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David T. C. Davies (Monmouth) (Con)
The Chancellor of the Exchequer (Mr Philip Hammond)
In 2010, we inherited the UK’s largest deficit since the second world war, at 9.9% of GDP. We set out a clear fiscal framework to restore confidence in the economy and reduce the deficit, which has subsequently fallen by more than two thirds.
We have delivered the lowest corporation tax rate in the G20 and cut employment costs through the employment allowance. Our unemployment rate, in consequence, is at its lowest level for more than 40 years, and since 2010 we have seen 3 million more people find work. With the economy operating at near record high employment, our focus now must be to increase productivity and, thus, real wage growth.
David T. C. Davies
Will my right hon. Friend confirm that despite all the fearmongering from many, including Opposition Members, since the Brexit referendum, we have the best growth rates and best inward investment rates in the whole of Europe, and the lowest unemployment rates for four decades? Is that not a ringing endorsement of this Government’s policies?
Mr Hammond
My hon. Friend is absolutely right to say that we have the lowest unemployment rate for four decades, and that is a remarkable achievement. The British economy has performed with remarkable resilience since June 2016. Last year, we had the second highest growth rate in the G7. The British economy is fundamentally strong and resilient. Yes, we have some short-term uncertainty, but underneath that is a strong and resilient economy ready to go forward and reap the benefits that are available in the future.
Mr Chris Leslie (Nottingham East) (Lab/Co-op)
A fortnight ago, at the International Monetary Fund, the Chancellor was talking about the fiscal and unemployment consequences if a transition deal on Brexit is not achieved by the first quarter of next year. He was right then, so what is he doing to help secure a specific transition agreement in that first quarter of next year?
Mr Hammond
We are preparing for all outcomes in our negotiations with the European Union, but the Government’s objective is to reach a deal. As the Prime Minister made clear in her Florence speech, as part of that deal we want to agree an implementation period, during which businesses and Governments can prepare for the new relationship, and we want to agree the principles of that period as soon as possible. Last week, at the European Council, the 27 agreed to start internal preparatory discussions on guidelines in relation to an implementation period. Together with the broad support for the idea in Parliament, this should give British businesses confidence that we are going to provide them with the certainty they require.
Theresa Villiers (Chipping Barnet) (Con)
Will the Chancellor welcome the fact that there are more women in work than ever before and set out what steps we can take to ensure that this is one of the best countries in the world for women to set up and run their own businesses?
Mr Hammond
One of the remarkable achievements of the past seven years has been the increase in participation in the workforce, particularly in the number of women participating in the workforce. That is in large part due to the family-friendly policies this Government have pursued, with huge increases in the availability of childcare—free childcare—and in the tax deductability of childcare. We will continue to drive a set of policies that encourages women into the workforce, both because it is economically sensible and because it is socially inclusive.
Sir Vince Cable (Twickenham) (LD)
One of the biggest fiscal steps that can be taken to reduce unemployment is public sector investment in housing. May I therefore welcome the Communities Secretary’s statement yesterday that the Treasury has agreed to increase net borrowing by, I believe, £50 billion in order to enable this to happen? Will the Chancellor confirm that this is Government policy?
Mr Hammond
No, and that was not what my right hon. Friend said, as the right hon. Gentleman very well knows. I would, however, agree with him that increasing activity in the construction sector is a very good way of creating jobs, but he will know that at 4.3% our economy is approaching full employment and the output gap is extremely small.
Philip Davies (Shipley) (Con)
Given that more people are in employment, there is more opportunity for people to take advantage of employee share ownership saving schemes. Unfortunately, the maximum amount of time someone can pause one of those schemes is six months, which means that many women on maternity leave for up to a year have to cash in their schemes and cannot take advantage of them to maximum effect. I am sure that is an out-of-date anomaly, so in the Budget will the Chancellor extend the period of time that an employee share ownership saving scheme can be paused to up to 12 months? In that way, women on maternity leave can enjoy the same benefits of those schemes as everybody else.
Mr Speaker
The hon. Gentleman used the words “employment” and “employee” and just about got his question in order.
Mr Hammond
I am sure he did, Mr Speaker. My hon. Friend raises an interesting but technical point that has been raised with me by others, including the TUC. I will take what he said as a Budget representation and look into it carefully.
Kate Green (Stretford and Urmston) (Lab)
Getting second earners and couples into work is one of the best ways to reduce family poverty and protect women economically for the future. Rather than putting money into continuing to increase the tax threshold, which rarely benefits low-income families, will the Chancellor consider measures in his Budget on the work allowances in universal credit, which are currently a real deterrent to second earners looking to increase their labour market participation?
Mr Hammond
The Government made commitments on the personal allowance and higher-rate threshold in their previous election manifesto. We reiterated them in the 2017 manifesto, and we remain committed to those policies. Of course, I will take into account all the representations I receive from right hon. and hon. Members, and I shall take the hon. Lady’s comments on the work allowance as such a representation.
Robert Neill (Bromley and Chislehurst) (Con)
The Economic Secretary to the Treasury (Stephen Barclay)
I thank my hon. Friend for his work on the London Finance Commission, which recommended giving London a wide range of additional powers. The Government have committed to continue to work with the Greater London Authority and London Councils to ensure that London has the powers it needs to maintain its status as a world-leading city.
Robert Neill
I am grateful for that response, but will my hon. Friend particularly and urgently consider whether an element of fiscal devolution—for example, a tourist levy or something similar—might be part of a robust funding package for Crossrail 2, which is a critical part of national infrastructure and will give a boost worth around £150 billion to the whole UK economy?
Stephen Barclay
As my hon. Friend is aware, the Department for Transport is scrutinising the business case for Crossrail and discussing it with Transport for London. It is right that the London region does not retain disproportionate amounts of revenue. Some of the recommendations in the commission’s report are very broad ranging.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
If the ministerial team are to deliver anything for the London Finance Commission, will the Minister at least talk to the commission about the difficulty, with Brexit coming, of recruiting anyone to come to live and work in London? The search for talent is very difficult indeed. No one wants to work in this financial capital because of Brexit—what is he going to do about it?
Stephen Barclay
The hon. Gentleman needs to question whether Labour Members are fully signed up to the recommendations of the London Finance Commission. For example, many of his colleagues on the Opposition Benches may not support the retaining of almost half of all stamp duty across England.
Paul Masterton (East Renfrewshire) (Con)
The Chancellor of the Exchequer (Mr Philip Hammond)
The UK internal market benefits all the nations and regions of the United Kingdom. It is essential that no new barriers to living and doing business in the UK are created. Exports to the rest of the UK are vital to the success of Scotland’s economy, generating £50 billion in 2015. That compares with £12 billion of exports to the EU and £16 billion to the rest of the world and it accounts for 63% of Scotland’s total exports.
Paul Masterton
Small and medium-sized enterprises make a vital contribution to local economies, so I am delighted that in East Renfrewshire the number of registered enterprises has gone up by 18% since 2010. Does the Chancellor agree that as those businesses look to expand from being local to national players, it is vital to maintain the integrity of the UK internal market? Any moves to fragment it would damage the Scottish economy, place huge barriers to trade on both sides of the border, and put that vital contribution he just outlined in jeopardy.
Mr Hammond
I strongly agree with my hon. Friend that the fragmentation of the UK internal market would be damaging for the Scottish economy, particularly small businesses. This is not just an issue for Scotland, though. We all agree that protecting the UK internal market is in our shared interests, and the Government will work to make sure that there are no new barriers to doing business across the UK.
Kirsty Blackman (Aberdeen North) (SNP)
Staying in the UK internal market while the UK crashes out of the EU is set to cost Scotland £30 billion over five years, according to research by the London School of Economics published today. Aberdeen is set to lose the most, at 7% of gross value added. Will the Chancellor be clear on behalf of his Government that no deal is not an option?
Mr Hammond
As I have already said, the Government are preparing for all possible outcomes of the negotiations with the European Union, as any prudent Government would, but the Prime Minister has made it very clear that our strong preference is to achieve a deal, which is good for Britain and which protects British jobs, British businesses and British prosperity—by which I mean the jobs, businesses and prosperity of all of the United Kingdom.
Kirsty Blackman
On that note, 56% of EU nationals in FTSE 250 companies are highly likely, or quite likely, to leave the UK before the conclusion of the Brexit negotiations. What is the Chancellor’s assessment of the impact on the Scottish economy of all of this talent leaving the UK?
Mr Hammond
I am very confident that, whatever the outcome, all of this talent will not leave. The Prime Minister made it very clear yesterday that her top priority remains giving assurance to EU citizens living in the UK, which is why she is working hard to deliver a deal on citizens. It is the area in which our discussions with the European Union are most advanced. The hon. Lady has the Prime Minister’s personal commitment on the importance that she attaches to that area.
Colin Clark (Gordon) (Con)
Financial and accounting services amounted to Scotland’s most valuable export service in 2015. Of the £8.8 billion they were worth, £7.6 billion, or 86%, went to the rest of the UK. Does my right hon. Friend agree that conserving the UK internal market is vital to protect such an important sector of the Scottish economy?
Mr Hammond
My hon. Friend is right to draw attention to the important role of financial services and insurance in the Scottish economy as a subset of the broader point that the internal market works extremely well for Scotland and is very important to Scotland’s exports. It would clearly be catastrophic for the financial and insurance services sector if businesses based in Scotland were no longer able to operate across the border into England.
Wes Streeting (Ilford North) (Lab)
If I understand this correctly, we have Scottish National party members who understand the benefits of the European single market, but not the UK single market, and we have fanatics in the Conservative party who extol the benefits of the UK single market but who would happily drive a coach and horses through the European single market. Perhaps, in his characteristic fashion, the Chancellor can set out a slightly more grown up position and tell us how he will protect both in the interests of the British economy.
Mr Hammond
The Government’s position is very clear: the benefits of the UK internal market are absolutely clear to all of us and we will not allow it to be compromised. In our negotiations with the European Union, we hope and expect to agree a deal that will allow British businesses to continue to enjoy the benefits of access to the European marketplace and European companies to continue to enjoy the benefits of access to the UK market.
Andrew Percy (Brigg and Goole) (Con)
The Exchequer Secretary to the Treasury (Andrew Jones)
The Government are investing more than £1 billion to stimulate the market to build the next generation digital infrastructure that the UK needs for the future. This includes the £400 million digital infrastructure investment fund and the £740 million for full fibre broadband and 5G mobile. That is in addition to the Government-led £1.7 billion superfast programme, which will extend coverage to 95% of UK premises by the end of the year.
Andrew Percy
The vast majority of my constituents in east Yorkshire and north Lincolnshire now enjoy superfast broadband, but a small number in rural areas still struggle with access to broadband and to good 4G, 3G or even 2G mobile coverage. What more can the Government do to give BT Openreach and the mobile networks a kick up the backside to make sure that we get the coverage that we are all paying for?
Andrew Jones
The Government are working to continue their progress on the superfast broadband roll-out. We expect to reach 95% by the end of this year. We have already seen some changes from the internal reorganisation within British Telecom, separating out Openreach. The progress will be maintained through Government expenditure in that programme and in the digital infrastructure investment fund.
Helen Goodman (Bishop Auckland) (Lab)
The Office for Budget Responsibility has just reported on the poor productivity record in this country. Investment in broadband is crucial to improving that, so when will the Minister respond to the letter that I wrote to him on 1 September about broadband in Teesdale?
Andrew Jones
I absolutely agree that broadband and digital progress are critical to the productivity of our economy. I am not aware of that letter. I will look into it with immediate effect, and I apologise for the delay.
Alan Mak (Havant) (Con)
As the fourth industrial revolution accelerates, superfast broadband will be key to the productivity of our high-growth technology businesses. Will the Minister continue working with entrepreneurs and businesses to ensure that they get the broadband system that they need?
Andrew Jones
I most certainly will continue to work on that. My hon. Friend has consistently spoken up on behalf of entrepreneurs and enterprise since he arrived in this House. The Government’s intention to pursue our broadband investment, whether it is superfast or full fibre, is right at the heart of our efforts to improve productivity.
Sammy Wilson (East Antrim) (DUP)
BT has received hundreds of millions of pounds from the Government for public investment in the digital network. But there are parts of my constituency—both rural and urban—where broadband coverage is still very poor, such as the town of Carrickfergus. BT refused to look at innovative ways of splitting the network. Is it not time that the Government looked to other bids for some of the money they are investing in broadband in order to ensure that there is better coverage?
Andrew Jones
The hon. Gentleman makes an important point. All our constituencies have some areas that are not yet fully able to access the important benefits of broadband. I will discuss his points with my colleagues in the Department for Communities and Local Government, and report back to him.
Peter Dowd (Bootle) (Lab)
I am pleased that the Communities Secretary has been inspired by Labour’s fiscal credibility rule in relation to investment in infrastructure—including digital infrastructure and, recently, house building. But this does beg crucial questions. Does the Minister support his colleague’s bid to “borrow more to invest” or is it more a bid to steal the Chancellor’s job?
Andrew Jones
I have already outlined the Government’s progress on broadband. The hon. Gentleman mentions, I think, some kind of speculative comment regarding the forthcoming Budget. The Chancellor has already answered that question.
Peter Dowd
The digital infrastructure plans are wholly inadequate, as my hon. Friend the Member for Bishop Auckland (Helen Goodman) indicated. Is the Minister aware that productivity figures are at pre-crisis levels, and is he really aware that regional industries are up to seven times more productive than others? What is the digital investment strategy doing to close that shocking gap?
Andrew Jones
The hon. Gentleman seems to have forgotten the announcement of the national productivity investment fund—a £23 billion pot of money for investment in infrastructure, including digital infrastructure, across the country. I have already mentioned the £400 million digital infrastructure investment fund and the £740 million for full-fibre broadband and 5G. We are already approaching the figure of 95% of UK premises having access to superfast broadband by the end of the year, and that puts us in a strong place for the future.
Sir Edward Leigh (Gainsborough) (Con)
The Financial Secretary to the Treasury (Mel Stride)
The Government are committed to reducing the administrative burdens for small and medium-sized enterprises, including in the east midlands. That is why we delivered £272 million of net reductions in administrative burdens between 2011 and 2015, and why we continue to reduce unnecessary interaction with the tax system.
Sir Edward Leigh
We still have one of the longest tax codes in the world. I know that the Treasury is under constant pressure to bung extra pieces of money to particular interest groups, but may I suggest to the Minister that he sticks to his last on the Treasury Bench and argues the case for less taxation, simpler taxation and less debt? That is the best service we can give to the young and to businesses.
Mel Stride
My hon. Friend raises an important point about complexity, which is why we continue to work with the Office for Tax Simplification to ensure that our tax code is as simple as it can be. But there is no doubt that, in upholding our exemplary record of clamping down on avoidance, evasion and non-compliance— £160 billion of revenue from 2010 to 2015—we make no apologies for having a tax code that works to support our public services.
Alison McGovern (Wirral South) (Lab)
Some 130,000 small and medium-sized businesses that export to Europe currently do not have to deal with any bureaucracy at our border to do so, but they could face such bureaucracy if the Minister’s colleagues have their way. Does the Minister think that that will be good or less good for British business?
Mel Stride
As the hon. Lady knows, we are in the middle of negotiations with our European partners. I am confident that, as the Prime Minister has expressed at every turn, we will secure a good deal for this country. In the context of our borders, that will mean that the situation will be as frictionless as possible, which will be good for trade, our country and our economy.
Stephen Kerr (Stirling) (Con)
Does the Minister agree that the Labour party’s plans to raise corporation tax would harm small and medium-sized businesses—
Mr Speaker
Order. Just for the benefit of the hon. Gentleman, may I say that the Opposition’s plans for taxes are not a responsibility of the Government? This is a lesson we all have to learn; in my case I learned it early in my first Parliament, and the hon. Gentleman has learned that lesson today.
Jim Shannon (Strangford) (DUP)
Across the whole United Kingdom, and not just in the east midlands, small and medium-sized businesses have created not hundreds but thousands of jobs. Small and medium-sized businesses in my constituency tell me that they are over-regulated and that bureaucracy restricts their ability to employ more people. What is the Minister doing to address that?
Mel Stride
The hon. Gentleman is absolutely right about the critical importance of small and medium-sized enterprises. We have more than 5 million small businesses in our country, and they are right at the heart of generating the wealth that generates the taxes that support the public services we all wish to see thriving. I have already explained that we are working closely with the Office of Tax Simplification to make sure that, wherever possible, the Government get out of the way of business, rather than standing in its way.
Mr Shailesh Vara (North West Cambridgeshire) (Con)
The Chief Secretary to the Treasury (Elizabeth Truss)
The gender pay gap in the public sector is 18.3%, which is a record low, and this compares to 24.5% in the private sector.
Mr Vara
I am grateful to my right hon. Friend for those comments. Will she explain how the new duty introduced by this Government, requiring public sector bodies to publish the differences between male and female pay, will support the trend of an ever-reducing gender pay gap, which is at a record low?
Elizabeth Truss
The new duty we have introduced will mean more transparency, so we will be able to find out where the particular issues are in the public sector. Are there, for example, occupations such as engineering that are well paid and that women are less likely to go into, and what can we do to encourage women to apply for roles in them?
Marsha De Cordova (Battersea) (Lab)
Median public sector wages are £1,000 lower in real terms than they were in 2010. Does the Minister agree that it is about time that hard-working public sector workers got the pay rise they deserve?
Elizabeth Truss
We have already been clear that the pay review bodies will have the remit to look at how high-quality public sector workers can be retained and recruited right across the board, whether they are teachers, nurses or police officers.
Nicky Morgan (Loughborough) (Con)
The chief executive of Virgin Money, Jayne-Anne Gadhia, has this morning given evidence to the Treasury Committee on the Treasury’s women in finance charter—she is the Government’s women in finance champion. Ministers will know that one way of tackling the gender pay gap is to ensure that we have more women in senior roles, so will the Chief Secretary urge the Chancellor to reply to the letter I wrote to him last week about appointments to the Bank of England, where more senior women are needed, because the evidence this morning shows the importance of role models?
Elizabeth Truss
First, I congratulate my right hon. Friend on her work to promote these issues that she did as Women’s Minister. It would be great to see other professions, such as legal services, looking at the success of the women in finance charter and seeing what they could do. I will urge my colleague to reply to my right hon. Friend’s letter asap.
Dr Lisa Cameron (East Kilbride, Strathaven and Lesmahagow) (SNP)
In addition to the gender pay gap, the disability pay gap remains extraordinarily high, yet disabled people are not mentioned in the Government’s industrial strategy. When will we harness the potential of disabled people in our economy and create policies that effectively show that?
Elizabeth Truss
The hon. Lady is absolutely right to highlight the issue of making sure that disabled people have a full opportunity to participate in the economy. The fact is that we are missing out on huge amounts of talent—the talent of disabled people, women and older people—in our economy. We need to unleash that to help our country to become more productive, and also for the sake of those people, who have so much to contribute.
Ms Nusrat Ghani (Wealden) (Con)
The Chief Secretary to the Treasury (Elizabeth Truss)
Last year, public spending was 38.9% of GDP, which equates to about £28,500 per household. This is comparable with other leading countries.
Elizabeth Truss
My hon. Friend is absolutely right. We spend more per student on education than Germany or Japan. Because of our management of the public finances, we have been able to push £1.3 billion more of education spending to the frontline, where it is going to make the most difference in classrooms.
Chris Evans (Islwyn) (Lab/Co-op)
Is the Chief Secretary concerned by speculation that the Bank of England will increase interest rates by 0.25% in November, which would have an adverse effect on public spending?
Elizabeth Truss
That is one of the reasons why we need to make sure that we are reducing our debt and reducing our deficit in order to reduce the interest payments that came as a result of the previous Labour Government leaving us with the highest deficit in history. We have an independent Bank of England, and it is very important that as a Government Minister I do not tell it what to do on interest rates.
David Hanson (Delyn) (Lab)
The Chief Secretary to the Treasury (Elizabeth Truss)
In 2010, there was a significant gap between wages in the public and private sectors whereby public sector workers received an average of 5.76% higher pay. Today, wages are comparable, and when we take into account more generous pension benefits, there is an additional 10% pension premium in the public sector.
David Hanson
Last week, the rate of inflation was announced at 3%. Public sector pay rises are at 1%. Will the Chief Secretary confirm that that is a pay cut for millions of workers, and will she take this from me as a Budget representation: “Scrap the cap”?
Elizabeth Truss
It seems that the right hon. Gentleman cannot take yes for an answer. There is not a public sector pay cap. We have said that individual Secretaries of State will be responsible for making proposals on their workforces dependent on specific circumstances. We are facing very different issues in the NHS and in the armed forces. What is important is that we look at the evidence and make sure that we can recruit and retain the best possible workers in the public sector, but we also need to make sure that we do not price out of the market people working in the private sector.
Mr Mark Harper (Forest of Dean) (Con)
Will the Chief Secretary urge her Cabinet colleagues, when they are making these decisions, to bear in mind that public sector pay rises must be fair not only to public sector workers, but to the five sixths of workers in the private sector who face the same pressures and challenges?
Elizabeth Truss
My right hon. Friend is right. The fact is that we were left a legacy by a previous Government who spent money that they did not have. We have had to get the public finances back on track. We do recognise that there are areas in which we need to make sure that we can recruit and retain high-quality public sector workers, but we also need to make sure that we have a thriving private sector economy. That is why we have ended up with the lowest unemployment for 40 years.
Neil Gray (Airdrie and Shotts) (SNP)
We know from the Resolution Foundation that this decade, from 2010, is the worst for wage growth in 210 years, so when will the Chief Secretary to the Treasury ensure that Departments are fully funded to scrap the cap?
Elizabeth Truss
The reason we have not seen the wage growth that we want to see is that we have an issue with productivity in this country. In order to raise living standards for everybody, regardless of whether they work in business or in the public sector, we need to make sure that we raise productivity. That is why we are investing in infrastructure and skills—doing all the things that the previous Government did not do to make our country more productive.
Charlie Elphicke (Dover) (Con)
Can my right hon. Friend confirm, for the avoidance of doubt, whether there is a pay premium for the public sector over the private sector?
Elizabeth Truss
There is not a pay premium. Public and private sector pay are roughly comparable, but in the public sector there is an average of 10% additional remuneration in terms of pension contributions.
Mr Speaker
I hope that the whole House will join me in congratulating very warmly the right hon. Member for Tatton (Ms McVey) on her significant birthday today.
Ms Esther McVey (Tatton) (Con)
I am older and, I hope, wiser. Like all the ladies who are at my age, I am just hitting my stride and coming of age.
Ms Esther McVey (Tatton) (Con)
The Exchequer Secretary to the Treasury (Andrew Jones)
I wish my right hon. Friend many happy returns of the day.
I confirm that the Government are taking big decisions for Britain’s future and investing in transport infrastructure in Cheshire and across the north. Just last week, my right hon. Friend the Secretary of State for Transport announced road investment of £65 million in Cheshire. That included £18 million of funding for five different local road schemes and £47 million for the Middlewich bypass. That is on top of improvements that the Government are already making to the M6, M62 and M56.
Ms McVey
I welcome the Minister’s reply. The Cheshire and Warrington local enterprise partnership has a bold agenda for increasing business in Tatton and Chester. The local plan has an equally bold agenda for increasing the number of houses, which will bring money to the Exchequer and help to meet the country’s housing need, but we have a significant need for the mid-Cheshire rail line. May I ask the Chancellor and his team to look at that for the forthcoming Budget?
Andrew Jones
I will take that as a Budget representation. The basic point is that we are clearly very ambitious to unlock, through transport investment, both residential and commercial opportunity. That has been a feature of Government policies over the past few years, and I am sure that it will continue to be.
Tony Lloyd (Rochdale) (Lab)
In Cheshire and across the north, the reality is, as the Minister says, that infrastructure investment will unlock productive capacity. Does the Minister recognise that the disproportionate investment per head between the south-east and the rest of the country is unacceptable and must change?
Andrew Jones
The hon. Gentleman’s assessment is simply mistaken: Government investment is broadly equal across the different regions of our country. I highlight to him that the central Government investment going into the north during this spending period is £13 billion, which is a record in British history.
Several hon. Members rose—
Mr Speaker
Order. As a very distinguished chartered surveyor, the hon. Member for The Cotswolds (Geoffrey Clifton-Brown) will know that the Cotswold is a very significant distance from the north or the north-west, but we will look forward with eager anticipation to hearing the hon. Gentleman at some later point.
James Cartlidge (South Suffolk) (Con)
Kevin Hollinrake (Thirsk and Malton) (Con)
The Chancellor of the Exchequer (Mr Philip Hammond)
The Government have reduced the deficit by well over two thirds—from a post-war high of 9.9% of GDP in 2009-10 to a low of 2.3% of GDP in 2016-17. We have done that not out of some ideological obsession, but because the key challenge is to get debt falling to increase the resilience of our country so that if the need were ever to arise, we would have the capacity to support the economy against a future shock.
James Cartlidge
I thank my right hon. Friend for that answer. May I make one simple request about the Budget: whatever measures he announces, he resists the temptation to pay for them by billing our grandchildren? Instead, will he continue the excellent work that has seen us slash by nearly three quarters, as a percentage of GDP, the record post-war deficit that we inherited from the Labour Government?
Mr Hammond
Yes. It is not responsible to make so-called hard choices by loading the price on to the next generation and the generation after that. We have to make difficult decisions and we have to bear the consequences of those decisions. At £65,000 per household, our public debt is still far too high, so I can confirm to my hon. Friend that we will continue the plans that we have announced to reduce the deficit in a measured and balanced way to ensure that debt falls as a share of GDP.
Kevin Hollinrake
Despite this Government’s significant efforts to tackle the deficit by reducing tax avoidance, companies such as Microsoft and Apple are still saving hundreds of millions of pounds in corporation tax by booking sales in Ireland. Does my right hon. Friend agree that we need to continue to develop measures to make sure that companies that sell to UK customers pay tax in the UK?
Mr Hammond
My hon. Friend puts his finger on an important problem. Corporation tax in the UK—in fact, in all countries—is levied on profits generated by the activities of companies within the territory. The big global digital companies present us with a new challenge of attributing profits effectively to individual jurisdictions. We are continuing to work with the OECD’s taskforce on the digital economy, and we are also looking carefully at ideas emerging within the EU for interim solutions pending a full international solution.
Nick Thomas-Symonds (Torfaen) (Lab)
Given that the previous Chancellor has now said that in 2008 the Labour Government
“did what was necessary in a very difficult situation”,
does the current Chancellor accept that the fact we have thousands of people going to food banks and desperately underpaid public sector workers is entirely the fault of Tory policy?
Mr Hammond
No. Of course a Government need to be able to respond to an external shock, but a prudent Government have got the economy in good shape to respond before such a shock arises. The problem in 2008-09 was that the then Labour Government were borrowing tens of billions of pounds at the top of the economic cycle—grossly irresponsibly.
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
The major cause of the deficit was of course the collapse in tax revenue following the global financial crisis in 2008, yet that is exactly what we will face again unless there is a transitional deal with the EU to allow our world-leading financial services sector—it contributes £66 billion a year in tax revenue—to operate legally within the single market. As my hon. Friend the Member for Nottingham East (Mr Leslie) has already said, we have been asking the Government all year to confirm that there will be a transitional deal. As today is the penultimate Treasury questions before the end of the year, the last Treasury questions before the Budget, and—if hon. Members have read the papers—perhaps the Chancellor’s last Treasury questions ever, will the Government promise UK-based firms a transitional deal guaranteeing market access before the end of this year?
Mr Hammond
As I have already said, the Government have made it clear—the Prime Minister set this out in the Florence speech—that we want to agree an implementation period as part of a deal with the European Union. We are greatly encouraged by the fact that, at last week’s European Council, the 27 agreed to start internal preparatory discussions on guidelines in relation to an implementation period. We are confident that that will give British businesses confidence that we are going to provide them with the certainty they require.
Mr William Wragg (Hazel Grove) (Con)
Luke Graham (Ochil and South Perthshire) (Con)
The Economic Secretary to the Treasury (Stephen Barclay)
Infrastructure is at the heart of the Government’s economic strategy, and our investment will boost productivity and growth. Since 2010, more than £250 billion has been spent on public and private sector infrastructure.
Mr Wragg
The biggest investments in transport infrastructure in generations, including the Ordsall rail curve in Greater Manchester, have been made possible by this Government. Will my hon. Friend commit to further investment in our rail network, particularly on local commuter routes through my constituency?
Stephen Barclay
My hon. Friend makes a good point. This Government have committed to the largest rail investment programme since Victorian times, including a £55.7 billion investment in High Speed 2. He will be aware of the Chancellor’s announcement in Manchester last month of £300 million to improve connectivity to High Speed 2 across the northern region.
Luke Graham
Will my hon. Friend confirm his commitment to the Tay cities and the Clackmannanshire and Stirling city deals, and will he commit to meeting the local leaders and me to discuss how we can deliver this transformational change for our region?
Stephen Barclay
The Government remain fully committed to agreeing both city deals, and to working constructively with the Scottish Government and local partners. I am, of course, very happy to meet my hon. Friend to discuss this further.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
A decent transport infrastructure is an essential platform for economic growth, but the Minister will be aware that public transport investment in the north-east is only £200 per head, whereas it is £2,000 per head in London. Will he now commit to investing in the north-east on the Tyne and Wear metro, and with public money, not some private finance initiative?
Stephen Barclay
The Government are committed to increasing infrastructure investment across all regions, including the north-east. Indeed, investment is 30% higher than it was under the Labour Government. It would be better for Opposition Members to recognise the record investment in infrastructure, which is driving productivity and growth.
Mr Jim Cunningham (Coventry South) (Lab)
Will the Minister say how much investment is going to the west midlands, as it is very important to the British economy?
Stephen Barclay
The investment going to the west midlands as part of the midlands engine and through the devolution deal is part of wider investment—the £23 billion of investment that has been announced through the national productivity investment fund. The hon. Gentleman will be aware of the Secretary of State for Transport’s announcement on rail spending between 2019 and 2024, which includes the £24 billion announced just last week.
Alex Chalk (Cheltenham) (Con)
The Financial Secretary to the Treasury (Mel Stride)
Since 2010, HMRC has secured more than £53 billion from big businesses alone in additional tax revenue from tackling tax evasion, avoidance and non-compliance, and we have made it an offence for a corporate to fail to prevent the facilitation of tax evasion by its employees. Corporation tax revenues were £55.3 billion in 2016-17, their highest level on record.
Alex Chalk
Keeping up the pressure on multinationals to pay their fair share of tax is vital. Will my right hon. Friend join me in welcoming the additional £160 billion in tax revenue collected by HMRC since 2010 as a result of tackling avoidance and evasion, thus making the UK’s tax gap one of the lowest in the world?
Mel Stride
My hon. Friend is absolutely right—we have collected £160 billion since 2010, far more than was raised during the 13 years under the Labour party. The latest figures show that our tax gap overall is now at 6.5%, better than any year under Labour, where in 2005-06, for example, it was as high as 8.3%.
Anneliese Dodds (Oxford East) (Lab/Co-op)
Successive cuts to British corporation tax have manifestly not led to greater business investment, and according to the Institute for Fiscal Studies they are not responsible for the rise in receipts since 2010. So, with huge pressures on our public finances, will the Chancellor delay his proposed cuts to corporation tax?
Mel Stride
I am surprised that the hon. Lady should raise the issue of corporation tax, because we have brought corporation tax down from 28% in 2010 to 19% and we have further plans to reduce it further, to 17%, and yet the hon. Lady’s party wishes to inflate those rates of tax to 26%, which would destroy jobs, destroy wealth, destroy growth and lower the amount of tax that we can collect to support those vital public services that we all wish to see thrive.
Stephen Crabb (Preseli Pembrokeshire) (Con)
One way that companies avoid tax is, of course, by employing people illegally. We still have too many illegal jobs in our economy in sectors such as construction. So will my hon. Friend and his colleagues resist those calls that are floating around to place new and additional burdens on legitimate work, and instead redouble their efforts at enforcement through HMRC to root out illegal work in our economy?
Mel Stride
My right hon. Friend is absolutely right. As the Minister responsible for strategic oversight of tax, I am always concerned to ensure that the measures that we put in place are proportionate, and do not carry extra burdens for those who are rightly carrying on their business and running their companies in exactly the correct fashion.
Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)
Intergovernmental co-operation is vital if we are to combat international corporate tax evasion. In February this year Treasury Ministers withdrew from a meeting with the EU PANA Committee, which was set up to investigate issues and prioritise reform. What sort of message does the Secretary of State think that sends to corporate tax evaders?
Mel Stride
International co-operation with other countries is an area where we have an exemplary record. We have co-operated with the OECD on the base erosion and profit shifting project—many of the recommendations are actually going through the House at this precise moment, in the latest Finance Bill—and, of course, we have common country reporting; we were leading that move in around 2012.
Royston Smith (Southampton, Itchen) (Con)
The Chancellor of the Exchequer (Mr Philip Hammond)
In 2017-18, as a result of increasing the tax-free personal allowance and the higher rate threshold, 31 million individuals will see their income tax bill reduced and 1.3 million individuals will be taken out of income tax altogether; 585,000 individuals will have been taken out of the higher rate of tax in 2017-18.
Royston Smith
In 2017-18 and beyond, all basic rate taxpayers will pay £1,000 less per year in tax than they did in 2010. Can my right hon. Friend confirm that an employee paying the basic rate of tax would need to earn an additional £1,471 annually to take home £1,000 in extra income?
Mr Hammond
I can absolutely confirm that. I can also tell my hon. Friend the good news that a typical basic rate taxpayer will pay £1,005 less income tax in 2017-18 than in 2010-11.
Several hon. Members rose—
Nigel Huddleston (Mid Worcestershire) (Con)
Mr Hammond
I am always very open to receiving from colleagues around the House ideas for specifically targeted taxes. If my hon. Friend has such an idea I would be very pleased to receive it.
Sir Desmond Swayne (New Forest West) (Con)
The Chancellor of the Exchequer (Mr Philip Hammond)
As we look ahead to the GDP figures out tomorrow and to the Budget in a month’s time, my focus is on the three key challenges we need to meet as we seek to build an economy that works for everyone: first, protecting the economy by managing short-term uncertainty; secondly, achieving a good Brexit outcome; and, thirdly, addressing the longer term productivity challenge to ensure that real wages, and thus living standards, can continue to rise. Everything my Department does will be focused towards those three objectives.
Sir Desmond Swayne
What revenue has the privatisation programme raised and what would be the cost of nationalising the utilities?
Mr Hammond
I refer my right hon. Friend to the analysis of the Opposition party’s proposals, if we can call them that, done by the Conservative party at the time of the general election. The Government’s policy is to sell assets when there is no longer a policy reason to retain them and to reinvest the proceeds of such sales in policy priorities. Nationalising assets would increase public sector net debt, which would increase our debt interest bill and divert public spending away from more valuable areas. It would also mean that the future investment needs of any nationalised industries would have to compete for capital with our public services.
John McDonnell (Hayes and Harlington) (Lab)
I listened very carefully to the Chancellor’s response to the hon. Member for Aberdeen North (Kirsty Blackman) and my hon. Friend the Member for Ilford North (Wes Streeting) on the issue of no deal. May I tell him that his response was crushingly disappointing? Expressions of hope of a deal are just not good enough. The Chancellor knows the economic perils our country faces if there is no deal: he described it, rightly, as a worst-case scenario. May I urge him, in the interests of our country, to have the courage of his convictions, and stand up and face down his opponents in Cabinet and confirm today that, like us, he will not support or vote for a no-deal Brexit?
Mr Hammond
As the right hon. Gentleman very well knows, our clear objective and priority is to achieve a deal with the European Union. Our preference would be for a deal that gives a comprehensive trade, investment and security partnership between the UK and the European Union in the future. As part of such a deal, we will seek an implementation phase that gives British businesses, and indeed Government agencies, proper time to prepare for the new circumstances they will face.
John McDonnell
If the right hon. Gentleman cannot stand up to his opponents on a no-deal Brexit, can he at least stand up to them on the transition period? Business leaders yesterday made it clear that they need certainty now on a sensible transition period, yet the Prime Minister yesterday sowed more confusion in her statement, giving the impression that the transition is to be negotiated only after we have settled on what, as she describes it, the “future partnership” with Europe will be. Businesses cannot wait: they need to plan now; jobs are in jeopardy now. If the Prime Minister is not willing to stand up to the reckless Brexiteers in her party, will the Chancellor? Will the Chancellor make it clear, in a way that the Prime Minister failed to do yesterday and as business leaders have been calling for, that we need the principles of any transition confirmed by the end of this year?
Mr Hammond
The right hon. Gentleman is correct to say that this matter is urgent and pressing, which is why we were so pleased that last week at the European Council the 27 agreed to start internal preparatory discussions for an implementation period. I am confident that we will be able to give businesses the confidence and certainty they need.
Damien Moore (Southport) (Con)
The Financial Secretary to the Treasury (Mel Stride)
As I said earlier, we have cut corporation tax dramatically and as a consequence we raise 50% more in corporation tax today than we did in 2010.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
Mr Philip Hammond
The hon. Gentleman will see, if he looks at that revision, that the cause is lower-than-anticipated returns on UK investment stocks held overseas, principally returns on mining and petroleum-related activities.
Amanda Milling (Cannock Chase) (Con)
The Exchequer Secretary to the Treasury (Andrew Jones)
I will most certainly join my hon. Friend in both celebrating the project and urging everybody working on it to be as ambitious as possible. In terms of support, since 2010, my hon. Friend’s area has benefited from more than £300 million in grants to support cutting-edge innovation in the west midlands through Innovate UK. The Government welcome private investment in innovative and high-tech businesses right across the economy, which is why we announced an additional £4.7 billion for research and development at the 2016 autumn statement.
Joanna Cherry (Edinburgh South West) (SNP)
Mel Stride
As the hon. and learned Lady will know, when the Scottish Government decided to restructure their police and fire services, they went into that decision with their eyes wide open—they knew what the VAT consequences would be—so it is down to the SNP to ask those questions of itself.
Geoffrey Clifton-Brown (The Cotswolds) (Con)
Andrew Jones
I will take the matter up with my right hon. Friend the Secretary of State for Transport and get back to my hon. Friend.
John Mc Nally (Falkirk) (SNP)
Mr Philip Hammond
We are acutely aware that inflation has spiked, but the overwhelming majority of forecasters expect it to start to fall again in the new year. The spike in inflation has been driven primarily by the depreciation in the value of sterling last year, but I will take the hon. Gentleman’s comments on VAT as a representation for the Budget and will consider them carefully.
Charlie Elphicke (Dover) (Con)
The Chief Secretary to the Treasury (Elizabeth Truss)
My hon. Friend is absolutely right. We should not be giving away our negotiating position when we are entering one of the most important negotiations that the country has ever been involved in, and that is why we need to be prepared for all eventualities. I am delighted to be meeting my hon. Friend tomorrow to discuss the issue in more detail.
Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)
We are having difficulties with mobile banking in my constituency. I know of instances in which two different mobile banks have arrived in the same community while other communities have seen no mobile banks at all. We have problems with people queueing in rough weather and getting wet, and problems with paper banking. Will the Chancellor, or some other Minister, propose ways of reorganising mobile banking and making it more user-friendly, and of getting the banks to co-operate with each other to deliver a service that is vital in the highlands?
The Economic Secretary to the Treasury (Stephen Barclay)
Mobile branches are vital to many communities, and I am sure that many banks will have heard the hon. Gentleman express his concerns, but these are commercial decisions. It should be recognised that since 2011 the number of branch visits has fallen by roughly a third, that more than 600,000 people aged over 80 are now registered for internet banking, and that a fifth less cash is used for payments. Those changes in the market reflect the way in which branches, including mobile branches, are being used.
Robert Neill (Bromley and Chislehurst) (Con)
Stephen Barclay
My hon. Friend is right. The UK financial services industry pays more than £71 billion to the Exchequer in tax and employs more than 1 million people directly and 2.2 million through the sector as a whole, two thirds of whom are outside London. Because of his work as chair of the all-party parliamentary group for Gibraltar, my hon. Friend will be aware of the importance not just of financial services in the UK, but of our links with industries in territories including Gibraltar.
Rachael Maskell (York Central) (Lab/Co-op)
Teachers have travelled from all over the country today to lobby Parliament about severe real-terms cuts in their pay. The Chief Secretary has said that she has lifted the pay cap owing to the pressure that Labour has placed on her, but will she confirm that her Department will fund the recommendations of the pay review body rather than cash-strapped local authorities?
Elizabeth Truss
The fact is that teachers received, on average, a 4.6% pay rise last year, including promotions and responsibility allowances. Pay in schools involves a great deal of flexibility, and headteachers can decide how they pay teachers. However, it will be up to the Department for Education to look at the specific circumstances in schools and make those determinations.
Mr Peter Bone (Wellingborough) (Con)
Does the Chancellor share my frustration at the fact that since the EU referendum, a number of senior politicians have been talking down the economy? Should they not be talking it up, because we have a great future outside the European Union?
Mr Philip Hammond
Yes. As I said earlier, the UK economy is fundamentally strong. We have the world’s second largest services export sector at a time when emerging economies across the globe are sucking in new demand for services, and we have a global lead in various areas of emerging technology that will drive the fourth industrial revolution. This country has a bright long-term future. Of course we must deal with short-term uncertainty, and of course we must tackle our productivity challenge, but we are fundamentally in good shape.
Patrick Grady (Glasgow North) (SNP)
Given that support for a single Scottish police force was in the 2011 Scottish Tory manifesto, can we assume that the Government think that the £280 million VAT fee is a price worth paying, or will they finally see sense and scrap the VAT on Scotland’s fire and police services?
Mel Stride
The hon. Gentleman’s colleague, the hon. and learned Member for Edinburgh South West (Joanna Cherry), asked exactly the same question, and I shall give exactly the same answer. When the Scottish Parliament and Government made that decision, they knew that structuring the police and fire services in the way that they chose would lead to the VAT outcome that they should have expected all along.
Jeremy Lefroy (Stafford) (Con)
What does the Chancellor believe we need to do to improve productivity, which is rightly one of his three priorities?
Mr Philip Hammond
We need to invest in our infrastructure and the skills of our people, we need to ensure that our high growth businesses have access to long-term capital, and address the regional disparity in productivity performance. If we can tackle those four things, we can start to close Britain’s productivity gap and see real wages rising sustainably over many years ahead.
Stephen Timms (East Ham) (Lab)
Speaking to the Treasury Committee earlier this month about the transition agreement for exiting the European Union, the Chancellor said that
“it will still have a very high value at Christmas and early in the New Year. But as we move through 2018, its value to everybody will diminish significantly.”
Yesterday, however, the Prime Minister told us that we will not get a transition agreement until October next year at the earliest. Does the Chancellor stand by the very different view he expressed just a fortnight ago?
Mr Hammond
As I have said several times today, we are reassured by the fact that at the European Council the 27 agreed to start the internal preparatory discussions on an implementation period. We are absolutely aware of the needs of business in this area, and they have been reinforced again by business leaders this week. We are confident that we will be able to deliver reassurance to business in accordance with its needs.
Antoinette Sandbach (Eddisbury) (Con)
May I urge my right hon. Friend when looking at the business case for HS2 phase 2b to consider carefully the additional £750 million cost to the Exchequer of building over the Cheshire salt fields?
Andrew Jones
We discussed this issue when I was a Transport Minister. All the topography and construction implications as the route is finalised will be taken into consideration as part of the business case.
Mr Speaker
We all remember when the hon. Gentleman was a Transport Minister and he enjoyed telling us how he travelled to work by bus; I remember thinking that the fellow passengers on the bus must have been absolutely exhilarated to know that they were accompanied at the time by the Under-Secretary of State for buses.
Helen Goodman (Bishop Auckland) (Lab)
The Chancellor acknowledged earlier that the fall in the exchange rate following the Brexit vote has pushed up inflation. What is the Treasury’s estimate of the impact of that on people’s standard of living?
Mr Philip Hammond
The hon. Lady will be aware of the increase in inflation—CPI inflation stands at 3%. Most forecasts suggest that it might go 0.1% higher before falling steadily from late this year. Obviously any increase in inflation will have a negative impact on real wages, and we very much look forward to CPI inflation falling and real wage growth resuming in this country next year.
Several hon. Members rose—
Mr Speaker
We are out of time, but the temptation to hear remaining colleagues is, frankly, just too powerful.
Anna Soubry (Broxtowe) (Con)
The Chancellor, in his efforts to secure a good Brexit deal and a transition period, has the confidence and support not only of Members on the Government Benches, but from across the whole of British business, including in Broxtowe—unlike the Labour party, which inspires complete fear with the Marxist mayhem it would put into policy if elected into government. Will my right hon. Friend confirm that it is in the best interests of British business to secure a transition period as a matter of some urgency, and will he do all he can to get that transition period?
Mr Hammond
Yes, British business has made it clear that it wants the earliest possible certainty about the implementation of interim arrangements. It has also made it very clear that it does not want any Marxist mayhem.
Mr Speaker
Can either remaining Member ask a question consisting of 10 words or fewer?
Mr Sheerman
May I make a plea to the Chancellor? A teacher has visited me in the House today, whose school has run out of money for photocopying and for books in the Library. If the Chancellor wants to do something about productivity, he should invest in schools and colleges now.
Elizabeth Truss
The hon. Gentleman seems to have missed the announcement just before the summer that we are putting £1.3 billion more into the frontline, not by taking in more taxes, but by using the money we have across government better.
Scott Mann
The previous Chancellor of the Exchequer implemented a second homes stamp duty levy, which has delivered £5.11 million into the Cornish economy and is set to deliver 1,000 homes. May I seek an assurance from the Treasury that this money will continue into the future?
Mr Philip Hammond
We consider all areas of taxation in the run-up to all fiscal events, but I have certainly heard my hon. Friend’s comments and I will take them as a representation.
Raqqa and Daesh
(6 years, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Urgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
Each Urgent Question requires a Government Minister to give a response on the debate topic.
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John Woodcock (Barrow and Furness) (Lab/Co-op)
(Urgent Question): To ask the Foreign Secretary if he will make a statement on the liberation of Raqqa and the future of the counter-Daesh campaign.
The Minister for the Middle East (Alistair Burt)
I thank the hon. Gentleman for his continued engagement on this important issue. Raqqa was officially liberated on 20 October. The Syrian Democratic Forces, supported by the global coalition against Daesh, began operations to liberate Raqqa in June 2017. Military operations are ongoing. My right hon. Friend the Secretary of State for Defence has highlighted the continued leading role that the UK is playing as part of the global coalition’s counter-Daesh campaign, and we in this House pay tribute to the courage, commitment and effectiveness of the British forces overseas. The United Kingdom is the second largest military contributor to the global coalition and plays a leading role in the humanitarian response.
The liberation of Raqqa this month follows significant Daesh territorial losses in Iraq, including Mosul in July. Daesh has now lost more than 90% of the territory it once occupied in Iraq and Syria. The Foreign Secretary will in due course provide a full update to the House on the counter-Daesh campaign, including the operation to liberate Raqqa. I look forward to providing the hon. Gentleman and other Members with further information in due course.
John Woodcock
I thank the Minister for that response. He will recall that back in November 2015 the then Prime Minister, David Cameron, made the case for the liberation of Raqqa—which has now been achieved—a central part of asking the House to endorse the RAF airstrike campaign, which has been taking place in Syria since that time. I think I speak for the whole House when I echo the Minister’s tribute to the professionalism of the Royal Air Force and how it has carried out that campaign. There are significant questions about the conduct of some of the forces in some of the actions in the campaign, but the RAF has been exemplary.
There are many questions that flow from this, but I want to cover three broad areas in the short time that I have today. First, what is the future for the region? Will the Minister tell us how the UK will engage in attempts to bring to an end the civil war that has already claimed 500,000 lives, the vast majority at the hands of the Syrian regime under President Assad? Secondly, what will be the UK’s role in the reconstruction of the region? Thirdly, what will be the next steps in the global campaign to defeat not only Daesh, which is clearly disintegrating, but the evil ideology that has perverted so many people in the region and enticed too many Brits to join it? Will the Minister also tell us what the future will be for the Brits who have been over to the region and might now be seeking to return?
The Minister has always been assiduous on this matter, but the Government’s failure to offer a statement to the House following the liberation of Raqqa suggests a lack of respect for Parliament and for the British people, on whose behalf we were asked to make the decision to send the Royal Air Force into a theatre of combat. There is a worry that it also suggests the complacency and lack of grip that have too often been the hallmark of Governments of both colours when attempting to maintain stability in a region in the aftermath of conflict.
Mr Speaker
I am not going to make any evaluative comments about the motivation or conduct of the Government. Suffice it to say, principally for the benefit of those who are not Members of the House but who are attending to our proceedings, that one of the principal motivations for the Speaker in selecting an urgent question is the judgment that the matter needs to be treated of in the House and, implicitly perhaps, that a Government offer of a statement might reasonably have been expected.
Alistair Burt
Thank you, Mr Speaker. To deal with the hon. Gentleman’s last point first, a range of statements have been made at regular periods on Iraq and Syria and counter-Daesh operations, and I indicated in my remarks that the Foreign Secretary intends to present a full statement that covers the range of recent activities. I take the hon. Gentleman’s point about the liberation of Raqqa, and a statement covering that and other things is expected and will come in due course, but he was right to ask this urgent question, and I appreciate that and am happy to respond.
The hon. Gentleman reminded us that David Cameron asked the House to support activity due to the impending civilian crisis in the area where Daesh was active and the horrendous stories of abuse that were emerging. It is to the House’s credit that it recognised and supported that action, and we have seen that carried through extraordinarily by the forces that the House asked to take part. As for the UK military contribution, the RAF has conducted 1,609 strikes to date—1,348 in Iraq and 261 in Syria—using six Typhoons, eight Tornados, and Reaper drones. We have around 1,350 military personnel committed in the region. UK troops have helped to train over 57,000 Iraqi security force personnel, which says much for the opportunity of future stabilisation. Again, we pay tribute to the forces and what they have done, and the quality and accuracy of the airstrikes in which they have been involved.
The hon. Gentleman asked three specific questions about what happens next in terms of activity, stabilisation issues and ideology. Our partner forces are closing in on Daesh’s presence in the Euphrates river valley up to the border with Iraq. There, the Syrian efforts will be met with those of the Iraqi security forces, closing in on Daesh and ensuring their ultimate military defeat. No one should underestimate the importance of Raqqa to the whole Daesh ideology, and media reports have made that clear. The fall of Raqqa and Mosul is a tremendous blow to those who would have inflicted harm upon us all. The taking of those cities is of immense importance.
As for stabilisation, we have immediately stepped up our humanitarian support. This weekend, the Secretary of State for International Development announced an additional £10 million to help restore crippled health facilities, to deliver much-needed medical support and relief and, crucially, to clear lethal land mines and explosives. In leaving the city, Daesh has left a reminder of its killing machine behind it, and we are making immediate efforts in relation to that. We will of course move towards further stabilisation in due course as the area becomes more stable.
Lastly, the hon. Gentleman is right to suggest that military action on the ground is only one part of the contest with Daesh and its ideology. We must be prepared for Daesh to change its form. It will return to its terrorist roots, luring more adherents to its evil ideology, so we will continue to tackle the extremists on simultaneous fronts, including by preventing foreign fighters from returning to their country of origin. We will continue degrading Daesh’s poisonous narrative, decreasing its ability to generate revenue and denying it a safe haven in the virtual world. Indeed, as I was able say at the United Nations recently, we will also ensure that Daesh is brought to justice. Fighters returning to the United Kingdom can expect to be questioned about their role, and it will be for the Crown Prosecution Service to consider any evidence against them. Fighters who are captured in Iraq or Syria must be treated according to the laws of armed conflict, but they can well expect to stand trial there if offences are alleged against them.
Sir Hugo Swire (East Devon) (Con)
We should reject the language coming out of Russia comparing the bombing of Raqqa to the bombing of Dresden. None the less, the result is not dissimilar.
Will my right hon. Friend try to rectify a wrong that has so often affected us in the aftermath of such events by calling for a donor conference and showing British leadership, so that we can start to rebuild Raqqa and what little remains of the shattered lives of its inhabitants and those who used to live there?
Alistair Burt
My right hon. Friend is correct to point to the immediate misery of the aftermath for those who have been caught up in the conflict. The world now recognises that it has a responsibility to work with those on the ground to rebuild areas of conflict, because that is the best way to prevent conflict from happening again. We expect a political reconciliation, so that there are no sectarian difficulties in either Iraq or Syria as they return to conventional governance.
On the physical reconstruction, the Syrian Democratic Forces have been at pains to minimise the damage to the city’s infrastructure as they advance, but, in an urban battle such as this, it is impossible to advance against an enemy such as Daesh without causing any damage at all. It must be remembered that Daesh’s tactics do not adhere to the conventions of warfare. It booby-traps buildings and has taken many other desperate measures to protect its vile interests, including using schools and hospitals as tactical headquarters, denying those facilities to the innocent civilian population.
A stabilisation programme will be put forward under the auspices of the UN reconstruction effort, which will come after political decisions are made to ensure the reconstruction follows political commitments made by those involved in the governance of Syria. I do not know about a donor conference yet, but I will take that idea back to the Foreign Secretary and the Secretary of State for International Development.
Emily Thornberry (Islington South and Finsbury) (Lab)
Thank you, Mr Speaker, for granting this urgent question to my hon. Friend the Member for Barrow and Furness (John Woodcock). I thank the Minister for his opening remarks. I wholeheartedly agree with his sentiments. For once, we are in union that the victory against Daesh in Raqqa is a vital blow against an evil death cult, and it makes a mockery of Daesh’s pretensions to establish a caliphate in Syria or elsewhere. It shows them to be the weaklings and cowards they are.
This is a timely reminder of the battle we and our allies fought on this very day 75 years ago, the second battle of El Alamein—the battle that destroyed the Nazis’ ambition to control Egypt. As we recall Churchill’s words after that hard-fought victory, perhaps we can turn them around: this is not the end of the beginning for Daesh, it is the beginning of their end. We should be grateful for that.
I hope the Minister can address my questions in his response. If he is unable to do so and we rely on the Foreign Secretary to make a fuller statement, will he ensure the Foreign Secretary is able to answer my questions? I will not repeat the question on the Government’s response to the humanitarian crisis, but this is my second question: now that Daesh is in disarray in Syria, what is Britain’s ongoing military mission in Syria? In short, what is our strategy for the future of Syria, and what is the military’s role in that strategy? In particular, what steps will the Government now take to help rebuild some form of sustainable governance in Raqqa? What role, if any, will the armed groups that helped to liberate the city from Daesh play in its future administration? And how will the Syrian, Kurdish and Arab opposition forces, which played such a pivotal role in the campaign to retake Raqqa, be represented as part of a genuinely viable peace process for Syria as a whole? If there is one thing on which we can all agree, surely it is that the very last thing the middle east needs right now is another vacuum.
Finally, as the Minister will know, his Department recently confirmed that it has channelled £200 million since 2015 to support the so-called moderate opposition in Syria. Can he give the House a guarantee today that none of that money has ended up in the hands of al-Nusra or other jihadi groups? It would be a tragedy if, while rightly celebrating the destruction of Daesh in Raqqa, British taxpayers’ money is funnelled into organisations that are just as bad.
Alistair Burt
I warmly welcome the right hon. Lady’s remarks, which are highly appropriate and much appreciated. The whole House has engaged collectively on this subject, and it is appreciated by all that she speaks as she does. The House is demonstrating that there is nothing between us on presenting a united front against Daesh and its ideology.
I am pleased that the right hon. Lady mentions El Alamein, partly because I was there on Saturday. As a much-travelled Minister, I had the opportunity to represent Her Majesty’s Government in laying the wreath on behalf of the United Kingdom to commemorate the 75th anniversary of that extraordinary battle, which over a period of days turned the tide in north Africa and in the war. I was proud to stand alongside representatives of the Commonwealth and people from the United Kingdom who fought with the Desert Rats, as well as representatives of the German and Italian Governments, to recognise that, 75 years later, Europe has achieved much by coming together. In doing so, we demonstrated tolerance and forgiveness, which are sometimes rather lacking in other parts of the middle east, where memories are long and dates are often remembered for the wrong reasons. I was proud to represent the United Kingdom, along with representatives of the military, our ambassador and Admiral Sir Tim Laurence, who represented the Commonwealth War Graves Commission, of which he is vice-chairman.
Returning to the right hon. Lady’s questions, we recognise the need for ongoing humanitarian relief, about which we have more information if she wishes. As far as the military are concerned, we do not know what will come next. The military will remain engaged as long as there is a need for them to be there. As I have indicated, the strategy further to close off the avenues for Daesh in the Euphrates valley will be supported by United Kingdom personnel until there is no possibility that military action could recommence and no possibility that coalition forces could be put under pressure.
As the right hon. Lady rightly says, the coalition is clearly essential. The coalition comprises a large number of people from the Kurdish region of Syria and Iraq and from other areas. Discussions are ongoing about how the coalition will stay together, but it is premature to say anything about a disbandment. The coalition has to be kept in place until there is no further military threat, and that will be advised either by my right hon. Friend the Defence Secretary or my right hon. Friend the Foreign Secretary in due course.
On support going in the wrong direction, there has been a continual concern since 2011 that, in trying to provide support for legitimate opposition forces in such difficult circumstances, arms and money get traded. There has been an absolute determination to try to ensure that supplies going to support opposition forces do not go in the wrong direction. As far as possible, that is still the case. I cannot say with absolute certainty that not a single pound or element of aid has gone in the wrong direction—there are difficulties on the ground, where forces must co-operate to overcome Daesh—but the Government are absolutely determined to ensure that, as far as possible, the risk is minimised. I assure the right hon. Lady that that is the case.
Mr Speaker
The Minister of State is an extraordinarily busy and conscientious bee, and I feel sure that I speak for the whole House in saying how delighted we are that he represents us on these important occasions in all sorts of different parts of the globe.
Dr Julian Lewis (New Forest East) (Con)
Does the Minister accept that the reason why bombing Daesh in Syria was so much more controversial than bombing it in Iraq is the same as the reason why there have been so many more RAF airstrikes in Iraq than in Syria? Namely, we want the ground forces of the Iraqi Government to win in Iraq, but we claim not to want the ground forces of the Syrian Government to win in Syria. Does he accept that the outcome of the welcome squeezing out of Daesh in Syria is down to a combination of the Kurdish-led Syrian Democratic Forces and Syrian Government forces, whether we like it or not? The 70,000 so-called moderates are now well and truly dominated by Islamists, and as the right hon. Member for Islington South and Finsbury (Emily Thornberry) said, we ought to be careful about whom we support.
Alistair Burt
I am not going to go over previous discussions about this, and I understand the point of my right hon. Friend’s question. The coalition forces in Syria that have been backed in relation to Raqqa contain a variety of forces, but not Syrian regime forces. We still hold, and are right to hold, the Syrian regime responsible for a large proportion of the atrocities in Syria, and that should not be forgotten or glossed over. President al-Assad is responsible for launching murderous attacks on his own people, and it has been right to separate, in so far as is possible, coalition forces fighting Daesh from those of the regime.
Chris Law (Dundee West) (SNP)
We welcome the news that Daesh or the so-called “Islamic State” has been defeated in Raqqa by the Syrian Democratic Forces after its three-year rule over the city. We also welcome the pledge we hear today of £10 million from the Department for International Development in humanitarian aid.
Does the Minister agree that in order to sustain the military achievement in Raqqa, rebuilding efforts and the introduction of post-IS mechanisms need to start immediately in order to allow locals to develop and run their city meaningfully and in an inclusive manner that will ensure good governance and reliable public services? What funds have therefore been allocated, both to the immediate and the long-term reconstruction of Raqqa and the wider region? Does the Minister agree that British jihadists need also to be captured, where possible, and tried for their heinous war crimes, some of which, such as genocide, can only be faced in the International Criminal Court at The Hague? That would allow the whole world to witness them. Does he agree we should do that rather than, to use the words of the Minister of State, Department for International Development, the hon. Member for Penrith and The Border (Rory Stewart), follow an approach where
“the only way of dealing with them will be, in almost every case, to kill them.”?
That of course will only fuel IS recruitment.
Alistair Burt
I thank the hon. Gentleman for his support. There are two elements of reconstruction after conflict, the first of which is the stabilisation phase. My right hon. Friend the International Development Secretary addressed that the other day, and it is about providing the immediate assistance that is needed. As I indicated, that helps to clear lethal landmines and explosives, restock hospitals and mobile surgical units, provide some 145,000 medical consultations, provide immediate relief for innocent people who have been displaced, improve access to clean water and look after pregnant women who are in difficulties. The United Kingdom is contributing to that immediate work. In the longer term, resources have not yet been allocated, and that will be done in conjunction with UN and other donors who will be providing support. That will be a long-term process.
Again, the hon. Gentleman put his finger on the necessity for inclusive governance in a difficult area. That will be a matter for the Syrian people and for the political negotiations we expect to start in Geneva in November, which will look at the overall governance. They will have to take into account the situation in Raqqa and the political situation in the area, which will be difficult, but he is right to talk about inclusion.
On those returning to the United Kingdom, let me make it clear, as the Defence Secretary said on 12 October, that those who go to Syria put themselves in danger. Those who go to Syria to take action against the United Kingdom and the UK’s interest put themselves in particular danger, and if they are involved in conflict or in planning actions that will take the lives of British citizens, they run the risk of being killed themselves. Of course those who surrender to forces in the area must expect to be treated under the laws of armed conflict, and to be treated properly and humanely in terms of being brought to justice. As I have said, those who return to the UK will also be questioned about their activity and brought to justice. It is important that justice is seen as the ultimate outcome for those who have committed wrong, but those who are a present danger to the UK run a greater risk and it is right that they do.
Tom Tugendhat (Tonbridge and Malling) (Con)
I thank my right hon. Friend for his detailed and full answers; he has been educating the House very effectively. May I, however, press him on a couple of areas he has not yet addressed? Does he not agree that the finality of the conflict in Raqqa gives the lie to Russia’s claim that it was in any way supporting the fight against Daesh? May I therefore call upon him and on his colleagues to make representations to the Russian Government that the actions they are taking in Syria are against the interests of humanitarianism and of the civilians? Will he make representations to the Russians to say that what they are actually doing is making a new problem for themselves in the future?
Alistair Burt
I thank my hon. Friend, who is the Chair of the Foreign Affairs Committee. Russia’s engagement in this has clearly been to stabilise the Assad regime. The Russians’ primary objective has been to secure their interests in Syria, through Assad, rather than to recognise that he had turned against his own people and to join in a coalition of interests to secure peaceful transition and peaceful reform as part of the end of the conflict. Clearly there are operations against Daesh which have not been participated in by regime forces or those who have supported them, such as the Russians, and other action has been taken, but I am not sure it is true to say that in all cases Russia has not taken action against Daesh forces, because it will have done when those forces were threatening the regime. That is when Russia will have taken that action.
Moving on, the Geneva talks that will start under the guidance of Staffan de Mistura will inevitably involve Russia as a participant in trying to see what we can do now, towards the end of the conflict, to provide stabilisation. I can make it clear that the UK will echo the remarks made by the Chairman of the Foreign Affairs Committee. We recognise Russia’s responsibility in the conflict, but now it has a responsibility in the post-conflict situation to remedy some of the problems it has caused.
Mr Ben Bradshaw (Exeter) (Lab)
Some Members of this House received and continue to receive considerable abuse for the decision we took back in November 2015 to support the extension of the RAF mission to Syria. Does the liberation of Raqqa and this considerable setback to Daesh not show that we were absolutely right?
Alistair Burt
Yes, in a word. We have been learning over time the consequences of not taking action. We have all learned that there are consequences of action and of inaction, and sometimes the choices are impossible. But it is perfectly clear that decisions not to do anything will almost inevitably result in a situation becoming worse and steadily more difficult for those involved. The right decisions have to be taken on intervention or not, but the decision of the House to support David Cameron’s determination to take action in Syria was the right one.
Sir Henry Bellingham (North West Norfolk) (Con)
Is the Minister aware that a young medical student from my constituency, who was radicalised at Khartoum University, went to Raqqa, via Turkey, to work in an ISIS hospital? She and dozens of other such medical students are obviously authors of their own peril, but does the Minister agree that every effort should be made to get them out safely?
Alistair Burt
We have no facility to get British citizens out of Syria. Those who have gone to Syria have not been able to access any consular support, because we cannot put British officials at any risk in trying to deal with that. At present, that is the situation. Those who have gone to Syria have done so at their own risk. Inevitably, some people will return, and I hope that those who have a story to tell about turning against Daesh are able to convince others that this was a false ideology and that they should not be seduced by them into travelling abroad; these people may have a role to play in making that story clear.
Jo Swinson (East Dunbartonshire) (LD)
In welcoming the liberation of Raqqa from Daesh, we recognise that the city has experienced death and displacement on a huge scale. The 8,000 or so civilians left are in a devastated city without access to drinking water, sewerage, electricity, schools and hospitals, and Assad’s forces are just a few kilometres away. Where does the Minister think responsibility for the rebuilding of Raqqa lies? What will the UK Government do to minimise any delays in that arising from what he referred to as political decisions?
Alistair Burt
In a sense, it is not a question of responsibility—certainly the people of the area have not caused their own destruction—and it makes sense for the world to be supportive of efforts that will ensure a return to normality, with people having decent lives. Members can expect the UK to play a leading part in supporting those efforts to rebuild schools, hospitals and the economy. I think this is something in which the world will be engaged. On the responsibility of the state, clearly the UK holds the regime to be responsible for a significant part of what has been inflicted upon its people. There has to be a political decision about moving forward with a political process before reconstruction can begin. The decisions have to be taken and that is the view of the international community. It does not prevent the immediate humanitarian assistance in difficult situations from taking place—that is what is happening now—but longer-term reconstruction must follow a political settlement.
Bob Stewart (Beckenham) (Con)
Does my right hon. Friend know how many Daesh terrorists have escaped from Raqqa and where they might be headed?
Alistair Burt
I do not know the answer to that question because it is just impossible to gauge. Talk seems to centre around the low thousands of foreign fighters. Over time, it will become clearer, but I am not sure I can rightly say anything more accurate than that. It is clear that some will attempt to return to other parts of the region and beyond from where they came. Some countries have supplied more fighters than others. They will be a risk until they have all been interviewed, those who are responsible for crimes have been brought to justice, and others have been dealt with in other ways.
Mike Gapes (Ilford South) (Lab/Co-op)
My right hon. Friend the Member for Exeter (Mr Bradshaw) referred to the vote two years ago. Unfortunately, I was unable to take part in that vote, but I welcome the liberation of Raqqa. As the Minister said, it proves that conflicts of this kind cannot be won simply from the air. Ground forces have to be used. Will he reiterate our praise for the Syrian Democratic Forces, particularly Syria’s Kurds, who have played a pivotal role, and tell the Turkish Government to stop attacking them?
Alistair Burt
The hon. Gentleman has always been clear in his determination to take what he considers to be the right action, regardless of the political pressure on him, and he has been courageous to do so. Some battles clearly cannot be fought without ground troops being involved, as recent conflicts in Iraq and Syria have shown. There would have been no liberation of Mosul from the air, nor of Tal Afar or Raqqa. The United Kingdom did not take part in those operations; others have done so elsewhere, with our support. The hon. Gentleman is right to mention Kurdish forces’ leadership of the coalition forces that have been operating in Raqqa and the extraordinary work they have done. Whatever difficult situations may be faced back in the Kurdish region of Iraq, it is clear that those fighters and the people they represent deserve to be treated with the greatest of respect. Any political situation needs to be handled with great care, and there needs to be a lot of dialogue between states, not undue pressure or force.
