Lord, Lord Adonis, mentioned the Midlands engine and the Chancellor’s announcement today. Those are identified, existing priorities on specific transport functions. I will review the detail of the announcement and write to the noble Lord, Lord Adonis, as he suggested, and advise other noble Lords, including the noble Lord, Lord Kennedy. I thank noble Lords again for their broad support.
House of Lords
Iraq: Displaced Minority Communities
(7 years, 8 months ago)
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The Lord Bishop of Coventry
To ask Her Majesty’s Government what steps they are taking to help displaced minority communities in Iraq to return to their homes in areas liberated from Daesh.
The Minister of State, Department for International Development (Lord Bates) (Con)
My Lords, UK aid is supporting vulnerable people, including minorities, to return to their homes in areas liberated from Daesh in Iraq. With UK funding, the UN is helping people to return home by restoring light infrastructure, reopening hospitals and schools, and providing cash assistance to people who need to re-establish their livelihoods.
The Lord Bishop of Coventry
I thank the Minister for his reply and pay tribute to the Government’s work thus far. The Minister may like to know that I was in Iraq in January and was gladdened by personal assurances from the President, the Prime Minister and the Iraqi authorities about their desire to rebuild the diverse fabric of the society.
Does the Minister acknowledge that the return of minority communities to their homes and villages is still very limited, and does he agree that herculean efforts are now needed by the international community, including our own Government, to help the Iraqi authorities? In particular, is he willing to commit to the need to rebuild houses—100% of Christian houses were destroyed or damaged—and to rebuild trust between neighbours as well as security? Does he agree that that would be the most fitting tribute to our service people who have given their lives for a better future in Iraq?
Lord Bates
Absolutely, and I pay tribute to the work of the right reverend Prelate over many years, and to his compassion for Iraq in seeking how faith communities can play an important part in building reconciliation in that country. He will be aware that the UN Plan was published to help the effort in Mosul in particular, involving some $930 million, and $570 million for Mosul.
The UK has a reputation for taking the lead in providing humanitarian assistance and helping people to rebuild their communities. It is worth noting that in the fierce battle to liberate the remaining part of Mosul, 60% of Daesh territory has been lost—it is losing the battle—and over 1 million people have returned to their homes. That is a sign of progress.
Baroness Royall of Blaisdon (Lab)
One of the minorities in danger of disappearing in Iraq is the Yazidis. I suggest that a genocide is going on and that the women are being treated in the most despicable, inhumane way. What are the Government doing to help these wonderful people in their dreadful circumstances?
Lord Bates
The noble Baroness is absolutely right about the appalling atrocities being committed against Yazidis, Christians and other religious minorities. That is one of the reasons why the Foreign Secretary has led the campaign to bring Daesh to justice. This initiative involves working with the Iraqi Government and others, and going to the UN to ensure that these atrocities are recorded and that eventually, when peace is restored, Daesh can be brought to justice for the crimes it has committed against humanity.
Lord Naseby (Con)
My Lords, for those of us who had relatives in Germany after the Second World War, what helped enormously there was the introduction of the Marshall plan. Is not the time coming for those in the West to think about producing the equivalent for Syria and Iraq? In particular, it would be nice to see the United Kingdom in the lead.
Lord Bates
The Marshall plan initiatives in post-war Europe are certainly topical, for not only the Middle East but the needs of Africa, which is facing famine. I think we will look at that, but we can take pride that the UK has consistently been at the forefront of efforts to raise funds in that region: £169 million, including £90 million in the present year, has already been raised to be spent in Iraq to help people, along with £2.3 billion for Syria, our largest response ever. However, I totally agree that more needs to be done.
Baroness Sheehan (LD)
My Lords, what representations have the Government made to the governor of Kirkuk in light of last November’s Amnesty International report, Destruction and Forced Displacement in Kirkuk, which documented the demolition of homes and forced displacement of Sunni Arabs in the wake of attacks by Daesh?
Lord Bates
I am sorry, I do not have details of our response, but I am very happy to write to the noble Baroness on that point.
Lord Collins of Highbury (Lab)
My Lords, one of the impacts for internally displaced people is of course on women and children, whose future is affected because there is no access to schools or appropriate medical treatment. I know the Government have been supporting efforts in this field, but could the noble Lord reassure the House that where people are returning, we will put in the necessary effort on education?
Lord Bates
The noble Lord is absolutely right to raise that point. Of course, there is a vehicle in this regard: the Iraq Humanitarian Pooled Fund, which the UK is one of the largest contributors to. People can draw down on it for specific purposes, particularly schools, education and healthcare, as well as rebuilding homes, which was mentioned previously. It is encouraging that even in areas just recently liberated in the west of Mosul, 30 schools have already reopened and 16,000 children were able to return to school. That has to give us hope in a very difficult and dark situation.
Lord Hylton (CB)
My Lords, important lessons were learned when east Mosul was freed. Are they now being applied to west Mosul, where the population is much larger? Does the Minister agree that co-ordination between the Iraqi Government, the military forces, the UN and voluntary agencies is absolutely essential?
Lord Bates
Yes, I totally agree with that. A coalition of some 68 countries was involved, but a very important aspect, of course, is that the legitimate Government of Iraq are in the lead, and we are working with them. The United Nations Office for the Coordination of Humanitarian Affairs is taking the lead on the humanitarian response, and we work through those agencies very effectively to ensure that co-ordination is happening. One reason why it is taking so long is that past lessons learned tell us of the immense dangers to civilians, 750,000 of whom are still trapped in Mosul. We need to ensure they are protected and cared for as this military effort is prosecuted.
Lord Cormack (Con)
My Lords, does my noble friend agree that this is a particularly appropriate moment for us to pay tribute to all those gave service—both in Iraq and Afghanistan—because this morning the Queen is unveiling a memorial to all those who have served?
Lord Bates
It is absolutely right that we should do that and recognise the 226 British service personnel who gave their lives to build a better Iraq and, of course, the 43 British civilians who also died in that effort. We recognise and pay tribute to their sacrifice today.
Universal Credit
(7 years, 8 months ago)
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Baroness Sherlock
To ask Her Majesty’s Government what assessment they have made of the impact on claimants of the time taken between applying for Universal Credit and receiving payments.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Henley) (Con)
My Lords, the universal credit assessment period and payment structure is a fundamental part of its design, reducing welfare dependency by mirroring the world of work. Safeguards are in place to help the minority of claimants who are in genuine need to transition to universal credit. This includes advances and budgeting support. We continue to work closely with landlords, local authorities and other organisations to ensure claimants are supported.
Baroness Sherlock (Lab)
My Lords, if only it were that simple. In 2013 the Government introduced a rule that when you first claim benefit you are not entitled to any money for the first seven days. The problem is that universal credit is paid monthly in arrears so it means you get no money at all for six weeks. That does not sound very long, but the typical family in social housing has only £200 in savings and some people are in debt. Social landlords are now saying that tenants are getting into big arrears and people are turning to payday lenders and even loan sharks. Even the noble Lord, Lord Freud, recently told the Work and Pensions Select Committee that the seven-day waiting period should be dropped. Please can the Minister not be complacent about this. Will he go back to his department, look again at the evidence and please take action before anyone else is pushed into debt?
Lord Henley
My Lords, I repeat what I said in my original Answer. It is a fundamental part of the design. That argument was put forward by my noble friend Lord Freud during the passage of the Bill and was debated at great length. We recognise that this does not necessarily suit everyone. That is why I again made clear in the second part of my Answer that there are safeguards in place. We introduced universal credit advances for new claimants. Claimants can apply for an advance immediately if they are in need and can receive up to 50% of their indicative award soon afterwards. To go back to the original point, it is important to make sure that we mirror the world of work where 75% of employees are paid monthly.
The Lord Bishop of Oxford
My Lords, in the last three months I have visited a large number of food banks across the diocese of Oxford in seemingly affluent communities, building on my experience of food banks in the diocese of Sheffield. All have underlined to me that the most common reason why people access food banks is delay in accessing welfare payments. It is clear from the Government’s figures that too few people are aware of, or receiving, the emergency payments intended for them. Will the Minister please outline what steps the Government are taking to improve communication of and access to short-term benefit advances for existing benefits and to ensure that lessons learned from this are applied to the operation of universal credit?
Lord Henley
My Lords, the right reverend Prelate is right to draw attention to the problems some people have in knowing how the system works. He will find that how work coaches explain the administration of universal credit to people coming to them is completely different from how it used to operate. I recommend that the right reverend Prelate takes an opportunity to visit one of his local jobcentres to see how it works in practice. He might find that things have moved on a great deal since, say, his time in the diocese of Sheffield. If he wishes to take up my offer, I will be more than happy to make the arrangements.
Lord McKenzie of Luton (Lab)
My Lords, is it not the case that it is not just the architecture of universal credit that is creating problems but its administration, as the Select Committee in the other place determined? I understand that, when asked about the sometimes fractious relationship between the DWP and the Treasury over universal credit, the noble Lord’s predecessor said that,
“there were times when one’s view about the Treasury was totally unprintable”.
Does the current Minister have any such inhibitions?
Lord Henley
My Lords, we have all on occasions had moments when we have had doubts about what goes on in the Treasury, but I shall not go into that at the moment. I shall go back to what the noble Lord said about the administration of the benefit. From my experience some 25 years ago in the old Department of Social Security, and seeing how things are operating now in the DWP with universal credit, I think that there is a very real change taking place. It is important that noble Lords get a look at what the work coaches are doing and how they are getting this over to claimants who are coming to them. The offer that I made to the right reverend Prelate is one that I repeat to the noble Lord.
Baroness Bakewell of Hardington Mandeville (LD)
My Lords, it is a fundamental design of universal credit that people have to wait a month for their benefits to mirror what happens in real life, but that is not actually what is happening. Many families are experiencing delays of up to 12 weeks in the payment of universal credit, forcing them to use food banks and borrow from loan sharks. I have heard what the Minister says about the mechanism in place to prevent it happening, but is he aware that it is just not happening?
Lord Henley
My Lords, we were grateful for the support of the Liberal Party as part of the coalition Government in the passage of the Bill and in reaching that appropriate design, whereby we were looking for something that mirrors the world of work. That is what we are doing. That is why we also built in, as I made clear in my original Answer, the safeguards that we have. That is why, for example, I have stressed that there are universal credit advances for certain individuals who are having problems coping with that four-week waiting period.
Baroness Hollis of Heigham (Lab)
My Lords, I am sure that all of us in this House want universal credit to work, but it is not. There have been pilot schemes showing how people are being plunged into debt through no fault of their own. There are three simple administrative changes, as my noble friend on the Front Bench mentioned, that would transform the easy delivery of UC and prevent people spiralling into deep debt from which many can never recover. The first is to get rid of the seven-day waiting period; the second is to pay people fortnightly as well as monthly in advance, if they so wish; and the third is to pay housing benefit, if tenants so wish, direct to the landlord. Those three things together would transform the ability of people who are not particularly sophisticated about the benefit system—why should they be?—and give them the opportunity to get money that will help them back into the labour market, as we all want, and not have a lifetime of debt hanging over them.
Lord Henley
My Lords, I am very grateful that the noble Baroness offers support for universal credit. Like her, we wish to see it work, which is why, as my noble friend Lord Freud always made clear, we want to see a very slow rollout of universal credit. The noble Baroness, Lady Hollis, will be aware just how slow that rollout has been—deliberately so, before the noble Baroness, Lady Sherlock, giggles too much—so that we can learn as this goes along. I do not necessarily accept the three points that the noble Baroness made, but they can be taken into account as we continue with that rollout as it accelerates over the coming year.
Armed Forces: East of Suez
(7 years, 8 months ago)
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Lord Wallace of Saltaire
To ask Her Majesty’s Government what proportion of the United Kingdom’s Armed Forces will be deployed east of Suez, in the light of the Foreign Secretary’s speech in New Delhi on 18 January.
Viscount Younger of Leckie (Con)
My Lords, a significant proportion of the UK’s Armed Forces are deployed in the Gulf. As the Prime Minister said last December, Gulf security is our security. This figure fluctuates according to operational demand. However, with the advent of major exercise programmes, British defence staff in Dubai, the regional land training hub in Oman and the UK naval facility in Bahrain, we will have the permanence and presence to deepen our partnerships in the region.
Lord Wallace of Saltaire (LD)
My Lords, it is 50 years since the then Government announced that we would withdraw from east of Suez. They published a White Paper and there was substantial debate in the Houses of Parliament. The Foreign Secretary, first in Bahrain and then in Delhi, has spoken of deploying an aircraft carrier group to the Indian Ocean and of Diego Garcia being a major UK and US base. I am told that to maintain an aircraft carrier group in the Indian Ocean would take almost half the surface vessels available in the fleet. Presumably, there would be a significant air and land element on Diego Garcia. Will the Government bring this major shift in policy to Parliament, or does the MoD think that the Foreign Secretary was speaking a little out of turn and a little unbriefed?
Viscount Younger of Leckie
My Lords, there is no question but that the UK and US military facility in Diego Garcia contributes significantly towards regional and global security. The UK footprint may not be major in size, but it represents a significant contribution to our bilateral defence and security relationship with the US. At the moment the Royal Navy has 41 personnel permanently deployed in Diego Garcia, with a capacity to surge that for contingent operations in the wider region from 2021. That could include a carrier strike task group, should the situation change.
Lord Taylor of Holbeach (Con)
My Lords, we will hear from the noble Lord, Lord West, and then from my noble friend.
Lord West of Spithead
My Lords, a carrier battle group is the perfect platform for power projection east of Suez, but whenever one goes east of Suez one might be going in harm’s way. A carrier battle group is not a carrier on its own. When I took a battle group to the Far East for the Hong Kong withdrawal, it was 14 ships, including two nuclear attack submarines, because of those sorts of risks. Does the Minister really believe there is sufficient money in the naval programme to ensure adequate support shipping for a carrier operating in the Far East?
Viscount Younger of Leckie
Yes, indeed. The noble Lord will know that these matters are kept constantly under review. The new class of Queen Elizabeth carriers are going to be the biggest and most powerful warships ever built for the Royal Navy, so the capability is certainly there. Their deployment to the Gulf will depend very much on what the demand will be.
Lord Robathan
My Lords, some of us may be able to remember the speech by Harold Wilson, some 50 years ago, in which he said that withdrawing from east of Suez would leave the Americans and Chinese facing each other eyeball to eyeball. Does the Minister consider that the current difficulties in the South China Sea are similarly dangerous, and what contribution can the UK make there?
Viscount Younger of Leckie
The situation in the South China Sea is certainly also being kept under review, but this Question relates to the Gulf. At the moment we see it as extremely important to be sure that our presence in the Gulf is strong enough for our interests there and to work with our Gulf partnerships.
Lord Singh of Wimbledon (CB)
My Lords, we are in the 21st century, not in the 19th. Is this macho posturing really helpful to the cause of world peace? Russia and China could argue, with similar logic, to have a naval presence west of Suez, much closer to home. Should we not be thinking in 21st-century terms?
Viscount Younger of Leckie
We believe that we are thinking in 21st-century terms. Let me say a little more about the build-up of our presence in the Gulf. It is very important to have a strong defence presence with the naval facility in Bahrain, HMS “Jufair” and the regional land training hub in Oman—and to have a stronger engagement with the creation of the British defence staff in Dubai. We are also building more short-term training teams to build our partners’ capacity. For example, in 2018 exercise Saif Sareea 3 will take place.
Lord Touhig (Lab)
My Lords, in his Bahrain speech the Foreign Secretary said:
“Britain is back East of Suez”.
He also said:
“We are spending £3 billion on our military commitments in the Gulf over the next 10 years”.
Yet the SDSR barely mentions it, merely speaking of “setting our vision” in the “Gulf Strategy”. When will that strategy be published? The noble Baroness, Lady Anelay of St Johns, said in March last year—almost a year ago—that it would be published in due course. When have we heard those sorts of words before? Does the Minister agree with me that a major shift in our military profile in the Middle East should be put before Parliament first and not used as a headline-grabbing speech for the Foreign Secretary on a world tour?
Viscount Younger of Leckie
When we get to the point where we want to build up our presence in the region, it is absolutely right that it is announced. It was announced as part of a speech, which is perfectly normal. Over the next decade we will spend £3 billion on defence in the Gulf region. That will very much help us build up our maritime land and air bases in Oman and give us a persistent and increasingly permanent naval defence there. Therefore, what has happened is perfectly normal.
Baroness Jolly (LD)
My Lords, last year, an extra £800 million was committed to defence projects east of Suez. As the Minister said, we currently use bases in the Gulf, Diego Garcia and, of course, the Sultanate of Brunei. Are there plans for more? With hard power comes soft power, so are human rights ignored in these countries as part of these deals?
Viscount Younger of Leckie
The noble Baroness may be referring to arms sales as well as human rights. We consider our arms export licensing responsibilities very carefully. As well as having an increased presence in the Gulf to tackle terrorist issues, it is very important that we look at cybersecurity and all those matters to which I think the noble Baroness alluded.
Homelessness: Housing Benefit
(7 years, 8 months ago)
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Lord Kennedy of Southwark
To ask Her Majesty’s Government what assessment they have made of the effect on levels of homelessness of the proposal to withdraw Housing Benefit from 18 to 21 year olds.
Lord Kennedy of Southwark (Lab)
My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In doing so, I refer noble Lords to my entry in the Register of Lords’ Interests.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Henley) (Con)
My Lords, from 1 April, automatic entitlement to housing costs in universal credit will be removed for some 18 to 21 year-olds. This policy removes a perverse incentive for young adults to leave the family home and pass the cost on to the taxpayer. There is a comprehensive set of exemptions in place for the most vulnerable.
Lord Kennedy of Southwark
Last week, the Government made the announcement about the withdrawal of housing benefit from 18 to 21 year-olds. On the previous Friday in this Chamber, they supported the Homelessness Reduction Bill and said that they had identified money for that purpose. Does the noble Lord not see the absurdity and hypocrisy of those two decisions? Does he agree with the comments of the Member for Enfield Southgate in the other place, who described the decision to withdraw these benefits from 18 to 21 year-olds as “catastrophic”?
Lord Henley
My Lords, I simply do not accept the point that the noble Lord makes. Yes, we supported that Bill and will support it again tomorrow, when I think it will have its Committee stage in this House. We will continue to do so and we will continue to protect the most vulnerable in relation to housing. But we also wish to make sure that young people do not slip into a life on benefits. That is what this change is about.
Baroness Bakewell of Hardington Mandeville (LD)
My Lords, currently, 19,000 18 to 20 year-olds on jobseeker’s allowance claim housing benefit. They are simply unable to live at home for a variety of reasons, including physical and sexual abuse. If housing benefit is withdrawn, how does the Minister think that these young people will be able to find jobs if they are living on the streets?
Lord Henley
My Lords, not one of the individuals on jobseeker’s allowance to whom the noble Baroness referred will be affected. As I made clear in my Answer, this matter relates to those on universal credit. As we also made clear in another place, and I will make clear now, there is a considerable number of exemptions. I think that some 25 are listed in the regulations—I can go through them if the noble Baroness wishes me to do so—which offer protection for those who need it.
Lord Watts (Lab)
My Lords, given the massive increase that we have seen in the number of young homeless people on our streets, how will this policy help that situation?
Lord Henley
My Lords, this policy will help that situation by encouraging young people to stay at home with their families rather than establishing themselves in a life on benefit. As we made clear, for those who need help, protections are in place. It is the noble Lord and those who wish to get rid of measures such as this who would condemn individuals to a life on benefit and cause far greater problems than we are addressing with this measure.
Lord Marlesford (Con)
My Lords, does my noble friend agree that one of the beauties of housing benefit is that it is very flexible and can be focused where it is needed, and that it is the most efficient way of helping people who need affordable housing?
Lord Henley
My Lords, my noble friend is correct in relation to housing benefit. It is right therefore to withdraw it for those 18 to 21 year-olds on universal credit who can stay at home.
Lord Hylton (CB)
Does the Minister accept that some young people in this age bracket have genuine reasons for wanting to live somewhere else? They might have no family or a dysfunctional family, or they might have to move to take up an apprenticeship or another important opportunity.
Lord Henley
My Lords, I fully accept the noble Lord’s point. That is why he will find a list in the regulations—I do not want to delay the House by reading it out in full—of some 25 different exemptions for 18 to 21 year-olds. That will be operated in the most sympathetic manner, and I do not think that anyone with a genuine reason to leave home is likely to suffer at all. I am more than happy to show the list to the noble Lord and to others—but reading it out in full would waste the House’s time.
Baroness Sherlock (Lab)
My Lords, there are so many reasons why young people choose not to live at home, but remarkably few of them do. If somebody is out there on their own aged 18, something else is going on. The Minister can give all the lists he wants, but people out there who have suffered from repeated bad decisions when they have applied for disability benefit or all kinds of other benefits will not trust them. Is it not the case that all the homeless charities have pointed out that the proposal is likely to increase homelessness? Even though there are young people who want to go out and rent independently, the National Landlords Association said:
“Never mind the nuances, all landlords will hear is that 18-21 year olds are no longer entitled to housing benefit … they just won’t consider them as a tenant”.
Have the Government thought about that?
Lord Henley
Of course the Government have thought about it. That is why we are bringing forward this measure and why we will be working with stakeholders such as the National Landlords Association and others to develop appropriate engagement for landlords to make them understand how the new rules will operate. As I said, protections have been built into this that mean that no one who has to move away from home will suffer. We think it is right that there should not be a perverse incentive that encourages people to move away from home and live on benefits at the expense of the taxpayer.
Supply and Appropriation (Anticipation and Adjustments) Bill
Thursday 9th March 2017
(7 years, 8 months ago)
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Criminal Finances Bill
Thursday 9th March 2017
(7 years, 8 months ago)
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The Minister of State, Home Office (Baroness Williams of Trafford) (Con)
My Lords, serious and organised crime threatens our national security and prosperity, but for the victims the greatest impact is the harm that it inflicts on their lives and personal well-being. This criminality can affect anyone: from those caught up in gang warfare to the slaves forced to work or subjected to abuse by human-trafficking gangs, to the victims of scams and cyberattacks designed to steal their money and that of their friends and families. It is all-pervading—it undermines our safety, prevents prosperity and corrodes communities. The perpetrators of these crimes do so largely to make money—that is almost always their primary motivation. The Government have therefore brought forward the Criminal Finances Bill to combat the money laundering that allows criminals to fund their lavish lifestyles and reinvest their illicit gains in their criminal enterprises.
The origins of this legislation lie in the Government’s 2013 Serious and Organised Crime Strategy, which sets out a clear goal of working with the private sector to make the UK a more hostile place for financial criminals. More recently, last year the Government’s Action Plan for Anti-money Laundering and Counter-terrorist Finance identified how to build on the UK’s risk-based approach to addressing these parallel threats. As noble Lords may well be aware, the tactics used by serious criminals are often employed by those seeking to fund terrorist-related activity, so the police and others must use similar methods in their response to both. The Bill will give effect to the legislative aspects of the action plan, making it a key part of one of the most significant changes to our anti-money laundering and counterterrorist finance regime in over a decade.
Specifically, the Bill will help law enforcement officers to tackle money laundering, recover the proceeds of crime and international corruption, and, where possible, return these assets to victims. Part 1 provides for unexplained wealth orders, or UWOs, as I will refer to them—a valuable new device to investigate those suspected of money laundering, requiring them to explain the source of their wealth to a court. Where they cannot do so, law enforcement agencies can look to recover those assets. I recognise that there may be questions about the operation of this power and it may help noble Lords if I briefly clarify how it will work.
If a law enforcement agency suspects someone of involvement in serious crime where their wealth appears to exceed their known income, it can apply to the court for a UWO. The power can also be applied to non-European politicians or officials who may be involved in corrupt activities but where evidence of their links to criminality is not easily available. The individual would then need to satisfy the court that their property had been lawfully acquired. If they did not provide an adequate explanation, the authorities could seek to recover their property. Crucially, these orders are only an investigative tool; the tests for any further legal action, including prosecution or civil recovery, would still need to be satisfied.
The Bill will also enhance the existing seizure and forfeiture powers in the Proceeds of Crime Act 2002, also known as POCA. Although the police can currently seize cash, they cannot do likewise with money in bank accounts or where criminals store their profits within other items of value, such as casino chips, precious metals and jewels. As criminals adapt, so must we, and we are extending these powers accordingly. The provisions seek to extend the use of another useful investigative tool—disclosure orders—to money-laundering investigations.
This Government are committed to working in partnership with business on these crucial issues. A key element of this partnership will be the changes that we are making to the suspicious activity reports, or SARs, regime, which allows regulated companies such as banks to provide critical intelligence to our law enforcement agencies. In particular, the Bill will create a specific gateway to allow the sharing of information between regulated companies so that they can submit better-quality reports.
This approach has been piloted under the Joint Money Laundering Intelligence Taskforce, otherwise known as JMLIT, and I have heard first hand from both banks and the NCA about the positive results that it is delivering. For example, from May to July 2016 the JMLIT helped to deliver 37 arrests of individuals suspected of money laundering, the closure of 114 suspicious bank accounts and the restraint of £145,000 of suspected criminal funds.
In addition to these measures on money laundering, Part 3 of the Bill creates vital new offences of corporate failure to prevent tax evasion. This means that we will be able to hold to account companies which unreasonably fail to prevent their staff criminally facilitating the evasion of taxes, either in the UK or overseas. These measures will ensure that anyone wishing to do business here must have the highest possible standards of compliance and enforcement, helping the UK to maintain our place as a world leader in tackling corruption and tax evasion.
I have spoken primarily about criminal activity but, as I have said, we must also address the vulnerabilities in our financial system that are exploited by terrorists. As such, Part 2 of the Bill makes complementary changes to ensure that relevant measures being provided for money-laundering investigations will also be available for investigations into terrorist financing. By starving terrorist groups of funding, we aim to take away their ability to buy weapons, plan attacks and fund the propaganda that incites others to follow their evil ideologies.
Throughout the Bill’s scrutiny in the House of Commons, the Bill was the subject of notable cross-party support. There is consensus that these measures will make a real difference in the fight against money laundering and terrorist finance, and I trust that noble Lords will reach the same conclusion. However, there have been, as ever, some areas where we have been pushed to do more. I am pleased to say that the Government have listened and we have amended the Bill on Report in the Commons to allow for the civil recovery of any proceeds of gross human rights abuse overseas. This amendment was prompted by the horrific treatment of Sergei Magnitsky, a Russian tax lawyer. I have read about this case; Magnitsky’s treatment was truly shocking, and it is only one example of the many atrocious human rights violations committed globally every year. I welcome the fact that we have taken action, sending a clear statement that we will not allow human rights abusers to launder their criminal assets through the UK.
I am also sure that noble Lords will be interested in the issue of company ownership transparency in the British Overseas Territories and Crown dependencies. I stress that this Government have led the way in the fight against global corruption and we remain committed to working with these territories on this agenda.
I know that these topics, and others, will be of interest to many noble Lords and I look forward to debating them today and over the coming weeks. This is an important piece of legislation. It will make a significant contribution towards tackling the twin threats of money laundering and terrorist financing. The men and women of our law enforcement agencies do great work in combating those threats, and many in the private sector are dedicated to helping with this effort. The Bill will help provide them with the powers and legislative framework they need to do so more effectively. We continue to work closely with law enforcement agencies, the regulated sector and the devolved Administrations on the provisions and may bring forward some further technical, but essential, amendments in Committee. I will, of course, keep noble Lords updated.
The UK is a great place to do business. We should be proud of our status as a global financial centre, and we must protect it. We are a world leader in the fight against global corruption: this is important work and it must continue. We must do all we can to protect the most vulnerable in our society, to keep everyone safe and prosperous. I beg to move.
Lord Rosser (Lab)
My Lords, I thank the Minister for setting out the purpose and provisions of the Bill and for her earlier letter which covered the same ground. The Government’s Explanatory Notes on the Bill state that it makes,
“the legislative changes necessary to give law enforcement agencies, and partners, capabilities and powers to recover the proceeds of crime, tackle money laundering and corruption, and counter terrorist financing”.
The notes go on to say:
“The measures in the Bill aim to: improve cooperation between public and private sectors; enhance the UK law enforcement response; improve our capability to recover the proceeds of crime, including international corruption; and combat the financing of terrorism”.
This Bill has already been through the House of Commons, where we supported its aims and objectives but pursued points which reflected our feeling that the Bill did not go as far as it could have done in providing statutory and other backing for investigating and combating money laundering, tax evasion, corruption and the financing of terrorism in this country and overseas. Our approach in this House will be very similar.
As the Minister has said, the Bill provides for new orders and powers and enhancements to existing orders and powers: in particular, a new unexplained wealth order; increasing the scope of disclosure orders to cover money laundering investigations; an extension of existing seizure and forfeiture powers; a strengthening of suspicious activity reporting; a widening of investigatory powers into the funding of terrorism; and an extension of facilitating tax evasion offences to companies involved in such activities.
In her letter to which I referred, the Minister said that this Bill had been described by Transparency International UK as,
“one of the most significant pieces of anti-corruption legislation in the past few decades”.
However, unless I am mistaken, Transparency International, in expressing its concerns about the UK’s role as a safe haven for corrupt assets, has also said that,
“The UK’s Overseas Territories should require company beneficial ownership information to be made public, in a format that is free and searchable”—
an issue that this Bill does not address. The United Kingdom publishes a central register of beneficial ownership—why not our overseas territories as well? Surely we have a responsibility to ensure transparency in our tax havens.
The British Virgin Islands was by far the most widely used tax haven in the Panama papers, with over half of the 214,000 corporate entities that came to light in the Panama papers being registered in the British Virgin Islands. More than 75% of corruption cases involving property investigated by the Metropolitan Police’s proceeds of corruption unit involved anonymous companies registered in secrecy jurisdictions, 78% of which were registered in the UK’s overseas territories or Crown dependencies.
Three years on from the first request from then Prime Minister to our overseas territories to consider public registers, only Montserrat has so far committed to introducing such a register. The only agreement so far has been to create central registers of beneficial ownership and provide UK law enforcement agencies with access within 24 hours. Yet, in 2014, the then Prime Minister wrote to the overseas territories stating that,
“beneficial ownership and public access to a central register is key to improving the transparency of company ownership and vital to meeting the urgent challenges of illicit finance and tax evasion”.
What do the Government intend to do about this situation?
Unfortunately, the Government have confirmed in the letter of 6 March sent to Members of this House that they have significantly changed and weakened their previous stance to which I have just referred. Their stance now, as the letter says, is simply:
“It remains our ambition that public registers become a global standard. If and when they do, we would expect the Overseas Territories and Crown Dependencies to follow suit”.
The United Kingdom, along with its overseas territories and Crown dependencies, is the biggest secrecy jurisdiction in the world, and yet there is no question now, as far as the Government are concerned, of expecting our overseas territories and Crown dependencies to follow us and establish public registers of ownership. Instead, the Government’s approach is that if public registers become a global standard, they would expect our overseas territories and Crown dependencies to follow suit. If public registers do not become a global standard, then that presumably is the end of the matter as far as the Government are concerned.
As long ago as 2011, a World Bank study found that 70% of over 200 corruption cases involved the use of anonymous shelf companies to launder funds and conceal the identity of corrupt politicians. Anonymous companies are also used to launder corrupt and illicit funds into the UK, and transparency about the beneficial owners of these companies—companies which can be created in a matter of hours—has been identified as an important part of the solution to tackling the laundering of such funds.
The OECD has estimated that tax havens may be costing developing countries a sum of up to three times the global aid budget. Corruption hits developing countries very hard: around $1 trillion flows out of developing countries via illicit financial flows every year. Africa is a net creditor to the world. Private registers of beneficial ownership will not be accessible to people in developing countries, which is where people suffer the most from the financial secrecy that tax havens offer. The reality, surely, is that, as more registers of beneficial ownership become public—as has happened in this country—the quicker that will become the norm and universally accepted. The EU Parliament has now voted for public registers of beneficial ownership to be in place across the EU.
Maybe there is some overwhelming reason why action cannot be taken in regard to our overseas territories. If so, no doubt the Government will set that out in responding at the end of Second Reading. It certainly does not appear that there is a bar in legislating, because, as I understand it—perhaps incorrectly—as a matter of constitutional law the UK Parliament has power to legislate for the overseas territories.
While this Bill addresses the issue of corporate liability, amendments were nevertheless tabled in the Commons to extend the application of a “failure to prevent” approach in the Bribery Act 2010 to other forms of economic crime, such as fraud and money laundering. The Government have called for evidence on this issue, but there needs to be sufficient deterrence to corporate misconduct, and arguments have been put forward that there should be a strict, direct corporate liability offence, along the lines of, I believe, Section 7 of the Bribery Act 2010. Perhaps the Minister can respond to that point when she replies to the debate.
A case can also be made for saying that the ability to prosecute companies should be extended not only to economic crimes but also to cases of severe harms caused to individuals, including those overseas. The Business & Human Rights Resources Centre recorded over 300 allegations of human rights abuses made against 127 UK-linked companies between 2004 and 2014. Despite evidence that some companies were potentially repeat offenders, there have been no corporate criminal prosecutions. Nearly half of the allegations were made against extractive companies. Are the Government looking to extend the terms of this Bill to enable prosecutions to be made more feasible against companies, as opposed to individuals, for crimes of this kind?
Billions of pounds in corrupt money comes into this country every year. The National Crime Agency has indicated that the amount of money laundered in this country each year could be as high as £90 billion. It is not clear, though, what provisions in this Bill are intended to address the effectiveness, or otherwise, of our anti-money laundering system. There are a large number of supervisory bodies in the relevant sectors, which leads to a fragmented approach over identification of risks and their mitigation and the approach to enforcement. It also raises the question of whether some of the 27 supervisory bodies have conflicts of interest when 15 are also lobby groups for the sectors they supervise, for example. Once again, it would be helpful if the Minister could address this point about the need to overhaul our anti-money laundering system if we are to stop billions of pounds of corrupt money coming into this country each year, and indicate how this issue is addressed in the Bill.
On the enhancements to the suspicious activity reporting regime, will there also be, for example, a system for prioritising suspicious activity reports in order to help ensure that the resources of the law enforcement agencies are deployed to maximum effect and benefit? There were over 380,000 suspicious activity reports in 2015, ranging from the theft of small amounts of petty cash to suggestions of serious organised crime. What are, and will be, the procedures for ensuring that scarce resources are not spent processing minor crime reports coming via the suspicious activity regime at the expense of investigating more serious activity reports?
If the measures provided for in the Bill—which we support, albeit that they could have gone further—are to be effective and made to bite, the necessary resources will need to be provided. Whether we are talking about the new offences and powers in the Bill or the extension of existing powers, further resources, not least financial and staff resources, will surely be required. What are the Government’s intentions in this regard, and which agencies will be responsible for implementing and enforcing the new powers set out in the Bill, apart from the National Crime Agency? For example, will Border Force be involved, or the many individual police forces in this country, and if so, in what way? What is the Government’s assessment of the impact of this Bill on the forces and agencies, including our security and intelligence agencies, which will be responsible for implementing its provisions?
I have indicated our support for the aims and objectives of the Bill, but as I have also stated, there are areas where we think that more could be done than appears to have been provided for. There is also the issue of resources and the effectiveness of our systems and processes, not least in relation to combating money laundering. As the Minister has said, the Bill is not seeking to address victimless crimes. We want it to prove to be about more than just good intentions. Instead, it should play a key part in the process of ending the situation where this country appears to be a money-laundering hub so that we show what can be achieved, in particular on coming down hard on money laundering and the purposes for which it is used, as well as on tax evasion through schemes and arrangements that have not been cleared by revenue and customs. We want to ensure that we can show the wider world what can be achieved in this regard.
Baroness Kramer (LD)
My Lords, like the Labour Benches, we are supportive of the overall purpose of the Bill and the majority of its clauses, in particular as amended by the Magnitsky amendment with its powers to freeze the UK assets of those suspected of abusing human rights. Our goal both at Second Reading and in the stages that follow will be to strengthen the Bill. We have a number of what I would say are relatively small but significant issues that we want to tackle, but most of our conversation will be about issues that are not in the Bill but which we think it should address. I will just say in this context that several of my colleagues are speaking in this Second Reading debate and so quite a number of issues, from corporate governance to POCA, will be covered by them. We thought that the House would appreciate not hearing repetition where it is avoidable.
As we all recognise, the purpose of the Bill is to crack down on both corruption and tax evasion. It seems impossible to address those issues without looking at the overseas territories and Crown dependencies. I do not want to repeat what was said by the noble Lord, Lord Rosser, but we all understand that everybody’s ideal would be a central register of beneficial ownership that is publicly available in every location.
We on this side feel that this is an opportunity to push the issue further and we hope that the Government will consider taking advantage of that, but we also recognise that the overseas territories and Crown dependencies are in different positions both with regard to the authority of the UK Government and in the degree to which they have progressed along this track. As I understand it, all three Crown dependencies have a central register, which, although not publicly available, can be examined by UK tax and law enforcement authorities—but the picture is much more varied for the overseas territories, while the particular issues with regard to Gibraltar are made even more complex by our upcoming exit from the EU. But we all recognise that the Panama Papers were a serious wake-up call for anybody who was complacent in this area and we look to the Government to treat this as an opportunity to act.
We also want to raise questions with the Government about our capacity to investigate and enforce, both under the relevant clauses in this Bill and more generally, across the area. Only today OLAF, the anti-corruption body of the EU, made it clear that the UK may be liable for a €2 billion fine for its failure to crack down on customs fraud by Chinese clothing importers—an issue that apparently has been brought to the Government’s attention on many an occasion.
I do not know the rights or wrongs of that, but when we look at the range of issues we are all aware that many people are concerned about the mechanisms of property ownership, in particular the ownership of high-value properties in areas such as central London. The All-Party Parliamentary Group on Anti-Corruption has drawn our attention to more than £4 billion-worth of properties that have been bought with suspicious wealth. That surely has to be an area of concern.
Some have raised concerns over the care sector and the structure of its ownership. I remember the shock in this House in 2015 when Barclays, which you would think would be totally aware of these issues, was fined £72 million by the FCA over what was known as the “elephant deal”, a £1.9 billion deal in which it elected to provide confidentiality for politically exposed people engaged in that deal by outrunning its own procedures. As I remember, the documents were typed on a typewriter so that they would not be in the computer and internal compliance system, and the cash was put in a safe brought in to the team’s offices for that purpose. How any institution would think it should be able do that is quite shocking and reflects the lack of respect in many areas for our actual capacity to enforce. That must surely be addressed.
An issue very close to my heart that I want to engage with in the Bill is the protection that we offer—or rather, do not offer—to whistleblowers. It seems entirely pertinent across the whole range of issues covered by the Bill. When I was a member of the Parliamentary Commission on Banking Standards, we looked at whistleblowing, but I do not think that we came out with recommendations that were strong enough or pushed hard enough for action on this front.
For anybody who doubted it, the issues with RBS and its global restructuring group will underscore the risks that whistleblowers face. As many in this House will know, the whistleblowers who exposed what was happening with RBS and its GRG typically found that it was a career-ending move. They lost their jobs, suffered great personal stress and personal crisis and have not received protection as a consequence. Others will be very well aware that in the United States the career-ending impact of whistleblowing is widely recognised. That is why compensation schemes for whistleblowers who expose real fraud or misuse are in place. That is an area we have to explore.
Every one of us will agree, I think, that profiting from crime, funding terror and evading tax have absolutely no place in the UK. It is our purpose to row in behind the Government and then strengthen the Bill, which provides an opportunity to tackle those egregious and completely unacceptable forms of behaviour and criminality.
Lord Brown of Eaton-under-Heywood (CB)
My Lords, if my speech appears somewhat bland, as I fear it may, it is not for any want of enthusiasm for the Bill, but rather because I have not yet had time to give it the full and detailed scrutiny that it undoubtedly requires.
I applaud the Bill’s intent: in broad terms to strengthen and widen our powers to strip international and domestic criminals—fraudsters, money launderers, terrorists, tax evaders, gross human rights abusers and so on—of their ill-gotten gains. I am in no position to criticise, but I regret the Bill’s length and complexity at 171 pages. This is in the context of an existing regime essentially based on the Proceeds of Crime Act 2002, the subject of a leading Oxford University Press textbook, which itself is more than 700 pages. There have been a large number of reported cases on POCA over the last 15 years, all of which resulted in lengthy judgments—alas, not all easily reconcilable. Indeed, I had the misfortune to sit on several of them, though fortunately not on one of the last leading cases, Waya, heard in the Supreme Court in 2011-12. The first hearing, before five justices, failed to produce any coherent judgment, even by a majority. It had to be relisted some months later before nine justices, including the then Lord Chief Justice, my noble and learned friend Lord Judge. The judgment then took a further nine months to prepare. I mention these matters only to emphasise the inherent complexity of this area of the law and the absolute need to produce clarity and, wherever possible, simplicity in the provisions being introduced by the Bill.
That the Bill is highly desirable in principle cannot be doubted. The May 2013 foreword by the then director of the Serious Fraud Office to the OUP book I mentioned referred to the huge improvement effected by POCA on the very limited scheme, first introduced in the Criminal Justice Act 1988, for ensuring that crime should not pay, but it also recognised remaining weaknesses and gaps in the POCA scheme. The editors of that book suggested, in their preface, the need to re-examine the existing regime and for new and reinvigorated emphasis to be placed on the recovery of ill-gotten gains.
On the statistics, the editors pointed out the regrettable failure of POCA to have made any effective breakthrough in terms of recovery—rather the reverse. The annual proceeds of crime in 2013 were estimated, very roughly, at between £19 billion and £48 billion a year. Annual recovery by way of all measures—cash forfeitures, criminal confiscation, civil recovery and, indeed, penal taxation—amounted in each of the five years from 2006-07 to 2010-11 to between only £125 million and £161 million. It is greatly to be hoped that, with the enlarged enforcement powers provided by the Bill, a very substantially higher proportion of criminal gains will be recovered by the state and, to my mind altogether more importantly still, stripped from the criminals.
There is much to be welcomed in the Bill. Of course, it goes well beyond curing the deficiencies in the existing POCA scheme. A number of the individual measures positively gladden the heart. Prominent among them, surely, are the unexplained wealth orders, the enhanced and improved suspicious activities report regime, forfeiture of assets of gross human rights violators—the so-called Magnitsky amendment—corporate responsibility regarding facilitating tax evasion, measures to combat terrorist financing and so forth. Close scrutiny of these and much else will, of course, be for another day—or, rather, days—but for now I simply put on record my necessarily preliminary but otherwise full support for the Bill and wish it well.
Lord Faulks (Con)
My Lords, the Bill is largely a legislative reflection of the Action Plan for Anti-Money Laundering and Counter-Terrorist Finances published jointly by the Home Office and HM Treasury in April 2016. The objectives of both the plan and the Bill are to be welcomed. This country has a remarkable reputation for the rule of law, the independence of the judiciary and the integrity of our law enforcement agencies, but we face significant challenges from money laundering, financing of terrorism and major fraud. At a time of significant change in our international role, it is vital that we maintain this reputation. To do this we need to work with international groups and with the private sector. We should also ensure that our enforcement agencies have the resources they need. The Bill should help considerably, although legislation on its own will not be enough.
The National Crime Agency estimates that serious and organised crime costs the United Kingdom at least £24 billion annually and that money laundering could be taking place at a scale between £36 billion and £90 billion per annum, as the noble Lord, Lord Rosser, suggested. For understandable reasons these latter figures are rather vague.
The Bill was broadly welcomed when it was introduced and debated in the House of Commons. Some useful amendments expanding the definition of cash were made and, as we have heard, the Magnitsky amendment. The definition of cash to which the amendments referred was that in the Proceeds of Crime Act 2002—I have always pronounced the acronym “pokka” rather than “poker”; we may get into the same debate that they had in the Supreme Court about the pronunciation of “De Keyser”.
The amendment was introduced by a cross-party group of Back-Bench MPs led by my former ministerial colleague, Dominic Raab. The new provisions, although not as robust as those who put forward the amendment would have liked, nevertheless provided that the High Court could make an order to freeze the UK assets of individuals implicated in gross human rights abuses. A number of MPs emphasised that it was important that the new clause be actually used. The Minister in the Commons, Ben Wallace MP, agreed that the Government would collect data on the exercise of the new clause. I am glad about that confirmation, since it will enable Parliament to see whether the clause does not remain simply an aspiration.
UWOs mean that an individual or company will have to explain the origin of the assets that appear to be disproportionate to their known income and if they are suspected of involvement in or association with serious criminality. There are safeguards for this power and the decision to make an order will be made by a High Court judge. The orders have been widely used in Australia, among other jurisdictions, and are broadly considered to have been successful, although there was some pushback from the courts there where it was felt they had been used as a trigger response by enforcement agencies. It seems to me, however, that there are sufficient safeguards to ensure that the power is not resorted to in lieu of normal investigations. I understand that there will be a statutory code of practice, about which the House will no doubt want to hear.
In a sense, because the burden of proof will be on the individual or company to explain the origin of the assets, there will be very little that can be done to conceal matters, but one should not underestimate the ingenuity of lawyers who may be involved, at considerable expense, in representing wealthy individuals and companies that may be the subject of UWOs. I have seen the helpful Home Office flowchart indicating how the UWOs will work in practice, and my one concern is what happens if the subject responds with some sort of explanation but not much of one. It is suggested that the law enforcement agency will then decide whether the issue has been resolved or further investigation is required. I can imagine there may be something of a stonewall response; is it anticipated that the agencies will go back to court, or how will matters proceed generally?
Criticism of the Government was made in the House of Commons—and by the noble Lord, Lord Rosser, here—about the absence in the Bill of provisions covering overseas territories and Crown dependencies. I should declare an interest, having been the Minister at the Ministry of Justice with responsibility for the constitutional relationship between the United Kingdom and the Crown dependencies. I know that Jersey, Guernsey and the Isle of Man have been anxious to work effectively with the United Kingdom to assist in the international efforts to increase corporate transparency and to tackle tax evasion and corruption. All three have agreed to hold company beneficial ownership information in central electronic registers, or similarly effective systems, with near real-time access for UK law enforcement. Jersey has a non-public central register, accessible to UK law enforcement on request. Both Guernsey and the Isle of Man have agreed to establish a central register or similarly effective system, and work is under way to ensure implementation. In the case of the Isle of Man, legislation will be introduced in 2017; as to Guernsey, work is under way to ensure implementation by 2018.
The cost of taking measures to obtain the proceeds of crime from individuals and companies, or indeed to prosecute for fraud or related offences, can be very considerable. It is necessary sometimes to be pragmatic about these things and in this context I pay tribute to the Government for accepting the use of deferred prosecution agreements. These were introduced following an initiative by the former Solicitor-General, Sir Edward Garnier QC, and have been used effectively to obtain significant sums of money and to avoid the costs of prosecution. Most recently, the SFO entered into a DPA with Rolls-Royce, which was approved by Sir Brian Leveson, the President of the Queen’s Bench Division. The total sum in the UK settlement was £497.25 million plus interest and the SFO’s costs of £13 million.
We will no doubt discuss in Committee the provisions about terrorist financing, disclosure orders and suspicious activity reports. I accept the point made by the noble Lord, Lord Rosser, about not being obsessed by de minimis provisions in SARs. They will assist in the overall strategy that lies behind the Bill. Most of the changes seem sensible.
I cannot sit down before mentioning a story published in the Observer last Sunday about the enormous price the super-rich pay to keep their privacy. It appears that they are prepared to pay some £218,000 a year in tax rather than declare who owns the £20 million-plus megamansions in which they live—or do not live. The Government introduced this so-called envelope tax. The idea, presumably, was to crack down on dirty money. It has certainly brought in tax. The story suggests that tax receipts on all envelope properties worth more than £1 million came in at £178 million. Privacy is one thing, but this sort of tax deal seems contrary to the underlying philosophy which informs the Government’s approach, or certainly should. There may be respectable reasons for privacy, but equally, there may be some very far from respectable reasons. As many noble Lords know, large parts of the most expensive areas of central London are dark at night, and I suspect that many of these properties are owned by rich international financiers, some of whom will not have obtained their money honestly. Are the Government happy with this state of affairs? Perhaps the Minister can tell the House.
With some difficulty, and with the invaluable assistance of the Printed Paper Office, I managed to obtain a revised impact assessment in relation to UWOs. It suggested that perhaps 20 UWOs a year might be obtained. This was based on practitioners’ experience, presumably with freezing orders. This seems a rather modest ambition. Are UWOs going to be considered as simply part of the investigative toolkit, as the Minister seemed to suggest, or are they likely to be the basis of a major initiative? There are clearly opportunities, as I have indicated, but the agencies may have to be ready for expensive legal tactics to frustrate them.
I hope that some modest improvements in the Bill may be effected. The Minister always displays a willingness to listen, and she can count on my support in taking this Bill through your Lordships’ House. However, I ask all those who may be contemplating amendments to bear in mind what the noble and learned Lord, Lord Brown, said about the complexity that these provisions have previously involved and the risk that further elaboration may be required by the courts, so I hope amendments can be kept as simple as possible.
I hope that the legislative ambitions are reflected in an increase in the recovery of assets from criminals and in the enhancement of our reputation both nationally and internationally.
Lord Rooker (Lab)
My Lords, I pay tribute to our colleagues in the Commons for their work on the Bill. I will single out Dominic Raab, Margaret Hodge and Tom Brake.
The Bill does not reach all the parts that need reaching on financial crime, but it is progress. It remains the case that not a single UK financial institution has faced any criminal charges as a result of the 2008 financial crisis. Only individual employees have been charged. The employers—Barclays, USB and Deutsche Bank—have not faced charges, and we have the ludicrous position that it is still not illegal under current UK corporate liability law for companies to mislead their auditors.
I shall say one word on Brexit. As we seek new trading arrangements and relationships, it is crucial that our corporate liability regime is broadly equivalent to that of our major trading partners. In this respect, it is very worrying that the recent case, already referred to, of Rolls-Royce, reported extensively in the Financial Times on 21 and 22 January, might affect our trade deals. For directors to use nearly £700 million of shareholder funds to escape personal liability for their actions or the actions of those they supervise is questionable. The Serious Fraud Office must clean this up—but in view of my previous parliamentary run-in with Rolls-Royce in 1980, I will say no more.
I shall make four brief points. The first is on unexplained wealth orders. They are proportional and measured and are subject to judicial oversight. In respect of overseas politically exposed persons, they are really useful as they do not require suspicion of serious criminality. The key issue is the laundering of money from overseas in the UK. As the noble Lord said, it should be easier for UK law enforcement to investigate and act on the wealth of kleptocrats and corrupt officials.
In February last year, I was on the first UK kleptocracy tour. I was the only parliamentarian amongst the researchers, campaigners and journalists—but it was on a Thursday. The tour was specifically in respect of Russians and Ukrainians buying property in London. I will give two examples from the eight tour stops. We started in Whitehall at the property lying above the Farmers Club at 4 Whitehall Court. Flats 138A and 138B were purchased by Igor Shuvalov, ranked the fifth most powerful official in Russia, for a sum of £11.44 million—some 80 times his salary. The Russian register of companies shows that he and his spouse have the beneficial ownership of the company, Sova Real Estate, which owns the apartments. They operate care of Tulloch & Co., Hill Street, London.
We were treated at each address to the story of who allegedly lived there, how much was paid, who owned it, where the money came from, and a magical mystery tour through the British Overseas Territories and local authority files on planning applications. We parked outside Witanhurst Place, Hampstead; a home second only to Buckingham Palace in size. It was built originally by a British soap merchant in the 1920s and is now worth £300 million. It was purchased through a British Virgin Islands company by Andrey Guryev, then a Russian senator, who in 11 years never included it in his asset declaration.
My second point is on the anti-money-laundering rules. The new corporate offence of failure to prevent tax evasion in the Bill, which has already been referred to, should be applied to economic crimes such as money laundering. This is an essential next step. I often wonder why more attention is not paid to the lawyers and estate agents involved in property sales such as those to which I have just referred. They are usually smart, blue-chip operations that do not like the searchlight of sunshine on their activities. As far as I know, no bank has ever been prosecuted in the UK for laundering corrupt wealth from another country.
We need to catch up with the United States’ anti-money-laundering legislation regime and—wait for it—the EU directive on human trafficking and money laundering, which has a corporate liability formula stronger by far than the current UK regime. The UK Government promised to catch up but never have. Is it not ironic that we are going to catch up with the EU as a result of Brexit?
On 18 June 2015, I initiated a short debate in Grand Committee on the Transparency International report on how corrupt capital is used to buy property in the UK. I want to remind the Minister of just one recommendation in the report. This is not the first time I have raised this with the Government—these are not new issues. The recommendation was touched on by my noble friend from the Front Bench. It is that there should be greater co-ordination between the 27 anti-money-laundering supervisors in the UK.
I got nowhere with the Minister in the Moses Room or with his letter afterwards. This issue still needs to be addressed. The lack of co-ordination means that there is a failure to identify risks; the approach to enforcement is inconsistent, and is not transparent or effective; and there are conflicts of interest. As my noble friend said, 15 of the supervisors are lobby groups for the sectors that they supervise. Only seven control for institutional conflicts of interest and, in a survey, one even admitted to carrying out no targeted anti-money-laundering legislation monitoring at all during 2013. What are the Government doing about this and why is it not in the Bill?
Public procurement—this is my third point—is not in the Bill and ought to be. The Government appear to have a blind spot regarding corruption in public procurement. However, the NHS and local government are potential massive risks in the awarding of contracts. In the local government case, of course, it owns very substantial physical assets. At the Government’s anti-corruption summit in 2016, they committed to introduce a conviction check process to prevent corrupt bidders winning public contracts. This promise has not been implemented. Furthermore, there is no public information on its progress.
I have a proposal—I have come with a positive suggestion. The Government should ask their own anti-corruption champion, Sir Eric Pickles, to conduct a review at national level to assess the risks of corruption in local government and the NHS, with particular reference to procurement. Very high standards are observed by councillors and officers, but they are undermined by cases of misuse of position.
A Transparency International report on the conditions for local government corruption found that the following were present: low-level transparency, poor external scrutiny, networks of cronyism, lack of resources to investigate, outsourcing of public services, significant sums of money in play, a decline in the robustness to resist corruption and the reduced capacity of our local press. Sir Eric should be asked to look into this area.
My final point is to pay tribute to Bill Browder, chief executive of Hermitage Capital and author of Red Notice. I have not met Mr Browder, although I was present at a meeting in the Commons in 2015 where he spoke. I had previously read Red Notice and said at the meeting that I shed a tear as I read the part of it relating to the death of his lawyer, Sergei Magnitsky. I cannot see how anyone would not need a tissue as they read the account of his murder in a Russian prison.
I salute Mr Browder for his dedication and perseverance in trying to bring those guilty of the murder of his lawyer to justice—and for his sheer bloody-mindedness. Chasing them legally around the world, and now in this Bill, is a must. The Minister must also confirm what was said in the Commons: that the Government will use the powers in the Bill. I support it.
Baroness Bowles of Berkhamsted (LD)
My Lords, I will address the corporate liability aspects of the Bill, and therefore declare my interests in the register, in particular as a company director of companies large and small. I welcome the Bill, but it should go further to establish transparency on the beneficial ownership of companies in overseas territories, to enable corporate liability over a wider range of economic crimes in the future and to provide a less circuitous procedure for considering disqualification of directors when a company has already been found guilty of an economic crime.
The UK has made progress on tackling economic crime and improving transparency, but it is hard to get credit for that in the international arena when we are still seen as sponsoring tax havens. I was directly reminded of my country’s record many times—with varying degrees of friendliness or otherwise—while I was chair of the European Parliament’s Committee on Economic and Monetary Affairs, including in a public hearing with the OECD. We have not gone far enough yet. The bottom line is that people have a right to know who owns companies—not only would I say that is part of the incorporation licence and the fundamental bargain with society, but it would tackle tax evasion, money laundering and other offences.
We have had plenty of experience recently of how hard it can be to pin blame on large companies. The “directing mind and will” or the “identification doctrine”, as it is called, of responsibility is straightforwardly applicable to small companies, but for large companies it becomes almost impossible to find a chain of responsibility up to the board. Even if you do, collective failure does not count: you have to pin it on an individual. It is completely unfair, and divisive, for the law to bear down on small companies but not on multinationals. Sometimes the issue may be negligence more than criminal intent, which makes it entirely appropriate to address it with a “failure to prevent” offence. However, it is rather disappointing that only bribery and now tax avoidance are to be covered. I am aware that the Government have launched a call for evidence on corporate liability for economic crime, and that document usefully draws together several strands. The culture breakdown that led to the financial crisis brought about the senior managers and certification regime for banks, soon to be implemented for other financial institutions as well. There is a case to say that all large companies should have something similar. However, not all companies are regulated, and we do not have a proper company regulator—at least not yet—and a senior responsibility regime will have to attach to something.
We already have a list of financial and economic crimes elaborated in Part 2 of Schedule 17 to the Crime and Courts Act 2013, and there must be a strong case to say that all those should be treated consistently. The call for evidence puts forward some other liability options than the failure to prevent an offence, but in every liability option it suggests that a due diligence defence should be considered, rendering them very similar. The other options are fixing the identification regime, which needs doing separately anyway, or sectoral regimes such as the senior managers regime, which again falls into the “also needed” rather than the “instead” category.
Since Brexit makes a further Bill unlikely, why not enable further economic crimes to be introduced to this Bill through statutory instrument, enabling account to be taken of the call for evidence? Economic crimes can already be added to the Crime and Courts Act by order, so why not have something broadly similar in this Bill, with some safeguards about which I have some ideas? Companies should already have measures in place to prevent crimes done in their name, so for good companies it should not be a burden. For others it should engender a change in culture so that economic crime procedures are properly implemented and overseen. We must get rid of protective ignorance. You cannot get away with it in the US, so why here?
That leads me to the point about director disqualification. Section 8 of the Company Directors Disqualification Act 1986 enables the Secretary of State to instigate disqualification procedures in the public interest. These procedures then go to the court to determine whether a director is unfit. This recently expanded scope is a powerful backstop. That is all well and good, but if a company is found to be in breach of serious legislation, why should it need the intervention of the Secretary of State to activate review of the directors? That could be resolved at the time the company is found to be in breach. I do not see why it has to go around the loop of the Secretary of State being tipped off somehow, picking it up and then sending it back to the court, which is the main area that is going to tip the Secretary of State off in the first place. The court has more expertise and would have got a long way towards the answer already.
Section 9A of the Company Directors Disqualification Act, regarding competition policy, already adopts a straight-through consideration of the directors, if that appears appropriate. I cannot see the justification for economic crime being a follow on, always requiring the intervention of the Secretary of State.
The Lord Bishop of Oxford
My Lords, I join other noble Lords in thanking the Government for introducing this Bill. I support it. The Government have led on tackling corruption since the then Prime Minister set the issue of tax transparency at the heart of his G8 summit in 2013. He should also be thanked for hosting the anti-corruption summit in May last year. The Bill follows this good record and takes some further welcome steps to try to tackle corruption. The unexplained wealth orders will provide stronger powers for UK law enforcement to seize and repatriate the proceeds of grand corruption. The new corporate offences of failure to prevent the facilitation of tax evasion should be particularly praised because they will apply all over the world. I hope that in due course these offences will apply to all economic crime.
As bishops, we often travel to our linked dioceses all over the world. The global church is present in many developing countries, where corruption can often be a real problem. Some estimates say, as we have heard, that around $1 trillion annually leaves the developing world in illicit financial flows. That is a scandal. The secrecy enabled by tax havens across the world costs developing countries at least $100 billion a year, according to the UN. Along with other noble Lords, I press the Government to go further and faster in this area for the sake of the very poorest. Until the UK Government go further in tackling the secrecy that is still enabled by UK tax havens, we cannot claim to be doing all we can to tackle corruption. As we have heard, Ministers have made some progress in recent years in getting overseas territories and Crown dependencies to list who owns which company within their jurisdiction, but unless these registers are published—as the UK’s now is—people in developing countries, who are losing out the most, will never be able to see where their money is going.
Christian Aid and other charities have campaigned vigorously on these themes over a number of years. They tell me that a relative of one African president took and spent $38 million of his country’s money on a private jet using an anonymous company in the British Virgin Islands, according to the case against him made by the US Department of Justice. Without a public central register of beneficial ownership in the British Virgin Islands, we would not know what that company is or who benefits from it, and we would have no guarantee that UK law enforcement would be making the right request to get the information needed. Public registers of beneficial ownership will put this information out into the open, and people in developing countries will be able to see the information that is important and relevant to them, which should be their right.
I urge Ministers and others to aim still higher. We should aim to have public registers of beneficial ownership in the UK’s overseas territories, at the same time as getting the private registers in place by June. I shall be supporting noble Lords who try to use this Bill to put in place a timeline for when we will have that transparency.
I urge all noble Lords to reflect on the scale of the problem. Tax havens are costing developing countries at least $100 billion a year, according to the UN. I read a recent statistic that said that around one-third of rich Africans’ wealth is currently held in tax havens. If this money was held in Africa and taxed properly we would be able to employ enough teachers to educate every child on the continent. That is the scale of the problem we are looking at here and the scale of the good that can yet be done. I welcome this Bill and urge Ministers to act while the Bill is in the House of Lords to ensure that these issues are further addressed in this legislation.
Lord Flight (Con)
My Lords, I first declare my interest as in the register, and in particular as director of Metro Bank and as a regulator in Guernsey. I very much echo Dominic Raab’s comments on this Bill in the other place. I want Britain to be a competitive and successful global hub open to international talent, as it has been for 400 years, and I want us to be known the world over for our integrity, our commitment to the rule of law and our adherence to moral principles. We need to stop turning a blind eye to the blood money of despots that may flow all too freely through London and other UK businesses, through banks and into properties. The new sections in Clause 1 are designed to address the weakness in the current UK asset-freezing regime.
I briefly make the point that I do not actually agree that compulsory public registers are going to help with the issue, particularly in Guernsey and Jersey. The law enforcement agencies do not support public registers. David Lewis, head of anti-money-laundering standards in the Financial Action Task Force has made the point that incomplete and unverified public registers are not nearly as useful as law enforcement agencies keeping the right and detailed information. Tax authorities do not support public registers, as they reduce the candour of reporting in central platforms. UK intelligence and law enforcement is a key foreign policy asset, and will be undermined. The proliferation of standards hurts multilateralism, and the OECD reported, when the UK announced its own plan, that,
“proliferation of inconsistent models is in nobody’s interest”.
The most positive organisational aspects of the Bill are the greater contact and interaction that it facilitates among the various entities working in the area, in both public and private sectors. It has been the absence of this to date which is largely responsible for a pretty poor showing in terms of actual success of anti-money-laundering activities.
I support particularly the objective of stronger partnership with the private sector. I am pleased to report that Metro Bank has signed up to be part of the Joint Money Laundering Intelligence Taskforce and I believe that that entity can be much more effective in increasing the volume of discoveries. The BBA will create a register of the business specialities of particular banks and make it available to the Joint Money Laundering Intelligence Taskforce, to bring the relevant experience into JMLIT to work on money laundering and terrorist financing. The BBA, Home Office and Treasury will operate a public private partnership to educate consumers and businesses about the risks of becoming involved in money laundering.
The Bill will create some key new relevant instruments, particularly the unexplained wealth order. The noble Lord, Lord Rooker, raised that issue. It is an extremely important instrument and I believe that huge use will be made of it in the future. Part 3 creates an offence of corporate failure to prevent tax evasion. If the person acting on behalf of a company criminally facilitates a tax evasion offence by another person, that company would be guilty of the offence. There are various other measures which, in the main, will be effective in increasing the volume of money laundering discovered.
However, I have concerns that the additional costs created versus the likely cash recovery will continue to be unsatisfactory. As others have pointed out, the NCA estimates that the amount of money laundered in the UK could be up to £90 billion. In the period 2014-15 the NCA received 381,882 suspicious activity reports, but the amounts of money that have been recovered look pathetically poor. In 2015-16 only £255 million was recovered under the Proceeds of Crime Act. In the whole period between 2010 and 2016, £2 billion was recovered using all powers in the Proceeds of Crime Act. In 2015-16 HMRC secured 1,135 charging decisions and collected £2.7 billion in additional tax and penalties, but that was significantly less than forecast and anticipated. The BBA estimates that its members are now spending £5 billion annually on core financial crime compliance. A lot of that seems to me to be pretty wasted. I accept the problems that are presented, but what is missing are more effective and determined policies to deal with the real criminals.
Let me also raise the issue of PEPs, which is relevant to this House. The Bill defines a PEP as an individual who is or has been entrusted with prominent public functions by an international organisation or by a state other than the UK, another EEA state or a family member of that person. Yet the FCA requires banks to treat domestic UK politicians as PEPs. I would be grateful if the Minister could clarify the law. At a personal level, I was somewhat surprised to discover that the bank where one of my daughters banks was inquiring about her boyfriend’s income as part of a PEP inquiry, arising from my political involvement. That struck me as somewhat inappropriate; the time and effort might have been better spent somewhere else.
The key objective should be to improve the identification of those involved in corruption overseas and the laundering of the proceeds of their crimes in London. That is why collaboration is so important, to enable law enforcement agencies to satisfy demands at the outset of such investigations, given that all the relevant information may be outside the UK. An unexplained wealth order made in relation to a PEP living overseas does not require a suspicion of serious criminality. This should be particularly helpful in cleaning up the UK money laundering activities of corrupt overseas politicians. The Bill also provides for the civil recovery of assets belonging to those involved in or profiting from human rights violations.