Ms Nusrat Ghani (Wealden) (Con)
I welcome the news that Raqqa has been liberated from Daesh, especially with respect to Paradise Square, where the terrorists carried out public beheadings. I thank the Minister for all his work to secure the UN resolution on locating and prosecuting Daesh. Will he update us on that, and on the Geneva process?
Alistair Burt
I thank my hon. Friend for her kind remarks. I was pleased recently to have the honour of moving the resolution at the UN, which was adopted unanimously by the Security Council, to further the work commenced the year before by the Iraqi Foreign Minister to bring to justice those responsible for the crimes of Daesh and to institute an investigative process to help that work. The United Kingdom will support that work and see the resolution carried through. I met Staffan de Mistura in New York and he is hopeful that the Geneva process will restart in November. There is clearly a long way to go, but an absence of conflict will help that process. It is essential that a process of justice emerges from the political conversations in which the people of Syria have the chance to choose their leadership, and that they do not have one imposed on them.
Alison McGovern (Wirral South) (Lab)
The Minister has said some helpful things today, not least about the cost of inaction possibly being as great as the cost of action—a point made forcefully in the paper written by the hon. Member for Tonbridge and Malling (Tom Tugendhat) and Jo Cox, “The Cost of Doing Nothing”. Does the Minister agree that it is vital that those who have committed war crimes in Syria are brought to justice? Will he update the House on the British Government’s role in making sure that the Syrian Government, who have prosecuted a brutal campaign and bombed hospitals, are brought to justice in whatever way possible?
Alistair Burt
I hope it will please the hon. Lady if I tell her that while I was in New York I met the leader of the White Helmets, along with members of the opposition. We give enormous credit to them for what they have achieved, and to the work of the hon. Lady and others in supporting them.
On bringing people to justice, it is clear that those who are responsible for war crimes in any circumstances—whether they belong to Daesh or the regime—should feel that justice is available against them. The process against Daesh is clear; I suspect that the process against the regime will be more difficult, but if there is evidence, it should be prosecuted and pursued. The United Kingdom will be determined to see that process carried through, although I do not suspect for a moment that it will be particularly easy.
Rehman Chishti (Gillingham and Rainham) (Con)
Like all colleagues, I welcome the military defeat of Daesh in Raqqa. What steps is the international community taking to ensure the vacuum in that area is not filled by the Iranian militia? That region is a key link to Lebanon, where Iran has some key interests.
Alistair Burt
My hon. Friend’s knowledge of the area is considerable, and we remember his long campaign to make sure that we refer to Daesh as Daesh. We pay tribute to him for that. The militias operating in the region are not always under the control of the coalition forces or, in Iraq, of the Iraqi Government. As far as I am aware, every attempt has been made to ensure that the forces occupying the ground are under the coalition’s control and thereby to minimise any danger of sectarian activity. However, we have to remember that some of the militia have been involved in close fighting and helping to relieve some areas. It is essential that those who are responsible for them now play a part in building a consensual process of governance and do not use them for sectarian purposes. It is an opportunity for some to perhaps show new colours, take a different direction from the one they have taken in the past, and build stability rather than disruption.
Chris Bryant (Rhondda) (Lab)
The Minister rightly referred to the accuracy of the 261 British strikes on Daesh in Syria, by which I presume he also means to say that, to his knowledge, no civilians were casualties of British strikes. By contrast, the Russians said that their whole aim in Syria was to attack and put an end to Daesh, yet 95% of their attacks seem to have been on other opponents of Assad. Does that mean that the Russians are liars or militarily incompetent?
Alistair Burt
On the first part of the hon. Gentleman’s question, only 0.31% of coalition air strikes result in a credible report of civilian casualties, highlighting the care taken by the coalition to avoid such casualties. We have not seen any evidence that we have caused civilian casualties, but that is not the same as saying that we have not or will not, especially in close urban fighting against a ruthless terrorist enemy that uses civilians as human shields. Hopefully, the relief of Raqqa will make that likelihood still less.
The question about the other air strikes that have taken place and the use of other forces is one for others to answer, but the hon. Gentleman is correct about the care taken by the coalition, and particularly by the RAF. The RAF’s rules of engagement, avoiding strikes where it is known there are civilians, are very clear. Others must be responsible for their actions, but actions and air strikes that have unnecessarily taken civilian lives make the process of reconciliation afterwards so much harder and therefore fuel the causes of further conflict, which the UK has tried desperately hard not to do.
Leo Docherty (Aldershot) (Con)
The Minister has mentioned Iran. Does he think that the role played by Iran in both Syria and Iraq presents a threat to our interests?
Alistair Burt
I wish that we had more time. My hon. Friend’s knowledge of the area is very considerable, and he brings that with him to the House. We have been clear in saying that there is evidence of Iran being a disruptor in the region. It has been involved in activities in both Iraq and Syria—in Syria, supporting the Assad regime and supporting its own interests by doing so, and being complicit with a leader who has waged war on his own people have made that region more unstable. In Iraq, it must now allow the Iraqis to run Iraq—the Iraqi Government to run a unified Iraq—and recognise that its influence should be confined to the border. It has an opportunity now to play a part in making peace in the region, but can only do so if it listens to the concerns of others and understand that its influence can be used for better in different ways than it has been up to now.
Ian Murray (Edinburgh South) (Lab)
I thank the Minister for his work on this very difficult issue. Has he any idea of how many UK nationals have left the UK to fight with Daesh, and of what work the Foreign and Commonwealth Office is doing with the Home Office to identify these individuals and, where possible, repatriate them?
Alistair Burt
The short answer is that I do not know. I do not have a figure. We have worked on the number of relatively low hundreds, but we do not know. I will not put a figure on it—why pluck one out of the air? The numbers are not huge, and are not as great as some from other places. On dealing with people when they return, let me make it clear that there is no facility to return people—certainly not from Syria. We have no personnel there and we have no responsibilities in that regard. If people make their way back to the United Kingdom and are identified as having taken part in conflict in Syria or Iraq, they will be detained and will have to answer questions while it is found out exactly what they have done, which is right and proper, and those who have committed offences can expect to face justice.
Mr Philip Hollobone (Kettering) (Con)
My constituents in Kettering are increasingly alarmed about the number of British jihadists who have been fighting our armed forces personnel in Iraq and Syria. My understanding is that about 850 of them have been identified, of whom about 400 are already back in the UK. Please correct me if I am wrong but I do not believe that there has been a single prosecution for any offence. Will the Minister try to understand that if no effective action is taken against these people in this country, it will send a positive signal to potential jihadists to Syria to say, “We can go off and fight British services overseas because nothing will happen to us when we return.”
Alistair Burt
Many terrorist offences have extra-territorial jurisdiction, which means that people can be prosecuted in British courts for terrorist activity in Syria or anywhere else in the world. Any decision on whether to prosecute will be taken by the police and Crown Prosecution Service on a case-by-case basis. That requires evidence of what people have done. It does not require rounding up people who have been in a particular place and detaining them without any legal process for doing so. It is essential that we find out what people are doing. That will require the sort of investigative work that I announced earlier that we have promoted through the UN. The investigations unit is entirely designed to uncover the evidence that will bring people to justice. It is a question of holding this number of people in reasonable bounds so that everyone knows that they have gone there, but that the numbers are not as great as those from other countries. There is a determination in the United Kingdom to make absolutely certain that if those who put the country at risk return, they can expect to be questioned, to be brought to the notice of the security authorities and to be subject to controls thereafter according to existing law. Where prosecutions are possible, people will be prosecuted and rightly so.
Ruth Smeeth (Stoke-on-Trent North) (Lab)
I am sure that the whole House will agree with me when I offer my thanks and congratulations to all those people, and their families, who have served in Operation Shader. Given what we learned in Fallujah about the industrial use of improvised explosive devices in domestic property, can the Minister give us some more information on what efforts are being made to ensure that, on the ground, we are supporting people to clear those IEDs?
Alistair Burt
I thank the hon. Lady for her question. She is right to thank the families of those involved for their sacrifice, too. As I mentioned earlier, my right hon. Friend, the Secretary of State for DFID, deliberately targeted some of the money that has been given to deal with the IEDs, the explosive devices and booby traps that are littering Raqqa and Mosul. The United Kingdom is contributing to the landmine clearance effort, and we will continue to do so.
Henry Smith (Crawley) (Con)
Further to earlier questions about returning fighters to the UK, there are a number in my constituency who have actively supported Daesh in Syria and are now back home. I appreciate the fact that a cross-Government response has been made to those individuals and that there will be prosecutions where appropriate. In addition, can I also have an assurance that, to keep the wider community safe in my constituency and across the country, the security services will be monitoring the activities of those who have returned but cannot be prosecuted because there is insufficient evidence to ensure that they are not radicalising their communities?
Alistair Burt
My hon. Friend is absolutely right. More than 60 countries are now providing data to coalition partner Interpol to build a global database of those foreign fighters who have worked with Daesh. The database has grown from 40 people in 2013 to 14,000 internationally and it continues to grow. This information, along with our other investigative efforts, helps to ensure that people in the United Kingdom are safer.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
The Minister was correct earlier to pay tribute to the Kurdish peshmerga forces for their contribution in defeating Daesh on the ground in both Iraq and Syria. How concerned are the British Government, therefore, about the events of last week when the Iraqi military and Shi’a militia captured Kurdish-held territory in Kirkuk province, about the reported clashes with Kurdish forces and about a splintering of the anti-Daesh forces in future?
Alistair Burt
The Foreign Office and I are in pretty close contact both with the Iraqi Government and the Kurdish Regional Government in Iraq. Our understanding is that the process of recovering so-called disputed territory has been done not through conflict, but by agreement between the Government of Iraq, peshmerga forces and the Kurdish authorities. We have been at pains to do all we can to say to both the Regional Government and the Iraqi authorities to do nothing to risk a conflict. There are Shi’a militias in the area, but my understanding at the moment is that the responsible parties are doing everything they can to avoid conflict so that they can return to the dialogue that must take place between the Kurdish representatives and the Iraqi Government following the referendum in September.
Graham P. Jones (Hyndburn) (Lab)
There is a significant presence of al-Qaeda in the Arabian Peninsula and Daesh in Yemen. What assessment have the Government made of the extremist threat in Yemen, and what support are we giving to the ground troops of Saudi Arabia and United Arab Emirates and the Government forces that are trying to defeat those extremists in that country?
Alistair Burt
That is a slightly wider question, but, in relation to Daesh and others, it is absolutely pertinent. We do not take part directly in the coalition operating in Yemen. Of course UK representatives are available to ensure that international humanitarian law is adhered to by those who are taking action using munitions supplied by the United Kingdom. That work is ongoing, but it is not a direct part of the coalition. We have supported the coalition’s aims in pushing back an insurgency against an elected Government, which has opened up the risk of more ungoverned space in Yemen in which AQAP and Daesh can operate. We continue to work towards a conclusion of that conflict. We are working extremely hard on trying to get negotiations to start again so that the conflict can come to an end, because that is the only thing that will secure the area and deal with that risk of al-Qaeda in the Arabian Peninsula.
Stewart Malcolm McDonald (Glasgow South) (SNP)
One of the most horrifying elements of this war has been the weaponisation of food. I am sure that the Minister has seen the story in The Times today, reporting that the United Nations says that 90% of its aid trying to get through the Wafideen checkpoint to East Ghouta is turned back. What are the Government doing about that particular case and, more broadly, how are they trying to fight against President Assad waging starvation?
Alistair Burt
The hon. Gentleman is right. The area has returned to medieval conditions of war and siege in which humanitarian aid, which ought to get through under international rules, is not allowed to get through because of forces on the ground. We make strenuous efforts through the UN and humanitarian agencies, which do extraordinary work in these places. We should pay tribute to those who are working on the ground in dangerous conditions to provide relief and to try to get things through, but it is difficult and we will continue to make that case. In Raqqa, however, the UK has provided more than 660,000 relief packages—including blankets, clothing, hygiene items and kitchen utensils—and more than 88,000 monthly food rations, so where we can get things through, we do. But there is no doubt that aid and the refusal of aid is used as a weapon of war, and it should not be.
Toby Perkins (Chesterfield) (Lab)
It is in the interests of Assad and Putin to suggest that life is returning to normal in Syria. The Minister mentioned the meeting in Geneva in November. In light of that, what more will the UK Government be doing to ensure that Russians and other actors are aware that there can be no lasting peace in Syria while Assad continues to rule and while there is not a role for peace-loving Sunnis, as well as those of all other communities, in Syria?
Alistair Burt
The House can be absolutely clear that the points that the hon. Gentleman has made were made during conversations with the P5, including to Foreign Minister Lavrov and Staffan de Mistura. Russia is protecting its own interest in Syria and it is doing so in what we consider to be an unconscionable manner, by supporting President Assad and what he has done to his people. There can only be a political resolution that gives the people of Syria the free choice to choose their Government. This is not an easy process, and we are giving all backing to Staffan de Mistura as he restarts the Astana talks in Geneva with all parties present. It is essential that the people of Syria have the choice of their own President and Government. It cannot be the case that everything is returning to normal in Syria. That is true in some parts but, in areas of serious conflict, the situation is still miserable for civilians attacked by their own Government.
Phil Wilson (Sedgefield) (Lab)
I congratulate my hon. Friend the Member for Barrow and Furness (John Woodcock) on securing this urgent question. The decision in this House in December 2015 to take military action in Syria was obviously controversial, but it was the right one in my view. As somebody who supported that decision, I pay tribute to the RAF and to the professionalism of our military servicemen and women who are in the region today. My question is about UK foreign fighters who may have left Syria and ended up in refugee camps in Turkey. What are we doing to track those people down and return them to justice?
Alistair Burt
As I mentioned earlier, the acquisition of names on to the Interpol database is extending the reach of national authorities in the more than 60 countries from which foreign fighters have gone to fight in Iraq. That will provide a basis for what happens when they return. I am not aware of any efforts that are being taken to visit camps in order to identify people before they return. I do not know about that matter, so I will find the answer and ensure that it is made available in the Foreign Secretary’s next statement.
Sammy Wilson (East Antrim) (DUP)
Happily, the campaign against Daesh in Syria is coming to an end, bringing hope to millions who suffered abuse from these evil madmen. But in light of the events in Kirkuk last week, is the Minister concerned that Iraq and Iran are now turning their attention militarily towards the Kurds? Does he see that as a potential source of conflict, and what role can he and the Government play in trying to diffuse the situation?
Alistair Burt
The first role I hope that I can play is to urge the House to be cautious of reports coming out from the region. It is not always entirely clear what is happening on the ground, and those with vested interests are trying to stir up more conflict than there need be. Our understanding is that there is sufficient of a relationship between Baghdad and representatives of the Kurdish Government to enable a dialogue to take place so that the conflict is avoided. I do not believe it is true that Iraq and Iran have turned their attention to conflict in the Kurdish region. There is a risk of conflict—that is true—but everything we know about Prime Minister Abadi, and his actions and rhetoric, indicates that he does not want conflict. That has been mirrored by those in the Kurdish region. We are using all our efforts to ensure that that will remain the case, but the hon. Gentleman is right that there are spoilers who might start to urge a conflict. We should be doing all we can, in this House and at a Government level, to urge the necessary dialogue, which we think is taking place.
Points of Order
(6 years, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text
Iain Stewart (Milton Keynes South) (Con)
On a point of order, Mr Speaker. You will be aware of the growing level of abuse and intimidation in many parts of our political system. Such toxicity endangers a considerable progress on equalities that this country has made and that you have commendably championed. It could dissuade many decent people from taking part in legitimate political debate. Have you received any indication from the Minister for Women and Equalities that she wishes to make a statement to the House to clarify the legal obligations of political parties under the Equality Act 2010? In the absence of such an indication, could you advise me on how such matters might urgently be considered by the House?
Mr Speaker
I am grateful to the hon. Gentleman for his point of order and for his courtesy in giving me advance notice of it. The short answer is that I have received no such indication as yet from the Minister for Women and Equalities, whom, as it happens, I saw last night at an event that I hosted in Speaker’s House, at which she spoke eloquently and with conviction on the importance of inter-faith harmony. It is open to a Minister to volunteer a statement. Such has not, to date, been proffered.
The hon. Gentleman is referring to an ongoing problem, arguably of greater salience, scope and prominence than in the past. If there is no such statement, but the hon. Gentleman—possibly supported or accompanied by colleagues from across the House—wishes to debate the issues, it is open to him to seek either a one and a half hour debate in Westminster Hall or to approach the Chair of the Backbench Business Committee and seek a debate under its auspices. That is the best and most practical advice that I can give to the hon. Gentleman, who has raised a serious matter in a very measured way. [Interruption.] Is the Government Whip muttering something of importance? I am sure that he has something to say, but it does not need to be said in the Chamber; it can be held for elsewhere, where I am sure it will be of great interest.
Mr Speaker
I am not sure that there is much to add. If the hon. Lady wishes to raise a point of order on the same matter, the answer is no, to be honest.
Mr Speaker
Order. The hon. Lady raised a point of order with me yesterday. She sought my guidance, which I offered her. If the point of order is on a similar matter to that which the hon. Member for Milton Keynes South (Iain Stewart) has just raised and to which I have responded with crystal clarity, there is nothing to add.
Amanda Milling
Further to that point of order and the point of order I raised yesterday, Mr Speaker. I would like to seek some clarification. Yesterday, you suggested that I apply for an Adjournment debate. I was wondering what mechanism—
Mr Speaker
Order. Forgive me, but I think it is extremely clear that I have dealt with a serious matter raised in a very measured way by the hon. Member for Milton Keynes South and given clear advice. If there are people who are unclear on the basis of what I have said, I am frankly surprised by that, but it is open to them to approach me for further guidance. What they should not seek to do—I am sure that the hon. Lady would not knowingly seek to do this for one moment—is to abuse the procedures of the House. I have tried to help the hon. Lady, and we will leave the matter for now.
John Mann (Bassetlaw) (Lab)
On a point of order, Mr Speaker. Where an MP is elected by Parliament to represent us on a foreign delegation and is subsequently sent home from that delegation for inappropriate behaviour, will such cases always be reported back to the body that elected them—that is, to Parliament—and have they been in the past?
Mr Speaker
What I would say to the hon. Gentleman is as follows. He has raised an extremely important matter, and, again for the avoidance of doubt, I do not consider or treat it lightly. That said, the House will note that the hon. Gentleman raised the issue in extremely broad terms—I do not knock him for doing that, but I say it by way of factual response.
I say to the hon. Gentleman, on advice, that raising a point of order in the House is not necessarily an effective way, or even necessarily a proper way, of pursuing an allegation of impropriety against anybody, whether a Member of the House or anybody else. If the hon. Gentleman has grounds for supposing that there has been impropriety by an hon. or right hon. Member, falling short of possible criminality, which would obviously be considered elsewhere, I ask the hon. Gentleman to write to me, because I am sure he is interested in the issue, rather than in, for example, securing parliamentary attention—I know that would not motivate the hon. Gentleman. [Interruption.] No, no, I have known the hon. Gentleman for over 30 years, and I know that would not motivate him in any way. If he is concerned about the issue—and I respect that—and he has a particular point that he wants to raise with me in writing, I assure him, and, more widely, I assure the House, that I will give the matter my urgent attention. I hope that is helpful to the hon. Gentleman.
Mr Speaker
I am very grateful to the hon. Gentleman. As I have just been advised—and it would seem to me fairly clear—where a question is hypothetical, it is actually quite difficult to provide a concrete answer. I would certainly expect that if a suspected abuse had taken place, that would be reported, in all likelihood, to the political party of which the suspect was a member. Depending upon the nature of the visit—that is to say, whether it was a visit organised by, or with sponsorship in some way from, a parliamentary body—it might well also be reported elsewhere. I would certainly hope and expect that such occurrences, or alleged occurrences or abuses, would be reported, and if they are reported, those who are reporting them can expect them to be investigated.
I hope the House can see that, far from brushing aside the hon. Gentleman’s concern, or that of any other Member, I am keen that those matters should be properly explored, but they are not necessarily best explored via the point of order procedure on the Floor of the Chamber. The hon. Member for Milton Keynes South sought my guidance. I gave him very clear and practical guidance, which I have every expectation he will follow. If practical guidance is what people want, that is what I am seeking to provide.
If there are any further points of order that are unrelated, I am happy to take them; if not, we should proceed to the ten-minute rule motion.
Affordable Home Ownership
Tuesday 24th October 2017
(6 years, 6 months ago)
Commons ChamberRead Full debate Affordable Home Ownership Bill 2017-19 View all Affordable Home Ownership Bill 2017-19 Debates Read Hansard Text
A Ten Minute Rule Bill is a First Reading of a Private Members Bill, but with the sponsor permitted to make a ten minute speech outlining the reasons for the proposed legislation.
There is little chance of the Bill proceeding further unless there is unanimous consent for the Bill or the Government elects to support the Bill directly.
For more information see: Ten Minute Bills
This information is provided by Parallel Parliament and does not comprise part of the offical record
Mr Christopher Chope (Christchurch) (Con)
I beg to move,
That leave be given to bring in a Bill to make provision for affordable home ownership; to require the inclusion of rent to buy homes in the definition of affordable housing; to make provision for a minimum proportion of new affordable housing to be available on affordable rent to buy terms; to provide relief from stamp duty when an affordable rent to buy home is purchased; and for connected purposes.
It is beyond dispute that home ownership is by far and away the most popular and desirable form of housing tenure. This is confirmed by the British social attitudes survey, which shows that 86% of people aspire to own a home. Home ownership lies at the heart of a true property-owning democracy, in which young and old alike are enabled to take responsibility for their own lives. Home ownership facilitates flexibility in the size and location of accommodation, taking into account changes in a place of employment or additions to the family. Home ownership also encourages long-term financial independence from the state and, therefore, from taxpayer subsidies.
With home ownership so popular and so manifestly in the public interest, one is bound to ask why it has been allowed to decline—it is now at a 30-year low of only 63%. The answer is lack of affordability. In most parts of the country, the price of houses has been increasing far faster than earnings. The greatest impact has been on younger buyers. In the 1980s, six out of 10 of those aged under 40 were homeowners; now, fewer than four out of 10 are.
To her credit, the Prime Minister clearly wishes to correct this public policy failure, which is having such an adverse impact on the next generation of aspiring homeowners. The proposals in the Affordable Home Ownership Bill should therefore be particularly appealing to the Government—not least because they do not add to the nation’s debt, but rely instead on ensuring that some of the land set aside under section 106 planning agreements for affordable housing is earmarked for homes built for affordable rent to buy. My Bill requires the Government to put beyond legal doubt that local authorities must treat affordable rent to buy on a par with affordable rent, and it requires local authorities to specifically include affordable rent to buy schemes in their development plans.
For those not familiar with affordable rent to buy, this is how it works. It provides an accessible route to home ownership for those who cannot immediately afford a deposit. In that respect, it has an advantage over other low-cost home ownership schemes, which still require substantial up-front funding. Under affordable rent to buy, families take out a fixed five-year renewable assured shorthold tenancy and agree to pay an affordable rent—80% of the market rate, normally—for five, 10, 15 or 20 years. By paying an affordable rent, families are able to start saving towards a deposit.
In addition, under the scheme, which is being pioneered by a small number of imaginative local authorities, the tenants receive 10% of the property’s market value as a gifted deposit to add to their savings and reduce their mortgage costs at the point of purchase. On becoming 100% homeowners after five, 10, 15 or 20 years, tenants can access a wide range of mortgage products utilising the credit worthiness they will have developed during their time as tenants. The essential element of security of tenure also enables families to develop roots in their local community.
The model to which I refer is wholly funded by institutional investors. Substantial funds have already been forthcoming, but a further £40 billion will be available under this system for new affordable homes, at no cost to the Exchequer. That could provide homes at £200,000 each, and that could provide 200,000 such homes—a significant way of addressing the problem we have with housing.
However, that is all subject to one caveat, which it is the purpose of the Bill to address. Currently, affordable rent to buy does not come clearly within the definition of affordable housing, and the Bill requires that it should so do. There needs to be an explicit reference to affordable rent to buy in the national planning policy framework definition of affordable housing. Such clarity would enable many more local authorities to take forward these innovative schemes.
There should be no problem with clarifying the definition, because, in a typical affordable rent to buy scheme, one in three purchasers is moving directly from the social rented sector, and almost all the others are from the housing waiting list.
The House of Commons Library briefing paper published in late August states:
“There is no all-encompassing statutory definition of affordable housing in England. Indeed, there is a good deal of ambiguity in the way the term ‘affordable’ is used in relation to housing.”
It is to help fill that vacuum that I brought forward this Bill, which will provide a definition of affordable rent to buy. Subject to consultation, this would be the definition: “Affordable rent-to-buy housing is housing that is made available at a rent level which is at least 20% below market rent, including service charges where applicable, and later made available to the tenant living at the property to buy at a cost which may be less than market value. Provision should be made for receipts or a proportion thereof to be recycled for alternative affordable housing provision if the subsidy is withdrawn. Eligibility is determined with regard to local incomes and local house prices.”
I hope that the Minister for Housing and Planning, my hon. Friend the Member for Reading West (Alok Sharma), who I am delighted to see in his place on the Treasury Bench, will embrace that, or a very similar, definition. Unfortunately, despite parliamentary questions and letters from a number of colleagues, many of whom are co-sponsors of the Bill, we are still waiting for a result. It may be that we are waiting for the announcement to be made not by my hon. Friend but by the Chancellor of the Exchequer on 22 November. However, whether it be now or on 22 November, something must be done about this, because we need to open up the £40 billion of private institutional investment in our housing that we so desperately need.
If one looks, as some of us may, at the Government website on affordable home ownership schemes, it is a depressing sight. Indeed, there is hardly anything on it, and certainly no reference to anything as imaginative as the schemes to which I have referred. I will save anybody interested in looking at the website the need to do so by quoting from it. It has an overview saying how people can get
“help with savings, through a Help to Buy ISA”
or
“a home through shared ownership”.
It goes on to say:
“The Help to Buy mortgage guarantee scheme closed at the end of 2016.”
It then talks about Help to Buy equity loans and so on. However, it does not address the real problem: that so many people in this country want to embark on a road to home ownership but cannot afford even to save for a deposit because they are paying full market rent rather than an affordable rent. I therefore hope that the Government will take seriously the issues raised in this Bill.
One of the most significant fiscal changes affecting housing in the last 30 years has been the policy of the Treasury to treat stamp duty as a cash cow. Stamp duty is now a significant burden for those moving into home ownership. It is a transaction tax, which, like all such taxes, has had the consequence of reducing the number of transactions. My Bill would enable the Government to give special relief from the burden of stamp duty, in line with avowed Government policy to promote home ownership among first-time buyers. I hope that we will hear more about that in the Budget.
This Bill should enjoy the support of everybody in this House because it works with the grain of public opinion and would enable more people to reach their aspiration of becoming homeowners in the United Kingdom.
Question put and agreed to.
Ordered,
That Mr Christopher Chope, Mr Gary Streeter, Derek Thomas, Craig Tracey, Mr Philip Hollobone, Mr Ranil Jayawardena, Steve Double, Robert Halfon, Philip Davies, Sir Edward Leigh and Sir Desmond Swayne present the Bill.
Mr Christopher Chope accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 3 November and to be printed (Bill 115).
Universal Credit Roll-out
(6 years, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Speaker
Before I call the shadow Secretary of State for Work and Pensions to open this emergency debate, I should advise the House that it can last for a maximum of three hours and that a very significant number of colleagues—in excess of 25—wish to speak. There is of course no time limit on Front-Bench speeches, but I would be grateful if Front Benchers would tailor their contributions to take account of the interest of their Back-Bench colleagues.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
I beg to move,
That this House has considered the Government’s response to the decision of the House on pausing the Universal Credit full service roll-out.
Once again, Mr Speaker, I thank you for granting this emergency debate, which is so important to the people we represent. It is very important that we have this opportunity to return to the roll-out of universal credit, following last week’s Opposition day debate. Just to refresh everyone’s memory, the motion calling for a pause to the programme was unanimously approved by 299 votes to zero. Since then, we have heard nothing from the Government about what they intend to do, in response to the concerns raised last week, to fix universal credit. I always welcome the Minister for Employment to his place, but why is the Secretary of State not here to answer? Obviously I understand that emergencies do happen, but I did not get a satisfactory response from his office when I rang earlier, and apparently Downing Street is none the wiser either.
The press has reported that the Government are considering reducing the six-week wait for the first payment after making a claim. Will the Minister confirm whether that is correct and, if so, when will it happen? Will he also explain why his Government deem it acceptable to brief the media but not to make a statement to this House? Does he recognise the constitutional implications of his Government’s inaction to date?
Chris Bryant (Rhondda) (Lab)
Did my hon. Friend notice that virtually every Conservative, or Conservative representative of the Government, who spoke on this matter over the weekend seemed to suggest that the problems with universal credit were to do not with the policy but just its implementation? However, the six-week delay is actually a policy decision that was in place from the very beginning, and that is what is causing the poverty and the problems.
Debbie Abrahams
My hon. Friend is absolutely right. To be fair, some Conservative Members, and indeed a Conservative Assembly Member, have recognised the real problems with the structural design of universal credit, even saying that it is “indefensible”.
As it stands, there is overwhelming evidence of the harmful impacts of universal credit, including rising debt, rent arrears and even evictions. The Government must take action or face serious constitutional questions. They have had three sitting days to respond to the legislature but have failed to do so, keeping this House and the country waiting, along with the 7 million people who are expected to be using this programme.
Ruth George (High Peak) (Lab)
The Government’s figures indicate that 90,000 families will be transitioned on to universal credit full service over the next 90 days. Does my hon. Friend therefore agree that while the Government delay making a decision, about 1,000 more families each day, on average, will have to wait six weeks and get further into debt?
Debbie Abrahams
My hon. Friend is absolutely right, and that is why this debate is so urgent—we cannot wait. Although, yes, this is still a small proportion of the full number of people who will have universal credit rolled out to them, this amounts to a 63% increase in the number of people who will be on full service over the next six months.
Lucy Frazer (South East Cambridgeshire) (Con)
Does the hon. Lady accept that 50% of people who have received universal credit have actually received it early and applied for an advance payment?
Debbie Abrahams
As my hon. Friends are saying, it is a loan. I will return to that, but I want to make that important point.
Simon Hoare (North Dorset) (Con)
The hon. Lady nailed it in a remark that she made a moment or so ago. There have been just three sitting days since the Opposition day debate. Were we to presuppose that Her Majesty’s Government would seek to respond to that debate—let us not presume that—would it be fair, in all honesty, to expect them to do so within three sitting days?
Debbie Abrahams
I will come on to that in a moment. The precedent was, unfortunately, set by the current Government.
As I said, the Government have had three sitting days to respond to the legislature. It might be useful to quote the right hon. Member for Ashford (Damian Green), who is now First Secretary of State. At the last such defeat for a Government, in 2009, he raised an immediate point of order, in which he asked the then Deputy Speaker:
“In the wake of that devastating vote for the Government, have you had any indication that Ministers intend to come to the House and make an immediate statement about how they propose to change their policy, as the House has now spoken clearly?”—[Official Report, 29 April 2009; Vol. 491, c. 931.]
Within three and a half hours, the then Government made a statement.
The right hon. Gentleman had changed his tune a bit by last Thursday, when he said that all
“governments have to abide by the rules of parliament. We’re a parliamentary democracy,”
but that
“as the Speaker said last night, motions like that are non-binding motions, so they don’t engage government activity particularly.”
He cannot have it both ways.
These events have raised a more fundamental constitutional question, given reports that the Government no longer intend to require Conservative Members to vote against Opposition day motions.
Kevin Hollinrake (Thirsk and Malton) (Con)
The hon. Lady said earlier that the up-front payment is, in her words, a loan. If it was not a loan, it would increase the overall quantum of benefit paid to recipients. Is that what she is proposing?
Debbie Abrahams
I will say exactly what I am proposing very shortly.
If the Government’s position is that Opposition day debate motions should have no binding effect on the actions of the Government, it fundamentally alters the relationship and balance of power between the Executive and Parliament. It would mean that apart from votes on legislation and matters of confidence, the Government could ignore the decisions and will of Parliament. This is very dangerous ground, and the situation needs to be seen in the context of the blatant power grab by the Executive that we witnessed on Second Reading of the European Union (Withdrawal) Bill last month.
Jeremy Quin (Horsham) (Con)
For the hon. Lady to accuse the Government in such a way is to suggest that there has been a change from precedent, but votes on Supply days have never been binding on the Government. That is a clear precedent going back many years, and the position was entrenched by the Fixed-term Parliaments Act 2011.
Debbie Abrahams
The point is that we need an urgent response to this really important issue. We are calling for a clear set of proposals from the Government that will reflect the will of the House and pause universal credit roll-out while the issues that I raised—and many more that I did not have time to raise—are fixed.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
I thank my hon. Friend for securing this debate. Is she as surprised as I am by Conservative Members’ denial of the seriousness of these issues? Their comments will give no succour to my constituents, such as the mother of three who is currently sleeping on her cousin’s floor after she was evicted from her home because of non-payment of rent that resulted from delays in universal credit. This is not about the Opposition versus the Government; it is about real people—our constituents—suffering.
Debbie Abrahams
My hon. Friend raises an important case. It is absolutely shocking that in 2017, in the fifth richest economy in the world, such cases are brought to our surgeries day in, day out. Things are only going to get worse, and that is absolutely unacceptable.
Heidi Allen (South Cambridgeshire) (Con)
The moment for pausing universal credit—this is determined by statutory instrument, as the hon. Lady knows—has passed, but there will be another opportunity to do so in January, when another one-month pause is built into the system. If we could find a compromise with the Government and make significant changes to the policy, such as reducing the six-week wait to four weeks, would that be acceptable to the Opposition?
Debbie Abrahams
Something needs to happen urgently. As the hon. Lady knows, full service is being rolled out to 55 areas this month. The cold months are upon us, and Christmas is just around the corner. We need an urgent response now.
Mr Jim Cunningham (Coventry South) (Lab)
A number of cases have been brought to me. Last Christmas, one constituent waited for two months without any money to get redress. On the constitutional question, democracy can only work if everybody gets involved. It is no good the Government boycotting Parliament.
Debbie Abrahams
I totally agree with my hon. Friend. We must have a responsive Government who listen to the will of the House and the people we represent. It is not good enough just to say that a motion is not binding—we need action.
Ms Angela Eagle (Wallasey) (Lab)
Does my hon. Friend agree that there is an urgent need for a pause? In Wallasey, the roll-out will begin halfway through November. Six weeks later, it will be Christmas. The Department for Work and Pensions will not be open on Christmas day, which means that many of my constituents will have to wait until the new year for assistance. That is why our local food bank is looking to collect 15 tonnes of extra food to deal with demand. Does she agree that it is time that the Government listened to Parliament and acted to alleviate such obviously avoidable hardship?
Debbie Abrahams
My hon. Friend makes an important point. Food banks are running out of food as the scheme is being rolled out. What will happen to families who desperately need financial support?
Paula Sherriff (Dewsbury) (Lab)
One of my constituents who has severe mental health problems has been signed off as sick until December. We go on to universal credit in November, and he has been advised that if he does not prove that he is looking for work, he will be sanctioned and his benefits will be stopped. Does my hon. Friend agree that it is dangerous to have assessors overriding the views of registered doctors?
Debbie Abrahams
My hon. Friend makes an important point about the impact of in-work conditionality. There are about 1 million people on zero-hours contracts who may not know from one week to the next whether they will be able to work 35 hours each week, and we know how much harm universal credit will do to them. Those people are doing the right thing, but they may be sanctioned if they are deemed not to be working enough hours.
Ms Karen Buck (Westminster North) (Lab)
My hon. Friend is being generous with her time. During last week’s debate, I raised the reluctance of private sector landlords to rent properties to people who are on universal credit. Is she aware that social landlords frequently issue a notice indicating that they will seek possession of a property if the tenant is in arrears for only a week? Is it not scandalous that an ever-increasing number of people will approach the Christmas period with such a threat hanging over them?
Debbie Abrahams
Absolutely. Surely what is happening is not right, so we must stop this.
I will now make some progress, although I will take more interventions later. People might not have kept up with the hundreds of stories that we have heard from colleagues on both sides of the House, but we must make sure that the Government’s flagship programme is amended to take account of the real hardship that people are experiencing. We have heard about that hardship not just from claimants, but from charities that deal with claimants, as well as many other organisations.
There are three key issues with universal credit: the programme’s design flaws, which have been there from the outset, as I mentioned last week; the cuts that were introduced in 2015; and various implementation failures. First, I will talk about the programme’s flaws. The six-week wait before new claimants receive any payment is particularly draconian, and it is having real impacts. Four weeks of the waiting period are to provide that universal credit can be backdated, but an additional week’s wait was added as policy, and claimants must wait a further week for their payment to arrive. That is believed to be one of the primary drivers of the rise in debt and arrears.
Kevin Hollinrake
The hon. Lady talks about a six-week delay before any payments are received, but she will be aware that up-front payments are made available at the initial stage, so does she accept that that is not quite the case?
Debbie Abrahams
No, I do not.
It is so important to stress that half of those in rent arrears under universal credit entered arrears after making a claim. We know that one in four is waiting more than six weeks, and one in 10 is waiting more than 10 weeks.
Stephen Lloyd (Eastbourne) (LD)
There are 1.5 million people on housing benefit in the private rental sector, and private landlords do not have the flexibility or even the patience of housing associations and councils. Does the hon. Lady agree that if 50% of the 1.5 million people who will ultimately be on universal credit lose their homes, it would be an absolute catastrophe?
Debbie Abrahams
We know the real issues involved in the housing crisis at the moment, so the hon. Gentleman makes a very fair point.
The Government claim that the purpose of making payments once a month in arrears is to mimic the world of work, but that is not the case. Data published just yesterday by the Office for National Statistics shows that a quarter of the lowest-paid—those most likely to be on universal credit—are paid every week or fortnightly. As my hon. Friend the Member for Wirral West (Margaret Greenwood) has said, given that nearly 400,000 more people are due to go on to universal credit over the winter, at this rate 80,000 people will be waiting more than six weeks for a payment, with 40,000 people waiting more than 10 weeks for their first payment.
Louise Haigh
My hon. Friend makes the very important point that these policies are not accidental consequences, but something that is baked into the universal credit system. That is why it is not unreasonable to ask the Government to respond within three sitting days of last week’s Opposition day debate. Does she share my concerns that universal credit payments will be made to only one member of a household and about the consequences of that policy for victims of domestic violence, on which my hon. Friend the Member for Birmingham, Yardley (Jess Phillips) has been campaigning?
Debbie Abrahams
Again, my hon. Friend makes a very important point. I will come on to all the different issues. I have raised the so-called advance payment, which is in fact, as I have said, a loan—it has to be paid back within six months.
Debbie Abrahams
No. I am sorry, but I am not going to take any more interventions.
Other design problems I mentioned last week include: the fact that payment is made to one member of the household—predominantly men—and that the second earners, who are predominantly women, face much reduced work incentives; the fact that severe disability premium payments were not incorporated into universal credit; the fact that rent is paid to the claimant rather than the landlord; the fact that self-employed people are subject to the punitive minimum income floor, which fails to reflect the reality of the peaks and troughs in their working hours; and the fact that in-work conditionality is coming down the track, meaning that 1 million working people will have to visit jobcentres while much of the Jobcentre Plus estate is being closed, and will face financial sanctions if they fail to work the hours their job coach deems they must work. On top of that, there are the real-time information flaws, which have been mentioned by my right hon. Friend the Member for East Ham (Stephen Timms), and the fact that there is no time limit on disputes, which will lead to more delays in payments. There is also, of course, the fact that the child element of universal credit has been reduced from 20 to 19 years.
I turn to the cuts made to the programme since its introduction. Universal credit was meant to simplify the system, but it was also meant to make work pay. We have always supported those principles, and we still do, but unfortunately the 2015 summer Budget slashed the work allowances, and the rate at which support is withdrawn was dramatically increased. As the Institute for Fiscal Studies said in its response to the Budget, that meant the promise that work would always pay was lost. The cuts reduced the work allowances from £222 a month to £192 a month for a couple with two children claiming housing costs. It is estimated that that will result in an additional 340,000 people in poverty by 2020. Some families have been left as much as £2,600 a year worse off.
Families with three children face even greater difficulty, as the Government have decided that the state should play no role in supporting the life chances of the third child. A whole generation of children will be born without the support that was offered to their siblings, which is a break from the historical principle that the state should not punish children for the circumstances of their parents. Single parents have been hit particularly badly. In real terms, a single parent with two children who is working full time as a teacher will be £3,700 a year worse off.
That is even before we reach the Government’s freeze on social security rates, which the Joseph Rowntree Foundation predicts will push 500,000 more people over the poverty line. Its analysis shows that the freeze will mean that a family of four receiving universal credit will be over £800 a year worse off in 2020, and that is on top of the other cuts I have outlined. Will the Minister confirm that the Government will continue the freeze on social security payments, including universal credit, given that it was introduced when inflation was 0.3% but the rate is now 3%?
As I revealed last week, the Child Poverty Action Group’s forthcoming report estimates that these cuts will push 1 million more children into poverty, 300,000 of whom are under five. What does it say about this Government when their policies knowingly push children into poverty? The Secretary of State, the Minister for Employment and many other Conservative Members have tried to suggest that data apparently showing a 3% increase in employment outcomes under universal credit compared with the situation under the previous system is evidence that universal credit works to get people into work. However, they fail to add that the data is from 2015—before the cuts were implemented. Will the Minister now commit to updating the figures, and will he retract these particular statistics, which he has used numerous times?
It is worth pointing out that the most recent figures show an underspend—I repeat, an underspend—on tax credits of as much as 2.4% compared with the projections of the Office for Budget Responsibility. Will the Government provide an exact figure for the savings that that has created? Could not some of the underspend be put towards sorting out the problems that we are now encountering under the new programme? I will return to that point in a minute.
Debbie Abrahams
I am very sorry, but I will not give way now.
I turn to the implementation failures. Leaving aside the many changes to the programme’s schedule over the past few years, the most recent roll-out has been beset by problems. I was glad that the Government listened to Labour and will replace the high-cost phone line with a free one. Will the Minister give me a timetable of when that will happen? Will he also assure me that the free phone line will be funded not by the taxpayer but by Serco, the contractor?
Other implementation issues still remain, however, including the fact that people are denied prescriptions and dental treatment because pharmacies and dental practices do not know who is eligible for free treatment. People also do not know about advance payments or alternative payment arrangements.
I have been inundated with emails and calls from people telling me their UC horror stories. For example, a self-employed Oldham woman is worried that she will lose her business and home when she goes on to universal credit. I have received so many stories from self-employed people that you would not believe it, Mr Speaker. They are really concerned about what universal credit will mean for them. A private landlord is worried that three of his tenants are thousands of pounds in rent arrears under universal credit, although they had never previously been in rent arrears. Southwark Council estimates that such arrears will be an average of £1,700 per universal credit tenant. Disabled people are isolated and alone as the support of severe disability premiums disappears, along with other disability support. As I have mentioned, food banks are running out of food. Even current and former DWP advisers are expressing their deep concerns about the programme and the fate of claimants.
I come back to my asks. First, the Government must end the six-week wait. They should bring it forward by at least one week, but if it is to be brought forward by two weeks, as has been widely reported, that will make a huge difference to people. Secondly, they must ensure that alternative payment arrangements are offered to all claimants at the time of their claim. To suggest that this already happens is more than a little disingenuous. The DWP guidance is vague to say the least. The alternative payment arrangement options include fortnightly payments, split payments and payments directly to the landlord.
Debbie Abrahams
I will not; I am sorry.
My third ask is that the Government reconsider closing one in 10 jobcentres at the same time as they are rolling out the programme. It is nonsensical that those closures are happening at the same time.
Finally, given the latest assessment from the OBR, which shows a projected 5% underspend in tax credits, which is equivalent to £660 million, will the Government commit to investing that money back into the programme, for example to eliminate the two-child limit? I also remind the Minister of my earlier question about lifting the social security freeze.
All this is reason for the Government to respect the will of the House—this country’s elected representatives—and pause the universal credit full service roll-out. I stand ready to work with them in the national interest to address these problems and avert the disaster that is universal credit.
The Minister for Employment (Damian Hinds)
We had a very good debate last week, to which around 80 Members contributed. As I said then, there were passionate, thoughtful and insightful speeches from across the House. I am aware that many hon. Members wish to take part in today’s debate, so I shall keep my remarks brief.
The hon. Member for Oldham East and Saddleworth (Debbie Abrahams) pressed us to respond to last week’s vote. It may help if, before coming to the substantive matters, I put that vote in context.
Damian Hinds
Not just yet, but I will later if I may.
We take part fully in all proceedings of the House, including Opposition day debates. Last Wednesday, the Secretary of State opened, I closed, and large numbers—
Damian Hinds
I just said, not just yet.
Large numbers of Conservative MPs made valuable contributions. The decision on whether or not to vote is a matter for Members and their parties, and as you, Mr Speaker, noted last week, it is a legitimate decision to take. Universal credit was fully legislated for in the Welfare Reform Act 2012 and subsequent statutory instruments, and it was extensively debated by Parliament.
Liz McInnes
If the Minister thinks we had such a good debate last week, why did his party abstain from voting?
Damian Hinds
Well, I will come to many of the things that came out of the debate, and as I just said, it is a legitimate decision to vote or otherwise in such a debate, but there is much that one takes from a debate like that, and I thought, as I said, it was a very high-quality session of this House.
Frank Field (Birkenhead) (Lab)
I have asked the Secretary of State twice, and now the Minister twice, for advice for me to take home to Birkenhead. On the Secretary of State’s advice, he says that the roll-out of universal credit in Birkenhead in November will all go hunky-dory—no need to worry: people will not actually be reduced to hunger and perhaps destitution. However, the staff of our food bank in Birkenhead are saying that, on the experience of other areas where the benefit has been rolled out, they will need to raise another 15 tonnes of food in the coming year. Should I go home and tell people not to pay any attention to the food bank staff and say that they are scaremongering? Should we put all our trust in the Minister that this will work?
Damian Hinds
The right hon. Gentleman is of course right that he has raised that point a number of times. I think last time he raised it, he put it in the context specifically of Christmas. I am aware that organisations like food banks do have an increase in their activity at Christmas-time. I think we have to be careful in ascribing the reasons for the usage of food banks to individual or simple causes, and as I said to him—
Damian Hinds
No. If the hon. Lady will forgive me, I am responding to the right hon. Gentleman.
Mr Speaker
Order. I understand the—[Interruption.] Order. I understand the very strong passions in this debate, but Members should respectfully wait for the Minister to deal with one intervention before immediately seeking to embark upon another. If I may very gently say so, I do think that the Minister himself is a most courteous fellow, and I think he ought to be treated with courtesy.
Damian Hinds
And, Mr Speaker, my response to the right hon. Member for Birkenhead (Frank Field) today is to say no, of course we do not expect that to happen. We want this system to work absolutely as well as it can. We have improved the process, for example, on advances, to make sure that people get the assistance that they need in a timely way.
Damian Hinds
If the right hon. Gentleman will forgive me, I am very conscious of time. I am conscious of the large number of people who wish to take part.
Frank Field
This is not the food bank staff thinking up ideas or targets. This is our food bank talking to other food banks in other areas that have already had the roll-out. On that basis, they suggest that in the coming year—not just Christmas—they need to raise an additional 15 tonnes of food. Are they scaremongering, so we should put what they say to one side, or should we believe them that the Government will not be able to deliver universal credit without reducing people to hunger?
Damian Hinds
Of course I am not going to say a word against the right hon. Gentleman’s food bank staff and suggest that they are scaremongering or doing anything else negative like that, but my response to his substantive question is, no, we do not expect these things to happen because we want this system to work as well as it possibly can. Its performance continues to improve and we continue to evolve and improve the system.
Jim McMahon (Oldham West and Royton) (Lab/Co-op)
Will the Minister give way?
Damian Hinds
No, if the hon. Gentleman will forgive me.
We also continue an active dialogue with Members across this House and, of course, other people outside, and we will continue to listen to concerns. Where we hear about improvements and identify the need for them, we will make them. As the Secretary of State and I said in opening and closing last week’s debate, the Government will continue to roll out this benefit gradually, in a considered way, adjusting as necessary as we go.
The Opposition are asking for a pause in the roll-out. We already have planned pauses in the roll-outs. We have just had one pause and another is scheduled for January. These breaks in the schedule have intentionally been built in. They illustrate my point of a slow and considered roll-out, rather than the alternative big bang approach—an approach which Opposition Members may recognise from 2003, with the disastrous implementation of working tax credits, with billions misspent and many families left without money for six months, and many, many more facing huge repayment bills.
Jim McMahon
If the Government are so confident in their position, why this week have they refused to publish the risk register that would set out for the whole of Parliament exactly what had been planned?
Damian Hinds
Debates over risk registers in relation to a number of different parts of Government policy happen the whole time. They also happened, by the way, when the Labour party was in government. I think people in general would agree that it is important, for the sake of better management of government, to be able to consider these things in the way that they are.
Albert Owen (Ynys Môn) (Lab)
The Speaker is right that the Minister is a courteous man. I have written to the Secretary of State and not yet received a response, and I was hoping to question him today on this very point. Before first coming to this House, I ran a welfare centre. This policy is flawed because it relies from day one on hardship payments. Hardship payments should not be a policy decision. The Secretary of State could do the decent thing now and pause this, or even reduce that period. I ask the Minister to respond directly to that point.
Damian Hinds
It is a system that is replacing a deeply flawed system and striving to face up head-on to endemic problems that we have had for decades and that were left in the “too difficult to deal with” tray—an old system, where complexity and bureaucracy had so often served to stifle the independence, limit the choice and constrain the outlook of its claimants.
Jeremy Quin
Would my hon. Friend agree that, unlike the disaster that was the tax credit roll-out in 2003, the Minister and the Government had built into this process a slow roll-out, and the Minister has proved himself adaptable on the landlord portal and on the advances and the ever-increasing speed with which these payments are being made?
Damian Hinds
My hon. Friend is quite right. We will not remake those mistakes of the past, and that is why this is such a careful and gradual process.
Wendy Morton (Aldridge-Brownhills) (Con)
Would my hon. Friend agree, therefore, that by doing this roll-out steadily, over a period of time, over nine years, it enables us to continue to learn and adapt as we go and to develop the best system, which clearly is what we are doing?
Damian Hinds
I agree with my hon. Friend entirely. It is so important to go through the process and optimise the system, because universal credit prepares people for work, helps them into work and helps them to get on in work. Eventually, we estimate that about 7 million people will benefit from the advantages it brings, with a quarter of a million more people in paid work as a result. We know that it is working already. Three separate studies show that people get into work faster with universal credit than they do with jobseeker’s allowance. Once there, they face none of the hours rules and cliff edges that have held people back.
Ms Marie Rimmer (St Helens South and Whiston) (Lab)
The Government listened to some of the requests raised in a Westminster Hall debate on this issue in January 2016. There have been some changes and improvements. However, it is the cuts and the savage implementation of sanctions that are hitting people the hardest, and giving a loan to somebody already in debt is not a help at all. You should not be doing that, Minister.
Damian Hinds
We think that having a system with conditionality is important and the level of sanctions is down quite significantly year-on-year. The vast majority of people are not receiving sanctions.
John Redwood (Wokingham) (Con)
One flexibility the Labour spokeslady asked for was the opportunity to pay rents direct to the landlord, so that tenancy is protected. Is the Minister considering that?
Damian Hinds
Not only considering, but over a third of tenants in the social rented sector have that arrangement under universal credit right now. It is available for vulnerable claimants and for those for whom that arrangement is important.
As you said last week, Mr Speaker, what we do in this House is important. Members’ insights are important, too. Indeed, Members of Parliament are uniquely placed to funnel and convey feedback and to critique and propose improvements.
Peter Aldous (Waveney) (Con)
I pay tribute to the Minister. Since February, he has engaged with my constituency to improve universal credit. Taking into account the debates we have had over the past few days, does he not agree that to make universal credit truly flexible and personalised but also fair, it is necessary to ensure that first payments are made far more quickly and that private sector landlords can set up alternative payment arrangements on the same basis as social landlords?
Damian Hinds
We are continuing to improve processes, and that includes my hon. Friend’s point about ensuring that alternative payment arrangements in the private rented sector work as well as they can. He and I have had the opportunity to discuss this issue.
Sammy Wilson (East Antrim) (DUP)
In looking at what might be available to him, will the Minister look at the situation in Northern Ireland where, by default, payments are made directly to landlords, payments are made on a two-weekly basis, unless claimants request otherwise, and split payments are made on the basis of demands from individual claimants? If the changes introduced in Northern Ireland are working effectively, will he take some lessons from them?
Damian Hinds
It is, of course, a reality of devolution that we will have different systems operating. There is a different approach in Northern Ireland and a different approach again in Scotland—they are not exactly the same. For clarity, the hon. Gentleman identifies three points: rent paid direct to landlords, which we have discussed; more frequent payments; and split payments, which came up a couple of times in the speech by the hon. Member for Oldham East and Saddleworth (Debbie Abrahams). They are all possible in England when appropriate for an individual claimant.
Damian Hinds
I want to press on, because I do not want to take up too much time.
From last week’s debate, as well as the general commentary received and heard, I have taken away for action a number of points that were raised. There were some individual cases, and also policy and process matters, including how we can improve arrangements for direct rent payments, our approach in cases of domestic abuse and the process for housing benefit debt recovery. Some informational issues also came up. In response to my hon. Friend the Member for Gloucester (Richard Graham), I committed to publishing the roll-out schedule for the landlord portal and trusted partner status. A question was asked by the hon. Member for Newport East (Jessica Morden) about staffing levels. In fact, we are increasing, not decreasing our staffing levels to complement the roll-out of universal credit. The hon. Member for Oxford East (Anneliese Dodds) asked about the process for third-party representatives acting for clients. I recognise that we can do more in providing clear information on such matters and I commit to doing so. As well as reporting to the whole House, we are making sure that additional information is provided to Members as the full service comes to their constituency, and we are running a number of sessions in the House for both Members and caseworkers.
Liz Kendall (Leicester West) (Lab)
Those of us who have had some experience of working in government on rolling out policies know that just because a policy or change in policy is announced does not mean it is actually happening on the ground. I urge the Minister to accept the call for a pause to guarantee that the changes he says he is making are actually filtering through on the ground. That is a problem. It is not a new problem in government, but if he pauses some of the changes can be made so that people’s lives do not have to suffer.
Damian Hinds
I am grateful to the hon. Lady for that intervention. Of course, we monitor those things constantly. As I was saying earlier, this is one reason why we have pre-scheduled pauses in the sequence.
Yes, this is a fundamental reform. This is a lot of change. It is a new benefit, a new IT system and a new operational system involving new ways of working with partners. Yes, that does bring with it some challenges, but its implementation is happening at a very measured pace, stretching over nine years from 2013 to 2022. In the next four months, universal credit will move from covering 8% of the benefit recipient population to 10%. This careful, gradual approach means we can continually adjust and evolve the programme. We can see that in enhancements such as the landlord portal and trusted partners, the refreshed approach to advances and many, many other back-of-house and systems changes. We see this effect coming through in the huge improvements in timeliness and first-time accuracy.
Damian Hinds
I apologise to both hon. Ladies who have stood up, but I want to bring my remarks to a conclusion. I know that many Members, on both sides of the House, probably including them—
Damian Hinds
Not including the hon. Lady, but many Members, perhaps including the hon. Member for Wallasey (Ms Eagle), will wish to contribute to the debate.
In every phase and in every respect, the development of universal credit has been all about enhancing the way it helps people to get into work and get on in work. Already, universal credit is transforming lives and we want more families to benefit from the satisfaction, the self-esteem and the financial security that comes from progressing to a job, to a better job and to a career.
Neil Gray (Airdrie and Shotts) (SNP)
Thank you, Mr Speaker, for the opportunity to debate universal credit again today, and well done to the shadow Work and Pensions Secretary for securing today’s debate.
In my two and a half years in this place, I have become accustomed to some big, historic events happening, such is the nature of the era of politics we are living through right now. Last Wednesday, we witnessed something very rare: not only a Government losing an Opposition day motion, the first time that has happened for over 40 years, but a Government refusing to concede an inch to try to win the vote and Mr Speaker giving as close to a rebuke as is possible for the Chair to give to those on the Government Benches.
I pay tribute to you, Mr Speaker, in that regard. I do not believe the Government would have had any intention of respecting last week’s debate, last week’s vote, or indeed the conventions of this House, were it not for you challenging their behaviour in such a way. The statement from the Leader of House at business questions on Thursday was apparently to be the sum total of the Government’s response to the defeat. It gave no indication of when the Secretary of State would return to the House following the debate, nor did she say which areas of concern the Government were looking to act on. The Government’s behaviour last week encapsulated perfectly their approach to difficult decisions, whether they be difficult because of divisions within the Cabinet, divisions within the Conservative party or divisions among our constituents.
Either way, this is a Government paralysed by fear, indecision and a complete lack of strategic direction, a Government desperate to deflect, defer and delay. I say that because they have basically accepted they need to do something in key areas that are completely undermining universal credit, but rather than accept a partial solution, offered to them on a plate by a group of Tory Back Benchers ahead of the debate last week, they deflected and deferred, caught up in indecision. They threw up red herrings on the telephone charges but refused to do anything substantive in the key policy areas. Their every move is a desperate calculation to fight the fires of that particular day. Strong leadership would have seen action last week; strong leadership would have accepted the parliamentary arithmetic and the mood of the House and of our constituents, and would have accepted the need to act.
Last week, we saw the desperate weakness of a Government unwilling to defend their flagship social security policy in the Lobbies, in what must be a near unprecedented scenario. They completely misread the House. They had no idea—or decided to ignore the fact—that the main Opposition parties were working together to force a vote on Wednesday night. They completely misread the strength of feeling in the House against universal credit in its current form and the way that you, Mr Speaker, would react to that defeat and the Government’s sleekit abstention. In doing so, they showed a disrespect for Parliament. They thought they could wriggle out of an embarrassing defeat by abstaining, but instead they had to contend with a defeat and an embarrassing rebuke from the Chair. Even now, after the Government have been dragged to the House, we still get nothing.
I feel for the Minister, who has been forced to substitute for the Secretary of State, because he has been asked today to defend the indefensible. I am hoping that the events of the last week will have offered some steel to those on the Government Back Benches who pushed hard for reform but accepted the three-line Whip to abstain. This is a Government on the run. Now is the time to force home the changes we have all been pushing for: fixing the six-week wait, fixing the advance payment being a loan, fixing the monthly payments. All of these would be a start, but the biggest win would be for the Government to acknowledge the glaringly obvious—the evidence in front of their eyes—and admit that universal credit as it stands is failing those it should be helping.
Lucy Frazer
My hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) put a very good question to the hon. Member for Oldham East and Saddleworth (Debbie Abrahams) when he asked whether she anticipated that the overall pot would increase. She said she would come to that, but she did not—I twice tried to intervene because she did not come to it, but she did not take my interventions. What is the SNP’s position on that?
Kate Green
Does the hon. Gentleman agree that if the Government are making choices, it would be sensible for them to choose to prioritise the incomes of low-income families, instead of prioritising the interests of higher earners by cutting taxes and raising the tax threshold? Does he agree that there is scope for improving work allowances in universal credit and helping those who earn the least?
Neil Gray
I absolutely agree with the hon. Lady, and I will come to that shortly.
The Government should review the cuts to the work allowances, which are acting as a disincentive to work and making work pay less; review the cuts to housing benefit, which are driving up rent arrears, as I am sure will be touched on in tomorrow’s debate; and review the cuts to employment support, which are denying help to those who need it most, and they should fully review and then scrap the disgusting sanctioning policy, which could have cost the life of my constituent, Mr Moran, and has cost the lives of others. That was the subject of an excellent paper by Sharon Wright of Glasgow University and Peter Dwyer of the University of York in The Journal of Poverty and Social Justice.
The Government are hiding behind the illusion that universal credit helps people into work and makes work pay. They actually believe that universal credit is working on this basis. The Secretary of State’s own figures show that in the 2% of jobcentres where universal credit has been rolled out, there has been a mere 3% uplift in employment rates.
Justin Tomlinson (North Swindon) (Con)
The hon. Gentleman and I often speak in the same debates and I understand his passion for supporting the most vulnerable in society, but from visiting jobcentres and talking to people going through the process, I know that the staff are incredibly passionate about the way universal credit is helping people. It is time that all Members engaged and listened to the positives as well as the challenges we need to navigate.
Neil Gray
I thank the former Minister for his intervention. I said last week, and I say again, that we agree with the premise of universal credit—rolling together all these benefits into one payment and simplifying the system—but under successive Chancellors and Work and Pensions Secretaries, of whom there have been too many in recent years, the benefits have been salami-sliced to nothing. The issues facing universal credit are the result of the Government’s cutting and cutting the areas where they are meant to be helping people.
James Cartlidge (South Suffolk) (Con)
Further to the very good intervention from my hon. and learned Friend the Member for South East Cambridgeshire (Lucy Frazer), if the hon. Gentleman thinks that universal credit has been cut too much, and given that the Scottish Government have tax-raising powers, will he put his hand in his pocket and add extra relief north of the border?
Neil Gray
The hon. Gentleman knows better than just to regurgitate the Whips’ interventions notice, and he knows that the Scottish Government are responsible for 15% of social security powers and that they have already mitigated more than £400 million of Tory cuts. How much more does he expect the SNP Scottish Government to clear up this Tory Government’s mess?
Dr Philippa Whitford (Central Ayrshire) (SNP)
Does my hon. Friend recognise the figures that show a 17% increase in rent arrears, a 15% increase in the number of people getting into debt with loan sharks and a 87% increase in crisis grants from the Scottish Government in universal credit areas?
Neil Gray
My hon. Friend is absolutely right. The evidence is there for the Government to see.
Is the 3% uplift in employment rates really worth the rise in in-work poverty we see in universal credit areas, the crippling rise in rent arrears or the disgusting rise in foodbank use? There is no data on the quality of the jobs the 3% are managing to pick up, but we know that work coaches are forcing universal credit claimants to sign conditionality forms that force them to take any job, regardless of its security or suitability, and that the threat of sanctioning is forcing them to take it. We know that in general there is a rising prevalence of insecure and low-paid work, which is crushing morale and harming the UK’s productivity rate. The threat of sanctioned destitution is forcing people into accepting precarious and unsustainable work.
Joanna Cherry (Edinburgh South West) (SNP)
My constituent Martyn Dewar, the disability students officer at Heriot-Watt University, has pointed out to me that although under employment and support allowance a disabled person can become a student and continue to claim, the same will not happen under universal credit? Does my hon. Friend agree that this is another loophole the Government should close in the interests of disabled students, if they obey the instruction of the House last week to pause the roll-out of universal credit?
Neil Gray
I absolutely agree with my hon. and learned Friend, who raises a very pertinent point that I hope the Government have heard.
We all agree that employment is a route out of poverty, but what hope do we give those who are employed and living in poverty? What hope can the Government give them, given that they are currently participating in the only route out of poverty the Tories know and yet still live below the line? The cuts to universal credit are making people worse off. In East Lothian, more than half of the local citizens advice bureaux clients on universal credit are worse off by on average £45 per week. A third of their clients are better off but by just 34p per week. We know from the Resolution Foundation that the decade from 2010 is to be the worst for wage growth in 210 years. Not since the Napoleonic Wars have we had it so bad.
Antoinette Sandbach (Eddisbury) (Con)
In those calculations, does the hon. Gentleman include the 1.3 million people who do not have to pay tax any more, or the £1,000 that goes straight into the pockets of those earning the least in this country?
Neil Gray
The cuts in the tax thresholds do not help those on the lowest incomes. [Interruption.] They do not. That is not the best direction of the funds. Helping people in receipt of work allowances and addressing the taper rates would be of far more assistance to people on low incomes.
Universal credit is not making work pay, and the Government are not making work pay. They are making people pay the price for austerity cuts. If the Government are serious about universal credit and serious about tackling inequality, they need to get serious about fixing the major problems with universal credit as it is currently being rolled out. Parliament has spoken on universal credit, and it is time the Government acted to fix it.
Several hon. Members rose—
Mr Speaker
Order. There is a very large number of would-be contributors to the debate, and as a result I am applying a four-minute limit to each Back-Bench speech, with immediate effect.
Mr Mark Harper (Forest of Dean) (Con)
I am grateful to you, Mr Speaker. It is always good to have that discipline behind one.
Let me start with a point about process. I listened carefully to what the shadow Secretary of State, the hon. Member for Oldham East and Saddleworth (Debbie Abrahams), said. In the House, she resisted temptation and accurately quoted what the House had decided last week, but I am afraid that outside the House the Labour party is misleading people. It is saying that Parliament voted to pause and fix universal credit, but the motion last week did no such thing. I mention that because it is important to the substance of today’s debate about the Government’s response.
As the hon. Lady said, the House did ask the Government to pause, but what the House did not do was provide a single reason in that motion why the Government should pause. [Interruption.] I was at the debate last week, and I spoke in it. The hon. Lady set out some reasons in her speech, but the motion, which is what the Government have been asked to respond to, contained not a single reason why the Government should pause.
Victoria Atkins (Louth and Horncastle) (Con)
It may well be that if Her Majesty's Opposition had added just a couple of words to their motion so that it read, “That this House calls on the Government to pause the roll-out of universal credit full service in January 2018, as announced in the written statement by the Government in November 2016”, we could all have agreed.
Mr Harper
I am grateful for my hon. Friend’s intervention.
Let me run through, very briefly, one or two of the points made by the hon. Member for Oldham East and Saddleworth. She is fond of saying that she completely supports the principle of universal credit and wants it to be implemented, but she then goes on to list innumerable reasons for her fundamental disagreement with all the key strands of the benefit. She cannot have it both ways. If she does not want universal credit to be implemented, let her just stand up and say so. She should not pretend that she agrees with the fundamental principles, and then say that she disagrees with almost every important aspect of it.
I listened to and read very carefully what the hon. Lady said during last week’s debate. I shall pick just a couple of reasons for the fact that I could not support that motion. The hon. Lady referred specifically to housing. The Minister set out the position very clearly today, as the Secretary of State did last week. If there are universal credit recipients who have issues with managing their rent, they can arrange for their landlords to be paid directly, but I do not think we should patronisingly assume that every single person receiving universal credit is incapable of managing the rent. Most of them are perfectly capable of managing their finances, and we should treat them accordingly.
Mr Harper
What I was going to come to was why I do not think it is right to pause the roll-out. One of the important aspects of the roll-out is the housing portal which will enable social housing landlords in the first instance to communicate with the Department to deal with tenants when there are rent issues. If we were to pause the roll-out, the Department would not have an opportunity to deal with the real issues that are raised, and to fix them.
Mr Harper
I am going to make some progress. I have only a couple of minutes left.
The Minister has been very clear today, and, like the Secretary of State last week, he has listened carefully to the issues that have been raised and, I think, has dealt with them. If we just paused, we would not have the opportunity to deal with any of those issues.
Mr Harper
I have only a couple of minutes left.
The shadow Secretary of State had a number of asks, although I noticed that between last week and this week the list had become considerably longer. That is what happens when the asks are not included in the motion. In her speech last week, the hon. Lady specifically asked for waiting days to be removed completely. Waiting days have always been a factor in the welfare system. [Interruption.] I read the hon. Lady’s speech very carefully, and she said at the beginning that she wanted to get rid of the waiting period.