As I said, I am concerned that the Bill will add substantially to costs, so it will be important that it achieves a major increase in the amounts recovered from money laundering and terrorist funding activities. I believe that the most useful change will be that of allowing entities within the regulated sector, such as banks, to voluntarily share information on suspected money-laundering activities—subject, that is, to informing the NCA. The private sector holds data on financial transactions and related personal data. The law enforcement agencies hold details of criminals and intelligence on crime. When these data have been shared in the past under the Joint Money Laundering Intelligence Taskforce, there have been positive outcomes for both sectors. Although existing data protection legislation allows for the sharing of information for prevention and detection of crime, regulated companies are understandably concerned that there should be express legal cover directly related to the anti-money-laundering regime to reduce the risk of civil litigation for breach of confidentiality.
It is the Government’s intention that allowing entities to share information should allow so-called super SARs to be submitted to the NCA which would draw on multiple sources of information on suspected money laundering. At present, I feel that the NCA is just weighed down with hundreds of thousands of reports which often amount to little more than many banks protecting themselves.
Baroness Whitaker (Lab)
My Lords, I declare an interest as a member of Transparency International UK and a former member of its advisory council.
I welcome this Bill in general. I simply follow the noble Lord, Lord Flight, with a note of disagreement and a few remarks in support of unexplained wealth orders. These could make considerable inroads into combating the injustice of the enjoyment of the profits of crime, which, as has been said, run into billions of pounds. At present, according to the OECD’s Stolen Asset Recovery initiative, we freeze the equivalent of only $225.5 million a year.
I also commend this proposed measure because, as a civil rather than a criminal provision, it bears on the asset not the individual, and because a High Court judge needs to be satisfied that there are reasonable grounds that the asset has not been lawfully acquired. I agree with TI UK that this accords with human rights obligations.
I welcome the Government’s assurance in the other place that figures on these orders will be included in the annual statistics of asset recovery and that there will be an updated code of practice enjoining co-operation between the agencies concerned. I ask the Minister: which will be the first year for the inclusion of these figures, and when will the code of practice be available?
As my noble friend Lord Rosser said powerfully, echoed by the noble Baroness, Lady Kramer, the right reverend Prelate the Bishop of Oxford and others, among the matters which remain to be dealt with are public registers of beneficial ownership in the overseas territories and Crown dependencies, as well as strengthening the capacity to repatriate seized funds. Can the Minister tell us how the Government propose to pursue the highly desirable obligation to declare beneficial ownership in these tax havens?
Further measures to repatriate the illegal gains looted from developing countries are necessary. This has been a scandal for years. I hope that the Minister can offer us some comfort.
That said, the Bill as a whole will not only improve justice but will enhance to a degree the reputation of the UK as a serious fighter against corruption. I hope that we can enable it to do even more in Committee.
Baroness Stern (CB)
My Lords, I begin by declaring my interest as an officer of the Anti-corruption APPG. My involvement in this Bill arises from my concern about corruption—and I am most grateful to the right reverend Prelate the Bishop of Oxford for his remarks about the effects of corruption in poor countries. I have in past years visited a number of countries where grand corruption has penetrated deeply into the administration. The outcomes are hugely damaging to the majority of people in those countries.
For many, corruption can mean, for example, living through a harsh winter with only a few hours of electricity per day, because the money that should have been invested in the electricity company has gone into a bank account somewhere far away from that country. It can mean many babies dying because there is no money for maternal health services. This can happen in an oil-rich country earning a lot from its oilfields, but where the money that should have gone into mother-and-child health has been diverted by corrupt politicians or officials to banks outside their country. The money is then used to buy penthouses in western capitals, or works of art, or jewellery.
The victims of grand corruption are too many to count. We are debating this Bill because a lot of the money that is not going to the electricity company, or to maternal or child health, is ending up illicitly in banks in the UK and in places such as the overseas territories—places where the UK has a special responsibility. So I warmly welcome the Bill.
Grand corruption is one of the major destabilising forces in the world today. It creates extreme poverty and misery. It deprives millions of education and healthcare that could lead to a fulfilling life. It makes a mockery of the rule of law. It prevents countries from developing healthy economies, and it leads to violence and insecurity. Only last month, Transparency International UK published a report linking corruption to the growth of violent extremism. Grand corruption also stands squarely in the way of the realisation of the United Nations’ sustainable development goals, which we in the UK strongly support.
The Government, and the coalition Government before them, have done a great deal to take corruption seriously. Many examples come to mind, such as: the anti-corruption summit, held in May last year, which was very successful; the introduction of a public register of beneficial ownership in the UK; the appointment of an anti-corruption champion, Sir Eric Pickles MP, who is doing a sterling job; and the Action Plan for Anti-money Laundering and Counter-terrorist Finance, which should bring about real improvements.
Now we have this Bill, which comes to us after receiving cross-party support in the other place for what is in it, and for some things that are not yet in it. There are many important measures in the Bill, as the Minister has explained to us. Strengthening the suspicious activity reports regime is essential. The Magnitsky amendment represents a huge step forward and I was very glad to hear the Minister talk about human rights abuses around the world in this connection. Some argue that grand corruption should be classified as a human rights abuse; I find that argument convincing.
The unexplained wealth orders, which Transparency International has described as a “valuable tool”, are very welcome. It is to be hoped that these orders will make it possible to take action when the prosecution route is not available, either in the country of origin or in this country, because of the complexity of operating in different legal systems.
In this context, the case of Maxim Bakiyev is relevant. He is the son of the overthrown President of Kyrgyzstan. After the overthrow, he sought refuge here and bought a house in Surrey for £3.5 million. He was convicted in absentia in his own country of embezzling millions from the state. I am sure the Minister will know that the Government of Kyrgyzstan are rather disappointed that the United Kingdom has not been able to take any action to help them recover some of the missing millions.
I hope that we can make progress in your Lordships’ House by revisiting the question of public registers of beneficial ownership of companies registered in the overseas territories. There is substantial disappointment in many quarters about the Government’s more cautious approach to moving to transparency and having public registers. The noble Lord, Lord Rosser, made the case for that very strongly. I must read the same newspapers as the noble Lord, Lord Faulks, because I too read about the people who were happy to pay £218,000 to keep their ownership of a property secret. I echo the question posed by the noble Lord: why do we allow this?
Finally, I put on the record comments made by Mr Nick Herbert MP on Report in another place. He was responding to the argument that, although transparency is a good idea in theory, it is not always practical, because if one place has open registers, those looking for a safe haven for a lot of money will choose another haven where secrecy still reigns. He said:
“We are talking about measures that are necessary to protect not just the UK taxpayer but the poorest countries in the world, which are disadvantaged and penalised because people are able to siphon off funds unlawfully and immorally and shelter them in various regimes. We are apparently saying that we are willing to accept that, because if we take action against it, some other regime will perform that immoral task. That seems to me to be a wrong position for the House of Commons to take”.—[Official Report, Commons, 21/2/17; col. 940.]
No doubt we in your Lordships’ House feel the same.
I end by saying to the Minister that she must be very happy today to be responsible for a Bill which has such profound implications, covering huge wealth and grinding poverty, shameless and unimaginable greed, and the heroism of campaigners such as Bill Browder, and which, when implemented, will surely make the world a slightly better place.
Lord Hodgson of Astley Abbotts (Con)
My Lords, I begin by drawing the House’s attention to my entry in the register of interests of your Lordships’ House.
It is always a pleasure to follow the noble Baroness, Lady Stern, who, as ever, has introduced an informed and incisive view. Like her, the right reverend Prelate the Bishop of Oxford, who is no longer in his place, had some very valuable things to say about the role of this Bill and its impact on the developing world. In an earlier part of my life, I had a chance to hear a spellbinding lecture by Professor Peter Bauer—later Lord Bauer, a Member of your Lordships’ House. He revolutionised the way the world thought about development economics.
In that lecture he pointed out that, in his view, the single thing that most held back undeveloped countries in achieving their potential was the prevalence of corruption, and that if you could root it out, many countries that suffered from underdevelopment would move forward quite swiftly. It seems to me that what applies to underdeveloped countries has an application in a developed nation such as ours. That is why I instinctively have sympathy with a Bill like the one before us today which has the strategic aim of reducing criminal activity and corruption.
However, I do not believe that that support and sympathy should be slavish. More regulation is not always the answer to every problem because any measure, including measures such as those in the Bill before us, come at a cost—a point raised by my noble friend Lord Flight. I refer not just to the cost of establishing the necessary enforcement powers but to the increased costs for those affected by the regulations.
More worrying for me, however, is that too widespread an approach can include a drag on, or an impeding of, innovation in the development of our financial services. Why is that so important to us in this country? The City of London has become a world financial centre—probably second only to New York in size. Surprisingly, it has achieved this despite being backed by only a medium-sized economy, and the country as a whole has benefited greatly from the City’s success.
That success has had to be based on innovation and acceptance of new ideas. Bigger economies such as that of the US and, increasingly, China can rely on weight of money and the volume of economic activity to carry them forward. The UK cannot. We have to be nimbler, quicker and more entrepreneurial, and being nimbler, quicker and more entrepreneurial is a concept that can worry regulators. Regulators are, appropriately and rightly, risk averse. They can be concerned that novelty automatically hides malfeasance, and thus they block or slow the development of new ideas and new approaches. However, if novelty becomes a dirty, suspicious word, the City and the country will be the long-term losers.
To summarise what I see as the dilemma, on the one hand, too low a standard of behaviour damages the City’s reputation and drives business away; on the other hand, an unreasonably high bar drives businesses away because of the costs, problems and time taken to complete transactions, and the unwillingness to adopt new ways of working. That seems to be the delicate balance we have to strike when we look at proposals such as those in this Bill.
Therefore, as we go to the Committee stage of a Bill whose strategic aims I entirely endorse, the test that I wish to apply is: will what we are proposing encourage good standards of behaviour, or merely mindless compliance whereby forms are filled and boxes ticked?
I turn to a couple of provisions of the Bill, both of which have already been mentioned, so I shall be very brief. First, I support the proposal of unexplained wealth orders and I thank the Minister for her further explanation in her opening remarks. My noble friend Lord Faulks raised a couple of points about them, and I was interested in receiving the White Collar Crime Centre report, which suggests that the enforcement of UWOs will present challenges. Where state officials and politically exposed persons are concerned—two categories that are particularly in the target zone for UWOs—it will be hard to prosecute because of what the White Collar Crime Centre calls “personal immunity” and “financial immunity”. I look forward to hearing in the wind-up or in Committee how those two immunities will work, and whether they will have implications for or impede the way this provision is used. As my noble friend Lord Faulks said, we shall need to look at the Australian and Irish experiences to date.
My second question about the Bill concerns the overseas territories. A number of noble Lords, including the noble Lord, Lord Rosser, raised this in his opening comments. We have a particular responsibility in this country. White collar crime is very flexible: it is like a balloon—you squeeze it in one place and the air pops out somewhere else. Therefore, we have to explore our links with our overseas territories and Crown dependencies. I look forward to hearing the views of other people, because I am not sure that we have the situation quite right yet, and the noble Lord, Lord Rosser, obviously has some important points to make about that.
For the rest of my speech I want to return to the idea that new regulation should be formed to encourage quality behaviour and not mindless compliance. I do so because I firmly believe that it is only by engaging the widest possible range of people in the fight against criminal financing that we can ultimately hope to have a high degree of success. It is interesting to note that when Security Service chiefs talk about their successes, they always emphasise how much they have benefited from the notifications that have come from members of the public.
I regret to say that I do not think that the authorities responsible for the detection of criminal financing have so far managed to engage the interest and support of the public—particularly those who work in the City—in the same way. Why is this? First, it is because many people believe that the existing regulations, both on money laundering and SARs, gather together a vast mass of data—much of which is irrelevant—which the public believe is then put in a file and never examined. They have no reason to believe the contrary. I hope the Government and the authorities will develop a regime which encourages the use of the precision of a rifle shot, not the blunderbuss approach of a shot-gun. Under that regime, the authorities should connect better with the general public about their objectives and how they are being achieved.
Secondly, there are concerns among the public about effectiveness and the value for money that the present regime provides. Regulators always seek more powers, usually with more money to enforce them. We need to be careful to ensure that, before more powers are granted, all existing powers are being used effectively. I was interested to note that at Second Reading, Sir Edward Garnier, the Member for Harborough and an experienced lawyer, said:
“I have noticed that in the past with confiscation orders. Very often, the courts make an order, and either the order is never put into action or very little of the amount required from the offender is ever recovered”.—[Official Report, Commons, 25/10/16; col. 208.]
Is this true and, if so, what are the statistics? Is the Minister confident that other existing powers are being fully used?
Finally, I turn to the point made by the noble Lord, Lord Brown of Eaton-under-Heywood. In 2015-16—the last full year for which figures are available—the National Crime Agency, which cost £478 million to run, seized £26.9 million of assets. Am I alone in feeling that, when billions of pounds are supposed to be passing through the City of London, that is not an adequate performance? There are some 27 different bodies engaged in this, so it would be helpful if, before Committee, the Minister could give noble Lords a little schedule of each body’s costs and asset recovery in the last year for which figures are available. I support the Bill, but we need to make sure we are creating an effective, lean crime-fighting machine and not just adding to the bureaucracy.
Lord Watson of Invergowrie (Lab)
My Lords, I start by apologising to the Minister for the discourtesy of missing the first minute of her speech. I was in the Library and the Bill started too quickly for me.
The Bill is certainly a step in the right direction to strengthen the capacity of the UK’s law enforcement agencies to address dirty money, whether it is connected to corruption, money laundering, tax evasion or terrorist financing. In particular, I am happy to support measures such as the unexplained wealth orders and the new corporate offence of failure to prevent tax evasion. The Bill highlights why the integrity of the UK’s financial system is so important. This goes to heart of the UK’s global reputation for its commitment to clean business and fair play, and of public confidence in business and corporate behaviour domestically.
I was pleased to hear the Minister echoing the Minister for Security, Ben Wallace, who remarked, at Second Reading in the other place, that the Government’s aim is,
“to combat money laundering, terrorist finance and corruption—here and overseas”.—[Official Report, Commons, 25/10/16; col. 195.]
That is most welcome but, rather like the Bill itself, the Ministers did not go far enough. The elephant in the room with this Bill is the overseas territories. The Government are not doing enough to persuade them to adopt public central registers of beneficial ownership. Why has the Government’s stance on this weakened during the passage of this legislation?
My noble friend Lord Rosser highlighted the pathetically weak wording in the letter sent by the Minister to noble Lords this week. For those who have it to hand, it was the third paragraph from the end. I will not repeat his critique, but the Government simply have to do better on the overseas territories. We all know that they will not voluntarily take meaningful action on transparency. Requiring transparency in the overseas territories would be one of the most effective things the Government could do to tackle corruption and money laundering.
Introducing provisions for public registers of beneficial ownership in the overseas territories would fulfil the Government’s stated aims and support the measures in the Bill. I was pleased to note the cross-party support on this on Report in the other place. It was led by the All-Party Group on Responsible Tax with the support of a large number of NGOs. The All-Party Group on Anti-Corruption—I declare an interest as its vice-chair—also supported and continues to support campaigning on this issue.
I acknowledge that there are some constitutional and jurisdictional sensitivities as far as the overseas territories are concerned, but that is not a reason to delay meaningful action in this area. Progress has already been made with some private registers, allowing information sharing between law enforcement agencies. That is welcome, but the wider, and crucially important, issue of the need for public registers cannot be overstated. I urge the Minister to commit to a deadline by which we can expect to see public registers of beneficial ownership in the overseas territories in place and operating. I also urge the Government to continue their dialogue with the territories and to support them in achieving this objective.
There is a strong, responsible business case for transparency on beneficial ownership at a public level. Companies carrying out due diligence need access to this information so they can be confident that they know who they are doing business with. This supports sound, clean, competitive business practice. A survey of companies in 2016, conducted by Ernst & Young, showed that 91% of respondents believe it is important to know the ultimate beneficial ownership of the entities with which they do business. The only surprise about that outcome was that 9% apparently believe it is not important—and we can only speculate as to who they might have been. Transparency on beneficial ownership is also really important for developing countries, where illicit financial flows, often channelled through anonymous companies, have a significant and damaging impact, leading to the loss of millions of pounds needed for schools, hospitals and other public services.
Other noble Lords have referred to this matter, but it is a powerful argument for registers of beneficial ownership being made public. Developing countries and their civil society organisations must have access to the information needed to combat the vast amounts of money siphoned off by corrupt politicians or officials and redirected to private foreign bank accounts. The UK needs to remain a leader on this issue, ideally in partnership with other members of the G20. Under David Cameron, the UK forged a leading role in tackling corruption and criminal financial activity. I am not usually one of his cheerleaders, but by hosting the anti-corruption summit last May he sent a clear message that his Government were serious about the issue—and not just on a global scale. He also believed that it was essential that the UK should shed its image as a major repository for dirty money.
I also want to focus on the importance of bringing the law on corporate liability for economic crime up to date with current business practices and structures. The noble Lord, Lord Faulks, mentioned his experience as a Minister in respect of overseas territories and Crown dependencies—but, regrettably, he had nothing to say on corporate liability. Noble Lords will be aware that the Ministry of Justice’s call for evidence is currently open on this issue. That is welcome, but it represents a rather timid approach by the Government, because one commitment of the anti-corruption summit was a full consultation on corporate liability. Perhaps the Minister will announce that the intention is to move on to that—and, I hope, ultimately to legislative reform.
We can no longer tolerate Victorian era law which means that large companies can insulate themselves from liability via evasive internal structures enabled by their size and complexity, while small companies have fewer places—or perhaps just fewer people—to hide and thus are more likely to be prosecuted. That does not accord with the Government’s stated commitment to a level playing field and fair competition. This must operate not just internationally but domestically as well.
This also goes towards protecting the UK’s reputation as a key financial centre. I will quote another Tory now. Sir Edward Garnier stated in the other place last month that the UK’s global reputation was connected to our financial services industry. He was right: companies in that sector, and their employees, need to know that there is a real risk of a criminal conviction if they step beyond the line of honesty and acceptable behaviour. I do not see this as an area in which regulatory oversight and fines should be the sole means by which we address corporate malfeasance. There should of course be a role for regulators, but there needs to be more. It is widely understood that companies can and do plan contingencies for fines into their budgets. That is no disincentive to criminal activity—or even to just looking the other way, which can amount to the same thing.
The key point is that companies must abide by, and act in accordance with, the values of the society of which they are part. Free market economics often exists in a universe parallel to the power imbalances and social norms of society that it helps to perpetuate. Most people want business to be open and fair, with genuinely deterrent sanctions for those who feel that the rules do not apply to them and that they can get away with it. A vibrant but openly honest financial services industry is vital to build and maintain public trust in UK business, both at home and abroad.
My closing point is that public registers of beneficial ownership in the overseas territories and reform of corporate liability for economic crime are very reasonable additions that would complement the valuable measures already set out in the Bill.
Lord Thomas of Gresford (LD)
My Lords, I welcome the Bill generally but in particular the provision in Clause 15, which inserts a new Section 303Z5 into POCA, giving the court the power to release frozen funds to pay legal expenses. That was a matter I argued many times in this Chamber, particularly during the coalition Government when there was a reduction in legal aid generally. At about that time I had a wealthy client whose assets were frozen and consequently he had legal aid. At the end of the trial, when he was acquitted, he was awarded his costs but, as legal aid had paid his legal team, all he had to pay for were the parking charges for his Rolls-Royce, which he had parked a mile away from the court in case it influenced the jury.
Money-laundering legislation has had a major impact—for business, the cost and time of introducing systems; for individuals, the struggle to prove identity. It is quite something when you have to produce a utility bill not less than a month old to prove who you are to a bank where you have been a customer since the age of 15. You wonder where all this information goes. What happens to it? Who deals with it? Yet, at the same time, as the noble Lord, Lord Hodgson, pointed out, there is a general feeling that prosecutions do not match the considerable efforts and discomforts that we have to suffer. As the noble Lord, Lord Flight, pointed out, compliance is not cheap—£5 billion annually is the cost assessed by the British Bankers’ Association for the way in which banks have to deal with core financial crime.
My experience of the POCA proceedings which occur when a trial is over has not been satisfactory because they are lengthy and complex. I have not been involved in many because, as usual, experts jumped up to capture the market in such proceedings. The reversal of the burden of proof, with the defendant having to prove where the assets came from, was not satisfactory because the trial judge was almost certainly bound by the view of the jury of the facts and the veracity of the defendant. So, from that point of view, it is not a fair procedure.
As the noble and learned Lord, Lord Brown of Eaton-under-Haywood, and the noble Lords, Lord Flight and Lord Hodgson, have pointed out, the figures are not very satisfactory for recovery. They have commented on various years and I will comment on 2014-15 for additional reasons, which I shall point out. In that year, the agency collected £155 million; the National Audit Office reckoned that the cost of collection was £100 million; but—this is the important figure—the confiscation orders made by the courts that were outstanding was £1.61 billion. I call that failure, and the Bill may go a long way towards rectifying the failure that has existed so far.
I was pleased to hear from the noble Baroness, Lady Whitaker, who is a distinguished member of the board of Transparency International. A task force examined the efficacy of money-laundering controls in this country in May 2015 and it came up with important and key findings: first, that the levels of asset recovery in the UK are small compared with the likely amounts of corrupt wealth being laundered; secondly, that only a small minority of suspicious activity reports, SARs, relating to grand corruption are acted on by law enforcement agencies; and, thirdly, that the timeframe moratorium period of 31 days for responding to SARs is generally inadequate to investigate and achieve asset restraint for grand corruption cases.
In July 2016 the Home Affairs Committee was shocked when it heard oral evidence from Robert Barrington, the executive director of Transparency International UK, who said that,
“it seems likely that in terms of money laundering going through the UK system every year, it is at least £100 billion”.
We are always talking about the corruption in Panama, but the committee pointed out that in Panama £100 billion is twice the size of its entire economy. So, given the amount of money passing through the UK system, we are much more involved in money laundering than Panama.
A number of noble Lords, including the noble Lord, Lord Rosser, my noble friend Lady Kramer, and the noble Lord, Lord Watson, a moment ago, underlined another of Transparency International’s conclusions. Mr Barrington said:
“Clearly one of the things that makes the UK attractive as a centre for money laundering is its historic links with the Overseas Territories and Crown Dependencies, because you can move money very quickly to jurisdictions that are very well-linked and for whom your bank of lawyers and accountants will have very close connections and can easily set up shell companies and so on”.
I was interested in what the noble Lord, Lord Faulks, said about that. He believes that legislation is going through the Crown dependencies but I wonder what is happening with the overseas territories.
On the question of corporate liability, the Government are following Section 7 of the Bribery Act 2010. I was involved in the Select Committee that looked at that Bill and afterwards when the legislation went through. I was later asked to give a talk in the premises of a well-known firm of solicitors to some very important clients about the effects of the Bribery Act. I was so shocked to hear other speakers winding up these companies about the amount of compliance that would be required that I thought it necessary to say, “Look, you are not all going to go to prison immediately”. Indeed, of course, under the Bribery Act there is not such a liability as they were saying at that time.
I was at a dinner last night in Threadneedle Street—not a place I go to frequently—where I was sitting next to a young lady who is involved in asset management. She said that the department in her company that is expanding without any obvious horizon is the compliance department. I can see that compliance departments will expand in all these companies and that lawyers will have a new industry of advising people on this Bill which is an effect of the Bill that I would not like to see.
There is much to discuss. The thrust of the Bill is right and I hope that we can refine it in certain important areas.
Lord Dear (CB)
My Lords, coming in to bat as late as I am in a debate like this, almost everything I wanted to say has already been said. I shall try to be brief but my brevity does not signify any lack of sincerity or support for the Bill. I welcome it warmly, as I have made known before.
In the 1990s I was HM Inspector of Constabulary, carrying at that time a special responsibility to satisfy the Home Secretary of the day about police activity against organised crime and money laundering—was it adequate? At that time I found that the response to arrests was reasonably good but the response to the recovery of cash was downright poor. All too often those at the top of the criminal tree were getting off scot free. They were not being arrested or inconvenienced, and certainly none of their assets was being recovered. In other words, if you got to that position, life was something like a bed of roses. The amounts then, much exaggerated now, were eye-watering—absolutely staggering amounts of cash, of property, of assets and of works of art. To have seen the product of some of those investigations and listened to some of the intercepts from deep-cover operations showed to me—and I thought I knew everything about it—just how deeply rooted this was. The 2013 Act has gone a long way towards improving that 1990s position, but there is no doubt—and it has been implicit in everything that we have said so far—that the very top end of crime, which we are concerned with in this debate today, is all about status, power, hedonism, violence and cash. If you take the cash away, most of the rest falls away, almost into insignificance. It is quite clear that this Bill has almost universal approval; there is nothing very contentious in it except perhaps to criminals, and we are not too concerned about them in the sense that we have been debating today.
One of the things that will clearly develop from this is the much closer working relationship between HMRC and other agencies, and properly handled that is to be welcomed. I will not go into some of the particular things that interest me in the Bill: unexplained wealth orders, which have been mentioned already, the much-strengthened investigatory powers against fraud and money laundering, and the improved facilities for helping SARs—suspicious activity reports. After I came to your Lordships’ House 11 years ago, I very shortly joined the Home Affairs Select Committee. We carried out an in-depth, searching inquiry into money laundering and its effects. One of the things we looked at was the way in which SARs were being handled, and even then they were handled very well. We spent a fascinating day at the London offices looking at the way in which the huge amount of information from all the various agencies and bodies was collected. They said, “We put so much in, they can’t possibly look at it”. In fact, there was a great deal going in. What was really becoming apparent was that it was being computerised in a very sophisticated way and whole patterns of criminality were being developed, leading one very quickly to see who was involved and where the money was going.
This clearly will help drive down crime. Although we have not mentioned it much today, it would certainly help to slow down, if not stop, terrorist funding. I say, not jocularly, that the days of terrorists rattling tins for collections in central European cafés have very long gone—they disappeared before the First World War. Terrorists now are highly sophisticated in the way they draw down the funds for operations.
I want to mention just three things. The first was touched on by the previous speaker, the noble Lord, Lord Thomas of Gresford, just before he sat down. He is quite right: we have a very poor record in recovery of assets. We talk about large sums but, in proportion, they are very small. Law enforcement has to start supporting this legislation and I hope it will be encouraged—if not encouraged, certainly pushed very hard—to do so. The root of that is that the law-enforcing agencies—certainly police and others working similarly close to them—are judged on what are called “results”, and the results are arrests: “Get the person into custody and before the court. We know we need to chase the stolen property and need to chase the assets, but we are too busy because we have other things coming up and we are being judged on results”. That has to change quite considerably.
We have heard this very hackneyed story about the way the FBI, during the prohibition era in America, took down very high-level criminals by using tax-evasion legislation. That is very close and in parallel to this legislation. I hope to forecast confidently that through the use of this legislation we will move away, in selected cases, from chasing the criminal through the criminal courts and simply go for the asset. The damage it does to him—or her, but usually him—and his organisation is massive and total. Chasing to try and get the conviction is often counterproductive.
I gloss over the second thing very quickly, although I feel very strongly about it. We have heard a great deal about the overseas territories and the Crown dependencies and I agree with everything that has been said. I certainly support public registers of beneficial ownership.
The third thing we have brushed on very briefly in this debate is Bill Browder’s book Red Notice, which I too have read. For those of your Lordships who are still not sure, the book is about Sergei Magnitsky’s death, which led to the Sergei Magnitsky Rule of Law Accountability Act 2012 in the USA. He was a lawyer who stood up against high-level corruption and money laundering in Russia. He was arrested and, in custody, was tortured over a long period and then beaten to death. Browder then pursued his case for many years, eventually getting that Act that I have just mentioned on to the statutory book in America. It is all about human rights abuse and money laundering, and preventing those contributing to that from getting visas to go into the United States. The big thing is about freezing their assets wherever they could be frozen—certainly in the USA. There have been various unforeseen consequences on that; it is a very delicate situation and the Act led to a tit-for-tat war between Russia and the USA, and one has to watch that very closely. Notwithstanding that, the thought of being able to draw human rights abuse and money laundering into this Act in this way has much to commend it for, so my heart and sense of direction supports that.
I repeat, in conclusion, that the Bill has my very warm support—it is very-long awaited and I welcome it. I am confident that it should have a profound effect in the areas we are discussing: humanitarian, social, counterterrorism and so on. I will certainly do my best to assist its passage through your Lordships’ House.
Lord Patten (Con)
My Lords, the UK, generally with all-party support, has an excellent leadership role internationally in efforts to combat financial crime and the terrorism that all too often feeds of it. For example, landmark measures were brought forward by the Labour Government. I would pick the then Bribery Bill, introduced in another place in 2009 by Jack Straw. That was a landmark on which much later policy has been developed, helping conceptually in the lead-up to the Bill before us. That steady, all-party drumbeat of support has brought me into very happy coalition with, for example, Diane Abbott, the shadow Home Secretary in another place. One finds these coalitions spring up in the most unlikely way. I also know the noble Lord, Lord Rooker, will take me seriously when I say that I join his coalition on kleptocracy in London, not just because of the money laundering that is probably involved, but because of the devastating effect it has on the occupancy of properties in so many London boroughs. Hear, hear to everything he has said.
Like the noble Lord, Lord Dear, I welcome so many of the provisions and tools made available by the Bill, such as the new unexplained wealth orders and the developing suspicious activity reports. There is nothing for any decent, honest person, foreign or British, to worry about in these. These provisions started in the Proceeds of Crime Act 2002—I spell it out in full to avoid the POCA/poker linguistic dilemma that my noble friend Lord Faulks pointed out. These have worked very well. In particular, I welcome the bringing together of public and private information sharing in a proper, public/private partnership against financial crime. This has not been noted thus far, but I think this is an international first, so the data held by UK law enforcement agencies can be brought together with that held by regulated entities in the private sector undertaken by banks and so on. This will help us in combating money laundering. It is certainly an international first and an approach that should be followed throughout in the battle against the ever mutating cybercrime, which is one of the biggest threats to international economic and indeed social peace on the globe.
That is all good macro stuff and I warmly support the Bill, as I guess my noble friend the Minister has noticed, but I would like to move from the macro to the micro picture and to a legislative dog in this context which has yet to bark, and I hope will not even whimper. I seek confirmation that there is no intention on the part of HMG to introduce provisions that would impose legislation in this or in any other way directly from Westminster on to Gibraltar. I hasten to make, as it were, a declaration of non-interest in this matter. I have no financial interests in Gibraltar and I do not intend to have any. My wife and I simply ended up there on a short holiday, but I was rather taken by the little place and that has subsequently spurred an interest in and contempt for the persistent, disgraceful and costly incursions by Spanish state vessels into our territorial waters there.
Financial services, in which, like others in this House, I have interests in and knowledge of here in the United Kingdom, have flourished in Gibraltar. I have gone into the matter in a little detail and I think that they are based on very high regulatory standards. It is my understanding that the relevant UK departments are content with the present arrangements. Indeed, back in December 2016 my right honourable friend the Prime Minister stressed this in the House of Commons following an exchange of notes between us and Gibraltar saying that we are content with the current arrangements and that the UK’s law enforcement objectives are being met. I believe that that has been confirmed by my noble friend Lady Anelay at the Foreign and Commonwealth Office.
Setting aside the undoubted legislative can of worms that would be opened by seeking for the first time to impose legislation from Westminster, and thus setting a precedent for those who have unfriendly feelings towards that little place and therefore could use it in a malign way, I stress that a great deal has gone on lately. Gibraltar has set up a register of beneficial ownership under the terms of the fourth anti-money laundering directive. This builds on Gibraltar’s record of effectiveness in the exchange of information. Indeed, the OECD has recognised that, admittedly using a phrase that is not a ringing endorsement, in a recent review and has classed Gibraltar with the UK, the US and Germany in the top category known as—they do not like to overspeak in the OECD—“largely compliant”, so Gibraltar is there with those other countries.
I simply seek a reconfirmation from my noble friend on the Front Bench, if confirmation is needed, that HMG have no intention of allowing the provisions of this Bill to extend by default to Gibraltar with its entirely independent legislative arrangements, curious though they are. If my noble friend does not have time to address this point during her wind-up remarks, I will fully understand. She may choose to write to me and place a copy of that letter in the Library of the House.
Lord Anderson of Swansea (Lab)
My Lords, like my noble friend Lord Watson I begin with an apology to the Minister. I had assumed that there was more substance in the earlier business and so I arrived only when she had already embarked on her speech. I welcome the Bill and I would make one preliminary proposition, which is that the strength of our credibility as a country in the field of tackling criminal finances will be much enhanced if we have clean hands. I believe that we do and that we are leaders in this field. Nevertheless, as the figures shared by a number of speakers have shown, including those referred to by the noble Lord, Lord Faulks, crime has paid. Asset recovery has been relatively small and sometimes attempts must be made against the wiles of clever lawyers and accountants to gain back as much money as we can. For example, there is still a suspicion that London is one of the centres in which international criminals find it easy to launder their money.