The reason for the waiting period is very simple. If someone falls out of work for a few days, for example, we do not want that person to submit a universal credit claim. There has always been a waiting period in the benefits system, and I think that that is sensible. The Minister has already dealt with the cases in which people need to be paid more frequently, and has accepted, as the Secretary of State did last week—
Mr Harper
I am not going to give way. I have only a minute left.
The Minister has accepted, as the Secretary of State did last week, that the system was not paying people fast enough initially, but also pointed out that the more recent figures showed that the Department had speeded up the payments, and that it has refreshed the guidance to ensure that people can receive advance payments, which I think is very sensible. [Hon. Members: “Loans.”] They are not loans; they are advance payments. Anyone who earns a salary is familiar with the concept of an advance.
I have looked at all the issues that the hon. Member for Oldham East and Saddleworth raised last week. The Secretary of State dealt with each and every one of those issues thoroughly during the debate, but the motion, which called for a pause, did not give a single reason why the Government should pause roll-out. The Secretary of State, the Minister and the Leader of the House have made it clear that as we develop changes in the policy, they will be reported to the House. That is why I do not find it surprising that after only three sitting days—as was pointed out by my hon. Friend the Member for North Dorset (Simon Hoare)—Ministers had not come to the House.
I think that the Minister set out the position very clearly today and that the House has debated it very clearly, and I therefore think that people should have confidence in a policy that will get more people into work.
Carolyn Harris (Swansea East) (Lab)
Last Wednesday I came to this place to do what I, like everyone else here, was elected to do: to debate the issues that affect our constituents, and to vote on those issues in the way that we believe will best support them. The Ayes definitely had it last week, with 299 votes to zero in favour of pausing the full roll-out of universal credit until the problems encountered in the pilot scheme had been fixed. Not only did the Government forfeit their right to vote, but they are now ignoring the result, pretending that it did not happen and burying their heads in the sand.
Gerald Jones (Merthyr Tydfil and Rhymney) (Lab)
Does my hon. Friend agree that it is one thing for the Government to ignore Opposition Members, but it is another thing—and foolhardy and irresponsible—for them to ignore organisations such as Shelter, Citizens Advice, Gingerbread and the Child Poverty Action Group, to name but a few, which are at the forefront of dealing with the chaos of this roll-out?
Carolyn Harris
I certainly do. Such is the Government’s arrogance.
Coastal Housing, one of the leading social housing providers in my constituency, tells me that 90% of its tenants who are already on the pilot scheme are behind with their rent. In total, those tenants are over £73,000 in arrears, which means that, on average, each of them owes approximately £830. Coastal Housing and its tenants have told me of a series of problems with the scheme. The initial seven-day waiting period does not cover housing costs; the month-long assessment period, followed by a wait of up to seven days for the money to be paid into their banks, is putting too many people in debt before they even start on the scheme; and people are being forced to rely on food banks for the first time ever while they wait for their money. However, despite all those issues with the pilot scheme, the Government think that the best way forward is to plough on regardless.
I anticipate mayhem for far too many vulnerable people on 13 December, when the scheme is rolled out in Swansea. It does not take a mathematician to work out that if they transfer 12 days before Christmas and the payments take between 35 and 42 days to appear in bank accounts, a lot of Swansea residents will be in dire straits at the worst possible time.
Hannah Bardell
The hon. Lady is making a powerful speech. Does she agree that if the Government had a heart, they would put that pause on the roll-out of universal credit—and, indeed, on other benefit sanctions—before Christmas, so nobody goes without over the Christmas period?
Carolyn Harris
I certainly do agree. No money and no support services open over the festive period means that my most vulnerable constituents are going to be desperate. Where is this Government’s compassion?
Kevin Hollinrake
The hon. Lady says there is mayhem. In my area, universal credit was rolled out 15 months ago, and although there are undoubtedly some problems, it is certainly not mayhem, and the measures introduced by the Government in recent weeks will fix the vast majority of the problems. So may I give the hon. Lady, and hopefully her constituents, the comfort that this will not be mayhem?
Carolyn Harris
I do not agree, and I can give examples from the summer when there was mayhem, even before this system came into operation.
How can Conservative Members be so oblivious to the predicament they are putting people in? [Interruption.] If they quieten down, they will be able to listen to what I have to say.
During the summer holidays I became aware of the empty shelves in my local food bank. These shelves were empty because mothers could not afford to feed their children. They were relying on the free school meals during term-time, but during the school holidays they had no choice but to visit the food banks. So I decided to do something: I set up a lunch club for local children. I anticipated that me and my team would feed around 500 children, yet we ended up feeding 6,638 over 10 days. That was the scale of the problem, and that was before universal credit.
So how on earth are my constituents going to cope at Christmas with less money coming in and an even greater demand for money going out? Should I start planning a Christmas lunch club now, and asking local companies for donations yet again, or will the Government please open their eyes, look at the situation they are creating, and put a hold on the roll-out until the fundamental flaws of this ridiculous universal credit are resolved?
Kelly Tolhurst (Rochester and Strood) (Con)
Last week we had a Labour Opposition day debate on pausing the roll-out of universal credit, and now we are debating the outcome of that Opposition day debate. Universal credit is a great move forward in how benefits are claimed. It is replacing an outdated system—a system which is complex, and which I have seen from my own experience in my constituency discourages people from working for more than 16 hours a week. Many of my constituents have wanted to work more than 16 hours a week and have said that it is just not worth the hassle, because if they were to do more than 16 hours even for a short period, they would be affected and could be left in financial difficulty, with waits for benefits to be reinstated.
Universal credit will ensure that people are better off in work and will make it far easier for constituents who want to work more hours and gradually increase hours to be better off, and to be able to do that without the stress or worry about the impact. This is a gradual roll-out over nine years, moving from 8% of the claimant count to 10%, and all new claimants. The number of people on universal credit as of the summer was 590,000, and 230,000 of them—nearly 40 %—were in work.
As with all policies, implementation is key. Of course when we move from an extremely complex system to a more simple system there will always be things that crop up, which the Government then work to address. That is shown by the fact that the Government are doing a gradual roll-out.
Mrs Anne Main (St Albans) (Con)
I am listening to the figures my hon. Friend mentions. Does she recall that the hon. Member for Swansea East (Carolyn Harris) said there was mayhem before universal credit was rolled out? I am puzzled by that, as this is a gradual process.
Kelly Tolhurst
My hon. Friend raises an important point, which serves to show that there are some inconsistencies in the Opposition’s argument against universal credit.
The Government are doing a gradual roll-out, so that testing can take place, and they are then able to modify the implementation based on what is learned from the experience of the practical implementation of the scheme. As Ministers have made clear, claimants who cannot afford to wait can get advances up front. These payments are made straight away. The Opposition are irresponsibly scaremongering in an attempt to frighten existing and potential claimants, and trying to negatively portray the universal credit system as a bad thing, rather than talking about the benefits to the people of this country.
Kelly Tolhurst
I will not give way at the moment.
The Opposition are scaremongering rather than talking about the benefits of universal credit in helping people move into work and making it easier for claimants in the long run. Universal credit is a good step forward in how benefits are delivered to the people who need them. Claimants who need these advance payments because of their particular circumstances will receive advances within five days, which is quicker than for new claimants applying for the old jobseeker’s allowance.
Dr Whitford
Does the hon. Lady recognise that these have to be paid back once universal credit is received, which means that people will already be spiralling into debt? It is just a loan.
Kelly Tolhurst
I thank the hon. Lady for her intervention, but there is an assumption that everyone on universal credit will already be in debt, which I refute.
For Labour to suggest that this Government want to deliberately disadvantage people when they need help from the state is frankly appalling. I am also amazed by the indignation of the Opposition about the outcome of last Wednesday’s debate, which was just that: it was an opportunity for the Opposition to debate an issue that they wanted to bring before the House.
However, over the last few weeks since returning from recess we have had some major pieces of actual legislation from Government passing through the House, but where were the Opposition in these most important debates? Why were they not in the Chamber debating and questioning the Government? Notably on the Finance Bill, we would have expected the Opposition to be doing exactly that. Was the reason for their absence that that would not have generated sharp headlines? The Committee of the whole House on the Finance Bill did not even run to its full allotted time. That is unbelievable, since the Opposition have complained not only about not having enough time to debate important issues, but we have also debated not debating in this House. The first piece of Brexit legislation had a Second Reading in the House last Monday, too, and where were the Opposition?
If the Labour party truly believed what it was saying—that it does indeed support the principle of universal credit—it would be working with the Government to make sure that the roll-out is a success, rather than scaremongering and trying to block this good reform to our benefits system.
Jack Dromey (Birmingham, Erdington) (Lab)
Disaster looms for tens of thousands of Birmingham citizens, with universal credit being rolled out less than a fortnight before Christmas, on 13 December. MPs’ offices are being besieged by worried claimants, including people who have suffered previous changes introduced by the Government, and the Government seem to be oblivious to the pain they are causing. All too often over the years they have shamefully demonised claimants, and they blunder ahead learning nothing from the mistakes of the past, even on universal credit where there is agreement in principle but the Government seem determined to get it wrong in practice.
On the issue of demonising, I must tell the story of Angela, who came to my constituency office and wept for 45 minutes as she poured out the fact that she had left school at 16, trained to be a nurse, met her husband in the NHS, and they then got married, bought their own home, and had three kids, but, sadly, two of them were disabled, with Scottey, the eldest, being severely disabled. She told about how she was feeding Scottey on one occasion, and then she saw on the television, as she said, Mr Osborne’s speech about shirkers and strivers. Three weeks later a whispering campaign started against her in Kingstanding, with two neighbours in particular saying “Why has she got a car on benefits and we haven’t?” She described what this ultimately culminated in: “Jack, you know what kids are like; they listen to their parents.” Twice in three weeks, when she was out in the streets with Scottey in his motorised wheelchair, local youths threw stones at him.
I thought to myself then, and I think to myself today: do the Government not begin to understand the pain that they have caused over the years—in the changes from disability living allowance to personal independence payments, for example? The impact studies showed that 0.5% of the claims were fraudulent and 99.5% were not. Nevertheless, the Government went ahead with the change, which had catastrophic consequences for people such as Fiona in my constituency, who fought for her life and tried to keep working but ultimately got her PIP two weeks before she died of breast cancer, and Zak, who was in a wheelchair and was assessed and reassessed from three months old. He finally got his PIP two years ago on 17 July; he died on 3 August.
Do the Government not recognise the problems on this and so many other fronts, including for those suffering from motor neurone disease who are desperate to secure lifetime awards rather than being constantly reassessed? I heard a very moving contribution at a recent event here in the House of Commons from a man who said:
“I’m going to die. For God’s sake, why do you keep reassessing me?”
Then we have the Tory Workers Union attacking people like us who are raising issues like this today. It has said to me:
“Most people are not on UC but have jobs and want their MP to show some sort of encouragement”.
Actually, many of them do have jobs. We will never cross the road on the opposite side. We will support the working poor, the poor and the vulnerable. Labour founded the welfare state and we believe in a Britain that looks after the poor, the working poor, the disabled and the vulnerable.
Martin Whitfield (East Lothian) (Lab)
My hon. Friend talks about workers who are claiming universal credit. Studies in East Lothian have shown that 18% of those people who are working saw no change in their income, that 18% saw an average increase of £18.31, and that 45% of people in work saw a fall in their income of £39.99 a week.
Jack Dromey
My hon. Friend is describing real-life experiences in our constituencies and bringing home the facts that the Government seem oblivious to. I sometimes question what planet the Government are living on.
We are determined that we will get this right, and that is why, unashamedly led by our shadow Secretary of State, we have been fighting to achieve precisely that. I stress again that there is agreement across the House on the principle of universal credit, but unless the Government get it right, the pain will continue and be magnified for hundreds of thousands of people in the next stages. I say to Ministers specifically in relation to Birmingham: please do not press ahead with the introduction of universal credit on 13 December. Come and listen to some of the heartbreaking cases. We have had people in tears in our constituency offices asking, “What are we going to do over Christmas?” Come and listen to the landlords who say that they are never again going to let to tenants on universal credit. Hear at first hand the real-life experience of the consequences of your actions. Have you no heart? Pause universal credit and then get it right.
Andrew Bowie (West Aberdeenshire and Kincardine) (Con)
This is the second time in less than a week that I have stood and spoken in favour of the Government’s planned roll-out of universal credit. Last week, my colleagues and I listened as we were lectured by the Opposition. Time and again, it was implied that because, at election time, we on these Benches wear blue rosettes rather than red, orange, yellow or green ones, we did not hear the same difficult tragic cases in our surgeries, we did not work just as hard for those vulnerable individuals who desperately need our help, or we did not care just as much for the welfare of our constituents. In fact, some even asked—I have heard this again today—whether we were proud that we were pushing our constituents into poverty. And do you know what? I find that grossly offensive.
Andrew Bowie
I will not give way.
I am proud to be a Conservative Member of Parliament and I am proud to sit on these Benches with colleagues who work just as hard, and care just as much, for the people they represent as any other Member of this House. Let us be clear that no party in this place has a monopoly on compassion. Socialist, nationalist, Liberal, Conservative or Green—all of us in this place are here first and foremost to serve our constituents. To imply otherwise, and to indulge in wild and insulting generalisations, does not help our constituents, does not inform the debate, and does very little for how people perceive this place, and neither does the gratuitous scaremongering that we heard too much of in last week’s debate. To imply that simply because this Government are a Tory Government they do not care, and are not listening to and acting on the concerns of Members and public bodies, is unfair and untrue.
Last week the Secretary of State announced that all Department for Work and Pensions helplines would be free by the end of the year. A couple of weeks before that, he announced that a more proactive approach would be taken to making clear the availability of advance payments.
Chris Stephens (Glasgow South West) (SNP)
I thank my fellow member of the Work and Pensions Committee for giving way, but does he not agree that an issue about third-party providers remains? Is he as worried as I am about constituents in Glasgow who have telephone bills of £100 as a result of using third-party providers to try to get help from the DWP?
Andrew Bowie
I thank the hon. Gentleman for that intervention. I agree that questions have to be asked about third-party providers, so I would join him in questioning the Government about that.
I know that the Secretary of State was listening to the Work and Pensions Committee last week when I and other Members expressed concern about the amount and quality of the data being gathered on advance payments. None of these actions is that of a Government who are not listening. This debate is about whether we should pause the roll-out of universal credit or if we should press cautiously ahead while learning, and evolving, testing and refining the system, as we continue to deliver this important life-changing benefit to the people of the UK. In my opinion, we should and must press ahead.
Eleanor Smith (Wolverhampton South West) (Lab)
I recently had a meeting with the Snow Hill citizens advice bureau in my constituency, which has expressed concerns about the roll-out of the full service. I agree that we need to simplify our benefit system, but universal credit is not working for most of its claimants. The six-week waiting period is pushing claimants further into debt, with some facing more delays if they have complicated circumstances. This forces claimants to borrow money and rely on food banks, and some face eviction while waiting for their first payment. Although the full service has not yet been implemented in my constituency, the shocking cases I have heard about from the citizens advice bureau and other organisations have prompted me to speak out. I agree with many of my colleagues that the Government should pause the roll-out until a system that is fully functional has been put in place.
Douglas Ross (Moray) (Con)
Mr Speaker, you will be aware that I received much criticism for missing last week’s debate on universal credit, so I welcome the opportunity to contribute to this week’s proceedings, six days on from the last time we discussed the matter. I note that the hon. Member for Falkirk (John Mc Nally) is not in the Chamber on this of all days.
My constituency will see the full roll-out of universal credit in April next year, so I did follow the debate very closely. I was encouraged that Members on both sides of the House agreed that the general principles of universal credit were correct. We heard that from Conservative Members and from all the Opposition parties. I also noted the final vote last Wednesday. As my right hon. Friend the Member for Forest of Dean (Mr Harper) said, that result was different from what Labour Members have described in this debate. The Leader of the Opposition tweeted earlier today that Labour had secured an emergency debate on why the Government were
“not respecting Parliament’s vote to pause & fix Universal Credit”.
That was not the vote that Parliament held last week, yet that is what the leader of the Labour party is suggesting we are speaking about just now. That is not the case.
While there are issues with universal credit—I will come to them in a moment—we must also acknowledge the benefits. Recent data shows that compared with under the old welfare system, people on universal credit are more likely to find work, to stay in work and to earn more money in work.
Several hon. Members rose—
Douglas Ross
I am sorry, but Opposition Members were critical that I was not here to represent my constituents’ views last week, so I will use my four minutes to speak for them.
That the system has benefits is hardly surprising, given that things have been simplified. I am grateful that the Government are listening to concerns raised by Members on both sides of the House, as we saw with the decision on the cost of calling the helpline.
Our last debate under Standing Order No. 24 was about another Government decision not to vote. During that debate, the hon. Member for Perth and North Perthshire (Pete Wishart) said:
“The key thing is that nobody expects them”—
the Government—
“to change their policy or direction on certain issues just because they get beat on a Labour party Opposition day motion—that is the last thing people expect.”—[Official Report, 10 October 2017; Vol. 629, c. 228.]
While the SNP shadow Leader of the House might not expect things to change, I am encouraged that the Government are listening to concerns from Government and Opposition Members. The responses that I have received from the Secretary of State and Ministers to constituency queries have been constructive and helpful. By dealing with issues in that way, we can ensure that universal credit, which is accepted across the political spectrum with an agreement in principle, not only works for everyone, but delivers for everyone.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
Thank you for allowing this debate, Mr Speaker, and for your comments about whether it should be held. I also thank the hon. Member for Oldham East and Saddleworth (Debbie Abrahams) for her efforts in bringing this debate to the Chamber today. She said earlier that we cannot wait, and she is absolutely right. We cannot wait any longer for the Government to listen finally to the pleas that are being made. They ignored Parliament last week, but they have been ignoring calls since the pilot programme was launched in Inverness and the Highland Council in 2013.
Between 2013 and 2017, there have been ministerial meetings, letters, questions and debates pleading for action. The hon. Member for Swansea East (Carolyn Harris) said that the problems were evident before the full service roll-out, which was exactly what we found in Inverness. We have been pleading for action. The hon. Member for Birmingham, Erdington (Jack Dromey) spoke eloquently about the people who come to his constituency surgeries in tears, and I have also had many people turn up in tears—the disabled; single mothers; the low-waged. Last Friday, a constituent turned up to my office crying tears of gratitude for, in her words, “ending her nightmare” with universal credit.
The situation is not just about the wait for payments. This is about missed payments, delayed payments, wrong payments, communication blockages and debt by default. Those who talk about scaremongering or do not want to acknowledge that those things are facts should come and listen to the people who experience them from day to day. There is the humiliation of their being asked to go for a work capability assessment when they are clearly unable to work.
Fiona Onasanya (Peterborough) (Lab)
Does the hon. Gentleman agree that this has a tremendous impact on disabled people? We have asked for the roll-out to be paused and rectified instead of continued at a time when the Government know that the system is not working.
Drew Hendry
I completely agree, and I am grateful to the hon. Lady for making that point. I have had constituents whose carers have helped them struggle to my constituency surgeries to tell me about their difficulties with the process. People who are blind or incapable of walking unaided are having to go for work capability assessments. That is humiliating and degrading, and the roll-out should be paused. Those things should be fixed or taken out of the system.
Mr Paul J. Sweeney (Glasgow North East) (Lab/Co-op)
The Government have lauded the fact that the system for processing universal credit will be entirely online, but 35% of people do not have access to the internet in my constituency, which has one of the highest claimant counts in Scotland. Surveys by Citizens Advice have found that 32% of people will be totally unable to access the system and that another 32% will have great difficulty in doing so. This is just a Kafkaesque nightmare that further frustrates, demoralises and depresses the poorest and most vulnerable in our society.
Drew Hendry
I thank the hon. Gentleman for his contribution, and I completely agree. I have experience of exactly the same—
Mr Speaker
Order. I have said this before, but I will gently say it again for the benefit of new Members: a Member cannot be expected to give way to a second Member while responding to an intervention from the first. It is just a matter of timing. That is all. I understand the hon. Lady’s commitment, but we have to do these things in an orderly way.
Drew Hendry
I was just clarifying that I have experienced exactly the same in my constituency, where mobile phone coverage still lags behind, particularly in our rural areas. This is not only about people’s inability to get online; people are unable to get on a bus to actually get to a jobcentre to use its facilities. Those bus services sometimes do not exist.
David Linden (Glasgow East) (SNP)
I commend my hon. Friend on his work in Inverness, which everybody in Parliament admires. When he mentioned jobcentres, I noticed the Minister for Employment shaking his head, but he wants to close three of the four jobcentres in Glasgow East, where digital exclusion is a massive problem. Does my hon. Friend share my concern?
Drew Hendry
I am grateful to my hon. Friend. It beggars belief that jobcentres will be closed during this process. Moving on—
Drew Hendry
I am going to make a little progress.
I want to discuss some of the effects that have occurred in my constituency since 2013. This is not new to us; we have experienced things on a daily basis. Over 60% of my casework—this is coming to everybody—is made up of universal credit issues. This is an incredible drain on the resources of my staff. The jobcentre staff are working as hard as they possibly can, as are staff at the citizens advice bureau and all the other agencies, including food banks, which are having to deal with the collateral damage. The use of food banks is being driven up by universal credit. If anyone on the Government Benches cares to listen to the people at the sharp end, they will understand that that is a fact of life. By the way, if someone is going to donate to food banks, please take UHT milk and tinned meat, because those are the kinds of things that they desperately need. The chair of the Scottish Welfare Fund told me in the past week that people are now going to food banks for food that does not need to be cooked so that they can save money on electricity and avoid running up bills. How damning is that?
I agree with you, Mr Speaker, that the Minister for Employment is a gracious gentleman. I have spoken to him across the Chamber about this issue on many occasions, but now is the time to listen to the experts and to those who are actually experiencing the effects of this. Now is the time to pause this shambolic, chaotic roll-out, and to take the trouble to fix it. Now is the time to listen to the people who are struggling through against the increasing poverty to which they are being subjected. Please, come to my summit in Inverness, listen to the agencies, hear what these people have to say, and get them involved in the process of sorting this out so that people can live in dignity.
Michael Tomlinson (Mid Dorset and North Poole) (Con)
It is a pleasure to have the opportunity to set out my clear support for universal credit and its principal aim of ensuring that work always pays.
Several hon. Members rose—
Michael Tomlinson
I will give way in a few moments.
I support universal credit, which simplifies what was an over-complex and bureaucratic system. Like my hon. Friend the Member for West Aberdeenshire and Kincardine (Andrew Bowie), I am disappointed by some of the tone of the debate both today and last week. Today, we have heard accusations of knowingly pushing people into poverty; last week, we heard the comment that the Conservative party is undertaking “calculated cruelty.” When I raised that point, there were cries of “Oh, yes it is!” from the Opposition. What a ridiculous assertion. What utter nonsense.
A person does not have to be best friends with Opposition Members to know that, as my hon. Friend the Member for Eastleigh (Mims Davies) said, no party has a monopoly on compassion. No party has a monopoly on care or concern for the most vulnerable. I know many Conservative Members, just as there are in each and every political party, who were driven into politics by their concern for the most vulnerable in our society. Let us not have any more nonsense about calculated cruelty.
Where there is a difference is on policy. This debate is on the Government’s response to last week’s debate. What is their response, and what should it be? Mr Speaker, you rightly said in response to a point of order that
“this motion does matter; it is important; it was passed. As a matter of fact, however, it is not binding. That is the situation.”—[Official Report, 18 October 2017; Vol. 629, c. 959.]
So what should be the Government’s response? Let us consider the substance. Conservative Members want universal credit to succeed, but heaving heard the debate both today and last week, I fear there are Opposition Members who do not want it to succeed.
Kate Green
The hon. Gentleman and I have previously been Committee colleagues, and I have a lot of respect for the way he approaches such matters. When the Government first proposed universal credit in 2011, they said it would lift 900,000 people out of poverty, including 350,000 children. That laudable aim should be welcomed on both sides of the House. What is the Government’s ambition today for the number of people they expect to lift out of poverty?
Michael Tomlinson
I, too, enjoyed working with the hon. Lady in a cross-party spirit on the European Scrutiny Committee in the last Parliament, and I look forward to doing so again. I have been told—I hope the Minister is able to confirm this—that 250,000 additional people will be helped into work as a result of this policy.
Michael Tomlinson
No, I will not.
The Government’s response should be to ensure that universal credit succeeds and has the transformative potential to get people into work and to ensure that they stay in work. The Government should continue to test, to learn and to rectify during the gradual roll-out.
Richard Graham (Gloucester) (Con)
Does my hon. Friend agree there are three things that the Government could recommend? First, Jobcentre Plus offices should brief all local councils on what universal credit is about and how it is being rolled out. Secondly, jobcentres should be encouraged to have credit union literature to help people avoid getting into loan sharks and debt problems. Thirdly, the Government should work closely with the largest housing associations, such as Bromford, to establish best practice between housing associations and jobcentres.
Michael Tomlinson
I would encompass those questions in one by saying that better communication is needed. Each of us, as a Member of Parliament, bears a responsibility for that communication, too. Having heard the responses, we should pass them on to our constituents in good faith and in good time.
Michael Tomlinson
No, I will not.
The Government should be listening, and they have listened on telephone numbers. It was implied last week that it was a premium-rate number and that all telephone calls cost 55p a minute, which is absolute rubbish, but I am pleased that the Government have listened and, in fact, have gone further by indicating that all telephone calls to the Department for Work and Pensions will now be free. I welcome that development.
The Government should not listen to those who want this policy to fail. The system is not perfect, and the Government are right to listen and to learn from their mistakes, but it is not cruel to encourage people into work. It is not cruel to support people while they are in work, to remove barriers to people increasing their hours or to remove disincentives for people getting into work. Arguably, the cruelty was in the old system. People were penalised if they wanted to take on more hours, which left them trapped on benefits, rather than enabled to reach their full potential.
Ruth Cadbury (Brentford and Isleworth) (Lab)
Last week, the Government party refused to vote on the Opposition day motion seeking a pause on the roll-out of universal credit. The motion was tabled because UC is not working in the way its designers told us it would and the way many of us intended and wanted it to. The full roll-out of UC started in my constituency in April 2016, and it is not working for hundreds of my constituents. I know that because they have told me directly and because I have also been told by those trying to help them to deal with the consequences and the mess: the citizens advice bureau, the council’s revenues and benefits staff, food banks, places of worship, community organisations, teachers and school welfare officers.
Those whose income and business depends on regular and reliable payments are also feeling the impact—not only council and housing association landlords, but private landlords, many of whom are small businesses, and childcare providers, which are also small businesses. Employers are telling me of the stress the delays and non-payments are having on their staff who are UC claimants; this is affecting their ability to remain in work, because they cannot afford their childcare place or the cost of travel to work. At worst, claimants are losing their homes, and the only temporary accommodation available at a price the DWP will pay is well outside London—it is too far to commute for those in work hoping to keep their jobs.
Stephen Timms (East Ham) (Lab)
My hon. Friend is absolutely right. Does she agree that alongside the delays, which are such a huge problem, this system is riddled with errors—its administration is not working as it should?
Ruth Cadbury
If I have time, I will make one specific point on that.
Other impacts have emerged as the Government cut the funding for DWP staff, which adds to waiting time and errors; many Members will have seen the article in The Independent from a DWP worker who deals with benefits. Then we saw the cuts to in-work support and the cuts to support for third and subsequent children. Those of us who live in high-rent areas, such as west London, where a small family flat costs about three quarters of an average worker’s take home pay, have seen no proper adjustment of the local housing allowance.
In the face of all this evidence, so clearly set out last week by so many MPs on both sides of this House, the Government party refused to vote, and three parliamentary days later the Government have still made no statement to the House in response to the many important and excellent points made in the debate calling for a pause. The Leader of the House committed the Government to respond to the debate and the vote. There is no reason why the Secretary of State or a Minister could not have come to this House before now, at least with an initial response, and today the Minister did not use the opportunity he had to respond to the vote last week. The Government’s actions—or, rather, lack of them—hold in contempt not only Parliament, but those already unable to feed themselves or their children, those who are facing eviction, those who have lost their jobs and, overall, those who have lost their dignity and hope for the future.
Let me give an example from my casework to show why the Government need to freeze or put a pause on the roll-out of UC. I have encountered two people, at different times, whose UC was stopped when employers paid them at the end of the outgoing month, because of the way the weekend or the bank holiday fell, and the DWP stopped their claim because it told them they had been paid double that month and so were not entitled to any UC. This went on for weeks and weeks, with them having no money to pay the rent and the childcare places being lost, and they were put at risk of losing their jobs. If a UC claim is terminated by the DWP, even because of a mistake by the DWP, it cannot be reopened, and the claimant is required to make a fresh claim and to use a new email address—all the journal is lost.
My hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams) has given the House several suggestions for changes and improvements that could be made to the UC system, including reducing the six-week wait, reinstating the limited capability for work element for disabled people, assessing self-employed people on their annual income, reinstating the level of work allowances and reducing the taper rates. Those are just some of the improvements that could be made and that the Minister could be considering. He could have made some initial comment on them just now, but he did not do so. The system needs to be properly resourced and to have adequate staffing and adequate IT. Local authorities and other landlords need to have access to claim data. By saying that they want the system to work, the Government are, in effect, admitting there is a problem. They need to do more than just want the system to work; we need to know when they will make it work.
Mr Speaker, after last week’s debate, you said:
“This place, and what we do here, matters very much.”—[Official Report, 18 October 2017; Vol. 629, c. 957.]
I agree with you, and so do my constituents.
Jeremy Quin (Horsham) (Con)
I am grateful to have caught your eye, Mr Speaker; I am conscious that I spoke in the recent debate on the Government’s response to Supply day debates and in the debate last week on universal credit. I recognise that in this place repetition is not frowned on, and that hesitation and deviation are positively encouraged in some quarters, but I shall do my utmost not to try the House’s patience.
With the greatest of respect to the hon. Member for Oldham East and Saddleworth (Debbie Abrahams), I question the wording of the motion, which asks us to debate the Government’s response to
“the decision of the House”
on universal credit. The House knows what the hon. Lady means—I know what she means—and I am not interested in silly semantic arguments, but this does get to the core of the matter. The Commons expressed a view, as you wisely said in response to the points of order after last week’s debate, Mr Speaker. It gave its advice to the Government on the roll-out of universal credit. However, the House cannot, on the basis of an Opposition day non-legislative motion for debate, take a decision on a matter of Government policy.
As we discussed at length in the previous debate under Standing Order No. 24, and as I believe was agreed among Government and Opposition Members, declamatory resolutions proposed for Opposition day debates are not and cannot be binding on the Government. That constitutional convention was entrenched by the Fixed-term Parliaments Act 2011, the principle of which was supported in the Labour and Liberal Democrat manifestos in 2010. When that Act was last debated, three years ago yesterday, the Opposition spokesman at the time, the hon. Member for Liverpool, West Derby (Stephen Twigg), spoke in its favour and said that the Labour party continued to support it.
There is no constitutional requirement for the Government to respond to resolutions of the nature we are discussing if that is what the Opposition choose to table for Supply day debates. If the Government choose to respond, they have to determine when and exactly how, particularly if there are fiscal consequences to any actions they determine. Part of the role of the House is to hold the Government to account, so I do not think that last week’s debate was in any way fruitless or a waste of time. In the immediate term, the Government were held to account through the Secretary of State’s responding to 17 interventions. By my count, in a much shorter speech this afternoon, my hon. Friend the Minister for Employment replied to 11 interventions. He was held to account by this House.
I have absolutely no doubt that Labour’s talented Front-Bench spokespersons will do their utmost and use all their wiles to ensure that the Government’s decisions on universal credit are drawn to the electorate’s attention. Conservative Members are comfortable with the roll-out, the time we are taking and the way we are presenting it to the country. Ultimately, the electorate will decide. They are seeing the Opposition’s view and the Government’s view, and that is one role of the House.
I am comfortable with the position that our Government are taking in implementing the changes. That is partly because when I talk to staff at my local jobcentre, expecting the usual litany of failure that accompanies IT projects from all Governments, I hear enthusiasm and positivity about the universal credit system and how responsive it is. I am pleased that the Government have already proved themselves similarly responsive, with 50% of new claimants now securing advances, the new landlord portal and the consistent improvement in the time taken to make payments. There may be other measures that the Government can take to bolster the success of the system, but to my mind they would be wholly wrong to pause the roll-out of a system that reduces complexity, increases flexibility and improves employment outcomes for the recipients.
Helen Goodman
Conservative Members have talked a lot about improving work incentives. I shall not go over the history, but I have constituents who say things such as:
“My own personal position is that of a single parent carer to my disabled child. I can’t work as he has very high and complex needs… Quite frankly the rollout of universal credit is terrifying”—
Mr Speaker
Order. The hon. Lady’s eloquence is equalled only by her length. Interventions must be brief.
Jeremy Quin
The hon. Lady is always eloquent, and I take seriously the issue she has raised. I urge her to draw that to the attention of Ministers. I cannot handle specific issues in her constituency, but as I conclude I can describe the generality of employment under this Government. We previously debated universal credit on the day on which the new employment figures came out.
Jeremy Quin
If my hon. Friend does not mind, I will not.
I assume that it was only because of the timing of the release of those employment statistics that the Opposition Front-Bench team were unable to weave them too strongly into their speeches on the day. They did not welcome the 52,000 increase in employment on the previous quarter; they did not welcome the 215,000 increase in employment on the previous year; and they did not welcome the fact that unemployment is at the lowest rate since 1975. [Interruption.] Obviously, they did not have time. There is evidence that universal credit is helping this success story. I urge the Government to continue to look creatively at how the system can work better, but under no circumstances to halt the roll-out.
Laura Smith (Crewe and Nantwich) (Lab)
Last week, I shared with the House my own experience of benefit delay as a single parent when I was working as a teacher. We all sat and listened as Members from across the House voiced their concerns—and their constituents’ concerns—about the impact of universal credit. We also heard some horror stories—only they were not stories; they were accounts of ordinary working people living through the so-called reforms that this Government have insisted on pushing through. The concerns raised on the Opposition Benches were echoed by Gingerbread, Citizens Advice, Crisis and—indeed—some Members on the Government Benches.
Surely the Government do not plan to ignore the decision made by this House and to carry on regardless? The six-week wait is forcing people into further debt. My constituency of Crewe has been identified as one of the most indebted places in the country, with almost 4,000 children living in poverty. My constituents literally cannot afford to be subjected to this punitive programme.
Will the Government admit that the six-week wait is nothing more than a penny-pinching exercise? How dare they patronise us with their excuses? Do they really expect me to explain to my constituents that the Government’s six-week wait is there to teach them how to manage their finances better? We keep hearing the stock defence that universal credit is getting more people into work. What type of work is that—secure work, work that pays a real living wage? We all know what lies behind those unemployment figures—poverty pay and precarious work. The truth is simply that this Government’s policies are hurting ordinary working families, hurting the poorest and hurting the most vulnerable in our society.
We were told that this policy would “make work pay”, but the Institute for Fiscal Studies says that a further 3 million working families will be made on average £2,500 a year worse off. Food bank referrals have increased by more than double the national average in areas where universal credit has been fully rolled out.
The Government have finally listened to the Labour party and stopped ripping off constituents with their premium charge helpline. They now need to listen to the calls of charities and councils and immediately pause and fix the roll-out of universal credit, before more people are pushed into debt, hunger and homelessness. A pause would stop the rapid increase in the number being brought under their programme. I ask the Secretary of State to outline his response to the many concerns that have been brought to his attention again today. This is the Government’s last chance to show that they do have some heart, that they can see sense and that they respect the decisions made by this House; otherwise, they risk consigning themselves to the dustbin of history as a Government who lack compassion, competence and credibility in equal measure.
Chris Green (Bolton West) (Con)
A policy should be founded on its vision and its values. The idea that work should always pay is clearly a good value, and many people across the House agree with that. The system should be easy to understand as those accessing it should be able to do so without any challenges or barriers in their way. Simplifying the system from six benefits down to one achieves that aim. People should be able to increase or decrease their hours as the work or the requirements change. It should be quite straightforward for people to increase their hours and for employers to give more hours and more work—if that is what they want to do—so that people can get more experience and there is more reason for employers to give more training and for people to gain greater qualifications. That allows progression and, perhaps, promotion in the workplace, which is very good for those individuals, for the society around them and for the businesses employing them.
Chris Green
I will not give way; time is tight.
The Government are delivering for the poorest. Periods of Labour government have always resulted in an increase in unemployment. From 1997 to 2010, unemployment went from 2.1 million to 2.5 million. Unemployment has dropped to below 1.5 million under this Government.
Rachel Maclean
As well as the employment figures rising, we have seen more disabled people get back to work. Does my hon. Friend agree that that is a chance for them to fulfil their potential in the workplace and in life?
Chris Green
My hon. Friend highlights an important point. Many fully able people have got into work, and we need to ensure that the whole of society—all our communities—can get into work.
The number of children in workless households has fallen to a record low in every region since 2010, and the figure has fallen by 90,000 in the past year. The Resolution Foundation reported that the number of low-paid people—those on less than two thirds of the median wage—is at the lowest level since the 1980s.
Chris Green
I will not give way.
Labour supported universal credit and has no plans to drop it. As my right hon. Friend the Member for Forest of Dean (Mr Harper) highlighted, the initial debate was supposed to be about a pause and fix of the universal credit roll-out, but it has now changed to just a pause. A pause to do what—amend it or drop it? There are currently no proposals from the Opposition to roll out a new system. We must have the opportunity to fix through the test, learn and rectify approach. Only 8% of universal credit has been rolled out so far and there are proposals to take that figure to 10%, but this is a slow and cautious procedure.
Tracy Brabin (Batley and Spen) (Lab/Co-op)
Will the hon. Gentleman give way?
Chris Green
I want to get to the number of issues that do need to be fixed.
The policy would be better if it were closer to its values. For example, the taper should be set so that it rewards people better than it does now. The seven-day waiting period ought to be reduced—not receiving money for one week involves a substantial sum for people who are often on the lowest wages. The test, learn and rectify approach gives an opportunity to improve the system of direct payments to landlords. That ought to go forward rapidly, but we also need to reflect on individuals being in charge of their own finances. The responsibility actually helps the individual because it is a responsibility they will have when they go into full-time work. It is a terrible situation when someone who has been so supported by the state and is, in a sense, dependent on it moves into work and has to realise the loss of that welfare support in addition to all the challenges of a new job. We also need to change the substantial six-week waiting period, which is not in the spirit and values of universal credit. The period ought to be four weeks, right from the off.
The Government are demonstrating that they are listening. A key part of that has been the introduction of the free telephone service. I do not want the roll-out to be stopped, but there needs to be reform for it to go on.
Afzal Khan (Manchester, Gorton) (Lab)
I am a new Member here. I was here for the debate last week, but I did not have the opportunity to contribute. However, I agree with the Minister that that debate was a good one.
It is outrageous that the Government are ignoring the clear will of the House— expressed by a vote of 299 to zero—to pause and fix the roll-out of universal credit. This is a real danger to the authority of Parliament. I will highlight two issues in my constituency to the Minister. A jobcentre is closing in my constituency, and many of my constituents are worried that the roll-out of universal credit will mean more trips to the jobcentre, which means that they will have to travel further. That could result in more sanctions as people are late or miss an appointment.
Afzal Khan
I only have one more short point; then I will see if the hon. Lady can have another opportunity.
The second point is that rent arrears are higher among universal credit claimants, young people cannot receive payments towards housing costs, and claimants need to borrow money before they receive their first payment, and all of that is contributing to a higher risk of eviction and homelessness. Will the Minister commit to addressing these issues?
Lucy Frazer (South East Cambridgeshire) (Con)
The issue of how we encourage more people into work and ensure that those who are not in work have a decent standard of living is an important one and is worthy of debate. It is valuable to debate not only the principle behind universal credit and the Government’s formulation of the policy, but, given that a further roll-out is due shortly, whether there should be a further pause to resolve and discuss issues such as the timing of payments before the roll-out is extended.
Both of those are legitimate concerns, but the difficulty with the motion and the debate last week was that those two issues were conflated. On the face of it, the motion before the House purported to raise the second issue—namely, whether there should be a pause, and a pause alone. A pause is a temporary or brief interruption, after which service will resume. However, the hon. Member for Oldham East and Saddleworth (Debbie Abrahams), in speaking in support of the motion, went far beyond arguing for a pause and instead identified fundamental weaknesses, as she saw it, in universal credit. She identified no fewer than 11 individual amendments she wanted to see. She quoted the charity Gingerbread as saying that the errors in the administration and structure of the system itself needed addressing. She concluded by saying:
“We cannot allow the devastating impacts of universal credit roll-out to happen.”—[Official Report, 18 October 2017; Vol. 629, c. 865.]
Those points are important, because when the Opposition bring an Opposition day motion before the House on an important point that affects the lives of our constituents, it is important that we as MPs know what we are voting on. When the Labour party put that motion before the House, did it intend to request a short and temporary pause to universal credit, or was it asking significant questions about the operation of universal credit? My concern is that, in that motion, the Opposition were playing politics and would have sought to use how we voted on it. If the Government had voted in favour of the motion, it would be open to the Opposition to say the Government agreed with the wider issues in universal credit outlined by the hon. Member for Oldham East and Saddleworth. If the Government had voted against the motion, the Opposition would say the Government were not even willing to agree to a short-term, temporary measure to fix administrative issues with universal credit.
Anna Soubry (Broxtowe) (Con)
Does my hon. and learned Friend agree that the Opposition’s motion would have had more credibility if it had included the word “fix”? There was no mention of that. It was simply about a pause.
Lucy Frazer
I do agree, because it would have identified what they were addressing.
I also agree with my neighbour and hon. Friend the Member for South Cambridgeshire (Heidi Allen). She asked the hon. Member for Oldham East and Saddleworth whether she was just asking for a pause or would accept administrative changes, and the hon. Lady did not answer the question.
We know the Opposition are playing politics, because the hon. Member for Walsall South (Valerie Vaz) admitted that in the last Standing Order. No 24 debate. It was put to her by my hon. Friend the Member for Cheltenham (Alex Chalk) whether she thought it was potentially contemptuous to put forward a motion for political effect, and she answered:
“I am sorry but I thought we were in politics. We are politicians, so that is what we would expect to do in here.”—[Official Report, 10 October 2017; Vol. 629, c. 217.]
Mr Speaker, in this House I expect to debate motions that affect the lives of my constituents. I expect when I vote that it is clear what I have voted on, so that I can be held to account. That should be the nature of politics.
Hugh Gaffney (Coatbridge, Chryston and Bellshill) (Lab)
Today, like every day, I am going to be speaking for the many, not the few. In my constituency and across the United Kingdom, people are worried. They live in fear that they cannot build a better, brighter future—and most criminal of all, no one is listening. So many of those constituents do not feel they are being listened to—not by the Tories in Westminster and not by the SNP in Scotland. Policies north and south of the border make this clearer every day. Indeed, this Government’s flagship policy on universal credit is the best example of this. Last week, I shared with the House a very simple message I had for the people of Coatbridge, Chryston and Bellshill, and people across the country: we are listening. My hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams) is listening, my right hon. Friend the Leader of the Opposition is listening, and those on the Labour Benches are listening. That is why we are here today.
I want to start by tackling the myth that people want to live on benefits; that they are lazy; that they are immigrants stealing from British taxpayers. How offensive, how wrong, how damaging, and how reflective of the society we are living in today. People do not choose to live on benefits. Millions of children across the United Kingdom are growing up in working poverty.
Several hon. Members rose—
Hugh Gaffney
No, I will not give way. I am going to continue for the sake of other Back Benchers who want to speak. [Interruption.]
Mr Speaker
Order. Passions are running high—very high indeed—but the Member must be heard.
Hugh Gaffney
Thank you, Mr Speaker.
These parents go to work but they still have trouble paying their bills. They cannot fill the fridge. This is not about choosing to live on working benefits—it is about a country that is not paying our workers the wages they deserve. It needs to be changed. Workers need justice. The welfare system was created by the Labour party and will only ever really be protected and saved by the Labour party. I want to make this clear: I am not against looking to ensure our welfare system is accessible, working and delivering for people in need, but I am against a failed system that does not work, and so far universal credit is not working.
Martin Whitfield
Does my hon. Friend agree with my constituent who describes receiving universal credit as
“not a choice but the only means for survival”
and says that there is
“little that is human, supportive and protective in UC”?
Hugh Gaffney
Yes, I do.
We know of so many stories across the country of families pushed to breaking point and people becoming more and more ill thanks to the pressures they are increasingly put under. We have heard over recent days attempts from the Government to try to control this situation. They now concede that we need to see a cut in the waiting times for receiving payments—payments that go on food, bills, and simply getting by. That is why Labour Members want to see an immediate halt and that is why some Conservative Members are starting to smell the coffee. Does the Minister disagree with his colleagues who have raised concerns? The fact that they were feted and dragged into Downing Street last week tells me that this Prime Minister is more worried about her job than about the millions of people across the country who are suffering.
I just want to say a word about last week. I had Tory MPs laughing at me when I was speaking. I saw Tory MPs mocking the moving points raised by hon. Members on the Labour Benches. It was a disgraceful way to behave, and it was made even worse by the fact—
Simon Hoare
On a point of order, Mr Speaker. I appreciate that I have not been in this House for that long, but this is a debate in which the hon. Gentleman has cast some very serious allegations against Conservative Members with no substantiation whatsoever. A number of colleagues have tried to intervene to tease and prise out the argument that he is putting—he is perfectly in order; I take that entirely—but what he has just said, on two occasions, has certainly caused offence to me, and I believe to all Conservative Members.
Mr Speaker
Order. I can deal with only one point of order at a time, I say to the hon. Lady in terms that frankly brook no contradiction.
I have heard what the hon. Member for North Dorset (Simon Hoare) has said. I understand that he—an extremely level-headed, even-tempered, equable fellow—is genuinely offended. I am not sure that I can find a cure for his sense of offence. The hon. Member for Coatbridge, Chryston and Bellshill (Hugh Gaffney) may, in the hon. Gentleman’s mind, have been discourteous—although that is a debatable point, as most things are here—but it was not disorderly. I hope that the hon. Member for North Dorset, who is a seasoned graduate of the Oxford Union of some decades ago, has not had his tender sensibilities overly offended.
Paula Sherriff
Further to that point of order, Mr Speaker. There was an unfortunate occasion in the House during the universal credit debate last week when a Government Member made an unfortunate comment, or used unfortunate behaviour, although he later apologised to my hon. Friend. To suggest that there was no mocking or inappropriate behaviour is not correct, because the Member in question did have the grace to apologise.
Mr Speaker
I am grateful to the hon. Lady for that attempted point of order. We will take the view that there has been an exchange. Now Mr Gaffney, who is, I think, approaching his peroration, should have the opportunity to do so.
Hugh Gaffney
Yes, I did get an apology last week. I accepted the apology, and we can move on. It was a disgraceful way to behave, but what made it even worse was the fact that you sat on your hands, and you did not turn up to do your job.
Mr Speaker
Order. I am enjoying the hon. Gentleman’s very spirited speech, but I must just say to him that I did not sit on my hands. I did not fail to turn up to do my duty. I most certainly did my duty. Debate goes through the Chair, and I think that the target of his criticism is other Members; I do not think that his target is me.
Hugh Gaffney
I certainly did not target you, Mr Speaker; I targeted the Government.
On a serious note, what happens to people who do not turn up for their universal credit appointment? They get their benefits taken off them. I repeat to the Government that they are showing no respect. If they cannot turn up to do their job, they should just move over. We are ready and willing to do the job for them. Let us halt universal credit.
James Cartlidge (South Suffolk) (Con)
It is incredible fun to follow the hon. Member for Coatbridge, Chryston and Bellshill (Hugh Gaffney), who seemed to be commenting on whether or not the Speaker was here, as far as I could tell. Last Wednesday, when we had the Opposition day debate, was the first day of the roll-out of universal credit in South Suffolk. I will be keeping a close eye on that. Like everyone else, I am sensitive to what people are saying about the real cases that are out there, as we need to be.
I remind hon. Members that we are here today not just because of process or a parliamentary vote, but because Gordon Brown committed one of the greatest blunders in UK public policy. He extended the means-tested benefits system so that it covered not just the poorest, the incapacitated and those in areas of industrial decay, but every area of the income stream. He nationalised millions of families’ incomes and created a massive new era of benefit dependency through the so-called tax credit system, and that was a fundamental error.
I am not speaking theoretically. The Opposition have talked about the real world, so let me talk about my experience. When I ran a small business, I had members of staff who refused to work more than 16 hours a week, because they would lose their tax credits if they did so. I even had someone decline a pay rise because of the impact it would have on their tax credits. We have to understand that Gordon Brown created the road to serfdom—the idea that everybody should be dependent on the state—and I fundamentally disagree with that.
It is impossible to move from such dependency on the state through a cuddly process. When people have been made dependent, it is difficult to break them away from that in the way that is best for them, but universal credit does so. Of course the process is incredibly tricky, but we need to look at the benefits of universal credit. It encourages people to work more hours and make the most of their talents instead of relying on the state. It includes universal support from work coaches, to help people to make the most of their ability. That is the sort of system we want, and we should remember that principle.
James Cartlidge
Fundamentally, we asked taxpayers to spend £30 billion a year putting a ceiling on wages and productivity. That is basically what happened, as I saw. Why would people want to earn more or be more productive, if they were so penalised through the benefits system? We ask ourselves why we have had such flat wage growth and such flat productivity. It is because we are paying people not to work harder.
That has a fundamental implication for the years ahead, because Brexit is coming. We need to remember what the country voted for. I campaigned to remain, but in my view the biggest issue was immigration. We want sustainable numbers of people to come into this country, but if that is to happen when we lose access to this almost limitless pool of very hard-working labour, particularly from eastern Europe, we will have to get the work done by people in the United Kingdom.
Rebecca Pow (Taunton Deane) (Con)
My hon. Friend is making an extremely passionate case. I want to mention an incident in my constituency of Taunton Deane. A vegetable farmer recently said that he could not get people to work for him, and has to use eastern Europeans. He knows that there are unemployed people, but because of the 16-hour rule they simply will not take the jobs.
Mr Speaker
Order. May I very gently point out that if Members who have arrived in the Chamber relatively recently intervene, they risk preventing colleagues who have been here for some hours from contributing? I know that the hon. Lady, who is a most courteous person, would not want that to happen.
James Cartlidge
It is absolutely right to look at welfare reform in the context of Brexit. My worry, and I say this sincerely, is that—let us look at the seasonal agricultural workers scheme, for example—there is already pressure for a scheme not to get more British workers, but to ask whether we can have workers from Ukraine or Russia. We must think about that, because at the moment unskilled migrants can come to this country only from the EU, not from outside the EU. We have to look at welfare reform through the lens of seeing whether British people will rise to the challenge of stepping into the breach.
The Work and Pensions Committee—I was a member of it—carried out an investigation and we looked at these issues before the general election, and the truth is that large parts of our economy are dependent on migrant labour. If we are to change that, we must understand that the sorts of reform we are now introducing will be just the start of it. There will have to be a real look at education, training and welfare. None of this stuff may necessarily be easy or palatable, but it should move us to a situation in which, instead of flat wages and flat productivity, British people are given a fair chance: they do their bit, and we back them. We will give them support through the universal credit system and we will give them training, and we will have a competitive post-Brexit economy.
Andrew Bridgen (North West Leicestershire) (Con)
Does my hon. Friend agree that welfare needs to be a platform to build from, not a ceiling people cannot break through?
James Cartlidge
I will not give way again. I respect the hon. Lady, but I only have a minute left.
As a mortgage broker, I had many cases where an extraordinary amount of a family’s income came from the tax credit system. That is not healthy, and it is not sustainable. I give the Government credit for having the courage—yes, the courage—to take these unpopular decisions. Sometimes, we have to back unpopular decisions, because without such decisions the country cannot move forward. We are doing the right thing, and we should be proud to be doing the right thing.
Stephen Timms (East Ham) (Lab)
Under universal credit, everybody’s monthly pay is automatically sent to Her Majesty’s Revenue and Customs through the pay-as-you-earn RTI—real-time information—system, and HMRC then sends that to the DWP so that it can do the universal credit calculation. There have been rumours for some time that the RTI system does not work very well. I have tabled questions about that, but the Minister has flatly denied that there is a problem.
It emerged last month, through a freedom of information request submitted by a member of the public, Mr John Slater, that there is a thing called the “Late, Missing and Incorrect RTI Project”. If RTI is late, missing or incorrect, we have a problem, because it is not possible to do the required universal credit calculation. I therefore tabled a question to the Minister:
“To ask…what the remit and activities of the Late, Missing and Incorrect RTI Project are.”
The Minister sent back an answer telling me that it did not exist and that there was no such thing. Fortunately, Her Majesty’s Revenue and Customs was more forthcoming on this point. I got a written answer last week from the Treasury, dated 16 October, to my written question 107309, which stated:
“The vast majority of Real Time Information submissions are accurate and on time. However, a very small number of data quality issues create discrepancies and these can have an effect on an individual’s tax and benefits position.”
Indeed they can, because if the information is wrong, people’s benefit calculations will also be wrong.
The following day, 17 October, also from the more helpful of these two departments, the Treasury answer to my question 107475 stated that,
“during the 2016/17 tax year approximately 590m payments to individuals were reported via RTI. 5.7% of these were reported late. HMRC does not hold the information in respect of missing and incorrect reports.”
If over 5% of them were just late, never mind the ones that were missing or incorrect, we do have a serious problem.
Looking through all the submissions we received, briefing us ahead of this debate, I was struck by the one from the Child Poverty Action Group, referring to,
“difficulty making claims for universal credit, with many online claims seeming to ‘disappear’.
Universal credit being underpaid because ‘real time information’ provided by HMRC regarding income is not always reliable or accurate.
Claimants being paid the wrong amount of universal credit for no apparent reason.”
What is happening is that the IT is not doing what it is supposed to do.
My hon. Friend the Member for Brentford and Isleworth (Ruth Cadbury) referred to the anonymous report in The Independent a couple of weeks ago by someone working in a jobcentre, who talked about the grim reality of administering universal credit, rather by contrast with the enthusiasm with which Tory Members have told us that people are working on this. That writer made the point that when there is a discrepancy between what people were paid and what HMRC says they were paid—in other words, an RTI problem—it takes ages to sort that problem out. Members representing constituencies where universal credit has been fully rolled out report endless mistakes, delays and errors, which take weeks and weeks to resolve.
Another reason why this project’s roll-out should be paused and then fixed is to stop these problems being inflicted on tens of thousands more.
Julian Knight (Solihull) (Con)
I am pleased to follow the hon. Member for East Ham (Stephen Timms), who has great experience as a former Pensions Minister. I am sure that he is aware that the idea behind universal credit is to change what has become a very dysfunctional welfare system that not only drains public finances and is very inefficient, but is a huge waste of human potential. Deeply flawed as the old welfare system was and remains, however, it is still a lifeline for many of the poorest and most vulnerable people in our society, and we have to be cognisant of that. Ministers must handle it with extreme care, even when acting with the very best of intentions.
I am sure that by now we are all familiar with the shortcomings of the old system. Not only was it very complex and difficult—both to navigate as a claimant, and for the Government and jobcentres to operate—but it created huge disincentives to work, as my hon. Friend the Member for South Suffolk (James Cartlidge) said. Many would-be jobseekers found themselves facing marginal tax rates not seen in this country since Denis Healey sat in No. 11. The idea of universal credit is that it rewards work: people can work the hours that they want, effectively. It brings in that flexibility and ensures that people will not face the very difficult decision, which has been mentioned by some hon. Members, of basically turning down work in order to keep benefits.
Ruth George
Does not the hon. Gentleman agree that under the last Labour Government’s tax credit system, the clawback of wages was 39%, whereas under universal credit it is 63%? The individual keeps only 37% of what they earn. If they pay tax, the clawback rises to 75%—they keep a quarter of it.
Julian Knight
I thank the hon. Lady for her intervention. I am about to discuss tax credits and my experience of dealing with that area as a personal finance journalist in 2003, when the credits were launched.
Work is the only long-term route to financial independence. Not only does long-term unemployment sap an individual’s self-confidence and erode their employability, but children who grow up in workless households are far more likely never to enter employment themselves. Generations of people do not get into work, and therefore poverty beds down. By acclimatising claimants to the rhythms of working life and being designed to ensure that employment always pays, universal credit not only supports today’s claimants, but is helping to steer many of the next generation away from the welfare system altogether, which is a very good thing indeed.
This is, undoubtedly, an enormous change, and Ministers have been wise to choose to proceed cautiously. The full roll-out of universal credit will not be completed until 2020, a whole nine years after the policy was first trialled and enacted. That involves many dry runs, and the process is in very stark contrast to the introduction of tax credits in 2003, when I remember very well that there was huge disruption to millions of people’s lives.
Neil Coyle (Bermondsey and Old Southwark) (Lab)
Is the hon. Gentleman aware that 2017-18 was supposed to be the final year for the roll-out of universal credit under the initial plan, but that the Government had already accepted that they needed to improve the process? Does he wonder why the Government are being so stubborn now?
Julian Knight
I applaud the Government for taking the roll-out to 2022—it shows they are listening. They want to get this right so that we do not end up with the situation we saw in 2003 with tax credits when, frankly, there was a dead ear from the then Government.
I will conclude as I am aware that many Members wish to speak. It is only right that we acknowledge the measures that the Government have put into place to protect vulnerable users, to provide an advanced payment system for claimants who cannot afford to wait for six weeks for new payments, and to ensure that people who are transferred on to universal credit see no loss in their entitlement in cash terms. The Government have rightly announced a review of DWP phone lines, which is a welcome and positive development. I hope that all Government Departments are cognisant of such situations and people in need are not charged excessively for using phone lines.
Patricia Gibson (North Ayrshire and Arran) (SNP)
We have heard in today’s debate, as we heard last week, about the way universal credit has been rolled out and how it is driving families into desperation and hardship. This House expressed its view, yet still the Government bury their head in the sand, wilfully holding their hands over their ears like an errant child. This roll-out must be halted so that the problems that have been identified—many today and many last week—can be examined and fixed.
The consequence of the hardship we have heard about so clearly in this Chamber is a tearing at the social fabric of our communities in a way that is cruel and completely unnecessary. Some 25% of claimants are waiting even longer than six weeks, according to the DWP’s own figures. Six weeks without support is simply not reasonable. The Government cannot use the excuse of innocence or ignorance. The problems with this benefit have been laid bare and Parliament has spoken. Deciding not to listen to the clamour of disapproval, which has been voiced for very legitimate reasons in this House and beyond, does not provide absolution for what is increasingly looking like wilfully causing harm to those in need of support.
I believe that since Parliament has spoken on this issue, there is an ethical imperative on the Government to return to this issue in a reflective manner, offering a positive, meaningful way forward on a matter regarding which we can all agree the principles. What is at issue here is the process—the way the benefit is being rolled out. It is surely not beyond the wit of the Government to revisit and improve it. It now seems clear that the reason for not pausing the benefit, which is riddled with errors, must be and can only be arrogance, and an ideological fixation that is really very difficult to understand.
Luke Graham
The SNP has raised three concerns about universal credit: timeliness; direct payments to landlords; and helping those most in need by closing the gap. Now that the Government have addressed all three, including by providing payments within five days—on the same day for those in urgent need—will she welcome those changes and accept that the Government are not being arrogant but actually listening?
Patricia Gibson
The three issues that the hon. Gentleman identifies are not our only concerns about the benefit. We are concerned about split payments, the six-week wait, the cut to work allowance and the flexibility of payments—I could go on, but I am constrained by time. There is much wrong with the benefit. Suggesting that fiddling about with three bits is enough, and dancing on the head of a pin about what the motion said last week, does not cover him in glory.
Properly administered, this benefit could really support people, but not unless time is taken to review the problems with it, some of which I have just mentioned. In the meantime, urgent transitional protections can be put in place to protect those who are victims of it right now. There is no doubt that universal credit payments need to be more flexible and adaptable to allow people more say, and that the system needs to be more responsive to how people live their lives and manage their household budgets. We cannot even begin to talk about an online digital roll-out unless we have already tackled digital exclusion.
People in Scotland and across the UK are suffering terribly, and what is heart-breaking is that the suffering is utterly unnecessary. The hardship is the result of how the Government have bungled the benefit. The status quo is no longer tenable. I urge the Government to do the decent thing: pause the roll-out and fix the problems, as the House voted they should do.
Stephen Kerr (Stirling) (Con)
One of the aspects of last week’s debate—we have seen and heard it again today—was that while Opposition Front Benchers said that they supported the principles of universal credit and that their concerns were about the manner of the roll-out, what we heard from those who sit behind them was abject opposition to universal credit. It appears to me that they do not want so much to pause the roll-out as to completely abandon it.
I speak as someone who not only supports the principle of welfare reform but wishes to see its implementation go forward. Universal credit is so much better at helping people into a position where they can help themselves. I do not add my name to those calling for a pause or halt to the roll-out of universal credit because the roll-out is already planned to take nine years, and it is taking nine years because the Government are taking time to get it right. It is called check and adjust.
Stephen Kerr
It is about learning from experience and adapting. It is about continuous improvement. Calling for a pause or halt does not help that process one jot.
Stephen Kerr
It is important to tackle a change of such magnitude in that way. It is important to take the right amount of time to absorb the lessons being learned.
Stephen Kerr
Let us look at what happened when Labour launched its tax credits with a big bang. I am still helping constituents who got caught up in that mess, which included £2 billion in underpayment and overpayment errors.
It is worth reminding ourselves why universal credit is such an important plank in welfare reform. It is about helping people to prepare for a return to the world of work. It is designed to mirror the world of work. When people return to the world of work, it underpins the promise that people will always be better off in work than on benefits. Under the old system, there was a cliff edge, because it made sense to work for only 16 hours or less, and it cannot be good if we end up penalising people because they chose to do the right thing and go to work. The old system punished work. People could lose more than £9 of every £10 extra they earned. Under Labour, the benefits system was so complicated that some people found that there was no point to working more because they would lose more in benefits than they would earn in work. The old system failed to get young people into work. The old system subsidised low wages by letting the tax credits bill get out of control.
It is also worth remembering what work does for people.
Alan Brown (Kilmarnock and Loudoun) (SNP)
On the point about low wages, does the hon. Gentleman agree that the Government should pay the real living wage, not the kid-on living wage?
Stephen Kerr
I am very proud that the Conservatives have introduced a national living wage. It is worth remembering what work does for people. It instils a sense of confidence and of self-worth. It enables people to manage their own affairs and make their own decisions for themselves and their families, to be independent, and not to depend on anyone or anything. That is what work does, and that is why it is so important to record again today that more people in this country are working than ever before and that unemployment is at a 40-year low. That is a good thing that we should be proud of. Universal credit is helping people to get back into work. Those on universal credit are four percentage points more likely to be in work within six months than jobseeker’s allowance claimants in similar circumstances. Universal credit underlines the salient principle that people should always be better off in work than on benefits.
I pay tribute to the Ministers at the Department for Work and Pensions. What I have experienced from them is a genuine willingness to engage and to receive feedback, and that is both positive and constructive. They have been impressively responsive to my concerns, and more especially to the cases of my constituents that have been brought to their attention. I am pleased that there has been a response to the urgent need for payments. Claimants who want advance payments should receive them within five working days, and for those in immediate need there is a fast-track payment that can be received on the same day. I was initially concerned about the payback period for advances, but I am assured that repayments can be delayed for up to six months, and for a further three months if necessary. I have also received reassurances from Ministers about the issues that face rural constituencies.
I repeat that while I accept that no one should have to wait for six months with no money, it should not be beyond our means to make improvements in the system to reduce the time before the first payments are received. However, it would be wholly wrong to pause the universal credit full service roll-out now.
Ruth George (High Peak) (Lab)
Let me start by giving credit to Members in all parts of the House who have listened to their constituents and to people who are suffering under the universal credit system and who have called for changes to be made in that system.
As many Conservative Members have pointed out, we have been going through the process of universal credit for six years now, and as the previous Secretary of State said, the system seems to be “fix and learn”. I wonder what problems he was seeking to address when his Government cut £5 billion from the annual budget for tax credit, taking it from a system that helped people into work and putting it into a system that will take an average of £2,500 a year from 3 million working families. I urge all Members to look at the Library figures that state how many families in their own constituencies are currently receiving tax credit and will lose such sums. They should come as a revelation to us all; and to those of us whose constituencies have already experienced the roll-out of full service—not just to unemployed single people, but to families and people who are disabled and seeking to work—they must come as a lesson.
The Government, and other Conservative Members, keep claiming that an extra 250,000 people will move into work under universal credit. I am afraid that that claim is based on figures from 2014-15, based on a small sample of single unemployed claimants before the huge cuts in work allowances were implemented. They do not apply to people who have been claiming employment and support allowance or to families. Analysis of lone parents has shown that their work incentive is reduced by eight percentage points. As for second earners, the huge clawback in universal credit actually reduces their incentive to work and makes it more difficult for families with children to be taken out of poverty. I urge all Members to listen to Citizens Advice and the Child Poverty Action Group, which say that an extra 1 million children will be taken into poverty by universal credit. That must give us all cause for concern.
The six-week wait was not introduced at the outset; it was introduced in August 2015, along with the extra seven days of unpaid waiting time. It does not mirror the world of work. Those who move into work are paid after a month at the most, but mainly within that period, and even those who must wait for a full month can often receive an advance. So this is not mirroring the world of work; it is putting people into debt. Local authorities have found that 31% of people on legacy benefits are in rent arrears, but under universal credit that proportion more than doubles to 73%. Debt is not a way for people to start in the world of work or start on their way in life. All this means that the number of people going to food banks has more than doubled, and they can only do so when they can actually get access to a food bank. In rural areas such as mine and those of many Conservative Members, food banks are not a panacea; they cannot provide food for families across rural areas, and that will mean children going hungry.
We are urging most earnestly the Secretary of State and the Government to listen and make sure this does not affect millions more families, especially as we are coming up to Christmas, and to pause now.
Kevin Hollinrake (Thirsk and Malton) (Con)
It is a pleasure to follow the hon. Member for High Peak (Ruth George), who has made some sensible points about the Government listening and our not wanting to get people into debt at the start of this difficult time in their lives.
Universal credit was introduced into Thirsk and Malton 15 months ago, and I am in no way ignorant or in denial; nor do I lack compassion about some of the difficulties that have been caused. In my experience, the vast majority of people have not suffered difficulties, but some have. Those difficulties fall into two different categories: technical and structural.
The technical difficulties are to do with mistakes, both by the user entering into the system and the people administering it at the benefits end of the system. There have been difficulties, and I have written to the Minister about them and know he will respond in detail. There are also structural difficulties with the monthly payment cycle, when many of my constituents, especially at the lower end of the income scale, get paid weekly. That has caused some cash-flow problems for some of my constituents.
Do I want to go back to the old system, or do I want a pause? I absolutely do not. Like many colleagues in this place, I have met staff at my citizens advice bureau, and have sat in on consultations with people accessing benefits, some of whom said before to the introduction of universal credit, “I cannot work more; there is a 16-hour limit on how much I can work.” The CAB itself has advised that that is the position. We do not want to return to that situation. We also do not want to return to a situation that is less effective at getting people into work and keeping them in work.
I also make a plea for the taxpayer in this debate. There are two sides to this coin. As the Prime Minister said last week, the Government have no money: all money is simply collected from the taxpayer and redistributed. Since the partial introduction of this basket of reforms, there are now 700,000 fewer workless households, and 40,000 households where people have never previously worked who are now in work. That is a benefit both to the taxpayer and the people in those households, particularly the young people in them. There has therefore been a fundamental improvement in many cases
I made the point earlier that the shadow Minister, the hon. Member for Oldham East and Saddleworth (Debbie Abrahams), described the upfront payment as a loan. Will she clarify that point? Is she saying that she does not want to make it a loan, but instead wants to make it an extra payment? That would add a burden on the taxpayer; that will mean more money has to come from the taxpayer. If that is what she wants, she should clearly set out her spending plans and calculate what extra payments she is going to make. Would that be fair, too, to those who do not ask for the upfront payments? We must take the taxpayer into account in our discussions on this matter.
I would unquestionably like to see some changes, particularly to shorten the timescale from six weeks to ease the burden on some of my constituents who are paid weekly and to make sure the upfront payments are available and also publicised to all who apply for universal credit. It would also be sensible to make more people aware that rent can be paid directly to the landlords in the social housing and private rented sectors and to have more training and ownership for the people who work to deliver these benefits. Other than that, I absolutely welcome this change.
Ms Marie Rimmer (St Helens South and Whiston) (Lab)
The Government ignored the decision taken during the Opposition day debate in Parliament last week. When will this Government of the fifth richest country in the developed world start to listen and learn to govern for the benefit of all people? They ignored the pleas expressed in the Westminster Hall debate on the north-west roll-out in January 2016. They ignored the warnings about fundamental flaws, public hardship, debt creation, complex systems, payment delays and the loss of client information. They were asked to fix the problems before the roll-out, but the roll-out continued.
There has been some improvement since then in the administration and some people have got jobs and got a named adviser—that has been helpful—but we have also seen the savage implementation of sanctions on people attending training provided by the DWP, on people going for interviews and on people who are hospitalised or on a hospital visit, just for being slightly late. I suggest that the Minister start to carry out some exit interviews among the staff.
The Government ignored the warnings from Government-commissioned IT companies on the complexity of the system and on the fact that the development timeframe could not be met. They also ignored warnings from councils and the Local Government Association that they could not develop their systems to fit universal credit in the time allowed. They also ignored the former Secretary of State, who quit days after the 2016 Budget after calling on the Prime Minister to reverse the cuts to universal credit.
The primary aims of universal credit were to simplify the system, to improve work incentives and to tackle poverty among low income families. This was wrecked in the 2016 Budget. Cuts in work allowances and changes to taper allowances resulted in 63% deductions—exactly the same as the tax credit threshold. The incentive to work was gone. Both measures were introduced by statutory instrument, using the negative rather than the positive procedure, so there was no parliamentary scrutiny. That is how they were sneaked through. There will be a £9.6 billion reduction in support to working families over the next five years, and the figure will be £3.2 billion each year by 2020. That illustrates the difference from the initial universal credit, for which there was much support. The incentives have gone, and a lot less money is going to the recipients. A former Prime Minister has described universal credit as
“operationally messy, socially unfair and unforgiving”.
Universal credit has been a universal shambles from the outset. This Tory Government were stopped in their tracks from cutting tax credits by slipping the cuts through via statutory instruments. Things have got worse under universal credit, with the Government deciding to implement further cuts in benefits for vulnerable people by rolling out the system. There was a public outcry on tax credit cuts because we had a debate in this Chamber and the media took up the issue. The results of these changes include increased personal borrowing and soaring debt, hungry children, cold children and schoolchildren suffering mental health issues and long-term damage to their lives. This must not happen in the fifth richest country. It must be stopped. The Government must listen to Parliament and to the Select Committees and make universal credit fit for purpose.
Wendy Morton (Aldridge-Brownhills) (Con)
This Standing Order No. 24 debate follows last week’s Opposition day debate on universal credit—a debate in which I also spoke, and one in which we heard a number of contributions from both sides of the House offering contrasting views. That debate provided an opportunity for Members on both sides to come to the Chamber and contribute, and they did so. The Opposition motion was debated and heard, and the Minister responded. I know that today’s motion is on the pausing of the full-service roll-out of universal credit, but I am left a little confused about where we are with this. Are we wanting to pause and fix? Are we wanting to pause? Or is it simply a case of the Opposition wanting to stop this really transformational piece of legislation, full stop?
My hon. and learned Friend the Member for South East Cambridgeshire (Lucy Frazer) hit the nail on the head earlier. Welfare matters, especially when someone relies on it, but improving the system matters, too. We have to ensure that work always pays, so that things are better and fairer for those who need it and for those who pay for it. The old system simply was not working. It was bizarre that it was not worth working more than 16 hours a week. There was no real incentive to work. The system needed change. Evidence shows that universal credit is helping people into work faster and is helping them to stay in work longer.
I do not want to repeat everything I said last week or what was said in many of the contributions today—that is on the record and I do not have much time—but I just want to touch on the issue of pausing, because the Opposition’s intention is not to pause the roll-out but to stop it. Universal credit has the potential to change people’s lives. To stop a benefit that prepares people for work and helps them get on in work would be wrong. This nine-year programme is designed to enable a gradual move towards universal credit. It is worth remembering that coverage is currently at 8%. Over the next four months, the roll-out will increase coverage from 8% to 10%—just two percentage points by my reckoning. [Interruption.] I am coming to a close now, Mr Speaker; I can sense you speeding me along.
Universal credit is a response to the overcomplicated system that we inherited from the previous Labour Government. Despite what the Opposition say, recent data show that universal credit is transforming the prospects of those who use it. It is important to continue with the programme, and my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) gave us some helpful insight into his constituency, where, yes, there are challenges, but there are positive stories, too.
Mr Speaker
Order. The Opposition Front-Bench winding-up speech of three minutes must begin no later than 4.52 pm, so the final two speakers have a maximum of three minutes left—a bit less.
Anneliese Dodds (Oxford East) (Lab/Co-op)
I apologise to the House for missing the start of the debate; I had to be at a sitting of the Finance Bill Committee. Colleagues have obviously already detailed many problems with universal credit, so I just want to focus on two: informed consent and data sharing. I mentioned them in last week’s debate, but the Minister was sadly unable to respond because he ran out of time. I have since written to him and to the Secretary of State, and I hope that he will be able to respond formally at the end of this debate with what he is going to do on both.
On informed consent, Members will recall the words of the Secretary of State from last week’s debate, when he said:
“Very often the CAB needs to call the local jobcentre rather than the national centre, because if it wants to deal with an individual case, dealing with the jobcentre would be more helpful.”—[Official Report, 18 October 2017; Vol. 629, c. 873.]
The point is that advice centres cannot directly speak to the jobcentre or to the DWP, because the rules have been changed under universal credit so that advice centres no longer have implied consent. The only individuals who have it now are Members of Parliament. Who is better to deal with a constituent with a head injury, for example, who is trying to work out what their universal credit allocation should be: me, an MP who knows little about it, or a specialist organisation such as Headway? Headway used to be able to provide advice on such issues, but it is no longer allowed to, owing to the new rules on implied consent.
I will provide a quick example from an advice centre, which I have sent to the Minister:
“Our clients are in and out of hospital and often taking heavy duty pain relief drugs. Access to computers and remembering the login details is often impossible.”
I will not provide the rest of the details, but I want to finish with this quote:
“Monitoring whether my clients have been properly paid through universal credit is a nightmare.”
The Minister can end that nightmare immediately today by extending implied consent to advice agencies, just as applied previously. It would be simple to do and would make an enormous difference to some vulnerable people.
On data sharing, there was some discussion last week about the scope and efficacy of the new landlord portal, which is intended to enable data sharing between landlords and the DWP. The DWP clearly accepts the need to share some data, but it is refusing to share data with local authorities. I do not know whether the Minister is ready for this in his constituency, but I have been informed that about 4,000 households in my constituency will have to take screenshots of their DWP entitlement—if they have a computer; many do not—and then email or take it to the local authority so that it can work out whether they are due council tax benefit, all because the DWP will no longer share that data with local authorities. The system could be changed easily, so I ask the Minister to wave his magic wand and change it.
Victoria Atkins (Louth and Horncastle) (Con)
I hope to end the debate on a note of agreement. Everyone in this Chamber wants people to have the opportunity to work, if they are able to work, and to be supported in the process of finding work. And when they do find work, we all want them to be paid properly. That, I hope, we can all agree on.
I hope we can also agree that the old system was a nightmare. I do not speak just from my experience of working in this place. In my previous career I worked in criminal courts across the country as a prosecutor for the Department for Work and Pensions. I would work through a whole load of cases when I visited a magistrates court, such as Camberwell Green magistrates court, and I cannot say how many single working mums were being prosecuted by the DWP because they had gone one or two hours over their 16 hours. Members of this House talk about being caring, but I dropped those cases myself—I took the decision that it was not in the public interest to prosecute. When did those cases happen? In the late 1990s and the early 2000s.
When people speak about a caring welfare system, let us not pretend that the old system cared. Let us instead work together to make the new system work better for our constituents. Let us take advantage of the pause in January 2018 to address some of the issues that have been raised in these debates, but please let us not pretend that the old system worked, because it did not. Universal credit is an effort to design a better system for our constituents, and I support it.
Debbie Abrahams
I start by thanking everyone who has spoken in this debate. I cannot express how disappointed I am that the Government do not seem to have heard the concerns raised by our constituents, charities and so many others, including some of their own Members, and how disappointed I am that the Secretary of State for Work and Pensions did not come to the House today. What message does that send? It is profoundly disrespectful to this House and to the people we represent. I sincerely hope that we have not reached a constitutional impasse, as the Government seem to be refusing to act on the will of the House as expressed in last week’s vote.
This important constitutional debate is, however, little relief for those living in areas about to be placed under universal credit full service. They face the debt arrears and possible eviction that have occurred elsewhere. In my opening remarks, I made clear the areas on which Labour wishes to see improvement from the Government. Those areas fall under three broad headings: programme design flaws; reversing cuts to funding; and implementation failures. Our criticisms have been confirmed time and again by hon. Members throughout this emergency debate and last week.
What we have here is a rare case in which Members of all parties are agreed on the fundamental principles at stake, and we are willing to work together to ensure that universal credit is a success and supports people into work without fear of a loss of income. The Prime Minister stood on the steps of 10 Downing Street and told the nation that she would help those struggling to get by, that she would build a country for everyone. More than a year has passed now, and no conceivable action has been taken to alleviate the miserable effects of seven years of failing austerity upon those on the lowest incomes.
The House’s view is clear: the Government must act. Should they fail to do so, we will keep holding them to account. We will keep fighting on this vital issue, standing up for the 7 million people who will be affected, until change has been realised and we have built social security that is fit for purpose and is there for all of us in our time of need.
Mr Speaker
The Question is as on the Order Paper. I will say it again—[Interruption.] Order. Some people seem to need help. [Interruption.] Order. I do not need harrumphing from a sedentary position from a junior Whip, the hon. Member for South Derbyshire (Mrs Wheeler). It does not avail her, and it does not assist the service of the House.
Question put and agreed to.
Resolved,
That this House has considered the Government’s response to the decision of the House on pausing the Universal Credit full service roll-out.
Andrew Bridgen (North West Leicestershire) (Con)
On a point of order, Mr Speaker.
Mr Speaker
We have a lot of pressure on time. If the hon. Gentleman really thinks it is necessary—I know he thinks everything that concerns him is terribly important —we will hear it.
Andrew Bridgen
On a point of order, Mr Speaker. Could you clarify how a Member of this House would raise an issue relating to equality and standards—
Mr Speaker
Order. I do not know whether the hon. Gentleman was in his place or not, but there were points of order raised about equality matters and respect issues earlier, with which I dealt. No clarification is required. My guidance was sought and I proffered it. We are short of time, and there is a debate now in which other people wish to take part. If the hon. Gentleman is interested, he can always seek guidance from my office. He does not need to raise a point of order now and it is desperately insensitive to other colleagues who wish to take part in current debates in the Chamber. This is not complicated.
Smart Meters Bill
Tuesday 24th October 2017
(6 years, 6 months ago)
Commons ChamberRead Full debate Smart Meters Act 2018 View all Smart Meters Act 2018 Debates Read Hansard Text Read Debate Ministerial Extracts
18:48 - The House divided: - Ayes: 314 / Noes: 228 - Question accordingly agreed to.
The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)
I beg to move, That the Bill be now read a Second time.
The Bill, which passed its pre-legislative scrutiny in 2016, is narrow in scope and technical in nature, but it is an important Bill that supports the delivery of the smart metering implementation programme to modernise an outdated part of our energy infrastructure. Smart meters are the next generation of metering technology and are an important element of a smarter energy system. We set out in the recent smart systems and flexibility plan how smart meters will enable technologies such as demand-side response, whereby consumers can gain financially if they lower or shift their electricity use at peak times. The data provided by smart meters will also help improve investment decisions in Britain’s energy infrastructure. A smarter, more efficient energy system could drive up to £40 billion in energy cost savings for consumers by 2050. Smart meters will help with that by giving consumers greater control over how and when they use energy. By allowing homes and businesses to better manage their energy use, we open up the possibility of flexible energy tariffs. Taken together with secure smart appliances, consumers will thus be able to benefit from using energy at times when it is cheaper. Shifting demand to match supply may be cheaper than building generation capacity to meet future demand peaks.
This is just the start. New innovative and disruptive business models and systems will be enabled, and will help deliver a cleaner, cheaper and more secure energy future. The smart meter roll-out is, as the Select Committee found, a vital infrastructure upgrade which supports our ambition to make Britain a world leader in energy innovation. Indeed, this is the first step on that journey—exchanging analogue meters for a digital model—and it will in itself deliver savings.
Alberto Costa (South Leicestershire) (Con)
I congratulate the Government on this Bill. Does my right hon. Friend agree that it is imperative that, in addition to having advertising from Smart Energy GB on the roll-out of these meters, small energy firms that are contacted by consumers, as I have done with my own, promptly respond to them on this matter?
Greg Clark
I am grateful to my hon. Friend for that, and he is absolutely right in what he says. If we want to have a fully smart grid, the more people that avail themselves of that the better. When members of the public share his enthusiasm, it is very important that they should be given the chance to have a smart meter.
Sir Edward Davey (Kingston and Surbiton) (LD)
Will the Secretary of State explain why the roll-out of the second set of smart metering equipment technical specifications—SMETS 2—has been so delayed? I understand, probably better than most Members, the frustration he will feel about the delays to the smart meter programme. Is not the concern that suppliers are going to fit lots of SMETS 1 meters, which will be a barrier to competition and reduce the benefits of the smart meter programme to consumers?
Greg Clark
I am grateful to the right hon. Gentleman for raising that concern. He is absolutely right that in moving towards a fully smart system we want full interoperability, which is what SMETS 2 achieves. It has been tested and will be rolled out from July next year. The key point is that those who have a SMETS 1 smart meter will be able to access the software upgrades that will provide that interoperability. That is an important aspect of the roll-out and I am pleased to confirm it to him.
Sir Edward Davey
I am grateful for that clarification, because it may put some minds to rest if they know that the software upgrades will be available. There is a danger that many suppliers, be they one of the big six or others, see the roll-out of as many SMETS 1 meters as possible as a way to stop competition and lock in their consumers. That should really worry everyone in the House. Has the Secretary of State weighed up the benefits of ensuring we have more competition through the roll-out of SMETS 2 meters against the obvious downside of delaying the 2020 deadline?
Greg Clark
Yes, I have. Again, I am grateful to the right hon. Gentleman for asking that question. It is essential that the upgrade is available so that the smart meters that are installed under the SMETS 1 standard will be operable under the SMETS 2 standard. That has been a key part of the development and testing for exactly the reason he mentioned.
Smart metering upgrades the interactivity of the energy system in general. One big advantage of it is that if the system is fully interactive, less unneeded generating capacity needs to be invested in, with consequent savings to consumers. Even in the initial operation, it is estimated that by 2020 consumers can make net savings on their household bills to the tune of £300 million. In addition to the bill savings, smart metering will deliver benefits to the energy industry and to the economy more widely. It seems to me to be essential that if we want to plan a prosperous future, building on our strengths, this country should be the place in the world that can best integrate renewable energy and battery storage—not least in electric vehicles—with the consumer. Smart metering is an important element of that.
Mr Jim Cunningham (Coventry South) (Lab)
Has the Secretary of State considered people in the poorer sections of society who might have difficulty paying?
Greg Clark
Yes, and it is important that all consumer groups should be able to access the benefits, including lower bills. That has been an important requirement, and the Bill addresses it by extending the necessary powers to ensure that we have the regulatory ability to insist that the roll-out goes to all consumers and is not restricted to the more affluent.
Sir Edward Davey
I am grateful for the Secretary of State’s answer to the hon. Member for Coventry South (Mr Cunningham). Is he trying to ensure that suppliers roll out smart meters to prepayment customers as soon as possible? The benefit of smart meters to those on low incomes who use prepayment is that some of the extra costs associated with prepayment go.
Greg Clark
The right hon. Gentleman is right: we especially want to extend smart meters to those on prepayment meters and those who might struggle to afford their energy bills, because the benefits of the savings are disproportionately better for them.
Amanda Milling (Cannock Chase) (Con)
Does my right hon. Friend agree that one of the biggest issues with the energy market is apathy on the part of consumers? We must try to get consumers to engage so that they understand their energy use and bills and can switch. Smart meters are critical to engaging the public.
Greg Clark
My hon. Friend is absolutely right. At the moment, an imbalance in information characterises the energy market. The suppliers know pretty well the consumption patterns of their customers, but those same data are not available to the customers to help them see whether they could make considerable savings either with another supplier or in a different type of tariff that might, for example, reward the use of appliances at off-peak times. It is a very important change.
Mims Davies (Eastleigh) (Con)
I note that the Bill is just the start in terms of innovation. However, a local college, a training provider for placing these meters, has raised this issue with me. It said that some energy companies have outsourced the placement work and the training and that the installation is not happening because the training courses are not sufficient. Do the energy companies have a question to answer when it comes to really helping consumers?
Greg Clark
My hon. Friend raises an important point. I would be very pleased to take up the particular concerns of her college. The energy companies do have an obligation to roll out smart meters. If they subcontract the work, they do not escape their responsibilities. Again, the purpose of the Bill is to extend the current regulatory powers through to the end of the roll-out so that we can ensure that the higher standards apply.
Alan Brown (Kilmarnock and Loudoun) (SNP)
I thank the Secretary of State for giving way one more time. On projected savings, consumer benefits are estimated in the Government’s cost-benefit analysis to be £5.24 billion. How much of that is based on consumers having to switch? In the same cost-benefit analysis, supplier benefits are estimated to be £8.25 billion. How will those supplier benefits be passed onto the consumer?
Greg Clark
The hon. Gentleman raises an important point. There are multiple benefits. About a third of the savings come from the possible reductions in the use of energy. Just over 40% comes from the supplier’s cost savings, which is a result of not having to read meters—that gets done automatically. We expect those savings to be passed onto consumers as savings in their bill. In the 21st century, it seems absurd that we should have to rely on someone physically coming to inspect, literally, a spinning metal wheel. That is decades out of date. To have such work done automatically provides important savings. Therefore, there are benefits to consumers and to the whole economy.
Sir Greg Knight (East Yorkshire) (Con)
Will my right hon. Friend confirm that, if a customer does not want to have a smart meter, they will not be forced to have one installed?
Greg Clark
I can certainly confirm that. There is no obligation on the customer whatsoever.
The roll-out is well under way. Some 7.7 million smart meters were installed by June 2017. The current rate of installation is around 350,000 a month, but that is increasing as energy suppliers continue to ramp up their delivery. As the right hon. Member for Kingston and Surbiton (Sir Edward Davey) mentioned, it is right that we should move on to the second generation of smart meters, the so-called SMETS 2 meters. One advantage of doing so is that the next generation of meters are between 20% and 30% less costly than SMETS 1 meters, thereby providing another good reason to upgrade.
In recognition of the importance of this upgrade and the value that it will bring to consumers, we are committed to seeing all homes and small businesses being offered a smart meter—but they are not compelled to have one—by the end of 2020.
Alan Brown
To help achieve that 2020 target, the install rate needs to go up from 350,000 a month to 1.25 million a month. How will that happen?
Greg Clark
There is a significant increase of the scale that the hon. Gentleman describes. Part of the reason for ensuring that we have these powers is so that the energy companies do not regard this as optional, and have to meet their obligations.
The Government are overseeing the process and that has enabled us to take steps to protect consumers. We have put in place a licensed central data and communications provider, the Data Communications Company. The information will not be held exclusively by the supplier. It is therefore available, with the consumer’s consent, to competitors. Through the DCC, energy companies and other authorised parties are able to collect energy data remotely and securely.
Let me take the House through the specifics of the Bill. Clause 1 extends by five years the Government’s powers to direct the roll-out of smart meters. Since the first legislation was introduced, the powers have lasted for five years at a time, which seems to be the right approach, rather than having powers in perpetuity. Therefore, it is consistent with our practice to come back to the House in order to renew those powers for five years.
Alberto Costa
I am, once again, grateful for the Minister’s generosity in giving way. I understand why the Government require the powers to be extended by another five years, but does the Minister agree that it is imperative that all energy companies, including the smaller ones that I mentioned earlier, give consumers information in a timely manner? The message plastered across the underground and in various papers is that consumers should contact energy suppliers, but from my own experience, those suppliers are not responding in a timely manner. What can the Minister say to assure me that energy companies will respond to consumers now, rather than in two years’ time?
Greg Clark
My hon. Friend again makes an excellent point. Companies are under an obligation to offer households a smart meter by the end of 2020, and these powers allow the Government and the regulator to hold them to their licence conditions in so doing. If he gives me the details of the particular supplier to which he refers, I would be happy to take up that case.
The powers are due to expire on 1 November 2018, so the Bill extends them for five years. An extension of the powers is necessary in order to ensure the successful roll-out by the end of 2020, and to maximise the benefits accruing to consumers during and after the end of the roll-out.
Clauses 2 to 10 introduce a special administration regime to ensure continuity of the smart meter continuation service currently provided by the DCC. Special administration regimes are common—in fact, typical—in network companies. They are primarily designed to guard against the DCC going insolvent due, for example, to cash-flow problems if one or more of its energy supplier customers were unable to pay its charges.
The DCC licensee is deliberately designed to have limited financial assets of its own to avoid the cost of holding large capital reserves, so it relies on timely and full payments from energy suppliers to meet its own contracted obligations to its subcontractors, which provide the communications network. If, for some reason—we regard this as being very unlikely—one or more of its larger customers did not make payments, there are provisions in the smart energy code to allow it to make emergency charges on other suppliers. If these emergency charges also went unpaid for some reason, there would be a theoretical risk that it could go into administration and cease service, so the special administration regime allows the Secretary of State—or Ofgem, with the Secretary of State’s approval—to apply for an administration order to be made in relation to the smart meter communication licensee. Such an order would direct that, while it is in force, the affairs, business and property of the company are to be managed by an administrator appointed by the court.
The aim of the special administration regime is to ensure that the functions of the smart meter communications licensee, under its relevant licences, are performed efficiently and economically, pending the company being rescued or its business being transferred to another company. In the unlikely event of the DCC’s insolvency, fundamental services may be disrupted. Therefore, it is prudent to have safeguards in place, as with other network operators, such that its continued operation is protected. This special administration regime is standard practice in the energy sector, and these powers are based on similar regimes that have been introduced—for example, for networks and suppliers.
The Bill allows the Government to continue to progress with the important goal for the national economy of delivering an energy system across the country that is smarter and more flexible.
Sir Edward Davey
I am grateful to the Secretary of State for giving way, and I know that he is on his peroration. One big policy issue is the interrelationship between the smart meter roll-out, with the 2020 deadline, and the energy price cap he has proposed. How does he see those linking together? Does he see the price cap going once all smart meters have been deployed?
Greg Clark
The draft Bill the Select Committee is going to scrutinise means that there would be a temporary price cap while the current uncompetitive conditions in the market continue. As we have discussed, one of the major advantages of the smart meter programme is that it corrects the imbalance of information between consumers and suppliers, and that is something Ofgem will want to take into account in deciding when to lift that price cap. So the connection with smart meters is very important.
The Bill is an important step in making sure we have one of the smartest, most flexible energy systems in the world, enabling us to take advantage of new technologies while at the same time delivering benefits for households and small businesses. I commend the Bill to the House.
Rebecca Long Bailey (Salford and Eccles) (Lab)
The Secretary of State has articulately outlined the provisions of the Bill, so I will not detain the House for too long on its detail. Essentially, the Bill has two purposes: first, to extend the powers the Government have to implement and direct the roll-out of smart meters from 2018 to 2023; and, secondly, to establish a special administration regime for the national smart meter communication and data service provider—the DCC—in the event of its insolvency. The Opposition are not opposed to those measures in principle and will support the Bill today, but we do have a number of concerns about some of its specific provisions and about the smart meter programme overall.
Clause 1 extends the powers of the Secretary of State in relation to smart metering from 1 November 2018 to 1 November 2023. As the explanatory notes state, this is
“so he has the ability to intervene where required to drive the timely completion of the rollout of smart meters by end 2020”.
Extending the time in which the Secretary of State can intervene to ensure timely completion to three years beyond the planned completion date is something of a paradox, but I would not be at all surprised if that was the true intention because, as of June this year, only 7.7 million smart meters had been installed at homes and businesses.
The Government are committed to the installation of an energy smart meter for all domestic and non-domestic customers by the end of 2020—that is 53 million gas and electricity meters at 30 million domestic and small and non-domestic properties. We are almost two years out from the deadline, but there are an awful lot of installations to do—millions, in fact. It is true that the pace of installation has increased in the last two years by over 288%, and that is fantastic, but as research by the Centre on Innovation and Energy Demand at the University of Sussex suggests, meeting the deadline would require 40,000 gas and electricity meters to be installed each day, even on present projections. However, as installation is voluntary, the roll-out thus far has arguably been hindered by poor public awareness, and we have heard comments from hon. Members about that already.
Many would also suggest that there is an obvious lack of consumer confidence in the possible benefits of smart meters. In fact, the Government’s public attitudes tracking survey recently found that 56% of a sample did not have smart meters installed, while a further 18% had never heard of them. I will pre-empt what the Minster might say in his response: the engagement body Smart Energy GB found that 97% of the population are aware of smart meters. If that is indeed true, despite the figures in the Government’s own tracker, why are not more people having smart meters installed?
Dr Caroline Johnson (Sleaford and North Hykeham) (Con)
Does the hon. Lady agree that of those people who have had smart meters installed, 80% welcome them and would recommend them strongly to a friend or family member?
Rebecca Long Bailey
The hon. Lady makes an interesting point. I am sure that those who have had the meters installed are perfectly happy with them. However, my point is that there does not seem to be sufficient public awareness. Given the scale of installations required, a big push from the Government and energy suppliers will be needed to achieve that objective.
Kate Green (Stretford and Urmston) (Lab)
One issue that has been raised by my constituents who are wary of the installation of smart meters is that they are unsure whether, if they change suppliers in the future, they would have to bear the cost of their smart meters being replaced by the new supplier. Does my hon. Friend agree that it would be useful to be able to give consumers very strong assurances on that point?
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I remind Members, to help them with their speeches, that after the current speech I will introduce an eight-minute limit.
Rebecca Long Bailey
My hon. Friend makes a fantastic point. Perhaps the Minister can confirm how the Government plan to expand public awareness about this. Beyond the availability and the benefits of smart meters, it is imperative to explain the benefits of the data they collect, as well as how consumers can access and use those data to bring their energy bills down.
We have already heard comments about data. I draw to the Minister’s attention the fact that Smart Consumer Alliance has highlighted to me that its research shows that
“several consumers in the UK have contacted their energy suppliers to securely interface to the data provided by the home area network functionality of their smart meter, but…in all cases this has been unsuccessful because energy suppliers often block connection to the meters, quoting technical difficulties and other issues”.
Those consumer requests were professionally assisted by academics and technology innovators in the UK with devices that are certified under the UK smart metering standard. As the Minister and the Secretary of State are aware, this data is very useful for research, enabling market competition through accurate tariff and supplier switching, intelligent heating systems, and consumer education and guidance in energy efficiency, as well as many future innovations in home energy management. However, despite the fact that consumers are struggling to access their own data, it is thought that these devices are being routinely used by the energy companies for their own data collection purposes.
On the design of the smart metering regulation and standards, as well as the justification for the cost of smart meters, the House is aware that consumer benefit was at the fore in discussions before implementing the roll-out. Indeed, at condition 49.4 of the energy supplier licence, there is the obligation to support, free of charge, requests for data. The amount of data collected by smart meters is enormous, and has a significant value for customers and those with whom they choose to share the data. It would therefore be encouraging to hear from the Minster what plans he has, in the light of the concerns I have raised, to ensure that consumers have unimpeded access to the data to which they are entitled.
I turn now to the second part of the Bill, on the special administration regime. Given the centrality of the DCC to the successful working of the smart meter system, it is clear that we need a plan in the event of its insolvency. I am therefore concerned by clause 7. As the explanatory notes summarise, the clause includes provision
“requiring the holder of the licence to raise the charges imposed on its customers or users so as to raise such amounts as may be determined by the Secretary of State and to pay the amounts raised to specified persons for the purpose of making good a shortfall in the property of a smart meter communication licensee available to meet the expenses of smart meter communication licensee administration.”
They go on to state:
“This will allow the costs of smart meter communication licensee administration to be recouped via the licence mechanism from the industry.”
The DCC is a wholly owned subsidiary of Capita plc, to which the task of providing all the communications and infrastructure for the operation of smart meters has been outsourced. However, it is not clear from the Bill or the explanatory notes why, in the event of this wholly owned subsidiary of Capita going into administration, customers and users, per se, should foot the bill, especially when they have already suffered the cost of the smart meter roll-out in their energy bills.
The Select Committee on Science and Technology estimated that the total consumer benefits of smart meters amount to more than £5 billion from energy saving and microgeneration. However, the benefits for suppliers, which include the big six energy companies and others, total £8 billion. Despite that, as my hon. Friend the Member for Southampton, Test (Dr Whitehead) has said to the Government, customers are estimated to pay somewhere between £130 and £200 on their bills to enable suppliers to recover the installation cost of a smart meter. In fact, when two of the big six energy companies announced price rises in February, they stated that a substantial element of the 10% increase resulted from the smart meter policy. The Government responded that they would monitor the extent to which costs were passed on to customers and intervene to make sure that customers saw the benefits.
When he sums up, will the Minister confirm what recent assessment he has made of the costs that consumers face for smart meter installation? Can he still provide evidence of a clear long-term average energy bill saving for smart meter consumers, despite the sum for installation cost recovery? What assessment has the Minister made of the possible costs involved in making good any shortfall in the property of a smart meter communication licensee that is available to meet the expenses of such a licencee’s administration? I appreciate that that is a hypothetical question and the answer is difficult to quantify, but if he has not assessed that or attempted to do so, will he confirm whether he has considered setting a limit on the cost that can be passed on to consumers? What safeguards will he put in place to protect consumers against an unfair increase in their energy bills as a result of administration expenses? Why do the costs seem to be borne by customers or users alone? Has he considered levying the recovery of such costs on any other entities that might benefit from smart meter data collection? If not, what is his rationale for not looking at those other entities?
The Minister will no doubt realise that there is invariably a risk that consumers who have smart meters installed could face an increase, rather than a reduction, in their energy bills. It would be helpful if he could provide clear assurances on that matter. Although an insolvency situation is extremely unlikely, if smart meter consumers have hanging over them the possibility that they will have to write a blank cheque for administration costs, many people will be deterred from participating in a smart roll-out.
Toby Perkins (Chesterfield) (Lab)
I congratulate my hon. Friend on her support for the Bill and the points that she has raised. A concern that has been raised with me is that a huge number of old-style meters are ending up in landfill. There is no need for that, because they still have value in many export markets. An enterprising company in my constituency, Meter Provida, has taken on the role of getting the old-style meters checked out and sold as exports. May I encourage my hon. Friend to put pressure on the Government during the passage of the Bill to consider enforcing compliance with the waste electrical and electronic equipment directives by companies that have old-style meters to ensure that more of them are reused?
Rebecca Long Bailey
My hon. Friend makes a valid point, and that is certainly something that the Opposition will take forward. It would be interesting if the Minister elaborated on the Secretary of State’s comments about the updating of SMETS 1. What will it entail, and when will it occur?
The Opposition have been clear about our concern that customers are paying for the roll-out. I fear that without adequate safeguards in the Bill, consumers may end up footing the bill for any mismanagement of the data collection regime resulting from insolvency. If that is the case, the Minister must understand the risk that this will be another example of consumer interests being shunted to one side in favour of others.
Only recently, the Government promised to knock £100 off the bills of 17 million households, but that promise is yet to be delivered on. Admittedly, following pressure, the Secretary of State came back with a legislative proposal a couple of weeks ago, but I am extremely concerned about media reports that surfaced at the weekend in which internal Government sources indicated that they might not implement the draft Bill at all. Indeed, we learned that the Government have allegedly already told energy investors that the Prime Minister’s draft Bill would be ditched if they felt that the big six power firms were doing enough to tackle high bills, and this approach has now also been confirmed by civil servants.
For the avoidance of doubt, will the Minister confirm in his summing up whether these assertions are true? If they are not, will he assure the House that no matter what pressure he, or indeed the Secretary of State, faces to shelve the energy price cap, the draft Domestic Gas and Electricity (Tariff Cap) Bill will be brought before this House and passed as urgently as possible?
Mark Pawsey (Rugby) (Con)
I welcome the Secretary of State’s speech introducing this Bill. He set out very clearly the benefits of the smart meter programme and what the Bill’s two main provisions will do. First, the Bill will extend the Secretary of State’s powers by five years, from 2018 to 2023. It is interesting that the legislation gives such powers in five-year batches to ensure that the powers are not unlimited. There would be plenty of objections from the Opposition if there were unlimited powers in the Bill, which takes us to 2023. It is entirely appropriate that it should be brought before us, because the very ambitious pace originally set has not been achieved, and the programme is running rather more slowly than we anticipated.
We also heard, secondly, about the introduction of the special administration regime for the body—the data communications company—managing the communication between the smart meters and the energy companies, as well as about the need for resources and facilities to provide protection and rescue given the rare possibility of financial failure. I was very pleased to hear the hon. Member for Salford and Eccles (Rebecca Long Bailey) say that the Opposition will support the Bill and that they welcome and value its measures.
I want to touch on the status of the data communications company, because the programme is running behind schedule and the company is involved in handling rather bigger sums than previously expected. The costs are now expected to run to £900 million, and the project has become more complex than originally anticipated. The energy companies are under pressure from the regulator to increase the rate of installation, which has led to more of the SMETS 1 meters—the first generation meters—being installed. It would be helpful if the Minister clarified when he sums up what will happen when we move to SMETS 2 meters. There is some concern that SMETS 1 meters may need to be replaced. I think the Secretary of State said that there would be an upgrade, but will the Minister talk the House through that process. I will come back to that concern later.
The cost of proofing the technology against cyber-attack has increased. This place has been affected by such an attack, so we all understand the importance of that. We will need to look at the DCC’s cost and revenue. The provisions relating to protection and rescue are very important. Will the Minister comment on the likelihood that those provisions will be needed?
This debate gives us all the opportunity to talk about the aims and objectives of installing smart meters. I am pleased that we have now upped the rate, with 370,000 now being installed per month. The principle of smart meters is fantastic and brilliant: the information about usage is sent to suppliers by the network that is being created. There are real benefits for the utility company. It already knows rates of usage, but this will tell it specifically where the demand is coming from, how much demand there is and at what times of day. All that will enable utility providers to predict demand better, which will in turn give us all the benefit of security of supply.
There are also real benefits for the consumer. By being informed about their energy usage, the consumer can decide to use energy when it is cheaper. They will have a greater awareness of their usage, and they will be able to manage their bills better and reduce their consumption. I am struck by the analogy with the computers we all find in our cars these days.
Our car’s mileage per gallon will vary according to the speed at which we drive on the motorway and how we drive—how much of a hurry we are in. It is possible to modify the mpg. I always find it interesting to note how I might be able to get an extra mile per gallon by modifying my behaviour. I see a real parallel between that and the usefulness of smart meters.
The other principal advantage I see is that of accurate billing. Many people pay for gas and electricity on the basis of what they estimate they may need, so in many instances they pay for more than they use. That is great, because it sometimes allows them to build up a credit and they do not have a debt to the energy provider, but as one person put it to me, that is not great for the family cash flow; so paying their bills on the basis of the amount of energy used rather than an estimate provides a real benefit.
The fourth advantage, which we have not yet seen but is a matter of concern, is that with smart meters, switching between suppliers ought to be easier because anyone looking to switch would have much more accurate data on which to compare suppliers’ tariffs. That should enable them to make a more informed decision. The technology within the meter should enable the switch to be made more easily. There is a real link here—the Secretary of State referred to it—between that ability and the need for some control and management of prices.
Matt Western (Warwick and Leamington) (Lab)
I have not done this before. There is a huge amount of sense in everything that the hon. Gentleman is describing, but I was surprised to hear—and maybe he would be—that more deprived households have not been prioritised for the introduction of smart meters. Given what the hon. Gentleman has been saying, it would be a real advantage to their household economy if they were prioritised. Would he welcome that?
Mark Pawsey
I thank my constituency neighbour for his remarks. Of course, the issue is the use of the second generation of meters—the SMETS 2 meters—and we need to get them into as many places with prepayment plans as possible, so that those households too can get the benefits of seeing when their electricity is cheapest and using their appliances when they get maximum advantage.
Amanda Milling
My hon. Friend mentioned switching. We need to actively encourage consumers to switch their energy providers to a much greater extent, so I am sure he will join me in welcoming the package of initiatives that are being taken. We talk about smart meters today; we have the energy switch guarantee as well. We should also be looking to make the process easier.
Mark Pawsey
I could not agree more. In many ways I regret the need for us to consider a price cap, because I believe the answer to the problem that we are trying to tackle is to make it easier for consumers to understand exactly how much energy they use and how much it would cost from another supplier and to make it possible for them to make an easy, effective switch.
Sir Edward Davey
In answer to the hon. Member for Warwick and Leamington (Matt Western), is not the real point that consumers on prepayment meters have to pay more than the rest of the population because of the cost of administering a prepayment meter and a move to a smart meter would remove that cost, so prepayment meter consumers are likely to benefit the most, and that aspect of the roll-out, which I tried to achieve as Secretary of State, should be accelerated?
Mark Pawsey
The right hon. Gentleman makes a superb case for getting smart meter roll-out moving as quickly as possible.
There are lots of reasons why we need to move on to SMETS 2 meters, but we have some problems with smart meters and SMETS 1. I had not come across those until this weekend, when I received an email from my constituents Mr and Mrs Lafferty, who are dual-fuel customers of First Utility. They were interested in the idea of a smart meter; they understood the benefits; and they arranged for an installation. In the first instance, that took two to three months, and regrettably the meter was installed in a location that was not particularly accessible to them, as elderly residents. Their daughter has to look at the meter. She also has to look at the meter because, just a few months after the installation of their smart meter, they decided to transfer to another provider, EDF, believing that there would be a better price. They were astonished to find, however, that their smart meter was not compatible. Their smart meter is now being used as a dumb meter, with their daughter having to visit their home to take readings. One concern is that such accounts discourage people from taking advantage of smart meters.
I put a message out on Facebook to my constituents to comment on the issue and, if I may, Madam Deputy Speaker, I would like to read one or two. One said that they
“had smart meter installed by one company. It worked fine, but then I changed company and it doesn’t work for the new company. Ridiculous that there isn’t a standard technology.”
The answer, of course, is that there will be, but we need to crack on with it. Another constituent said:
“good to see how much we were spending but it hasn’t changed the way we do things.”
That is something we need to get across. Another said:
“Not yet changed supplier, but I know when we or if we do, we will need to change the meter. The installer said they are working on a meter which would be easily compatible across all suppliers so wouldn’t need changing. So it might be worth waiting.”
We must not put people off in the short term, because of any issues that are happening right now.
Patricia Gibson (North Ayrshire and Arran) (SNP)
We in the Scottish National party support the roll-out of smart meters, but it is essential that maximising consumer and environmental protections lies at the heart of any strategy to do so.
It is empowering for consumers to have near real-time information on their energy consumption to help them to control and manage their energy use, and in turn save money and reduce emissions. If roll-out is effective and well managed, there are obvious benefits to consumers. Nearly eight in 10 people with a smart meter would recommend one to others, and the same number with a smart meter say they have taken steps to reduce their energy consumption. Those with an in-home display model in particular feel they have a much better idea of what they are spending on energy and check it regularly. If having new technology in their homes helps consumers feel that they can exercise better control over energy consumption and be better informed about their energy use, with greater control over their bills, then of course that must be welcomed.
In previous speeches, we have heard about switching suppliers. I would like to say, right at the outset, that switching suppliers has a limited effect. Research shows that people who switch tend to be those who are better off. They switch and they save money. However, there is not a sufficient impact on the lowest income households, which are in most danger of fuel poverty. They find it much more difficult to switch suppliers.
We often hear that smart meters are free to consumers. They are not. They are paid for through energy bills. Every household will, ultimately, pay for the new meter roll-out via their bills. It is important that consumers understand that having a smart meter is a choice. Trading Standards has expressed concern that data from citizens advice bureaux suggest that consumers are not being told that they can refuse a smart meter, if they so choose.
Toby Perkins
There is a really important point here about consumers from the lowest income households. Given that companies have different tariffs, why do the Government or the companies themselves not say, “We’ll stop you having the responsibility of deciding the best tariff for you. We have all the data. At the end of every quarter, we’ll look at your bill, tell you what would have been the best tariff and put you on it, so you always save the money without having to do all the work yourself”? Companies should have the information to be able to do that.
Patricia Gibson
What the hon. Gentleman says sounds eminently sensible. The problem is that the better off and most well-informed people are switching and saving. That is being subsidised by the people who are unable to switch and save because they do not feel up to the task. The poorest households are actually subsidising the most affluent households, which have the ability and the expertise to switch and save. That is a real issue that has to be addressed. Similarly, as mentioned before, those on prepayment meters—the poorest households in our communities—must have access to smart meters if they want them.
It is important, as part of this process, that the Government’s regulatory framework clearly establishes the rights and obligations of all aspects of smart metering design, development, installation and operation, as well as monitoring and reporting. Customers must be reassured, and continue to be reassured, that their data and security are robustly protected in the course of the smart meter roll-out. There is concerning evidence, however, that smart meters are being installed before the programme’s requirements as an internet-connected energy system have been fully determined. The UK Government must do everything in their power to protect consumers during the roll-out. There were disturbing reports last March in the Financial Times of GCHQ intervening in smart meter security, claiming to have discovered glaring loopholes in meter design, and causing some alarm. Such concerns must be fully addressed.
The plan to install smart meters in every home by 2020 must not leave consumers out of pocket. It must be asked whether the cost of the roll-out will be borne by all energy consumers. The successful operation of smart meters can also be a postcode lottery. In areas with a poor mobile signal, there is a real chance that smart meters will not work. If we are applauding the merits of smart meters, this has to be borne in mind, because digital inclusion matters.
Almost 100,000 fewer households were in fuel poverty in 2015 than in the previous year in Scotland, but there is still much more to be done. The Scottish Government have commissioned a review, due to be completed next year, of the definition of fuel poverty in order to inform a new fuel poverty strategy that will be followed up by a warm homes Bill. There has to be a focus on those in most need of help to heat their homes.
Sir Edward Davey
The last time the Scottish Government reviewed the definition of fuel poverty, they came up with a definition that I did not think was very good, whereas in England and Wales we reviewed it and came up with a policy that secured cross-party consensus. May I urge the hon. Lady to go back to Edinburgh and look at the fuel poverty definition we produced here in Westminster?
Patricia Gibson
As the right hon. Gentleman knows, when something is being done well, others should learn from it—I am a great advocate of that approach—and if something is being done well in Westminster, the Scottish Government have no difficulty learning from it. I only wish that that was reciprocal.
We need to be mindful of those most in need of help to heat their homes, and that must involve a joined-up approach, as a wide range of policy areas are encompassed by any attempt to tackle fuel poverty. Citizens Advice has stated that consumers in vulnerable situations could miss out on the potential benefits of the £11 billion smart meter roll-out, which they will be helping to fund through their energy bills. Such risks might relate directly to the installation and/or the ability of these households to benefit from the smart meter system.
Generations of British consumers have been locked into a “risky and expensive” project by the UK’s subsidy deal for a new nuclear power station at Hinkley Point in Somerset. That is not my assessment, but the assessment of the National Audit Office. Under the terms of the 35-year contract, EDF is guaranteed a price of £92.50 per MWh it generates—twice the wholesale price. The subsidy will be paid through energy bills that the Government’s own figures estimate will translate into a £10 to £15 chunk on the average household bill by 2030.
I do not want to revisit last week’s debate, but I should mention at this juncture that the National Audit Office has also pointed out, worryingly, that withdrawal from Euratom
“might be interpreted as a change of law”,
resulting in an adjustment of the £92.50 price promised to EDF, or might even trigger a one-off payment to EDF through a compensation clause in the contract. I shall leave that for the Minister to consider in his own time, but the fact is that EDF has been guaranteed three times today’s price for electricity for 35 years.
Former Conservative Energy Secretary Lord Howell—among many others—has criticised the Hinklev deal, calling it
“one of the worst deals ever”
for British consumers and industry, and has protested against
“endless government guarantees of risk-free returns to the investors”.—[Official Report, House of Lords, 22 October 2015; Vol. 765, c. 789.]
We now know that when Hinkley has been completed, several renewable alternatives will be cheaper. When it comes to helping consumers to keep their bills down, it is hard to see how the white elephant that is Hinkley will do so. Perhaps, for that reason, it is easy to understand why I am so concerned about the fact that consumer protection has not always necessarily been at the heart of the Government’s thinking. The price cap is, of course, welcome, but there is still a huge subsidy from the taxpayer for the energy from Hinkley Point. It seems that we are giving with one hand and taking with the other.
Every household needs and deserves a safe, affordable energy supply. The Government strategy must be clear, and what is best for consumers must lie at the heart of the entire process. By contrast, in Scotland minimum energy efficiency standards will be developed and announced in the private rented sector, with consultations on how owner-occupiers can improve the energy efficiency of their homes with financial incentives. Ultimately, the Bill must be about empowering consumers and delivering better, smarter and cheaper ways of heating our homes. Smart meters are part of that, but they must deliver for all, especially our vulnerable consumers, and deliver in a way that enables data to be secure and protected. The environmental benefits are, of course, also important.
We support the Bill, but, as I have said to the Minister, we have reservations. We urge the Government to ensure that the important elements to which I have referred lie at the heart of the legislation.
Antoinette Sandbach (Eddisbury) (Con)
I support the Bill, because it will help to ensure that the Government’s roll-out of smart meters achieves its aims. It is an important initiative, allowing consumers to understand their energy consumption better and reduce it accordingly.
Alongside the positive ambitions of the smart meter programme, I urge the Government to push for an agenda of improving energy efficiency, as that is vital to reducing bills and fuel poverty. Smart meters will help to equip us for the future, but we must think about a comprehensive package of measures to reduce consumption. The information and data from smart meters could be used to measure the efficiency of, for example, warm home programmes. Where energy efficiency measures have been installed, the smart meters will effectively register the drop in consumption, which strikes me as a potential additional benefit of the smart meter programme.
I have just had a smart meter installed at home, and it has given me plenty of information, but as we do not currently have half-hourly settlement, there is no incentive for me to set my dishwasher three hours later. Like many other consumers, I have a delay programme on my washing machine. At present, there is no incentive for consumers to make use of the potential saving which would reduce demand on the grid and lower their electricity bills. It would make no difference to me, but at the moment, as a consumer, I am not incentivised.
Smart meters are of huge benefit to consumers and the energy companies, because they allow demand-side management—a technical term, which is rather dry. If it is possible to save 10p or 20p a couple of times a week by delaying starting the washing machine or dishwasher, those amounts start to add up and have a real impact on consumer bills. That is why the roll-out of the programme is so interesting: it has huge potential for the future.
Caroline Flint (Don Valley) (Lab)
The hon. Lady makes a good point about the use of technology, but does she also accept that some of the poorest families in our communities cannot afford to buy the white goods that are at the cutting-edge of this technology, and we need to address that problem as well?
Antoinette Sandbach
I do accept that, although I know there are some very good companies—including one not too far away from me—that recycle white goods, allowing people who are replacing their dishwashers and washing machines to give them to a charity that then sells them on at very low cost. Moreover, most machines now have an A or A-plus rating, and even quite good value machines are quite energy efficient. I think this will therefore become a consideration when people are considering replacing their white goods. I accept that that will involve a higher up-front cost for more vulnerable households, but it will help them make more informed choices about where they can save money in the long term, and of course those on benefits who qualify for the warm home discount or scheme and for greater efficiency measures will be saving on their electricity bills, and they can set aside the money saved and hopefully in due course therefore be able to replace their machines in an energy-efficient way.
There is a responsibility on consumers to be conscious of energy use and to make the most of the benefits of smart meters, but we must also combine the roll-out with an effective campaign raising awareness of the need for responsible and efficient energy use. I acknowledge the work of Smart Energy GB in this respect, but it clearly must do more. It needs to inform consumers further about the benefits of this programme and reach further into homes. I see lots of adverts on the TV, but am uncertain whether they really do explain the benefits to consumers and how they can save on their bills.
This measure not only improves energy security, but also contributes towards meeting our international decarbonisation obligations. The smart meter roll-out has the potential to address the energy trilemma, but concerted action by consumers and, indeed, suppliers is required in order to maximise the benefits.
We must think on a broader scale if we are to address the three issues I have just mentioned. That is why improving energy efficiency, in conjunction with the smart meter programme, is so important. I have asked the Chancellor to consider having a dedicated infrastructure fund and to incentivise energy efficiency measures in the upcoming Budget, because of the benefits that can be leveraged in conjunction with the smart meter roll-out.
Various concerns need to be addressed, and reassurances need to be provided by the Government on some issues relating to the provision of smart meters. The hon. Member for North Ayrshire and Arran (Patricia Gibson) pointed out the concerns around data; it is important to reassure consumers on that, and that they understand the benefits that data will bring in terms of reducing their bills.
There is also the issue around the 16-bit encryption code for smart meters. EDF and other energy companies have indicated that that smart meter has not yet been developed, but it could have very progressive consequences in terms of protecting data and ensuring there is good interaction to allow easy switching between all the energy companies. One of the concerns about the current roll-out of SMETS 1 is the fact that it does not allow for switching; the consumer is given the information about their energy consumption, but it is a shame that there is this lack of ability to smart-switch. I urge the Government to put a rocket under the energy companies, to make sure they roll out the second generation of meters as soon as possible.
This exciting development by the Government has huge potential benefits, particularly for consumers who fall into the vulnerable category, for whom it could be a complete game changer. I know that some of the newer energy companies, such as OVO, which are particularly active in the pre-payment meter market, are rolling out smart meters. This process is therefore having an impact. I support the Government’s aims, but it is clear that some issues will need to be ironed out in Committee if we are to provide the maximum benefits to consumers, as the Bill is designed to do.
Caroline Flint (Don Valley) (Lab)
It is quite clear from the speeches of the hon. Member for Eddisbury (Antoinette Sandbach) and others who have spoken that we all agree that being able to end estimated bills is a good goal to achieve. In fact, an EU directive in 2006 stated that getting rid of estimated bills was the way to go. In 2009, European Union guidance indicated that it was looking to member states to roll out intelligent metering systems to 80% of consumers by 2020. That related just to electricity; no deadline was given for gas. The interesting aspect of all this is that no other European Union member state apart from the UK decided to go through the distribution network operators rather than through the retail suppliers. I think that that was a mistake on our part.
We have gone for the 2020 target and stated that it should be for 100%, but my worry is that across Governments, including the last Labour Government and the coalition, the execution of this programme has been badly managed and consumers have always been given the lowest priority when it comes to effective practical project management of this important scheme. There is now a danger of that happening under the Conservative Government. We have heard that the 2020 target is unlikely to be met, which is probably why clause 1 of the Bill extends the power to amend licensing conditions from 1 November 2018 to 1 November 2023. In my view, we should have stood back and made a choice about who should be involved in the implementation of this service, rather than having 10 different companies competing to fit smart meters in any one street. I think we would have been better off going down the network operators route, rather than the one that has been chosen.
We know that the cost of this programme, which is being paid for entirely by household bills, is £11 billion and rising. Indeed, as ITV and the Big Deal campaign highlighted, the estimated cost has risen by over £1 billion in the past year alone. The reasons for this involve cross-Government departmental incompetence. They include underestimating the number of properties requiring one meter, not two, and the number of homes that require two visits because they are not dual fuel customers, as well as underestimating by about 10% the number of properties that will require a second visit because the smart meter does not communicate properly.
I have already had individuals telling me that, having had their smart meter fitted, they might end up with a dumb meter if they choose to switch. They are coming to me and saying, “Caroline, what is going on here?” Everything in this debate on energy always gets laid at the door of the consumer. They are told, “It’s your fault for not switching enough. It’s your fault for not acknowledging the adverts on smart meters and getting one fitted.” When are we going to ensure that the energy companies take responsibility for this, and when are we going to ensure that the Government take responsibility for acting on behalf of consumers? All this is adding to the cost burdens on consumers through no fault of their own. When are the Government going to cap the cost to the consumer of this programme? When it tops £12 billion, £13 billion, or £15 billion? This is something that the Government should look at seriously.
It has become clear that there are problems with the first generation of smart meters because they use mobile networks to forward the data from the household, and we do not yet know how many will fail to operate if customers exercise their right to switch supplier. After all the time and cost involved in installing them, many may well become dumb meters once more when moved to a new supplier, which would be unacceptable. This revelation has led to the installation of a new data network, managed by the Data Communications Company, which went live in November 2016, but the new meters, which use the new data network, will not be available until November 2018. The Government required the DCC to produce a delivery plan to rectify the situation. The plan, which was announced last week, will ensure that all first-generation smart meters will be fully functional, but that process will not be completed until July 2019—another cost borne by the taxpayer for mistakes made by the industry.
The House of Commons Library reports a Government claim that the net benefits up to 2030 are an estimated £5.8 billion to be shared between consumers, suppliers and networks, but that estimation has already been downgraded. However, if consumers were to gain all the benefits, that would mean just a £19 a year saving on bills for a decade. To gain even that modest saving from this expensive programme, energy suppliers would have to pass on all their savings to consumers, but I have not heard that from the energy companies. The truth is that the benefits for energy companies’ bottom lines are obvious: no more meter reading, and fewer staff in customer service centres fielding enquires from angry customers about delayed switching or inaccurate bills. As I asked at the Energy UK conference last week, will the savings be invested into better customer services or just into greater profits?
So far, the benefits of smart meters appear to be stacked in favour of the suppliers unless we make huge assumptions about smart meters boosting switching. One benefit to the networks would be if suppliers provided incentives for consumers to shift their energy usage. A past example is Economy 7, which encouraged people to heat their water overnight at lower unit costs, and that principle could be extended with smart metering. Given what we know, I am sure that consumer groups will be concerned if smart meters lead to proliferation of time-of-use tariffs, which enable companies to charge higher unit costs at peak time—perhaps above any cap imposed by Government.
When smart meters were introduced by the Government of Ontario, they tried to manipulate demand at key times of day and did so by inflating costs at peak times of use. The result was not a shift in demand to off-peak hours and a reduction in energy bills; the pattern of demand barely moved, so consumers simply ended up paying more for the energy they received. We should also be mindful of the concerns of the fire service and the Fire Brigades Union about people putting their washing machines and dishwashers on overnight, because if something malfunctions when people are asleep in their beds, that presents the greatest fire risk.
I do not want to see UK consumers’ energy bills rise or the energy price cap circumvented because consumers have opted into a complicated tariff that appears to offer savings they cannot fully work out. I had hoped to amend the Bill to include a price cap, because this is about customers saving on their bills, but I hope the Government will ensure that new time-of-use tariffs, aided by smart meter monitoring, will not lead to the energy price cap being circumvented by an industry that, let us face it, has run rings around the Government for seven years and has not acted in consumers’ best interests.
Bill Grant (Ayr, Carrick and Cumnock) (Con)
I welcome the Bill’s Second Reading. Installing some 53 million smart meters in some 30 million domestic and small business premises, with an anticipated completion date of 2020, is an ambitious programme and, as the right hon. Member for Don Valley (Caroline Flint) said, companies clearly need to up their game and increase the installation rate to achieve the target. On a more positive note, there is an 80% satisfaction rating for the 7 million or so SMETS 1 meters that have been installed, but that rate also needs to be improved.
The harnessing of new and improved technologies will allow energy customers to be made aware in real time of their energy consumption and its cost, which is equally as important. Smart meters will also transform the experience of prepayment customers, which has to be welcomed. Somebody said earlier that prepayment customers could be prioritised to take them out of receiving excessive bills, and if that is possible through the installation process, I would welcome it. Smart meters will benefit both consumers and suppliers by allowing customers to budget better for energy bills, and enabling suppliers to avoid estimated bills and to provide accurate billing without a premises visit.
Switching suppliers should, and I believe will, be made easier, which will benefit the consumer. There are issues, however. Energy suppliers need to harmonise that transition to avoid any confusion with smart metering.
Recent research by British Gas involving some 200,000 customers using SMETS 1 meters—the older technology—has been positive in showing an energy reduction of some 4%, and eight out of 10 users would recommend smart meters. As the hon. Member for Stretford and Urmston (Kate Green) said, some people are wary of smart meters, and it would be good if we could allay that fear. I hope the public will come with us on this ambitious programme. The roll-out of SMETS 2 meters will benefit consumers, suppliers, the distribution network and the United Kingdom as a whole. I am delighted to support the Bill.
Steve McCabe (Birmingham, Selly Oak) (Lab)
I do not argue with plans for a special administration regime in the event of a failure of the DCC, but I have a number of questions about the programme’s roll-out, extension, monitoring and costs. The current smart meter programme is at stage 2, alternatively referred to as the main roll-out, and that is scheduled to end in 2020.
As we have heard, the vast majority of energy companies are still installing the earlier generation of smart meters rather than the more efficient, cheaper and longer-lasting second generation. The Government have announced that, as of July 2018, SMETS 1 will no longer count towards the 2020 target. As that phase was due to be completed in 2016, what are the reasons for allowing the installation of those less efficient meters until 2018? Has the Minister received any representations from energy companies urging it and, if so, what reasons have they given?
Lord Bourne told the Energy and Climate Change Committee that there were 2 million smart meters in store. Could that have anything to do with the decision? If so, is there a risk that the Minister might be accused of massaging the figures with what is essentially an inferior meter?
I know from information supplied in answer to parliamentary questions that by December 2016 some 330,000 smart meters were operating in dumb mode—not operating as smart meters—and that by March 2017, that figure had risen to 460,000, involving a cost of between £30 million and £50 million. Who is responsible for keeping tabs on the costs of this programme?
I asked in a parliamentary question how much had been spent on the installation of SMETS 1 meters to date, and the answer was
“the Government does not hold data on expenditure on smart meter installations”.
EDF Energy has also questioned the extension proposed in the Bill and argues that
“if these powers are to be extended a clearer rationale should be provided for the need, and length, of any extension.”
The Minister will be aware that the Energy and Climate Change Committee raised questions about the 2020 target, and he will know that both the Institute of Directors and some in the industry have suggested that the purpose of the extension might be to give the Government wriggle room.
The Minister will also be aware that, in May 2015, the Energy and Climate Change Committee warned that problems with smart meters are
“symptomatic of a national programme that the Government has left largely to suppliers and failed to drive forward effectively.”
The Committee also warned that, without significant changes,
“it could prove to be a costly failure.”
Part of the justification for this programme is that it should mean that consumers benefit because they are able to shop around for the best deals, but if a SMETS 1 meter can no longer function as a smart meter when a customer switches, is that not a barrier to switching rather than an encouragement? As this is a voluntary programme, would someone not be well advised to wait until they are offered a SMETS 2 meter, or indeed to demand one? MoneySavingExpert.com, the UK’s biggest consumer website, is advising its readers to do just that.
As we have heard, the Government’s cost-benefit analysis estimates that by 2030 smart meters will have delivered £5.8 billion of net benefits. Those benefits, which are to energy suppliers, networks and consumers, are offset by a cost of £11 billion paid for by consumers. According to answers to parliamentary questions I submitted, the net benefit was reduced by a further £1.5 billion between 2014 and 2016. Can the Minister explain that reduction? Although the Government have said in answer to a parliamentary question that there is no link between this reduction and the issue of the interoperability of SMETS 1 meters, they also say that the 2016 cost-benefit analysis has already made allowance for the plan to enrol and adopt SEMTS 1 into the DCC. I understand that the cost of the DCC has already risen by a further half a billion pounds since it was first proposed. Who is responsible for monitoring and containing these costs?
In September 2016, the House of Commons Science and Technology Committee suggested that the essential aims of the smart meter programme are likely to fail without
“a programme of user engagement before, during and after installation.”
It is becoming clear that there is a lack of consumer trust and confidence in, and understanding of, the smart meter roll-out. As we have heard, the Department for Business, Energy and Industrial Strategy’s most recent public attitudes tracker found that people were less than convinced about smart meters, and a recent article in The Daily Telegraph claimed that only one in five consumers is accepting the offer of a smart meter. I know the Minister is eager to promote customer satisfaction, but without a renewed campaign to increase public awareness and improve perceptions of smart meters, there must be a concern that the benefits will not be realised.
I also want to ask about evidence that has emerged about the behaviour of energy suppliers and those they engage to promote their plans. They are required to take reasonable steps to offer smart meters, so why are people receiving cold calls claiming that accepting one is a legal requirement? I understand that the Minister might have already referred this to Ofgem, but can he confirm that that is the case? If so, will he indicate when we might expect to hear some response? There are also some safety concerns, as highlighted by—
Caroline Flint
On that last point about what happens when our constituents hit those sort of buffers—when they are faced with inaccurate information—they say to me that they just do not know who to approach to complain about it. That is a fundamental weakness in the system—where should people go?
Steve McCabe
I absolutely agree. I understand that there is a code of practice, but who is making sure that it is being enforced?
I understand that there are also some question marks about the safety of the installations, as was highlighted in a BBC “Watchdog” programme, which showed that some gas and electricity meters have led to safety issues in homes. So what I really want to ask the Minister is: what checks are carried out on the behaviour of energy suppliers to ensure that they are complying with the smart metering installation code of practice? As my right hon. Friend asks, what redress do the public have when they are clearly being misled by people who are supposed to be giving them the best possible information?
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
As my hon. Friend the Member for North Ayrshire and Arran (Patricia Gibson) pointed out earlier, the SNP welcomes the progress on smart meters. The Scottish Government have set out developments for the roll-out in their Scottish energy strategy, which will obviously encourage uptake.
As we have heard from many Members, the benefits of smart metering technology are more accurate bills, more convenience and better energy. The technology can enable customers to better manage their energy, so consumers will be able to get a better deal, and could help consumers with more competitive tariffs. There are, though, serious concerns that must be dealt with before we can welcome everything in the Bill or, indeed, the whole roll-out of smart meters.
The first concern is on data and privacy. As we heard from my hon. Friend the Member for North Ayrshire and Arran, GCHQ did some work on the vulnerability of smart meters and found “glaring loopholes” that would allow access to meters. There is not only the potential for the abuse of customer information, but a security concern. If smart meters can be accessed in that way, it is potentially dangerous for national security. It is incumbent on the Government to ensure that proper controls are in place to make sure that that cannot happen.
It is important that consumers know that their data will be safe. I urge the Government to look into measures that allow the consumer to have more control over and ownership of their own data. They should have the right to look after their own information. There are clearly issues of connectivity and reliability, particularly with respect to customers’ concerns about whether units will work when they switch energy suppliers.
Stephen Kerr (Stirling) (Con)
Does the hon. Gentleman agree that the issues with the first generation of smart meters could easily give rise to frustration among consumers? They are encouraged to monitor their energy usage and costs and to shop around, but when they do shop around, they discover that their smart meter is no more and has deceased.
Drew Hendry
The hon. Gentleman makes a pertinent point. The Government need to put the consumer confidence issue front and centre and deal with it.
We must consider the costs and the potential increase in bills to pay for those costs. The right hon. Member for Don Valley (Caroline Flint) mentioned the fact that the consumer is not necessarily put first in the process. Surely, it would be appropriate for the outcome of a cheaper bill—a better deal for the consumer—to be put right at the heart of the delivery of the smart meter programme. I am not convinced that it is currently, so I suggest the Minister come back with some reassurances on how it will be.
With respect to the serious problems with consumers’ bills, the smart meter roll-out does not deliver on some of the big elephants in the room. My hon. Friend the Member for North Ayrshire and Arran mentioned Hinkley Point, one of the biggest white elephants around. The cost-benefits will be negated by the costs of Hinkley and the strike price that has been agreed, which nearly doubles the cost to consumers.
Smart metering does not tackle other issues for consumers in the different parts of the nations of the UK. For example, in my constituency and others in the highlands, we still have the inequity of consumers paying up to 6p more per unit than consumers in other parts of the UK. That cannot be right. When the Minister looks into measures to reduce costs for people in their homes, I urge him to consider some of the more pressing issues that are adding to fuel poverty.
There is, perhaps, one issue that the Minister could consider in taking forward smart meters, particularly when we get to the next generation of smart meters. We have talked a lot about the ability to switch tariffs and to monitor how much is being spent, but how easy would it be to allow consumers the ability to switch suppliers at the touch of a button in the next generation of smart meters? That is within the gift of the technology. Why is it not within the scope of the measures that we are taking forward?
I will not take up the full time that is available to me. I will just finish with a few questions. Will the Minister come back and state clearly, today and in future meetings as the roll-out goes forward, what will be done in practical terms to ensure that vulnerable people will not miss out in the roll-out of the smart meters programme? When will we see details on the next generation of meters, and will the Government consider those payment and switching options that I mentioned? When will we see the detailed roll-out of the strategy to understand how everyone will be included in this by 2020?
Alan Brown (Kilmarnock and Loudoun) (SNP)
I start with a slight confession: I sometimes wonder whether I am easily confused. I ask that because I have been looking at the information that the Government have put out in the briefings associated with this Bill. I have to ask myself, “Are the Government easily confused, or are the Government trying to confuse us?” I want to highlight some of the issues that I have picked up.
First, it is claimed that the extension of the Secretary of State’s powers to intervene until 2023 does not extend the actual period of the smart meter roll-out beyond the 2020 target date. The Government claim that they are on target to hit their deadline, but analysis shows that 53 million smart meters need to be installed but that only 7.7 million meters have been installed since 2011. That leaves 45 million smart meters to be installed in just a three-year period.
Stephen Kerr
Is there not an upside to this? The meters that have been installed so far have fairly limited functionality and interoperability. The upside is that the second generation of meters, which will be fully functional, will allow the Government to put their foot to the floor and move ahead with these meters.
Alan Brown
I understand the hon. Gentleman’s point, and I thank him for it. It is a bit like saying that the long-drawn-out introduction of universal credit is good, when the roll-out was a shambles. It is not enough to say, well, this roll-out is a shambles but that is good because better technology is coming further down the line.
Steve McCabe
Surely, if the hon. Member for Stirling (Stephen Kerr) was right in his assertion, he was making a perfect argument for not installing any more of these inferior meters.
Alan Brown
I thank the hon. Gentleman for his point. I know that that was alluded to in the previous intervention. Yes, if there is better technology, it makes sense to work towards installing that better functionality. There is another consideration when it comes to extending the deadline. If we are going to be honest about things, extending the deadline will actually make the installation process much more efficient. How much will it cost to ramp up and supply the additional labour that is needed to go from 350,000 meters a month to 1.25 million meters a month? It will take extra labour, extra training, a massive recruitment exercise, and then, lo and behold, all these people are out of a job because the installation period has gone by. There is actually some merit in considering doing this over a longer period, as it could work better for consumers in the long run.