While much has been done about the London property market, as the noble Lord, Lord Faulks, pointed out, there are areas where the lights are always off. Let us think of a not too hypothetical example whereby a foreign individual buys several properties without even bothering to look at them and says that he is not going to live in them. I can give the noble Lord details of particular properties. Who is to blame for that? Should the estate agent tell the Government, or the accountants or the bankers? These are not hypothetical cases and they have national implications because they affect property prices right down the chain and are therefore of considerable public interest. There are many areas in which alarm bells should be sounded, but who will ring them? I therefore ask the Government again if they are satisfied that, even after the passage of this Bill, the instruments will be available to ensure that crime will not, as it has in the past, pay.
I have two further brief observations to make. The noble Lord, Lord Patten, has anticipated my comments in respect of Gibraltar. What is clear is that following the exchange of notes in April last year, the Government and those who had initially proposed amendments in the other place and then withdrew them are now satisfied. However, we need to look at this carefully. My noble friend Lord Rosser pointed out the revelations in the British Virgin Islands as set out in the Panama Papers. Surely there are lessons to be learned from that lax matter. I understand the constitutional position of Gibraltar, which has just been made clear by the noble Lord, Lord Patten. Gibraltar is fully compliant with current EU and OECD law, but I hope the Government will pledge to work as hard as they can to ensure that there is a public register—even though I heard a colleague say that the tax authorities and agencies are not pressing for public registers, fearing that the amount disclosed will be rather less than they currently receive.
My main point, however, relates to the so-called Magnitsky provision set out in Chapter 3, Clause 12, which will put in place freezing orders based on human rights abuses. Of course, there are key differences between this and the US legislation, but both have been triggered by the same outrage. I first came across this issue in 2013 at the Parliamentary Assembly of the Council of Europe. The background is well known. The noble Lord, Lord Dear, pointed out the full detail so I need not reiterate what he said so well. It concerned a massive fraud against the Russian tax authorities. Astonishingly, Mr Magnitsky was himself posthumously found guilty of fraud, and no prosecutions have been brought against the prison authorities responsible for the beatings and torture or those who benefited from the fraud, such as the former head of the Moscow tax office, Olga Stepanova, through whom the majority of the relevant fraudulent tax reimbursements were made. Funds from the fraudulent transactions were traced to her ex-husband. He and two of his deputies bought properties in Dubai shortly after the fraudulent refunds. It would be helpful if the Minister indicated the latest stage of the paper trail and said whether she was satisfied that no part of it leads to London, contrary to the assertions of Mr Bill Browder. I successfully moved an amendment to the resolution in the Council of Europe encouraging member states to follow the US lead, and I am delighted that we are now broadly doing so.
This is perhaps not the time to dwell on the Russian system of government because we have to work together in many fields. However, let us think of Alexander Litvinenko, the recent conspiracy against the Government of Montenegro and the doping scandal at the Olympics, although the latter shows that sanctions do in fact pay. All of these lift the lid on aspects of the Russian system. Therefore, the inclusion of Clause 12 is most welcome. The background, of course, is the campaign by the indefatigable Bill Browder of Hermitage Capital, but I must also praise Dominic Raab, the all-party group in the other place and, perhaps most of all, the Minister, Ben Wallace. There was clearly careful preparation for the debate on 21 February, which is well worth reading. The result is a welcome attempt to deal with abusers of human rights and torturers worldwide, which is a major step forward.
A number of concerns were expressed: about the exclusion of a visa ban, about the short term of the 20-year limitation and when it begins to run, and about the question of enforcement. However, the Minister was most positive and forthcoming in this respect, giving a commitment to a review and annual reporting. I therefore congratulate all concerned. I say again, the debate in the other place is well worth reading. The history of this clause shows Parliament at its best, working consensually and constructively to a very positive outcome.
Lord James of Blackheath (Con)
My Lords, I am deeply grateful to be allowed four minutes in the gap to comment on this very important Bill. The Minister is already aware, from our correspondence, of the thrust of my main concern, which is that the Bill does not do anything adequately at this stage to encompass and force the disclosure of the vast amount of information that, for reasons of either negligence or complicity, becomes available to executive structures within companies that have discovered things that ought not to have been done and which they ought to own up to and show.
I will give two examples of how and where this has occurred. In 1986, I went with a certain Dr David Kelly to the head office of Lloyds Bank in the Midlands district in order to inspect the paperwork it had for the payment arrangements for the Iraqi supergun. The papers had been set out by the local director. After about 10 minutes, he turned to Dr Kelly and said, “While you’re here, would you like to see the payment arrangements we’ve got for the manufacture of capacitors for the Iranian nuclear bomb development?”. Yes, he would. So the papers were produced and the whole of this was put into the hands of our senior military intelligence operation at that time. How on earth can that occur in a reputable bank, with an FT top 500 company manufacturing these extremely sensitive components for a very large sum of money? Whatever happened to end-user certificates? That ought to be somewhere in this Bill.
The other example is much more of commercial negligence and complicity. I was put into a company, again by the Bank of England, to try to sort out its horrendous problems. It was a specialist in manufacturing turnkey operations for industrial units to be built in foreign countries, and its main client was Libya. It was building a cola bottling operation at Aziziya, and the total cost at the end, when we sent the final invoice, was set at £126 million. There was no problem getting paid because the next day we got £128 million back. I said, “Send back the £2 million surplus immediately. We don’t want it”. My new colleagues—I had only just joined—said, “No, no, we have to keep it”. I said, “Why?”. They said, “If we don’t, we’ll never get another deal in Libya”. I said, “What’s it all about?”. What it is all about is that they want that £2 million to be used to open bank accounts in Naples and Rome, and they are providing all the details of how this is to be done. When I go back into the records, I find that they have already opened five bank accounts along the Mediterranean coastline for similar sums in the past. It is only on that condition that they get the business. In those circumstances, they claimed that they had done it for commercial reasons and would not have got the business otherwise. They were probably right, but somebody else would have done. That money is just being used for the availability of a turnkey operation for anybody to walk into Rome, and £200,000 buys you an RPG—a rocket-propelled grenade—that gets rid of a Popemobile at 180 yards very securely.
We need to stamp out this sort of thing and we need a wholly new set of standards for the disclosure of information that may be thought innocent or accidental but is not. There is so much of it. I have given noble Lords two examples but I could give a great many more. It is an outrage with a Bill as important as this if we do not crunch this once and for all. I thank noble Lords for my four minutes.
Baroness Hamwee (LD)
My Lords, when I first looked at this Bill, the first word I wrote down was “privacy”—which may be a legacy of recent Home Office Bills. Then I wrote down “housing market London” and then “reputation”. My noble friend Lady Bowles referred to the fundamental agreement with society. The noble Lord, Lord Hodgson, reminded us—picking up points made by my noble friend Lord Thomas of Gresford—of the importance of engaging the public without the deterrence of bureaucracy, which I am not alone in the Chamber in having suffered from. I should perhaps have first written “transparency”, which goes hand in hand with—I stress this—the accessibility of information, because the antithesis of transparency is not privacy but secrecy. So I will not be defensive if, from time to time during the passage of the Bill, I apply in a moderate way the lens of privacy.
What might seem, at first sight, a rather dry subject on only a very little reading turns out to be the stuff of a page-turning thriller—possibly accompanied by coffee and Sachertorte, as the noble Lord, Lord Dear, reminded us, as lunchtime comes and goes. Sadly, it is not fiction that apparently more than £100 billion of dirty money goes through the UK system each year, so far as one can tell—ironically, as my noble friend said, equivalent to twice the size of Panama’s economy.
The criminality that is the subject of the Bill does very real damage to the UK’s reputation and to individuals. The noble Baroness, Lady Stern, referred to the penetration of grand corruption and gave your Lordships a very vivid picture of the impact of corruption. The noble Baroness, Lady Whitaker, referred to the importance of the restoration of funds. We have been briefed by organisations outside this House on the evidence of the cost to developing countries of corruption and of the use of tax havens.
Of course, it is all around us. You do not have to go on a kleptocracy tour to see it in London. Transparency International said:
“For those in possession of corrupt funds, a property in the UK can provide a secure investment, but also help bestow prestige, respectability and a bolthole when the going gets rough at home. Most importantly, property in the UK can be acquired anonymously through companies registered in secrecy jurisdictions and anti-money laundering checks can be bypassed with relative ease”.
That is a pretty quick canter through many of the issues that this Bill gives rise to—one could quote very much more from Transparency International on this subject.
I resent, on behalf of those who struggle to find housing in London and those who are affected, perhaps slightly less directly but still pretty directly, by corruption, the fact that property in my city is available to corrupt individuals. There are some developers at the high end who are selling London. I welcome the steps taken to tackle the situation. I dare say that, from these Benches, we will be pressing the Government for more, while also unpacking how appropriate and effective the measures in the Bill will be. Some of this will be detail, but important detail. For instance, is £100,000 the right threshold for unexplained wealth orders? How big should be the identifiable tip of a possibly very substantial iceberg?
The noble Lord, Lord Faulks, referred to safeguards. I am sure that we will want to satisfy ourselves about those. I confess to feeling a little discomfort, which perhaps in the context is inappropriate, about a civil rather than a criminal standard of proof applying in this area. No suspicion is required in the case of a non-UK or EEA politically exposed person. That is a hook on which to ask about progress on the definition of PEPs domestically, possibly in writing, after this debate. My noble friend Lady Kramer alerted me to the possibility of guidance being given by the FCA, I think, under the recent Bank of England and Financial Services Act. It is quite clear that there are issues around domestic PEPs.
Like everything else, new legislation depends on enforcement. Would it be indelicate to inquire whether the Minister wants to say anything on the sharing of information and co-operation with other EU states, post Brexit? There are 27 states, of course, like the 27 fragmented supervisors who have been referred to. Comments have been made about the number of SARs now; quantity can hinder effectiveness. One must worry about the NCA’s capacity to deal with super SARs, though I note the reference of the noble Lord, Lord Dear, to the description of systems that are in use.
I am anxious about the extension of seizure and forfeiture powers, but not perhaps as the Minister may expect. Why extend them only to specified items? I appreciate that the list of items in question can be extended, but why not to all items now—certainly all items of personal property, if not real property, such as land?
I noted the extension elsewhere in the Bill of powers to immigration officers, which will take my noble friend Lord Paddick and me back to comments we have made on previous legislation about the disappearing distinction between immigration officers and the police. We may also want to probe a little on the supervision and powers of civilian counterterrorist investigators. My noble friend Lord Sharkey, who cannot be here today but will, I know, join us at a later stage, wants to probe the operation of deferred prosecutions and will have suggestions about money being held in escrow until the agreed sum is paid, given the problems of collection of cash—because it seems that pockets and wallets are sensitive to depletion in a way that, apparently, deprivation of liberty cannot match. Prison seems to be merely an occupational hazard to some people.
I mentioned the damage to individuals. Corruption and the infringement of human rights go hand in hand. I welcome the Magnitsky amendment. The Joint Committee on Human Rights, of which I am a member, commented on the issue. The committee is currently looking at business and human rights, including issues of strict liability, civil remedies and reporting and transparency. There is quite a lot of read-across here.
My noble friend Lady Kramer rightly mentioned the issue of whistleblowing, while the noble Baroness, Lady Bowles, the noble Lord, Lord Watson, and others mentioned corporate liability—but I will come back to where I started, with transparency. There is a clear will to spend some time in Committee on the implementation of public registers of beneficial owners in British overseas territories. It was the focus of the speech of the noble Lord, Lord Rosser, though we heard a contrary view. The UK has led the way and we have heard about steps being taken elsewhere in the European Union. Let us acknowledge that Montserrat has committed itself to introducing a register, though we do not know when, and use our influence—or, if necessary, power—over what are, after all, British overseas territories: further and faster, as the right reverend Prelate said.
The term “open for business” is used quite a lot at the moment, in the context of the UK being open for business. None of us wants to be open for the business of being used as somewhere to bleach some very dirty laundry.
Lord Kennedy of Southwark (Lab)
My Lords, at the outset of my remarks I am pleased, like my noble friend Lord Rosser, to put on record that Her Majesty’s Official Opposition support the aims of this legislation. We will seek, as we always do, to probe, strengthen and improve the legislation that has come before us from the other place so that the Bill goes back there in better shape than when it arrived here.
Both serious organised crime and terrorism pose real and present dangers to the United Kingdom, and it is our job to ensure we pass laws that are fit for purpose and provide the law enforcement and other agencies with the tools they need to do their important job of keeping the United Kingdom, its citizens and all the people living here safe and protected from danger.
Noble Lords will have heard the figure of £24 billion, which is the estimate of what serious criminality costs the UK economy each year. I agree with what the noble Lord, Lord Faulks, said about the cost to the UK. It is a huge sum of money and with it go lives destroyed, communities ruined and real hurt to our economy. It is everything from the vulnerable person being ripped off on the phone by con artists—losing thousands of pounds, possibly every penny they have—to tax evasion, the evil trade in drugs, prostitution, slavery and firearms. It is our duty to do everything possible to disrupt the activities of criminals, to stop these activities and to bring the perpetrators to justice.
The things that criminals do to hide their ill-gotten gains include holding large cash sums and buying expensive cars, art, jewellery and expensive clothes in order to live a lifestyle that they have not earned through legal means, as the noble Lord, Lord Dear, said. An estimated $1.6 trillion is laundered throughout the world, and the National Crime Agency estimates that many billions of pounds of that money is laundered into or through the United Kingdom as a result of international corruption. Those are staggering figures, and they illustrate why action is needed.
The noble and learned Lord, Lord Brown of Eaton-under-Heywood, made an important point about the disparity between these criminal gains and the amounts recovered from those criminals, as did a number of other noble Lords during today’s debate. Action must be taken to make the UK the most hostile place in the world for those seeking to move, hide or use the proceeds of crime, and the criminals must get that message loud and clear.
I agree with what the noble Lord, Lord Flight, said about the importance of the various agencies, both public and private, working more closely together and sharing information, and the provisions there are very welcome.
That must also be the case for all the Crown dependencies, and this is one area where I think the Bill is deficient and improvements need to be made. My noble friend Lord Watson was right when he highlighted that the Government’s position on our overseas territories is weak: they have to do better than they are doing at present.
Transparency is one of the most effective ways of dealing with this type of corruption. The right reverend Prelate the Bishop of Oxford spoke about the scandal of the illicit flows of funds from the developing world and the need for firm action to be taken to deal with the issue of tax havens in British Crown dependencies and overseas territories. The lack of transparency is a real problem and prevents individuals from seeing who owns what. It enables criminals to hide behind a cloak of secrecy.
I agree with the noble Lord, Lord Hodgson of Astley Abbotts, that we have to get the issues right in respect of overseas territories. It would be appreciated if the Minister could explain to the House why the Government have not sought to introduce requirements to ensure that overseas territories and Crown dependencies which come under the jurisdiction of the United Kingdom publish publicly available registers of beneficial ownership. It is a requirement here in the UK, allowing us to see who owns which company, so why not in overseas territories and Crown dependencies?
The United Nations Conference on Trade and Development recently estimated that tax havens, including those in the United Kingdom’s overseas territories, are costing developing countries at least $100 billion per year. The noble Lord, Lord Thomas, referred to this. The Minister must be aware that the British Virgin Islands was by far the most widely used tax haven in the Panama papers, as referred to by my noble friend Lord Rosser. We have the ability to change that, and we should take the opportunity that the Bill provides to do so.
With the additional challenge of Brexit, it is important that we create an economy, a business centre, that is the best in the world in which to do business legally and is attractive to inward investment but protected from the risks of criminality. I do not agree with the noble Lord, Lord Hodgson of Astley Abbotts, if he is against proper regulation. It is not about box-ticking but about preventing criminality in a proportionate manner.
I have been reading Faulty Towers, a report from Transparency International UK which looks at the impact of overseas corruption on the London property market. It makes staggering reading. £4.2 billion of property has been bought in London with suspicious wealth, as the noble Baroness, Lady Kramer, referred to. In 14 landmark developments, almost 40% of future homes were bought by those from high-corruption jurisdictions. Again, I agree with the noble Lord, Lord Faulks, in this respect.
My noble friend Lord Rooker made important points about who owned what property in some of the most expensive parts of London. The shining of sunlight on bankers, estate agents and other middlemen must happen urgently. This situation leads to, among things, a distortion of housing supply, with ordinary law-abiding citizens unable to afford a home in the capital. The noble Lord, Lord Patten, speaking about the effects of criminal activity on the purchase of property in London, made similar points.
My noble friend Lord Anderson of Swansea made important points about properties bought in London with suspicious funds and asked who should ring the alarm bells—should it be the estate agents, lawyers, accountants and the bankers? I bought the home I live in 13 years ago. My wife and I could not afford to buy it at today’s prices, and we live in a very ordinary terraced house in Lewisham. That is a problem all over London, with people who work hard, pay their taxes and play by the rules unable to afford a home in the capital.
I agree with the noble Baroness, Lady Kramer, on the need for further protection for whistleblowers. I hope that the Minister will comment on that in her response.
There are many welcome measures in the Bill. Part 1 includes a number of measures, including the creation of unexplained wealth orders, which seek to tackle criminals who claim that they have no assets and are penniless but at the same time appear to control considerable funds. This measure will require an individual or organisation to explain the origin of assets that appear to be disproportionate to their known income. It is a welcome move, as is the extension of disclosure orders to money laundering, which will require someone who has relevant information to answer questions put to them as part of an investigation.
Chapter 2 of the Bill seeks to improve the procedures around money laundering and suspicious activity reports. Allowing the National Crime Agency further time to consider such reports, along with the power to request further information, is again a welcome move. The sharing of information to identify illegal activity is vital, and ensuring that companies can share information for the purposes of preventing and detecting serious crime, with clear legal certainty, will be another important tool in the box. The noble Lord, Lord James of Blackheath, gave a number of examples of shocking practices that have taken place in the past. Such behaviour has to be condemned and stamped out, with, where necessary, people brought to justice for behaving so irresponsibly, aiding criminality and putting lives at risk.
Tax evasion is a crime. I welcome provisions in the Bill that seek to disrupt this activity and in particular to deal with the issue of a company operating a business in the UK being able to escape criminal liability because a tax loss is suffered in another country rather than the UK. This will be of particular benefit to developing countries, which are at great risk of such activity.
Additionally, I welcome the introduction of new powers in respect of forfeiture and seizure of assets. I will want to probe in Committee whether we have got the list right and whether the process to amend it by the affirmative procedure is the correct way to proceed.
The Bill also seeks to extend the powers of various officials and agencies. We will again probe in Committee whether the new measures are both proportionate and fit for purpose.
The second part of the Bill extends powers provided for in Part 1 so that they can apply to investigations in relation to terrorist assets and terrorist financing. These measures are welcome. We must always be vigilant and ensure that we have in place measures to assist the appropriate authorities in carrying out investigations into terrorist offences. I am sure that the Minister will acknowledge the sometimes grey area between money laundering offences, criminality and terrorism offences, so having powers that work across the piece is important for those engaged in the work to keep us safe.
Part 3 introduces a welcome new corporate offence of failure to prevent tax evasion, but we will want to explore in Committee what further can be done. The noble Baroness, Lady Bowles of Berkhamsted, is right that people have the right to know who owns which companies and to be clear about the chain of responsibility. Economic crime must be policed with vigour. Good companies will have proper procedures in place and those that do not will be forced to take action. The Prime Minister has committed to getting tough on irresponsible behaviour in big businesses, and that is an aim I welcome very much.
Cracking down on corporate economic crime has the potential to deliver significant savings to taxpayers and ensures that the vast majority of businesses that act responsibly and play by the rules are not put at a competitive disadvantage. It would be useful if the Minister could comment on how she sees the present balance of the corporate liability regime and whether there is not a case for reform to make it easier to prosecute those companies that commit offences.
I again confirm that I welcome the Bill. We will seek constructively to probe and challenge the measures contained in it so that we send back to the other place an even better Bill that can tackle effectively and proportionately all the issues that Members around the House want dealt with, with people protected and kept safe, which is the first duty of government.
Baroness Williams of Trafford
My Lords, I thank all noble Lords who have taken part in this Second Reading. We have had a very constructive debate and consensus across the piece that there should be general support for the Bill. Clearly, we will take a few things further in Committee—I think I know what they are.
The noble Baroness, Lady Stern, said that I must be very happy to be introducing a Bill such as this. Yes, I am. It will further enhance our ability to bring to book those who seek to engage in corruption and tax evasion and benefit from all those other proceeds of crime.
I will turn first to the Crown dependencies and overseas territories, because it is what most noble Lords have mentioned today. The Government agree about the importance of combating grand corruption. International corruption threatens the progress of many developing nations, and this country must do everything in its power to leverage our international status, and that of our financial sector, to combat it.
There is clearly still much to do, but the Crown dependencies and overseas territories with a financial centre have made significant progress on the commitments that they made in the run-up to the London anti-corruption summit last year. That summit positioned the UK as a global leader in the fight against corruption, and the Government have not changed their position. As the noble Lord, Lord Rosser, and many other noble Lords pointed out, the UK has created its own public register. We are leading the way, and we hope that others will follow. Progress is being made, and I encourage noble Lords to recognise the considerable amount of work that is going on in this area. I take this opportunity to thank my noble friends Lord Flight and Lord Faulks for outlining the progress that is going on in the Crown dependencies as we speak.
The noble Lord, Lord Rosser, asked whether we can legislate for the overseas territories and Crown dependencies. We have the power to legislate for the overseas territories and Crown dependencies, but we do so almost always with consent. Where we do not, it is on moral and human rights issues, such as homosexuality and the death penalty. However, just because we can legislate for them does not mean that we should do so when we are working with them to implement existing agreements on a consensual basis. This has already delivered significant achievements, and it is right that we continue with this approach.
Obviously, our long-term ambition remains that publicly accessible registers of beneficial ownership will become the global standard. Should this happen, we would expect all jurisdictions to meet this standard, including the overseas territories and the Crown dependencies.
Lord Watson of Invergowrie
I welcome the fact that discussions are continuing with the overseas territories, but they seem to be left entirely open-ended. In my contribution, I asked for a deadline. I do not believe that the Minister will give me one now, but there has to be some point beyond which we say to the overseas territories, “We’ve tried discussing this with you, we’ve tried to carry you with us, but if you’re not coming, then we have to take positive action”.
Baroness Williams of Trafford
I hope I can be helpful to the noble Lord. Progress is being made, but at a point at which progress is not made, we may have to take a different view. As we see it now, the overseas territories have come an awfully long way from where they were even this time last year. My noble friends have given the House an update on how much progress the Crown dependencies are making. The point is that there is progress. Were progress not to be there, I might have given a different response to the noble Lord. I hope he is satisfied thus far with what I am saying.
Lord Anderson of Swansea
Is there not the danger in the argument of a level playing field of a comprehensive public register across the board that that will never be achieved, because there will always be some countries which would hold out against it? All one can reasonably hope for is the greatest measure of agreement.
Baroness Williams of Trafford
The noble Lord is absolutely right that we will never get a global homogenous position with every country being equally compliant. We are aiming for those territories and Crown dependencies to work towards the standard to which we aspire. That is where we are at this point. I hope both noble Lords are satisfied with that.
I trust that this House, like the Commons, will recognise the constitutional settlement that we have with these territories and agree that we should look to work consensually with them rather than enforcing legislation.
The noble Lord, Lord Rosser, and my noble friend Lord Faulks made the point that there is no point in legislating if law enforcement agencies do not have the resources to deliver. I understand the concerns raised regarding law enforcement and the resources available fully to implement these new powers. I am pleased to say that £764 million has been invested in law enforcement agencies since 2006 and that more than £257 million has been invested over the past three years under the asset recovery incentivisation scheme—otherwise known as ARIS—which returns recovered assets back to the front line. These moneys are used by law enforcement for reinvestment in law enforcement capabilities or in community crime prevention schemes.
In addition, the Home Office share of ARIS is invested in front-line capabilities, including the regional organised crime units, ROCUs, which have received more than £100 million in direct funding from the Home Office since 2013-14. We reformed ARIS to boost the resources available to tackle serious and organised crime. A top slice of £5 million has been set aside every year until the end of this Parliament to fund key national asset recovery capabilities.
The noble Lord, Lord Rosser, also asked which agencies can use the powers in the Bill. The powers in the Bill can be used by a variety of law enforcement agencies, not just the NCA. The police, the Serious Fraud Office, HMRC, the Crown Prosecution Service and immigration officers will be able to use the new powers in the Bill to investigate money laundering and seize criminal assets.
My noble friend Lord Faulks asked about the effect of partial compliance with a UWO. If there is compliance or purported compliance, the rebuttable presumption that the property is recoverable does not arise. However, law enforcement has valuable information and can pursue an investigation, if relevant. If the purported compliance is false or misleading, it will be an offence.
My noble friend also asked why so few UWOs are predicted—20 per year—and why the amount expected to be recovered as a result of UWOs is so small. A number of other noble Lords alluded to this. I reassure noble Lords that the figure given in the impact assessment is a conservative estimate based on the views of operational practitioners. It is not a definitive indication of how often this power will be used. The Government are keen that these powers are used in as broad a range of cases as possible, and we are already actively engaging with law enforcement and prosecutors to encourage the use of all the new powers being introduced by the Bill. Ultimately, it will be for the enforcement authorities, which are operationally independent, to decide when and how often to use these new powers. We will carefully monitor and review the use of UWOs once they are introduced. This will inform future changes that may be needed to ensure that they are being used to their maximum effect.
My noble friend also asked what we have learned from the use of UWOs in Australia. As part of the work developing our draft legislation, we have noted with interest the experience of other jurisdictions which have existing provisions for UWOs, Australia being one of them.
The noble Lord, Lord Rosser, and other noble Lords spoke about corporate failure to prevent other economic crime and asked why the Government have not created a corporate liability offence in respect of failure to prevent economic crime. The damage caused by economic crime perpetrated on behalf of, or in the name of, companies to individuals, businesses, the wider economy and the reputation of the United Kingdom as a place to do business is a very serious matter. However, the Government believe that it would be wrong to rush into legislation in this area and that there is a need to establish whether changes to the law are justified.
On corporate criminal liability for economic crime, the Government launched a public call for evidence on 13 January—which I think one noble Lord alluded to—which is open until 24 March. This is part of a potentially two-part consultation process. It has requested and will examine evidence for and against the case for reform and seeks views on a number of possible options, such as the Bribery Act failure to prevent model. Should the response the Ministry of Justice receives justify changes to the law, a consultation on a firm proposal would follow. We are therefore not in a position to comment on the timetable for reform, should that be the way forward.
The noble Lord, Lord Rosser, made a point about SARs reform, which was mentioned during the consultation on the Bill but is distinctly lacking in the Bill. He asked whether SARs will be prioritised as major and trivial. Reform of the SARs regime is a crucial part of the Government’s Action Plan for Anti-money Laundering and Counter-terrorist Finance. We have established a programme to reform the SARs regime, working collaboratively with partners in line with commitments published in that plan. The Government are seeking improvements in the short, medium and long term, and the legislative elements in the Bill are only one element of the wider reform that is required. During the review of the SARs regime that the Home Office ran in 2015, a number of regulated-sector companies suggested that suspicious activity reports should be prioritised. We will consider this as part of the SARs reform programme.
The noble Lord, Lord Rosser, suggested that the anti-money laundering regime is confused and ineffective and asked what HMG are doing to reform the 27 supervisory bodies. The Government consulted on reforms to the anti-money laundering supervisory regime in the autumn and have considered the responses. The Treasury intends to publish the outcome of that review in the coming weeks in order to ensure the most effective possible supervision of the regulated sector.
The noble Baroness, Lady Kramer, talked about whistleblower protection.
Lord Hodgson of Astley Abbotts
My Lords, does that mean that the results of the consultation will be available in time for Committee? What was discovered as a result of that consultation will inform our debate on money laundering in a very important way.
Baroness Williams of Trafford
I can find out and let my noble friend know. I did say a matter of weeks, so we may be in luck.
Protection for whistleblowers under the Employment Rights Act 1996 means that dismissal for whistleblowing is automatically unfair. BEIS is reviewing legislative provisions around protecting whistleblowers in the workplace and will make recommendations on how we might strengthen them.
My noble friend Lord Faulks and another noble Lord referred to the Observer article about individuals using the tax on enveloped properties and asked what was to become of that. We are providing new investigate powers, including UWOs, which will make it easier for our law enforcement agencies to investigate money laundering in the London property market and recover the proceeds of crime. However, the issue will not be solved by law enforcement action alone. We need to ensure that lawyers, estate agents and other professions, as many noble Lords have mentioned, are complying with their obligations under the Money Laundering Regulations. To that end, the Treasury has launched a review of the anti-money laundering supervisory regime and will publish the findings imminently.
In addition, the Government intend to publish a call for evidence, seeking views on a new register of overseas companies that own property in the UK. We hope to do so shortly and will then introduce the relevant legislation when parliamentary time allows.
Lord Rookie—sorry, I mean the noble Lord, Lord Rooker; I do not know why I called him “rookie”—talked about the Government ensuring that the Magnitsky power will be used. The expansion of the civil recovery regime is a significant step and adds to the suite of powers available to UK law enforcement agencies, including the NCA, to combat money laundering and other serious crime. Ultimately, it will be a matter for the agencies to decide which powers are justified on a case-by-case basis, but the use of this power will be subject to the relevant safeguards in Part 5 of POCA. In particular, law enforcement agencies will need to be satisfied and have the evidence required to satisfy a court on the balance of probabilities that property in the UK is the proceeds of gross human rights abuses or violations overseas.
The noble Lord, Lord Rooker, talked about fines on banks in the UK. He raised the issue of banks in the UK not being penalised for laundering funds from overseas. I have a huge list of fines, which I will not read out today, because it would take up valuable time in responding to the noble Lord’s point, but I will send it to him and other noble Lords and place a copy in the Library.
My noble friend Lord Faulks asked about deferred prosecution agreements in the Bribery Act, and I thank him for his words on DPAs. I agree that they are a very useful tool that encourages companies to engage with law enforcement and self-report wrongdoing. It is used effectively for bribery overseas, for example, in the case of Rolls-Royce, and it will be useful in bringing new offences under Part 3.
The noble Lord, Lord Flight, asked what the Home Office is doing to improve asset recovery and said that not enough is being recovered. More assets have been recovered under this Government than ever before. In 2015-16, we recovered more than £255 million-worth of criminal assets using the POCA powers. We have delivered our 2015 manifesto commitment to return a greater share of recovered assets to the police. When performance exceeds the baseline set in 2015-16, additional receipts will be invested in the regional asset recovery teams, which I think is the right way. The 50% share of recovered moneys that are already invested, including in local police forces, will be unaffected.
The right reverend Prelate the Bishop of Oxford talked about the large proportion of African wealth invested in tax havens. The UK is working precisely on that to bring corrupt leaders to justice and recover the assets that they have stolen, quite often from their own people, as the right reverend Prelate said.
In 2014-15, DfID’s gross losses to fraud and corruption were approximately £2.3 million, recoveries were £1.5 million and the net loss was therefore £750,000, which is a recovery rate of 67%.
The noble Lord, Lord Rooker, asked about procurement, particularly in the public sector. HMG are acutely aware of the risks that central and local government face, and that is why procurement is one of the priorities in the forthcoming anti-corruption strategy. He and other noble Lords have praised my right honourable friend in the other place, Sir Eric Pickles, and I join them in that praise.
The noble Lord, Lord Flight, and other noble Lords made a point about domestic PEPs. According to the Financial Action Task Force and EU law, politically exposed persons must be subject to some sort of enhanced due diligence in recognition of their influence, their authority and their prominence in public life. Our view is that banks should take a proportionate and sensible approach to know-your-customer measures for Members of Parliament, Peers and other UK PEPs. I fully accept, because I have heard various anecdotal evidence, that perhaps this is not being consistently applied across the piece.
I hope noble Lords will indulge me for one more minute, because I have quite a few things to get through. The noble Baroness, Lady Whitaker, asked when UWOs will take effect and when the code of practice will be available. At the earliest opportunity is the answer to that.
The noble Baroness, Lady Bowles, made a very good point about company director disqualification. Where a director is convicted, they can be disqualified as part of their sentence. Where a company is convicted of a Part 3 offence and the director is not party to that, fairness requires a separate hearing of application to disqualify. Where a director of a corporation is implicated in wrongdoing, they can be subject to prosecution. If their actions amount to criminality or facilitating tax evasion where their actions fall short of being criminal, investigators can already investigate whether they are fit and proper to continue to hold the position of a company director and report their findings to the Secretary of State.
I realise that I am well over my time and will have to write to noble Lords, as I still have a wad of answers here. I finish by again thanking noble Lords for what has been a very enjoyable debate.
International Women’s Day
(7 years, 8 months ago)
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Baroness Shields
That this House takes note of International Women’s Day and the role the United Kingdom plays in promoting gender equality globally.
The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport and Home Office (Baroness Shields) (Con)
My Lords, as we come together in your Lordships’ House today, millions of people around the world are celebrating International Women’s Day: people who have travelled very different paths and faced difficult challenges but who are united in the belief that no country can truly flourish—socially, economically or democratically—if it leaves half its people behind. This year’s theme is, “Be Bold for Change”.