Douglas Ross (Moray) (Con)
Just while we are still on installation, does the hon. Gentleman agree that the three big suppliers in Scotland—SSE, Scottish Gas and Scottish Power—seem to be focusing much of their work on the urban areas rather than on the more rural and remote areas, where fuel poverty is a bigger issue? Does he agree that the roll-out should be equidistant across the country, and that that is something we could achieve in Scotland?
Alan Brown
I thank the hon. Gentleman for that intervention. I agree with his point. There are also other logistical installation problems, which tie in with concern about how practical this 2020 deadline is. For example, at the moment, many properties in Scotland have gas meters installed in their external walls. Right now, smart meters cannot be installed in external walls. Last week, my office manager agreed to get a smart meter installed. Someone from the company came out and said, “I can’t actually give you a gas meter.”
Stephen Kerr
The other issue is connectivity. There is not the broadband or mobile telephony coverage that these rural areas need to sustain the functionality of the meters.
Alan Brown
I agree. There is an issue with connectivity, and a problem with gas meters on external walls. Flats and tenements quite often have banks of meters installed in communal areas, and there is not yet a solution for the installation of smart meters in those cases. Frankly, the 2020 deadline is dead in the water.
As I said, the consumer pays for any increase in labour costs and recruitment to try to hit a deadline, so that is an additional cost that eats into savings and is probably not yet projected. I am a wee bit unsure about the Government’s estimate of the financial benefits of the smart meter roll-out. I am not saying that the roll-out is not a good thing, but I do question some of the figures attributed to it. The only guarantee that consumers have is that they will have to pay for the £11 billion installation costs. As we have already heard, those costs are increasing.
There is an estimated direct consumption saving of £5.3 billion, which is only half the installation cost. There is also an assumption about long-term behaviour—that customers will continue to operate a reduced energy usage. I have a concern about human behaviour. It may be the natural instinct of many customers to modify their behaviour and turn down their electricity usage when they get smart meters, but bad habits may creep in over a long period and the savings might not be realised at the same level.
There are other estimated savings in the Government’s cost-benefit analysis that are, frankly, quite spurious. The Government estimate £8 billion of supplier benefits, but there is absolutely no guarantee that the £8 billion that suppliers are predicted to save will be passed on to consumers. The Secretary of State intervened earlier to suggest that the market will dictate that these savings will rightly be passed on to consumers, but I draw the Minister’s attention to the fact that market failure is the whole reason that we agree on energy price caps. There is no way that we can guarantee that future savings for suppliers will be passed on to consumers.
Other spurious savings estimates include carbon-related benefits of £1.3 billion and £98 million in air quality savings. Now, reducing carbon emissions is a good thing, but I question how we can quantify those reductions as savings that will go direct to the consumer. The Government estimate savings for each household of £11 per annum by 2020 and £47 per annum by 2030, and £16 billion of savings were estimated overall. However, as my colleagues have touched on, the bottom line is that these estimated savings of £16 million are completely dwarfed by the £30 billion project that is called Hinkley Point C. That wipes out any projected savings from this programme.
Other hon. Members have mentioned that all consumers are paying for this programme, so surely the fuel poor and prepayment customers should be targeted first and given assistance. We should ensure that these vulnerable customers get the smart meters they deserve. Smart meters are supposed to end estimated billing, but it is acknowledged in the Government’s own factsheet that accompanied some briefings that if somebody with a first generation meter changes supplier, it is quite possible that they will lose the functionality of the smart meter. Even if they retain some functionality, they will end up back with estimated meter readings. That is counter- productive and the opposite of what the smart meter roll-out is supposed to achieve.
It was said that the second generation roll-out will start in July 2018. Well, we need the Minister to confirm how certain that is. Will the energy suppliers be forced to move on to the second generation meters, or will they be able to use up the backlog of 2 million first generation meters or whatever the number is? What if the initial companies are doing cheap deals on the first generation meters to get them out the door? Are we still going to be stuck with them?
Matt Western
I have spoken to a major energy supplier in my constituency, and it is clear that suppliers are seeking clarity from the Government on not only the timescale in which they are supposed to install these meters but what are deemed to be all reasonable attempts to get them installed. So, overall, there seems to be a lack of clarity, even for the suppliers.
Alan Brown
Yes, I agree, and I hope we will get more clarity when the Minister sums up.
I agree that properly functioning smart meters can bring consumer benefits, but it is clear that they are not a silver bullet in reducing bills for energy users. To properly reduce costs, the Government need to look at their wider strategy. Nuclear commitments need to be scrapped. All renewables need to be able to bid in future contract for difference auctions. Much more also needs to be done to manage the smart meter process, and I look for confirmation on that when the Minister sums up. At the moment, the Bill will not achieve that, but it will extend the Government’s powers, and I hope we will hear how those will be used to better implement the roll-out of smart meters.
Finally, the Secretary of State mentioned the smart grid and the use of smart meters for demand management. If we are going to get to that, the future upgrades need to be much more efficient, and I look forward to that happening in due course.
Dr Alan Whitehead (Southampton, Test) (Lab)
We have had a very good debate this afternoon, with informed and engaged contributions from hon. Members on both sides of the House on a wide range of issues relating to smart meter roll-out and, in some instances, going a little beyond that. However, the contributions have all been relevant to a debate about a Bill with some very specific and relatively narrow elements.
Two of the clauses are very specific. One relates to the extension of the termination period during which the Secretary of State has powers over activities connected to smart meters from an end date in 2018 to an end date in 2023. The second addresses the lack in legislation of a smart meter communication and licensing administration regime by establishing one.
If we look very narrowly at the Bill, we might ask two important questions: why did the Government decide in 2014 that there should be a 2018 termination date for Government control over the smart meter roll-out, and why is that date now being extended to 2023? Is it being extended because, as hon. Members have said, the Government do not think the smart meter roll-out will in fact be completed in 2020, or are there other reasons for the extension? We might ask why, if there is a real risk of the roll-out being delayed by the Government’s inability hitherto to wrestle the operation of the DCC from possible paralysis—should it, or presumably the company to which it has been outsourced and of which it is now a wholly owned subsidiary, go bust, or should payments not come in to that company—these operations have apparently been conducted with no such safeguard written into legislation for almost four years since the establishment of the DCC in 2014.
Both questions, unless they have particularly good answers attached to them, demonstrate a certain, shall we say, laxity in the Government’s approach to the oversight of the roll-out of smart meters, and might prompt further questions: what else is possibly in the woodwork that may be impeding the progress of the smart meter roll-out to a successful conclusion, and are there further things we might do to ensure that the process works well in moving towards that goal?
Hon. Members have raised a number of those possible issues this afternoon. In an intervention, my hon. Friend the Member for Chesterfield (Toby Perkins) talked about dumb meters being replaced by smart meters and about what would happen to them. The hon. Member for Eddisbury (Antoinette Sandbach), in a very thoughtful contribution, raised the issue of what we should do about energy efficiency in conjunction with smart meters, and talked about how those two issues might go hand in hand. My right hon. Friend the Member for Doncaster North—
Dr Whitehead
I am very sorry—it’s Don Valley now, isn’t it?
My right hon. Friend talked about the continuing imbalance of benefit in the roll-out of smart meters, with the benefit appearing to be accruing to energy companies, as opposed to customers. For our part, we support the idea of introducing smart meters across the country to replace the dumb meter system that serves the customer very badly and has historically done so, and is certainly not fit for purpose for the requirements of the different ways of supplying, using and measuring power that are coming our way with the energy revolution that is upon us.
The gain not only to customers but to our energy systems as a whole of having collectively installed, sufficient smart meters across the country to bring in new ways of measuring and predicting use of associating smart meters with smarter grids, thereby saving enormous amounts of further future expenditure in grid strengthening and capacity additions—all to the benefit of a smarter, more resilient, more efficient energy system for the future—suggests that supporting smart meters is right thing to do.
But then we come to the process by which smart meters are rolled out, and there is much to raise an eyebrow about. First, there is the Government’s original choice of who should undertake the roll-out—the energy companies: a model not adopted by any other country managing a smart meter roll-out programme, as my right hon. Friend the Member for Don Valley (Caroline Flint) pointed out. Secondly, there is, as a number of hon. Members have mentioned, the high overall costs built into the roll-out—costs that will eventually land on consumers in the shape of bills on their doormats. Thirdly, there is the truly lamentable performance so far in getting the DCC—the communications company responsible for making smart meters communicate well and on an interoperable basis—up and running so that smart meters, once installed, really can communicate with other and with the system. That communications company has now only just gone live, at the very end of the window for doing so before serious repercussions arise. Fourthly, there was the decision, halfway through the roll-out, to transition from one type of smart meter to another—a process akin to trying to change the wheel of a car while it is driving along the road.
All these issues raise legitimate and far-reaching questions about whether the goal of having a critical mass of smart meters in place by the end of 2020 is likely to be achieved and whether, in the short time available to us, moves can be made to get us back to that goal. The recent reports in the 2016 impact assessment suggest that we are not doing very well on installation—that we are set for an almighty bunching of installations in late 2018 and 2019 that is very daunting, even if vans of installers are not starved of meters to put up because they have been told not to install the old ones and are awaiting supplies of the new ones to install. I welcome the consultation on methods of resolving the possible hiatus in supply during the changeover from SMETS 1 to SMETS 2 meters. However, I am minded—I think the Government will have some difficult decisions to make in this regard—of what we need to do by 2020 in populating the country with smart meters to the extent that we can really make these changes possible, for our collective good, given the sheer number of smart meters that have been installed across the country.
We need to judge the very modest changes to the smart meter roll-out regime in this Bill against that wider background of decisions and progress made in the roll-out itself, and of how far away we are from the goal of having a national smart meter presence that makes all the other energy innovations—and cheaper energy and gas—possible, and to decide whether we should take the opportunity to add further elements of “getting on with it” into the Bill as it progresses through Committee.
We will not oppose this Bill on Second Reading. However, I place the Minister and the Government on notice that in Committee we will closely scrutinise the roll-out provisions currently in place to look at ways in which we can make amends for some of the frankly sloppy decision making that has occurred in the progress of the roll-out, and stiffen the sinews of the programme so that it works as well as it can. It is perhaps no coincidence that the—
Greg Clark
Will the hon. Gentleman confirm that the programme motion is generous in providing time for consideration of the Bill?
Dr Whitehead
The last time I heard about the progress of the programme motion, there was no agreement on the number of days that could be set out for the Committee stage, so it may well be the case that that concern will be reflected tonight. However, I would emphasise that as far as the main purpose of the Bill—
Simon Hoare (North Dorset) (Con)
As I understand it, there are six days in the programme motion—[Interruption.] Forgive me; there are eight days in the programme motion for a Bill on which the Labour party will not divide the House. It seems bizarre to divide the House on the programme motion.
Dr Whitehead
I repeat that according to my latest information, the discussions about what should be in the programme have not concluded. That may be reflected in what we do tonight.
I have with me plastic models of Leccy and Gaz, the characters from the advertisements for the smart meter roll-out. Hon. Members can see that as far as Leccy is concerned, the model does not stand up; perhaps that is no coincidence. We want the process to stand up as well as it can, and we will work hard to ensure that it does.
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Richard Harrington)
Earlier this year when I decided I was going to switch my supplier, I found myself on my hands and knees with a torch and a duster, clearing cobwebs away. That is no way to go on. The purpose of this Bill is to give us all a way of changing supplier and put us in control of our destiny when it comes to our power.
I thank hon. Members from both sides of the House for their contributions, none of which I take lightly. I look forward to the Bill Committee, and I will be delighted when we have agreed with the Opposition the time needed to go through the Bill in great detail. I will not go into as much detail in this speech as I will do in the Committee, because I am delighted that everything has been agreed. I remind Members on both sides of the House that the Bill is not about money saving, modernisation for the sake of it or replacing old kit; it is the platform for a new smart and flexible energy system that gives control to all customers—vulnerable customers and others alike. That is absolutely necessary, which is why we are doing it.
Of all the points made by hon. Members on both sides of the House, I particularly want to clear up one first made by my hon. Friend the Member for Rugby (Mark Pawsey). The SMETS 1 and SMETS 2 meters have been much discussed, and I can confirm that a software programme is being developed that will allow full conversion between the two. That will be done remotely, so customers who have had the meters installed will not have to worry about people coming to their house and changing them again. That conversion programme will start within a year.
Richard Harrington
I am very sorry, but there is not time. The smart meter programme is the foundation of this whole system of freedom. It is one of the most significant engineering projects that has been undertaken in our country, and I am delighted to report that about 370,000 smart meters are being installed each month. I have met the suppliers, and they have all made arrangements to double or triple that in the next few months. I thank hon. Members on both sides of the House for their contributions today, and I look forward to the agreed scrutiny of this Bill. I commend it to the House.
Question put and agreed to.
Bill accordingly read a Second time.
Smart Meters Bill (Programme)
Motion made, and Question put forthwith (Standing Order No. 83A(7)),
That the following provisions shall apply to the Smart Meters Bill:
Committal
(1) The Bill shall be committed to a Public Bill Committee.
Proceedings in Public Bill Committee
(2) Proceedings in the Public Bill Committee shall (so far as not previously concluded) be brought to a conclusion on Thursday 30 November.
(3) The Public Bill Committee shall have leave to sit twice on the first day on which it meets.
Proceedings on Consideration and up to and including Third Reading
(4) Proceedings on Consideration and any proceedings in legislative grand committee shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which proceedings on Consideration are commenced.
(5) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.
(6) Standing Order No. 83B (Programming committees) shall not apply to proceedings on Consideration and up to and including Third Reading.
Other proceedings
(7) Any other proceedings on the Bill may be programmed.—(Rebecca Harris.)
Business without Debate
(6 years, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text
Delegated Legislation
(6 years, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text
Madam Deputy Speaker (Mrs Eleanor Laing)
We now come to the presentation of public petitions. I call Mr Martyn Day. [Interruption.] Order. Let us be fair to Mr Day, who wishes to present his petition. Will people leaving the Chamber please do so quietly?
Petitions
(6 years, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text
Martyn Day (Linlithgow and East Falkirk) (SNP)
I rise to present a petition relating to the personal independence payments assessment criteria and process. Before I read it, I would like to add that this issue is the single greatest source of requests for home visits from my constituents. Many are disabled with degenerative conditions and are totally stressed out by the process.
The petition states:
The petition of the residents of Linlithgow and Falkirk East,
Declares that the petitioners believe that Personal Independent Payment (PIP) forms are extremely complex; further that assessors do not fully understand the impacts of all disabilities; and further that the current rules are leading to many recipients unfairly losing their benefits and thus having to go through a very stressful appeal process which worsens their condition.
The petitioners therefore request that the House of Commons urges the Government to undertake a full review of the PIP claims process and in particular to ensure that the assessment criteria are fit for purpose; further that PIP claim forms are simplified; further that staff training and guidance are improved to ensure better decisions; and further that lifetime PIP awards be made to people with the most severe conditions and deteriorating condition.
And the Petitioners remain, etc.
[P002066]
Anne Marie Morris (Newton Abbot) (Ind)
I rise to present a petition asking for fairer funding for Devon pupils, on behalf of the residents of my constituency. This petition, signed by a number of my constituents, and a similar petition signed by a further 900 of them, expresses concern about the funding situation in which our schools find themselves. It states:
The petition of residents of the constituency of Newton Abbot,
Declares that each pupil in Devon received £290 less than the national average; further that Conservatives in Devon believe this is not right; and further that the recent Government consultation was flawed and did not improve the situation.
The petitioners therefore request that the House of Commons urges the Government to increase the funding for the young people of Devon.
And the petitioners remain, etc.
[P002067]
Leaving the EU
(6 years, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Charlie Elphicke (Dover) (Con)
I rise to address the preparedness of the United Kingdom to leave the European Union with no agreement.
Brussels warns that the talks on a Brexit deal are taking longer than they should. The IMF issues cautions about risks to the global economy. Only today, it was reported in The Times that one of the European Union’s many presidents, Donald Tusk, has warned of the risk that the talks will collapse. Planning for no deal is not simply a negotiation point; increasingly, it is the responsible thing to do in the national interest.
This is not due to lack of effort on the part of the Prime Minister, who set out a positive and forward-looking proposal in her Florence speech. She even made a bold financial offer to move the talks forward. Last week she flew to Brussels ahead of the European Council to underline the positive case that we make. What was the response of the European Council? It said that we must agree the so-called Brexit divorce bill, and it will not talk trade until we sign on the dotted line. That does not look promising. How can we agree a price until we know what we are paying for? Even if we overcome the impasse on money, the trade talks may not go easily either.
Moreover, there is a serious risk of our being offered a bad deal which is worse than no deal. The risk is that we shall be asked to pay £50 billion as a settlement for a trade deal that requires us to adhere to EU rules. If that happened, we might as well never have left. We would be run by remote control, without a seat—or a say—at the table. Our ambition to seek the opportunities that are open to us around the world would be lost, as we would not have the flexibility to change our rules as we might wish to. That would be the worst of all worlds. It is a deal we should not take, and it is a deal that we will not have to take if we make sure we are ready on day one, deal or no deal.
Let us remember that we all want a deal. The EU would benefit from a deal every bit as much as we would. The EU is already the winner in free trade with the United Kingdom: we buy £100 billion more in goods from the EU than we sell to it.
Henry Smith (Crawley) (Con)
That is precisely the point. The intransigence of the EU27’s negotiating position will ultimately be detrimental to their own economic interests. It is therefore absolutely right for us to prepare for no deal, because this country will thrive regardless.
Charlie Elphicke
My hon. Friend has made a powerful point. He is absolutely right. If we lived in a world of tariffs, they would hit EU exports to the UK to the tune of £13 billion, but our exports to the European Union would be hit by only £6 billion. Tariffs would hurt the European Union twice as much as they would hurt the UK, and that is why a deal is in the interests of everyone. What is more, the lawyers are clear that the EU has no legally valid claim for its divorce bill. As a matter of international law, no deal will mean no money for the EU. Frankly, we could just say, “See you in court; we’ll test your case,” and take it to an independent court or international arbitration, because we know what the position is. That is another reason why a deal is in the interests of the EU.
The UK is also an important part of the security guarantee for the entire European continent. We are not just a defence umbrella; we also have a great treasure-trove of information and expertise, as well as being a bridge to the “Five Eyes”. That is why a deal that includes data and information sharing is needed by all, and why the Home Secretary is right to say that no deal on security would be unthinkable because it would be crazy for the EU not to want to continue to share information and data after we leave the EU. We might not want to be controlled by Brussels, but that does not mean we do not want to co-operate and have a positive relationship with all the remaining EU27 member states.
What about the view of the British people? This is yet another case where the people are way ahead of our political system. Here we hear voices, particularly from the Labour party, about how we should just write a blank cheque and fold on a deal whatever the terms, yet the British people say, “No, we didn’t vote to leave the EU only to pay out vast oceans of cash and be run by remote control.” So it is little surprise that a recent Sky News poll found that 74% of people think that no deal is better than a bad deal, and it appears that patience is starting to wear thin with the EU because a poll by Opinium last Friday found that 37% of people want the UK to leave the EU without a deal if by March 2019 no satisfactory deal has been reached.
Mr Marcus Fysh (Yeovil) (Con)
Does my hon. Friend agree that if we do not set the agenda for the circumstances of both having a deal and not, the EU will do it for us, and that is the antithesis of what the people voted for in the EU referendum?
Charlie Elphicke
My hon. Friend, who is a powerful advocate and champion for his constituency, makes a powerful point, and he is absolutely right, because the British people believe that the future is global, not regional or continental. They are right to do so: 90% of future world economic growth will come from outside the EU. Moreover, the EU has been in relative decline for the past 40 years: 40 years ago the EU accounted for 30% of global GDP; today the figure is just 15%. That is a massive relative decline, and it is hard to fathom why the OECD would want us to continue to be involved in an organisation whose share of GDP seems to be pointing in a southerly direction.
As the wider world grows, we can grow with it. The figures powerfully underline that, as did the Governor of the Bank of England in a powerful speech to the International Monetary Fund just last month, in which he said that the British people had taken a decision to step back in order to jump forward. He said that there will be short-term economic turbulence, but in the longer term Britain could be doing really quite well, and there was massive rationality in the decision taken.
Jim Shannon (Strangford) (DUP)
We will have many debates on this issue, and I congratulate the hon. Gentleman on securing this debate. First, we should congratulate the Brexit team which is working very hard on our behalf to try to accomplish a deal. A deal would be preferable, but Brussels must be very careful about what it wishes for, as a bad deal or no deal would be a bad deal for them.
Charlie Elphicke
I completely agree with the hon. Gentleman, particularly on his generous remarks on the Secretary of State for Exiting the European Union and his ministerial team, who work day and night in our national interest, seeking to get the best deal for us.
That brings me neatly to the case for being ready on day one: why should we be ready on day one? Already establishment figures are saying that this would be wasted spending. I say it is in the national interest and is the best investment we can make. There are three key reasons for that.
The first reason is for insurance. We buy house insurance before we are burgled. In the same way, we should insure against the risk of error in the current negotiations, or things going wrong at the last minute. We should insure against the risk that there is not a meeting of minds by making sure we are ready on day one, and prepared for every eventuality. Secondly, we should be ready on day one in order to get the best deal. Any experienced negotiator knows that if you have the other side stuck to the table, they will have to do a deal. You can then hit them with a higher price and worse terms.
David Linden (Glasgow East) (SNP)
Is not one of the UK’s major problems the fact that Her Majesty’s Government are approaching this issue with multiple voices, with the Foreign Secretary giving his vision of Brexit in the pages of The Daily Telegraph and the Prime Minister, who is hardly hanging on to power, giving another? Is that not the reason why there is no deal coming forward and no compromise being offered from Brussels?
Charlie Elphicke
A deal is in everyone’s interests, and that is what we hope to get. The British internal market is the best deal for all the country, including the people of Scotland.
Mr Iain Duncan Smith (Chingford and Woodford Green) (Con)
I congratulate my hon. Friend on securing this debate. With all this talk about the Government speaking with different voices, let me remind the House that Germany does not have a Government yet, Spain is in total chaos, the Netherlands has only just managed to get a Government and Mr Juncker seems to spend an awful lot of time in bars getting 28 pints of beer and not being able to figure out who is with him. Also, they are all now giving out separate messages about what their future relationship with the UK would be. Does that sound like speaking with one voice?
Charlie Elphicke
As ever, my right hon. Friend makes a powerful point.
My third point is that this would be no-regrets spending. We should have made this investment long ago. Our customs systems are creaking, our border systems are ageing and our roads are not resilient. In other words, this is investment that we ought to make anyway. There are strong reasons for us to invest now to have world-class systems. Singapore manages customs clearances in seconds, and Australia has cutting-edge border controls. We could have systems like that—systems that keep murderers out of the country and ensure that we can track down visa overstayers swiftly and help them home—yet it takes years to build the simplest road, and our airports and ports suffer from long-term underinvestment. This has cost our economy billions of pounds already.
Being ready on day one is not simply about Brexit; it is in the national interest to ensure that we have fast, efficient networks that will help to drive our economy forward. It is not just my own constituency of Dover that is affected. Gridlock at Dover will mean gridlock for the British economy. The midlands engine will conk out if it cannot get vital components, and the northern powerhouse will cease to whirr if it cannot get parts on time. Tailbacks are not new on the roads to the channel ports, and this underlines why we should be committing to this spending, irrespective of a no-deal scenario. A no-deal scenario without planning could also cause delays, damaging the economy and preventing Britain from taking advantage of Brexit’s opportunities. Even if a deal is struck, Britain will be hampered if we do not have world-class infrastructure. That is why we ought to be investing in it now. In order to enable the greatest opportunities of Brexit to be grasped, we must start preparing for a no-deal scenario right away. This would be responsible, no-regrets spending.
I have a response to the naysayers who say that it would be wrong to invest now. I say that it would be wrong to wait until the last moment, and that it is in the national interest that we invest now. At least £1 billion should be allocated in the November Budget to invest in upgrading our systems and infrastructure so that we will be ready on day one to forge ahead on day two. Will the Minister tell the House what discussions are happening on this, and whether such investment might be forthcoming? Some will say that however ready we are, those across the English channel will not be ready and that we should therefore not even bother. They say that we should simply run up the white flag. Can the Minister confirm that ports on the other side of the channel will be required to upgrade their systems in line with the World Trade Organisation global trade facilitation agreement that came into force last February? That agreement was warmly welcomed by the European Union. Can he also confirm that article 7 of that agreement makes detailed provision for fast customs clearances, electronic payment systems and trusted trader regimes? Does he agree that if we start preparing now, there will be no need for queues of lorries on either side of the channel? Will Britain take the case to Geneva and start insisting that EU member states spend money now to facilitate trade in a non-discriminatory way, as required under the WTO trade facilitation agreement?
There are those who say that our systems cannot possibly be ready in time, and that our systems of administration and Government organisation simply cannot cope with all this. Those are not people who believe in Britain. Nor are they people who have studied our history. The history of our island story is that when there is a need, there is no obstacle that we cannot overcome and no challenge that we cannot meet. That is true. Sometimes we are a bit late to the party and a bit late to realise the pressing issues facing our nation, but we always get there in the end. Our history books are clear on that. We can do this, and we must do it to deliver the greatest opportunities to our future generations by seeking a global future.
Craig Mackinlay (South Thanet) (Con)
In addition to the infrastructure costs of customs and borders, which are the right things to plan for, is it not incumbent on parliamentarians and Departments to speak to businesses and say, “This is what WTO means”? As the days progress and as the intransigence of our EU partners sadly does the same, it is looking more and more likely that WTO rules will apply, and that is nothing to be fearful of.
Charlie Elphicke
My hon. Friend makes a powerful point. Half our trade is conducted under WTO rules, and we manage that quite successfully.
We have spent long enough waiting for the EU to get its act together. Three quarters of the country agrees that we should be prepared to walk away if progress cannot be made, and it is vital that we have the option to do so and that we are fully prepared. That is why we must be ready on day one to forge ahead on day two —deal or no deal.
The Parliamentary Under-Secretary of State for Exiting the European Union (Mr Steve Baker)
I congratulate my hon. Friend the Member for Dover (Charlie Elphicke) on securing this debate and the expertise that he demonstrated in leading it. I also put on record how pleased I am that my right hon. Friend the Secretary of State for Exiting the European Union is in the Chamber for this important debate.
In this House, and on the indispensable ConservativeHome website, my hon. Friend has shown that he is a great and true champion of Dover and, by extension, our country. No one is any doubt about the key strategic importance of the port of Dover, which he represents with such insight and determination. As I listened to his speech, I was reminded that his voice is that of a person who campaigned to remain, but has wholeheartedly accepted the democratic decision of the UK. He referred to recent polling, and I am in no doubt that he speaks for the majority of the British people who expect the Government to be ready on day one in all circumstances. With that in mind, I am glad to confirm that while we are working for a good deal—we are confident that we will obtain one—the Government are making extensive preparations to exit the EU even in the unlikely event that no agreement is reached between us.
The Government respect the vote of the people to leave the EU in a referendum authorised by our Parliament. The Government triggered article 50, and we are negotiating for a good outcome that works both for the people and businesses of the UK, and for those in the EU. The tone and assurance of the Prime Minister’s speech in Florence added new momentum to the negotiations. It made it clear that we are a nation that meets our financial commitments, and it reiterated our desire for a time-limited implementation period that is in the interests of both the UK and the EU. Both sides are agreed that subsequent discussions have been conducted with a new spirit and we are determined to work together to reach agreement. We are ambitious and positive for Britain’s future and for these negotiations but, as my right hon. Friend the Secretary of State made clear in the Queen’s Speech debate, the Government will be proceeding in the only responsible way possible: preparing plans for a range of possible outcomes.
I wholeheartedly agree with my hon. Friend that while it is in the mutual interests of the EU and UK to negotiate a deep and special partnership, we also have a duty to plan for a scenario in which we leave the EU without a deal. People should not be alarmed by our contingency planning, nor read into it any pessimism. Rather, I hope that the public will be reassured that we are taking the actions of a responsible Government who are determined to ensure a smooth exit under a range of scenarios. It is our ambition to continue and enhance our status as a great global trading nation that is respected around the world as a beacon of free trade.
I agree with my hon. Friend that being prepared for a smooth exit in all scenarios will ensure that we are in the best position to seize new opportunities as we leave the EU and begin to operate our own independent commercial policy within the framework of the WTO. We will be outside the customs union, at liberty to embrace free trade, and outside the European economic area. Our intention is to work with our EU partners as we lead the race to the top on global standards and pro-competitive regulation, driving up productivity and, with it, living standards.
I am happy to tell my hon. Friend that we have been working across Government for over a year on detailed delivery arrangements for a range of scenarios. Plans are well developed. Each Department has a clear understanding of how withdrawing from the EU may affect its existing policies and services under a wide range of outcomes. I agree with him that it is responsible to spend in preparation for that range of outcomes.
The Treasury has committed more than £250 million of new money to support Departments such as the Department for Environment, Food and Rural Affairs, the Home Office, Her Majesty’s Revenue and Customs, and the Department for Transport in this financial year for exit preparations, including under no deal. My Treasury colleagues are talking to all Departments about their funding requirements in 2018-19.
Charlie Elphicke
I thank my hon. Friend for his typically outstanding response to the debate. Does he agree that to rule out no deal in all circumstances, as the Labour party wishes to do, would be not only foolish and against the national interest, but would invite a truly appalling offer from across the channel?
Mr Baker
I am grateful to my hon. Friend for that invention, which gives me the opportunity to reiterate that we are, of course, striving with all our resolve to secure a mutually beneficial deal. He is absolutely right that on sitting down at the negotiation table, one must be willing to step up and walk away. Her Majesty’s loyal Opposition—ably represented by their one Member here, I am sure—have taken the view that they would accept any deal.
Chris Law (Dundee West) (SNP)
I remind the House that Scotland in the UK actually voted 62% to remain, and recent polls show that more than 70% of people now want to remain in the EU, so this is not going too well in Scotland.
Returning to the preparation, figures that came out today from the London School of Economics show that every part of the UK will be devastated—the LSE used the phrase “devastating blow”—as a result of Brexit. The LSE suggests that a soft Brexit would cost Britain £235 billion, whereas no deal would cost £435 billion. What is the Government’s response?
The Secretary of State for Exiting the European Union (Mr David Davis)
More than voted SNP.
Mr Baker
Yes, and we are seeking a deal that works for all parts of the United Kingdom.
We are conducting a wide range of analysis of not only our strengths and interests, but those of our negotiating partners. We will continue that analysis, and it will continue to inform our negotiating position.
Our plans have been carefully developed to provide the flexibility to respond to a range of negotiated outcomes and to prepare us for the unlikely eventuality of not securing a deal. Some of our planning has already become evident, and more planning will become public over the coming months.
Mr Duncan Smith
Does my hon. Friend agree that we should not persist with the idea of a “deal or no deal” scenario? These are simple variations of a deal. The reality is that a free trade deal may or may not be secured, but there is a deal to be done under WTO rules that may, in a sense, subsequently include free trade, but not be a specialist free trade deal. Can we stop talking about no deal and start talking about a deal that the European Union will have to meet with the UK?
Mr Baker
I am grateful for the clarity with which my right hon. Friend makes his point, but I hope he will not mind if I say that, in the time available, I perhaps ought to leave that particular point for a debate on the negotiation, if such a thing were to arise.
In addition to the European Union (Withdrawal) Bill, which will ensure that we have a fully functioning statute book on the day we leave, the Government are already bringing forward other legislation as required. Our trade Bill will give the UK the foundation for an independent trade strategy. We will create a world-class international sanctions regime through the sanctions and anti-money laundering Bill. We will deliver an effective customs regime through the customs Bill. Our Nuclear Safeguards Bill will ensure that we can deliver a domestic nuclear safeguards regime. This legislation will support the future of the UK in a wide variety of outcomes, including one where we leave the EU without a negotiated outcome.
Alongside bringing forward necessary legislation, we will be procuring new systems and recruiting new staff when necessary to ensure that we deliver a smooth exit, regardless of the outcome of the negotiations. Secretaries of State have already begun to set out their plans to Parliament. For instance, in last week’s Transport questions, the Secretary of State for Transport explained that his priority was to seek
“new aviation arrangements—both with the EU and with those states where we currently rely on EU-negotiated arrangements for market access”.
He went on to say that he was seeing
“nothing but good will and constructive discussion between us and those countries in ensuring that there is no interruption in flying.”—[Official Report, 19 October 2017; Vol. 629, c. 976.]
We also understand that we need to prepare and deliver as a whole country. That is why we have been having positive and productive engagement with the devolved Administrations in Scotland, Wales and Northern Ireland, which is essential to our success as a country. We have been engaging with, and will continue to engage with, the devolved Administrations on issues where joint action is required across the UK to ensure that we are prepared for a smooth and orderly exit from the EU.
Charlie Elphicke
We all want a smooth and orderly exit from the EU. Will the Minister just address my point about trade facilitation and the requirement for the facilitation of trade under the WTO?
Mr Baker
I am grateful to my hon. Friend for drawing me on to that point of detail. I am happy to say that I am very proud of the UK’s customs authority, which already works hard to ensure that trade is as fast and frictionless as possible. We were ranked fifth globally in the World Bank’s 2016 logistics performance index on customs, and I know from my time serving on the Treasury Committee that our excellent officials are working to take us higher up that index.
My hon. Friend mentioned the WTO trade facilitation agreement. It might be going too far to expect our trading partners to be compelled to upgrade, but he is right to say that the agreement came into force on 22 February. It affects all contracting parties to the WTO, of which the EU is one.
In both his speech today and his report that we discussed in July, my hon. Friend rightly focused on the importance of having a functioning border on day one. We are confident that we will have the resources that we need to continue to run an effective borders and immigration system in the future, with or without a negotiated agreement on our future arrangements. We recognise that businesses want clarity, and we want to reduce uncertainty during the negotiation wherever we can. That was why we set out our thinking in papers over the summer, and it is why we stand ready to discuss our future relationship. We want to provide stability throughout the UK and for our partners in Europe to ensure that the economy, services and infrastructure are protected in a range of scenarios, for all parties. However, we are in a negotiation, and we will need to manage information carefully to protect the UK’s interests and secure the best possible outcome for UK businesses and citizens. The House has voted not to disclose material that could damage the United Kingdom’s position in its negotiations with the European Union.
We now look forward to the December European Council. The EU has agreed to start internal discussions on our future relationship and an implementation period. We look forward to progressing the negotiations in the mutual interest of both the UK and the EU. Preparing for a range of exit scenarios is an approach that has been endorsed by the Foreign Affairs Committee, which recently said that not preparing for all outcomes would be a “dereliction of duty”. The Government are rising to that duty, even as we approach the negotiations anticipating success. We do not want or expect a no-deal outcome, but we will be ready in any event.
Question put and agreed to.
Finance Bill (Fifth sitting)
Tuesday 24th October 2017
(6 years, 6 months ago)
Public Bill CommitteesRead Full debate Finance (No.2) Act 2017 View all Finance (No.2) Act 2017 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 24 October 2017 - (24 Oct 2017)
The Committee divided: - Ayes: 2 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 9 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 9 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 9 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 7 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 9 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 9 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 9 / Noes: 10 - Question accordingly negatived.
The Financial Secretary to the Treasury (Mel Stride)
It is a pleasure once again to serve under your chairmanship, Mr Howarth. Clause 43 will ensure that rates of air passenger duty for the tax year 2018-19 increase in line with the retail prices index. The changes will ensure that the aviation sector continues to play a part in contributing towards general taxation.
APD forms an important part of Government revenue. The Government have raised APD by RPI each year since 2012, and the clause continues that trend. With no tax on aviation fuel or VAT on international and domestic flights, APD ensures that the aviation sector plays its part in contributing towards general taxation, raising £3.1 billion per annum. The aviation sector continues to perform strongly. The UK has the third largest aviation network in the world, and passenger numbers at UK airports have grown by more than 15% in the past five years.
Clause 43 sets the APD rates for the tax year 2018-19 in line with RPI. The changes will increase the long-haul reduced rate for economy class tickets by just £3 and the standard rate for all classes above economy by just £6. The rounding of APD rates to the nearest pound means that short-haul rates will remain frozen for the sixth year in a row. That will benefit 80% of all airline passengers. To give industry sufficient notice, we will announce APD rates for 2019-20 at the autumn Budget 2017, legislating in the corresponding Finance Bill.
APD is a fair and efficient tax, where the amount paid corresponds to the distance and class of travel of the passenger. The changes made by clause 43 will ensure that the aviation sector continues to play its part in contributing towards general taxation, raising £3.1 billion a year.
Anneliese Dodds (Oxford East) (Lab/Co-op)
It is a pleasure to serve under your chairmanship, Mr Howarth. I have a couple of questions. Air passenger duty is a matter of considerable public debate, and debate within the industry, so it is appropriate that we probe this.
First, can the Minister provide us with a little more understanding of what he views as the purpose of this tax? In his introductory remarks, he appeared to reduce it specifically to revenue raising. Others have seen the duty as a potential green tax as well, although clearly it is not hypothecated for that purpose. It would be helpful to know whether he believes the duty has any kind of deterrent effect.
Secondly, in the light of the Scottish Government’s policy approach, does the Minister anticipate a race to the bottom in relation to APD in future, particularly given the representations made by Newcastle airport and others about potential unfair competition from across the border?
Finally, mention has been made in some of the discussions on this duty of the potential impact on those with protected characteristics who might need to travel more frequently on long-haul flights, for example. It would be helpful to hear the Minister’s views on whether these changes might have a disproportionate impact on certain ethnic minorities. That has come up in some of the debates around APD.
Mel Stride
I thank the hon. Lady for her questions, which I will answer in order.
The purpose of APD is clearly, as the hon. Lady identified and as I explained in my opening remarks, to raise revenue—£3.1 billion in this instance. Like all taxes, it will also change behaviour to some degree, and to the extent that it makes flying a little bit more expensive, it could be expected to have the effect of diminishing demand for air travel. The lower rates for economy, which takes up more space on aircraft than first class, assist in ensuring that flights are as full as they can be.
The hon. Lady mentioned the Scottish Parliament and the devolution of APD, which will become air departure tax in Scotland. That tax has not yet been switched on, although devolution arrangements are in place, and we will of course monitor the issues that she has understandably raised in respect of competition with airports, particularly in the north of England. On long-haul flights and the impact on various groups, including ethnic minorities, I would be happy to write to the hon. Lady with any information that we have.
Kelvin Hopkins (Luton North) (Lab)
I am glad that the Minister has raised the question of ethnic minorities. My constituency has a large Caribbean community, who are concerned about air passenger duty’s effect on flights to the Caribbean to see family and so on. Has the Minister received any specific representations on that? The other question, of course, is about the airlines themselves. In Luton, we have London Luton airport. What representations have the airlines made to the Minister?
Mel Stride
If I may, I shall write to the hon. Gentleman on the specific questions that he has raised about the consultation on these measures.
Question put and agreed to.
Clause 43 accordingly ordered to stand part of the Bill.
Clause 44
Petroleum revenue tax: elections for oil fields to become non-taxable
Question proposed, That the clause stand part of the Bill.
Kirsty Blackman (Aberdeen North) (SNP)
It is welcome that the Government are looking to reduce the administrative burden in relation to elections for oilfields to become non-taxable. That is positive news. The Chancellor of the Exchequer has mentioned in two Budgets that there will be changes in the taxation system to make it easier for late-life assets to be transferred. I have heard noises from the Chancellor in recent times that he may not introduce that in the autumn statement this year, and I will just make this pitch to the Minister. This issue is incredibly important. The oil and gas industry is not asking at this moment for significant changes, but for the change in relation to the transfer of late-life assets. I would very much appreciate it if, in the context of reducing the administrative burden and making things easier for companies dealing with the very mature field in the North sea, the Minister would hear my case on that and make the case to the Chancellor.
Anneliese Dodds
I must admit to being slightly confused about the purported impact of this change. Some of the inputs from stakeholder bodies seem to imply that there will be some kind of Revenue impact as a result of the changes in relation to procedures for elections for oilfields to become non-taxable. For example, Oil & Gas UK has welcomed the change, saying that the move will reduce the headline rate of tax paid on UK oil and gas production. In contrast, Friends of the Earth has expressed disappointment at the tax cut. As I understand it, petroleum revenue tax was permanently zero-rated in 2016, and the Government’s assessment of the measure’s impact on the Exchequer is that it will be negligible. Therefore, can the Minister enlighten us on why some people appear to view the measure as potentially having an Exchequer impact, but the Government do not appear to have that view?
Mel Stride
Perhaps I should set the scene that I would have set had I realised that others were going to contribute to this debate, because I think that that will pick up some of the questions that have been raised. However, before I do that, I shall turn immediately to the question raised by the hon. Member for Aberdeen North about the transfer of long-life assets. I will take her remarks as a Budget representation, but I am sure that she understands that at this moment, in the run-up to the Budget, I will not comment further on specific taxes or arrangements relating thereto.
Clause 44 makes changes to simplify the process for opting oil and gas fields out of the petroleum revenue tax regime, reducing the administrative burdens on affected companies. To ensure that participators could take advantage of the changes as soon as possible, the legislation had effect from the date of its announcement, on 23 November 2016. I shall provide Committee members with some background to the measure.
At Budget 2016, as part of a £1 billion package of measures to support the oil and gas industry, the Government announced that PRT would be permanently zero-rated. That was to simplify the tax regime, to level the playing field between older fields and new developments and to increase the attractiveness of UK investment opportunities. It was decided that the tax should not be abolished completely, because some companies still require access to their tax history for carrying back trading losses and decommissioning costs. As a result, participators still have to submit returns, which many find complex, time consuming and expensive. Following consultation with industry, the Government are therefore simplifying the rules for opting fields out of the PRT regime. The changes made by clause 44 will allow the responsible person for a taxable oilfield to remove the field from the PRT regime simply by making an election to do so and then notifying HMRC. When coupled with the Government’s removal of other reporting requirements, these changes will save companies an estimated £620,000 in total ongoing costs per annum.
The clause builds on the Government’s support for the UK oil and gas industry, including the £2.3 billion package of fiscal reforms announced in the 2015-16 Budget. I therefore hope that the clause will stand part of the Bill.
Question put and agreed to.
Clause 44 accordingly ordered to stand part of the Bill.
Clauses 45 to 47 ordered to stand part of the Bill.
Clause 48
Carrying on a third country goods fulfilment business
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
Clauses 49 to 55 stand part.
That schedule 13 be the Thirteenth schedule to the Bill.
Clauses 56 to 59 stand part.
New clause 5—Annual report on powers in relation to third country goods fulfilment businesses—
‘(1) The Commissioners must prepare a report on the operation of the provisions of Part 3 of this Act in relation to each tax year after their commencement within six months after the completion of that tax year.
(2) The Chancellor of the Exchequer shall lay a report under subsection (1) before the House of Commons.
(3) Each report under subsection (1) shall cover in particular—
(a) prosecutions for an offence under section 53,
(b) penalties imposed under Schedule 13,
(c) the effects on the operation of Part 3 of the United Kingdom’s withdrawal from the European Union or (as the case may be) preparations for that withdrawal,
(d) implications of the matters specified in sub-paragraph (c) for the activities and resource requirements of HMRC in connection with the provisions of this Part,
(e) implications of the matters specified in sub-paragraph (c) for the exercise of the powers to make regulations under Part 3, and
(f) HMRC’s assessment of the extent to which the operation of, or changes to the operation of, comparable provisions in other countries affect businesses in the United Kingdom.’
This new clause requires HMRC to produce an annual report on the operation of Part 3 relating to third party goods fulfilment businesses and specifies some of the information to be included in that annual report.
Peter Dowd (Bootle) (Lab)
It is, as ever, a pleasure to serve under your stewardship, Mr Howarth.
I want to talk about fulfilment businesses in part 3, clauses 48 to 59, and the annual report on powers in relation to third-party goods fulfilment businesses, or new clause 5. I will speak a little about the fulfilment business measures before addressing the specifics of our new clause.
We welcome the action and powers for HMRC to deal with the problems created by the difficulty in properly taxing and charging VAT on the profusion of small businesses trading online through platforms such as Amazon. They are not just problems for the Exchequer. Many small businesses find themselves outcompeted and outpriced by overseas traders, which not only have lower operating costs but artificially lower their prices by failing to pay VAT on the goods they sell to UK consumers through fulfilment houses based here. It is essential that we act to protect both the taxpayer in general and the thousands of small British businesses that are, as we have discussed, the lifeblood of our economy.
It is not just lower prices and running costs that present problems for our small businesses. I have dealt with casework from small businesses that found themselves severely disadvantaged when filling out their VAT returns when they were unable to obtain VAT receipts from either their overseas supplier or the fulfilment business in question. In one case, the reason for the problem was simple: there were no VAT receipts because the seller had not charged VAT, unbeknownst to that particular British business. The online fulfilment house involved simply washed its hands of the matter and blamed a third-party seller that it supposedly has no control or influence over. It is right that we bring our laws up to date and ask the huge online fulfilment businesses to take their responsibilities to our society seriously, assist the Exchequer in levying the proper taxes and stop hiding behind the excuse of separate businesses.
Many of the overseas sellers we are talking about could not and would not exist were it not for online retailing sites and the fulfilment services they provide. The business models are entirely based on the mode of operation laid down by the multinational online marketplace, which makes their businesses possible. Action has been too slow to deal with these problems, which have festered for far too long, but better late than never. We do not seek to hinder action on this at all and we welcome the broad sweep of these measures and other related efforts to address the problems that have grown up from online marketplaces and fulfilment houses.
New clause 5 seeks another review—this time on an annual basis—examining the working of these new powers and responsibilities so that Parliament can keep a check and a close eye on the problems around fulfilment businesses. It is an expanding market and business sector, and we have to try to keep up with it. We hope that the new clause will prevent any future problems from festering too long and ensure that Her Majesty’s Treasury keeps a close eye on changing business practices in this field, which might threaten the Exchequer or, importantly, undermine small businesses.
Kelvin Hopkins
It is a pleasure to serve under your chairmanship again this morning, Mr Howarth. When I first entered this House over 20 years ago, I visited my local VAT office and they said that if they had more VAT officers they could collect many more times their own salaries. That has been the case ever since. I am not so familiar with third country goods fulfilment businesses, but it nevertheless strikes me as something that requires a proper resource within the VAT component of HMRC. I wonder whether we are still understaffing VAT offices and whether we could collect much more by employing more staff. At that time, the ratio between the staff salary and the tax they collected was about 5:1. Every additional member of the VAT staff produced five times more than their own salary. If that is still the case today—it may be an even bigger ratio—it would be helpful to think about employing more staff.
Mel Stride
Clauses 48 to 59 and schedule 13 implement the fulfilment house due diligence scheme. The scheme will require that from 1 April 2018, fulfilment businesses in the UK that fulfil goods for traders based outside the EU must register with HMRC, keep certain records, and carry out robust due diligence checks on their overseas clients.
The fulfilment house due diligence scheme is part of a package of measures announced at Budget 2016 that will disrupt and deter VAT abuse by overseas traders who sell goods to UK consumers via online markets. To address the point raised by the hon. Member for Luton North, the measure is not one that requires lots of extra inspectors; it requires a different attitude and regime for the fulfilment houses that are facilitating this VAT fraud. We expect it to be effective in those terms, rather than needing large numbers of additional staff.
Together, these measures are expected to deliver £875 million for the Exchequer by 2021. Many overseas traders selling via online marketplaces import their goods en masse to fulfilment houses in the UK, in readiness to fulfil anticipated future orders from UK customers. Once imported, the fulfilment house businesses will store, pack and sometimes deliver these goods on their behalf. Currently, certain overseas traders do not comply with the obligation to charge VAT on their goods held at UK fulfilment houses, as the hon. Member for Luton North pointed out. This not only deprives the UK Government of a significant amount of revenue but allows these overseas traders to obtain an unfair competitive advantage over the honest majority of VAT-compliant businesses operating in our country.
Clauses 48 to 59 and schedule 13 implement the fulfilment house due diligence scheme. Clause 48 sets out that all UK fulfilment houses that fulfil goods owned by traders established outside the European Union will be within the scope of the new scheme. These are referred to throughout the legislation as “third country goods fulfilment businesses”.
Clause 49 sets out that, following commencement of the scheme, all third country goods fulfilment businesses in the UK will require approval from HMRC as a “fit and proper” person in order to continue operating legally.
Clause 50 outlines that HMRC will maintain a register of all such approved persons. It will publish such details from the register as it deems necessary to allow counterparties, such as those in the express deliveries industry, to check whether they are dealing with a compliant fulfilment business.
Kirsty Blackman
I beg to move amendment 37, in clause 60, page 71, line 16, leave out ‘paragraph 2’ and insert ‘paragraphs 1A and 2.
1A (1) The provisions of this Schedule shall not apply to a person specified in paragraph 1(1) except in accordance with the provisions of this paragraph.
(2) No person shall be subject to the provisions of this Schedule unless they fall within a class of persons specified in regulations made under sub-paragraph (3).
(3) The Commissioners may by regulations specify a class of persons to whom this Schedule applies provided that the relevant conditions in sub-paragraphs (4) to (9) are met.
(4) The condition in this sub-paragraph is that the first regulations may not be made until after the Commissioners have undertaken an assessment of the impact of the implementation of the provisions of this Schedule on—
(a) small businesses that have limited technological connectedness,
(b) businesses in rural areas, and
(c) businesses that are likely to have been affected by the closure of HMRC offices.
(5) The condition in this sub-paragraph is that the first regulations may not apply to more than 25 per cent of persons to whom paragraph 1(1) applies.
(6) The condition in this sub-paragraph is that the Commissioners have prepared an assessment of the likely effects of making regulations in the form of a draft which has been laid before the House of Commons by the Treasury.
(7) The condition in this sub-paragraph is that the House of Commons has resolved that regulations should be made in the form of a draft laid in accordance with sub-paragraph (6).
(8) The condition in this sub-paragraph is that the second regulations may not be made—
(a) until at least twelve months have elapsed since the making of the first regulations,
(b) unless, taken together with the first regulations, they apply to no more than 90 per cent of persons to whom paragraph 1(1) applies.
(9) The condition in this sub-paragraph is that the third set of regulations may not be made until at least twelve months have passed since the making of the second regulations.’
This amendment would provide for a staged implementation of the provisions for making tax digital in relation to income tax, with review of impact on specific groups and provision for each new stage to be subject to approval by resolution of the House of Commons.
The Chair
With this it will be convenient to discuss the following:
Amendment 7, in clause 60, page 75, line 7, at end insert—
‘(1A) Regulations under sub-paragraph (1) must in particular require a person or partnership to record service charges separately from other income.’
This amendment imposes a duty on HMRC to require separate records to be kept of service charges.
Amendment 8, in clause 60, page 75, line 7, at end insert—
‘(1B) Regulations under sub-paragraph (1) must in particular require a person or partnership to maintain separate records in respect of each employee and in respect of any prescribed time period of service charges received and to make those records available in a prescribed manner.
(1C) In sub-paragraph (1B), “prescribed” means prescribed by regulations.’
This amendment imposes a duty on HMRC to require separate records of service charges to be kept in respect of each employee and in respect of prescribed period to be made available in a prescribed manner.
Amendment 39, in clause 60, page 75, line 7, at end insert—
‘(1B) Regulations under sub-paragraph (1) must in particular require a person or partnership to maintain separate records in respect of each employee and in respect of any prescribed time period of service charges received and to make those records available to those employees.
(1C) in sub-paragraph (1B), “prescribed” means prescribed by regulations.’
This amendment imposes a duty on HMRC to require separate records of service charges kept in respect of each employee and in respect of prescribed period to be made available to those employees.
Amendment 33, in clause 60, page 78, line 19, after ‘day’, insert
‘no earlier than 1 January 2022’.
This amendment provides that the provisions for digital reporting in Clause 60 may not be brought into force before 2022.
Amendment 40, in clause 60, page 78, line 20, at end insert—
‘(4A) No regulations may be made under subsection (4) until after 90 days after the Chancellor of the Exchequer has laid a report before the House of Commons which sets out—
(a) the steps which HMRC has undertaken to establish that suitable software is available;
(b) the results of the testing by HMRC and others of that software; and
(c) the reasons why mandatory use of the software is in the interest of HMRC and taxpayers.’
This amendment would require the Chancellor of the Exchequer to report on software suitability and testing before giving effect to the provisions of Clause 60.
Clause 60 stand part.
Amendment 34, in clause 61, page 78, line 34, after ‘day’, insert
‘no earlier than 1 January 2022’.
This amendment provides that the provisions for digital reporting in Schedule 14 and Clause 61 may not be brought into force before 2022.
Clause 61 stand part.
That schedule 14 be the Fourteenth schedule to the Bill.
Amendment 35, in clause 62, page 79, line 12, at end insert—
‘(5A) No regulations may be made under sub-paragraph (5) on a day prior to 1 January 2022.’
This amendment provides that the provisions for digital reporting in Clause 62 may not be brought into force before 2022.
Amendment 38, in clause 62, page 79, line 12, at end insert—
‘(5A) But no regulations may be made by the Commissioners unless the conditions in sub-paragraphs (5B) to (5D) are met.
(5B) The condition in this sub-paragraph is that the first regulations may not be made until after the Commissioners have undertaken an assessment of the impact of the implementation of the provisions of those regulations on—
(a) small businesses that have limited technological connectedness,
(b) businesses in rural areas, and
(c) businesses that are likely to have been affected by the closure of HMRC offices.
(5C) The condition in this sub-paragraph is that the Commissioners have prepared an assessment of the likely effects of making regulations in the form of a draft which has been laid before the House of Commons by the Treasury.
(5D) The condition in this sub-paragraph is that the House of Commons has resolved that regulations should be made in the form of a draft laid in accordance with sub-paragraph (5C).’
This amendment would provide for implementation of the provisions for making tax digital in relation to VAT to take place only following a review of impact on specific groups and provision for regulations to be subject to approval by resolution of the House of Commons.
Amendment 36, in clause 62, page 79, line 19, at end insert—
‘(6A) Regulations under sub-paragraph (5) may not impose mandatory requirements for businesses to generate quarterly updates.’
This amendment provides that any system for quarterly updates to be generated must not be mandatory.
Amendment 10, in clause 62, page 80, line 13, at end insert—
‘(12) Before making regulations under sub-paragraph (5) and in any case within three months of the passing of the Finance (No. 2) Act 2017, the Commissioners shall lay before the House of Commons an assessment on the effects on compliance with the requirements of those regulations by small businesses of the United Kingdom’s withdrawal from the European Union.’
This amendment requires HMRC to publish an assessment of the effects on electronic VAT records requirements for small business of the UK’s withdrawal from the EU.
Clause 62 stand part.
Kirsty Blackman
The Scottish National party has previously raised concerns about the moves to digital reporting. It is not that we do not support the principle of moving towards digital reporting. We have been clear that we think this could be a positive move. The concerns that we have raised previously have been about the timing of the moves and the way in which smaller companies were expected to move to digital reporting first. The Minister, to his credit, has changed the proposed plans and come up with a much more sensible direction and timeline for moving to digital reporting than the Government previously suggested.
Our amendment highlights specific concerns about the move to digital reporting, which, despite the Government’s changes and moves, we still feel have not been adequately answered. The amendment deals with the impact on specific groups that we feel might be negatively affected by the move to digital reporting.
The first group is small businesses that have limited technology for connectedness. There are small businesses that do not make that much use of the internet. There are some coming through that are wholly internet-based, and for which it is very important; but some are still starting that are not technologically advanced and do not use the internet much. We are concerned about the impact on them of having to report digitally online, in view of their access to technology. The businesses in question are not only in rural areas; they may just be run by someone who does not make huge use of the internet.
The second group is businesses in rural areas. In those areas in particular, even though commitments have been given by the Scottish and UK Governments about improving access to digital connectivity, at the moment not everyone has a fast enough internet connection to enable them to access the relevant services. If it is mandatory for businesses to use online digital reporting, that will be a problem for those without access to adequate technology—particularly in rural areas. Areas in England are affected, as well as those in more remote parts of Scotland. I understand that there have been Government commitments to get people on to digital systems, but we are not quite there yet.
Ruth George (High Peak) (Lab)
Does the hon. Lady agree that, in areas such as the remoter parts of Scotland, as in areas of my constituency, broadband access can be intermittent? The Government have excluded from the provision those who are completely digitally excluded. However, there are areas with patchy broadband—people have it on some days but not others—and there could be a problem for people who do not fall in the group that the Government have excluded.
Kirsty Blackman
I agree. In Kingswells in my constituency, which is a large suburb of Scotland’s third city, there are significant issues about access to fast broadband. There is access to slow broadband, and it is sometimes intermittent, for reasons to do with historical infrastructure. Broadband companies were put on the grid to begin with and they now find it more difficult to upgrade the historical technology. I appreciate the point that the hon. Lady has made; it is important to note that for some people intermittent access can be as difficult as no access.
The third category of businesses we have chosen is those likely to be affected by the closure of HMRC offices. I have needed to do tax returns online only since I became an MP. The problem with some of the questions is that yes or no are the options but my answer has been “maybe” or “kind of”. Despite the fact that the online form was fairly clear, I needed to phone someone to get some advice on whether to tick yes or no. If businesses lack advice and information from HMRC about the correct option to choose in some cases, it will be more difficult for them to fill out the forms.
It is important that businesses should be given the advice, information and support they need to fill in the forms correctly online. I am sure that no businesses will be trying to make errors; they will be looking for advice. My concern, particularly regarding HMRC offices, is the lack of access to advice that people might have.
Mel Stride
The important point is that, for many years, people have not simply been walking into or getting an appointment at their local HMRC office. The fact that we are drawing offices together into 13 beefed-up regional centres is particularly important in the context of telephone advice, which the hon. Lady is alluding to and which will still very much be available for exactly the circumstances she describes.
Kirsty Blackman
I appreciate the Minister’s point. In an earlier sitting, he mentioned the positive timelines when people phone HMRC for advice; apparently the phone is answered very quickly. I get that he says the statistics show that, but people are walking into my surgeries and into my constituency office saying that they have tried for hours to phone HMRC and have really struggled to get through. Despite him saying that the statistics show one thing, the lived experience of my constituents is very different. That is why I have these concerns, and even if one person or a handful of people cannot get through on the phone and fill in their form on time because they are not able to answer the question, it is a concern. I implore the Minister to continue working on call times and to ensure that, when people phone, they get through as quickly as possible and that the calls are answered, and that the advice provided is correct so that people can make the correct choice, particularly with online forms.
Labour Members have tabled a number of amendments to the clause. We were clear in the SNP manifesto that we supported a phased move to digital reporting, so what the Minister has proposed is now much more in line with what we were thinking. I ask that Labour Members, in speaking to the amendments, explain why they chose 2022, and I will make a call after that on whether we think supporting them is relevant. One Labour amendment suggests that we should not move towards digital reporting, which would be a concern for us because our manifesto commitment was positive about digital reporting. I look forward to hearing the comments from the Opposition and the Minister.
Stella Creasy (Walthamstow) (Lab/Co-op)
As ever, I am eager to serve under your chairmanship, Mr Howarth. I come to the Committee with a series of amendments on what digital reporting might offer us to resolve some of the challenges faced by employers and employees in our country. There are two issues in particular, which I will come to in turn, because as ever with the Finance Bill, they are technical.
First, I will deal with the treatment of the lowest-paid staff in our country—Office for National Statistics data show that, of all low-paid people, waiters and hospitality staff get paid the least—and what we can do to help them with their incomes. Secondly, I will look at how digitisation could help us to address compliance, which is one of the biggest issues for small businesses. To prefigure the Minister’s comments, I know he will say that that is for another Bill, but given how important it is for the systems to work together, I think this is an issue for this Bill. I hope he will bear with me.
I turn first to amendments 7 and 8—amendments 8 and 39 are identical—which concern the treatment of waiters and hospitality staff. Many Members may be familiar with campaigns on the treatment of tips, service charges and gratuities and with evidence showing that some employers were using those to top up people’s wages and to avoid paying the national minimum wage. Members might therefore be relieved that legislation was brought in to prevent that, but it has become clear that many employers still use tips, service charges and gratuities to avoid paying their staff properly. The amendments go to the heart of how we can address that.
In particular, Members might not be aware that people are supposed to pay tax and national insurance on their tips. If an employee is paid their tips through a tronc, where their employer collects the money usually using an online system, which is what we are debating today, the employer is supposed not only to pool the tips and share them out—after all, I think we would all recognise that as well as the person who serves a meal, the people who work in the kitchen deserve recognition of their work—but to check that the employee has paid national insurance and tax.
Bim Afolami (Hitchin and Harpenden) (Con)
On the question whether a scheme is being run by the employer or by employees or staff, is the hon. Lady alleging that employers are acting contrary to existing guidance and legislation? I am not entirely sure.
Stella Creasy
Yes, that is the concern. There is a lot of evidence that the exemption, which lets staff run their own tips scheme—it is like staff in a small café sharing the money in the jar, but across a large restaurant chain—is being used by major employers to avoid paying national insurance and, indeed, pension obligations further down the line, especially given auto-enrolment.
Another issue to which the amendments relate is the variations in charges that employers apply to employees for administering such schemes. Some restaurant chains will pass on 100% of the tips paid to a member of staff, while others will charge up to 20% in administration fees for doing it through an electronic system. Clearly, that is not fair and I warrant that customers have never had a restaurant explain to them how much they will charge the employee to pass on the tip that customers want to give them. The amendments are designed to help us understand what is going on.
I hope that the Minister will have strong words with his colleagues in the Department for Business, Energy and Industrial Strategy, because if, as we fear, a tax take is being avoided and the lowest-paid people in our country are being exploited as a result, surely we all agree that we need to do something about that. That is why I tabled the amendments. Indeed, 18 months ago, many of us took part in a Government consultation on precisely those issues—that is, how to ensure a fair system for administering tips, service charges and gratuities. I have to tell the Minister that, 18 months on, the Government have not even published the results of that consultation, let alone looked at what could be done to make sure that neither the Exchequer nor the employer is being short-changed.
The Bill offers the Minister an opportunity to make progress on an issue that his ministerial colleagues have kicked into the long grass. If we are digitising records, we can ask employers to clarify precisely what is being collected in tips, service charges and gratuities, and what is income. The amendments address exactly that point: they simply propose that an employer should record the different forms of income—with electronic systems that should be a relatively easy thing to do—and an employee would then be able to access that information.
That is important because if someone is self-employed and working in restaurants—my colleagues from north of the border have mentioned people administering their own tax records—they ought to know what their liabilities are. At present, however, someone who is part of a tronc system does not necessarily know what they are being paid in tips, gratuities and service charges. These simple amendments ask the employer to set out precisely the different streams of income, which their computer systems will easily collate for them, so that our tax system acts more efficiently.
If the Minister is not prepared to accept the amendments and acknowledge the need to make progress—we are, after all, talking about the poorest-paid employees in our country—will he commit to asking his ministerial colleagues in BEIS why it is that, 18 months on, when so many people have provided information about how we could solve the problems, nothing has happened? Indeed, I have regularly asked when the consultation results might at least be published, but the answer has always been, “Sometime in the future.” I am sure that the Minister would agree that the people who serve him a cup of coffee in a restaurant deserve better service from us in making sure that they are not exploited.
Amendment 10 relates to an issue that has come up very little in this Committee—we should correct that—namely the Japanese knotweed that is Brexit, which has taken up so much of our time. I appreciate that the Minister will say that the amendment is not needed because he has published a White Paper on how customs and VAT should fit together. However, having read that White Paper, I must draw attention to an omission from it.
I am sure that Government Members will judge me because I have become slightly obsessed with things such as the 13th directive on VAT, and I am sure they would all like to do a pub quiz on it too. Normal VAT rules allow that businesses registered in the UK can recover UK VAT. People understand that: for most businesses, VAT compliance is one of their biggest pieces of work. The issue with the 13th directive, which the amendment addresses, is the question of what happens when businesses trade in Europe. After all, Europe is still the primary market for the vast majority of businesses: 63% of members of the Federation of Small Businesses have said that Europe is their priority market. That means that if a salesman goes to Sweden and stays in a hotel, the hotel might charge VAT and there is no way that that business would be able to deduct Swedish VAT on its UK VAT return. At the moment, however, under the single market procedures, there is a process by which foreign VAT can be recovered directly from the country in which it was incurred.
For those Members who are VAT geeks, that provision is in articles 170 and 171 of Council directive 2006/112/EC, the prime VAT directive. I will, of course, pass that detail on to Hansard. The detailed rules are in Council directive 2008/9/EC. That is implemented in our own domestic legislation, in section 39 of the Value Added Tax Act 1994 and regulation 20 of the Value Added Tax Regulations 1995. In practice, that means that each European state is obligated to make a VAT refund. Obviously, there are rules on that, but it works pretty straightforwardly through an online electronic system, which is why it is relevant to the charge under discussion. I can see the Whip wondering where I am going with this, but there is a direct connection.
A similar scheme applies across the EU to businesses that are not established in the EU. That is the 13th VAT directive, which is implemented by section 39(2)(b) of the 1994 Act and is a more complicated system. The amendment is simple. When we leave the EU, we will no longer be able to rely on the simplicity of the intra-country VAT collection scheme that has helped businesses in Britain to trade and provide services, particularly in Europe. We will, therefore, need to move to the 13th directive, or we may move to something else. The customs White Paper, for instance, mentions an “innovative” scheme, but I am pretty sure that other countries, for which the intra-country scheme works well, would not be particularly willing to undertake such innovation. I think they would be happy for us to move to the 13th directive.
I am concerned that there is a lot of evidence that the 13th directive and its administration is not very effective for countries outside the EU. In particular, the 13th directive states that member states must refund VAT to foreign traders. It also states:
“Member states may make the refunds…conditional upon the granting by third states of comparable advantages regarding turnover and taxes.”
One could argue that the Bill’s introduction of an online electronic system provides a comparable advantage, but my amendment asks the simple question being asked by many businesses, including local businesses in my constituency, which are starting to panic about how they will manage their VAT returns in future. How will the proposed electronic scheme fit in with regard to both the current regulations relating to intra-EU VAT refunds and the 13th directive?
Having looked at the Minister’s document, I am concerned that, although it talks a lot about what the UK will do, it does not talk a lot about the 13th directive and what it will mean for British businesses. Page 19 refers to contingency in case there is no deal—of course, we all know that that is a sensitive question for the Cabinet—but what British businesses need to know now is, if they are going to continue to trade in Europe, how they can do that in a cost-effective and red-tape-free way?
One of the more bizarre elements of Brexit is that we seem to be arguing about red tape as though the other side wants more of it, and those of us who wanted to stay in the European Union are bad for wanting less of it. This issue is a great example of that challenge, where being part of the European Union had simplified a process for British businesses. A quarter of FSB members have said that the introduction of any tariff or complication with trading with Europe would put them off trading altogether. We need this Bill to match what is going to happen in future, so that businesses using an online system will not have to change it very quickly as a result of the rules of the 13th directive implemented by other countries making it harder for them to use.
If the Minister will not accept my very simple amendment asking him to set out just how this Bill will impact on the 13th directive, will he commit to discussing with British businesses what the directive might mean for them in terms of VAT compliance and recouping their costs, and what the consequences for them will be in terms of administering the scheme? All small businesses in our constituencies that are looking at that future trading relationship will want to know how much additional paperwork they are going to get, and they deserve an answer.
Peter Dowd
I will to speak to clauses 60 and 61, schedule 14 and clause 62 together, as they represent a package of measures that would introduce powers and regulations surrounding digital reporting and record keeping for both VAT and income tax.
The Opposition’s concerns about the Government’s plans for making tax digital are well-versed. We raised them on Second Reading of the March Finance Bill, before they were dropped, and raised them again in the debate on the Ways and Means resolution for this Bill, as well as on its Second Reading. We fully support digitalised tax reporting, which we can all agree has the potential to drastically reduce the amount of time individuals and business owners will have to spend filling out long and complicated tax returns. We could also free up some of HMRC’s time, so that it is better spent clamping down on tax avoidance.
Mel Stride
These clauses introduce the requirements for making tax digital for businesses. That is a major step in our journey towards a system in which technology makes it easier for businesses to get their tax right. The majority of businesses, as we have heard, want to get their taxes right but, none the less, make honest and avoidable mistakes in fulfilling their tax obligations. Not only does that cause them concern and frustration when HMRC intervenes to put it right, but taxpayer error and failure to take reasonable care cost the Exchequer £8 billion a year.
VAT has been online since 2010 and more than 98% of registered businesses already send VAT returns to HMRC in this way; many do it themselves, some use agents to do it for them. Making tax digital will be voluntary for income tax and national insurance contributions for those who fall below the VAT threshold, even if they are registered for VAT. Hon. Members will note that provisions in the Bill relating to income tax—that is, clauses 60 and 61—cannot enter into force until an appointed day order is made by the Treasury. The Government have committed that that will not happen before 2020.
The hon. Member for Bootle very generously welcomed, as did other Members, the timetable changes that I announced in July. The hon. Gentleman suggested that we have not gone far enough. I would point him to the remarks of Mike Cherry, the FSB chairman, who welcomed the delay that I announced in July. He said that it makes
“the roll-out of the changes far more manageable for all of the nation’s small firms”.
Many similar comments were made by businesses and organisations representing businesses at that time.
Let me set out in detail a few aspects of the legislation for making tax digital and we can pick up some of the points made by hon. Members. Clause 60 provides the framework for a future extension of making tax digital to income tax and class 4 national insurance. It sets out to whom the rules would apply—broadly, any unincorporated trading business or landlord with turnover of more than £10,000 a year. Clause 60 provides that the regulations made using these powers cannot mandate the provision of information more frequently than once a quarter, so we can be very clear on the frequency issue in the legislation. That output will be generated automatically by software and sent at the press of a button to HMRC. There will be no requirement for businesses to pay income tax or national insurance alongside their final year update.
Clause 61 introduces schedule 14, which makes consequential amendments to the existing income tax administration rules. Clause 62 amends the powers in the VAT Act 1994, enabling HMRC to amend the existing VAT regulations to provide for digital record keeping and information reporting.
The hon. Member for Bootle has suggested a number of amendments to clauses 60 to 62. He also asked several questions relating to those clauses in Committee last week, which I hope to address today. Amendments 33 to 35 would have the effect of delaying making tax digital implementation until 2022 at the earliest. Having consulted widely and received feedback both from external stakeholders and Members, the clear message was that, although digitising tax was a positive step, some had concerns about the scope and pace of change.
As many Members have reflected today, on 13 July we announced significant changes to the scope and timetable for making tax digital, giving 3.5 million businesses more time in which to prepare. Businesses will not now be mandated to join making tax digital until April 2019, and then only to meet the VAT obligations. Businesses with a turnover below the VAT threshold will be exempt from making tax digital altogether. That change was widely welcomed—as I pointed out, it seems a realistic path to implementation. Trade representative bodies and other stakeholders who previously expressed concerns are now engaging with HMRC to ensure a successful roll-out of the programme. HMRC has already started piloting the changes for income tax, allowing for at least three years of testing on a voluntary basis before mandation.
Changing the timetable further would create uncertainty for businesses and undermine our ability to pilot the changes properly. Digital software is increasingly part of the way that businesses operate; further delay to making tax digital would result in increased divergence between the way that businesses run themselves and the way they do their tax. Making tax digital is about ensuring that businesses get their tax right and helping HMRC to address the £8.7 billion tax gap. We need to balance ensuring that businesses and agents have time to prepare with ensuring that everyone can experience the benefits of doing tax digitally at the earliest opportunity. I am confident that the current timetable strikes the right balance.
The hon. Member for Bootle also tabled an amendment to stipulate that there should be no requirement under MTD for mandatory quarterly updates for VAT. Under our current plans for MTD for VAT, no business will be required to provide updates to HMRC more frequently than they do now. Most already submit VAT returns quarterly and they will provide the same information with the same frequency. The difference is that the updates will be sent to HMRC from digital records.
The hon. Gentleman’s final amendment would require my right hon. Friend the Chancellor to lay a report relating to the software used for MTD before the House. HMRC has begun piloting MTD services and intends to test the system extensively. That pilot will be used to test the range of software products available to businesses. HMRC is working with the software developer industry and others to ensure that products are available to businesses and agents at a range of different price points. As it emerges from the pilots, HMRC will publish information about available software products on gov.uk to enable businesses to choose appropriate products.
The hon. Member for Walthamstow has tabled three amendments to clause 60—I would expect no less than three; it is very modest of her, on this occasion, though I think one amendment was submitted twice—which seek to ensure that businesses record service charges separately for each employee. As the hon. Lady knows and has pointed out, the Department for Business, Energy and Industrial Strategy has consulted on service charges on these matters. The issue is of course very important: I know that she has pursued it for a long time and given an eloquent and lengthy discourse on many of its byways and alleyways. As perhaps was demonstrated by the intervention of my hon. friend the Member for Hitchin and Harpenden, these particular matters are complex. It is the Government’s contention that this is not the right forum in which to start trying to address, tempting though it is, through making tax digital, some of what I accept may be iniquities in the operation of companies’ tips and service charge systems. We have to wait for the results of the BEIS consultation.
Stella Creasy
I am a little surprised, given that we have presented evidence today that tax may be being avoided by using HMRC’s E24 guidelines, that the Minister says that we have to wait. We have been waiting 18 months for the consultation even to be published. If he will not accept the amendments today, can he just tell us how long he is prepared to wait and how many people he is prepared to see exploited by the regulations before the Government act?
Mel Stride
I thank the hon. Lady for what is a slightly loaded question, if I may say so. I am certainly not prepared to wait for abuses of any kind, but I am prepared to wait, and it is right to wait, for a deep and considered consultation, as opposed to a short debate in the context of the Finance Bill. That is the critical point to bear in mind on this matter.
The clauses before us provide for making tax digital for business. That concerns the way in which businesses record and report their tax liabilities. The hon. Lady made some powerful points about the treatment of service charges, but I believe that they would be better pursued through the Department for Business, Energy and Industrial Strategy. It has responsibility for this area and is best placed to ensure that tips, gratuities and service charges are treated in line with the principles of clarity and transparency set out in its recent consultation. Dealing with the matter through legislation on digital taxation would risk missing crucial elements for employees or businesses that have been captured in the submissions to the consultation.
Ruth George
Bearing in mind that national minimum wage legislation can be implemented by BEIS only on an individual basis, when an individual complains, and such cases can be settled only on an individual basis, does the Minister not agree that a wider remit than that of BEIS will be required to tackle substantive abuses that go across whole workforces, as described by my hon. Friend the Member for Walthamstow?
Mel Stride
The hon. Lady raises an extremely important matter, which is those employers who do not adhere to the requirements of the national minimum wage. HMRC and the Treasury take that extremely seriously, and we have mechanisms in place, as she may know, for reporting instances of that where they occur. I can assure her that the Treasury is the Ministry directly responsible for strategic oversight of HMRC and that HMRC takes any abuse of the national minimum wage requirements and regulations in this country extremely seriously, and pursues and brings to book those who commit abuses.
Stella Creasy
Will the Minister therefore commit today to investigating the use of the E24 guidelines and the tronc schemes, to which we have referred? He may not accept our wider point about protecting people and the tips that they have rightly earned, but HMRC’s E24 guidelines fall directly within his remit, and it is precisely that scheme that we are worried employers are abusing, so will he commit today, given that he has just explained to my hon. Friend the Member for High Peak that he cares very much about this matter, to an investigation and to publishing the results, so that we can all be confident that no one is being exploited in that way?
Mel Stride
HMRC can already investigate when it suspects the kind of abuse to which the hon. Lady alludes. To be specific, if HMRC opens an inquiry into whether PAYE or NICs are being operated correctly, it will be able to ask the employer or the troncmaster how they have recorded service charges and tips and how those have been allocated, and trace them back even to which customers paid for them. The tools are there, the willingness is there and the evidence is there that HMRC is doing precisely what the hon. Lady would expect it to do in pursuing this matter.
Stella Creasy
Just so that we are all clear, because I can see that Government Members are also concerned that there may be abuse of the E24 guidelines—this is not about individual companies—will the Minister commit today to his officials doing an investigation on whether the E24 guidelines are being abused in the way that has been described and to reporting back to all of us in the House?
Mel Stride
As I just said to the hon. Lady, we can say in relation to any aspect of HMRC’s operation or any of the rules that it is there to clamp down on that we want regular reporting and all the rest of it. The point is that as a Ministry, the Treasury is there to have strategic oversight of HMRC and to ensure that it is behaving in an appropriate way and chasing down tax avoidance, evasion and non-compliance in whatever form they may appear, including the forms that she has raised. We will continue to do just that.
Ruth George
Bearing in mind that individuals have to raise a complaint in order to secure an investigation by HMRC compliance, and that the workers we are talking about are some of the most vulnerable and most susceptible to exploitation, immediate dismissal or changes to their terms and conditions because they are often not in the workplace for a substantial length of time, does the Minister agree that it would be helpful if HMRC were able proactively to investigate these schemes, rather than having to wait for individual vulnerable employees to put themselves at risk by raising a complaint?
Mel Stride
The hon. Lady overlooks the fact that it is often possible for those who wish to complain to do so anonymously through their trade union or other representatives. That is what happens in many cases. HMRC does not have to rely on a specific complaint to conduct an investigation. It may have suspicions of its own for a variety of reasons. I do not think that we are in a position where people are unable to come forward, as she suggests.
The hon. Member for Aberdeen North has tabled two amendments that seek to review the impact of MTD on specific groups. I recognise her concerns, but the Government have been clear from the outset that businesses that are unable to go digital will not be required to do so.
If you will indulge me, Mr Howarth, it is worth looking at some of the detail of the Bill at this point. The hon. Lady has raised a very important point about potential digital exclusion. Clause 60 covers exemptions, as I am sure she is aware. New sub-paragraph (4) of paragraph 14 of schedule A1 states:
“The digital exclusion condition is met”—
for those who would not be required to put in their returns digitally—
“in relation to a person or partner if…for any reason (including age, disability or location)”—
the hon. Lady rightly raised rural localities—
“it is not reasonably practicable”—
that is not the same as completely impossible—
“for the person or partner to use electronic communications or to keep electronic records”.
I think that is a well-crafted clause to catch the kind of circumstances about which the hon. Lady and I are concerned.
Kirsty Blackman
The concern raised by the hon. Member for High Peak was about intermittency. The issue is not about people who do not have access to the internet at all, but those who have only intermittent access. The clause may not be lenient enough for them to make a case for not having digital access. Does the Minister have a view on that?
Mel Stride
I thank the hon. Lady for her further point. I guess it comes down to interpretation. It seems to me that if it is not reasonably practical for a person or company to use electronic communications, the reliability of the service—another way of describing the point she raised—would be an important part of the judgment that would be made.
The clause continues with “Further exemptions”. Proposed new paragraph 15(1) states:
“The Commissioners may by regulations make provision for further exemptions.”
New paragraph 15(1) states:
“The exemptions for which provision may be made include exemptions based on income or other financial criteria.”
There is therefore a recognition in the Bill that not only do we need to get it right for the current circumstances, but we need the flexibility to be ready for any circumstances that might present themselves and which we have not considered at this stage. Those would need to be addressed further down the line.
For those who can go digital but require additional assistance, HMRC will continue to provide a diverse range of digital support, including webinars, helplines and YouTube videos, to help them meet the requirements of making tax digital.
The hon. Member for Aberdeen North also seeks to provide for a phased implementation period, with the commencement of each new stage requiring approval by the House. We have already revised the implementation to start with businesses that report quarterly, and stakeholders are operating on the basis of the new timeline. We are phasing in the implementation by piloting the changes and by starting with mandation only for VAT and those above the VAT threshold. The secondary legislation required to lay out the detailed operation of MTD will be laid before the House in due course, offering Members a further opportunity to scrutinise our plans and consider our proposals.
The hon. Member for Walthamstow has tabled an amendment to require HMRC to publish an assessment of the effect of our exit from the European Union on MTD for VAT for small businesses. HMRC wants to give businesses plenty of time to adapt to MTD and is allowing for a full year of piloting the changes before mandation applies and before the UK leaves the European Union. If businesses wish to begin keeping their records digitally before we leave the EU, they will be able to do so.
The hon. Lady raised specific issues in respect of VAT and the 13th directive. The Government do not consider there to be an MTD issue here. MTD is about how records are kept and reported, rather than the nature of the VAT regime itself. The regulations will be consistent with the requirements of the 13th VAT directive, but if she has specific concerns, HMRC will be happy to look into them.
Stella Creasy
I am happy to clarify. At the moment, the intra-country VAT scheme is administered online, which makes it relatively simple for people in the UK to reclaim VAT they have incurred in other countries. As we know, the 13th directive requires every single other country to come up with its own VAT scheme, so there is a question about the compliance of different schemes with our scheme. If we have a digitised system, it needs to be able to interact with 27 other countries’ VAT schemes, rather than one EU-wide scheme. Has the Minister’s Department done any work on how the other 27 schemes will interact with our online scheme, so that businesses can be assured of the frictionless transfer that his Government so often promise on these issues?
Mel Stride
The hon. Lady raises a very specific point within what is a large set of negotiations on all the issues of customs, excise and VAT. She will be aware that a customs and excise Bill will be presented to Parliament fairly shortly.
Stella Creasy
I have looked at the Minister’s White Paper, and it does not mention the 13th directive at all. If he could clarify that a second White Paper will address this issue with the 13th directive, I am sure that many small businesses would be relieved.
Mel Stride
As I am sure the hon. Lady knows, the White Paper sets out that the Bill will be a framework Bill. The purpose of the Bill will be to ensure we can enact through legislation—largely secondary legislation—whatever arrangements we arrive at as a consequence of the negotiations we are in the middle of. It is not my position here today to prejudge exactly where we will end up on VAT, but I can reassure the hon. Lady that all the preparations and legislation will be in place to accommodate in as frictionless a manner as possible—as she rightly says—the exercise of VAT between ourselves and our former European partners, as well as customs at the borders and all the other important issues that will arise once we leave the European Union.
Stella Creasy
The Minister is being incredibly generous. I hope he will forgive me; sometimes I must feel like a bear of very little brain on these issues. The 13th directive is the manner by which EU countries deal with non-EU countries’ VAT claims. It is an immovable part of the post-Brexit landscape, as I am sure the Minister agrees. Can he clarify that it is the 13th directive that his Department is engaging with? He said that the White Paper was a framework document. Will the customs union legislation deal with the 13th directive, or does he think there will somehow be a completely different scheme? I know that the White Paper talks about innovation, but it seems a bit pie in the sky to suggest that the 13th directive will not be part of this. Why is he not talking about it?
Mel Stride
I refer the hon. Lady to my last reply: the customs Bill is not there to map out every single eventuality as to how VAT will be handled, what rules and regulations we may or may not operate with under World Trade Organisation rules or what agreement we will have with the EU on all the issues, including those she has raised, or otherwise. It will be a framework Bill that will ensure that we are in a position promptly and effectively to bring in whatever measures we need to move forward in the orderly manner she referred to. On that note, I think we have given her amendments a thorough examination.
The Government’s ambition is for the UK to be the best place in the world to start and grow a business, and for HMRC to be one of the most digitally advanced tax administrations in the world. Making tax digital will be a major step forward in the way that businesses conduct their record keeping and interact with HMRC. I commend the clauses to the Committee.
Question put, That the amendment be made.
The Chair
With this it will be convenient to consider the following:
Amendment 41, in schedule 16, page 609, line 4, leave out “may” and insert “must”.
This amendment would remove HMRC’s discretion over whether to publish information on people have incurred a penalty and the conditions of paragraph 46 have been met.
Amendment 42, in schedule 16, page 611, line 27, at end insert—
“Duty to publish information on operation of penalty regime
51A (1) The Commissioners must publish information about the operation of the penalty scheme in relation to each tax year within six months of the completion of that tax year.
(2) Such information shall cover in particular—
(a) the nature of the abusive tax arrangements giving rise to penalties,
(b) the extent to which such arrangements relate to offshore income, assets and activities,
(c) the extent to which people who would otherwise have been liable for a penalty under these provisions were not liable due to being convicted of a criminal offence in accordance with paragraph 52.”
This amendment would broaden the requirement for HMRC to publish information on penalties to cover the nature of the abusive tax arrangements, the extent to which they involve offshoring and the instances where successful criminal prosecution is used instead.
That schedule 16 be the Sixteenth schedule to the Bill.
Mel Stride
Clause 65 and schedule 16 introduce a new penalty for any person who enables the use of tax avoidance arrangements that are later defeated by HMRC. Currently, tax avoiders face significant financial costs when HMRC defeats them, but those who enable them bear little risk; they gain financially while their clients foot the bill. The purpose of the penalty is to deter people from enabling tax avoidance arrangements, reducing the number of schemes on the market.
Enablers of tax avoidance arrangements will now face penalties of 100% of the fees that they earned from the failed avoidance. The measures ensure that there are powers to tackle the full supply chain of avoidance arrangements. The penalty is designed to have a behavioural impact on the minority who continue to supply abusive avoidance arrangements, while ensuring that the vast majority of professionals who advise on genuine commercial arrangements are not affected. The measures are targeted carefully to capture abusive arrangements that no reasonable person could consider to be a reasonable course of action, and only those enablers who knowingly enable such arrangements that are later defeated.
The measure was developed after extensive consultation last year with representative bodies and large accountancy and law firms. Following the publication of draft legislation in December 2016, HMRC held a significant number of meetings with stakeholders to help refine the technical detail of the legislation. That engagement has been constructive, and stakeholders have welcomed HMRC’s collaborative approach, acknowledging that many of their concerns have been addressed.
For too long, those who enable tax avoiders have been able to gain financially from schemes, knowing that they face little sanction when their scheme is defeated. It is time that that is put right.
Anneliese Dodds
As the Minister has helpfully set out, the measures will introduce new penalties for tax avoidance enablers. Specifically, penalties charged will be equal to the amount of consideration received or receivable by the enabler for their role in enabling the tax avoidance arrangements that were defeated.
Our amendments 41 and 42 would require the publication of information about how the new scheme will operate. Specifically, we think it is necessary for lawmakers, the public and others to be aware of who is being penalised through these new tax measures; the nature of the abusive tax arrangements that have been uncovered and dealt with; the extent to which they apply to offshore income, assets and activities; and the extent to which successful criminal prosecution is used rather than this penalty.
We think that that information is necessary because we are concerned that, although it is a welcome step, this measure is potentially insufficient. We are concerned that the Minister’s aspirations for this measure to have a behavioural impact might not be realised, and that concern relates specifically to the extent of the penalty.
As I have said, the penalties charged will be equal to the amount of consideration received or receivable by the enabler for their role in enabling the tax avoidance. Therefore, in effect, they will be required to pay back merely the payment they received for the inappropriate arrangement in the first place. That payment might not even cover HMRC’s costs of investigation and recovery.
As I understand it, penalties have been reduced after consultation, which is regrettable. Given that this is the Finance Bill, we cannot suggest that those penalties should be restored to a level that would cover HMRC’s costs—that would be inadmissible. None the less, we can ask for the information that we will require to assess whether this regime is watertight and driving the behavioural change suggested by the Minister.
Ruth George
Does my hon. Friend think that the clause provides HMRC with any impetus to investigate such schemes at an early stage? At that point, very little tax may be recoverable, resulting in a smaller penalty. That would create a perverse incentive to delay investigations until greater charges can be levied in order to cover HMRC’s costs. I would hope that the Minister would want to incentivise the early investigation of such schemes.
Anneliese Dodds
My hon. Friend makes a good point about the potential perverse incentives created by focusing uniquely on HMRC receiving payment from the client for the creation of such schemes and the enrolling of individuals and firms on to them, rather than on the activity of creating those schemes in the first place and, above all, on HMRC’s costs as a result of investigating them.
All of us, as Members of Parliament, are well aware of the kinds of schemes under discussion. It was interesting to hear the Minister mention the principle of eliminating those schemes that no reasonable person would think should be followed by taxpayers. We have voluminous evidence that that is not currently the case. We need only look at some of the flow charts produced and revealed during the Lux and Panama leaks to be aware that there clearly is an industry in creating such tax avoidance schemes.
We need very tough measures against those schemes. Given that they could be costing the Exchequer dearly, we feel it is appropriate to have a greater amount of information about the measures and, in particular, to compel HMRC and the Government to publish that information in full so that we can assess their efficacy.
Mel Stride
I make clear the Government’s total commitment to clamping down on tax avoidance. We have brought in £160 billion since 2010 by clamping down on avoidance, evasion and non-compliance. We have already introduced legislation that clamps down on those who generate abusive schemes, and the Bill seeks to catch up with those who have benefited or who expect to benefit from such schemes. That leaves us to deal with the enablers in the centre of the equation.
The hon. Member for Oxford East raised the issue of naming. The Bill will allow the flexibility to name those who have been enabling these schemes. We believe that a proportionality test should be applied to take account of how significant and widespread the abuse has been, but if a very serious level of abuse has occurred, there is provision for the individuals, partnership or company concerned to be named in the way she described.
The hon. Member for High Peak is entirely correct that HMRC should be encouraged to address these cases early, rather than letting them run on. The clause seeks not only to ensure that we can catch up with these things quickly, but to prevent them from happening in the first place. It is about behavioural change, which is so important. We have seen a lot of evidence that many of these schemes are beginning to close down because we are sending the right signals and getting tough and serious about it.
Anneliese Dodds
I am concerned about incentives. HMRC is not being given specific additional resources, and some of the investigations may be quite detailed. As my hon. Friend the Member for High Peak asks, where is the incentive to crack down on the schemes early? The funds receivable may be very small because the schemes are unlikely to be used by a large number of taxpayers. I am concerned that we may be making it difficult for HMRC to take action, because the Bill does not include a requirement to cover its costs.
Mel Stride
The incentive for HMRC and for the Government is to squeeze the tax gap and minimise the number of people avoiding tax. If we do not get on with clamping down on those individuals and companies in a timely fashion, we will make things worse right across the piece and generate less tax as a consequence. We have a clear incentive to ensure that these measures bite at the earliest opportunity. It is about changing behaviour. The very best approach to tax avoidance is to ensure that it does not happen in the first place.
Question put and agreed to.
Clause 65 accordingly ordered to stand part of the Bill.
Schedule 16
Penalties for enablers of defeated tax avoidance
Amendment proposed: 41, in schedule 16, page 609, line 4, leave out “may” and insert “must”.—(Anneliese Dodds.)
This amendment would remove HMRC’s discretion over whether to publish information on people have incurred a penalty and the conditions of paragraph 46 have been met.
Question put, That the amendment be made.
Finance Bill (Sixth sitting)
Tuesday 24th October 2017
(6 years, 6 months ago)
Public Bill CommitteesRead Full debate Finance (No.2) Act 2017 View all Finance (No.2) Act 2017 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 24 October 2017 - (24 Oct 2017)
The Committee divided: - Ayes: 9 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 9 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 9 / Noes: 10 - Question accordingly negatived. ]]]]HS_COL-159]]]]
The Committee divided: - Ayes: 9 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 9 / Noes: 10 - Question accordingly negatived.
The Chair
We come to the dénouement of the Finance Bill in Committee. I hope the Government Whip liked my use of English—very evocative. I call Peter Dowd to move amendment 43.
Peter Dowd (Bootle) (Lab)
I beg to move amendment 43, in clause 69, page 91, line 16, at end insert—
“(1A) In Schedule 23 to FA 2011, after paragraph 65, insert—
‘66 (1) No later than 30 September 2020, the Commissioner shall undertake a review of the exercise of the powers under this Schedule in relation to relevant data holders specified in paragraph 13D.
(2) The review shall consider in particular the number of appeals in relation to Data-holder Notices.
(3) The Chancellor of the Exchequer shall lay a report of a review under this paragraph before the House of Commons within one month of its completion.’”
This amendment would require HMRC to review the exercise of its data-gathering powers in relation to money service businesses.
Peter Dowd
It is a pleasure to serve under your stewardship, Mr Walker, notwithstanding the fact that you have just stolen my joke. I asked my daughter, who studied French, what the French for “dénouement” and “ambience” was, but she did not find that very amusing.
Clause 69 extends bulk data-gathering powers, which were given to HMRC in the Finance Act 2011, to money service businesses such as Western Union. The clause continues the Government’s plans to rapidly expand HMRC’s powers to collect bulk data from third parties. In the Finance Acts of 2011, 2013 and 2016, the powers were extended to merchant acquirers, and in 2016 they were extended to, to collect bulk data from providers of electronic stored-value payment services, also known as digital wallet transactions.
The powers are part of the Government’s strategy to tackle the hidden economy and reduce the tax gap. All Members agree that people operating within the hidden economy evade tax and gain an unfair competitive advantage over law-abiding, tax-paying individuals and businesses. Under anti-money laundering legislation, money service businesses are already required to conduct due diligence checks on customers, in certain circumstances at least. HMRC supervises the majority of money service businesses for compliance with that legislation, so it can request limited information from them as part of its supervision for anti-money laundering purposes. It can also use any information obtained for tax compliance purposes but cannot currently request that information with the original intention of checking the tax position of their customers. This clause would change that by requiring money service businesses to become data holders, to collect data from their users, and to pass that data on to HMRC when requested.
It is important to be clear about how a money service business would hand over a customer’s data to HMRC. First, HMRC would issue a notice to the data holder requiring it to provide HMRC with information. The data holder can respond and, if it rejects the notice, can appeal to the tribunal. The tribunal then makes its ruling. Under these provisions, any money service business that does not comply will be issued with a financial penalty. Similarly, HMRC has the power under this measure to apply directly to a tribunal for approval at a hearing without notice being given to the data holder—effectively going over its head.
At no point in the process is the individual or the business who used the money service business and whose information is being passed to HMRC notified, as I understand it. It seems that the clause is not open to individual appeal at any point in the judicial process. In fact, it rests solely on the shoulders of the money service business to appeal when necessary.
The Opposition fully support measures to clamp down on the hidden economy—on individuals and on businesses using unsavoury and slippery practices to avoid paying their fair share of tax—but we are talking about third parties collecting massive amounts of data to hand over to HMRC. Money service businesses are effectively being asked to pick up the slack for HMRC, which, in our view, is increasingly underfunded and under-resourced. I have said it before, and I will say it again: Government statistics show that since 2010, there has been a 17% reduction in HMRC staffing levels. The Minister needs to address the resources available to HMRC to crack down on the hidden economy. It appears that once again the Government are ambitious in the powers they wish to give themselves—through the back door, some would say—but not so enthusiastic about funding and resourcing their commitments.
The Minister will be aware that although most money service businesses keep records of due diligence checks on customers, they do not have the time—or, I suspect, the inclination—for the pretty onerous task of sifting through the data to provide HMRC with individual records. I therefore find it unlikely that they would refuse or appeal a notice, which is the supposed judicial check on this broad, sweeping power. What does the Minister think is a reasonable notice period for a money service business to process and respond to HMRC? Does he accept that there may be hidden costs for money service businesses that have to comply with these measures?
In the Government’s consultation, there was much debate about the substance of the information that would be transferred between money service businesses and HMRC. According to the Information Commissioner’s Office,
“it is clear that some of the information that may be provided to HMRC for the purposes of extending data gathering powers to money service businesses will constitute personal data in instances where the customer is an individual, a sole trader or a partnership… It will therefore be an important data protection obligation for the MSBs under the scope of the proposed legislation to provide their customers with privacy notices… The minimisation of the collection of personal data of individual consumers is an important privacy protection principle in financial transactions.”
I suspect the Minister will need to consider those concerns as part of a wider discussion about the scope of HMRC’s powers.
The privacy group Liberty has raised concerns that the practice of bulk data surveillance is suspicionless surveillance and constitutes a disproportionate interference with article 8 of the European convention on human rights, as enshrined in the Human Rights Act 1998: the right to respect for private and family life. Liberty’s concern is that bulk data surveillance inverts the traditional relationship between suspicion and surveillance that exists in UK law, because suspicion comes first to justify subsequent surveillance.
In the light of these concerns, our amendment calls for a review of the exercise of schedule 23 powers, with a particular emphasis on how they relate to data protection. The Government have the right to ensure that HMRC has the necessary powers to tackle the hidden economy, but they are also obliged to ensure proper judicial oversight and the protection of people’s rights.
I am reaching my dénouement. The Minister’s case for new bulk data-gathering powers rests on the need for third parties to help HMRC to catch customers who participate in the hidden economy, which costs the Treasury £6.2 billion a year, as I recall. However, he has rejected our attempts to introduce a register for offshore trusts, our calls to crack down on tax avoidance by removing the exemption for offshore trusts in the Government’s deemed domicile proposals, and any meaningful attempt to bring transparency and accountability to non-doms who abuse the UK tax system. I will not call it a double standard; that is not a fair assessment.
However, the Government are demanding all this information from money service businesses customers to ensure that they are not participating in the hidden economy—yet at the same time rejecting any sort of information being held on offshore trusts, which are used to shelter hundreds of billions from the UK Exchequer. As I said last week, there needs to be careful consideration of the balance between individual liberty and the powers of the state. Over the past few years, we have seen multiple Finance Bills whereby Government give HMRC sweeping data-gathering powers, from merchant banking to digital wallets. I believe there is a rational concern that though these powers can tackle criminality, they can also impede an individual’s right to privacy. Any Government need to ensure that the balance is struck fairly and proportionately—and we are not convinced that this does so. Otherwise, there is a real fear that, increasingly, only those who can afford to secure their financial privacy, or to shelter and shield their wealth and financial transactions from the state, will have any privacy. The Government should give more thought to that.
The Financial Secretary to the Treasury (Mel Stride)
It is a pleasure to serve again under your chairmanship, Mr Walker.
Clause 69 will extend HMRC’s data-gathering powers to money service businesses, allowing it to better identify and take action against businesses and individuals operating in the hidden economy. Money service businesses, or MSBs, are entities that provide money transmission, cheque cashing, or currency exchange services. They provide valuable financial services that are relied upon by many tax-compliant customers. However, these services are vulnerable to exploitation by those who want to disguise their income. Under the clause, data provided by MSBs to HMRC will allow HMRC to better identify non-compliant customers who are exploiting MSB services to hide their income and operate in the hidden economy.
The hidden economy is made up of those businesses that fail to register for tax, and individuals who fail to declare a source of income that should be taxed. By hiding their activity from HMRC, those operating in the hidden economy deprive the Government of vital funds to run public services. That places an unfair burden on the vast majority of people and businesses who pay their fair share of tax. Hidden economic activity also disadvantages compliant businesses. HMRC’s operational experience shows that non-compliant businesses and individuals can exploit the services offered by MSBs to disguise or dispose of undeclared income. They can do this, for example, by cashing a cheque for undeclared work. HMRC’s data-gathering powers allow it to collect data from certain third parties. Following public consultation and a Government response in 2016, the clause extends those powers to MSBs. It does that by introducing MSBs as a new category of data holder from whom HMRC may require data. MSBs are defined under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017.
“Credit institutions”, or, practically, banks and building societies, are excluded. The term MSB is generally taken to mean a business that provides money transmission, cheque cashing or currency exchange services without transacting through a bank account or providing general banking services. The clause is intended to cover those businesses. Supporting regulations will be made at Royal Assent, using an existing power to make regulations contained in schedule 23 of the Finance Act 2011. Those will provide detail of the types of data that can be requested. A draft of the regulations was published for consultation last year and regulations will subsequently be laid before the House, subject to the negative resolution procedure. The clause does not impose any additional record-keeping requirements on MSBs. HMRC cannot request data that an MSB does not hold. That is an important point and relates to the concern raised by the hon. Member for Bootle.
HMRC will work collaboratively with MSBs to minimise the administrative burden of complying with the new law. MSBs can appeal against a data notice issued by HMRC on the grounds that it is unduly onerous, or if they consider that the notice asks for data that is outside the scope of relevant regulations. HMRC can request data necessary to detect and quantify hidden economy tax risks. That includes information needed to identify an MSB’s customers and records that the MSB is required to keep under money laundering regulations. It also includes data about aggregate customer transactions. HMRC will not request data on individual transactions.
The hon. Member for Bootle raised an important point—what data can HMRC request under these provisions? The answer is aggregated data, which will not include data on the value of individual transactions made by customers.
Kelvin Hopkins (Luton North) (Lab)
I want to respond briefly to what the Minister said. It is a pleasure to serve under your chairmanship yet again, Mr Walker, possibly for the last time during this Committee.
I have always had a concern about the money service industry, particularly since many of my constituents send money to family members overseas. There are large immigrant minorities from every part of the world in my constituency. Some of the transactions have been insecure—we have seen companies where money has been lost, and I have long thought that there ought to be a much higher degree of regulation of that industry.
There is obviously an issue around charges. I suspect that charges vary widely and are often very high. It seems to me that what we really want is at least a state company doing this business, either instead of or alongside these organisations, which would be properly regulated, have fair charges, and be open and transparent, apart from personal secure information about transactions, which my hon. Friend the Member for Bootle talked about. Bringing the state actively into that area would be a great advance. Perhaps I speak from a left position that might not find favour with the Government, but we ought to look forward to a much more regulated industry with a strong state sector in the future.
Mel Stride
To reply briefly to the hon. Gentleman’s point: the issue of MSB ownership and state involvement is probably slightly beyond the scope of this Bill, but his points are noted. If he continues to work very hard, who knows what might happen? Much to our horror and dread, the state may end up owning just about everything in this country, if he and his merry men and women have their way.
Peter Dowd
I have accepted previous assurances provided by the Minister and we have withdrawn amendments appropriately, in good faith and good spirit. The issue under discussion goes beyond the technicalities and reaches into the very nature of a state that does not interfere in people’s affairs where it has no business to do so. That is not to say that the state has no business interfering; it does so with tax collection, which helps maintain the balance of society. It would not be appropriate for me to withdraw the amendment, because I think that many members of the Committee would like to err on the side of caution and accept it, even though they will not do so. We will therefore leave it hanging and I have no doubt that we will return to the issue of privacy at a future date.
Question put, That the amendment be made.
Stella Creasy (Walthamstow) (Lab/Co-op)
I beg to move, That the clause be read a Second time.
It is a pleasure to serve under your chairmanship, Mr Walker. I am conscious that several members of the Committee may wish to take part in the emergency debate on universal credit—a subject close to many of our hearts—so I do not intend to speak for a long time. However, we ought to get value for money out of these Committee sittings and, indeed, this Bill, so I hope that my new clause gives the Government some ideas about how we can solve the pressing problem of the public finances and the lack of funding.
Government Members often argue that Labour only wants to spend money, but my proposals very much seek to save money for the country. Indeed, they present a way to protect UK taxpayers and British businesses, generate potentially billions for the Exchequer, and address the pressures on the housing market. I am sure that none of us would want to lay claim to the magic money tree, but I believe that my new clause would provide for a concrete cash cow in which the Government could invest, and I hope to convince Ministers and Government Back Benchers to support it.
The new clause relates to a proposal by the previous Chancellor of the Exchequer—I am not sure how many jobs he has now, but he is currently the editor of the Evening Standard—about the way in which capital gains tax was applied to property sales.
Kelvin Hopkins
I am interested in the former Chancellor and how many jobs he has. It is particularly interesting to learn how much he is being paid for those jobs.
Stella Creasy
I am afraid that I do not have that figure to hand, but I do have figures relating to the amount of money that the new clause could raise for the public Exchequer. I hope that my hon. Friend will be as pleased with and as interested in those numbers as I am.
Historically, only UK residents or those with a permanent UK base have been subject to capital gains tax. In April 2013 that was changed to include the disposals of UK dwellings owned by non-resident companies, partnerships and collective investment schemes, which were subject to an annual tax on enveloped dwellings. In April 2015 that was extended to all non-UK residents disposing of UK residential property, and the critical point is that that was about residential property. The argument that non-doms should be paying capital gains tax on the disposal of property was put forward by the previous, and indeed current, Government. The question is: why did they make it apply only to residential properties? As I hope to prove, that has created a loophole through which some people have chosen to put their properties.
We are talking about a rate of tax that is between 18% and 28%, or 20% for corporates. The standard OECD double tax treaty expressly preserves the right of countries to tax non-residents on capital gains from the disposal of local real estate. Many of us will have seen at first hand in our communities the impact of this country’s over-inflated housing market and the connection between the residential and the commercial property market. The Adam Smith Institute reckons that there are 1 million non-doms in the UK, although only 110,000 are declared. Those people are part of our communities, but they are benefitting from an advantageous tax position because of this loophole.
The Bill tries to address issues relating to inheritance tax and holding property through UK companies, so the Government are interested in where people might be using companies to avoid paying tax. Indeed, that is one of the debates that we have been having. The new clause addresses another issue, which is the ability to designate a property as a commercial property to avoid paying the residential charge that this Government introduced in 2015. We know that that is hitting UK companies competing with non-UK companies. In tabling this new clause, I am making a plea to the Minister to be on the side of British businesses that are being unfairly treated in our tax system. We know that people set up property holding companies to avoid those charges. By changing the loophole, we would be able to apply the charge fairly across the board. Indeed, it has to be asked why anybody would hold UK real estate through a foreign company except for tax purposes.
The Minister might say that this about a competitive tax advantage for the UK. Let me reassure him that almost nowhere else in the world exempts foreigners from tax on selling real estate. By closing the loophole, we would simply bring ourselves into line with Canada, Australia and indeed the rest of Europe. The Minister may claim that there are anti-avoidance rules that would take precedence, but if a non-resident company operates in the UK through a UK permanent establishment, the disposal will be subject to UK capital gains tax. That is not the requirement we are talking about; we are talking about organisations that hold property in the UK through offshore companies and designate that property as commercial property. It is the difference between the residential and the commercial that we need to deal with in terms of this loophole.
Ruth George (High Peak) (Lab)
Does my hon. Friend think that the definition of commercial properties would include properties that were previously residential, such as those in my constituency in the Peak district? They were residential homes, but they were sold to owners who live outside the area and are now used primarily as second homes, although they are rented for a very small number of weeks during the year. That has turned them into commercial properties, severely depleting the number of homes available to local people, particularly in rural areas of outstanding natural beauty.
Stella Creasy
My hon. Friend has shown how simple it is to evade the tax by avoiding the loophole—the previous Chancellor tried to close it by ensuring that non-doms paid capital gains tax on the sale of residential property—simply by repurposing a building as commercial property. Even given the rules on closed companies in existing legislation, people can get around the charge. I am suggesting that the figure could be as much as £8 billion. I certainly think that at least £1 billion of public revenue could come from closing the loophole and simplifying the way we treat non-doms with capital gains tax. The Minister may have a different number, but the point of the new clause is to get the number.
The Bill is about how we manage public finances. Giving this tax loophole to non-doms means that our British businesses are unfairly treated and our property market faces artificial pressure. We are missing out on vital funds that could go into our public services. The new clause is not a magic money tree; it is a concrete cash cow. If the Minister will not agree to publishing the data, will he commit to looking at how we can close the loophole?
Mel Stride
New clause 2—I think it is now known as the concrete cash cow clause—provides us with an opportunity to discuss the rules surrounding UK commercial property and those who are foreign-domiciled. As the hon. Member for Walthamstow explained, her new clause would require HMRC to review the taxation of capital gains on commercial property disposal by UK taxpayers with a foreign domicile.
There is no question but that all UK residents, whether UK-based or non-domiciled, are chargeable for tax on profits from selling UK land. That includes non-domiciles who are taxed on a remittance basis, where foreign income and gains are taxed only when they are brought into the UK. Our tax base is predominantly those who are resident in the United Kingdom. As the hon. Lady has drawn to our attention, recent changes removed non-residents into the UK tax base for the sale of UK residential property. The new clause raises the fact that that treatment does not extend to non-residents for the sale of commercial property in this country. While I understand why she suggests that extending the laws would raise revenue, I should point out that this is a very complex area, which needs to be carefully considered.
The 2015 rules were designed to catch individuals and ways in which a person may hold title over a dwelling such as via trusts and closely held companies. They do not apply to companies with lots of shareholders. The structures that are used to own commercial property are different from residential property, often more complex and involving corporates, joint ventures and specialist property vehicles. We would need rules that address such structures and get to the heart of the ultimate owner.
Will the hon. Lady consider this illustration? I might live in Canada and own 50% of a home in Walthamstow. I might easily conceive, if I did not know for sure, that selling my part of the house in the UK would mean paying some UK tax. However, imagine instead that I own a handful of shares in a fund of some kind, which in turn owns half an office block in Walthamstow. Being such a minor shareholder, I may not even know how my money is invested. To send the tax man chasing round overseas for the little shareholder in a commercial building would hardly be cost-effective. We would need to design balanced rules that look at how the market works and what would yield the Exchequer the best return.
Extending the current rules to include any UK property is not a simple matter of striking through “residential property” and inserting “all UK property” into the current provisions, as this would not take into account the intrinsic differences in the way that commercial properties are owned and dealt with.
Ruth George
Does the Minister agree that now that we are seeing residential property increasingly acquired by such complex structures, and that by eradicating the omission for commercial properties, it would simplify the legislation? HMRC would not have to establish whether a property was commercial or residential because there are so many grey areas, as my hon. Friend the Member for Walthamstow pointed out.
Mel Stride
The point I was trying to make was not so much whether one classified a property as residential or commercial. My point was that where it is commercial, the ownership arrangements can be so complicated that this kind of approach is far from simple.
Stella Creasy
I think the Minister is making a strong case for the new clause and providing the data. He may want to update his colleagues on the fact that the closed company model is five or fewer participants. Were there to be six participants, that would extend the limitations he is talking about. I also want to ask him, now that we have the residential rules in place, whether he will commit to publishing how many properties that were previously cast as residential are now categorised as commercial use since that legislation came in. We might begin to get an understanding of whether people are using this loophole to evade the capital gains tax to which we are entitled.
Mel Stride
I am certainly happy to look into the issue of what data are available that might reasonably be released for those properties that might have changed from residential to commercial. My point is that the existing rules for residential property involve, for example, consultation with external experts over a period of two years. They are arguably, for reasons that we have been discussing, more simple and straightforward than the arrangements that would need to be in place for a commercial property situation. To ensure that legislation works effectively, HMRC would be able to collect taxes from overseas taxpayers.
The UK commercial property market is even more complex and inextricably linked to many other markets and investments both in the UK and overseas. Bringing non-resident companies into these rules would bring with them a whole tax code for corporates, which would need to be considered and applied consistently in the context of someone who may have no other UK tax footprint.
Of course, there are existing exemptions and reliefs for the UK investor that would need to be considered to see whether and how they might apply to an overseas equivalent and whether such exemptions could be used to undermine the idea as a whole. Any change to further broaden our base would require consultation with the public, tax experts and affected sectors, particularly those involved with funds and pensions, to ensure they were clear, enforceable, robust to avoidance, and achieved their intention. I assure the hon. Member for Walthamstow that we keep all taxes under careful and continuous review to ensure that the tax system works effectively for the taxpayers of this country.
Stella Creasy
Again, the Minister makes a compelling case for the new clause, which would enable exactly such an information-gathering exercise. As he points out, this may be a complex area. I note, however, that the Bill deals with overseas companies and their inheritance tax positions. I fail to understand why Ministers accept that we need to address the use of commercial entities to avoid inheritance tax but do not accept that we need to address their use to avoid capital gains tax. Will he say a little about that?
Mel Stride
As I have said, I assure the hon. Lady that we keep all taxes under careful review to ensure that the tax system works effectively for the taxpayers of this country. I favour that, rather than requiring HMRC by statute to conduct reviews, as the best way to develop tax policy. I heard what she had to say about those taxes, and I will certainly consider the questions that she raised, but I urge the Committee to reject the new clause.
Stella Creasy
I am afraid that I am not satisfied that the Minister has made a strong enough argument against his own argument that this is a complicated area in which we need information. The new clause would not commit the Government to closing the loophole; it would simply start the process of asking how much the loophole costs us and recognising that, where we create a category for one type of property and people can apply it to another, that may generate a loophole that is exploited to the detriment of the UK taxpayer. With that in mind, and in full support of the British businesses that are being penalised as a result of the Government’s failure to address that loophole, I wish to test the will of the Committee on this matter.
Question put, That the clause be read a Second time.
Mel Stride
Mr Walker, having rocketed through this Bill, efficiently and I think in near-record time, it is only right that I say “thank you” to all those who have made our rapid progress possible. I start with yourself, Mr Walker. I thank you for your patience, good humour and of course for teaching us the right pronunciation of “schedule”. I also thank your co-Chair, Mr Howarth, for his sagacity, which is unrivalled on the Panel of Chairs, with perhaps the exception of yourself, Mr Walker.
I thank all members of the Committee. I thank Opposition Members for their pursuit of their duty of scrutiny of the Bill, although ultimately they were, rather pleasingly, unsuccessful in all the Divisions that we have had. However, we will not hold that against them; they did their job very thoroughly and very effectively indeed. I want to particularly and personally thank the hon. Members for Bootle, for Oxford East and for Aberdeen North for the very good-natured and decent way in which they have dealt with me personally and all the Government Members of the Committee; and, yes, I want to thank the hon. Member for Walthamstow as well, from the bottom of my heart. I genuinely respect her eloquence and determination, and I have enjoyed the mental contortions that she has put me through during the Committee.
I thank the Government Members of the Committee. Their contributions were slightly limited, but when they came they were of a quality that was unrivalled and unparalleled in the history of Committees. I thank the Whips on both sides: my hon. Friend the Member for Beverley and Holderness and the hon. Member for Manchester, Withington. As a former Whip, I know that often they are in the background but what they do really matters and they have ensured that this Committee has run in a very efficient and effective manner.
I thank those who gave evidence to the Committee, the Clerks, Hansard and the Doorkeepers. Most especially, I thank my own officials at the Treasury and HMRC, who in the short time that I have been a Minister have impressed me immensely with their knowledge, guidance and overall their patience and kindness towards me, in many, many hours of trying to explain what has been an extremely technical Bill.
Finally, on a personal note, if I might be indulged, I thank my two young daughters, Ophelia and Evelyn, who, in the last couple of weeks, while their father grappled in his dreams with this highly technical Bill, managed to stay out of their mother and father’s bed and to give them some sleep.
I look forward to Report. Of course, as someone has already mentioned, we have the delights of a further Finance Bill after the Budget, which I know we can hardly wait for.
Peter Dowd
May I completely concur with the sentiments of the Minister? I thank all my colleagues and Government Members for their patience and forbearance. I will just leave on this note because I am quite stunned: I have visions of the Minister grappling in bed. [Laughter.] Best to leave it on that note.
Kirsty Blackman
I thank you, Mr Walker, and Mr Howarth for your chairmanship of this Committee. It has been excellent, as ever. I also thank all hon. Members—in particular, my hon. Friend the Member for Glasgow East, who has sat through his first Finance Bill. It will possibly be the first of many. I think he hopes not, but we shall see. I would like to give special thanks to Miriam Brett, our researcher, who provided me and my hon. Friend with a huge amount of useful information, which we used during the Committee.
Question put and agreed to.
Bill, as amended, accordingly to be reported.
Westminster Hall
(6 years, 6 months ago)
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UK Relations with Taiwan
(6 years, 6 months ago)
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Bob Blackman (Harrow East) (Con)
I beg to move,
That this House has considered UK relations with Taiwan.
It is a pleasure to serve under your chairmanship for the first time in Westminster Hall, Mr Paisley. I place on record my entry in the Register of Members’ Financial Interests: along with many colleagues, I took part in the all-party parliamentary group visit last month to Taiwan, where we were hosted by the Government and businesses from across Taiwan. That is one of the great values of all-party parliamentary groups; we can visit countries and states around the world, report back to Parliament and brief Ministers and members of the Government who, despite the extremely hard work that they undertake, cannot be everywhere all the time. It is a vital part of our parliamentary work.
To set the scene, Taiwan is the 22nd largest economy in the world, with a gross domestic product of close to $530 billion. It is a growing country with a population of 24 million, concentrated around the coast of a volcanic island, and its industry is growing dramatically. It is a vibrant democracy and an open society, with opportunities to share our values of freedom, democracy, the rule of law and human rights. The UK and Taiwan have many shared interests in maintaining peace and stability not only in Asia but in the Asia-Pacific region in general.
Taiwan is also, of course, well known around the world for its high-tech information and communications technology industry. Its target of increasing and strengthening five key industries—the Asian silicon valley, biomedicine, green energy, smart machinery and defence—means ample opportunities for free trade between us and Taiwan. I am one of those who believe that in the Brexit era, we have an opportunity to be internationalist and broaden our horizons in terms of the countries with which we trade and opportunities to set up new arrangements around the world. Taiwan is one country where we have a huge opportunity, because we have such a strong base to build on.
Taiwan has been a World Trade Organisation member since 2002. Who knows where we will be after March 2019, but I suspect that given our involvement with countries such as Taiwan, we will have an opportunity to forge closer links and possibly a free trade deal and further co-operation with Taiwan post-Brexit. As our economic relationship is central, further improvements have been made. More than 300 UK companies have business operations in Taiwan already. I ask not only the Foreign and Commonwealth Office but the Department for International Trade to encourage more UK companies to set up trading links with Taiwan.
At the last count, Taiwan was the UK’s 39th largest export market and 28th largest source of imports overall. We exported £1.8 billion in goods to Taiwan in 2015, but imported £3.5 billion, giving a trade deficit of £1.7 billion. We have had a trade deficit in each of the last 10 years. It is important, in the post-Brexit world, to look to improve the importance and levels of our exports. Our exports to Taiwan peaked as long ago as 2010, so there is a lot of potential to improve on the position.
To give a brief history of Taiwan and our trade involvement, in 1950 we ended unofficial relations with the Republic of China following the Chinese civil war and recognised the People’s Republic of China, but we maintained our relations in Taipei and continued to conduct trade-related activities. In September 1963, a Government office was established in the UK by the name of the Free Chinese Centre, becoming the Taipei Representative Office in 2015. Obviously, there is a lot of opportunity there.
In 1976, we established the Anglo-Taiwan Trade Committee in Taipei, which ended up increasing our involvement with Taiwan overall. In 1993, the Anglo-Taiwan Trade Committee and the UK Education Centre merged to become the British Trade and Cultural Office, which became the British Office Taipei in 2015, to ensure that we extended the full scope of the work.
The Government’s position on Taiwan has been summarised in written evidence to the Select Committee on Foreign Affairs:
“Under the terms of the 1972 agreement with China,”
the Government
“acknowledged the position of the government of the PRC that Taiwan was a province of the PRC and recognised the PRC Government as the sole legal Government of China. This remains the basis of our relations with Taiwan.”
Will my right hon. Friend the Minister clarify, when he replies to this debate, our relations with China?
Sir Desmond Swayne (New Forest West) (Con)
I, too, have an entry in the register. Early in my ministerial career, it became abundantly clear to me what huge importance our principal ally, the United States, attaches to free movement within the South China sea. Does my hon. Friend agree that we must bear in mind in all our future relations with China the importance that our principal ally attaches to the South China sea?
Bob Blackman
The military position with respect to Taiwan and the statements made by the People’s Republic of China—not least this week, as representatives have met to determine their future strategy and reconfirm their view that Taiwan is a province of China—strengthens my view that we must stand steadfast with our allies in the United States and in Taiwan to ensure Taiwan’s future economic prosperity and independence.
Mr Nigel Evans (Ribble Valley) (Con)
I declare my interests as contained in the Register of Members’ Financial Interests. I am also chairman of the British-Taiwanese all-party parliamentary group. Does my hon. Friend agree that it is a great shame that relations between Taiwan and China have deteriorated since the democratic elections in which Tsai Ing-wen was elected President of Taiwan? We can see from the number of flights between Taiwan and China every week—more than 800—that if only both sides could sit down and see how many mutual interests they have, the prosperity that would pour from that would be beneficial to the peoples of both countries.
Bob Blackman
Opportunities will arise with the recommencement of direct flights from the UK to Taipei on 1 December. That is a welcome move, which will encourage the development of trading relations and tourism between the UK and Taiwan. As my hon. Friend says, it is right that given the number of flights and the relationship between Taiwan and the People’s Republic of China, there are opportunities for greater trade and co-operation.
As a result of the political situation in Taiwan, the people have exercised their democratic right to a vote—we all understand that in a democracy, we do not always get the results we would like—and have elected a President and a party that are far more independent of the People’s Republic of China than the Chinese might like. On our visit to Taiwan, the great impression that I gained, as I am sure other colleagues did, was that the people of Taiwan see themselves as Taiwanese, not Chinese. That is very important for our future relations.
My right hon. Friend the Member for New Forest West (Sir Desmond Swayne) referred to defence links. Although the UK does not have any military ties with Taiwan, we should press the Government to promote Taiwanese participation in international organisations, so that we can normalise relations and gain from its expertise.
Bob Stewart (Beckenham) (Con)
It would be great if we had more military links with Taiwan—for example, if Royal Navy ships visited. The United States does not visit Taiwan because of Chinese pressure, but perhaps we should be looking at that sort of activity. I ask the Minister to consider that. Royal Navy vessels are in the South China sea and it would be great for them to visit Taiwan. That may upset the Chinese, but frankly—tough.
Bob Blackman
I thank my hon. Friend for that intervention, I think. My view is that as a country we should not be going round trying to upset people across the world.
Sir Desmond Swayne
Can I take my hon. Friend back to his assertion that the Taiwanese people do not see themselves as Chinese? Part of the complexity of the issue is that some do. The tragedy was that Chiang Kai-shek saw precisely that identity, and it was that put him in the position of refusing the possibility of remaining in the United Nations when the People’s Republic of China became the proper representative of China and the Chinese.
Bob Blackman
My right hon. Friend tempts me to talk through the history. As he knows, the people of Taiwan have transferred from Japanese and Chinese rule to independence. They fiercely defend their independence from both Japan and China.
Mr Nigel Evans
I apologise for intervening again; sadly, I have to leave soon on Select Committee business. As well as being chairman of the British-Taiwanese all-party group, I am vice-chair of the all-party group on China. This is a complex issue. When I say that I am a friend of China and a friend of Taiwan, some people cannot get their head around that, but we want to have good relations with Taiwan and China. We need to promote that and get both sides working together.
Bob Blackman
My hon. Friend gets to the meat of the issue. We need to use our soft power, particularly in the post-Brexit era, to harness co-operation from individuals and individual countries around the world. The opportunities for co-operation will allow the economies of the People’s Republic of China and Taiwan to grow, to the mutual benefit of all citizens. We should encourage that.
I return to the British Government’s role. In 2009, Taiwan became part of the visa waiver programme. It was decided, after assessing different regimes around the world, that Taiwan was a low-risk country. During the first year of the programme, the number of visitors to the UK from Taiwan increased from 26,100 to 54,200. The estimated figure last year was 82,900, and with the introduction of direct flights, the numbers will increase yet further.
The Taiwan-UK youth mobility scheme, which provides 1,000 UK visas each year to Taiwanese people between the ages of 18 and 30, was launched in 2012. It also gives UK young people the opportunity to visit Taiwan each year and interrelate with young people from Taiwan. That needs to be part and parcel of the future of our relationship. Those on the scheme are encouraged to work full or part time, to carry out voluntary activities or study, and to understand the mutual benefits of the culture, society and lifestyles of our two countries. In 2016, the UK Government opened the registered traveller service to Taiwan, which has improved the convenience of travel for Taiwanese citizens who visit the UK frequently. We have built stronger relations between our two nations as a result.
There are clearly many opportunities. In the past year alone, visits to Taiwan have been made by the Minister for Trade Policy; by the Prime Minister’s trade envoy, Lord Faulkner; and by three UK parliamentary delegations. In February, a number of UK cities participated in the first ever UK-Taiwan smart city forum in Taiwan. In March, Sir David King, our special representative on climate change, visited Taiwan. In June, Taiwan’s Deputy Minister of Economic Affairs met the Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Watford (Richard Harrington), to promote co-operation on renewable energy. In September, Lord Faulkner visited Taiwan again, to witness the signing of a letter of intent for co-operation on railway heritage between Taiwan and the UK. Direct flights will resume on 1 December; I trust many colleagues will be present to witness the first flight arriving at Gatwick. Clearly, we will need to expand Gatwick to accommodate all the extra flights coming to our great city of London.
We need to build on our strong relationship and promote regular dialogue between our two countries.
Ian Murray (Edinburgh South) (Lab)
I draw the House’s attention to my entry on the Register of Members’ Financial Interests; I was on one of the delegations to Taiwan. The hon. Gentleman is making a very good speech on our relations with Taiwan. Given all the delegations that take place and all the ministerial support that the UK and Taiwan give each other, will he encourage the Minister to encourage his Chinese counterparts to allow Taiwan observer status in international bodies? That status has been stripped from Taiwan recently, which has set back its whole economic development and strategy. The best way of improving Taiwan’s relations across the world is to allow it to have observer status in international bodies.
Bob Blackman
I am coming on to what needs to happen. First, we need to facilitate industry collaborations. Smart city initiatives give UK cities outside London the opportunity to participate in promoting business with Taiwan. With smart cities and industries such as renewable energy and railways, the UK and Taiwan can look forward to greater co-operation. We need to build on our successful links.
Secondly, we need to promote and support Taiwan’s participation in international organisations, as the hon. Member for Edinburgh South (Ian Murray) says. One is the World Health Assembly. Taiwan was a key contributor to the WHA for eight consecutive years and dedicated itself to international medical work and disease prevention, so it was a great shame that it was excluded from the WHA this year, at the behest of the PRC. In my view, the PRC is adopting a short-sighted approach in continuing to want to exclude Taiwan, and I note that Lord Ahmad of Wimbledon and my right hon. Friend the Minister have directly raised concerns about this issue with the PRC.
The severe acute respiratory syndrome, SARS, epidemic of 2002-03 clearly showed what can happen if we exclude people and countries from participating in the promotion of good health. at that time, researchers in Taiwan did not receive the data they needed to combat that virus, and it continued to spread in both Taiwan and China. So we have a part to play in encouraging the PRC and other countries and organisations to promote Taiwan as a member.
Bob Stewart
I, too, have visited Taiwan and been influenced by what I saw there. The Taiwanese provide world-class emergency teams when something goes seriously wrong in any country worldwide and they should be hugely applauded for that. There is never a restriction; Taiwan sends its teams wherever it can, although sometimes China blocks them. Nevertheless, it is a fantastic thing that Taiwan does for the world.
Bob Blackman
I thank my hon. Friend for that intervention and I agree completely.
To continue with my short list of international organisations, another is the United Nations framework convention on climate change. We know that we cannot combat climate change by ourselves; we have to co-operate with all others across the world. Taiwan has set a very ambitious target for reducing greenhouse gas emissions and it is therefore absolutely right, even though it is a small island state, that Taiwan should have a key role in helping and encouraging others to participate in this process. It is a great shame that Taiwan has not been invited to do so since 2016, so I firmly believe that our Government should encourage others to allow Taiwan to participate in the process again.
Similarly, there is the International Civil Aviation Organisation. Back in 2013, Taiwan was invited to attend the ICAO assembly as a guest, but since the assembly in 2016 it has been excluded. That is complete nonsense. My hon. Friend the Member for Ribble Valley (Mr Evans) referred to the number of flights between Taiwan and China, and now of course international flights go from all over the world into Taipei, which means that Taiwan needs to be represented in the ICAO, even if just as a guest.
Iain Stewart (Milton Keynes South) (Con)
I also declare my interest in the Register of Members’ Financial Interests. My hon. Friend has touched on a very important issue—air safety. I sit on the Select Committee on Transport and air safety should not be a bargaining chip in international relations; it is paramount. No one country has a monopoly on the wisdom of what makes it safer for us to fly around the world, so I find it unexplainable that Taiwan—a major air carrier—should be excluded from deliberations on that issue.
Bob Blackman
I thank my hon. Friend for that intervention. Quite clearly, international air safety should trump all other issues. Irrespective of diplomatic relations, it does not make sense to fail to seek the co-operation of countries to ensure that international airspace is safeguarded.
The final item on my list of asks concerns the International Criminal Police Organisation, or Interpol. Cross-border crime is becoming a more serious issue year by year, and as we seek to contribute to the global efforts against organised crime, cyber-crime and terrorism, it is quite clear that in the coming years we should support Taiwan’s participation in Interpol as an observer so that further progress can be made. We can see that Taiwan has already made a great contribution towards Interpol, and quite clearly it is unfair and ridiculous that it is excluded from that organisation, especially given the levels of cyber-crime emanating from south-east Asia.
I return now to what I regard as the value of the British-Taiwanese all-party group. The group has more than 150 members from Parliament, which makes it one of the largest groups in Parliament. My hon. Friend the Member for Ribble Valley and Lord Steele are the two co-chairs of the group, which shows it not only has a cross-party view but speaks with a strong voice on behalf of the UK Parliament on relations with Taiwan. We should also remember that in October 2014 the Lord Speaker, Baroness D’Souza, became the first ever Lord Speaker to visit Taiwan, which demonstrates the positive development that is taking place between our two countries.
I look forward to hearing further contributions from colleagues. I also ask my right hon. Friend the Minister to emphasise in his response to the debate the importance of UK-Taiwan relations and to say how we can further the development of those relations, economically, diplomatically and possibly militarily, if that is appropriate. Even more significantly, given the increased focus and increasingly outward-looking nature of the PRC, it will be important in the future that we stand by our allies and friends in the South China sea region, to ensure that that region is not destabilised.
Ian Paisley (in the Chair)
I should inform Members that I intend to call the first opposition spokesperson at approximately 10.30 am. Given the number of people who have stood up this morning or who are down to speak, I do not need to put a time restriction on contributions. However, I ask Members to bear in mind that speeches should be about six minutes long, as I am sure there will be other interventions.
Jim Shannon (Strangford) (DUP)
It is a pleasure to be called by you, Mr Paisley, to speak in Westminster Hall. I also congratulate the hon. Member for Harrow East (Bob Blackman) on making such a good case in this debate, which he secured.
The statistics about this issue are very important. In 2016, the UK exported some £1.8 billion worth of goods and services to Taiwan, and we imported goods from Taiwan that were worth some £3.5 billion. So we have a trade deficit with Taiwan, but we are very happy to have had such a trade deficit with Taiwan in each of the last 10 years.
UK imports from Taiwan peaked at £4.2 billion in 2012, and in 2015 the UK’s exports to Taiwan represented about 0.4% of all UK exports. In 2015, Taiwan was the UK’s 39th largest export market and the 28th largest source of UK imports. It is clear from those statistics and from the presentation by the hon. Member for Harrow East that there are links with Taiwan and that there is a desire for those links to be enhanced. That was also demonstrated by the work carried out by our esteemed Minister for Trade Policy, who visited the island last September, shortly after the Brexit vote; he secured a flight from Gatwick to Taiwan for the first time in five years. We hope to build upon such links over the next period of time, which would benefit both our countries.
However, as with any issue that involves a politician, things are rarely black and white. It is not so simple just to enhance trade with Taiwan, as we must also continue to respect our other trading partners, which in this case includes China. It is about getting the balance right.
From the outset, I have believed that my experience of hailing from Northern Ireland helps with this situation, as it shows that a border dispute must not signal the death of mutually beneficial trading deals. The Republic of Ireland is essential to our trade, as it is a big importer of our goods, and vice versa. Even if the British mainland makes it abundantly clear that Northern Ireland remains British and continues to do so, that will not stop trade with the Republic of Ireland. That can and should be the approach for dealing with the China-Taiwan issue. We can and must enhance trade links without further alienating the two nations, so it is a case of getting the balance right, as the hon. Member for Harrow East said when he introduced this debate.
Recently, I read an article that highlighted the fact that persecution of people on the grounds of their faith had increased over recent years in the Asia-Pacific region. Indeed, that article was set at the first Asia-Pacific Religious Freedom Forum, which this year was held from 18 to 21 February in Taiwan. That conference, which was hosted by the former Vice-President of Taiwan, Annette Lu, was timed to coincide with the Chinese new year celebrations and to come right after the general elections in Taiwan. It showed the passion in Taiwan for moving away from the Chinese enforcement of religion and for moving towards religious freedom. I believe that we have a duty to support Taiwan in that regard. China is guilty of many human rights and religious persecution issues, and we must acknowledge that. However, the fact that the conference was held in Taiwan sends out a clear message about the ethos of those who are elected in Taiwan. They want true co-operation, to allow people the freedom to believe as they choose, without fear of persecution. ChinaAid’s president, Bob Fu, a former Chinese dissident himself, said that the conference declaration was a road map
“for those who wish for a free world”.
People from 26 countries took part in the forum, from Pakistan, China, Cambodia, Indonesia, Malaysia, Thailand, Myanmar and others. They included representatives of charities and international non-governmental organisations that focus on freedom of religion, such as Open Doors International, which works with minority Christians worldwide. No one nation or organisation can work alone to fight the rising tide of hatred, so there is a need for greater co-operation between those who want a peaceful world. It is not too much to hope for the faith, hope, charity, love, mercy, liberty and peace that can help to preserve those people.
During the conference, Pakistan-born Swedish politician Nasim Malik said that nations across the world had realised that peace and stability were needed for development. Off the back of that peace and stability comes the opportunity for economic development. We have done it with China; we can do it with Taiwan, and we should work towards that. With prosperity and growth we can do that; Malik said that the countries in the Asia-Pacific region should also realise that reality for their economic growth and prosperity.
A similar viewpoint was held by Brian J. Grim, president of the Religious Freedom & Business Foundation, who said that the global economy had become religiously diverse, so protecting religious freedom would strengthen the global economy as well. How true that could be, if we put that ethos clearly at the core of what we do. I believe that those two things can, and must, be intrinsically linked, and that we have a role to play. While strengthening our trading ties, we can and must offer the support for that freedom that will help people to grow an economically viable nation, whatever nationality is attributed to them.
Hailing, as we do, from a nation where many people often confuse the nationalities, it goes straight to my heart when people question whether I am Irish or British. Let me make it clear: I am an Ulster Scot, from Northern Ireland, and I am proud to be part of the United Kingdom of Great Britain and Northern Ireland. I am very proud to put that on record; I am proud to be British. However, I must also say that to see my children with no food on their plates or no job to go would also go straight to my heart. There must be the ability to involve ourselves with economic issues without involving ourselves in nationality ones. That is a fine line, but I believe we possess the ability to walk it.
John Lamont (Berwickshire, Roxburgh and Selkirk) (Con)
I am delighted to be able to speak in the debate—I am grateful to you, Mr Paisley, for allowing that—and I congratulate my hon. Friend the Member for Harrow East (Bob Blackman) on securing it. I am particularly pleased to follow the hon. Member for Strangford (Jim Shannon).