In some regards, it is a sad indictment that despite the integral role that women play in every aspect of life, we still struggle to be considered equal. In the opening years of the 20th century, courageous women joined hands and stood beside each other in solidarity. Outside this very House, suffragettes fought for women’s rights in our democracy, yet more than 100 years on, we are still striving to become a society that is truly equal. I feel a great sense of unity and purpose in this House, especially on the issue of gender equality, and I have every confidence that there will be a significant and meaningful debate today. But this debate goes way beyond our borders: the responsibility to raise awareness and tackle gender inequality in all forms is universal. It sits at the very heart of achieving fundamental human rights and equality for all.
In this country, we can be enormously proud of the progress we have made on gender equality. This Government have made great strides in ensuring that men and women are rewarded equally for their skills and abilities. More women than ever are in work, and the gender pay gap is at its lowest point, but we must persist. The new gender pay gap regulations, which will come into force next month, will provide greater transparency and move us significantly in the direction of eliminating the pay gap altogether. This progress, combined with our introduction of shared parental leave and pay, is also an important step in recognising the often undervalued work that women do. It goes a long way to addressing the impact of punitive career setbacks that occur when one parent takes on the lion’s share of domestic responsibilities.
I remember those painful setbacks myself. As a single mother, I experienced the immense pressure of wanting to be a perfect and indestructible parent while having to support my son and trying to lead a successful professional life. It is a balancing act that is often misunderstood and can be incredibly challenging and heartbreaking, which is why it is of the utmost importance that we give single parents the credit and support they deserve. Luckily, in my professional life I have had the privilege of working in some of the most forward-thinking, creative and innovative companies, and throughout that experience I have witnessed great women contributing their skills and talents to improving our lives through technology and innovation.
Technology has the power to be the great leveller. The internet represents opportunity on a massive scale and in theory empowers equally, yet when it comes to the question of women and their place in the technology sector, this rule does not seem to apply. Indeed, often it is quite the opposite, as men outnumber women and dominate senior roles. Women currently fill less than 30% of tech jobs in the United Kingdom. One explanation is that there are simply not enough women applying for these roles and even fewer girls studying science, technology and coding in secondary schools.
This was not always the case. In fact, women in the UK played a significant role in the beginnings of modern computing. The portrait of Ada Lovelace, which hangs proudly in No. 10 Downing Street, is a testament to this. The Countess of Lovelace was a brilliant mathematician who wrote the first instructions for the analytical engine which launched the birth of computing. We cannot forget the proud tradition of the pioneering women code-breakers of Bletchley Park—or women in science and technology the world over, for that matter. For example, there are those who worked for NASA, as portrayed recently in the Oscar-nominated film “Hidden Figures”. These brilliant African-American women scientists calculated crucial flight trajectories for Project Mercury and other successful space missions, but received faint praise at the time.
By the 1980s, the advent of home computing made the industry lucrative, and we started seeing advertising showing teenage boys playing videogames, making them suddenly the de facto experts in this once female-friendly business. Jobs in IT became high status, and as the pay packets grew bigger, men took over the jobs previously done by women. So much so, that in my first computer science class in 1980, there were just three women in a class of 400.
The Government want women back where they belong, taking the lead in computing. We were the first Government globally to introduce computing in the national curriculum, allowing pupils to learn computational thinking and creativity as active participants in the digital world. We worked with some fantastic organisations, such as the Stemettes, which provides effective mentoring schemes and events for young women and girls that give them confidence and the belief that they can succeed in science, technology, engineering and maths. Women Who Code, a global non-profit programme, is working to inspire women and encourage them to embrace careers in technology. Nationwide programmes such as the Code Club provide networks of volunteer-led, after-school coding clubs for younger children and girls in particular. In addition, the Government are supporting women entrepreneurs by investing £2.2 million as part of the superfast broadband rollout, which will enable them to access new markets and grow their businesses online.
The UK is a world leader in gender equality, and we take great pride in that. But outside the UK, millions of girls are kept from attending school, and this is a significant factor in poverty and lack of economic opportunity. UK aid has helped educate 5.3 million girls globally, giving them choice over their futures and the means to secure their livelihoods. We also played an important role in securing global agreement for UN sustainable development goal number 5, which is to:
“Achieve gender equality and empower all women and girls”.
Internationally, this Government have been a powerful voice for women’s protection and equality. We established a benchmark through the Modern Slavery Act, which gives law enforcement the tools to fight this appalling crime. It gives them the tools to ensure perpetrators are brought to justice and enhances the support and protection available for victims.
Additionally, the Home Office is co-ordinating efforts across government, and globally, to tackle the crime of FGM and is supporting the work of the voluntary and community sectors, survivors and professionals who oppose this extreme manifestation of gender inequality and abuse. This work enables us to raise awareness and to become part of a wider conversation that empowers women globally to have open discussions, both online and offline, about this devastating practice.
I firmly believe that technology is a vital piece of the puzzle in how we effect female empowerment. Today, it is the means by which we communicate, learn, network, and engage with global markets. Digital technologies have great potential as tools for the inclusion of marginalised groups, enabling new kinds of participation in economic and political processes. Recently, we saw this potential in action as women organised online and marched in cities all round the world to defend their basic human rights. However, the digital world must also be safe, inclusive and empowering. That means building resilience through education and equipping all people with the tools to respond to and report harmful content, so that there is no opportunity to use the internet as a weapon against equality.
I know that many women have been recipients of hurtful, aggressive and degrading attacks online. Online misogyny is abhorrent. It is a global gender rights tragedy and must be addressed. We air our views on social media and we are punished with mockery, harassment and the threat of sexual abuse. For many this is compounded by racist and homophobic language. These tactics are used to undermine our human rights and dignity and to silence our voices. To that end, the recently announced review of domestic abuse and violence legislation presents us with an opportunity to simplify the existing wide-ranging legal protections and support people with the information and knowledge they need to protect themselves. Nobody should be left in any doubt of our commitment to ensuring that all women and girls live free from violence and abuse, whether online or in their communities.
Our commitment to this cause is exemplified by the work of the WePROTECT Global Alliance, which was founded and funded by this Government. Today WePROTECT works in collaboration with more than 70 countries, NGOs and law enforcement and industry leaders as part of a multi-stakeholder initiative to galvanise global action and eradicate child sexual abuse and exploitation online.
The newly announced cross-government drive on online safety, led by DCMS, will bring together the Home Office, the Department for Education, the Department of Health and the Ministry of Justice as part of a powerful co-ordinated effort to continue our work to make the internet safer.
We are also using new, technology-led communication to speak directly to young people and to help them recognise abuse. Our acclaimed teenage relationship abuse campaign, Disrespect NoBody, encourages teens to rethink their views on violence, abuse and consent. Young people need information and tools to build healthy, respectful and nurturing relationships. That is why last week, the Government announced a new duty on all schools to provide education on relationships as part of the PSHE curriculum.
The Child Exploitation and Online Protection Centre—CEOP—works across the UK to tackle child sex abuse and to provide advice for parents and young people. This work is both national and international and ensures that online child sex offenders are brought to justice in the UK courts, including those involved in the production and distribution of child abuse material.
Of course, more needs to be done and today’s theme, Be Bold for Change, means that everyone is watching expectantly to ensure that we continue making progress. Progress will not come easily—no true progress ever does. However, I am sure that I speak for all noble Lords here today in embracing the commitment to never stop striving towards a truly equal society. I beg to move.
Baroness Vere of Norbiton (Con)
My Lords, I remind noble Lords of the advisory speaking time for today’s debate of seven minutes, at most, to enable the House to rise by 7 pm.
Baroness Prosser (Lab)
My Lords, I start off by being chastised. I thank the noble Baroness, Lady Shields, for moving today’s debate. It is heartening to see that there are contributors from across the House, because we can solve these really difficult questions only if we work together.
Many women around the world will have had the freedom and the wherewithal to celebrate International Women’s Day yesterday by organising local events, social occasions or demonstrations and protests. We are lucky in this country that if we so wish we can do any of those things. However, many women will not have had those opportunities. Either their home countries will have strict social rules about the way women are expected to behave—many not allowing women to be out in public without a male escort—or any questioning of their Government’s policies or programmes will be seen as heresy and protesting as too dangerous. Then there are the women who are just too poor to be able to assemble for an objection or even to raise their heads. To be a poor woman in many parts of the world is to be dirt poor with no hope, no personal space and no rights. That is why we, who are by comparison so hugely privileged, must shout out for those women who cannot shout for themselves.
I am pleased that our Government have continued to commit 0.7% of national output to overseas aid and I would welcome the reiteration of that commitment from the Minister today. It is right that solid procedures must be in place to ensure this money is wisely and well spent. However, I am disturbed by the negative tone taken by the current Secretary of State for the department and I hope we can be reassured today that the right honourable Mrs Priti Patel is as committed to this work as we would like her to be.
Next week the 61st session of the United Nations Commission on the Status of Women will commence at the UN headquarters in New York. This year’s main theme will be women’s economic empowerment in a changing world of work. I have long believed that access to employment is the key to women’s equality. To have your own money in your own pocket is a major step towards independence and dignity. Key to achieving this status is the role of education and while the impact of goal 4 of the sustainable development goals has been remarkable, 57 million children globally are still not in school, over 50% of whom are girls. Poor families are much more likely to keep girls at home, either to help run the home or because limited money is always prioritised for boys.
While major programmes such as the SDGs are essential, local work is key. I am currently working to link up a charity in which I am involved with the work of an NGO called the Book Bus, which operates in a couple of African countries. It tours villages with a book bus and helpers, providing books and teaching children to read. Breaking down nervousness at the role of outsiders and persuading parents and whole families that children’s learning is key to all of their futures needs slow but respectful confidence building.
Equally, the local approach is essential in building the confidence of women and the support of men to encourage and enable women to participate in local life—generally an essential first step on the public activity ladder. It is a proven point that decisions made by both women and men generally lead to the most sustainable and effective outcomes. UN Resolution 1325, which requires the voices of women in peacebuilding processes, was not introduced as a sop but because we know solutions made by mixed communities produce better results.
This is a subject about which we could talk all day. Much is being done to help women to achieve their potential and much more continues to need to be done. I conclude with a small piece of information from 100 years ago. On 23 February 1917 a protest on International Women’s Day led to 12 days of revolt in Petrograd, formerly St Petersburg. On 2 March, Tsar Nicholas II was forced to abdicate and the Russian revolution was on its way. As John Knox said back in the 16th century, beware “the Monstruous Regiment of Women”.
Baroness Barker (LD)
My Lords, there is a country where one group of women are allowed to be recognised legally only if they can prove their identity to the satisfaction of a psychiatrist for at least two years. It sounds like Russia. There is a country where women can have their legal identity denied indefinitely by a spouse. It sounds like a theocracy, such as Saudi Arabia. There is a country where some women, in order to obtain legal recognition, have to make an application to a panel which meets in secret, whose composition is never revealed, and when a decision is made there is no right of appeal. That sounds like China—but no, in all three cases I am talking about the United Kingdom. That is how we treat trans women, and men, in our country today.
While England, Wales and Scotland have made significant progress on LGB rights, our trans citizens face discrimination in public services, a damaging lack of understanding in the media by people who should know better, and physical violence. Transphobic hate crime reports rose from 215 in 2011 to 582 in 2015, but prosecutions remained steady at 20 per annum.
In January 2016 in the other place, the Women and Equalities Committee produced a report which made 35 recommendations. On 7 July the Government replied; it was responded to on behalf of a Government in which Theresa May was Home Secretary. Today, I want to ask the Minister about some key points in the report and the response.
The Minister for Women and Equalities has a cross-government departmental role, because trans people face discrimination in a number of different aspects of government. In July, the Government said that they would agree an action plan—an update of the 2011 trans equality action plan, brought into government by my noble friend Lady Featherstone—and that they would monitor progress. We are still waiting, and I ask the Minister when that will happen.
The Women and Equalities Committee had evidence from all sorts of people, including legal and medical professionals, which stated that the inclusion of gender reassignment as a protected characteristic in the Equality Act was a huge step forward at the time, but it is now dated, and what we really need is an updating of that Act to make gender identity a protected characteristic. That could make a fundamental difference to the lives of these women. For example, it would enable political representation—we have no trans people in Parliament whatever. Some of us, in my political party, want to make sure that we give preference to some candidates from minority groups, which includes people from the trans community. In fact, we have adopted a candidate in a seat that we hope to win, but it would have been much easier to do if we had had that change in the law.
In the inquiry of the Women and Equalities Committee, people testified to the fact that the Gender Recognition Act was in its day pioneering legislation, but it too is dated. It has a medicalised approach and requires people to have a mental health diagnosis to confirm their identity. It runs contrary to the dignity and personal autonomy of applicants. The committee asked the Government within this Parliament to come up with proposals to change the Act in line with human rights legislation. The Minister for Equality said in 2016 that they would do that and make changes to demedicalise the gender recognition process. We are still waiting. When will it happen?
The gender recognition panel meets in secret. Is it monitored? How do the Government know that it is exercising its authority correctly? How do they know whether it is doing so efficiently or whether people’s rights are being abused?
Finally, the noble Baroness, Lady Stowell, will not be surprised to hear me raise the matter of the spousal veto, as it was a matter that we talked about during the passage of the Marriage (Same Sex Couples) Act. It is still the case that a spouse can withhold their agreement to a gender recognition certificate being issued to their partner who has transitioned. I cannot think of any other circumstance in which we would allow a spouse indefinitely to punish somebody to whom they had been close to prevent them obtaining the legal identity to which they should be entitled. When we have asked about this before, we have had numbers given to us of how many spousal recognitions have gone through, but we have never had the numbers of people who have been refused. We really do need to stop those women being indefinitely trapped in that situation.
We have done a tremendous amount in this country to lead the world in equalities legislation, but in this one respect we are lagging far behind. It is really important that we begin to pick this issue up very soon. Next year, we will have the Commonwealth Heads of Government Meeting in this country. We left to the Commonwealth a terrible colonial legacy on LGBT rights, but we tell it that it should get better.
Trans women are bold and I think brave in doing everyday things, but they have waited far too long for change. The Government may have hoped that the report sank without trace and that some of us have not noticed, but we have, and we will continue to ask the question until these women get the equality and equal treatment that they deserve.
Baroness Bottomley of Nettlestone (Con)
My Lords, first, I declare my interests as set out in the register. Following the noble Baroness, I was involved in the appointment of the last two chief executives of Stonewall, and I have been involved in the appointment of a large number of women to lead philanthropic and charitable organisations. I know how seriously her words are taken. I say that, along with my good friend the noble Baroness, Lady Prosser, I am so proud to be part of the monstrous regiment of women—and I think that many of us in this House are. One of the joys and privileges of being here is that there are so many women who in their time have broken through barriers and have had a pretty tough and difficult time—but their tenacity, courage and resilience have seen them through.
I cannot help but have a sense of jubilation about some of the achievements in the United Kingdom. Whoever thought that we would have a woman commissioner of the Metropolitan Police, Cressida Dick. This is extraordinary. Whoever thought we would have a female head of the TUC, in Frances O’Grady, who is such an excellent woman. Welcoming the Minister is a particular joy, because her background is very different to that of many of us, who battled on along rather conventional paths. She is an example of the modern woman—a technology expert, an entrepreneur and part of a modern generation. I am also pleased about the noble Baroness who will be winding up because her particular contribution in education is very much at the heart of all that we are achieving.
How can I not mention that now in Britain we have our second female Prime Minister? When I was young, many centuries ago, I never thought that we would have a single female Prime Minister, far less two. Did I ever think that we would reach 30% female MPs? Of course not. When I was an MP, there were 23 female MPs out of 600. I wore a black suit, a blue suit or a grey suit—I have not changed much—on the basis that, if I looked like a man, people would not be too disagreeable to me. We are lagging in the Lords with about 26% of females—that is because we move more slowly—but we have certainly been great pioneers.
However, in being excited about much that has changed in the United Kingdom, I do not for a moment want to underestimate the real issue of global disadvantages faced by women: the lack of education, financial empowerment and human rights. That is why I so celebrate the work of our Prime Minister Theresa May in her former job, on modern slavery, and the seriousness and focus that she gave to that. Within our own country, we all know that there are many women who are disadvantaged and who lack opportunity, freedom and the ability to develop their skills and personality. In celebrating what can be and what has been achieved, I would not like noble Lords to think that I underestimate all that needs to happen in the rest of the world and throughout the United Kingdom.
Frequently, this debate has focused on women in business. I think that we have had a rather exhausting conversation about women on boards, because I do not think that they are the single most important group of females in the United Kingdom. But the transformation is extraordinary. When I was first on a board in about 2000, the board meetings started, “Gentlemen and Lady”—and that is how they continued. Now we have beaten the 25% figure of women on FTSE 100 boards, ahead of time. That was not done by quotas, legislation or other such techniques that many in this country revile, but by exhortation, good example and a healthy bit of naming and shaming. Cranfield University deserves a lot of credit for helping on the naming and shaming, and I celebrate that. Now the latest target is that 33% of the senior leadership positions in the FTSE 100 and 33% of the board positions in the FTSE 350 should be female by 2020, which we were told about yesterday by the noble Baroness, Lady Williams of Trafford.
Of course, it is right that the executive positions are much more difficult to develop and fill with females because of all the difficulties over career breaks—as well as unconscious discrimination, lack of aspiration or role models, and everything else that we understand. However, we now have seven FTSE 100 female chief executives. The first female chief executive of the FTSE 100 was appointed in 1997; we now have seven. The first FTSE 100 female chair came in 2002; we now have four. That is an extraordinary rate of progress compared with the context in which I was operating when I was in government. There is more to do, and I welcome all those who are supporting enlightened employment practices, such as Vodafone and many others who are helping people with their return to work.
I will move forward fast to say something about women and the arts. We all know that in history, “anonymous” meant a female author who did not like to declare her name. The appointment of Maria Balshaw to replace Sir Nicholas Serota at the Tate—our largest, more impressive and iconic arts organisation—is extraordinarily exciting. There is a whole cohort of women coming through: Diane Lees at the Imperial War Museum; Jennifer Scott at the Dulwich Picture Gallery; Perdita Hunt at the Watts Gallery; and many others.
I pay tribute to another woman, Dame Vivien Duffield, who founded the Clore Leadership Programme for the arts, which helped to develop and coach so many of those women. It is not possible to speak in the House without mentioning Hull, the city of culture. Only this weekend there is going to be the Women in the World festival, at which many female artists, such as Lucy Beaumont and Maureen Lipman, are appearing. Many of the new commissions, too, will be female.
Lastly, I will talk about one area where we must see more progress—universities. It is extraordinary that, when we started these debates, about 12% of vice chancellors were women; it is now up to about 20%, but there should be more. Minouche Shafik is taking over as the first female director of the London School of Economics—my alma mater—and the noble Baroness, Lady Amos, is doing the same at SOAS. But the figures are low both for female vice-chancellors and female chairs. I am pleased that there are many female chancellors in this House apart from myself: for instance, the noble Baroness, Lady Chakrabarti, and the noble and learned Baroness, Lady Scotland. We all enjoy it, but only one in three chancellors is female. I ask the Minister to give her own personal commitment to the Athena SWAN equality challenge programme, because it is through education that we are going to deliver the future. The Athena SWAN programme has so much to offer in universities, and with her support and encouragement I am sure that so much more can be done.
Baroness Ford (CB)
My Lords, it is always a great pleasure to participate in the debate which marks International Women’s Day and I thank the Minister for her introduction. I always learn so much from my colleagues in your Lordships’ House, who in different ways are supporting women in very different walks of life. My pleasure this year is tinged with sadness, in that we will miss hearing from the late Baroness Heyhoe Flint—a frequent and lively contributor on this topic, an inspirational role model as a world-class cricketer and, quite simply, a wonderful human being. I had the great pleasure to work with her in the run-up to the 2012 Olympics and her views on equality and sport were always challenging but always entirely authentic.
I am sorry to disappoint the noble Baroness, Lady Bottomley, because I am going to talk about women and boards—so she can go and have a cup of tea now, if she likes. Unlike her, I do not think we have done enough. It is now 24 years since I joined my first board as a non-executive director. For much of those intervening years, change was painfully slow. In the last six years, though, particularly since the publication of the Davies report, the atmosphere and composition of UK boards has been changing rapidly and very much for the better. By the end of 2016, we had achieved female board membership of over 26% in our largest companies, ahead of the target set in 2011, and approaching 20% for the FTSE 250.
This matters, not just because we need to harness the talents of all our workforce to be genuinely competitive in a global, and post-Brexit, economy, or because it is self-evidently the right thing to do to have leadership teams reflecting the kind of society they purport to serve. I would argue that, to make real progress, women must be deeply embedded at the highest level: in the key decisions around allocation of resources and in critical investment decisions, at a time when some of our hard-won rights have never been under more pressure, around determining culture and behaviours. Although that has always been a strong conviction of mine, I was heartened to see some empirical evidence to support this instinct. Among MSCI world index companies surveyed in 2015, two really interesting findings emerged.
First, companies that had strong female leadership reported a superior return on equity, a key business metric: 10% against 7.4% on an equal-weighted basis. That is pretty significant. Secondly, companies lacking board diversity tend to suffer more governance-related controversies—there is diplomatic language for you—than average. That absolutely chimes with my own observations over the years that women are far more inclined to speak up about what they regard as unacceptable remuneration proposals and far more inclined to take account of the consumer perspective. To me, return and reputation are two key drivers of value in a business and it was highly affirming to see that in those two areas the contribution of women appears to be making a real impact.
So, what has happened in the last six years that has made such a difference, and are we really at a tipping point rather than a plateau? I feel that four factors, as with most changes in public policy, have been at work here.
First, the Government have taken a clear philosophical lead about the changes they expect to see. The initial preference for key targets over explicit quotas was enough to incentivise most companies to wake up, smell the coffee and understand that this was, quite simply, their last chance to engage voluntarily.
Secondly, the time was simply right. There is a huge talent pool of able, experienced women, ready and willing—and, critically, expecting—to serve at the highest level in organisations. That has been one of the biggest single changes in my business life, together with the diversity of experience now on offer.
Thirdly, public opinion is aligned with this. In an era when our political leadership in the UK at many levels is female, where our academic leadership, our major not-for-profit organisations, our public bodies, our scientific and arts institutions—as the noble Baroness, Lady Bottomley, described—have all embraced diversity, big business simply looks right out of step.
Finally, there has been a range of key enablers supporting the change. For both companies and individual women, the wide range of support and practical help is impressive. That has come in the shape of campaigning groups such as the 300% Club, led by serious business players. I see the noble Baroness, Lady Goudie, who was a leading light in that, in her suffragette purple today. We see it in the kind of excellent programmes such as the FTSE Cross Company Mentoring programme or in the excellent training and networking work done by the great Women on Boards group. In Scotland, my own initiative, the Norton House Group, works with board-ready women, to prepare them for and support them through their first board appointment.
Of course, some firms in the search community have transformed their attitude to diversity. The very best consultants not only have extensive networks of able people from very diverse backgrounds, but are also increasingly challenging chairs and senior independent directors to reflect on the candidate briefs they develop, specifically to challenge unconscious bias. That is a great step forward.
The face of British business is therefore changing. I believe strongly that this is a tipping point and not a plateau. As with all major change, however, we need to keep up the pressure until the change is embedded and normalised, and that will take time, effort and vigilance. But the UK is already a leader now among those countries that do not impose quotas and, indeed, ahead of some countries that do so but do not back those with meaningful sanctions. It appears that the voluntary approach, so far, is working.
Two things will help further with this. I feel strongly that mature, well-resourced boards could easily create space for an additional non-executive director and reserve that place for someone for whom this is their first board role. This would at a stroke widen the pool enormously. Secondly, I think that all search firms operating in the FTSE should annually publish their candidate data to show how diverse their shortlists have been. This will give companies a real insight into which firms actually take this seriously and help inform their choice when appointing these firms in the future. I am very proud to have added my own footnote to all this change. I was very pleased to chair the first company in the FTSE with an all-female senior line-up. As chairman of Grainger plc, I appointed a female chief executive, a female finance director and a female senior independent director. I had a call from one of our major shareholders on his discovering this. He remarked, “All the top jobs are held by women, Margaret. How could this have happened?”. I had a very clear answer for him. I explained that we had simply hired the best people.
Baroness Howells of St Davids (Lab)
My Lords, I thank the noble Baroness, Lady Shields, for initiating this debate and for her generous introduction to it. I think that we all enjoyed it and learned from it.
It seems only yesterday that I had the privilege to stand before your Lordships in this very Chamber to mark the 100th anniversary of the International Women’s Day movement. Today, I begin with a quote from the esteemed American historian, Laurel Thatcher Ulrich, who once famously said:
“Well-behaved women seldom make history”.
Her quote sits well with this year’s International Women’s Day theme, “Be Bold for Change”, for millions of women across the globe will be coming together at this time in March for a common purpose—equality of opportunity. They all know a simple truth: that if we are mindful of our todays, then we are duty bound to make change to improve our tomorrows.
I will concentrate on women whose skin colour is black because they carry the burden of double discrimination. Over the years I have been fortunate enough to witness many advancements in the old world of race relations and the modern one of diversity and inclusion. Back in 1971, just 2% of the UK population were identified as not white. Today, that figure is 14%, and by 2030 it is expected to be nearer 20%. Despite this, ethnic minorities make up only 6.2% of the country’s small and medium-sized enterprises, contributing £25 billion to £32 billion to the UK economy per year, whereas women-led enterprises add around £70 billion per year to the economy. Yet I remain mindful that if women of the world are to win the global change we seek, battles closer to home must be won. With women making up 51% of the population in the UK and being responsible for the majority of household expenditure, closing the gender pay gap provides us all with a clear opportunity to tackle one of the challenges closer to home that we must win to allow our daughters and our daughters’ daughters to be seen as equal in the eyes of society.
They say that necessity is the mother of invention. After the Second World War, the colonies were invited to support the mother country yet there was no special service provision for them. One of the hardest issues was the need for hairdressers to look after their hair. One of the problems with coming to a cold country when you have African Caribbean hair is that you have a lot of work to do to get it right. African Caribbean women throughout our metropolitan cities faced financial exclusion and were told by bankers, “We do not on principle lend money to black people”. They were forced to use the kitchen stove and the hair comb to straighten their hair so that they could cope in society. They needed to do that as the weather was bad. The fact that they needed help but did not get any did not stop them. Today, you can find hairdressers and beauty salons run by black women on the high streets of the towns of this country.
I know what those women suffered because I came here in 1951 and witnessed immigration. They had to help themselves. However, they received support from some people. Black women have set up groups such as Black Women Mean Business and the European Federation of Black Women Business Owners to facilitate progress. I have the honour to be the patron of the latter body. I hope that noble Lords will forgive me for talking about it because it comprises an amazing group of women. Never having been involved in business, I find it very difficult to know what that body is doing but, by God, it is good. Each year we hold several meetings with people who are trying to ensure that we take our place lawfully, but wilfully, in a nation that still carries double discrimination: skin colour—and noble Lords know the other one.
Young women from across the spectrum are taking science, technology, engineering and mathematics, otherwise known as STEM subjects, in far greater numbers than in the past. We, in Parliament, must continue to encourage young women to be fearless in resisting the “geek” label and continue this trend, ensuring that the engineering and science careers of the future do not remain solely male bastions. Noble Lords will know from the newspapers that young black women play a great part in that.
On 13 March 2013, 1 had the temerity to raise the question of black women on boards in this Chamber. I will not tell the House the response that I had from some Members of the House. Noble Lords may read it for themselves in Hansard. However, I am pleased to say that there are instances where the number of black women on boards has improved. Sir John Parker’s recent review into ethnic diversity on UK boards, Beyond One by ’21, recommends, among other things, a deeper trawl of talent and an improved pipeline to spot black and minority ethnic gifted individuals to be boardroom directors of the future. In addition, the report of the noble Lord, Lord Davies, Women on Boards, has been a huge success, helping the nation to exceed its targets in enabling more women to hold seats in FTSE 100 companies. When I first brought this question to the House, I was pooh-poohed, but it has happened. I am pleased to congratulate the people in this House who supported me at that time. However, we must continue to nurture black female talent, helping them to move beyond the “Imposter Syndrome” in the workplace, which is a novelty to the men of this world.
Baroness Brady (Con)
My Lords, it is an honour, as always, to speak in this House, particularly as it concerns International Women’s Day, which took place yesterday.
The day is about celebrating women and their contribution to our societies, our communities, our Governments and our nations. But I hope that we do more than that. We are seeking action and we are seeking change. Indeed, as we have heard, the theme for the day this year is “Be Bold for Change”, and we must.
EY, which should be commended for its support for the day, has a clock on its website counting down to the day we reach gender parity. At least there is a clock, one might think. Indeed, the Spectator wrote a leader recently, essentially saying that the problem was being solved and that the pay gap only really existed for women over 40. I hope it is right because at present, the clock stands at 170 years until we reach gender parity. That is surely why we must be “Be Bold for Change”. Indeed, taking an international view, there is still much work to be done. The UN estimates that only 50% of working-age women are represented in the workforce, compared with a figure of 76% for men. And we know it is not because women are standing idle. It is because our economies simply do not recognise the work that many women do. If they are not in low-paid, low-skilled jobs, they are in the informal economy—in social care and domestic roles that, sadly, go unaccounted for. This is not choice; this is not gender parity. But what kind of change must be made and who is the change-maker?
The starting point for some is government and, indeed, there are things government can do. I welcome, for example, the UK’s move to gender pay gap reporting for companies with more than 250 employees. There are limits to what the law can do, but there are no limits to what business can do to drive forward workplace equality and bring the 170-year clock down to meet the UN’s Planet 50-50 goal by 2030. To those who ask, “What about profitability? Isn’t that the only thing business leaders should be concerned with?”, I ask them to read a report on harnessing disruption. Business leaders will be familiar with this challenge. Innovation is about profits, but it is also about survival. Anticipating change and incorporating it into your business is vital in a globalised economy. The report talks of such things as advances in digital and big data analytics—all important trends that, if missed, mean a business can find itself behind a curve it can never get ahead of again.
What do these trends have to do with International Women’s Day? The full title of the report is actually Navigating disruption without gender diversity? Think again! It goes on to explain that, without incorporating what should be a mega-trend—gender diversity—into the workforce, businesses are far more likely to miss disruptive technology. Indeed, a recent report from the Peterson Institute found that 30% female participation on boards can add six points to a company’s net margin—and 30% is not even gender equality.
Yet, the EY report says that 23% of business leaders expect no change to gender diversity in the next five years. So, despite debating it here, in this Chamber, at the heart of government, those who must do the most to “be bold for change” are not Ministers but CEOs and chairmen. They must do it, not because of government policy, not because of equality for equality’s sake and not because of International Women’s Day: they must do it if they want to survive and thrive. CEOs should look at whether they have done enough to attract and retain top female talent. That is the greatest hedge of all.
CEOs, business leaders and especially those like myself who sit in both political and corporate camps, need to ask themselves the same questions Emma Watson asked herself when she stood up in front of the UN and said:
“If not me, who? If not now, when?”
I nearly made it through a whole speech without mentioning Brexit but, alas, business leaders I speak to are rightly concerned about it. Actually, they should be just as concerned about whether they have a plan to attract the best talent to compete, without missing out on half the population. If they do not, the terms of market access, passporting, the single market and the customs union might not be what does for them after all. Top female talent might just be the best insurance they can buy.
Lord Singh of Wimbledon (CB)
My Lords, I thank the noble Baroness, Lady Shields, for securing this important debate. I believe our different faiths in the UK can do much to promote the full equality of women in this country and further afield.
Equality does not mean we are all the same; it means equality of opportunity and of respect. There are a few things that men can do better than women and, from my own experience of having a wife and two daughters, there are many things women and girls can do better—like dominating family conversation and not letting me get a word in edgeways. My wife and children, however, always turn to my expertise in choosing clothes. It goes like this: we enter the shop and I go for the nearest chair to sit down, while they spend ages looking at different dresses. When they have narrowed the choice down to one or two, they come to me. I smile smugly and say, “This one”. They then look at each other, smile and say, “We’ll take the other one”.
In the past, the roles of men and women in the family were quite distinct, with the man being the major breadwinner and the woman the main carer. The welcome move to greater equality in society has resulted in wider acceptance that both roles are important and that there is nothing demeaning in men playing a greater role at home. While in our family I am still the hunter-gatherer—I frequently brave the charge of supermarket trolleys as I hunt for food—I also sometimes do the dishes and cleaning.
Sikh teachings place a strong emphasis on the equality of all human beings. Right from the start, Guru Nanak—the founder of the faith, born in 1469—made clear that this teaching of full equality and dignity included women. In a memorable line, the guru criticised prevailing negative attitudes to women, saying, “How can we call those who give birth to kings and rulers, lesser beings?”. In 1699, when Guru Gobind Singh gave Sikh men the common name Singh—meaning “lion”, to remind us of the need for courage—he gave the name or title “Kaur”, meaning “princess”, to women, to remind them and others of their elevated status in Sikh society. On reflection, that seems to be a bit more than equality. I would rather be a princess than a four-legged beast.