Taiwan’s place in the world remains uncertain, and that is regrettable. Taiwan is the most populous state and the largest economy that is not a member of the United Nations. It has undergone a transformation since the 1960s, from a relatively unprosperous dictatorship to a stable advanced economy and democratic state. Taiwan is one of the most democratic and liberal parts of Asia; that was most clearly illustrated by the ruling of the council of grand justices earlier this year that will pave the way for same-sex marriages. Human rights and the rule of law are generally respected in Taiwan, in contrast to many of its neighbours.
On the face of it, Taiwan is a state we should seek to promote as far as we can, so I have some sympathy with the 22,000 people who signed the petition calling for the UK to recognise Taiwan as a country. However, the issue is far from simple. The UK Government’s position on Taiwan is that the disagreement between the island and the People’s Republic of China is a matter for the two sides to agree between themselves by diplomatic means. That is a sensible approach to what is a complex international dispute, but it means that our links to Taiwan are not as close as they could be, which is unfortunate. It is disappointing, for example, that Taiwan has been unnecessarily excluded from some international organisations. Where Taiwan can contribute to the global good and there is no nationhood requirement, it should be allowed to participate, particularly as it is keen to do so. I see little reason why Taiwan cannot be accommodated in the assembly of the World Health Organisation or in the International Civil Aviation Organisation, for example.
Putting aside the international dispute surrounding Taiwan, the focus of our relationship with the state is to build on the strong economic links that we already have. Taiwan is a major economy, larger than Sweden, Thailand or Hong Kong, and it is a significant trading partner with the UK. We export nearly £2 billion-worth of goods and services to Taiwan, and it is good to see the UK Government building on that with their recent mission to promote UK renewable energy technology. With the first distilleries in 200 years set to open in my own area in the Scottish borders, it would be remiss of me not to mention that Taiwan is the third-largest overseas market for Scottish whisky. I was pleased that last year the UK Government worked with the Scotch Whisky Association to secure trademark certification for the product in Taiwan.
Bob Stewart
On the subject of whisky, I wake up. Taiwan has, for three years running, produced what people say is the best whisky in the world. It is great that Scottish whisky goes in there, but I think whisky will be coming the other way soon.
John Lamont
I have had the pleasure of enjoying that Taiwanese whisky, but I dispute that it will be able to compete with the finest Scottish brands.
About 38,000 British nationals visit Taiwan every year, and a few years ago I was lucky enough to be one of that number. I visited Taiwan as part of a delegation from the Scottish Parliament’s cross-party group on Taiwan. Taiwan is an incredibly beautiful and varied country. I found the Taiwanese people extremely friendly and accommodating, and was struck both by the economic development of the area and by its natural beauty. It is good that direct flights are set to resume between the UK and Taiwan. I would truly recommend Taiwan to tourists; it must be one of the most overlooked and underrated Asian destinations. I hope that other airlines will follow suit and provide a service to Taiwan from the UK, perhaps even from a Scottish airport.
Mrs Sheryll Murray (South East Cornwall) (Con)
I, too, refer Members to my entry in the Register of Members’ Financial Interests.
I would like to speak about my relationship with Taiwan. I visited Taiwan at the invitation of the country in 2011 and, more recently, in 2015, in cross-party delegations on both occasions. I am really surprised to see that the shadow Minister is alone on the Opposition Benches today. I am surprised that the Opposition Members who enjoyed those visits with me have not wanted to share their ideas about our relationship with Taiwan.
In Taiwan, I was fortunate enough to meet talented politicians and dynamic businesses and to learn more about their cultural heritage. I also saw for myself what a beautiful island it is, especially around Sun Moon lake. If Members have the opportunity to visit Taiwan, I encourage them to do so, because it truly is a beautiful place.
A true relationship between two countries goes two ways, and I am absolutely delighted to announce that the Taiwanese ambassador is due to visit Cornwall next month. Along with my hon. Friend the Member for North Cornwall (Scott Mann), I hope to introduce him to local politicians and to our creative and diverse home-grown businesses throughout Cornwall. I hope also to show him some of our heritage—after all, we have a world heritage site for our mining—and I hope that the ambassador and his team will be able to see the beautiful landscape that Cornwall is known for, so that, with the new direct flights, we might encourage tourism both from Cornwall to Taiwan and from Taiwan to Cornwall.
It is through such friendships, and a true working knowledge of each other’s country, that we can build the true, positive relationship we need with Taiwan as we leave the European Union and start building trading relationships around the world. I look forward to continuing to build that relationship with Taiwan. Taiwan deserves it and the United Kingdom can provide it through friendship.
Martin Vickers (Cleethorpes) (Con)
It is a pleasure to speak under your chairmanship, Mr Paisley. I congratulate my hon. Friend the Member for Harrow East (Bob Blackman) on securing this timely debate. I, too, visited Taiwan on a delegation earlier this year; as with others, that is recorded in the Register of Members’ Financial Interests. We saw a dynamic and go-ahead country eager to extend both cultural and economic relations with the UK. Some 7,000 or 8,000 students come from Taiwan each year to study here in the UK, and we should encourage and support that.
One area of particular interest where our two countries can work more closely is renewable energy. A delegation from Taiwan has already visited the Grimsby-Cleethorpes area. Dr Lin, the very active UK representative, will visit both Cornwall and Cleethorpes in the next few weeks, and we look forward to that. We also have a particular relationship with Taiwan because Catherine Nettleton, our UK representative there, spent part of her childhood in Cleethorpes, attending Thrunscoe School. That is another help in cementing the relationship between our two countries. I note that a trade and industry delegation visited Taiwan earlier this month, so relationships are clearly developing.
My hon. Friend the Member for Harrow East mentioned numerous statistics in connection with Taiwan. Indeed, 98% of Taiwan’s energy needs are imported, so renewable energy is something we can develop. The North sea, as we know, is a hub for wind turbines, and the port of Grimsby services many of the turbines in the North sea. Grimsby, of course, is neighbour to Cleethorpes, and many of my constituents are involved in the renewable energy sector. I hope that when Dr Lin visits we can develop the relationship further.
Iain Stewart
My hon. Friend rightly points out that Taiwan is fast developing its renewable energy sector. It has also made the decision to decommission many of its nuclear power stations. That is a further source of trade co-operation between our two countries, because this country has considerable expertise in that field. Does he agree that we should be doing all we can to encourage that sector in this country to make contact with Taiwan to share our expertise in the field?
Martin Vickers
I entirely agree with my hon. Friend. That is another area of co-operation that we can develop further. Referring to the renewables sector in my own constituency, marine operations are particularly strong in the Grimsby and Cleethorpes area, and the installation, operation and maintenance vessels that sail from there will be vital to Taiwan as it develops its offshore wind sector.
My hon. Friend mentioned transport. As I am a member of the Transport Committee, I refer to the situation on participation in the International Civil Aviation Organisation, which is particularly important if Taiwan is to develop further its communications and transport connections with the wider world. I know that the UK representative has written to Transport Ministers about the importance of that, because to participate in the carbon offsetting arrangements Taiwan must be a member of that organisation. It benefits us all if Taiwan is involved to that extent.
Speaking in my capacity as chairman of the all-party parliamentary rail group, may I refer to the co-operation between the UK and Taiwan on rail matters, which was raised by my hon. Friend the Member for Harrow East? He referred to the heritage railway agreement between the Alishan forest railway and the UK’s Welshpool and Llanfair railway. I am not sure whether my Welsh pronunciation is correct; it is about as good as my Taiwanese pronunciation. Nevertheless, Lord Faulkner, who is also an officer of the all-party rail group, and our trade envoy, played a key part in bringing that together. I know that the Taiwanese would like to develop further co-operation in the rail industry, and I hope it can be advanced.
Taiwan is an example of an independent, democratic nation, with a population of around 24 million. Its wealth is increasing considerably. Think what a nation of more than 60 million, which happens to be democratic and the world’s fifth largest economy, can do once it becomes a free nation again.
Scott Mann (North Cornwall) (Con)
It is a pleasure to serve under your chairmanship today, Mr Paisley. I think this is the first time that I have spoken in a Westminster Hall debate under your chairmanship, and you are doing a sterling job. I congratulate my hon. Friend the Member for Harrow East (Bob Blackman) on securing this fantastic debate. I refer Members to my declaration in the Register of Members’ Financial Interests; I made a visit to Taiwan hosted by the Taiwanese Government last year.
I will keep my contribution brief. Taiwan and the UK share a love of free markets, aspiration and cutting-edge technology. In 2016, the UK and Taiwan did £5.85 billion of trade, and we hope to see that getting bigger and bigger in our post-Brexit era. We share a love of fine wine, fine food, whisky, cutting-edge technology, good bicycles and good cars. The UK also has 300 businesses that are based in and operating out of Taiwan, and we are keen to see that expand and two-way trade between Taiwan and the UK continue.
Some of the exciting technologies on which we could collaborate include biotechnology, renewable energy development, as my hon. Friend the Member for Cleethorpes (Martin Vickers) mentioned, electric cars, smart technology and using technology to help with social care needs. There is also, of course, tourism, where Taiwan and Cornwall share an intrinsic connection. My hon. Friend the Member for South East Cornwall (Mrs Murray) mentioned the forthcoming visit of the Taiwanese ambassador to the UK in November, and I look forward to welcoming him, with my hon. Friend and my hon. Friend the Member for St Austell and Newquay (Steve Double), to Cornwall. I hope to talk to him about renewable energy technologies in Cornwall.
Moving on to the food industry—Taiwan and Cornwall share a love of food—in my North Cornwall constituency we have three Michelin-starred restaurants. When I went to Taiwan with the delegation, the food was fantastic, and I look forward to reciprocating that when Taiwanese representatives visit Cornwall.
Chris Davies (Brecon and Radnorshire) (Con)
Does my hon. Friend welcome the investment by Han Dian, the first Taiwanese food company to invest in this country, which is creating more than 100 jobs? Would he like to see further investment from Taiwan, as I would?
Scott Mann
My hon. Friend makes an exceptionally good point. A huge number of opportunities present themselves, and it is nice to hear of the investment that Taiwan is making in his constituency. It is a pleasure to speak today. Taiwan has a friend in Cornwall, and long may we stand together to promote free trade, free markets and good friendship.
Ian Paisley (in the Chair)
I do not see any other hon. Members standing, so I will call the first Front-Bench spokesman.
Peter Grant (Glenrothes) (SNP)
I am grateful for the chance to begin summing up the debate. I also welcome you to what I believe is your first outing as Chair here—
Peter Grant
You are shaking your head. I apologise. I must have misheard. I should have realised that you were showing an extremely experienced hand throughout proceedings; I congratulate you on that.
Peter Grant
We do not have to be here long to realise that we have to learn to think quickly on our feet.
Mention has been made of the important place that Taiwan has as a trading partner for the United Kingdom. That applies in particular to Scotland. Taiwan is our third or fourth biggest export partner. I heard one hon. Member say “third”, so I will say “fourth”. Perhaps it depends on what we count as exports, but they are about 10% of the UK’s total exports to Taiwan. Beverages are the single biggest export from the UK to Taiwan. The vast majority, of course, is proper whisky made in the only place in the world that has the right to call anything whisky. We allow them to import some cheap imitations from other parts of the United Kingdom, but we make sure that quality and quantity go together.
Mrs Sheryll Murray
Will the hon. Gentleman confirm that Scotland provided equipment to Taiwan so that it could produce its own whisky? Perhaps that is why Taiwanese whisky is of such good quality.
Peter Grant
Imitation is, of course, the sincerest form of flattery. I have no doubt at all that the expertise both in designing the plant and in including the secret magic ingredients can be exported—methods can be taught—but it is still simply not possible to make proper whisky anywhere outside of Scotland. Those who believe that the Taiwan whisky is the best in the world also think you can make whisky in places such as Ireland, and I believe even Cornwall has had a go.
The economic ties that we have with Taiwan are important not simply because of the export business. Interestingly, I note that for the past 10 years the UK has had a substantial trade deficit with Taiwan. Given that a trade deficit with some countries in Europe is used as an excuse for severing ties with them, it seems strange that the big trade deficit that we have with Taiwan should somehow have the opposite effect. We want to increase and strengthen those links. There seems to be a contradiction or an inconsistency.
As far as the Government of Taiwan are concerned, the Scottish National party welcomes, as we all do, the progress that has been made. It is hard to believe it is only 30 years since Taiwan was under full martial law. It has made a lot of progress since then, which has not always been easy. You cannot change from dictatorship to full democracy in a generation without encountering difficulties along the way. We must recognise that for a lot of the time the Government of mainland China have allowed Taiwan to develop in its own way, although at times they have interfered to an extent that I think is unacceptable. I hope the Minister will agree with that.
Nobody has yet mentioned the arrest and detention of Lee Ming-che, a human rights activist from Taiwan who disappeared in March when he entered China. Within the past four or five weeks Chinese television has broadcast him confessing to sedition and endangering the security of the Chinese state. After six months’ secret detention by the Chinese authorities, most of us would confess to almost anything. We can only wonder what pressure was put on him. He has confessed to planning a website and encouraging people to oppose some of the policies of the Chinese Government, and to distributing literature that criticised the Chinese Government. In other words, he confessed to doing things that all of us do every day of our lives and that people in Taiwan are used to being allowed to do.
Perhaps we should ask the Chinese Government to take note of the fact that economic development in Taiwan has gone on at the same time as the increase in democracy and increasing liberalisation of society. As has been mentioned, Taiwan is the first place in Asia officially to accept the principle of same-sex marriage. I hope that is an example that will go forward elsewhere in Asia.
It was suggested in an intervention that we should look to export arms to Taiwan and look for more military involvement, but I think that would be a disaster just now. The last thing the United Kingdom needs is to find more places for military adventures and more places to sell weapons, when we have no idea how and when and against whom they might be used in future.
For obvious reasons, I can identify with the idea that Taiwan is recognised as a country that is not yet a country. It is a nation, but it does not quite have full state recognition in the United Nations, for example. On the future status of Taiwan, it is important to consider the wishes and the will of the Taiwanese people. Far too often in such circumstances—we can certainly see it from the Chinese Government—it becomes all about what is in the strategic interests of China, which would like to integrate Taiwan more fully into China and to use it as a military base, for example. Whether we are talking about the long-term constitutional status of Taiwan, Gibraltar, the Falkland Islands or anywhere else, the ultimate question should always be: what is the will of the people? It is clear that for the time being, the will of the people of Taiwan is that it should not be further integrated into the People’s Republic of China.
Bob Stewart
On the status of Taiwan in the United Nations, there are 23 million people living in Taiwan—that is 35% of the size of our own population—and they are not represented at the United Nations. China blocks it and is very effective at blocking it. The United Nations and our Government should consider supporting moves to give proper observer status to Taiwan in the United Nations.
Peter Grant
I certainly would not object to that. I can think of other places that should be afforded the same opportunity, because the United Nations wants to be as inclusive as possible and should look for ways to bring people in as observers, rather than to keep them out. For the record, I am not a great fan of the way in which the United Nations Security Council works. It seems to be about making sure that the big military superpowers prevent anything from happening that might go against their interests, rather than to make sure that the world develops in the best interests of most of the peoples of the world.
I will conclude now because I am keen to hear the Minister and the Opposition spokesperson. Taiwan is unique, as far as I know, among all the countries of the world. On its constitutional status and its status as a significant economic power, although it does not have official recognition as a part of the United Nations, as has been mentioned, it is a good example to us that sometimes we need to be prepared to look at answers that are slightly different from the norm and whether it is possible to recognise the sovereignty of people before, during or after the transition to full statehood and to full recognition on the world stage.
I hope that the Minister will continue to rule out military involvement through sales of arms or an actual military presence in Taiwan. I can understand from one point of view why that has been suggested, but I really do not think that that would be the right way to deal with a situation that in many ways is encouraging. As I have said, there has been a lot of progress in Taiwan in the past 30 years. However, there are still dangers and there is significant tension between Taiwan and China. One false or unwise move by the United Kingdom or other powers could make things a lot worse not only for the strategic security of the United Kingdom but particularly for the 23 million people who live in Taiwan.
Helen Goodman (Bishop Auckland) (Lab)
It is a pleasure to serve under your chairmanship this morning, Mr Paisley. I congratulate the hon. Member for Harrow East (Bob Blackman), who gave us a really good overview of the current state of modern Taiwan and our relations with it. He asked the Minister a good question about the current situation in the South China sea. I hope the Minister will be able to say something about the British Government’s position on that.
My ears really pricked up when heritage rail and Lord Richard Faulkner, a Labour peer, were mentioned. In my constituency in 1825 we built the first passenger train, so we are keen to strengthen links with all countries to whom we have exported trains over the years.
The hon. Member for Strangford (Jim Shannon) made a good and important point when he spoke about religious freedom and the conference that was held in Taiwan. That is an indication of the good human rights record in Taiwan, which is an extremely important issue. I know he cares a lot about that.
We heard from two Cornish Members of Parliament. Like the hon. Member for Berwickshire, Roxburgh and Selkirk (John Lamont), I think that the recent court judgments on same-sex marriage are another indication of the significant progress on human rights in Taiwan. In terms of economic possibilities for trade and development, the hon. Member for Cleethorpes (Martin Vickers) was right to point out the importance of developing our relations on renewable energy.
Her Majesty’s Opposition fully accept the One China policy, as we did in government. After being elected, President Trump made a telephone call to the President of Taiwan—probably the first time that there had been a direct conversation between presidents since Chiang Kai-shek was in America in the middle of the second world war. President Trump said:
“I fully understand the One China policy, but I don’t know why we have to be bound by the One China policy, unless we make a deal with China having to do with other things, including trade.”
Will the Minister tell us the Foreign Office’s response to that?
At the same time as accepting the One China policy, we recognise the significant progress that Taiwan has made in the last few decades in implementing an effective democracy and in human rights. We should acknowledge the role of civil society organisations, which have often been at the forefront of that progress on human rights.
Hon. Members have spoken about the involvement of Taiwan in international organisations. Taiwan is a successful and important member of the World Trade Organisation, and a good case was made for its membership of the World Health Organisation and the UN climate change body. The suggestion made by my hon. Friend the Member for Edinburgh South (Ian Murray) that Taiwan could have observer status in some international organisations should be explored. I would like to hear from the Minister about that as well.
Obviously, relations between China and Taiwan are a matter for China and Taiwan. We want to see the continuation of dialogue between those countries, because that is ultimately the best way of securing peace and stability, which is in their interests, and those of the region and the wider world. The remarks by the Scottish National party’s Front-Bench spokesman, the hon. Member for Glenrothes (Peter Grant), about not ramping up military pressure and stress were wise, and I share those sentiments.
From the United Kingdom’s point of view, trading relations and cultural exchange are clearly important, and the Opposition feel that they should be developed. That development does not have anything to do with Brexit; Taiwan is an important country—it is particularly advanced in modern electronics—and there is obviously a lot of scope for mutual benefit.
The Minister for Asia and the Pacific (Mark Field)
I truly thank my hon. Friend the Member for Harrow East (Bob Blackman) for introducing the debate, and I am relieved that he recognises that it is not in the interests of Parliament—let alone the Foreign and Commonwealth Office—to upset other nations. However, I also recognise the early bid by my hon. Friend the Member for Beckenham (Bob Stewart) to join the diplomatic corps—perhaps as a Taiwanese whisky ambassador to somewhere like Antarctica. That might be the way forward.
I thank all members of the British-Taiwanese all-party parliamentary group for their valuable contributions to this vibrant and important debate. I am also grateful to the hon. Member for Strangford (Jim Shannon) and my hon. Friends the Members for Cleethorpes (Martin Vickers), North Cornwall (Scott Mann), North East Cornwall—
Mark Field
Would my hon. Friend bear with me for two seconds? I just wanted to praise my hon. Friend the Member for Berwickshire, Roxburgh and Selkirk (John Lamont)—the new boy in our midst. He is a Freshfields alumnus, as am I, and I think his wise words on the legal matters were well received by the House.
Mrs Murray
It is not for me to correct the Minister, but my constituency is South East Cornwall.
Mark Field
I am sure that battles in Bodmin and elsewhere were fought over such matters. I thank my hon. Friend for that intervention. I actually know her constituency rather well; close friends of mine have lived in Lostwithiel over the years. It is a very beautiful part of the world. Whether one is from Taiwan or any other part of the world, it is well worth visiting. It is not quite as beautiful as my constituency of course, but that is another matter.
Before I address the UK-Taiwanese relationship directly, I remind hon. Members of the British Government’s policy on Taiwan, as was set out by the Opposition, and will summarise where things stand with regard to Taiwan’s relationship with China and, indeed, the rest of the world. The British Government’s long-standing policy is that the issue of Taiwan should be settled by the people on both sides of the Taiwan strait. We therefore call on both sides to continue to engage in as constructive a dialogue as possible.
Bob Stewart
I may not be diplomatic, but I understand that in international law, national self-determination is a hugely important factor in determining a country’s future. Were the Government of Taiwan to ask the Taiwanese people whether they want to be independent, I suspect we know what the answer would be. The United Nations must wake up and understand that there are 23 million people who are largely unrepresented in the United Nations, but should be.
Mark Field
In fairness, I should point out that Taiwan acts independently—no one would dispute that—and the issue is that Taiwan is in a rather anomalous, unique situation in international affairs, which I shall try to touch on in my remarks.
There has been no official contact between the authorities in Taiwan and the Chinese Government since last year’s elections in Taiwan. However, both China and Taiwan’s leaders have recently noted that cross-strait relations have thickened substantially in the past decade; President Xi Jinping said so as recently as the 19th party conference, which comes to an end today. Economic ties have grown and continue to grow, and there has been more interaction between the people of China and Taiwan.
Turning to the relationship between Taiwan and the wider international community—something close to the heart of many hon. Members who have spoken today —the British Government believe that the people of Taiwan have a valuable contribution to make towards international co-operation on global issues such as aviation safety, climate change and organised crime. Their involvement would, in my view, reduce co-operation black spots, which pose a risk to the international community, including the United Kingdom and our own people.
However, I also accept that Taiwan’s ability to play the fullest possible role in addressing global challenges is restricted and has been under increased pressure over the past 18 months. As a number of Members have observed, Taiwan’s observer status in international organisations has come under closer scrutiny, and it was not permitted to observe the World Health Assembly as recently as May this year. The UK Government continue to support, and will continue to speak up for, Taiwan’s participation in international organisations where there is precedent for its involvement, where it can contribute to the global good, and where there is no prerequisite of nationhood for participation. We will uphold that nationhood issue and the one nation policy.
Helen Goodman
Will the Minister explain what he means by “where there is precedent”? For example, the climate change body is new, so there cannot be a precedent because we have only just set it up.
Mark Field
I appreciate that. It has been set up for quite some time, actually. Climate change has been a major global issue for 30 years, and I guess that Taiwan has had some involvement in international organisations of that ilk. It plays a useful and active role in, for example, the World Trade Organisation and the OECD, and I would like it to have the role that hon. Members referred to in Interpol and the International Civil Aviation Organisation. We meet Taiwanese delegations at the margins of such international meetings, and we will continue to do so. I accept the view of my hon. Friend the Member for Harrow East, and I will do my best to raise that issue. Many of the issues to which hon. Members referred, including aviation safety, international terrorism and climate change, are global and clearly apply as much to the 24 million people of Taiwan as to the other 7 billion inhabitants of the world.
The subject of this debate is the UK’s relations with Taiwan. Taiwan is a thriving economy, which enjoys the same democratic norms and values as the UK, including a free media and a vocal and active civil society. The UK and Taiwan enjoy strong, albeit unofficial, relations, which deliver significant benefits to us all. Taiwan continues to behave as a de facto state, but the UK does not recognise it as an independent state. Therefore, with great respect to all of my hon. Friends who referred to the ambassador, the truth is that the gentleman concerned, who is in the Public Gallery, is the unofficial representative to this country, not an ambassador in any official way. That is obviously a position we maintain, with our policy on China. That is an issue not just for this Government but for successive Governments over many decades. The relationship between us is strong and delivers significant benefits. That collaboration is built upon dynamic commercial, educational and cultural ties, facilitated by the Taipei Representative Office in London and the British Office in Taipei.
Taiwan and the UK are both open to foreign investment. We share a belief—much diminished, I fear, in international affairs today—that free trade and open markets are the very best ways to grow our economies and enhance our prosperity. That means that trade is the cornerstone of the relationship between Taiwan and the UK. Taiwan is the UK’s sixth-largest trading partner in the Asia-Pacific region and our 33rd-largest globally. I suspect we will move up in those rankings rapidly in the years to come. Bilateral trade reached £5.3 billion in 2015. Although business and financial services were our largest export sector, two thirds of the UK’s exports to Taiwan were goods—notably vehicles and state-of-the-art pharmaceuticals. Taiwan is also our fourth-largest export market, as was pointed out, for Scotch whisky, taking in £175 million-worth of it in 2016—they obviously enjoy it. Of course, our trade flows both ways. The UK is Taiwan’s third-largest investment destination in Europe, ahead of France and Germany, and Taiwanese investment in this country totalled some $115 million in 2016.
A number of Members discussed Brexit. As we prepare to leave the EU, the British Government are working closely with all our major partners and investors in the Asia-Pacific region, including Taiwan, to grow those economic links.
Jim Shannon
The Minister will be well aware of the importance of the agri-food sector to Northern Ireland. We have been trying to increase our exports of pork products to Taiwan and China, and we have been somewhat successful. Will the Minister indicate what more can be done to help the agri-food sector in Northern Ireland develop those exports even more?
Mark Field
As the hon. Gentleman will appreciate, I will have to get back to him on some of the specifics. More broadly, the UK and Taiwan are committed to continuing to take practical steps to enhance trade and investment between us and within the region. As has been mentioned, we have identified that live poultry and Scotch whisky are potential growth areas. We have also made great progress with our application to export pork products, paving the way for a Taiwanese delegation to conclude an inspection of UK facilities just last week. We hope that will lead to markets opening to UK exports very soon.
We want significantly to increase trade between the UK and Taiwan by improving reciprocal market access and helping our companies to do business on a level playing field. There are genuinely great opportunities for UK industries in sectors such as renewable energy, railways and transport infrastructure. As my hon. Friend the Member for Milton Keynes South (Iain Stewart) rightly pointed out, nuclear decommissioning is very important, not just in Taiwan but in the region as a whole.
The digital economy continues to offer opportunities for British companies. Taiwan is already looking to adapt UK standards to regulate its own digital economy, its fintech industry and driverless vehicles. We are keen to engage with the Taiwanese authorities on broad economic reforms to improve the business environment, which I hope will lead to greater returns on investment and increased trade in both directions.
Nigel Dodds (Belfast North) (DUP)
Will the Minister join me in praising the work of Taiwan NI—an organisation set up by, among others, a colleague of mine in the Northern Ireland Assembly, William Humphrey? It does great work among Taiwanese students and citizens living in Northern Ireland to promote Taiwan-Northern Ireland relations. That kind of interaction between students who come from Taiwan to places such as Queen’s University and Ulster University advances tremendously the understanding between Taiwan and the United Kingdom.
Mark Field
I am very glad the right hon. Gentleman pointed that out. It is greatly to the credit of the Northern Ireland Assembly, and it advances the relationship between the UK and Taiwan. I would not want the focus of this debate to be just on trade and investment co-operation—important though that is. We need co-operation to tackle crime and to promote educational connections and judicial and cultural exchanges, and those links will only be strengthened when direct China Airlines flights between London and Taipei resume in December.
I want to touch on a few issues that were brought up during the debate. On the issue of naval visits to Taiwan, I must stress that the UK’s policy is non-recognition, which means that Ministry of Defence Ministers, Foreign and Commonwealth Office Ministers and military assets cannot visit Taiwan. Doing so would imply recognition of Taiwan, which is not Government policy. However, we continue to develop strong links with Taiwan on Government priorities such as prosperity and the low-carbon agenda.
The UK’s position on the South China sea is long-standing and has not changed. We have very deep concerns about tensions and are committed to maintaining a peaceful maritime order under international law. We do not take sides, but we urge all parties in the region to settle disputes peacefully—ideally diplomatically but, if necessary, through arbitration. The UK Government remain committed to freedom of navigation and overflight.
The hon. Member for Bishop Auckland (Helen Goodman) asked about President Trump’s now-notorious call to the Taiwanese Head of State. Our position on Taiwan has not changed since the call to President Tsai. The UK’s long-standing policy on the status of Taiwan has not changed at all. We enjoy strong but unofficial commercial and cultural ties. The long-standing policy is that the status of Taiwan has to be settled by the people on both sides of the Taiwanese straits. We call on all sides to continue to engage in constructive dialogue. There has been no change, either from within or as a result of external causes.
I will conclude in a moment or two. We have a bit more time—do not worry, I am not going to delay the House for too long, Mr Paisley—so I will let everyone into a little secret. Like a lot of MPs, I have connections with Taiwan and although I have not visited myself, I was about to do so when the election was called.
In the previous Parliament, I was vice-chairman for international affairs for the Conservative party, and like my hon. Friend the Member for Ribble Valley (Mr Evans), I took the view that, as well as being a friend of China—Chinatown is in my constituency, and I have long-standing connections with the People’s Republic of China as a result—I should visit Taiwan. I was due to visit in September, but the election was called and I was thrust into a different office. I have had the chance in the past to meet the representative of the Taipei office in London and his team, and I have a great deal of respect for them. They also recognise that, unfortunately, our acquaintance has to go into cold storage for as long as I am a Minister—
Mark Field
Yes, it may not be very long at all—honestly, it is nice to get support on a cross-party basis on such important matters, isn’t it?
There is a lot of support here and—to be fair it is worth pointing out for the record—I have spoken with a couple of Labour MPs who wanted to come to the debate but had other engagements. They had been in Taiwan in the past. My hon. Friend the Member for South East Cornwall (Mrs Murray) made a robust point, but I think it is fair to say that there are friends across the House, and having that cross-party connection in place is a positive state of affairs for the relationship between the Taiwan and the UK.
Chris Davies
Earlier, I omitted to say that a little earlier in the year, before the election, I visited Taiwan—it has been declared appropriately in the register—so may I recommend a visit to the Minister? It is one of the most fabulous countries to go to and my eyes were certainly opened. Conservative Members and perhaps all other Members hope that he will one day be able to visit officially as a Minister.
Mark Field
It is kind of my hon. Friend to tempt me in that direction. I could of course argue that I have already been to the country to which he refers—we recognise the People’s Republic of China—but perhaps that would be a bit mischievous.
In conclusion, Taiwan has—as has been pointed out—a thriving democratic system and a healthy economy. Its authorities are eager to play a responsible role in continuing to tackle global challenges. I hope that within the context of our restricting but certain policy we will be able to play our part to ensure that Taiwan’s voice is heard, in particular in those global bodies where its co-operation is important, transcending many of the other international disputes. The British Government will continue to strengthen our already close ties with the people of Taiwan, because so doing will best serve the interests of the United Kingdom.
Ian Paisley (in the Chair)
I call Bob Blackman to wind up but, before I do, I remind him that I will want to put the Question, rather than letting the debate just peter out. If you could bear that in mind, Mr Blackman, you have a few minutes.
Bob Blackman
Thank you, Mr Paisley, and I thank the Minister for his constructive remarks in response to the debate. I welcome the views of the official Opposition and the Scottish National party, and I welcome my hon. colleagues from across the House putting the case for strengthening relations economically, commercially and on security between the UK and Taiwan.
The reality is that Asia faces a challenge over the next few years, and has done so on security, economic and cultural interaction. With China assertive and looking outward far more, the future of all countries in Asia is paramount. Today we have rightly concentrated on our relations with Taiwan. We have had an excellent debate on how to strengthen our relations in future and on how to assist our friends in Taiwan to fulfil their place in the world, whether in the United Nations or through other roles.
There is clearly very strong support from across the House, in all parties, for strengthening relations between the UK and Taiwan, which means that, regardless of who is in government, we will see our friendship and our commercial relationship growing ever stronger. That is very important. We may have differences of opinion about our views on defence and other things, or indeed about our recognition of Taiwan as a country, but what we can build on is the shared values—and shared progress—not only across parties but between the UK and Taiwan.
I therefore invite you, Mr Paisley, to put the Question. We can look forward to further development of excellent relations between the UK and Taiwan in the future.
Question put and agreed to.
Resolved,
That this House has considered UK relations with Taiwan.
Illegal Gypsy and Traveller Encampments: Bedfordshire
(6 years, 6 months ago)
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Ms Nadine Dorries (Mid Bedfordshire) (Con)
I beg to move,
That this House has considered illegal Gypsy and Traveller encampments in Bedfordshire.
It is a pleasure to be on the Benches in Westminster Hall for a change, rather than in the Chair, and a greater pleasure to serve under your chairmanship, Mr Paisley.
Having reached the ripe old age of 60 and spent a good deal of my formative years on the west coast of Ireland, in one of the most rural parts, including attending school there, I am very familiar with Gypsy and Traveller culture, probably in a truer sense of the word than today. Before this is perceived as some attack on that community, I also want to make the point that I am very aware of the health and educational outcomes for Gypsies and Travellers, and of some of the problems they face as a result of prejudice and anger in some of the other communities that they travel into. That being said, I am the MP for Mid Bedfordshire and I have a responsibility to my settled community to face some of the concerns expressed, which have become acute in my constituency over the past year, in particular this summer, when the situation was very difficult.
The village of Marston Moretaine experienced persistent unauthorised encampments of Gypsies and Travellers. The camps moved between various sites in the village, with ever growing numbers, before their eventual eviction. Recorded crime in the village increased, primarily instances of theft, burglary and vandalism. We have all heard this before, but cases included tradesmen such as plumbers having their equipment stolen overnight out of the back of their van, preventing them from continuing with their employment the next day.
The police force felt very much under siege at the time and although Bedfordshire police did their best with some of the complaints and crimes reported to them, they were unable to respond properly because so many were reported. The events in Marston formed part of a significant increase in encampments this year in Central Bedfordshire alone, although the problem that my constituents faced affected many across the county—I see my hon. Friend the Member for South West Bedfordshire (Andrew Selous) in the Chamber; the problem was not just in my constituency—and across the country.
In 2016 there were 45 encampments on Central Bedfordshire Council land, but this year there have already been 99 encampments, 58 of them on CBC land. CBC took eviction action on 26 of those encampments. Three were removed by the police using the powers granted under section 61 of the Criminal Justice and Public Order Act 1994. In 25 cases, the people left of their own accord before the eviction process began, the majority within one or two days of arriving, over the weekend, which I think is the pattern across the country. The conclusion of the events in Marston Moretaine demonstrated that the system can work well eventually, but the time that it took for that to happen is unacceptable to local residents in Marston Moretaine and across Bedfordshire, and therefore to me as their Member of Parliament.
CBC has made several requests for changes to the system of managing unauthorised encampments, and I promised that I would raise its concerns again today. Currently, the council uses the powers available under sections 77 and 78 of the 1994 Act, although those powers are better described as a process leading towards eviction. The process is slow and often results in large clean-up costs—repairs to gates, fences and other preventive measures that were put in place previously. Furthermore, the process has a number of loopholes that are being exploited. I would like the Minister to pay particular attention to those loopholes.
The three-month prohibition on returning to a site following eviction applies only to individual vehicles or identified persons. That means that traveller groups simply swap unauthorised camps with one another. The section 77 powers are also focused on a very narrow geographical area, which means that the Gypsies and Travellers move on to a camp 100 yards down the road and the villages and towns suffer the same problems— just the faces and the vehicles change.
On that basis, Central Bedfordshire Council and I would like to ask the Minister to make section 77 an actual power granted to councils whereby after a determined period, the council has the rightto use bailiffs to evict. That determined period needs to be short. The court process is generally a rubber stamp process, so as long as a council follows strict, laid-out guidelines that it documents, it should be trusted as a group of elected representatives to make that decision and to follow that process. The section 77 notice should not only prevent the current occupiers from returning within three months but protect that location from other groups setting up there in that three-month period. That would break the cycle of Traveller groups swapping locations. The three-month period is to allow the location to regenerate; we need to protect locations, particularly when they are on soft ground, not just to bar certain persons from being there.
We had a problem in Marston Moretaine when a Gypsy and Traveller camp went on to the village’s sports facility where local schools play football, cricket is played and which is used as a community facility. The Gypsy and Traveller caravans completely churned up the ground, which meant that it could not be used in the peak summer months and the community was deprived of that facility.
Section 77 should allow the council to widen the area in which reoccupation is not permitted, so that occupants cannot just move 100 yards down the road to another verge. That would have to be done reasonably, and the council would have to document its rationale in the case of persistent breaches of section 77, as people would expect. Councils should have the power to seize vehicles, including caravans, that illegally occupy land. I would add that they should have the power to seize those vehicles permanently and do with them as they wish.
Central Bedfordshire Council also believes that the local authorities and police forces would benefit from updated and standardised guidance on the use of police powers under section 61 of the 1994 Act. National guidelines are poor and the last advice document was issued back in 2011. The guidance needs to be updated with the proposed legislative changes. I say “proposed changes”, but the work has already been done for us; there have been changes in Ireland. It should not be too difficult to change the legislation; all we need to do is to look at what has happened in Ireland and to lift and adapt the legislation that is already in place there.
The use of section 61 currently varies among police forces, depending on their interpretation of the Human Rights Act, under which Gypsies and Travellers have entirely proper protection against discrimination, which no-one doubts. However, I had difficulties when I reported a crime to my local police force at a public meeting in my constituency. Gypsies and Travellers had been hawking goods to houses from the backs of vans that had no number plates and no road tax. If I came round to your house, Mr Paisley, with an unmarked car with no number plates and no tax and tried to sell you things out of the back of it, you would be straight on to the police. However, the police basically told me that they could not respond to that crime, despite the fact that the Gypsy and Traveller community were reporting crimes against them to the police.
Quite rightly, the police had to respond to those reports in the same way that they would respond to reports by anyone in the village, but one can understand the perception of my constituents. They are reported for hate crimes when they show their anger on Facebook and other social media platforms. They have displayed their anger at the police not even issuing crime reference numbers at that point. Constituents have even had the phone put down on them by the police, which I complained about. My constituents reported crimes—so many were being reported.
One can understand why anger comes into communities in such situations. I understand that the Human Rights Act has to be interpreted, but my constituents saw other councils taking different action, which they perceived to be more efficient and slightly more ruthless, and to better protect people’s environment, businesses and way of life. That simply was not happening in Bedfordshire because of the way Bedfordshire police interpreted its responsibilities under the Human Rights Act.
Andrew Selous (South West Bedfordshire) (Con)
I am extremely grateful to my hon. Friend for the case that she is making. She is illustrating that the current policy architecture does not work well for the settled community; I would argue that it does not work well for Travellers either. She mentioned human rights. What about the right of Traveller children to an education? Are we not elevating the right to travel over the right of children to an education? Does that issue not need to be addressed as well as the rights that our settled constituents deserve?
Ms Dorries
My hon. Friend and constituency neighbour is absolutely right. I was not going to make that point, but as I began by saying, the education, health and life expectancy outcomes for Traveller children are well known. However, Travellers have a right to choose their way of life. They have a right to choose how they wish to live and, as I said, I have a responsibility to put forward the case of my constituents. I thank my hon. Friend for his point.
The different treatment of unauthorised encampments in different counties and council areas and by different police forces is particularly difficult for my constituents—and I must admit for me—to understand. That is what led to comments that one group’s rights are being gold-plated at the expense of the rights of others. It is a fact—it is perceived by my constituents—that Bedfordshire suffers so badly with Gypsy and Traveller encampments because the police and councils in other places, such as Reading and Buckinghamshire, interpret the Human Rights Act differently. That is why we have been particularly under siege in the past year.
Given what I saw happen in my constituency this summer, I believe that my requests and those of Central Bedfordshire Council are reasonable and proportionate. As I said, there is already provision in Irish law. Somebody else has already done all the work and faced all these problems for us. It is time for this Government—my Government—finally to do something. These issues have been debated for years. This is not the first time I have raised them in Westminster Hall; I have been doing so since 2005. I have argued both publicly and privately with Ministers—with Labour Ministers from 2005 to 2010 and with coalition Ministers from 2010 to 2015—for 12 and a half years. I am getting to the end of my tether with being given the same reasons for why something cannot be done. It is now time. We have to do something, because I know that many MPs from all parts of the House are also coming to the end of their tether. We have to be seen to act on the rights of Travellers and Traveller children, as my hon. Friend said, but most importantly on the rights of our constituents and what they have to deal with day to day.
No one should have to go to their garage in the morning to put their key in the car to start their day’s work as a plumber and find that the contents of the back of their car and their shed are gone. That is happening not only in one house but in a number of houses. The crimes and crime wave—the spike in crime in a community—when the Traveller community arrives cannot be denied. Too often, too many people say, “We need to be careful what we say about this.” We do not need to be careful; we need to say it exactly as it is, as it happens, because our communities need to be protected.
I hope that the Minister will provide some succour for my constituents in his response. I hope he will be the one Minister I have spoken to—I have spoken to many over the years—who takes this issue away and says, “I’m going to do something about this. Once and for all, we’re going to provide councils with the powers that they need and communities with the protections they deserve, and we’re going to do something to make life better for people in the UK who repeatedly suffer from being besieged by Gypsy and Traveller communities.”
The Minister for Housing and Planning (Alok Sharma)
It is a pleasure to serve under your chairmanship, Mr Paisley, for what I think is the first time in this Parliament. Let me begin by congratulating my hon. Friend the Member for Mid Bedfordshire (Ms Dorries) on securing the debate and making a really powerful case for change. She pointed out that she is at the end of her tether; she has been focused on this issue for over 12 years, and I know from the debates we have had—the general debate I took part in on Gypsies, Travellers and local communities in the main Chamber a couple of weeks ago and the Westminster Hall debate led by my hon. Friend the Member for Aldridge-Brownhills (Wendy Morton)—that this issue matters to many Members of Parliament from all parts of the House, and it matters to our constituents.
I pay tribute to my hon. Friend the Member for South West Bedfordshire (Andrew Selous), who has also been pursuing this issue over a long period of time. He made a characteristically thoughtful intervention, thinking not just about the settled communities but about fairness in the system for the life chances of those from the Traveller and Gypsy communities.
I heard the recommendations made in the previous debates and those made by my hon. Friend the Member for Mid Bedfordshire about how we can improve the way in which we deal with illegal incursions. I share her view that there is a hugely negative impact from unauthorised encampments on all our constituents. She mentioned Reading, and I know from my constituency of Reading West that there have been numerous incursions on public and private land in recent months, which causes a huge amount of heartache to those law-abiding citizens in the settled community who have to deal with it daily, weekly and sometimes monthly. That is not good enough.
I said this in the previous debate, but there is a perception among the settled communities in our constituencies that there is not equity under the law right now and that, if they behaved in the same manner as some of those undertaking illegal encampments and associated antisocial behaviour, they would be treated more harshly by the law. We need to change that perception.
Not only do unauthorised encampments deny law-abiding citizens access to cherished open spaces—parks and so on—but, as we have heard, there are associated problems such as antisocial behaviour and crime. On top of that, there is the real cost of dealing with the clear-up that comes after an illegal encampment is exited, which falls on hard-working taxpayers—our constituents—up and down the country. We are absolutely in listening mode, which is why, during the debate on 9 October, I announced that the Government intend to consult on the way in which existing powers are enforced to understand what more can be done to tackle many of the issues that my hon. Friend raised today and which other hon. Members have raised in previous debates.
Andrew Selous
I am grateful to the Minister for what he has said. Will he give the House an idea of the timescale for when change might happen as a result of the consultation he has announced?
Alok Sharma
That is a perfectly fair question. I hope that in a matter of weeks we will seek to consult on this matter. I understand, as my hon. Friend the Member for Mid Bedfordshire said, that this is something we have been debating for years and the time has now come for action.
Ms Dorries
May I also say that there have been a number of consultations over the years? I hope this consultation will be the final one.
Alok Sharma
I hope that, as a result of the work we do in government, these debates will be more of a rare occurrence in future. Ultimately, it will be for colleagues and others to feed in their views when we move forward with this work.
As I said, my hon. Friend the Member for Mid Bedfordshire spoke powerfully about her constituents’ concerns about unauthorised encampments. She made a number of recommendations about how existing powers could be strengthened, which I have noted, including ensuring that local authorities and the police are allowed to do more to tackle unauthorised encampments. We will consider those proposals carefully alongside all the others we receive when we consult on this matter.
I want to touch briefly on site provision and its role in helping authorities to enforce the law. Sufficient site provision not only reduces the number of unauthorised encampments but enables the police to use the strongest enforcement powers. My hon. Friend talked about sections 61 and 62 of the Criminal Justice and Public Order Act 1994, and it is the case that under that Act the police can direct people from unauthorised encampments to appropriate local sites. Failure to comply with such an order is an offence and offenders are prohibited from entering any land in the local authority area for a period of three months. By comparison—my hon. Friend alluded to this—where no sites are available, the prohibition extends only to the area of the encampment. By providing sufficient transit and permanent sites, local authorities can help to protect communities from the nuisance that unauthorised encampments can cause.
As my hon. Friend set out, we recognise that there are problems in her area. Bedfordshire has had numerous unauthorised incursions. As she pointed out, in some cases an authority’s response was helpful to local residents, but there were instances where more could have been done. I take on board what she said about improving legislation.
Ms Dorries
I make the point that even though more could have been done by Central Bedfordshire Council during some of these incursions, it is a fact—I think my hon. Friend the Member for South West Bedfordshire (Andrew Selous) will back me up on this—that the council’s Gypsy and Traveller encampment team are at their maximum. They got to the point where they could not respond to any more emails or take any more telephone calls. They were working flat out and could not cope with the amount of public anger and representation they received. There is a limit to what each council can do.
There is also the perception that the Minister’s own council deals with this issue much quicker. Perhaps that is because he is the Minister and Reading Council feels that it would be more answerable—I have no idea—but it deals with these issues much more efficiently. That inequality and lack of equity about the response is part of the problem.
Alok Sharma
Of course we have frustrations in Reading as well; but we want councils and police to act using the powers that they currently have. I would point out that local authorities can apply to the courts for pre-emptive injunctions that would prevent unauthorised camping in a defined area and, where they see an illegal encampment, they can advise the court in advance, without waiting for all the paperwork to be completed before they go to court, so that a hearing date can be expedited. I have noted my hon. Friend’s points.
A multi-agency approach is vital if we are to deal with incidents successfully. Local authorities, the police and other agencies such as the Driver and Vehicle Licensing Agency should work together to find appropriate solutions. I know that that happens in some areas. I want to make it clear, as I did in the general debate on this matter in the House, that the awful incidents in question are the actions of a minority, and that we should not allow them to tarnish the whole community. However, I also recognise that every illegal incursion is one too many, and that those incursions have a direct impact on law-abiding citizens in the settled community.
As I have said, I hope that the House will be reassured by my announcement of 9 October. We want to move forward quickly on that. The Government are committed to ensuring that Gypsies and Travellers are integrated in society, and enjoy the same rights and responsibilities as everyone else. My hon. Friends the Members for Mid Bedfordshire and for South West Bedfordshire both talked about the life chances and health outcomes for, people in Gypsy and Traveller communities. Of course we want those to improve. I think that both sides of the House will agree that more needs to be done to ensure harmonious relations between communities.
I welcome the debate, which has reinforced my determination to look for ways to improve our response to such matters. As I have said, the Government will set out further details about the consultation shortly, and I invite all Members of the House to engage with that process.
Ms Dorries
I noted that the last couple of sentences of the Minister’s speech, to the effect that the Government are looking at the matter, were perhaps not as reassuring as the bulk of his speech. I know that the consultation has been announced, and that the Minister cannot pre-empt that; but it is time for everyone to stop being, for want of a better term, politically correct about this matter, because that is to diminish our constituents’ suffering. I hope that our colleagues will not hold back when they respond to the consultation, because if that happens and we do not tell it as it is and make the Minister understand the real pain, suffering and inconvenience that our communities experience, we are not doing our constituents justice.
Question put and agreed to.
Rail Links: South-west England
(6 years, 6 months ago)
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Luke Pollard (Plymouth, Sutton and Devonport) (Lab/Co-op)
I beg to move,
That this House has considered improving rail links in south-west England.
It is a pleasure to serve under your chairmanship, Mr Evans. I am proud to secure my first debate as an MP on the urgent need to improve the train line in the south-west of England. I am grateful for the cross-party support I have received ahead of the debate, and I will try to make my remarks as cross party as I can because I know the sentiments are shared by Labour Conservative Memberss.
I am proud to be a Janner—someone from Plymouth. Having been born there and as we live there, we all know that there is one thing in which we can instinctively believe: our train line is not good enough, and other regions get more money. As a region we have been given, and have accepted, a poor deal from Government for too long. Across nearly all areas of Government spending, the south-west, particularly the far south-west, receives below-average spend. In education, health, housing, road and rail the south-west lags at the bottom of the spending league tables. We need to change that, and we need to do it together. I am pleased that so many hon. Members from all parts of the House are here to debate the topic, and I hope the Minister will recognise that these are not just my concerns, nor those of my constituents or my party, but those of our region as a whole, presented on a cross-party basis.
I have three simple objectives that I encourage the Minister to take on board to help us in the south-west. We must realise the vision contained in the excellent recommendations of the peninsula rail taskforce, so we can have a railway to be proud of—an economic asset and not a liability. I encourage the Minister to help us to cut journey times from Plymouth to London from an average of three hours and 30 minutes to two hours and 15 minutes. Journey times are quicker to those regions lucky enough to have snazzy monikers such as northern powerhouse and midlands engine; I am afraid that the far south-west gets no such snazzy moniker, nor the spending that normally accompanies it. I encourage the Minister to help us to achieve our third objective: a railway that is resilient, with connectivity that will survive storms, and wi-fi and mobile connectivity enabling business to be done on the train.
With those objectives in mind, I have three simple asks of the Minister, his colleagues in the Department for Transport and those in the Treasury. First, will they look at how we can invest in quicker journeys and shorter journey times? The Minister will know that there is an opportunity to look at speeds on the Devon banks, the parts of the track between Plymouth and Exeter that are being repaired next year. While that work is going on, for a bargain price of £30 million, the track can be straightened, rails replaced and the speed limit lifted from 60 to 75 miles per hour. That would cut the journey from Plymouth to Exeter by three minutes; Great Western Railway trains would do it in just under an hour, and CrossCountry trains would do it in around 55 minutes. That would be a huge improvement on where we are now, and considering the billions being spent on High Speed 2 to cut journey times to the midlands for those in London, it is a bargain.
Secondly, I ask the Minister’s support for a pilot project in Devon and Cornwall, using Network Rail’s global system for mobile communications-railway, or GSM-R, masts for public mobile signal to power calls on trains and proper, full-distance wi-fi. I hope that my neighbour, the hon. Member for South West Devon (Mr Streeter), will pick up on that later. Finally, I ask the Minister to recognise the enormous amount of work put in by the peninsula rail taskforce, the councils, Network Rail, businesses and hon. Members, and to look again at his Department’s decision not to respond formally to the report. It is a first-class piece of work and deserves the benefit of a considered response from the Department.
Mr Evans, you will be aware that the far south-west is a beautiful part of the world, full of ingenious businesses, a superb tourism economy and the potential to deliver much more, but we need greater investment in transport. Plymouth has neither an airport nor a motorway—that ends in Exeter—and despite being the largest city on the south coast, larger than either Portsmouth or Southampton, our journey times to the capital are slower and our transport spend smaller. Post-Brexit Britain must not ignore the talent and potential of the regions. The far south-west is a region eager to deliver, but it requires strategic investment, especially in transport, to really motor.
The funding gap for transport in the south-west is real. The Treasury’s country and regional analysis publication shows that, in 2015-16, the total identified Government expenditure on transport in the south-west was £277 per head. In London, the figure was £973 per head. Spending in London is three and a half times that in the south-west, relative to population size. Spending in the south-west is the second lowest of all English regions, with only the east midlands being lower at £260 per head. These figures are greater when spending on transport infrastructure is factored in.
The Treasury’s figures on public expenditure on rail by year and region from 2015-16 state that the figure for London is £5.16 billion, while the south-west gets £357 million. That implies that, per head, people in the south-west are worth less than those in London. Let me be clear: people in the south-west are not worth less than those in the capital. As a member of the Select Committee on Transport, I asked the Secretary of State for Transport about these figures during our session last week. He encouraged me not to look at the figures. I am afraid that the figures are what I look at, because they tell a story about investment and political priority.
In 2014, as many hon. Members will remember, our poorly equipped train line suffered immensely during the UK storms, which literally washed away and left hanging parts of the track at Dawlish. A short distance down the track, the cliffs failed and fell on to the tracks, as has been happening for decades. The train line through Dawlish was closed for a number of months, costing the economy more than £1 billion. In the wake of the storms, the then Prime Minister David Cameron came to the south-west to visit Dawlish and see the damage for himself. In a press conference afterward, he said that
“money is no object...Whatever money is needed…will be spent. We will take whatever steps are necessary.”
Those are fine words, but the reality has often been quite different.
The problems were not just in 2014, when the precarious train line at Dawlish gave out. Each time there are storms, CrossCountry, which runs Voyager trains, must cancel the last leg of the journey from Scotland to Penzance at Exeter, because its trains short-circuit at Dawlish if they are hit by waves, blocking the track and requiring removal, effectively closing our rail line. It is not a historical injustice, but a regular occurrence. The recent Storm Brian meant that CrossCountry trains through Dawlish were cancelled yet again in the last week, raising the question whether anything has been learned in the three years since the floods. It is lucky that Great Western, which for the time being is still driving its so-called high-speed trains, can still go through Dawlish when the tracks are open. In no other part of the country would such a precarious train line or such a broken franchise commitment be tolerated by Ministers, so why are they tolerated in the south-west?
In the aftermath of those storms, the largely Conservative councils in the south-west, together with largely Conservative Members of Parliament, created the peninsula rail taskforce. It produced a series of excellent pieces of work, which my party supports, setting out a long-term programme of work to invest in our railways. I pay tribute to all those who contributed to and funded the PRTF reports and studies, and who continue to serve and contribute to that regional undertaking today.
Sir Hugo Swire (East Devon) (Con)
I fully understand that the hon. Gentleman is concentrating mainly on Dawlish and the Plymouth to London line. Will he also take the opportunity to support the existence of, and continuing investment in, branch lines such as the Avocet line, which plays a vital role between Exeter and Exmouth in my constituency?
Luke Pollard
I agree with the right hon. Gentleman that branch lines are important in the region. The PRTF report talks about not only investment in our main line, but creating wider Devon metro services and the importance of connecting not only Devon’s great cities, but its smaller towns as well.
Rebecca Pow (Taunton Deane) (Con)
While we are broadening the discussion a bit, does the hon. Gentleman agree that we should also look at new railway stations to help develop the whole network across the south-west? For example, in my constituency we are working on a railway station for Wellington. I am also working with my hon. Friend from across the border, the Member for Tiverton and Honiton (Neil Parish), on a station at Cullompton. I know the Government have committed money for the new stations fund, and I welcome that, but I wonder whether the Minister might let us know for how long the fund will be accessible, and whether he might work with us to push the project forward when the time is right.
Luke Pollard
More new stations in our region can only be a good thing. Continued investment in repairing and renewing existing stations, such as the efforts being undertaken at Plymouth, is also much appreciated. The peninsula rail taskforce produced a fine set of reports. One year since hon. Members who are here today presented it to Ministers, there has still been no formal response. In answer to a written question that I tabled on 20 July, the Minister confirmed that the DFT would not formally respond to the PRTF’s report at all. That is disappointing, and I encourage the Minister to look at it again. It is a fine piece of work, setting out what signals, track, curves and junctions need upgrading to achieve quicker and more resilient journeys. It is a costed plan of some £9 billion in total, with £2.5 billion of immediate asks.
Neil Parish (Tiverton and Honiton) (Con)
I very much agree with the hon. Gentleman that much more could be done to the track to get the trains faster. I want to get faster trains to Plymouth, but I also want to make sure they stop at Tiverton Parkway on the way. I very much back what my hon. Friend the Member for Taunton Deane (Rebecca Pow) said about a station in Cullompton as well as Wellington, and we must not forget the southern line from Waterloo to Exeter, which a great deal more could be done with.
Luke Pollard
The hon. Gentleman makes the point well.
In the general election, I was pleased that my party leader was so persuaded by the case for rail investment in the south-west that he backed spending £2.5 billion on the following immediate asks in the PRTF report: track straightening, signal upgrades, speed improvements and resilience at Dawlish in preparation for the Dawlish avoiding line. I fear I am getting a similar reputation to the Leader of the Opposition for liking trains. If Labour can do that, will the Minister look at spending that is as yet unallocated in control period 6 for funding the PRTF projects?
The Secretary of State recently announced £48 billion of maintenance and repair funding, with investment in infrastructure to follow in the so-called SoFA—statement of funds available—documents. My ask, which I am sure is that of other Members, is for the far south-west to gain its fair share of that funding. I do not believe voters or Members would accept or support yet more money going to other regions without the far south-west getting our fair share. I am sure that the irony is not lost on the Minister or members of his party present today that a plan put together largely by Tory councils and backed by Tory MPs is not yet being backed by a Conservative Government but is backed by the Labour Opposition. I am sure the Minister and all those with an eye on the region’s many marginal seats would like to address that.
We need a railway we can be proud of, and the autumn Budget is the Government’s chance to give us exactly that. Our rail travel should take two hours 15 minutes to London, not three and a half. We need to ensure we are investing in reducing the journey times at every opportunity. The PRTF’s “Speed to the West” study has identified an opportunity in the autumn Budget to allocate £30 million of new money and shave three minutes off the journey between Plymouth and Exeter. To complete the work, £600,000 is required for Network Rail to finalise the technical details and re-model the track plans. The work itself would cost £25 million to £30 million. That is a once-in-a-lifetime opportunity, because according to the chair of the PRTF, those tracks will not be repaired again for another 60 to 70 years. I encourage the Minister to support us in making the case to the Treasury and his own Department to spend that money.
I would like to take a moment to look at what transport infrastructure means for the wider south-west region as a whole. Last Friday at the Exeter Chiefs ground I joined Members and businesses from across the region for the south-west growth summit, where I made a pledge to back the south-west, as a number of Members did. The biggest single boost that could be delivered to our region’s economic performance is investment in our train line. The Minister and I are both big fans of modal shift—moving people from their cars on to trains. At present it is faster to drive between Plymouth and Exeter than it is to take a train. Will he help us to make modal shift possible, so that we can reverse those statistics?
Politics has changed, and new approaches are needed. Other regions of our country have seen the way that Opposition and Government MPs can join together to champion transport schemes in their region. I hope that that can be done in the far south-west. As a region, we need to be stronger, bolder and more relentless in delivering transport schemes and more passionate with Government to make sure we get the funding we deserve. If we continue to suffer from poor transport links, we risk losing jobs and missing the chance to protect and grow the economy in the south-west.
I would be grateful if the Minister could address in his concluding remarks the request for a pilot of using Network Rail’s mobile masts in Devon and Cornwall for train mobile signal, £30 million for a speed upgrade on the Devon banks and a proper response to the PRTF report. All three asks are in his hands. Our region awaits his decision, and I hope it is a good one.
Several hon. Members rose—
Mr Nigel Evans (in the Chair)
As hon. Members can see, there is considerable interest in contributing to the debate, so please be considerate of other Members when making speeches.
Kevin Foster (Torbay) (Con)
It is a pleasure to serve under your chairmanship, Mr Evans. I congratulate the hon. Member for Plymouth, Sutton and Devonport (Luke Pollard) on securing the debate. As he will know, we have two things in common. I not only share his interest in trains in the south-west but I was born in Plymouth, at the now gone Freedom Fields Hospital in his constituency.
It is a pleasure to speak about this issue. There has been a lot of attention given to railways in the south-west over the last three years, following the disaster at Dawlish. That attention has been welcome, because for too long our railways have been a Cinderella service. For me, this is about not just being negative but looking at how many people are using these services, the growth we are seeing in passenger numbers and the vital part our rail network is playing in many people’s lives. All that is being achieved with older stock, with a railway that is the remnants of what was left after the Beeching era and with the famous issues at Dawlish.
I have commented a couple of times that it is bizarre to have to look at the wind forecast, weather forecast and shipping forecast to see whether certain trains will be running west of Exeter. To be clear, that is not due to the track; it is due to the design of the trains and the rolling stock. Sometimes that gets confused, and people think the reason CrossCountry cannot run is an inherent issue with the Dawlish coastal railway, but it is not. When we see a 40-year-old train ploughing through a big wave, that is because of an issue with the design a few years back, which I hope is being carefully noted by Great Western in its trials for introducing new rolling stock on to the line within the next couple of years. That will be one of the most welcome investments we have seen in some time.
Dawlish is the iconic issue. It is vital that there is a commitment to completing resilience works there, so that the railway will stand for another century. It is perfectly possible to do that. While I hear talk of a new line, which might be something to pursue as an additional route in years to come, for now, in the short term, we have to make sure that that railway line does not close. There is little point having a great plan for a decade’s time if a piece of cliff moves and we end up with no railway line for a year or two. Our region could not possibly accept that outcome. I hope the Minister will give us an update on the work that Network Rail has been doing and that his Department has been funding.
One big thing to come out of the Dawlish incident was that the region finally came up with the peninsula rail taskforce plan. One of the things that most surprised me when I got involved in campaigning three or four years back in Devon and Cornwall was that we did not have an agreed ask. In many other regions, particularly in the north, we would find a united package of asks in order of priority, whereas traditionally in the south-west, in the past, we have had too much arguing between areas, with the outcome being that it was easy for national decision makers to send investment elsewhere.
A bonus of the PRTF plan is that it gives a clear set of priorities for the whole region that each area benefits from, and each area recognises that competing with other parts of Devon and Cornwall is not a productive way of going about it. It would be very hard to argue that Dawlish and Teignmouth should be bypassed while arguing that Torquay and Paignton definitely need rail stations. We need to keep a united front.
With the upcoming Devon banks work, it makes eminent sense to see if some journey savings can be achieved. While those services do not directly benefit Torbay, some members of my constituency’s travelling public will travel to Plymouth, and generally making services speedier across the whole line benefits each one of us.
It is also vital that we keep attention on local rail schemes that may make a difference, and in particular the prospect of new stations or reconnecting parts of the network that have not had a station since the middle to late 1960s. That means particularly looking at a new station in Edginswell. I was very pleased to hear the Minister’s positive views on that project last week, and I look forward to the meeting where we can discuss that in more detail. It is as vital to have local stations that allow people to connect to the network as it is to have a nice new train heading off from Newton Abbot at speed to London. Ultimately, the key time that matters for people is the time it takes from where they are to where they want to be, and that is where the transport network has to come together. It cannot just be fast between two points if those two points do not connect to other places.
I am mindful of the guidance you gave, Mr Evans, so I will conclude. Railways in the south-west provide a great opportunity and have a great unreleased potential that, with investment, could make a real difference to not just our region but the nation’s economy as a whole. I hope the Minister will give us some real encouragement and strong views on how we can take our region and our railways forward.
Darren Jones (Bristol North West) (Lab)
It is a pleasure to serve under your chairpersonship, Mr Evans. I congratulate my hon. Friend the Member for Plymouth, Sutton and Devonport (Luke Pollard) on securing this important debate. I know at first hand what a champion he has been over many years for investing in and improving rail in the south-west. In fact, when we were both nipping at the heels of the hon. Member for South West Devon (Mr Streeter) and the hon. and learned Member for Torridge and West Devon (Mr Cox) at the 2010 general election—sadly, we lost at that time—rail investment was a key issue, and it has been over the years since.
Now, as the Member for Bristol North West, my home constituency, I have two main concerns. First, I am disappointed that electrification of the track from London to Bristol has been cancelled. We now have the absurd position that new-generation Great Western Railway trains, which can be powered by electricity, get only as far as Maidenhead before they have to turn on the diesel engines. That cannot be right, and given that the Government are starting to fall behind on their climate change commitments, I hope to see that project completed soon.
My second, and to me and my constituents most important concern, is inner-city rail, which is vital to the future success of Bristol North West. Already there are congested road networks in the north of my constituency. I am talking about the very part that runs parallel to what will eventually be tens of thousands of new homes on the Filton airfield and adjoining land, and a tripling in size of our regional shopping centre—the Mall Cribbs Causeway. Those developments are right next to some of the largest employers in the city and region: Airbus, Rolls-Royce, GKN, the Ministry of Defence and the University of the West of England. Bristol North West is already congested, and continues to fail to meet its air pollution targets. With such significant development, failure to invest in proper rail infrastructure now will bring my constituency to a standstill, especially at peak commuting times and seasonal retail times, and will not help us to meet our air pollution targets.
I welcome the commitment from Network Rail and Great Western Railway to the opening by 2020-21 of the Henbury spur, with 18-minute services from Henbury through North Filton into Bristol Temple Meads, but we need that spur to develop at the next stage into the Henbury loop, connecting the track through Avonmouth to the existing Severn Beach line, which runs along the south of my constituency, and ideally, if we are in the business of funding the projects that I am asking for, with a new station at Horfield and Lockleaze, too. That is important for residents and workers.
In the Avonmouth and Severnside enterprise area in my constituency, there are already more than 14,000 jobs, and the local enterprise partnership expects a further 6,000 to 12,000 by 2026, yet anyone who has visited the enterprise area knows full well that it is not accessible without a car. I commend the work undertaken by organisations such as SevernNet, Ambition Lawrence Weston and the Shirehampton Community Action Forum in supporting new bus routes and company-backed shuttle buses, but the services run infrequently, often hourly, and not in line with shift patterns, and funding has been cut. The future of those bus services is now in question, and the answer, as consistently raised by the excellent Friends of Suburban Bristol Railways, must be rail.
However, this is not just about workplaces but about residents. Without the Henbury loop, most of the constituents in the middle and north-west of my constituency suffer from very poor transport connectivity to the rest of Bristol. That affects families trying to do the school run and get to work on time, young people trying to get to further and higher education facilities and older people who need to get out and about around our fabulous city.
I should take this opportunity, after a long period of intense lobbying from my grandmother, Irene Jones, to make it clear that the cuts resulting in the closure of the number 18 bus route through Westbury-on-Trym and Southmead are entirely unsatisfactory and that the bus route should be restored urgently.
The Henbury loop will happen only with appropriate investment to allow the connecting track to run past the entrance to the Bristol port without disrupting lorries and freight, and for associated signalling upgrades. That requires Government backing and investment, as the Secretary of State knows only too well from the persistent and admirable lobbying of my Conservative predecessor, Charlotte Leslie. As a starter for 10, I hope that the Department can assist the West of England Combined Authority in funding an independent study of the Henbury Loop business case, as recommended by the Department to my predecessor before the election.
As a recent European green capital, with strong city-wide environmental credentials, Bristol wants people to use public transport instead of their cars, but we can get people out of their cars only when the public transport network exists where it needs to and when services run frequently and efficiently and do not cost the earth to use. As the voice of 100,000 people, young and old, from Bristol North West, I call on the Government to help us to secure support and investment for inner-city rail in Bristol before it is too late. I offer to assist the Government in any way I can to ensure that that is the case and, in a comradely spirit with other hon. Members from the south-west, I call for support for better rail networks across the region, too.
Anne Marie Morris (Newton Abbot) (Ind)
It is a great pleasure to serve under your chairmanship, Mr Evans. This is a cross-party issue, and I am pleased to see many hon. Members here to support this cause. We may not be the midlands engine or the northern powerhouse, but we are the great south-west. That phrase is increasingly being used, and I sincerely hope that we can all support it, because we need that branding and that name.