Incidentally, when the Punjab was taken over by the British and the son of the legendary ruler Maharaja Ranjit Singh, was exiled to Britain, his daughter became a prominent suffragette. In the Sikh marriage ceremony, the couple are reminded of their equality and their responsibility to work as a team in looking to the needs of the family and wider society.
The Sikh gurus were aware then—as is sadly still true today— that war is often used to justify brutal treatment of enemy women. Sikh teachings remind us that in times of conflict, women and girls should, as appropriate, be regarded as mother, sister or daughter and be treated as such.
Sikh teachings on the equality and dignity of women were way ahead not only of society at that time, but of much of society today. However, we cannot afford to be complacent. In some Sikh families, the still-negative culture of the sub-continent sometimes overrides religious teachings, with girls being treated less favourably than boys, promoting a false sense of male superiority. Today, Sikhs and non-Sikhs need to do much more to make the dignity and complete equality of women the norm, within our different faiths and in wider society.
Baroness Jenkin of Kennington (Con)
My Lords, it is a pleasure to speak in today’s debate, introduced so ably by my noble friend Lady Shields. I made my maiden speech in the International Women’s Day debate six years ago and I am glad to say that today I rise with a little less trepidation than I did on that occasion.
We all have our daily routines, do we not? My first is a cup of tea in bed with Bernard, trying to have a chat and distract him from reading the papers. My next is 120 squats while I clean my teeth. Then, as I cycle over Lambeth Bridge, I think about two things. The first is how lucky I am to have been born with the golden lottery ticket of life—to live in a largely generous, tolerant and fair society. The second, as the noble Baroness, Lady Prosser, said, is to remember those who do not.
Every day I remind myself of the women around the world who are born to abject, grinding poverty and live utterly miserable lives. Those lives are blighted from birth. Often they experience FGM, followed by early and forced marriage, usually to much older men. Millions experience gender-based violence. Many are effectively slaves or are trafficked across the world. There is no escape for them. They have little or no access to any form of birth control, very little knowledge of sexual or reproductive rights and no choice of when or how to have their families. I particularly welcome the Government’s prioritisation of family planning and the forthcoming summit later this summer.
But the greatest injustice in these girls’ lives is the lack of access to education. We all know that the world would be a much better place if all girls went to school and that the key to helping developing countries solve their problems is educating their female populations. There are still 61 million girls across the world between the ages of five and 14 who are deprived of an education. In countries such as Nigeria, Afghanistan and Pakistan there are millions of girls who never get the chance to enter a classroom.
If political leaders around the world would wake up to the benefits, and the essential justice, of educating the daughters of their countries just as surely as they educate their sons, their economic growth would be boosted, their population pressures would reduce, infant mortality would drop and child nutrition would improve. We in this country should be proud that our Government are so committed to supporting the women and girls development agenda. For example, through DfID, we have helped 6 million girls attend schools in Punjab province in Pakistan, and I look forward to the day when every girl has the same chance.
I very much welcome the appointment by the Foreign Secretary of Joanna Roper, a senior diplomat, as a special gender equality envoy. I look forward to hearing more about how she plans to support this agenda. I am sure that she will hold these girls in her heart, as we all do.
In my remaining minutes, I move swiftly to another topic. Next year will obviously provide an opportunity to commemorate the centenary of some women’s right to vote, but this year too marks a special milestone in that journey. Noble Lords may have visited the current exhibition in Portcullis House focusing on the anniversary of the Speaker’s Conference in 1916-17. Speaker Lowther, the ancestor of my noble friend Lord Ullswater, said at the time:
“I cannot pretend that I look forward to it with enthusiasm. I fear that the number and complexity of the issues, which will be raised as we proceed, will overwhelm us and it will be almost impossible to obtain anything approaching unanimity upon the more important topics which will come up for discussion”.
But after many meetings, and a number of votes, an agreement was finally reached that led to the Representation of the People Bill. One of the most dedicated women’s suffrage supporters at the conference was Willoughby Dickinson MP. He was the only one of the conference members with a perfect record of both attending and voting in Parliament in all the Divisions on women’s suffrage. Dickinson recorded that on 10 and 11 January 1917 the conference agreed to consider the question of women suffrage by 18 votes to four and that they agreed that there should be some measure of women’s suffrage by 15 votes to six, but a Motion that it should be on the same terms as men was lost by 10 votes to 12. However, on 29 January he wrote:
“I made my proposition that vote should go to occupiers or wives of occupiers, and this carried 9 to 8. Thus by a majority of one, suffrage clause went forward!”.
Sir Willoughby, I am proud to say, was my great-grandfather, and in the exhibition is a photograph of him with his daughter—my grandmother—as she took her seat in the House of Commons in 1937. I can only imagine how astonished she would be, as the only Conservative woman MP in 1945, to see, with the election of Trudy Harrison a couple of weeks ago, 70 Conservative women MPs and our country led by our second woman Prime Minister—something of which I am very proud. I think she would also be astonished to find me on these Benches.
Baroness Donaghy (Lab)
My Lords, I thank the noble Baroness, Lady Shields, for introducing the debate. I hope that I will not be considered a fraud by taking part in a topic which has a global dimension. My international involvement in women’s campaigns took place in the 1980s and 1990s, and I will be concentrating today on the impact of government policies on women in the UK.
In all the globe-trotting that I did, whether it was to a women’s conference in New York in the 1980s, with Gloria Steinem as the guest speaker and where I think I made a speech about the Greenham Common women, or to South Africa—I was in Soweto in the late 1980s to witness the founding of NEHAWU, a healthcare workers’ union with a majority of women members—I learned three things: first, that it is inspiring to be among women who are dedicated and supportive of each other; secondly, that role models are important; and, thirdly and most importantly, that women globally need no lessons from us in the UK about how to improve their lot. I was humbled by their commitment and by the sacrifices they had made.
However, in my contribution I want to say more about the pay gap in the UK, the care economy and the gender impact of taxation and social security policies. I turn, first, to the pay gap in the UK. Tuesday was a significant day in more ways than one—not just because of the debate on Brexit, where women had to fight to be heard on both sides of the debate, but because it was the day when the average woman worker stopped working for free before they caught up with men. In the 66 days since the start of this year they have been working for free.
The reasons are the same as they were when the Equal Pay Act became law 45 years ago: the undervaluing of roles predominantly undertaken by women, unequal caring responsibilities and outright discrimination, and all the factors recently confirmed in a report by the Fawcett Society. One key way in which this discrimination could be tackled was by making a claim to an employment tribunal. However, the introduction of fees by the former coalition Government has seen the number of applications fall by 80%. From January to March 2014, just 1,222 sex discrimination claims were made compared with 6,017 in the same quarter in 2013. This is a denial of justice. The introduction of mandatory pay-gap reporting is welcome, but it will work only if there is a requirement to publish an action plan on how employers intend to deal with the problem, with penalties for those who take no action.
I turn to the care economy. A new report by the UK’s Women’s Budget Group for the International Trade Union Confederation shows that investing public funds in childcare and elder care services is more effective in reducing public deficits and debt than austerity policies. If 2% of GDP was invested in care industries in the UK, it could create up to 1.5 million jobs. The women’s employment rate would rise by more than five points in the UK and the gender employment gap would be reduced by up to 25%. This is surely better than the Government’s unimaginative and unnecessary austerity policies.
Not surprisingly, we even have gender bias in economic thinking. As the ITUC report states:
“Under the UN-mandated System of National Accounts, investment in physical infrastructure counts as capital stock, whereas investment in social infrastructure is considered as government annual current spending”.
One is an investment, the other a cost. If the 2% of GDP on the care economy was applied in other countries, it would mean 24 million new jobs in China, 11 million in India, 2.8 million in Indonesia and just over 400,000 in South Africa.
The gender impact of taxation policies is one of the most insidious forms of sex discrimination. The Women’s Budget Group has welcomed the Chancellor’s promise to consult on ways to ensure that the taxation of different ways of working is fair between different individuals. It is to be hoped that those consultations will be meaningful. As the group has said:
“Income tax cuts benefit men disproportionately more than women because women earn less than men and rely more on public services that tax revenues fund”.
It continues to say that,
“poorer local authorities can raise less money but need to fund greater use of vital services. Women stand to lose most from this inequality”.
A year ago, my noble friend Lady Lister of Burtersett asked a question about the impact on women of the raising of personal tax allowances. Of those who will not benefit at all from any rises in such allowances in this Parliament, 66% are women and 41% have dependent children. Raising the higher rate threshold benefits men. According to Treasury figures, 68% of those taken out of the higher rate tax band last time were men. That proportion will rise as the threshold is raised further to 2020. Those extremely costly measures worsen gender equality in two ways. They raise the disposable income of most men and erode the tax base for those who rely on government funds for benefits and public services. By 2020, the lost revenue due to the changes to personal income tax thresholds since June 2010 will be approximately £19 billion. This will be paid for by freezing working benefits and by cutting work allowances and reducing income disregard under universal credit. The latter alone will cost £3.5 billion a year. Both of these affect women: we still have a long way to go.
Lord Hussain (LD)
My Lords, I too thank the noble Baroness, Lady Shields, for introducing this debate. International Women’s Day was first observed over a century ago. Progress has been made around the world in the quest for equality. Today, women have gained the right to vote, to run for public office and to enjoy constitutional guarantees of equality in many countries. In many countries, women are active participants in the economy, are acquiring high-level education and are playing a crucial role in the political, economic, social and cultural life of their families, communities and countries. However, there are still situations in the world where the struggle for human rights, equality and the rule of law continues at a heavy price.
At a glance, countries in south-east Asia—namely, Sri Lanka, Bangladesh, India and Pakistan—have progressed well, and women there have held the highest ranks in politics and government. All these countries have seen female Prime Ministers. However, that is a superficial phenomenon limited to the ruling class of these countries, whereas the situation on the ground is very different. I draw noble Lords’ attention to Indian-administered Kashmir, where rape has been constantly used by the Indian forces as a weapon of oppression. The high-profile cases of sexual violence in the Kashmir valley show a pattern of intimidation and threats being deployed by the Government, the police and the military so that the cases do not reach trial.
Many victims of the Kunan Poshpora gang rape by the security forces, which took place in February 1991, have died waiting for justice and the justice system has failed to conclude the process of justice during the last 26 years. The victims have been disowned by their families, for reasons of “honour” and “shame,” and no support system is available for them in society.
According to the popular newspaper The Hindu, on 19 February 2015,
“Last year at a seminar in Srinagar, women from Kunan-Poshpora, twin villages in Kupwara district of Kashmir, publicly recounted the night of February 23, 1991, when soldiers of the Indian Army invaded their lives, privacy and dignity. Masquerading as a ‘cordon and search operation to catch militants,’ the soldiers of 4th Rajputana Rifles, of the Army’s 68th Brigade, entered the villages and launched the most potent tool of repression used in theatres of political conflict — rape, sexual humiliation and sexual torture”.
It goes on to say:
“Sexualised violence in wars and conflicts is neither incidental, nor is it a question of sex. When 125 soldiers lay down a siege over a village, separate the men from the women and sexually assault more than 50 women, from ages 13 to 60, it is indicative of a systemic military practice. The intent was not only to terrorise and traumatise the people under assault—they are often accused of harbouring militants—but also sending out a message of retribution to the Kashmir resistance movement”.
The newspaper further adds:
“The survivors, who appeared in front of a large gathering in Srinagar, for the first time since the incident, were accompanied by Syed Mohammad Yasin, the Deputy Commissioner of Kupwara in 1991. Yasin broke down when he said: ‘I was shocked to see the plight of the women … A woman told me that she was kept under jackboots by the soldiers while her daughter and daughter-in-law were being raped before her eyes. A pregnant woman was not spared either ….’ The message of retaliation, humiliation and shame was palpable.
These victims offer suffer from double victimisation through neglect and isolation. The Kunan Poshpora incident is one of many thousands of such rape cases at the hands of the Indian security forces in Kashmir. There is simply no end to it.
In Kashmir, since 1989 the death of a male generation at the hands of security forces has left behind a population of widows and another group of women called half widows. The half widows find their husbands missing during the last 28 years and it is generally believed that they were taken out of circulation by the security services and the police. They are either in custody or have died during custody under torture. Unless there is a closure and a certainty about these missing people, these women cannot get married and are called half widows. Many of these women are unable to find work due to either lack of education, lack of opportunities, family commitments, cultural or religious barriers or fear of travelling alone. Hence they live under extreme agony, fear and poverty.
According to the Association of Parents of Disappeared Persons, a local NGO, more than 10,000 people were missing in Jammu and Kashmir. The Government has admitted that nearly 4,000 are missing. The Amnesty International report of 23 August 2011 identified 2,800 mass graves in Indian-held Kashmir, while no international human rights organisation is allowed to investigate by the Indian authorities. In August 2016, the United Nations Human Rights Council was refused access by the Indian authorities to investigate these human rights violations.
While the world is celebrating India’s economic growth, the world’s largest democracy lacks respect for human rights and equity, while its security forces are committing some of the worst human rights abuses with complete impunity. Kashmiri women are crying out loud to the human rights campaigners of the free world to consider them equal and support them to get justice.
On that note, I ask the Minister whether Her Majesty’s Government will raise the plight of Kashmiri women with the Government of India at the earliest possible opportunity.
Baroness Hodgson of Abinger (Con)
My Lords, International Women’s Day gives us an opportunity to celebrate the progress that has been made for women, but also to identify the continuing challenges and consider ways to address them. I am grateful to my noble friend Lady Shields for her excellent introduction.
We should be proud of the UK’s recent global record on gender equality. We led the way in establishing a stand-alone goal as part of the sustainable development goals in 2015; we launched the preventing sexual violence in conflict initiative, or PSVI as it is known; and were the first G7 country to hit the 0.7% GNI UN aid spending target and to enshrine it into law. We have put women and girls at the heart of international development, and protecting women from violence and supporting survivors is a priority for our Government. However, in spite of all these efforts, there is still no country in the world where women have social, political and economic equality—even the UK—so where should we be looking to do more?
In much of the developing world, women struggle against patriarchal systems with societal norms and values that disempower them. In some countries, it is very difficult for a woman to function without her husband and harmful traditional practices, such as forced marriage and FGM, coupled with lack of education and no birth control, mean that women’s lives are severely limited. The reality is that equality is enshrined in many of these countries’ constitutions, but too often there is not enough political will to implement and enforce such policies on the ground. The UK can help with this by working with those Governments and by funding projects to work with men, as well as women, at grass roots. When male community leaders understand why gender equality benefits the whole of society, they can often be the biggest supporters. I have seen this in countries such as Mali, where I visited a village project that had persuaded people to stop the terrible practice of FGM.
At next week’s Commission on the Status of Women meeting at the UN in New York, the theme is women’s economic empowerment. When women are given the opportunity to earn a living, they not only lift themselves out of poverty but help to transform their countries. Too often, however, women are confined to the home, unable to choose how many children they have, and are expected to carry out unpaid care work. Nowhere do women suffer more than in conflict countries, where they are disproportionately affected. All too often, they become the victims of the sexual violence that rages—as the noble Lord, Lord Hussain, has referred to in the case of Kashmir—which then becomes embedded into society, even after the fighting stops.
I am a member of the steering board of the PSVI and was also a member of the Select Committee on Sexual Violence in Conflict, which published its report last year. We visited the DRC, and in Goma and the surrounding area we saw, with glaring clarity, the terrible effects of sexual violence on survivors, so I hope that the UK will continue to give a clear lead on this and encourage other countries to take similar action against it.
In countries where women are already the poorest, war also creates millions of widows, who become the most neglected and vulnerable of all. This in turn affects the welfare of their children, denying them education and well-being, and has a negative impact upon the future health and prosperity of the country.
The year 2000 saw the adoption of the ground-breaking UN Security Council Resolution 1325 on women, peace and security. This resolution was established to specifically address the matter of women in conflict around its four pillars of protection, prevention, participation, and relief and recovery. But 17 years on we still struggle to ensure that women play a part in peace processes. This is in spite of evidence that when women are included, there is a 35% increase in the probability of an agreement lasting 15 years. This lack of inclusion is seen startlingly in the Syrian peace process, where a Syrian Women’s Advisory Board has been set up in a consultative capacity and, once again, women have been excluded from having a full place at the peace table.
The UK was one of the first countries to adopt UNSCR 1325 and this year it is working on a new national action plan. Progress has been made in recent years, and I pay tribute to my noble friend Lady Anelay, who works tirelessly in her role as the Prime Minister’s special representative on preventing sexual violence in conflict. I also mention Tom Woodroffe, who has so ably led the wonderful team at the Foreign Office.
I also congratulate the MoD gender champion, General Messenger, on his outstanding work, and the progress made at the MoD. All UK troops deploying on overseas missions now receive training on women, peace and security and PSVI; more military gender advisers are being trained; and all relevant military doctrine will be gender-sensitive. However, still more can be done. I very much hope that the UK Government will consider making a commitment to ensure that a significant number of participants at any UK-hosted peace, security and aid events are women and will speak out strongly against international peace processes that exclude them.
While I am delighted that the UK has contributed $1 million to the UN global acceleration instrument to address the funding deficit on the implementation of UNSCR 1325, as well as additional funding over two years to support research at the LSE Centre for Women, Peace and Security, I hope that a proportion of UK development aid for fragile and conflict-affected states can be spent on women, peace and security. Most importantly, I hope that there can be an increase in funding for women’s rights organisations at the grass-roots level and more support for women human rights defenders.
I want also to draw attention to the Convention on the Elimination of All Forms of Discrimination Against Women, known as CEDAW, which is often described as the international Bill of Rights for women. The UK has never nominated anyone for a seat on the committee since the convention’s inception in 1979. Although elected members of the committee sit independently of their nationality, it is clear that they bring their state’s culture and outlook to the table and that they can have a profound effect on the committee’s deliberations and conclusions. A number of vacancies on the committee are scheduled to come up for election in June next year. Given our long-standing commitment to women’s rights and our proud position as a world leader on gender equality, surely we should be nominating a woman from the UK. We need to lead by example, so I ask my noble friend the Minister for an assurance that this will happen, and I trust that we will not be given more excuses.
In conclusion, while we have much to celebrate today, there is still more that we can do. Among other things, in May there will be a London-hosted conference on Somalia. I hope that the Government will be including the voices of women from Somalian civil society and once again showing the lead—by being bold for change.
Baroness Cox (CB)
My Lords, I also congratulate the noble Baroness, Lady Shields, on giving us this opportunity to celebrate the achievements of many women. I would like to introduce some examples of inspirational women and men who are working to promote the well-being of women and girls in some of the most challenging situations in our world: education in the conflict areas of Sudan and South Sudan; maternal and child health in areas of continuing conflict in Burma’s Shan State; and gender equality in Pakistan and the UK. I shall conclude with a celebration of success in Canada.
First, please travel with me in imagination to Sudan’s Nuba mountains this January and climb a rugged mountain for two hours to meet families hiding in caves for fear of aerial bombardment. There we meet people suffering snake bites and dying from malaria with no medicine. Yet their priority for help is education, especially for girls. Schools are deliberately targeted by Government of Sudan bombers, so education and exams have to take place out of doors, using the respected Kenya curriculum. When it is time for exams, 1,000 students converge and invigilation is undertaken on the mountainside. Our valiant partner, Nagwa, asks every student to bring a large stone. As they gather, she tells them, “When you hear the Antonov bombers approaching while you are doing your exam, you will place your exam papers neatly under your large stone. You will then run and hide in the caves. When the bombers have gone, you can return. Your exam papers will not have been blown away by the blast or the wind and you can continue your exams”. That is exam pressure with a difference, and many of those students perform as well as their counterparts in Kenya.
Moving to the tragic situation in South Sudan, I have had the privilege of visiting South Sudan more than 30 times, many during the previous war when 2 million people perished, 4 million were displaced and tens of thousands of women and children were abducted into slavery. Many are still missing and their families continue to grieve. But the people there still yearn for education as a priority. The Anglican bishop, Moses Deng, of the diocese of Wau in Bahr El Ghazal, recognises the importance of education, especially for girls. He has supported the establishment of a school delightfully called “A Girls’ School Which Boys May Attend”. The girls do attend, and so do the boys, and their achievements are amazing. They attain some of the best results in the country.
Moving rapidly to Burma, the Burmese Government continue their military offensives and grave violations of human rights in ethnic national areas such as the predominantly Muslim Rakhine State, the predominantly Buddhist Shan State and the predominantly Christian Kachin State. Among many local NGOs doing magnificent work is the SWAN Shan Women’s Action Network, which promotes maternal and child health in the conflict-affected areas of Shan State. But SWAN has great difficulty in obtaining funds, especially since DfID adopted a policy of using intermediary organisations to implement and monitor DfID support. SWAN claims that it cannot access these funds because of bureaucratic complexities and, as a consequence, it is in acute need of resources to continue its life-saving work.
We heard an identical concern being expressed by Bishop Moses Deng, who is desperately trying to obtain funds for life-saving food for thousands of internally displaced persons who have fled from conflicts to his diocese. He also says that he does not have the resources to meet the complexities of DfID’s requirements. I therefore ask the Minister to request that DfID makes funds more readily available to smaller indigenous NGOs carrying out life-saving work in remote and high-risk areas not reached by big aid organisations. I am thinking of organisations such as SWAN in Burma and local churches in South Sudan.
I turn briefly to the suffering of women caused by religiously sanctioned gender discrimination abroad and in this country. Last year I went to Bangkok to meet people who had to flee for their lives from the application of sharia law in Pakistan and the failure of authorities to maintain justice for victims of allegations of breaches of sharia law. Time permits only one example. Esther escaped from Pakistan with her family after her eldest daughter was abducted, compelled to convert from Christianity to Islam and forced into marriage. She told me, weeping, “I was terrified. I went to our neighbour’s house to find out who took my child. I fought them to regain my child. I still bear the scars on my arm”. The authorities refused to intervene. The family fled to her brother’s house, hiding in fear until they were able to escape to Thailand.
Now, sadly, I turn to causes for concern on our own doorstep here in the UK. Noble Lords may be aware of my Private Member’s Bill seeking to address the suffering of women from religiously sanctioned gender discrimination, and I thank noble Lords present who support that Bill. Of course, gender discrimination may occur in different faith communities, but with the growth of sharia councils, many Muslim women suffer in ways that would make our suffragettes turn in their grave. Forms of gender discrimination include asymmetrical access to divorce. The husband can divorce his wife merely by saying “I divorce you” three times; she has no reciprocal right. If they have not had a legally registered marriage, women have no rights and are often left destitute and helpless. Also, many men indulge in polygamy with four wives, although bigamy is illegal. Polygamous marriages may be desperately unhappy, as recorded by the courageous Muslim woman Habiba Jaan. Muslim women share their anguish with me when they describe being married into polygamous marriages—and their divorce. One lady wept as she told me she received her divorce through the post, saying, “I never thought this could happen in a democracy. I feel betrayed by Britain”.
Other disturbing examples relate to violence and killings in the name of so-called “honour”. Time does not permit me to give examples now, but many are on the record in the Second Reading debate on the Bill. The women who have had the courage to come forward to tell their stories are doubtless the tip of a huge iceberg. I am very grateful to the Muslim Women’s Advisory Council and to British Arabs Supporting Universal Women’s Rights for speaking out with courage about what is happening here.
The Government are still refusing to consider any proposals to ameliorate the suffering of these women until their review has reported. But there are measures that could be implemented quickly and could bring some relief. I ask the Minister to pass on this request for some of these measures to be adopted by the Government as a matter of urgency.
I finish on a note of celebration—in Canada. Following a protracted grass-roots campaign, spearheaded by the renowned Muslim women’s activist Raheel Raza, the Parliament of Canada passed a Bill in 2015 reinforcing Canada’s commitment to tackle all forms of violence against women and girls, including so-called “honour killings”, and helping to ensure that discriminatory practices, including polygamous marriages, do not occur on Canadian soil.
I hope that today’s debate will highlight the urgent need to address utterly unacceptable practices of violence and discrimination against women and girls, wherever they occur, and, by providing examples of inspirational women who can serve as role models, will help to support initiatives to promote justice, equality and the rights of women everywhere.
Lord Sheikh (Con)
My Lords, I am grateful that your Lordships’ House is again acknowledging this important day. I welcome that we pay tribute to the achievements of so many women and continue to push for full and proper gender equality across the world. Women are the pillars of our families and communities. They have played invaluable roles in our history, including during the two world wars, yet they struggle to gain equal treatment. Much progress has been made since the first International Women’s Day more than a century ago. However, there is still much more to be done.
I shall address the situation of women in the Islamic world. I appreciate that there is a negative perception among some people relating to the role and status of women within the Muslim community. I believe that we all, in particular the Muslim community, must develop a greater appreciation of this perception and do more to tackle it. This means ensuring equal rights and opportunities in a social, educational and economic context. As is the case in all other religious and non-religious circles, we must always seek to achieve genuine parity between men and women. The Muslim community must also speak with a louder voice on gender equality and do more to mark occasions such as International Women’s Day.
It is important to look at the facts in order to understand the challenges. In Islam it is believed that the most important person in one’s life is the mother. We are taught the respect and dignity that should be provided to them. Muslims in fact believe that paradise lies at the feet of the mother. We should also remember that Prophet Muhammad, peace be upon him, worked for a lady whose name was Bibi Khadija. In fact, Prophet Muhammed, peace be upon him, married Bibi Khadija, who was the first person to become a Muslim. It is therefore important to realise that females are not secondary to males in Muslim life.
With regard to education, girls actually now comprise an encouraging 43% of full-time Muslim students. A study last year also found that more Muslim women than men are now obtaining degrees. The same study found that average scores in school tests at ages 11 and 14 were higher for Muslim girls than for Muslim boys. Every year I present awards to British Bangladeshi school leavers and I can say that girls always outnumber boys in relation to high achievement. However, there is a problem for young Muslim women more widely, particularly for those not in education. Only 29% of Muslim women aged between 16 and 24 are in employment, compared with 51% of women in the general population. We need to investigate this paradox of increased education but low economic activity.
There is a disturbing disparity between single and married Muslim women’s career aspirations. Single women are one and a half times more likely to be in employment than married women. This unacceptable situation must be looked into as a matter of urgency. I would like to see dedicated programmes promoting the empowerment of Muslim women, perhaps most notably in workplaces. This could be in the form of providing practical training to assist with employment, or comprehensive childcare services. It is important that the Muslim community acknowledges these disparities and works with relevant organisations to help remedy the situation.
I must also mention that there has been criticism of sharia councils in some quarters, particularly among Muslim women. It should be noted that these are mediation services and do not claim to be making decisions that are legally binding. There is evidence that some decisions made are unfair to women. It is important that the deliberations and procedures of such a system are fair to men as well as women if the sharia councils are to have the confidence and respect of the people. Equality, equity and fairness must always be maintained at the heart of any system of dispute resolution. I would like to see the establishment of a national body, self-regulatory in its constitution, of which every sharia council should become an accountable member. Furthermore, I would like to see each sharia council have at least one female adjudicator.
Another social ill faced by some women is that of forced marriage. There are unfortunately no reliable statistics available on this in the UK. The hidden nature of such activity means that incidents often go unreported. However, I pay tribute to the work of the Forced Marriage Unit, the information it collects and the support it provides to victims.
I must emphasise the difference between arranged marriage and forced marriage. Arranged marriage requires the free consent of both parties. Forced marriage is where pressure or abuse is used to force one party into giving consent. I emphasise that Islam does not permit forced marriages. The bride and the groom must be asked by the imam in the presence of witnesses whether they both consent to the marriage before it can take place.
I emphasise that forced marriages unfortunately occur across a number of communities and religious groups. In 2014, forced marriage became a criminal offence. I believe it is as important that we educate all communities about the dangers of it. All communities must ensure that it is understood that forced marriages are forbidden and, more importantly, work towards changing cultural attitudes where it is a problem. I pay tribute to all the charities which work so hard in this area, such as the JAN Trust.
I have spoken many times of the pride I feel in living in a country where those of different cultures and faiths live alongside each other in relative peace. The United Kingdom is a symbol of tolerance and inclusivity to the rest of the world. It is therefore important that all communities work together to lead the way in promoting gender equality.
Lord Loomba (Non-Afl)
My Lords, for well over 20 years I have worked extensively on human rights, women’s economic empowerment and education of children. I strongly believe that these are the important areas which will promote gender equality in an increasingly globalised world. I am always proud to stand in this House and speak on International Women’s Day. I thank the noble Baroness, Lady Shields, for today’s important debate.
The United Nations says that our planet should be 50:50 by 2030. In essence, we need to achieve gender parity. We have already achieved so much, but much more remains to be done. We now have our second female Prime Minister, which is another landmark for the United Kingdom. As more and more women are able to achieve their goals and the “glass ceiling” begins slowly to be eroded, it shows that women can reach the top if they work hard. It is this pursuit of more women being in powerful roles that we should celebrate and embrace.
If around 50% of the world’s population does not have a voice of its own, we will not have the world we could and should have, with a more balanced and equal society in all its forms. As the sustainable development goals show, there is still a great need to help many women in the world today who do not have the kind of lives that they should have. They are not able to go about their daily lives without discrimination, which holds them back from their goals, desires and dreams, and from truly achieving their potential. This is why goal 5 is to achieve gender equality and empower all women and girls. It is to be commended that DfID’s work in shaping the SDGs and its continued policy of promoting gender equality mean the UK is at the forefront of pursuing an equal world free from discrimination.
The UN’s focus on the world of work and on economic empowerment helping women to become equal players on a level playing field will have benefits for all, but to achieve it we have to do more to ensure that women are engaged from an early age. We need to ensure that they not only have access to good quality education at an appropriate time, but are not discouraged from entering traditionally male-dominated professions, so that their influence can be felt in many more spheres of life. Some women in the developing world do not get access to even basic education. This is why goal 4 of the SDGs is to ensure inclusive and equitable quality education and to promote lifelong learning for all. Here I declare an interest as chairman and founder of the Loomba Foundation. It has recently embarked on a new project in partnership with Rotary India Literacy Mission to skill-train 30,000 impoverished widows—1,000 widows in each of the 30 states of India. They will receive literacy, numeracy and skills training to enable them to face the challenges in their lives.
Sadly, widows in many developing countries and countries of conflict are at the front line of discrimination, where they face unprecedented levels of human rights abuses, ostracisation and ill treatment. Their double discrimination is compounded by the lack of awareness many people have about the plight of widows and how they face many more hardships because of a cultural norm that deems it acceptable to treat them badly. More importantly, research published in 2016 in World Widows Report, which was commissioned by the Loomba Foundation, shows that the problems faced by widows are a formidable bar to achieving the SDGs and that it is crucial to the goals to help widows and to improve their situations dramatically. It is very reassuring to know that DfID, through the key policies of the Government under the leadership of the Secretary of State, puts women and girls at the heart of its agenda, which promotes gender equality globally.
Finally, I highlight the UN Women initiative HeForShe. Women will achieve equality faster if the British Government encourage men to recognise that women should be treated equally and with respect and dignity. It is strange that out of some 30 speakers today, only five are men.
Baroness Manzoor (Con)
My Lords, I also congratulate my noble friend Lady Shields on bringing this important debate to the Floor of the House to mark International Women’s Day and on her excellent introduction.
As we have heard, the UN’s theme this year is “Women in the changing world of work”—a title as fitting now as it would have been on the first International Women’s Day more than 100 years ago. Since then, there have been huge steps towards gender equality in this country and in many places around the world, with women increasingly carving out a place in public life and obtaining vital civil and employment rights.
We should be proud of the progress made in this country. We have record numbers of women going to university. Girls are outperforming boys at school and staying in school longer. However, despite the Equal Pay Act 1970, as, I think, the noble Baroness, Lady Donaghy, said, women in the UK still earn 19.2% less than men. A large part of the discrepancy is due to higher numbers of women in part-time work or taking time out of work to have children—but this is not the full story. Women working full-time still earn 9.4% less than men. Equal pay for work of equal value does not ring true when women’s work is still overwhelmingly undervalued and concentrated in lower-paid sectors. Women dominate the lowest end of the pay scale and hold 59% of minimum-wage jobs. This must change. As my noble friend Lady Brady said, businesses are key to this.
My father, who sadly died when I was in my early 20s, always said to me, “Getting a good education is a key. It unlocks doors and nobody can take this away from you”. How right he was, but this is no less important for women and girls living in poverty around the world. As my noble friend Lady Jenkin said, 61 million girls between the ages of 5 and 14 are denied the opportunity to attend school; 15 million do not even get as far as primary school. This is a global disgrace that shows how far leaders are from achieving sustainable development goal 4: inclusive and equitable education for all by 2030.
There is a whole host of reasons for this, including gender roles in the home, violence against girls, forced marriage and early pregnancy. But one blindingly obvious reason remains: education is hugely underfunded globally. UNESCO estimates that an additional $39 billion in education funding will be needed each year to achieve SDG 4 by 2030. The UN theme of women and work focuses specifically on unlocking the potential of women in the workplace across the planet by 2030. We all know that this will never happen if we fail to increase girls’ participation in education, as well as the quality of that education.
As I have already said, the impact of education on improving women’s economic empowerment is unparalleled. This is aided by DfID’s increased investment in family planning services, from £90 million in 2010 to an extra spend of £195 million per year since 2013. This UK aid has enabled 9.9 million more women to use modern methods of family planning—which is key.
UK aid via DfID is key, and I am delighted that the Conservative Government have promised to deliver a decent education to 11 million children, including 5.3 million girls. However, more still needs to be done. Despite UK aid to education, aid to global education has declined in recent years—and so has progress, particularly for the most marginalised girls in the most isolated communities. DfID must ensure that education remains a key priority. It has a great opportunity to demonstrate this commitment through greater support of the Global Partnership for Education later this year. The GPE does fantastic work to strengthen education systems and get girls in school and learning.
Lastly, I will touch on food. Food and good nutrition are the building blocks for further opportunity and educational attainment. Undernutrition can have a devastating impact on the physical, cognitive and mental development of women, girls and the unborn child. When I talk of undernutrition, I am not talking about starvation during famine or war but of often-hidden deficiencies of crucial nutrients, which lead to stunting, wasting and reduced immunity to diseases. In Pakistan, for instance, which I visited recently and to which the UK gives significant aid each year, 423,000 children die before their fifth birthday, and nearly half the children suffer from stunted growth and wasting. Many are young girls.
In addition, 500 million women are affected by anaemia worldwide. This disease, caused by iron deficiency, is responsible for a fifth of maternal deaths. In 2017, women should not be dying simply because they do not have the proper nutrients to sustain their bodies during pregnancy. DfID is undertaking some excellent work to empower women through better nutrition, and UK aid helped to save the lives of 103,000 women in pregnancy and childbirth between 2011 and 2015. But the pressure to improve nutrients in food must continue.
We are asked to be “Bold for Change”. When it comes to improving the lives of women in this country and around the world, we need to be bold. We need to properly finance education and prioritise equity until every girl has the opportunity to succeed. We need to consign preventable mortality in childbirth to the past and give women the nutrition that they need to thrive. If the last 104 years have shown us anything, it is that none of these issues will simply disappear overnight. This year, we must think creatively and holistically about how we tackle the stubborn challenges that women still face both at home and overseas.
We need more concerted global action to meet the needs of women and girls in humanitarian situations. I entirely agree with the Secretary of State for International Development when she says that women must,
“have the opportunity to play a full and active role in business, politics, peacebuilding and shaping the future of their country”,
in order to “achieve security and prosperity”. To my mind, to do anything less is not to care for half of humanity.
Baroness Goudie (Lab)
My Lords, I thank the noble Baroness, Lady Shields, for initiating the debate today and for her introduction to it, but also for the work that she was doing long before she came to the House of Lords. I also declare my interests as in the register.
On this International Women’s Day, never has there been a time when women’s rights have been more challenged. What does Brexit mean for women? Britain leaving the European Union following the referendum will result in another threat to women in the UK. The vote casts a shadow of doubt on the stability of the human rights of women, maternal and paternal leave, equal access to employment and salaries, and many other issues that make the United Kingdom a recognised leader in this field. Other countries have followed us: many women around the world have united to ensure more balanced rights for women on topics ranging from equal access to education and medical services, 30% representation of women on corporate boards, and equal pay and parity. I hope we do not lose any of these over the next few years.
Since 1915, the question of women’s rights in areas of conflict and post-conflict times has posed many obstacles. Many countries and people have worked very hard over the last 100 years to get some resolution on the issue of women being used as a tool of war. There has been a focus to involve women in the peace talks, and at every level. Five years ago, with the support of the then Secretary of State, Hillary Clinton, and the then Foreign Secretary, William Hague—now the noble Lord, Lord Hague—we saw more concrete developments at the UN and concords ratified by countries in the United Nations. Britain has made great commitments on PSVI and will not attend peace talks, if possible, without women at the peace table, including local women as they know the real requirements of their communities.
In times leading up to conflict, during conflict and post conflict, when families are trying to flee war-torn areas, the institution of education is often completely lost. Many times the schools become the headquarters for the peacekeepers. Furthermore, only 2% of development and humanitarian aid is spent on education. It is unbelievable. What does that say to all those families and individuals who have had their way of life disrupted? Millions of people are deprived of education but it is crucial wherever you are in the world. It is as crucial as other nutrition. Without education the future has negative consequences for these victims who we would love to see become survivors. It is difficult to make up lost education for these children.
Women and children suffer the most during global displacement. The numbers of displaced people have not been this high since 1945. The majority of displaced people—and there are more to come, unfortunately, as we know—are women and children who have no access to a home, food, clean water or education. Women assume the brunt of childcare and often become ill in the inadequate situations they find themselves in. There are no real hospitals in the refugee camps or real medical assistance. The children are most vulnerable with the lack of security, safety and nutrition. We know what this does to a child. Every day that a child misses proper education and nutrition their long-term life is marred. This is a heavy burden on mothers who are just trying to survive and who worry about the future of their children. Children may be stolen by traffickers or their parents may be prepared to let them go for a small sum of money, being told they are going to a better world. Girls may be married off because their parents feel that being a child bride might be a better way for them.
Three years ago, the noble Lord, Lord Hague, then Foreign Secretary, held a very successful convening of government leaders, INGOs, the international defence community and many others. As a result of this convention, a number of commitments were made that continue today around the world. I call on the Foreign Secretary, Boris Johnson, to hold another convening in the next six months to discuss the progress achieved and the future priorities for tracking sexual violence in conflict. Britain has been leading the world on this issue, including training, funding and our stance at the peace table. The noble Baroness, Lady Anelay, has been doing unbelievable work globally. She has taken to it and really held the mantle. It is important now that we consider where we stand and the future of this big issue. I mentioned earlier today the number of displaced people and the situation for all those living in camps and in war-torn areas. I hope that the Foreign Secretary will consider another convening in the next six months. It does not cost much money.
Women and children are a priority in peace talks. The United Kingdom has played a leading role, with Scandinavian countries and others, to ensure that peace talks include the rights of women and children. The focus is not just on peace. As we know, in one or two cases peace was done in a day but it lasted five minutes. Peace takes time and there have to be women there. When you have women at the peace table, peace lasts at least 15 years. The peace talks I know best—although I have read about Angola, Bosnia and Kosovo—are the Northern Ireland ones. Peace has held there because some women in this House, including the noble Baroness, Lady Blood, and others were there from the beginning, before people even realised that there was going to be peace. It is really important that local women are involved in peace talks because it is women who know when they have had enough of war.
We must work together globally to ensure that the rights that women have fought to gain over the years are not taken away, and we must continue to strive for equality. We have to build an equal future with men and women working equally around the globe.
Baroness Flather (CB)
I am sorry, but I have a little frog in my throat. I am sure it will go away. I thank the noble Baroness, Lady Shields, for introducing the debate. I am sorry that I am not with her on the technical side.
In 1990 I came to your Lordships’ House and, at that time, I was the only Asian in the House, man or woman. I increased the number of non-white Members by 100%. The only other person here who was non-white was Lord Pitt. I bring this up to point out how much the House has changed. It is worth thinking how much we have changed—and how much more women are doing today than they were in the House when I first came. They are Ministers, they are leading and they are on the Front Bench. We did not get that sort of thing from women when I first came, and I feel that it is a matter of pride that we have moved forward in ourselves. I have friends who have been here a longer time than me, and we have moved on—and that is a good sign.
I have picked up a couple of things from other speakers. The noble Lords, Lord Sheikh and Lord Singh, talked about their faiths. There is no doubt that what the founder of the Sikh religion said is probably the most wonderful statement for people to live by. The noble Lord, Lord Sheikh, said how women are respected in Islam. Maybe they are respected in their religion or faith, but they are not respected in practice, either in the Sikh religion or in Islam. I am sorry that neither noble Lord is here, but I really do think that we have to get away from what the faith says to what people are doing—because they are not doing what their faith says.
The next thing that I wanted to say refers to what the noble Lord, Lord Loomba, said about how few men are speaking in this debate. Without men’s support, women cannot move forward. It is a fact—we all have to work together, and the men have to work with us. So I am very disappointed that there are so few men speaking.
I know that it is a little bitty, but I just want to point out that I always feel that living in this country is a little like living in heaven compared to most other countries, especially the developing countries. People who have not been to other countries, or have not stayed in them, do not know. If you go as a tourist it is not enough, but if you have lived in any other country or you have visited to learn about that country, you will know that living here is like living in heaven. It is such a pity that most British people do not realise what they have and what they have achieved, for everyone.
I know that there is a long way to go for women. Part of the reason for that, if I may say so—it may be an unpopular statement—is that women themselves are at fault in many ways. They do not support each other and they are not sisters; they are rivals rather than sisters. When women learn how to support each other and how to work together, it will help a great deal. Please can all the wonderful ladies who have been involved in all sorts of things tell other women to support each other, because I have seen that they do not? I myself have experienced not being supported by women in different areas that I have worked in. That is by the by, but it is an important thing for us to remember. We need to be supportive of each other and help each other to move on.
My interest is mainly in developing countries, because my origins are from India. The noble Lord, Lord Sheikh, said something about there being an enormous amount of money in India. There is—in very few hands, and they do not part with it, not a penny. There is a new law in India that 2% of net profits should go to corporate social responsibility. Very people do that, though, and most of the middle-level businesses do not even know that they are supposed to do so. That is bad, given that, according to the World Bank, Indian billionaires could wipe out India’s poverty overnight. They will not do it because they do not spend any money; some people say that that is why they are rich, and perhaps that is so.
I have set up a charity called Women Matter. Our object is to find work for women that is paid—in developing countries, not in the UK. If a woman earns a little bit of money in Nigeria or India, for example—or anywhere—her life changes. She changes; her family changes; their health changes; everything changes. Education is essential, and the mother who earns a little money is very keen to send her children to school, much more so than the one who has nothing. There is no self-awareness in women in developing countries. They do not realise that they are worth anything because they have been told from birth that they are worth nothing. It is extremely important that we work on getting them access to economic empowerment, because with that comes self-awareness, self-respect and understanding of what their family needs.
I will give you an example of that. Bangladesh is not a remarkable country, as we know; it has not got a remarkable Government. We all know that, too. But do you know what has happened to Bangladesh? There are all those garment factories, and many girls and women working in them. It is better than India on every major tick-box: better education, better food, better family planning, and better in economic terms. There is an example for us. Women need not the Government but access to finance, because everything runs with money. Please, everyone, think about that, and see what you can do to get women some work.
Baroness Redfern (Con)
My Lords, it is a real pleasure and privilege to participate in this International Women’s Day debate. I thank the noble Baroness, Lady Shields, for highlighting the importance of promoting gender equality here and across the world. It is a day to celebrate the social, economic, cultural and political achievements of women. Aspirations are to create a world where women and girls can find role models and mentors in the careers they are interested in and inspire others to become leaders regardless of their gender—and of course challenge male-dominated industries.
Last year leaders across the world pledged to take action as champions of gender parity, not only for International Women’s Day but every day. The World Economic Forum predicts that the gender gap will not close until 2186, which is a very long time to wait. I am sure we all agree that bolder actions are required to accelerate gender parity, here and across the world. We may ask for parity, yes; but the real action is in making it happen and making real, tangible progress, where incremental milestones can be achieved.
It is pleasing to know that the FTSE 350 will see women occupying 33% of boards, but we still have to wait another three years for that to happen. It is interesting to note, though, that the disparity of women in executive, rather than non-executive, positions has seen a greater improvement. I feel that this is about supporting a voluntary approach to improving boardroom diversity, rather than a rigid, mandatory quota system; it works better and is more acceptable. In achieving a radical change in the number of women in executive positions, business leaders need to have a level of insight in their own organisations. Restrictions and lack of support inhibit female progression. Good practice would see regular reviews embedded in workplace policies and practices so that businesses can invest in their female workforce and promote leadership and management development. I congratulate those forward-thinking CEOs and business leaders who are the drivers of that change.
We have a devolution agenda in progress and we must ensure that we embed equally representation and commitment into this early process. The northern powerhouse is part of a wider drive to put more money, power and local decision-making into the hands of local authorities. Some 40% of local councillors in the northern powerhouse region are women, but women make up just 21% of council leaders and only one of the seven chairs of the established and proposed combined authorities in the northern powerhouse region is a woman. Of 134 senior leadership roles, 96, or 72%, are occupied by men. The northern powerhouse brings together clusters of authorities as part of that decision-making process. This is a unique opportunity to shape the future. As I alluded to earlier, women remain underrepresented in local government as councillors in political decision-making roles, particularly at the senior officer level. Therefore, the devolution deal offers a fantastic opportunity to get to grips with gender equality and women’s representation in our politics. We must actively encourage this and make sure that we do not simply recreate old inequalities. We must make the most of the incredible pool of talent to be found in women.
International Women’s Day is a fantastic opportunity to take stock, recognise the progress that has been made and celebrate the amazing women, past and present, who have fought battles, and who continue to fight every day in the name of equality all round the world in many difficult and dangerous situations and in very dangerous countries. The barriers in those countries are huge, particularly as regards overcoming poverty and a lack of access to education, and many suffer violence on a day-to-day basis.
As I said, today is an opportunity to remind ourselves how much further we have to go. It is a moment in time to remember that there is so much more to do to encourage women to be bold in the pursuit of change. The mission continues to raise aspirations, promote mentoring and champion role models through creating a network of aspiring, emerging, pioneering women and girls. We need to hold on to the saying, “You can be what you want to be”. Whether at school, work or home and in public life, it is important for our children and grandchildren to see the principles of equality and fairness in action. We need to see a lasting change here in the UK and internationally.
Baroness Healy of Primrose Hill (Lab)
My Lords, I rise to speak in this debate to welcome the 10th anniversary of the report of my noble friend Lady Corston into women in the criminal justice system. Although International Women’s Day should be a cause of celebration, there are still too many women incarcerated around the world, including in the UK. Therefore, the Corston report remains relevant.
The women’s prison population in England and Wales more than doubled between 1995 and 2010, from under 2,000 women to over 4,000. The numbers have since declined by over 10%, from 4,279 women in April 2012 to 3,821 in April 2016 according to the Prison Reform Trust—whose briefing I acknowledge for this debate—but the UK has still one of the highest rates of women’s imprisonment in western Europe.
The 43 recommendations of my noble friend Lady Corston provided a road map for women-specific criminal justice reform. The aim was that of systems change, of a,
“distinct, radically different, visibly-led, strategic, proportionate, holistic, woman-centred, integrated approach”.
To achieve this change, five key areas are essential.
The first is the expansion of, and sustained funding for, women’s centres in the community as one-stop shops to prevent women entering or returning to the criminal justice system. Secondly, liaison and diversion schemes should be extended and rolled out nationally to divert women away from custody and into support.
Thirdly, there should be specialist community support, including mental health support and accommodation for women affected by the criminal justice system. I very much welcome the Homelessness Reduction Bill currently before this House which obliges local authorities to take into account and advise women who need housing on leaving prison. Currently, women are systematically deemed “intentionally homeless” for going to prison and, in too many cases, they get no help on release. Only with more supportive accommodation can the cycle of repeat offending be halted.
Fourthly, there must be sentencing reform, with greater use of alternatives to custody and women’s community support services. Finally, and crucially, there should be co-ordinated, joined-up working between all agencies involved in the lives of women affected by the criminal justice system.
I am grateful to the campaign group Women in Prison, which this week published a review of the Corston report 10 years on. It calls for a joined-up approach that takes into account the root causes of women’s offending. Only by ensuring appropriate housing, mental health support and gender-specific women’s community support services can real progress continue to be made.
It is now increasingly understood that prison is rarely a necessary, appropriate or proportionate response to women who get caught up in the criminal justice system. Over half of women in prison have been victims of domestic or sexual violence. Over half have experienced abuse or neglect as a child, and a third grew up in care. Serious mental health problems are endemic in women’s prisons and are often a response to trauma. Some 84% of women’s prison sentences are for non-violent offences such as theft, which are often related to poverty and addiction. These women do not pose a threat to the public.
Most women serving short prison sentences are back in prison within a year. A prison place costs £42,000 per year—over 10 times more than a community sentence of £3,000. So prison makes no sense on economic or rehabilitative grounds and, I would argue, makes the situation worse for women and their families. A few weeks in prison, on remand or sentenced, is enough time for a woman to lose her home, job and children. When women leave prison, six out of 10 have no home to go to and nine out of 10 have no employment. Nine out of 10 children with a mother in prison are forced to leave home to go into care or live with relatives.
In 2016, 22 women died in prison—12 took their own lives, which is the highest number on record. Currently, 21% of self-harm in prison is by women, although they account for only 5% of the total prison population. The last 10 years have seen progress in certain areas of the criminal justice sector in relation to women—notably through the network of one-stop-shop women’s centres established following the Corston report. However, many of these centres are now at risk through lack of funding.
I look forward to the Government’s promised strategy, to
“reduce the number of women offending and ending up in custody, including through early and targeted interventions”,
as revealed in the recently published White Paper, Prison Safety and Reform. However, the Women in Prison group has expressed concern that the small custodial units recommended by the noble Baroness, Lady Corston, which were to be reserved for a very small number of high-risk women, have not materialised as she envisaged. There is concern that the planned community prisons will be built in addition to the existing estate and will, as such, serve to increase prison places for women.
More work needs to be done with sentencers. The Corston report said that,
“Defendants who are primary carers of young children should be remanded in custody only after consideration of a probation report on the probable impact on the children”.
Guidelines now state that the best interests of the child are to be taken into account when sentencing parents. This is welcome, but still mothers are imprisoned.
Another area of great concern is the number of women still imprisoned with mental health conditions. The noble Baroness, Lady Corston, recommended that,
“Sentencers must be able to access timely psychiatric reports and fail to remand in custody/sentence if not available”.
However, there is an issue in getting these reports as well as a lack of mental health referral places available, so judges or magistrates are likely to remand someone who is in the community and at risk of further offending due to their mental health issues rather than refer them for more appropriate treatment. It is therefore vital that community mental health and other such services are sufficiently secure, in terms of commissioning and funding, to ensure they remain a real sentencing alternative.
I thank the noble Baroness, Lady Shields, for securing this debate and conclude that, 10 years on, the need to encourage government to implement the excellent report of my noble friend Lady Corston remains essential. Let us “Be Bold for Change”.
Baroness Benjamin (LD)
My Lords, I too thank the noble Baroness, Lady Shields, for securing this debate, and I would like to concentrate on a subject that I know she has worked hard on—the harmful effects of pornography on young girls and women, not just in the UK but across the world.
This country is leading the fight on safeguarding, and other countries are watching what we do to combat this invasion of every part of our global society. Some might say that porn has been around for a long time but the rise of the internet has turned it into a global industry with a multi-billion pound turnover each year, exploiting women in order to make profits.
Pornography is having a major impact on a large number of young girls here in the UK who say that it has a negative effect on their lives and on how they are perceived and treated in society. It encourages the use of derogatory language about girls and young women. Many believe that pornography influences how women are portrayed in the media and online, as it shows harmful views and far too often shows women as sex objects. However, it also affects mental health and causes depression, anxieties and self-harm. It contributes to women being treated less fairly and creates unrealistic expectations of women’s bodies. It normalises aggressive or violent behaviour towards women and sends out confusing messages about sexual consent. It puts pressure on girls to have sex before they are ready and to perform sex acts, because boys copy what they see in pornography. Worst of all, as reported by the NSPCC, there have been more incidents of child-on-child sex abuse. The thought of all this pressure on girls makes me weep.
I recently received correspondence from Girlguiding on why we need less porn and more education in our schools. One girl said, “Imagine sitting happily in a lesson, concentrating on whatever subject is before you, only to be jolted into shock as you see an explicit image being passed around the classroom under the desks by boys”. This sort of thing is happening to girls as young as 11 in classrooms, corridors and playgrounds all across the UK.
According to Girlguiding, 60% of girls aged 11 to 16 report having seen boys of their age viewing porn on their phones, and all too often boys are using it to make girls feel uncomfortable or pressured, passing it off as a “bit of banter”. However, we need to identify this behaviour for what it is—sexual harassment, used as a weapon to bully, hurt and intimidate others. It gives boys the impression that it is normal to be violent or dominant and to act in a forceful way around girls, both during sex and in their wider relationships. But young people cannot escape these images.
One way to tackle this scourge is through legislation, and thankfully that will happen through the Digital Economy Bill, which will introduce age verification for access to online pornography. This will go some way to protect children and young people from the ability to easily access pornography. It will reduce the exposure to pornography and the harm it can cause on a global scale. I fully support this policy, which I have been advocating for several years. I have longed for this to happen. I thank the noble Baroness, Lady Howe, for her relentless campaign, and I congratulate the noble Baroness, Lady Shields, for her sterling work in this area and in helping to make this legislation possible, especially as she has a global influence on this type of policy. She made a promise to me and to this House that it would happen, so I thank her for keeping that promise.
I also pay tribute to the lead that the Prime Minister, Theresa May, has taken in tackling violence against women, especially in the Digital Economy Bill. The Bill will provide a means of enforcing the strong standards in this country concerning violence towards women in an online as well as offline environment so that prohibited material, which includes extremely violent pornography, will be blocked. It would be good to hear the Minister confirm this. Any suggestion that we wanted to make space in an online environment for violence against women as entertainment would clearly send quite the wrong message, fostering a world in which this violence could become more and more normal and acceptable. That will not do.
I also strongly believe that social media and search engines should play a role in ensuring children are not exposed to pornographic content by blocking or closing down offending sites, as many of them come from outside the UK. There should be an expectation for all internet platforms to address violations and companies should take responsibility for how their platforms are used. A recent report about Facebook not taking down child pornography groups is an example of how this irresponsible attitude exists right now.
Alongside this responsibility comes quality personal, social and health education and age-appropriate sex and relationship education, which should be taught in all schools to teach young people about the benefits and risks of using the internet and how to stay safe online. The scale of pornography that children and young people are having to cope with is becoming an epidemic and needs to be counterbalanced with education. Girls have to understand how they can be in control in any situation they find themselves in; to have the courage to stand up and say no; to develop high self-esteem and to feel worthy. All this comes through education and inspirational role models.
It was wonderful to hear Justine Greening, Secretary of State for Education, at last announce that sex and relationship education will become compulsory in all schools. It should, of course, be age appropriate and I hope that the lessons that most young people attend will cover things like consent, sexting, sexual harassment, domestic violence, sexually-transmitted diseases, healthy relationships and gender equality. These are issues that can build a well-rounded attitude of how to cope with life.
Although the subject of today’s debate is about women and girls, it is the effect of porn on boys and young men and their attitudes to women which is deeply concerning because it is women who bear the brunt of emotional, sexual and domestic violence. Unless we get a grip and wake up to the dangers facing society we will leave behind a terrible legacy which will echo across generations to come. Therefore, we must be bold global leaders in the field of helping to protect, inspire and motivate girls and women to have the courage to stand up for themselves and not be forced into doing things they are uncomfortable with—never. That should be our legacy to girls and women everywhere across the world.
Lord Sherbourne of Didsbury (Con)
My Lords, there cannot be many speeches in the House of Lords which begin with a mention of disposable nappies—this may be a first. I do so today because it helps to illustrate the theme of my speech.
I became aware of Valerie Hunter Gordon only when she died in October last year. She had been an army wife in suburban Surrey in the late 1940s. She had two babies and a third on the way—she went on to have six children—and was worn down by domestic drudgery. In those days, the old-fashioned towelling nappies had to be soaked in chlorine, washed, dried in a mangle and ironed. She did the maths: seven nappies a day, seven days a week, 52 weeks a year meant about 2,500 soiled nappies for every baby. Then she had her light-bulb moment. She created her own nappies: a disposal pad inside a waterproof garment. It was a success for her and her friends and created a great demand for these disposable nappies. She went to commercial companies to try to interest them, but they showed no interest at all. One has to ask how is it that these companies showed no interest and that in America, the land of inventiveness and enterprise, no one had thought of inventing disposable nappies. The answer is simple: in those days companies were run entirely by men who had never changed a soiled nappy before.
As I said, I only became aware of the name of Valerie Hunter Gordon when she died in October last year. Four days later, another remarkable woman died in Japan, Junko Tabei. She had wanted to be a climber, to conquer the highest mountains in every country in the world, but in Japan women were told they had to stay at home. However, she was not having it, and somehow managed to join an all-male climbing club. Many of the men refused to climb with her and so, in 1969, she set up a ladies climbing club and, six years later, she climbed Mount Everest.
This brings me to another lady who died recently, Margaret Pereira, another remarkable woman who conquered her own metaphorical Everest. She was a brilliant forensic scientist who joined the Metropolitan Police Forensic Science Laboratory. She became an expert in the analysis of blood—crucial in investigating criminal cases and vital before the introduction of DNA analysis—and was involved in many famous and notorious criminal cases. In those days women did not go to court because it was thought unsuitable for women to be involved in sordid cases. She said that she wanted to go to court and was told, “You cannot. Women do not do that kind of work”. She dug her heels in and she did go to court—she was involved in many cases, including the Lord Lucan case—and she went on shatter glass ceilings. She became head of the Forensic Science Service and president of the British Academy of Forensic Sciences.
I wish to mention just two other extraordinary women who have died recently. One was the intrepid journalist Clare Hollingworth. It was her brilliant scoop in 1939, spotting German troop movements on the Polish border, which, in effect, announced to the world the start of the Second World War and gave a whole new meaning to the phrase “breaking news”.
The other person, who was referred to earlier today by the noble Baroness, Lady Ford, is our former friend and colleague in this place, Rachael Heyhoe Flint. Let me read to you the opening paragraph of her obituary:
“When she was a young girl, Rachael Heyhoe was playing cricket in the middle of the road, with dustbins for wickets. Suddenly, the police rolled up and everyone scattered. ‘They hauled my brother and all his friends out from behind various hedges and wrote down their names’, she recalled. ‘Then I came out and said, “Do you want my name, please, because I was playing cricket as well?”’ And the policeman said, ‘Oh, no, girls don’t play cricket’”.
In the end she took on the cricket establishment, hitting it for six. She was a pioneer of women’s cricket, captained England and got the MCC to admit women.
All these women, in their own way, broke through the glass ceiling for others to follow. They show us how tenacity and determination can break down barriers of prejudice and discrimination, whether of gender, race, sex, religion or disability. They were and are great role models.
Baroness Uddin (Non-Afl)
My Lords, I begin by thanking the honourable Minister for initiating this debate and I also pay personal tribute to the noble Baroness, Lady Anelay, for so ably holding the fort on the issue of PSVI.
After 100 years of resistance, where have we come? We can take some pride and recognition, but not equality, for granted—there are miles to go. On every national and international platform, men continue to assert and define rights—rights to legislate and lead—while women continue to share responsibilities and bear sanctions without options on the division of their labour. The 2017 theme, Be Bold for Change, is a call for action for gender equality. Since January this year, we have seen the emergence of a new, bold resistance.
Yesterday, women across the world again demonstrated that they are prepared to challenge the status quo, stand in solidarity and oppose division and hate. New hope for activism has emerged in the guise of the movement to resist the new agenda of rising nationalism. Women are organising from every corner of the globe, standing shoulder to shoulder, knowing that changes may yet take more time but none the less prepared for the long battle ahead for sanity and justice. Those of us who marched against the attack on Iraq were plagued with a sense of defeat at not being able to stop our Government on their onward march to destroying world peace.
If there were any such doubts about the validity and impact before the women’s march began on 21 January, such reservations were vociferously answered by all the women standing together in the world. On 21 January, women and men marched throughout the world. Millions reclaimed their towns and cities with over 600 marches, including one in London, in what was estimated to be the largest co-ordinated demonstration in history. This new phenomenon is extraordinary in its ambition and inspirational in its message of hope to stand together against hatred—so there is boldness in the air.
Despite the many barriers mentioned by my noble friend Lady Howells and the noble Baroness, Lady Jenkin, there are changes afloat across the world in many countries. I was truly inspired by the many women leaders I met this year, particularly in Morocco, UAE, Turkey, Sudan and the US, where remarkable women are visible and active, leading government departments, universities, businesses and NGOs in their country, just as many women are doing in the UK. Many among them are dealing with the current global refugee crisis.
Having previously visited a small refugee camp in Athens with a group of parliamentary colleagues, I cannot comprehend the condition of Syrian women and their families fleeing their war-torn conflict zone. Women and girls make up 50% of the refugee population. They face insurmountable challenges, particularly if they are fleeing alone with their children, or if they are pregnant, disabled or elderly, and many human rights defenders have become anonymous in the face of humanitarian catastrophe.
Although my family and I have experienced war, it is not possible for me to comprehend the level of desolation of modern warfare, so we will have to remain resolute. Alongside providing security, shelter and basic needs, we have to remain vigilant and continue to ensure that services are available to protect women against rape, early marriage, violence and abuse.
In regard to this work I would like to pay tribute to two organisations: the women-led organisation Global One, which works in Lebanon, and Islamic Relief, for its persistence in so many dangerous zones and in particular for supporting vulnerable women in refugee camps. I also pay tribute to Dr Shaikha Al Maskari, a much respected UAE businesswoman whom I have had the pleasure of getting to know and who has dedicated her time, energy and personal funding to numerous refugee camps. I salute them all.
Bringing matters home, women NGOs have suffered massively from government cuts this last year. Among the casualties were two iconic women’s organisations in Tower Hamlets. They have been closed down, I believe, as a direct result of male leadership and local authorities not valuing or understanding the needs of BME women—discarded with disdain for women’s empowerment. I also wish to reiterate that women’s organisations in the vanguard, including Southall Black Sisters and the Newham Asian Women’s Project, among many other women’s empowerment projects, have seen drastic cuts in their programmes, rendering vulnerable women hopeless and helpless.
That brings me to my final few points. Muslim women have become a symbol of many of the ills of our society, including the inability to prevent radicalisation. Sadly, this is an oversimplification, if not a deliberate confusion of Islamic traditions within the constraints of a patriarchal society’s proscription and practice. Discriminating against women is as evident among Muslim families as anywhere else in Britain and the world. Unfortunately, the triple whammy is that women often have to negotiate choices between emancipation and Islamophobia. I will resist detailing the teachings of Islam, for we know how a little knowledge is a dangerous thing, but I commend the ongoing scholarly work of the honourable Shaykh Abdullah Bin Bayyah in contextualising women’s rights within Islam. He reminds us that Islam forbids injustice and makes an explicit distinction between Islamic teachings and societal traditions and practices.
Yet again, discussions around the lives of Muslim women have been mounted on the usual parody of forced marriages and sharia councils, with repressed, hapless women intellectually bankrupt of self-dignity. This happens at the hands of a small number of vociferous voices both within this Mother of Parliaments and outside in general, with two government inquiries into the impact of sharia councils not paying the required attention to a wide range of economic and educational concerns, in addition to the impact of Islamophobia. I would indeed welcome some attention being paid to equality of opportunity for the 49% of people in higher education and the dismal level of female BME representation in public office and on company boards.
Added to this onslaught, the Casey report piled on a timely attack, coming on the back of divisions and fear post Brexit—this was a case in point—offering the usual junket of references directly out of the pages of the previous misguided Cantle hyperbole on communities. It is as though the authors themselves are living in their blessed cocoons of a new nationalism based on veiled vitriol and lack any solutions for or comprehension of the danger of generalisation, portraying all women as living in repressive parallel alien community structures and whipped-up hysteria. It begs the question of whether the way the report portrayed Muslim women should bear any responsibility for the corresponding rise in hate crimes against Muslims, particularly women—or is it being suggested that the victims themselves should bear the responsibility for being attacked for living in an overprotected patriarchy? These generalisations reinforce division. They are dangerous and simply wrong. They keep Muslim women out of power and out of office. If the Casey report is to be implemented, I would ask the Minister what kind of programme is being proposed and what the Government are doing to involve Muslim women leaders in the delivery mechanism—not only those on its own list of approved mouthpieces but those with credibility on the ground.
Does the Minister accept that the Maria Miller report on employment needs more serious consideration by the Government? Surely, economic engagement is likely to lead to the greater empowerment of women. A staggering 30% of Muslim women are out of the economy, albeit that I quote the figure with caution because I do not accept that a full and credible assessment has been made of the true figure of BME women who are either out of or on the periphery of employment. What are the Government doing to utilise the Miller findings to help economic and employment integration?
Finally, I understand the frustrations of women around the world whose place in society is defined and judged—ill judged—not by their contribution to Britain, not by their intellectual capacity and skills, but by their clothing, culture and faith. To address these inequalities as lawmakers, we have to demonstrate that we are prepared to be bold in order to create the necessary change.
Baroness Seccombe (Con)
My Lords, I add my congratulations to my noble friend Lady Shields. This annual debate to celebrate International Women’s Day gives us all an opportunity to applaud the successes of women around the world, while recognising the injustices in so many spheres that still prevail today. Every generation has its goals, some ending in failure and some in limited success, while some are a complete triumph.
One of our many achievements, after years of badgering, was the introduction of the independent taxation of women. Prior to this, the income of a woman was added to that of her husband, who then paid tax on the full amount. Obviously, there were problems ahead. Margaret Thatcher saw these problems which many families faced, so legislation followed under which men and women were taxed separately, having their own allowances. Some women had saved a little nest egg to cushion against the possibility of future difficult times. Usually this was unknown to their husbands—for fear of it being known that they were committing an offence—and held in a secret building society account. The change to double tax allowances for a family made for a much more open and healthier tax regime, as well as being a lifeline for some women.
A debate of this nature deserves a few minutes spent on struggles. In 1917, the First World War was in its third year. Men throughout the world were fighting in various operations, but the main battleground was in Europe. Strangely, this gave women worldwide a release from the constraints of the home and the freedom to serve their country and hold important roles in the community. The battle for universal suffrage continued worldwide.
In 1917, Canada passed the Wartime Elections Act, allowing the vote for the wives, widows, mothers and sisters of soldiers serving overseas. This was the first time that women had been allowed to vote at a federal level in Canada. That year also saw the foundation of the Women’s Indian Association, which, two years later, went on to obtain partial suffrage. A god-daughter of Queen Victoria and daughter of the Maharaja of Punjab was a major suffragette, who majored on the idea of “no taxation without representation” to fight her battle. The same year, amidst the fall of the Romanovs, the Russian League for Women’s Equality obtained suffrage for women from the provisional Government and, happily, it survived into the communist era.
British men were stuck in the hell-hole that the trenches had become. Women were not only keeping the home fires burning but developing into a mighty force locally and nationally. Emmeline Pankhurst and all the courageous women who fought the long and hard battle for universal suffrage were upping their fight, and suffering hardship and derision in the process. The international theme for this year, as we have heard, is “Be bold for change”. These women faced a barrage of abuse from those who were happy with the current situation and wanted no change; they were certainly bold women.
As an optimist, I always see a glass half full, and I marvel at successive generations who have continued the fight and gained progress—even if too slowly. But now the pressure is irrepressible, and in all aspects of life women hold positions of seniority. Today, it is difficult to open a newspaper without reading about a woman being appointed to a high-flying position. Last week, the Foreign Secretary appointed a senior envoy to fight sexual discrimination worldwide, and I was particularly pleased to note that the headline did not even refer to her as a woman. On Tuesday, an article predicted that the gender gap was closing and that women graduating from 2020 could be the first to close the gender gap. If this is so, it will indeed be a triumph, even if it has taken decades to achieve.
I believe that pressure must never stop, otherwise we will slip backwards, particularly in some communities where women are seen by men as chattels, treated without respect and, in some cases, with physical violence. There are many unacceptable behaviours that continue in this country that shame our society. Each year in the past Lady Rendell would speak of the horrors of female genital mutilation, bringing public attention to these appalling practices. I pay tribute to her not only for educating me but for campaigning whenever and wherever she could.
So we must be brave and bold and keep our goals at the forefront of our minds. I hope that the warriors of tomorrow have the same vigour as our forebears.
Baroness Massey of Darwen (Lab)
My Lords, it is always a great pleasure to celebrate the achievements of women and I thank the noble Baroness, Lady Shields, for her part in this. Today, I shall talk about sportswomen in the UK who, through their determination, skill and personality have blazed a trail of success and equality, nationally and internationally, and have empowered girls and women in doing so. Sport used to be a much more male-dominated activity. This has improved due to women themselves, to the encouragement of Governments and organisations set up to encourage women to do sport, and to specific initiatives. I shall discuss some of these today. Even some sports which were once dominated totally by men have become female orientated, such as rugby and boxing. We are not totally successful in providing examples of good practice but the drive is there.
Before I go on I want, like the noble Lord, Lord Sherbourne, to pay tribute to my friend and cricketing comrade Lady Heyhoe Flint. I had the honour of welcoming her into your Lordships’ House after her maiden speech. We were on opposite sides, both in cricket and politically. We got on, we had jokes and we respected each other. Rachel was an example of providing global inspiration through her sports and also through her enterprising leadership in boardrooms. Her record was quite extraordinary: an England international in both cricket and hockey and honorary life member of the MCC, that male bastion. As captain of England between 1966 and 1976, she never lost a match. She had a magnificent test batting average.
She was not only a great sportswoman but a great charity fundraiser: president of the Lady Taverners, of which I am a member, and which raises funds to enable young disabled people to play sport. She was, remarkably, a director of Wolverhampton Wanderers Football Club and a board member of the England and Wales Cricket Board, one of the first two women to be so. In the House of Lords as a Conservative Peer, she was influential in regulating ticketing, among other things. She was very funny, a great after-dinner speaker and not always, I am glad to say, terribly well behaved. Rachel was a phenomenon whose legacy is not only her influence on girls in sport but in encouraging women to continue their careers working with sporting institutions. She would be sad to know that a recent report by Women in Sport shows that the FA, the RFU and the England and Wales Cricket Board are at risk of losing government support because they do not employ enough women in senior positions.
This is not just about statistics or meeting targets, it is about understanding that women contribute positively to boards in all fields—in industry, business, charities, sport and so on. I think that it is essential to have women on boards, as has been proved by research. More than 7.2 million women now play sport and do regular physical activity. The campaign by Sport England called This Girl Can has enabled the gender gap, which once stood at more than 2 million, to narrow to 1.55 million. Yet there is more work to do. When asked, 13 million women said they would like to participate more in sport, yet just over 6 million of them are not currently active. The organisation Women in Sport champions the right of women and girls to participate in sport from the field of play to the boardroom.
The Women’s Sports Trust focuses on using the power of sport to accelerate gender equality and stimulate social change. The Muslim Women’s Sports Foundation works with the Government, sports bodies and the sports industry to increase the involvement of Muslim women in sport, highlighting role models and increasing participation.
Many organisations encourage women in sport. The England Cricket Board’s Chance to Shine is a hugely successful initiative to encourage children in inner-city schools to play cricket in a quick and interesting way. Since 2005, around 1.5 million girls in state schools have taken up cricket. Women’s cricket has blossomed since England played their first test match in 1934, where they beat Australia 2-0. We are now ranked second in the world. The success of the England women’s team has often been the envy of the men. This year, we hold the World Cup, where we will have such splendid teams as India and Australia.
The 2016 Olympic Games saw Team GB’s best ever performance, with 67 medals. Women won more medals in total than men in the case of 29 countries. There were outstanding performances by women in many areas. In hockey, British women won the first ever gold, were unbeaten in all their games and beat the favourites, Holland, in the final. Did anyone see that marvellous game? It was splendid. I do not have time to go on to talk about athletics, rowing, sailing, equestrian events, gymnastics, boxing and other sports where women thrived. In the Paralympics, Team GB won 147 medals, 85 for women, including a remarkable 40 golds.
Magnificent sporting achievements in Britain and elsewhere have an impact globally on women. They are tokens of courage and persistence—of “I can do it”—for women all over the world. To overcome gender inequality, women need confidence, self-esteem and high goals. I think that success in sport, in physical activity, can help boost that confidence and self-esteem and develop ambition. Many girls and women will be proud of those women achievers and proud of their own achievements. Women’s sport has developed and will continue to develop, helping girls and women to achieve the best they can in all aspects of life. I hope that this Government will continue to back sport for women and girls and back gender equality in senior positions to create a new generation of women who aspire and succeed.
Baroness Tonge (Non-Afl)
My Lords, I thank the noble Baroness for securing this debate, which has been very entertaining, particularly the speech from the noble Lord, Lord Sherbourne. I do not think that I have ever heard nappies mentioned in this Chamber before. I can still smell the nappy sand bucket. I am glad that the noble Lord appreciates the hard labour put in by our generation of women before disposable nappies.
We have heard a lot in this debate about the “empowerment of women”; it is a phrase that everyone loves—women must be empowered. On the encouragement of women into the workplace and to become socially and economically active we all agree, but women cannot be empowered until they have power over their own bodies and are in control of their own fertility. This is crucial. Some of my colleagues in the all-party parliamentary group are nodding, because they have heard me say it ad nauseam, but it is so important to recognise.
Women cannot be empowered if, as many girls in the world still are, they are subject to FGM, married far too young and then expected to go on bearing children until they die. Pregnant, breast-feeding or dead is sadly still the lot of millions of women all over the world, because more than 220 million of them still have no access to contraception or safe abortion, as the noble Baroness, Lady Manzoor, mentioned.
We know from the work of the late Professor Hans Rosling—I have to mention him in this debate—and others and from international bodies such as the World Bank that the simple intervention of making contraceptives available without coercion will enable women to have smaller families which then have better access to education, as mentioned by the noble Baroness, Lady Jenkin. It is crucial for the empowerment of women. Children who are educated contribute to their country’s economy, and that country gets richer. It is good for it, and it is good for us. Ultimately, less aid is needed, there are fewer migrants and there are more and better trading partners. If we want to be really hard-headed about it, we could try telling the tabloids that.
I make no apology for repeating this message year after year, and I will continue to do so until I leave this House in my coffin, or before. I know that the Government have got the message, and I thank them for that and commend them for the work they have already done in this field, but will the Minister answer some questions when she sums up? It has not yet been mentioned, but following the imposition of the gag rule by President Trump, in a form even more draconian than before that will cut family planning services all over the world, what extra contribution will the Government make worldwide to make up the deficit? How will they ensure that safe abortion is still available, particularly after rape in conflict situations, which we heard about from the noble Lord, Lord Hussain, earlier? We must maintain this service for those dreadfully tragic cases. Will the Minister tell us about the conference planned for July this year and whether an announcement about extra funding will be made then?
The problems of women refugees concern me hugely. They and their daughters, often travelling without their men, are at risk of rape and trafficking—we have already heard that. In the Middle East, I visited the Zaatari camp in Jordan and heard how little girls are being married to total strangers because they will be safer with a husband to protect them in the camp. Sanitation facilities are poor, and women are frightened to use them. Healthcare, and maternal healthcare in particular, is scanty, although Zaatari camp is a pretty good camp. The women are in a constant struggle to feed their children and keep them safe.
Here I must put in a special plea for Palestinian refugees, some of whom have been displaced three times in their lifetime. Palestinians were treated well in Syria when they fled Iraq after the removal of Saddam Hussein. Noble Lords may remember that they went to Iraq in the first place because they fled their homeland. Since the civil war began in Syria and rebel groups started to hide in the camps, the Palestinians have been bombed and driven out. The health need of these women is enormous. UNRWA—the United Nations Relief and Works Agency, which provides for Palestinian refugees in particular—is grossly underfunded. It is a desperate situation for it now, and it is responsible for this group of refugees. Will the Minister tell us when the Government will give more funds to UNRWA?
Finally, I want to address problems much closer to home, those in this country. While we are working hard to help women in developing countries, our own women are beginning to be neglected. The Royal College of Midwives has already warned of an acute shortage of midwives, especially for older women who nowadays give birth having launched their careers, hopefully. They need much more attention and more staff. More midwives are needed. What are the Government’s plans for increasing the number of midwives working in the National Health Service?
Last week, I was at a conference at the Royal College of Obstetricians and Gynaecologists on abortion services. The shortage of doctors who can perform abortions, and the more tricky late abortions, in particular, is now very serious in this country. Only King’s College Hospital and St Mary’s Hospital can do abortion after 24 weeks, so women—desperate cases who need a very late abortion for the sake of their own health or for other reasons—have to travel a long way. It is desperate. This is because many commissioners now buy abortion services from the private and voluntary sector where no training takes place. This is really rather worrying, because it means that young doctors studying obstetrics and gynaecology cannot receive adequate training and experience because their hospitals are not providing the service, so they do not see it happening. What is going to be done about this problem and how will the Government ensure enough trained doctors to carry out this vital service in our own health service?
To conclude, I return to international development. I congratulate the Government on what they have done in the field of women’s health and for not giving in to the siren voices in their own party led by the tabloid press, which thinks that overseas aid is a waste of money. I congratulate them, but urge them to go on doing more.
Baroness Sheehan (LD)
My Lords, I add my thanks to those already given to the noble Baroness, Lady Shields, for securing this very important debate. Noble Lords have spoken with such knowledge and passion on wide-ranging subjects and I pay tribute to them. I want to single out the noble Baroness, Lady Howells of St Davids, for reminding us, if we needed reminding, of the struggles that black women have faced. I also thank my noble friend Lady Barker for drawing our attention to the difficulties that transgender women face in the UK today.
Maybe I can encapsulate the debate thus far as one in which speakers have greeted progress to date with caution, because much remains to be done. The World Economic Forum’s methodical approach in putting together the Global Gender Gap Report gives us an invaluable tool for keeping track of progress made across the globe. It shows us that across the four areas it tracks—economy, education, health and politics—in the 10 years from 2006 to 2016, the UK has slipped from ninth place to 20th place out of 144 for gender parity, only just ahead of Mozambique. I hope that these figures have set alarm bells ringing, illustrating as they do that much remains to be done at home.
However, this debate is about the UK’s role in promoting gender equality globally. There, too, the progress we have made to date must be vigorously protected. I will concentrate the rest of my remarks on four issues: the global gag rule, FGM, the role of older women and DfID itself. On a recent visit to Sierra Leone with the All-Party Parliamentary Group on Population, Development and Reproductive Health, chaired by the noble Baroness, Lady Tonge, I saw for myself the essential work carried out by DfID working in partnership with organisations such as Marie Stopes to mitigate the effects of child marriage, gender-based violence and FGM. Gender-based violence was an issue that the noble Baroness, Lady Cox, and the noble Lord, Lord Hussain, who is not in his place, brought to our attention. Gender-based violence is practised as a weapon of war by those depraved enough to continue it.
We have heard a fair amount about the global gag rule already from the noble Baroness, Lady Tonge. I emphasise how different this global gag rule, which has been brought in by the Trump Administration, is to the one practised under the Bush era. The implications are devastating. Rather than impacting $600 million of foreign aid, the expanded Trump version will affect $9.5 billion of aid that currently goes to projects where organisations champion women’s right to abortion. The Government in the Netherlands have already announced the creation of a fund to counter the global gag rule. When the noble Baroness responds to the debate, can she say whether DfID will join them in making a similar commitment? It has done so in the past.
I want to focus for a moment on FGM. According to recently published NHS figures, there were 5,484 newly recorded cases of female genital mutilation in the UK last year. Although we are making slow but sure progress in developing nations, I am certain that action here at home will send a strong message to developing countries that this practice has no place in the modern world. Will the noble Baroness also address in her response why we are failing to get the message across in health settings and schools and, secondly, why we have still seen no successful prosecutions to tackle this crime in the UK?
I will also say a few words about recognising the critical contribution made by older women to the economic well-being of their family and communities, as carers, shopkeepers, traders and entrepreneurs. Some time ago, I was an ambassador for a microfinance charity called Opportunity International and saw for myself the enormous trust that was placed in the hands of women, often older women, to multiply the money that was entrusted to them. Not only did they do that, but they were meticulous in keeping up with repayments, as it was a source of pride for them to be able to do so, thus ensuring that children and the vulnerable were beneficiaries. This point was made eloquently by the noble Baroness, Lady Hodgson of Abinger, as well as by the noble Baroness, Lady Flather. It is clear that in addition to moral and rights-based arguments for gender equality, there is a notable and substantial economic argument—study after study has shown that. In her concluding remarks, could the noble Baroness address what measures the Government are taking to ensure that the sustainable development goal to leave no one behind encompasses older women?
DfID has come under sustained attacks from elements in the media. It must do more to resist these and speak up for the millions of people across the globe who rely on it for the leadership it shows—often on pioneering projects that others shy away from, such as the girl group, Yegna, labelled “Ethiopia’s Spice Girls” by the Daily Mail. This transformational, award-winning project, using popular culture, was thrown to the dogs in the face of attacks by the tabloids. Yet it is a prime example of where a bold stance by the Secretary of State would have enhanced her reputation. I am sorry she did not take that opportunity. The soft power wielded by DfID throughout the world cannot be underestimated, and as a leading political and development player, the UK has a vested economic and moral interest in promoting gender equality.
Baroness Gale (Lab)
My Lords—and Ladies—first I thank the noble Baroness, Lady Shields, for bringing this really important debate to mark International Women’s Day. We have had, as usual, a great debate over a wide range of subjects relating to women and girls from all around the world, and I thank all noble Baronesses, and all noble Lords, for their contributions.
The global theme for International Women’s Day is “Be Bold for Change”, as many of us today have mentioned. It is about encouraging ground-breaking action to drive the greatest change for women. The United Nations theme for International Women’s Day is “Women in the Changing World of Work: Planet 50-50 by 2030”. It aims at addressing women’s economic empowerment in the context of globalisation and the ongoing technological revolution.
One of the key challenges for women is their low representation in leadership positions. The World Economic Forum produces an annual gender gap index, which ranks countries by the extent to which women and men have equal opportunities. It includes economic participation and opportunity, educational attainment, health and survival, and political empowerment. On this index, the UK is number 20; last year, we were number 18. On the IPU ranking, based on the percentage of women in the lower, elected House of Parliament, the UK is placed 47th; Rwanda is ranked first, with 61.3% women. Can the Minister explain why the UK has dropped down to 20th place? What measures would she suggest to improve our ranking? How we can move further up the IPU rankings?
Where there is good representation of women in elected legislatures, it is usually because special measures have been put in place, such as happened in the devolved institutions. In Wales, in the first elections in 1999, the Labour Party had special measures which meant that a good number of women were elected to good seats, and that has continued. We now have 41.7% of Members of the Welsh Assembly being women. In Scotland, 34.9% of the Members are women.
It is 99 years since women were first allowed to become Members of Parliament. In that time, only 456 women have been elected as MPs, compared with 4,738 men. That makes 8.8% women and 91.2% men. In the House of Commons today, there are 195 women, which is 30%, and 454 men, which is 70%. We are improving, but it is all very slow.
The Commons Women and Equalities Committee report published on 10 January recommends that the Government legislate for a minimum of 45% of candidates from all political parties to be women. If that target is not reached, sanctions should be imposed. Will the Minister do all she can to ensure that happens? It should be enacted if the number and proportion of women MPs fail to increase significantly in the next general election.
Next year, we will mark the centenary of the Representation of the People Act that gave women the right to become MPs. I am aware there are already plans in Parliament to mark the occasion. Does the Minister agree that, in the week of International Women’s Day next year, we should have more than just our annual debate? Will the Minister agree to have discussions with me and others to see whether we can agree on a good programme of events to mark this occasion in your Lordships’ House, without of course impinging on what is already being planned? I think we could have a great time next year, marking this great occasion. I have to say that 100 years is a long time to wait for women’s equality. We owe it to future generations of women to take positive action now.
Another thing I want to talk about is gender-based violence. The UN recognises this as direct discrimination against women, perpetrated against them because they are women. Domestic abuse, as a form of violence against women and girls, is internationally recognised as a serious violation of the human rights of women and girls. Eliminating all forms of violence against women and girls is essential for the realisation of fundamental rights, equality and non-discrimination. The British Crime Survey for England and Wales reported that there were over 100,000 prosecutions for domestic abuse in 2015-16, the highest level ever recorded. Where gender was recorded, 92.1% of defendants were male, and 7.9% of defendants were female.
Specialist support services for women, such as refuges, are a lifeline for women and girls escaping domestic violence, but women’s domestic violence services are in crisis. Women’s services have seen their funding shrink rapidly since 2010, and one-third of local authority funding to domestic and sexual violence services was already cut by 2012 and even more since. Can the Minister explain why funding is being cut from these vital services which do so much to help and support women and children at a time when they need it most?
I look forward to the Minister’s response, but before I sit down I would like to congratulate the noble Baroness, Lady Vere, on her recent marriage. I am sure that the whole House will join in giving her our best wishes. We wish her and her husband a happy and long life together.
Baroness Vere of Norbiton (Con)
My Lords, I thank all noble Lords who have spoken today. The contributions have been fresh and very thoughtful. International Women’s Day is a time for coming together, and I really appreciate how many speakers have reached across social and political differences and recognised the work of other people. My noble friend Lady Seccombe mentioned this, and I pay tribute to her for her many contributions over the years in these annual debates.
The UK is an international leader in promoting gender equality, with many in this House and the other place working tirelessly to protect the absolute right of all young people, whether boys or girls, to follow the path and fulfil their potential, free from tired and outdated stereotypes and unnecessary barriers to progression. Achieving gender equality is by no means straightforward, and there is no silver bullet. It is a complex and challenging issue; the breadth of subjects that we have heard today attests to that, from women in prisons to women on boards, and from women in their role in the economy to women and their role in peace, and also the impact of pornography on girls and young women.
In responding, I have tried to group some of these issues by subject. Noble Lords may occasionally feel that I am bouncing around somewhat, for which I apologise. If I do not respond today, I shall write.
First, on the role of women in the economy, I thank my noble friend Lady Bottomley for raising important issues so early on in the debate in so many areas in the economy and beyond, such as the arts, and her celebration of so many successes, so far at least. It was an uplifting contribution, as was that of my noble friend Lady Brady, who highlighted why business must attract female talent. It was my noble friend Lady Redfern who reminded us of the paucity of female council leaders and the impact that that will have and the consequences for the northern powerhouse initiative.
I am proud that Britain ranks as one of the best places in Europe for female entrepreneurs. There are around 1.2 million SMEs in the UK that are majority women-led. These businesses contribute an estimated £110 billion to our economy.
The noble Baroness, Lady Howells, who is understandably not in her place, raised the issue of the double discrimination of black women and their role in the economy. The Government take the matter of BME women’s employment very seriously indeed, which is why we launched the Ruby McGregor-Smith review to look at this—that is, the review of my noble friend Lady McGregor-Smith. The review looked at race in the workplace and published its findings earlier this year. It found that the UK economy would benefit from a £24 billion-a-year boost if black and minority-ethnic people progressed in work at the same rate as their white counterparts. It revealed that people from BME backgrounds are still being held back in the workplace because of the colour of their skin, costing the UK economy the equivalent of 1.3% in GDP a year, which is completely unacceptable. We are therefore taking action on the report’s recommendations and setting up the Business Diversity and Inclusion Group, chaired by Margot James, which will bring together business leaders and organisations to co-ordinate action to remove barriers in the workplace and monitor employees’ progress.
Women on boards were mentioned by the noble Baronesses, Lady Ford, Lady Howells, Lady Goudie, Lady Massey and Lady Redfern—but, notably, definitely not mentioned by my noble friend Lady Bottomley. We know that companies with more diverse boards and senior executives can access a wider talent pool and better represent the society that they serve. That is why we as a Government are supporting and promoting the Hampton-Alexander review’s targets for one-third of FTSE 100 senior executive leaders and one-third of FTSE 350 board directors to be women by 2020. Currently over 23% on the boards of FTSE 350 companies are women. That is more than double what we had in 2011, just a few years ago. We have exceeded the target set by the noble Lord, Lord Davies, of 25% women on FTSE 100 boards: there are now 26%. We are well on the road; I think we can all see that. The ultimate destination, though, is not yet in sight. I was interested to hear the ideas of the noble Baroness, Lady Ford, on how improvements might be made.
The noble Baroness, Lady Donaghy, specifically mentioned the gender pay gap. I am very proud that this Government have delivered on our manifesto commitment to require large organisations to publish their gender and bonus pay-gap data. What gets measured gets managed—and what gets measured publicly gets managed even better. She went on to say that there are no penalties if action is not taken. I beg to differ. We believe that the risk of brand and reputational damage will support compliance once gender pay gaps are made public. Furthermore, failure to comply would be an unlawful act and fall within the existing enforcement powers of the Equality and Human Rights Commission. The commission has, and will continue to receive, sufficient funds so that it can fulfil its role properly.
Turning from the economy to education, it is right that we talk about the education of girls across the world, as mentioned by my noble friends Lady Jenkin and Lady Manzoor. I am proud that the UK is a global leader in educating girls. Since 2010 the UK has supported 11.3 million children in primary and lower secondary school, which includes 5.3 million girls, and worked through global partners to train 380,000 teachers. In conflict-torn South Sudan, as mentioned by the noble Baroness, Lady Cox, we have helped 170,000 girls get an education. In Afghanistan we have given over 300,000 girls access to school. In Kenya our work has given disabled girls the chance to attend a mainstream school for the first time. The UK will continue to improve girls’ access to education by helping 11 million children gain a decent education in 2015-20 and supporting 6.5 million girls in school.
My noble friend Lady Bottomley made comments about higher education. We as a Government are committed to achieving gender equality in all areas of life, including academia. That is the logic behind the Athena SWAN charter, which was established in 2005 to encourage and recognise commitment to advancing the careers of women in higher education and research. By being part of Athena SWAN, higher education institutions are committing to a progressive charter, adopting a commitment to gender equality within their policies, practices, action plans and culture. We encourage all higher education institutions to sign up to that. In schools and for girls and young women, this Government are leading the way—and, as the noble Baroness, Lady Benjamin, said, are ensuring that PSHE is mandatory in schools and in the provisions of the Digital Economy Bill.
The contribution from the noble Lord, Lord Sheikh, was most interesting about the paradox of the education level of Muslim women versus their involvement in the economy. I hope that he will take forward his obvious passion for the subject and collaborate with others in the Muslim community to come up with some specific recommendations. I encourage the noble Baroness, Lady Uddin, to contribute to any work that goes on. She also mentioned the Casey review. As we know, that was only recently published. The Government are considering the Casey review’s findings and recommendations very carefully, and will publish plans for tackling the issues raised very shortly.
On international matters, the noble Baroness, Lady Prosser, talked about the Government’s commitment to overseas aid spending. I confirm that the Government remain fully committed to spending 0.7% of national income on overseas aid. This is enshrined in law. It is the goal of this Government, and specifically of the Secretary of State, Priti Patel, to make sure that they are completely focused on ensuring that, after detailed consideration, taxpayers’ funds are spent in the most effective way. Therefore, it would be inappropriate for me to comment on any further funding commitments in the future.
I wish to talk briefly about something mentioned earlier today. The UK is a leader in anti-corruption measures. Corruption has a devastating impact on the lives of women, men and children, particularly in developing countries. Only today, we discussed the Criminal Finances Bill, which has cross-party support and will further our efforts and those of our allies internationally.
My noble friend Lady Hodgson spoke about sexual violence in conflict, as did the noble Lord, Lord Hussain. Sexual violence in conflict is something this Government are committed to ending. That is why DfID, the FCO and the MoD are working to expand the reach and implementation of the UK’s Preventing Sexual Violence in Conflict Initiative, focusing on Iraq and Syria in particular. The UK is committed to ending all violence against women. That is why we were instrumental in securing dedicated targets within the sustainable development goals on ending all forms of violence against women and girls. DfID doubled its programmes on violence against women and girls from 64 to 127 in 2016. In 2013, the UK made the largest-ever donor commitment to tackling FGM, with £35 million to support the Africa-led movement to end FGM over five years.
The noble Lord, Lord Hussain, referred to Kashmir. We recognise that there are human rights concerns in Indian-administered Kashmir, including allegations of rape and sexual violence. Any allegations of human rights abuses should be investigated thoroughly, promptly and transparently. Perpetrators must be brought to justice.
My noble friend Lady Hodgson and the noble Baroness, Lady Goudie, talked about women’s role in the peace process. The UK Government’s ambition is to put women and girls at the centre of all our efforts to prevent and resolve conflict, promote peace and stability and prevent and respond to violence against women and girls. In doing this we can support UK interests in stability and security more effectively. We all know that women are a vital part of conflict resolution. Evidence shows that women’s participation in peacebuilding increases the probability of violence ending within a year by 24%, and peace agreements are 35% more likely to last at least 15 years if women exert a strong influence. The UK’s work on women, peace and security is outlined in the tri-departmental national action plan. It brings together the UK’s diplomacy, development and defence efforts and provides a policy framework to ensure that the provisions of UNSCR 1325 are met.
My noble friend Lady Hodgson commented on CEDAW. I suspect that she will not be happy with my response. The UK has never put forward a candidate for the CEDAW committee. This is an issue that we keep under review and consider further each time there is an election for these positions. We are very committed to our responsibilities under CEDAW and will submit our periodic review to the UN this summer. This review will set out the progress we have made towards achieving gender equality since 2013, the year of our last review. I shall endeavour to press further, lest a more appropriate response be forthcoming.
The gag rule has been raised by the noble Baronesses, Lady Tonge and Lady Sheehan. The UK firmly believes that supporting comprehensive sexual and reproductive health and rights of women and girls, through proven, evidence-based public health interventions, saves lives and supports prosperity. We will continue to work with all our partners—including Governments, the UNFPA and civil service partners—to deliver this. On the issue of safe abortion, the US and the UK are not likeminded. Research shows that restricting access to abortion services does not make abortions less common; it only makes them less safe. The UK will continue to show global health leadership by promoting and supporting comprehensive, evidence-based sexual and reproductive health and rights. We will keep our contribution to these services under review as the landscape changes.
The noble Baroness, Lady Tonge, mentioned funding for Palestinian refugees specifically. The UK is one of the largest donors to the UN Relief and Works Agency for Palestinian refugees, which provides services to some 5 million Palestinian refugees, including 70% of the population of Gaza. This ongoing UK assistance supports the provision of basic services to refugees across the region, including in the Occupied Palestinian Territories. The assistance is focused on support for the most vulnerable, including women and children.
On more domestic matters, the noble Baroness, Lady Gale, talked about the report from the Women and Equalities Select Committee on how we will be able to improve the proportion of women elected to the House of Commons. The Government welcome the report from the WESC and are committed to improving opportunities for women in every workplace, including in the House of Commons. Parliament should be representative of the population we serve. We should take the opportunity to celebrate the progress that has been made. We have more women than ever in the House of Commons and, indeed, in your Lordships’ House. However, it is clear that more must be done. Tackling this issue will require a concerted effort from all political parties, as well as from the Government. The Government are therefore considering the committee’s recommendations carefully and will respond as soon as they can.
The noble Baroness, Lady Barker, talked about the Women and Equalities Select Committee report on trans people. Ensuring that transgender people are protected from discrimination and able to achieve their full potential is a priority for the Government. We are grateful to the committee for looking at this important issue and we responded to its recommendations in July 2016. Furthermore, we shall publish an update to the trans action plan in due course.
To further support transgender people in the UK, we have also committed to review the Gender Recognition Act 2004 with a view to demedicalising it, streamlining the process and improving gender identity services. NHS England is increasing spending from £26 million to £32 million this year and will run a national procurement of adult gender identity services in order to award new contracts in 2017. The NHS and others are developing a national workforce and training plan to reduce waiting times.
I turn to a contribution from the noble Lord, Lord Sheikh, who talked about forced marriage. We believe that everyone should have the right to choose whom they marry—particularly me, clearly—as well as when they marry or if they marry at all. Stripping people of their choices and their choice to marry cannot be tolerated. That is why the Government are committed to ending the practice of forced marriage in the UK and overseas. We have established a dedicated Forced Marriage Unit, which supports people at risk of forced marriage. In 2015 alone, it provided advice in 1,000 unique cases. We will continue to give victims and potential victims of forced marriage and domestic violence the best possible support and protection.
Turning briefly to an area raised by the noble Baroness, Lady Tonge, we are aware that there is a need to increase the number of doctors who are trained to provide abortion treatment and care. The president of the Royal College of Obstetricians and Gynaecologists is leading a programme of work to address this issue, working with the Department of Health.
I turn, finally, to women in sport, a subject raised by the noble Baronesses, Lady Ford and Lady Massey, and my noble friend Lord Sherbourne. Sport can play a fantastic role in physical health and well-being, as well as bringing people together. There should be no barriers to participation, whether as a result of gender or disability. That is why Sport England has developed the This Girl Can campaign, which works to eliminate fear of judgment, to normalise women taking part in sport and physical activity, and to change perceptions of what sport is.
Baroness Heyhoe Flint was a fantastic athlete but also a champion of female participation in cricket and sport more generally, paving the way for many women who came after her. That is why I was very pleased to hear that the International Cricket Council had created an award in her honour to celebrate the best female cricketer each year.
I express my heartfelt thanks to all noble Lords who contributed today but, in particular, I thank the four noble Lords—five; I apologise—Lord Singh, Lord Hussain, Lord Sheikh, Lord Loomba and Lord Sherbourne, for participating, and I commend them on their bravery. I am, however, disappointed that more noble Lords of the male type were not able to join us today. I very much hope that, if I stand here in a year’s time, we will achieve 50:50 participation in the debate, if not in the numbers in your Lordships’ House. Women must not be excluded—but we cannot do it on our own.
This debate has demonstrated that progress has at times been hard won. It has also reminded us, as the noble Baroness, Lady Prosser, my noble friend Lady Hodgson, the noble Baroness, Lady Flather, and my noble friend Lady Jenkin noted, how fortunate we in our country are relative to so many women in the world.
The theme for this International Women’s Day, as my noble friend Lady Shields and other noble Lords noted, is “Be Bold for Change”. I finish by imploring Members of this House to use those words as a beacon to guide their extraordinary efforts in the future.