In the great south-west, as many speakers have said, there is significant potential, but that can be realised only with proper investment in infrastructure. My hon. Friends and others have made it clear that that is not just about the railways, but about the roads and buses. I certainly support everything that has been said about that, but I would make the case that, as my hon. Friend the Member for Torbay (Kevin Foster) said, we need to ensure that at least the existing railway line is resilient.
To the Government’s credit, they did ensure that the Dawlish railway line was reinforced, but there is still more work to be done. As has been alluded to, one of the biggest pieces of work that still needs to be done is on the Teignmouth cliffs which, hon. Members will be well aware, are one of the greatest causes of stoppages on the route. When I have spoken to my right hon. Friend the Secretary of State on that issue, he has assured me that the work will take place—it is not if, but when. The challenge we face is that currently, as far as I am aware, although perhaps my hon. Friend the Minister has good news for me, the money—overall, the work will cost us £200 million—is not included in the next rail control period. As I understood it, the Secretary of State undertook to me that he would go and talk to our friend in the Treasury to see whether that project, or at least the start of it, could be accommodated. I hope that the Minister will let me know that at least a conversation with the Treasury has been had. Clearly, I am not going to ask him about what will be in the Budget, because I will not get a response to that question. However, it is mission-critical that we sort out the Teignmouth cliffs.
There are other aspects to this, because the railway line has to be resilient as a whole. The weir works at Cowley Bridge are also unfunded, but need to be put in place; the railway has also been down because of flooding. In addition, I certainly support the request for the Totnes and Hemerdon upgrade. That is a once-in-a-lifetime opportunity. It will currently cost us £600,000 for the first report, then probably £30 million to get it done, but it seems to me to be a very sensible use of money.
One of the biggest concerns that many of our consumers, if you like, and those in our surgeries bring to us is the lack of proper wi-fi, so I absolutely endorse the call for the great south-west to be the pilot for the GSM-R project. That would mean aligning the masts of the telephone companies with those of the rail company, and I gather that Vodafone might well be up for that project.
In the longer term—it is right, in this House, to talk about the longer term—we must look at the future, and the 20-year PRTF plan does need a response, an acknowledgement. I ask the Minister to go back to his colleagues who answered the question that was put regarding whether there would be a response. It seems to me that at least an acknowledgement of the importance of this and a willingness to look forward would be appropriate.
I said to the Secretary of State that we really needed a long-term strategy for the whole peninsula. Forgive me for looking specifically at the peninsula, but as an MP in the peninsula, it is clearly where my main interest lies. That is not to downgrade in any way the importance of other parts of the line, because together we are strong and we help our tourism industry and our region as a whole, but we do need a proper strategy. At the moment, we have a railway line along the south coast. We talk about an additional line, but the reality is that we need to look at what we can do along the northern coast of the peninsula, because that has never really been looked at. To reopen lines that simply join what we currently have in the south to bits of infrastructure in the north seems to me rather short-sighted.
I am not asking for an immediate response or an immediate pot of money. That will not happen, but I do think it is incumbent on the Government to respond to requests from the House to give the south-west its fair share of attention and funding and to commit to looking at what we need in the great south-west, and at least to be prepared to put in place a proper strategy that we can all have input into and that will give us the productivity that the south-west can deliver and that this country desperately needs.
Dr David Drew (Stroud) (Lab/Co-op)
I have noted your request to keep speeches short, Mr Evans, so I will keep my remarks entirely local.
I met Great Western and Network Rail a couple of weeks ago. I made my usual request—as the hon. Member for Cheltenham (Alex Chalk) will know—to get half-hourly trains onto the Stroud valleys line, which goes to Cheltenham. They were interested, but non-committal. We need more trains on that line. It is an outrage that Gloucester and Cheltenham—two of our great communities —let alone the Stroud valleys, are badly served by the rail network. We need to have those trains sooner or later.
I was pleased to hear that we are getting the new sets in place—our gain and, dare I say, Scotland’s loss, because they are the 125s, but that is for them to worry about. We need some assurance that that is in the strategy, because I fear we will still be talking about this in 10 years’ time, which is completely unacceptable. We have redoubling on that line now, so there is no reason why we should not have shuttle trains going up and down.
Why does this matter? Well, Monday was a classic case in point: the first train out of Paddington was cancelled, which meant that the 9 o’clock train did not run. There were probably hundreds of families going to London—the first Monday of half-term—and they did not travel. That is completely unacceptable and it is a result of the fact that that was an hourly train. People cannot afford to wait an hour. Many of them did wait, but they then got on the shuttle train. If I had my way, there would be a half-hourly shuttle train, so that they would get to Swindon and they could then catch the inter-city train.
The Bristol and Birmingham line is also of concern. I appeal directly to the Minister. We have had countless reviews of the capacity of that line. It is about time we got some clarity from the different rail authorities. How many more trains can they run on that line? If they cannot run more lines, they should be honest and open. We had the greater Bristol network review. We are currently reviewing central railways, to look at the wider strategic influence of those particular lines. Some of us have argued for a long time for a second station at Stonehouse Bristol Road. We need to know if we are campaigning for something that will never happen. If it does not happen there, will it happen somewhere else, or is it not going to happen at all? We need clarity. The problem with the discussions with the different rail authorities is that we end up with promises that are never fulfilled. That is really disappointing for constituents who moan about the existing service, but expect something better, as we are moving towards the era of the train.
This is not just about getting to London, but about intermodal shift. We want that up and down our line to Cheltenham and also to Birmingham and Bristol. I hope the Minister will give me some assurance that he will talk to the rail authorities. Clearly some of us have an issue with the structure of those organisations, but let us leave that to one side. We want clear thinking about the way in which they will put more trains on and improve their service. That will enable people to use the train and become more satisfied with the service. At the moment, too many people are put off because they do not know if trains will run or, more particularly, they fear that they are being priced out because of the huge disparity between peak and off-peak prices. I hope that the Minister has heard all of those things. If they can get the service right in my part of the world, I am sure they can in all parts of the world.
Mr Gary Streeter (South West Devon) (Con)
It is a great pleasure to serve under your very experienced chairmanship, Mr Evans. I pay tribute to the hon. Member for Plymouth, Sutton and Devonport (Luke Pollard) for securing this debate and for the measured way in which he introduced it. I welcome the new energy he brings to this debate.
To my surprise and to the astonishment of my constituents, I have been here for 25 years: 13 under a Labour Government and 12 under a Conservative Government—I suppose in a year’s time it will be even steven. The reality is that in those 25 years we have not received the investment in the south-west rail link that we deserve. It is time that we put that right and our patience is wearing thin.
Although it is good news that the Government have announced another £400 million for the northern powerhouse—I am sure you have a smile on your face, Mr Evans, as it is just down the road from you—for those of us in other parts of the country, particularly when we feel undervalued and under-loved over the years, it is another slap in the face. They are getting so many millions of pounds in the midlands and the north and so on, but what about us? We are looking forward to hearing better news in the months and years ahead.
As the hon. Gentleman said, this did not begin in 2014 when the Dawlish line went down, but when we saw those images of the railway line swinging in mid-air, and when we were cut off from the rest of the country for six weeks—it seemed a lot longer—it released an outpouring of angst and anger from us in Devon and Cornwall. It was an icon of how we had been under-invested in for all those years. That was partly negative anger, but it did galvanise a lot of support in the west country, in the far south-west, in the great south-west. I agree that that is, as he said, a “snazzy moniker”: the great south-west—I like it; we should use it. That galvanised many things. We took the PRTF to see the then Prime Minister and the idea of a 20-year plan was born. He said, “I know it’s expensive, but we can do it bit by bit over 20 years. Put it all in one document, and we will deliver on it.” Now we have to deliver.
I think the Rail Minister is doing a fantastic job and I to pay tribute to him for the interest he has shown in our region. Whenever we have had meetings with him he is on the case, he knows his stuff and he has done his homework. However, I think it is disappointing that the Government are not going to respond formally. We thought they would respond to this 20-year report and I am sorry that they are not.
Things have not stood still since we submitted the report last November. More money has been spent on Dawlish. There has been extensive work east of Exeter—not as much as we want to see, but there has been work there. There are incremental upgrading works throughout the region. We are getting new trains—something we all look forward to—but that is not yet enough, far from it, to redress the imbalance of decades of under-investment, especially before privatisation, but perhaps that is something for another debate.
I want to row in behind those calling for specific responses from the Government. There are three things I want to say, but before I do, something we have not discussed but which is in the 20-year plan is the Government’s thinking about local services, for example, from Exeter to Okehampton and from Plymouth towards north Cornwall. It would be good to hear the Minister’s thoughts on that. It is not directly related to the inter-city movement from Penzance to Paddington, but it is very important for local services. It does the transmodal thing, and it will help move people around in the region. I strongly support the PRTF request for £600,000 for the study. This is a once-in-a-lifetime opportunity. Many of us have written to the Minister about that and I hope he can give us some good news—if not today, soon.
I have long believed that spot, or discrete, electrification is a significant way forward. If we can model that on the Devon banks, we can put it into operation throughout the journey, and it will help to speed up journey times without the need to electrify rail all the way down—I understand that, but we have to start somewhere and I would love to start in the Devon banks over the next few months.
I will conclude, with some passion: on-board connectivity is absolutely critical. The local enterprise partnership did a survey of businesses last year: “What do you want? What’s your highest priority?” They did not say journey times, they did not talk about resilience, although all those things are important. They said, “When we are on the train, we want to be able to use our mobile phones and computers. We want to be able to plug into our offices and the world out there, as other people in other regions can.” We need to see investment and energy from the Government on that. I thought the answer would be to make the train operating companies do it in franchise renewal, but a new idea has emerged recently. I do not know where it has been hiding, but it is a great idea. If Network Rail is happy to allow the mobile phone companies to attach their transmitters— I do not know how the technology works—to send signals from existing Network Rail infrastructure alongside the track, which I gather rejoices under the name of GSM-R, and which they are piloting in Scotland, that could solve our problems. We do not want it in control period 6; we want it now, in 2018, and we want to see progress on that. It would transform the way in which the rail service is valued by men and women in the west country. The plan is clear, the ask is clear, and the need is obvious. We want no more excuses from Government. It is time to deliver.
Mr Ben Bradshaw (Exeter) (Lab)
It is a pleasure to serve under your chairmanship, Mr Evans. I congratulate my hon. Friend the Member for Plymouth, Sutton and Devonport (Luke Pollard) on securing this debate on an issue that is hugely important not only to his constituency, but to all our constituencies in the region.
I have some sympathy for the Minister. As a Transport Minister I am sure he would love to have extra money from the Treasury to invest in all our schemes and in the railway network more generally. However, I am afraid that he, like successive Transport Ministers, is a victim of what I call Treasury orthodoxy. I want to encourage a debate, perhaps within the governing party as we move towards the Budget, on the arguments we have made about productivity. We have had an absolutely appalling productivity record in this country in recent years. It is one of the worst in Europe and has got worse since the 2008 global financial crisis and since the European referendum.
I think there is general consensus in this debating Chamber that we should improve productivity in a number of ways, including investing in education and skills and in infrastructure. We have had an incredible opportunity in the past few years since the global financial crash of record low long-term interest rates. There is an absolute opportunity to invest big-time in infrastructure for the future of our economy and our productivity. With the storm clouds of Brexit gathering and with the uncertainty that that is causing in our economy, it is even more critical now, before interest rates go up, that the people having discussions, particularly in the governing party, win that debate with the Treasury, because we are running out of time to secure meaningful investment in our infrastructure.
I completely support what my hon. Friend the Member for Plymouth, Sutton and Devonport said about the discrepancy between comparative spends up and down the country. I saw an even more graphic map than the one he referred to in which the south-west was not even featured because the amount of spend per head was so low. The map was produced by an organisation called Statista and was published in the Financial Times earlier this year. It showed us at the bottom of the regional list for infrastructure spend. I do not think there is any debate in this Chamber as to whether we have come off badly in terms of spend in our railway and infrastructure in general.
I must express my concern to the Minister that some of the money that has been allocated has not been spent well by Network Rail. It has a terrible record of cost overruns, and we are all paying the price with the fiasco of the cost overrun to the electrification of the main line from Paddington to south Wales, which is having a knock-on effect on all of our schemes. Network Rail told us in a session earlier today that work on the Cowley Bridge flood defences—let us not forget that Cowley Bridge goes back even longer than Dawlish; we lost the line at Cowley Bridge twice in the three years running up to Dawlish, which cut our region off as well—is going to start, but only on the culverts, which are to protect Cowley Bridge next spring. As the hon. Member for Newton Abbot (Anne Marie Morris) said, there is no funding allocated at the moment for the much more important work on the weir or for the upstream work on the Hele and Bradninch section of the lines, which are the important bits of the flood defence. As we enter into our winter of storms and heavy rains, we face another risk that the line will flood there and in other places.
We were also told that Network Rail has increased its assessment of the risk of a failure at the Dawlish line owing to heavy rain and/or storms to one in every three years. This matter is absolutely urgent. Our region cannot afford to suffer the disruptions that we have had in recent years, which have done so much damage to our economy. I hope the Minister will go away and have gentle words with the Treasury and with Network Rail about its performance on cost control so that we get the schemes delivered on budget and on time.
New stations are vital. Exeter is a bit like a mini-Bristol. The urban rail services in my city are incredibly important for moving people around, particularly at commuting times. We need more regular services; we need trains to stop at more stations; and we need new stations. Again, station builds are running behind time.
Rebecca Pow
The right hon. Gentleman is making a passionate case. The Government committed to £4.6 million to transform our railway station in Taunton. We are still waiting for one spade to go into the ground. I understand exactly what the right hon. Gentleman is saying: we need the promised services to be delivered. Will the Minister report on how that is going, because GWR and Network Rail still have not got on with it?
Mr Bradshaw
There is hardly a station that has been built and opened that has not overrun on cost. I was about to refer to the station in Marsh Barton, a very important industrial estate in my constituency. It was supposed to happen this year and we now understand no date at all has been fixed for it, which indicates that no money has been allocated for it, which is really disappointing not only for those who live and work in Exeter, but for those who commute in from outside.
On rolling stock, it was terribly unfortunate to hear about the initial trip of the new high-speed train serving our region. We understand from Great Western that it was unlucky. All the other trains that travelled that day were fine, but will the Minister assure us that when we get these long-awaited trains they will not pour water over people, they will work, will not break down and will be reliable? I also have a concern about the design for our luggage demands. Our trains were built in an age when suitcases were not the size of wheelie bins—people did not used to be able to carry those huge great cases—but I am worried that, having lost the guards van, and as a regular cyclist who puts my bike on the train, we will see conflicts between the people who regularly put their bikes on trains and people who need luggage space. If that becomes a problem, that is not only a problem for passengers, but for the staff who have to resolve the disputes.
Let us not neglect the Waterloo line, an important substitute line. It is a replacement line and an additional line for our region. It could be so much better if we had a few more passing places. That would allow swifter journeys and would service more stops, including places such as Pinhoe in my constituency. My basic plea to the Minister and to Opposition Members is to keep fighting the battle against Treasury orthodoxy and keep fighting for a fair deal for our region.
Alex Chalk (Cheltenham) (Con)
It is a pleasure to serve under your chairmanship, Mr Evans. I congratulate the hon. the Member for Plymouth, Sutton and Devonport (Luke Pollard) on securing this debate.
I think there is a consensus in the House that a strong train service in the south-west is vital for our thriving economy. It helps to create jobs and drives social mobility, but it would be wrong to assume that, notwithstanding all the excellent points that have been made about improving services to the south-west, the experience of the south-west is uniform, because it is not. My constituency of Cheltenham, which I unapologetically focus on, is even worse served. I will take a few moments to explain why.
Cheltenham is 93 miles away from London, yet it takes on average two hours and 16 minutes to travel from one to the other by train. How does that compare with my colleagues in the south-west? Bath, which is 116 miles from London—another 23 miles or so—takes one hour and 31 minutes. Bristol, 119 miles away, takes one hour and 43 minutes. Exeter, 202 miles away, takes two hours and two minutes. There is a dramatic difference. The historical context makes it even more galling, because there was a time when Cheltenham had the fastest train anywhere—not just in the south-west, not just in Britain, but in the entire world. The Cheltenham Flyer was the fastest train in the world. Why does that matter?
Cheltenham is home to companies such as GE Aviation, Spirax-Sarco, Zurich and Douglas Equipment, but it is also home to GCHQ. We have a faintly farcical situation. When the excellent men and women from GCHQ want to go to London—for example, to the National Cyber Security Centre—do they go on the train? No, they go on the so-called spy bus. I kid you not. Is that not a damning indictment? Cheltenham’s connectivity to London is manifestly inadequate, and has been for 50 years.
Another reason why the issue is important is that the Government are putting welcome investment into Cheltenham. For example, we have a cyber-innovation centre, which involves taking the finest minds from GCHQ and using them to nurture small businesses; and something like £22 million has been allocated for the building of a cyber-park to the west of GCHQ. That is fantastic, but getting the maximum benefit from it requires us to unlock the artery of jobs and investment from the south-east, which remains such an important economic hub.
It is worth making the point that my constituency has just had its literature festival, where Hillary Clinton spoke; we have 2.5 million visitors per annum for the jazz, food and science festivals. Yet we have a rail service that belongs in the dark ages. It is not enough to blame Beeching—although I do. He, of course, pulled up many lines in 1962. There are two things that we must do: the first is investment and the second is timetabling. I am pleased to say that the Government have shown great application on investment. The hon. Member for Stroud (Dr Drew) has mentioned the Swindon-Kemble redoubling—some £60 million has been invested in that, and it has been transformational. Next year we shall get the IEP trains, which will shave some minutes from the journey. However, the fact remains that it will still be far too long.
The second limb of what is needed, therefore, is timetabling. Instead of a service in which trains from Cheltenham to London must go via Gloucester, where the driver gets out, walks down the platform, gets in at the other end of the train and reverses it out on the way to Stroud and Swindon, we need a service that cuts out Gloucester. I want to be crystal clear: I do not propose anything that would adversely affect Gloucester. We should not have a beggar-thy-neighbour approach. I am talking about additional services. If they were introduced the journey time would drop to about one hour and 40 minutes. What strikes me as slightly odd is the fact that, while we are spending billions of pounds on High Speed 2, which may or may not be a good thing, one stroke of a pen with respect to timetabling could achieve a dramatic difference for the 115,000 people who live in my constituency. An additional service with a more direct route could be dramatic, and it would not cost a penny. A vital point to note is Great Western Railway’s wish to extend the franchise, which will come up in 2019: it is a golden opportunity for many people in the south-west—certainly my constituents—to get a far greater, much improved service, for minimum taxpayer outlay. We must not miss that opportunity.
The point that was made about 4G connectivity is right. At the moment trains effectively take their signal from the masts that they pass. In and around Stroud and Stonehouse it is hopeless; that logjam must be sorted out. If we unclog the link between the south-west and London, we unclog an artery of jobs and investment. Improving rail connectivity is at the heart of that, and there is important work to do.
Mr Nigel Evans (in the Chair)
There are about 15 or 16 minutes left, so please do the maths and help one another with that.
Mr Tanmanjeet Singh Dhesi (Slough) (Lab)
I shall be as brief as I can, Mr Evans. I thank my hon. Friend the Member for Plymouth, Sutton and Devonport (Luke Pollard) for securing the debate about how improving rail links will improve life for commuters in the south-west.
I fully concur with the view of my hon. Friend the Member for Bristol North West (Darren Jones) about electrification of rail lines; for the sake of efficiency and the environment, I believe electrification needs to be accelerated rather than delayed as is currently happening from Maidenhead to the west, and between Slough and Windsor, where it has been deferred.
Many hon. Members will wonder what the MP for Slough is doing in a debate about the south-west, but I am taking part because I think there is a common cause that should unite us in the Chamber. Something that I have highlighted, and on which I and my hon. Friend the Member for Reading East (Matt Rodda) agree—I also brought it up with my hon. Friend the Member for Plymouth, Sutton and Devonport during our Facebook Live conversation with constituents—is the western rail link to Heathrow. That is a direct rail link, coming in from the west through Reading and Slough, and on to Heathrow.
At present, anyone travelling from the south-west or the west has to go into Paddington, get another train, and then come back to Heathrow. I am a co-chair of the western rail link to Heathrow stakeholder steering group, which aims to promote the scheme and support the delivery of the rail link; we hope that the Minister will try to deliver that before 2024. That short, five-and-a-half-mile rail link will mean myriad benefits for passengers, the economy and the environment. It will reduce the journey time between my constituency and Heathrow to seven minutes, and offer four trains an hour in each direction. It will improve access to Heathrow from the south coast, the south-west, south Wales and the west midlands.
It is important to get that improved access. It will provide greater travel options for leisure and business travellers, as well as for Heathrow employees going to London Heathrow. It will also reduce congestion at London Paddington, which is already one of the busiest stations in the country. If we rely on Network Rail statistics, it will offer more than £800 million of economic activity, including additional economic benefits for various regions, and create a potential 42,000 new jobs—not to mention the carbon dioxide savings, which will equate to approximately 30 million road miles a year. I hope that with 20% of the UK population having access to Heathrow via one interchange, and the reduction in road congestion, the Minister may be able to give us some reassurance.
I seek the support of south-west MPs for the link, and would be obliged if the Minister provided an assurance that the western rail link to Heathrow will be given the priority it deserves.
Steve Double (St Austell and Newquay) (Con)
It is a pleasure to serve under your chairmanship this afternoon, Mr Evans. I congratulate the hon. Member for Plymouth, Sutton and Devonport (Luke Pollard) on securing the debate. Although we do not always agree, I absolutely concur with his passion and enthusiasm today about improving rail links to the south-west.
Cornwall has a long, historic and in some ways romantic connection to the railways, going back 200 years to Richard Trevithick and the steam engine that he invented. That great Cornishman started the rail revolution in this country, which continued through the Victorian age with great railway journeys across viaducts and bridges through Cornwall, some of which were built by Brunel. Perhaps there is a danger that the romantic image of railways in Cornwall may lead us to miss the point that rail is a crucial driver of the economy, in Cornwall and the rest of the south-west. It is difficult to over-emphasise its importance. That was brought into sharp focus in 2014, as many other hon. Members have set out, when the line was broken and Cornwall and parts of Devon were cut off. We took a slightly different view in Cornwall, with the headline in the local paper actually saying “England cut off”, but there was an incredibly negative impact on the economy. The few short weeks when the line was broken cost the Cornish economy several million pounds. It is to the credit of Network Rail and the Government of the time that there was quick intervention to get the rail link restored as soon as possible, but it is crucial that that should never be allowed to happen again.
We can never again be in a position where the rail connection is severed in that way. It is therefore absolutely crucial to get the investment we need, particularly in that stretch of that track, so that we build in the long-term resilience to ensure that the connection stays true.
I greatly welcome the peninsula rail taskforce report and add my voice to those calling on the Department for Transport to respond to it. That excellent piece of work draws on bodies from right across the south-west which have come forward with a positive, constructive vision of our railways for the next 20 years. It is important that the Government respond and recognise the work that has gone on.
I add my voice to those asking for the Department’s support for proposals to upgrade the speed on some of the track through Devon. However, I add a note of caution: the £600,000 that is being called for for the report sounds like an awful lot of money for what is essentially a desk-top exercise. I ask the Minister not only to support it but to ensure that we get value for money for every penny that we spend, so that we do not just throw money at things.
There is no doubt that in the south-west we need to catch up on investment in our railways and close the gap. As hon. Members have highlighted, we have been neglected for many years under successive Governments and have not had the investment that we need in our railways. However, we should acknowledge some of the investment that is going on. We are getting new trains from Great Western Railway to replace the 40-year-old trains that we have on those lines, providing new capacity and creating a better environment for passengers. That will be hugely welcome when it reaches the south-west later next year. We should welcome and acknowledge both that investment and some of the work going on through Cornwall to upgrade the signalling, which will increase capacity and reduce journey times there.
Investment is going on, but we still have a long way to go. I therefore add my voice to those calling on the Minister to ensure that we continue to invest in the south-west, to back the plans to upgrade our railways, and to ensure that the railway into the south-west is the economic driver that we all believe it can be so that we close the economic gap and make sure that we have a robust and resilient rail link for the future.
Matt Rodda (Reading East) (Lab)
I thank you for giving me the opportunity to speak this afternoon, Mr Evans, and my hon. Friend the Member for Plymouth, Sutton and Devonport (Luke Pollard) for securing the debate. I shall address my remarks to my constituency in Reading, which, as many people know, is served by rail services that start both in the far west of Cornwall and in west Wales. They meet at Reading and go on to London.
The state of the line at Dawlish is understandably of great interest to residents of the south-west, as we have heard. However, it also has real significance for Thames valley passengers, as my hon. Friend the Member for Slough (Mr Dhesi) mentioned. Delays on the line have a direct and immediate impact both on long-distance travel and commuter services. I shall address the economic benefits for Reading of a more reliable and robust long-distance service to the far south-west, and then pick up on some benefits to commuters in the Thames valley area.
On the first issue of long-distance rail services, rail travel from Reading to Exeter takes less than two hours—a significant advantage that we share as nearby large towns and small cities within a growing and advanced economy. I encourage the Minister to see that advantage and invest so that our residents and businesses can make better use of that. Exeter and Reading both possess similar local economies, and the interconnection of businesses could be taken further. The Met Office, for example, was based in Berkshire and has been moved to Exeter. We have a considerable IT industry in Reading that forms a supply chain for the Met Office and other public sector IT procurement in the south-west. A far better rail service between Reading and the Thames valley and other towns and cities further to the west can only support business and growth in both regions
Moving on to the advantages for local commuters, when the Dawlish floods occurred there was significant and sustained disruption in the Thames valley as railway services were affected. A large number of commuters had to decamp on to other services, such as those coming from west Wales or Oxford through Reading. That had a knock-on effect both on commuters who would have taken services from the west country up to London that stopped at Reading, and on commuters on other services. I very much hope that we can avoid any repeat of that type of disruption to our local economy and society in the Thames valley.
I will also highlight two other brief, related points. One is the benefit of further investment in local stations, which some hon. Members from the south-west have mentioned. We need a new local station on a line near Reading at Green Park. I concur with Members’ views on the benefits of local stations in growing the local economy. In our case, the station in the area near Reading would help to attract further IT investment to the town and put a greater emphasis on local transport being through public transport rather than road services. It would also generate further benefits by reducing air pollution in our area.
Let me finish by concurring with other colleagues who have pointed out the need for a shared and collaborative approach between towns and cities across southern and south-western England. I fully concur with the hon. Member for Cheltenham (Alex Chalk), who made eloquent points about his city needing a better rail service into London. We appreciate that—we are better served—but together we all stand to gain from further investment in the region if the Minister hears our concerns, so I hope that he can respond by reassuring residents across the region.
Rachael Maskell (York Central) (Lab/Co-op)
It is good to have you in the Chair this afternoon, Mr Evans. I thank all hon. Members for their contributions to this excellent debate—not least my hon. Friend the Member for Plymouth, Sutton and Devonport (Luke Pollard), who led this debate and asked some serious questions. The universal call from across the Chamber is for the Government not to prevaricate over bringing these much needed rail improvements to the south-west, and, for the first time, to put investment into the region at the scale that has been experienced in so many other places in the country—not least in London, where we see continuing significant investment compared with in the other regions.
In our party we believe that rail is not just a transport system in and of itself, but the gateway to economic regeneration, jobs and opportunities. That is why as a party, Labour—this is in its name—has demonstrated that it is about work and investment in work, and about making sure that infrastructure builds in to that to enable people to have the best opportunities. We believe that the Government should also prioritise that over their transport strategy. That is why the Leader of the Opposition committed £2.5 billion in funding to address the recommendations of the peninsula rail taskforce and—this is really important— to unlock £7.2 billion of gross value added and £1.2 billion of transport benefit. This is about investing to grow. We are starting to hear the Government moving along that line—we have been calling for it for some time—but I would also like to see that from the Department for Transport.
When research is undertaken and economic opportunity is identified, we want to see investment not only in local economies, but in productivity, as my right hon. Friend the Member for Exeter (Mr Bradshaw) said. I know that the Government are in real need of help to understand how they can drive productivity. I suggest that productivity in the south-west would improve if rail connectivity was far improved, and I ask the Minister to address that issue today.
When we see a lack of investment in rail, we see the effect on the finances of individuals in the region, so we need to look at wages and the impact on them. We know that in the south-west, the average wage is about £2,300 less for individuals, but in some areas, that can be as much as £9,000 less because people do not have the connectivity to open up the opportunities.
Some 75% of the south-west’s 98,000 businesses rightly demand the vital upgrades that are needed, and that are needed now. They say that cutting journey times and ensuring that trains are more frequent, accessible to all and reliable would sustain the economy and help it grow. The bitter experience of Dawlish in February 2014 cost the economy £1.6 billion, and then there was the sustained under-investment. As we have heard, that brought a focus to people’s anger and angst at the lack of urgently needed investment. That should sharpen the Government’s mind and bring into focus the need for more sustainable investment across the rail infrastructure through a strategic rather than a piece-by-piece approach, to ensure that long-distance trains arrive on time, are reliable and provide opportunities to people across the country.
The south-west is home to many growing areas of the economy. Members have talked eloquently about those areas, and particularly about digital infrastructure and tourism. Aerospace also has a major footprint in the region. Although such parts of the economy might be in their infancy, we need connectivity for them to grow. When we hear heard that train times to Exeter could be cut by 25 minutes, to Plymouth by 49 minutes and to Penzance by more than an hour, we must ask why the Government are delaying in moving things forward. We heard today about Devon banks project, which could improve train speeds, improving that part of the economy.
We want new rail technology. Signalling upgrades, electrification—switched on and not then switched off again—straightened tracks and new trains all help. The Government could also confirm today that they will revisit the peninsula rail taskforce report, ensure that it is scrutinised, go through it with rigour rather than setting it aside and ensure that it is put at the forefront of investment for the economic strategy for the south-west, not just for a separate rail strategy.
Greater connectivity in the south-west—for instance, to the airports, as we heard from my hon. Friend the Member for Slough (Mr Dhesi)—will make a difference and bring the region into parallel with other conurbations, rather than setting it back. It will boost the economy locally. We also need investment in infrastructure; we have heard a call across the House for investment in wi-fi. Trains are workplaces for many making long journeys, and the infrastructure is already there; we have an opportunity through the GSM-R system to ensure that we can upgrade the network quickly, without waiting for the next control period, so passengers get the high-quality service that they deserve. Freight—moving our goods—has not come up in the debate, but it also needs investment. The Government’s lack of focus on smart logistics is damaging the economy and clogging up our roads. We need to move more goods, not just people, on to our rail network.
We have heard clear demands from across the House on the environment. Yesterday we heard that 50,000 people in our country die prematurely each year due to poor air quality; people in bottlenecks in the south-west know those risks all too well. We need a serious modal shift in our transport system. Climate change in particular is increasing some of the risks. We have heard about Dawlish and the Somerset levels, where changing weather systems are impacting on how people travel. We must ensure that we address climate change in resolving our transport issues.
This is not just about climate; it is also about congestion. We must ensure that people can get on efficient forms of transport, and that rail is built to be resilient for the future. Essential upgrades have been made Cowley Bridge, Teignmouth and Dawlish, as well as an avoidance route for Dawlish, to ensure that disruption is not repeated as the climate changes. That is why it is important to draw the Environment Agency report identifying the risks into the rail strategy as we move forward.
We need the Government to understand that the Department for Transport’s modernisation of Great Western Railway is seen as a disaster at every level, not least the fiasco involving the franchises, which I understand the Secretary of State is thinking of fragmenting even further, the new rolling stock procurement in which trains cost twice as much as on the west coast main line, and the incompetence and profligacy apparent in the intercity express programme. That is not my assessment, but that of the National Audit Office, which highlighted a lack of strategic oversight causing project costs to rise by more than £2 billion.
In November 2016, the Minister put the final nail in the coffin by announcing that he would defer four “costly and disruptive” electrification projects in the region, but cancellation rather than deferral seems to be his action, meaning that dirty diesel on our lines, which pollutes the region, is preferred to electrification, which would improve connectivity. We have heard from all Members who have spoken in this debate the importance of getting on with putting the right infrastructure and the right investment into our rail system.
That is why the public support Labour’s national rail service. It is simple; there is straight accountability, no wastage on endless contracts and straight investment into the railways. It is long term, whereas contracts in the south-west lurch from year to year without strategic oversight for the long term or the long-term investment that follows it.
Now that the Government are starting to focus on borrowing, perhaps they will consider borrowing across the transport network to ensure that vital upgrades get under way now to bring economic advantage into the future. Labour has identified a transformation fund to address the issue by putting in the infrastructure needed and bringing the electrification and digitalisation services that we need. We will move forward. We will consider consulting on reopening branch lines, opening stations and improving the service to make sure that it ties in with economic development across the region. Station improvements will be part of moving forward. Plymouth is a particular station that I want to draw to the Minister’s attention; the funding gap of £15 million there must be addressed.
From this debate, I believe it is plain that Labour has a detailed national plan for the railway, strongly tied into economic growth and job opportunities and a vastly improved passenger service. We want rail to be the transport mode of choice moving forward, over long distances as well as for short journeys. We long to see regions such as the south-west reach their full potential and not be left behind. I trust that the Minister’s response will address that issue.
The Parliamentary Under-Secretary of State for Transport (Paul Maynard)
It is a pleasure to serve under your chairmanship, Mr Evans. I congratulate the hon. Member for Plymouth, Sutton and Devonport (Luke Pollard) not just on securing this debate but on his first debate in Westminster Hall—the first of many, I am sure.
I thank hon. Members who have come along and participated on the generally good-natured, good-spirited and constructive tone that they have all adopted. It has been a helpful debate. I will do my utmost to cover all the points raised, but as hon. Members can see, I have a carpet of notes before me that have been passed my way. If I do not cover everything, a simple email to my office might suffice to get more of an answer. However, I will do my best to cover everything in the time available before the hon. Member for Plymouth, Sutton and Devonport responds.
We are clearly seeing a great deal of change at the moment on rail in the south-west: brand-new trains, upgraded infrastructure, more capacity, faster journeys, greater resilience and greater reliability. That, after all, is what I believe passengers want. It is part of our record investment of more than £40 billion in the railways between 2014 and 2019, which will continue beyond that date to 2024, as set out in the statement of funds available that we announced just last week. We now expect to spend £48 billion on the railways between 2019 and 2024. It has allowed us to continue our extensive programme of renewals and deliver the enhancements deferred from the current period, to which the hon. Member for York Central (Rachael Maskell) referred. More than £5 billion is being invested in the wider modernisation of the Great Western route.
Amid all the numbers that we have released in recent weeks, I entirely understand that the frequent response is, “But what about project X in my particular local area?” We have not issued a great wodge of documentation that details the status of every single project, for the specific reason to which the right hon. Member for Exeter (Mr Bradshaw) alluded: we need to ensure that we do not disappoint people. When we announce a project, we need to understand its cost, scope and delivery, and have confidence that we can deliver it in the agreed timescale. That was a key finding that underpinned the reprogramming of control period 5, and led to the report by Dame Colette Bowe that was welcomed by the Labour Front Bench and the Government.
The Bowe report sets out another way to approach investment in the railway, by ensuring that we understand what we are putting our money into and make commitments only when we are confident that we understand them. That is a really important step forward. Over the remainder of the year, as part of our rail upgrade plan, we will make further announcements about how the insights from Dame Colette Bowe will inform the projects we take forward, and about where they sit among our priorities. We aim to take forward as many projects as possible, but we must ensure that we are confident in what we promise.
We have heard a lot about the peninsula rail taskforce, which remains a personal priority of mine; I thank my hon. Friend the Member for South West Devon (Mr Streeter) in particular for his kind comments. I stand by what I said at the launch: it is a most impressive piece of work, which I constantly cite to people around the country as a model for this sort of project. I do not want to be churlish, because I understand his desire for an official Government response, but I do not believe in gesture politics. A mere box-ticking exercise in which I issued a rigid ministerial statement entitled “Response to peninsula rail taskforce” would be less valuable than actual progress on the taskforce’s many recommendations. Some of that progress will occur as part of the rail upgrade plan, which will identify where different projects sit in the development process, but some of it will be delivered through franchise change, which operates to a slightly different timetable. I note that Great Western Railway is consulting locally on a scale never seen before in any franchise in the country. CrossCountry’s franchise is also coming up for renewal; it, too, is braving the south-west—even Torbay, I believe—and undertaking a consultation to understand what is most needed there.
I hear the frustrations of my hon. Friend the Member for South West Devon about trains not functioning at Dawlish in bad weather. My focus is on ensuring that we deliver the taskforce’s very worthwhile recommendations. When he sees the rail upgrade plan, I hope he will see the philosophy behind my seeming reticence today, but I am more than happy to continue discussions with all south-west Members in the all-party group about how to keep up momentum.
There may be an impression that we have done nothing since the launch of the taskforce. Far from it, we have done an awful lot, and I want to keep up that momentum. We are re-signalling the main line from Totnes to Penzance, providing faster journeys and potentially paving the way for the introduction of a half-hourly service on the Cornish main line. We are investing in 29 brand-new bi-mode AT300 trains for the route from Paddington to Plymouth and Penzance. We are completely overhauling the popular Night Riviera sleeper trains in Cornwall and expanding the Long Rock train maintenance site to help to maintain them.
We are continually investing to provide more solutions to deliver a more resilient railway in the south-west, and the taskforce’s blueprint remains a very important part of our work. It continues to work with Network Rail on its “Speed to the West” plans. Many hon. Members have mentioned the potential for selective electrification in the Devon banks. All that worthwhile work is ongoing; we need to do all we can to support it and get it to the next stage of development, which I look forward to.
There are several things that Network Rail can do to reduce journey times to Plymouth and the south-west more widely, which is the ambition of the hon. Member for Plymouth, Sutton and Devonport. It can try to understand how the benefits of the new trains can be maximised; it can look at the causes of dips in speed across the route; it can ascertain what quick wins can be delivered to achieve incremental marginal gains to demonstrate journey time improvement; and it can consider the discrete electrification proposals with its research and development department.
We can make significant improvements to journey times on this line, partly through new timetabling, which will be consulted on and introduced in the coming months. At the moment, there is a wide spectrum of journey times to Plymouth—between three hours and three and a half hours—but we may be able to begin to reduce that through better timetabling, so there is more good news to come.
Many hon. Members have mentioned the new IEP trains. There were initial hiccups—the train that has the politicians in it is always the one that breaks down on day one—but such is life. That investment will see much-improved reliability, increased capacity, reduced journey times and improved emission rates. The hon. Member for York Central might be forgiven for not noticing the statistics released today that show a 5.5% reduction in carbon dioxide emissions per passenger kilometre since last year. I welcome that and its continuation in years to come.
The AT300 bi-mode trains will not only improve connectivity with London, but significantly enhance it within the region. Many hon. Members mentioned local rail services that they would like to be improved. The hon. Member for Bristol North West (Darren Jones) referred to the Henbury spur and loop. Exeter is booming and has many ambitious plans for local transport. The network is growing. Hon. Members also mentioned the two separate competitions for the new stations fund, in which Portway Parkway and Reading Green Park were successful but, sadly, Edginswell and Marsh Barton were not. I am keen to work with all the local promoters of unsuccessful station proposals to help them to do better in the next competition and maximise their chances of winning. I am always happy to work with anyone who wishes to work with me.
I stress the importance that the Government attach to ensuring reliability. The situation at Dawlish is important and we are addressing it—we have already put money in. The rail upgrade plan will help us to understand how to ensure that Network Rail’s current work leads to meaningful work in the next two control periods. I thank hon. Members for participating in the debate. No region should ever feel that it is left out of the transport picture. The taskforce report is a fine piece of work, and I look forward to working with hon. Members on all sides to make it a reality.
Luke Pollard
I thank the Minister for his reply. I am grateful to hon. Members on both sides of the House for expressing their passionate and sincere belief that we need a better deal for rail in the far south-west. It is clear from all the schemes that they mentioned that there is a good case for investment. Although I understand why the Minister was not able to give assurances, I imagine that we will all look carefully at the autumn Budget for the £600,000 and the £30 million. Will the Minister write to hon. Members about the global system for mobile trial?
Luke Pollard
That is great. All members of the all-party group have a strong sense that the south-west deserves its fair share of funding. I anticipate that hon. Members on both sides of the House are gearing up to an intensified, relentless campaign. I am sure the Minister will be back to discuss this further in the future.
Question put and agreed to.
Resolved,
That this House has considered improving rail links in south-west England.
Local Authority Funeral Charges
(6 years, 6 months ago)
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Siobhain McDonagh (Mitcham and Morden) (Lab)
I beg to move,
That this House has considered local authority funeral charges.
In particular, I hope that the House will consider the exploitative fees faced by non-residents of a borough at their time of grief.
I will start by setting the scene faced by thousands upon thousands of families across the UK, before moving on to consider the specific cost of burials and then the disparity in charges between local authorities. Around one in seven families across the nation simply cannot afford to pay astronomical funeral costs, with the staggering cost of funeral poverty now at a record high of £160 million. The average cost of a funeral in Britain now stands at a remarkable £3,897, a figure that is up 5.5% in the last year alone. Funeral costs are rising faster than inflation, wages or pensions. In fact, the cost of even a basic funeral doubled between 2004 and 2014, and it has risen even faster, year on year, since 2014.
Nick Thomas-Symonds (Torfaen) (Lab)
My hon. Friend is making a very powerful case about funeral poverty and I congratulate her on securing this debate on the subject. Does she agree that the UK Government should do all they can to help local authorities to remove these fees and follow the lead set by my own local authority of Torfaen, which has abolished child burial fees all together?
Siobhain McDonagh
I thank my hon. Friend for his intervention and I am sure that, like me, he would like to congratulate our hon. Friend the Member for Swansea East (Carolyn Harris) for all her work in that regard; I will refer to her again later.
The rising cost of funerals has left a huge number of families trapped in a state of funeral poverty, which manifests itself both financially and emotionally, with University of Bath research identifying depression, anxiety and insomnia as funeral poverty’s common associates. It is no wonder, therefore, that funeral services were the most common item for credit card usage in the UK in 2013, with one in 10 people having to sell belongings to cover funeral costs. Grief leads to exploitation, exploitation leads to debt, and I personally cannot think of many worse debts to hang over a person than that arising from a family member’s funeral. I even hear that the Select Committee on Work and Pensions was told of a sobering case of a mother who was reportedly unable to afford a funeral for her son. Consequently, she was forced to freeze his body for months on end while she saved the necessary money to pay the funeral fees. That is just one of the terribly tragic human stories behind the facts and figures of widespread funeral poverty.
Such extortionate costs are not only faced by individuals but by local authorities. I am particularly disturbed to hear that several councils, including Monmouthshire County Council in Wales, carried out multiple public health funerals using shared graves last year, identifying a shortage of land as the reason for such an inhumane practice.
Despite the wide-ranging issues in relation to funeral poverty, it is the specific problem of burial costs and their widespread disparity across local authorities that led me to call this debate. A constituent of mine, Rachel, experienced the problem at first hand. When Rachel’s grandfather died in 1976, her family bought a plot for six graves in Honor Oak cemetery, which is in the London Borough of Southwark. In 1988, her grandmother passed away and was subsequently buried in the family plot. Rachel’s family now live in my constituency of Mitcham and Morden, in the London Borough of Merton, which is just a few miles south of Southwark.
Sadly, Rachel’s mother died in July this year. When Rachel and her family applied to open the plot in Southwark so that Rachel’s mother could be buried alongside her own mother and father, Rachel was advised that the charge to do so would be trebled, just because her mother was not a resident of Southwark at the time of her death and despite the fact that her family owned the grave space. The cost for Rachel’s family was a staggering £3,977.
I believe that was unfair; Rachel knew it was completely unfair; and, fortunately, after a little hesitation the head of the cemetery also agreed that it was unfair. Five days before the funeral, he accepted that Rachel’s family could bury their mother in the plot for a resident’s fee, which, at £1,326, is already expensive.
Rachel’s story of that anomaly is a story about the widespread national exploitation of grief. I, for one, do not think that Rachel or her family should ever have been put in that position in the first place. Rachel believes that the varying costs that families face from borough to borough is both unjust and unfair, calling it an
“extortionate death payment that is decided by the borough”.
Rachel has also said:
“Although we eventually managed to avoid paying the non-resident charge, there are others who are less able to fight the injustice, especially at a time when they are at their most vulnerable and grieving the loss of a loved one.”
Jim Shannon (Strangford) (DUP)
I thank the hon. Lady for giving way and for bringing this very important issue to Westminster Hall for consideration. In Northern Ireland, the average cost of a funeral is £3,000 and the funeral grant scheme should be available to more people than it is currently. Does she share my concern that the age and number of dependents is not a condition, when it should be, and the reality is that someone with five children just would not have a spare £3,000 to pay for a funeral?
Siobhain McDonagh
The position of families should certainly be considered at that desperate time.
The compassion shown by the head of Honor Oak cemetery was an isolated incident in what is a national problem—a rule for one that has not been the rule for all. For example, my constituents, Ann and her brother William, came to see me at my weekly advice surgery. Ann and her husband are joining us today to hear the Minister’s response to the story of the turmoil that their family have been through.
Just like Rachel’s family, Ann’s family have owned a grave space for decades—in their case, since 1965 in the London Borough of Hammersmith and Fulham. It holds both Ann’s grandmother and her father, who died in 1992. Before Ann’s mother passed away, she owned the grave space, which resulted in a £95.50 charge for Ann to transfer the ownership of the grave to her and her brother.
Does the Minister agree that that fee is both extortionate and unjustifiable? How can a resident in Hammersmith and Fulham be expected to pay £95.50 when a resident in Barking and Dagenham only pays £39 for the same process? And spare a thought for people in Hounslow, who would be charged £168 if they wanted to transfer the ownership of a grave.
Mrs Helen Grant (Maidstone and The Weald) (Con)
I congratulate the hon. Lady on securing this important debate. The average cost of a funeral in my constituency of Maidstone and The Weald is £4,900, including local authority costs, which is about 5% above the national average that the hon. Lady mentioned earlier. Does she agree that if local authorities can be persuaded to harmonise their funeral costs, they should also consider the very high additional costs?
Siobhain McDonagh
I certainly agree with the hon. Member, but later in my speech she will hear that even that high cost is not the highest in the country.
For Ann’s family, the cost of the funeral was just the beginning, at a time when they were already grieving for Ann’s mother. As Ann’s mother was not a resident of Hammersmith and Fulham at the time of her death, Ann was faced with a cost of £682 to lay her mother’s ashes. If the burial plot had been in Kingston, Ann would have been charged just £160, which—importantly—is precisely and fairly the same cost as that faced by the local residents. However, if the burial plot had been in Bromley, the cost would have been 14 times higher than in Kingston, at a shocking £2,212. That is an example of unjustifiable extortion, which was possible just because Ann’s mother did not live in that particular borough at the time of her death.
How can such a discrepancy between charges be acceptable? These figures could not be clearer in showing that the costs associated with burial are a lottery being run by local authorities, which unfairly prey on families at their time of grief. For Ann’s family, an extra charge of £170 was thrown in for good measure when she asked to add an inscription to the headstone, even though that change involved Hammersmith and Fulham Council doing nothing at all. Logic suggests that it is the inscriber of the gravestone who should charge for an inscription. Sadly, Ann’s case does not yet have an end, and I hope that the Minister will be able to help us to establish how she can best proceed, so that she can lay her mother’s ashes and finally be at peace. Ann clearly summarises her case:
“We are certainly not equal in life, but to allow us to be equal in death is surely the fairest and only decent decision to make.”
I have contacted dozens of local authorities to compare the costs associated with burial, and I am afraid that the Government clearly do not seem to consider us to be equal in death.
I am bringing this issue to the attention of Parliament because Ann, Rachel and others have asked me for help. I have also faced this scenario myself. When my dad, Cumin McDonagh, passed away 11 years ago, my family found ourselves in exactly the same position as Ann and Rachel. In our time of grief, my sister Margaret and I wanted nothing more than to ensure that he was as close to our mum as possible. The obvious choice for our family was to lay our dad to rest in Lambeth cemetery, just a few 100 yards from our family home. The cemetery is on the border between boroughs, but it sits narrowly in Wandsworth and, as residents of Merton, our family had to pay double the cost, despite the cemetery’s proximity to our home and, most importantly, to my mum. We did not fight the cost; we were mourning the loss of our dad and all we wanted was to see him at peace.
Across the country, local authorities double, triple and even quadruple their burial fees for non-residents, regardless of how long they previously lived in the borough—nearly every council charges extra for non-residents. That multiplier applies to any burial or interment fee, plus any grave lease cost. The justification offered by local authorities is that even if someone lived in the area for the majority of their life and owned a grave space there, the authority was not receiving their council tax at the time of their death.
For a non-resident of Bromley, the already extortionate burial fee of £2,069 faced by residents is quadrupled to an enormous £8,274 for non-residents. That means that there are former Bromley-based families, just like Rachel’s and just like Ann’s, who are simply not financially able to bury a family member in their family grave. And Bromley is not alone. Local authorities right across the country are capitalising on grieving families who have no choice but to pay the staggering costs with which they are burdened. A family might move a relatively short distance across a city and find themselves a non-resident for the cemetery they want to be buried in.
What is more, the costs are rising. Local authorities have increased cremation and burial fees by up to 49% over the past year. As a headline in The Times so aptly put it, “RIP affordable funerals”. I am sure that the Minister will agree that the bereaved should not be faced with the burden of having to shop around for the best deal on burial costs. It is unsurprising that human behaviour at a time of grief is not reflective of the behaviour of a typical so-called consumer. Those of us who have faced the loss of an immediate family member know only too well that we are desperate for the process to be as easy and efficient as possible and, above all, we want to be able to honour our loved ones as best we can. The last thing we want is to appear stingy to their memory. Those setting the burial costs know that, and they are in a position to capitalise on it immorally. What is more, privately-owned cemeteries are raising costs faster than ever, and I fear that recent history suggests that local authorities will follow suit, which indicates that there will be a worsening problem in years to come.
Although rates of cremation are rising, many people do not see it as an option, including many faith groups who consider burial to be a religious and deeply symbolic requirement. Choosing a burial, rather than a cremation, can add up to £5,000 in certain areas of the country, bringing some commentators to call a burial a luxury that is simply out of the reach of many families. Take Highgate cemetery in north London, where a burial can cost a simply staggering £18,325, or Hammersmith and Fulham’s council-led cemeteries in Fulham Palace Road and Margravine, which come with burial costs of a mind-blowing £12,464.
Mrs Helen Grant
I accept that the hon. Lady may well say more about this, but I wanted to mention that losing a child can be traumatic and can often lead to extreme financial hardship for the family, especially given the staggering costs to which she refers. I hope she agrees that the Chancellor should consider, in the coming Budget, setting up a child funeral fund to assist with those very high expenses in the case of children.
Siobhain McDonagh
I absolutely agree. We have already made reference to the wonderful campaign run by my hon. Friend the Member for Swansea East. She has been successful in getting child burial fees wiped out in Wales, as a result of that moving campaign and the story of the death of her son.
In Wandsworth, the cheapest council-led cemetery has burial costs of £4,697. The fees have risen by more than inflation in eight out of 10 council areas, with Watford Borough Council raising them by a remarkable 49.1% in the past year alone. That could be considered an isolated extremity, but not when burial fees are rising by more than double the rate of inflation across the country. They have risen faster than overall inflation, year on year, since 1980—they rose, on average, from £1,571 to £1,755 last year alone. Perhaps there is no starker example than that of the residents of Dunbartonshire in Scotland, where a letter change in a postcode makes the difference between being able to afford a burial and not. People in East Dunbartonshire should expect a fee of £2,088, which is almost double the fee in neighbouring West Dunbartonshire. As James Dunn, founder of Funeralbooker, so succinctly puts it:
“These price hikes are the ultimate stealth tax and a hidden side of austerity, going completely unnoticed by families until their moment of need. But with such significant price differences now appearing across the UK, many will be questioning whether these fees genuinely reflect the service they are getting or are simply down to opportunistic greed.”
I could not have put it better myself. There is a stark and immoral postcode lottery for the cost of dying, from an average burial fee of £419 in Northern Ireland to one of £3,806 in London. It is absolutely abhorrent that councils capitalise on life’s two certainties—tax and death—to plug the gaps in their funding and make up for widespread Government cuts.
So, what can be done? Although it does not excuse its extortionate pricing structure, I commend Lewisham Borough Council’s decision to ensure that all costs for non-residents are the same as for residents, provided they lived in the borough for more than 10 years. Hounslow Borough Council runs a similar scheme, whereby the fees are scaled to reflect the time spent in the borough. Does the Minister agree that such schemes could be replicated across all local authorities to ensure that the situation faced by Ann’s family, Rachel’s family and thousands of other families across the country is stopped once and for all?
Debate in these Chambers has led to tangible change and action on burial fees, with the commendable campaign on burial fees for children led by my hon. Friend the Member for Swansea East leading to such change across Wales. If we should take away one thought from today’s debate it should be Ann’s own words:
“I ask that the exploitation of grief stops, that there is one fair charge across all boroughs”.
I understand that there is a shortage of space for burials, with 680,000 of them projected for between 2015 and 2020 and full cemeteries providing councils with little income. I understand that residents’ taxes pay for the upkeep of council-led cemeteries. I even understand that there has to be a significant cost associated with a burial. But I do not understand the exploitation of the grief faced by families who are simply not in a position to negotiate or to shop around for the best deal. I do not understand the justification for astronomical burial costs, which is that they are needed to plug the gap that local authorities face due to Government cuts, and I certainly do not understand how those same local authorities can justify doubling, trebling or even quadrupling fees for their deceased former residents whose family members just want to see them laid to rest. It is high time that this tax on grief is put to rest.
The Parliamentary Under-Secretary of State for Justice (Dr Phillip Lee)
It is a pleasure to serve under your chairmanship, Mr Hollobone. I begin by congratulating the hon. Member for Mitcham and Morden (Siobhain McDonagh) on securing this debate, and I am grateful for the opportunity to respond.
May I extend my condolences to the hon. Lady’s constituents on the sad loss of their loved one? I was very sorry to hear of their distressing experience, and I am grateful to the hon. Lady for raising these concerns today. This constituency case raises an important matter that many of us will have to face when we lose a loved one. Understandably, however, it is an issue that we may focus on only when sadly we find ourselves faced with a perhaps unexpected financial pressure at an already difficult and distressing time.
The hon. Lady has questioned the sometimes wide variation in the burial and cremation fees charged across local authorities. I appreciate that those differences may sometimes be unexpected or difficult to understand—after all, public burial and cremation authorities are likely to be providing very similar services and facilities—but local authorities’ independence from central Government means that they are responsible for managing their budgets in line with local priorities. That is entirely appropriate; central Government cannot predict exactly what the cost of a local service will be. The fact that local authorities’ money is not ring-fenced allows them to use their resources flexibly, rather than going through burdensome reporting and accounting processes.
Local spending decisions are better made by people who understand their communities and who are therefore best placed to make the right call. For that reason, local authority spending priorities are ultimately a matter for local discretion. Councils in England will receive more than £200 billion for local services, including burial and cremation services, over the spending period 2015-16 to 2019-20. We do not shy away from saying that difficult decisions are required to finish the job of eliminating the deficit and dealing with our debts, but what we have seen since 2010 is that efficiencies can be made while broadly maintaining satisfaction with local government.
In line with the principle of local discretion, public burial and cremation authorities have the power to set their charges at levels they consider appropriate. It has been argued that one of the factors affecting the level of local burial fees is the availability of burial space, which is running out in parts of towns, cities and countryside. It is not a concern in some areas, however, so it is not yet clear that pressure on burial space is a national issue requiring central Government intervention. Successive Administrations have kept the situation under review, and we are considering whether the current position should continue.
In view of London’s particular needs in this area, the London Local Authorities Act 2007 makes special provision for eligible public burial authorities to terminate burial rights and reuse graves, subject to certain conditions. The decision on whether to make use of those provisions is a matter for individual burial authorities, taking into account all the local relevant factors. To date, however, take-up has been very low.
Siobhain McDonagh
If the Welsh Assembly and the Welsh Government can find it in their hearts to look at fees for child burial, why can guidance not come from the Department for Communities and Local Government about what the Government would wish to see from English local authorities? As the major funder of local authorities, that would seem a reasonable thing to do.
Dr Lee
Cross-Government work is going on in response to the campaign by the hon. Member for Swansea East (Carolyn Harris). I will come to that point later, but the decision on that work is yet to be made. The complexity is that the policy area sits across a number of Departments. If the hon. Member for Mitcham and Morden will bear with me, we are coming to a resolution.
In exercising their local discretion, many public burial and cremation authorities have chosen to waive or reduce fees for children’s funerals. I am grateful to those that have done that, and I take this opportunity to encourage many more authorities to consider it. I recognise the Welsh Government’s commitment in that context, and I would also like to thank providers of wider bereavement services, such as Co-op Funeralcare, that have made the decision to waive fees relating to children’s funerals.
The loss of a child is an incredibly difficult and distressing experience for any family, and the costs connected with it can therefore be of particular concern. As has been said many times in this debate, the issue has been championed over the past year by the hon. Member for Swansea East. I pay tribute to her tireless campaigning and her courage in sharing her own tragic experience in order to highlight this important matter. As promised in our manifesto commitment, we continue to work across Government to identify what more can be done to support families in the very difficult circumstances following the loss of a child.
The hon. Member for Mitcham and Morden also raised the variation in funeral costs more generally. The Government would not want to interfere with an individual’s choices for their funeral arrangements. In any event, the cost of funerals is not just an issue for Government—providers of funeral services including faith communities, funeral directors, local authorities and owners of crematoriums all have a role to play. We believe that where a family can take responsibility for the cost of funeral arrangements, they should do so, but there are times when state support is appropriate.
We are committed to supporting vulnerable people going through bereavement. The period following a death will have an emotional, social and economic impact for the bereaved, and people may need to draw on a wide range of support at that difficult time. That includes the provision of funeral expenses payments to help people on qualifying benefits with the costs of arranging a funeral. Such payments make a significant contribution towards the costs of a simple, respectful funeral, covering the necessary costs involved with burial or cremation and up to £700 of other funeral expenses. Funding from the funeral expenses payments scheme and social fund budgeting loans offers an adequate level of support, while crucially maintaining a fiscally viable fund.
Siobhain McDonagh
We are drawing near the end of this debate. Will the Minister consider taking on the issue of the discrepancies between resident and non-resident burial costs and encourage local authorities to look at understanding the length of time someone may have lived in a borough prior to their death?
Dr Lee
I will of course consider taking that on. As I said, the bereaved may need to draw on a range of support.
A question was raised about burial fees increasing because of austerity. We do not shy away from telling people that further difficult decisions are required to eliminate the Government’s deficit, but it has already been demonstrated that we made difficult decisions with local government finance and the public have broadly been supportive.
A number of issues were raised. A question was asked about the increase in public health funerals, which are the responsibility of local authorities. Funeral costs beyond burial and cremation fees are a commercial matter. I am grateful to those providers that already reduce or waive fees, particularly in relation to children. Transfer fees are at the discretion of local authorities. A child funeral fund was suggested, and that is a matter directly for the Treasury. I ask the hon. Lady to write to officials with details of the constituency case she raised. We will fully consider it.
I thank those Members who have contributed by way of intervention: the hon. Member for Torfaen (Nick Thomas-Symonds), my hon. Friend the Member for Maidstone and The Weald (Mrs Grant) and the hon. Member for Strangford (Jim Shannon). In conclusion, I thank the hon. Member for Mitcham and Morden. This debate has been a valuable opportunity to discuss matters that, if not considered openly, can only add to distress at the most difficult times in our lives. In participating in today’s debate, I believe we have gone some way towards positively addressing this issue.
Question put and agreed to.
Mr Philip Hollobone (in the Chair)
Will those not staying for the next debate please be kind enough to leave quickly and quietly? We now come to an important debate on English language teaching for refugees.
English Language Teaching: Refugees
(6 years, 6 months ago)
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Dame Caroline Spelman (Meriden) (Con)
I beg to move,
That this House has considered English language teaching for refugees.
As a linguist who spent the early part of my career living abroad, I know all too well how isolating it is for someone if they do not speak the language of the country in which they are trying to live and operate. Today, we are here to focus on the fact that being able to communicate in English in this country is absolutely key. In its report “Safe but Alone”, Refugee Action highlighted the inability to speak English as being one of the single most important causes of isolation and loneliness among refugees.
As Klajdi, a refugee interviewed by Refugee Action, said:
“What is most important is language. If you can speak the language you can make friends with your neighbour.”
Without English, refugees find it incredibly difficult to work, study and volunteer. They are effectively excluded from activities that would result in their becoming a connected member of their local community. People need language skills before they can progress, and a shared language enables integration, productivity and community cohesion.
The Casey review clearly highlighted the link between English language and integration, identifying English as
“a common denominator and a strong enabler of integration.”
More recently, a report produced by the all-party parliamentary group on social integration concluded that English is necessary
“to access employment opportunities and to build a diverse social and professional network.”
The report also recognised that speaking English is critical
“to social mobility in modern Britain.”
Jeremy Lefroy (Stafford) (Con)
I congratulate my right hon. Friend on securing this debate. Does she agree that speaking English is also incredibly important for intra-family relations? I recently met several refugee families in my constituency. The children spoke excellent English, because they went to school; the parents, with some exceptions, found English extremely difficult. That must sometimes cause a few problems within families, as well as in other contexts.
Dame Caroline Spelman
Without a doubt it does. As nearly everybody in the room will appreciate, if a parent cannot speak the language of the country in which she is living, she will certainly not be able to help her children with their homework. There are real, practical disadvantages that come with either parent not being able to speak the language in which the children are being taught.
Mr Jim Cunningham (Coventry South) (Lab)
I congratulate the right hon. Lady on securing what is a timely debate. Following on from the comments of the hon. Member for Stafford (Jeremy Lefroy), I am sure that the right hon. Lady will find in her surgeries that we often rely on the children, who can speak English, to interpret for their parents. Often the children are very young and do not understand exactly what they are being told. So the language is vital from that point of view.
There is also a shortage of classes. I hope the Minister will tell us how he intends to address that when he winds up. We should acknowledge that the Government have made about £10 million available for language courses for Syrian refugees.
Dame Caroline Spelman
The hon. Gentleman is right about that. Our constituencies are cheek by jowl. Sadly, in some situations in my surgeries I have been quite disturbed by what young children are hearing or having to explain to adults. Parents who do not speak English are in a painfully difficult position if they cannot get the help that they need and find someone to interpret for them. That is the situation that we want to address today.
At this moment in our history, encouraging greater community cohesion could hardly be more important. The recent European referendum caused quite a lot of community tension and has left many people feeling more separated from those around them. Following the vote, reports of hate crime and racist abuse dramatically increased. For many, the prevailing narrative of the last year has been one of division and discord, regrettably. Now the Government must ensure that the UK becomes a more inclusive, tolerant and united country in which to live.
Gloria De Piero (Ashfield) (Lab)
May I raise a point on behalf of training providers in my constituency, such as Sutton academy? It asked me to raise the importance of making resources available to provide good training. As the right hon. Lady says, good training provides community cohesion, among many other things.
Dame Caroline Spelman
Training is part of it. The hon. Member for Coventry South (Mr Cunningham) has just referred to the additional £10 million that the Government are providing to teach English. If refugees are to be trained, the first step is to train them in a language that they understand. Basic English learning has to be the start point; the training that they need to get a job is stage two. Resources are needed for both.
As the Second Church Estates Commissioner, I cannot miss the opportunity to point out that the Archbishop of Canterbury has said that we must be
“builders of bridges and not barriers”.
That is all of us; that is why we are here today.
English for speakers of other languages—known as ESOL—classes are essential to enable contact and integration, which is critical for building stronger communities. It is therefore essential both for the wellbeing of the refugees and for the population of our country as a whole. We must remember that ESOL funding has improved for some specific groups. In September last year, the Home Secretary pledged £10 million over the next five years in additional ESOL funding, available to refugees who arrive under the vulnerable persons resettlement scheme. Additionally, in July this year, the Home Secretary announced that the Syrian VPRS was to be expanded to include all nationalities affected by the Syrian conflict, because we know it has had an impact on the wider region.
John Howell (Henley) (Con)
I agree with everything that my right hon. Friend is saying. I wonder whether she has any ideas about how we can make the provision of English language training effective. In Oxfordshire, I found that a number of people went into the training and a few years later were no better at speaking English—they just used it as an excuse to socialise and get out of the house.
Dame Caroline Spelman
Language classes are a start point for those who have experienced the awful isolation that one feels when unable to even speak the language. However, it is also really important to get out of the house, for example to do the daily shop, and practise speaking the language, because practice makes perfect. That is where community groups have an incredibly important role in complementing the language classes, because once someone has got it, they have to use it or lose it. That has certainly been my experience.
Other resettled refugees who arrive in the United Kingdom under long-established gateway protection programmes—about 750 people a year—do not, however, necessarily receive the additional support that is being provided for those affected by the Syrian conflict. Crucially, nor do the majority of refugees in Britain who arrive not through resettlement schemes but as asylum seekers. A majority of refugees therefore cannot access the funding.
Unintentionally, that can mean that one Syrian refugee who is in the UK through the resettlement programme can access high-quality English language teaching, while another Syrian refugee from the same street in Damascus or Aleppo cannot. The need of one of them to learn English is no greater than the other’s, but they may have an extremely different experience and then a different set of economic opportunities in our country.
The policy for adult learners is the responsibility of the Department for Education. Most ESOL is financed through the adult skills budget, administered by the Skills Funding Agency. However, the funding for ESOL that is available through those avenues is no longer ring-fenced. The seven new mayoral combined authorities, plus the Greater London Authority, will assume responsibility for ESOL in their area from September next year.
Andy Street, my local West Midlands Mayor, has said something important on that subject:
“The West Midlands is one of the most diverse regions in the world, and as such we face many challenges in trying to integrate different groups and communities into our society…Speaking English is the most important part of integration and no-one in the West Midlands should be left without the opportunity to learn English.”
We need to hear all Mayors in combined authorities show that they really understand that.
Mr Cunningham
The right hon. Lady is quite right; her constituency is near mine, so she will know that in general terms the west midlands has been valuable in terms of integrating people. She will also know that Coventry, for example, has a very good reputation for integration. People of all different nationalities have settled there over the years—I think there are about 50-odd different languages spoken—so that dimension of the problem is clear. The other important factor is that we have never allowed a ghetto system to develop in the west midlands. If we isolate people out of fear, the danger is that they congregate together, but do not actually integrate into the community. They need the language as a common denominator to do that.
Dame Caroline Spelman
The hon. Gentleman makes a very good point, which is at the heart of Coventry’s bid for city of culture. Coventry is a city of peace and reconciliation, but one where we reach across diverse communities in the city to make sure that people do not become isolated. I sincerely hope that Coventry will win the bid.
In November 2016, the Government also launched the controlling migration fund, which aims to mitigate the impact of immigration on local communities. It includes a pot of £100 million over four years for which local authorities in England can bid. ESOL is one of several themes eligible under that fund, yet local authorities are under no obligation to fund ESOL projects.
In the March Budget, the Chancellor announced new money for English-language training as part of the midlands engine programme. The Government announced that they would provide
“£2 million to offer English-language training to people in the midlands whose lack of ability to speak English is holding them back from accessing employment.”
What are the stumbling blocks? Theoretically, refugees in England are eligible for fully funded ESOL provision on the condition that they have attained refugee status and meet the necessary income requirements. However, ESOL funding in England has decreased by 55% in real terms in recent years. More than half of ESOL providers who were interviewed said that their ability to provide high-quality classes had worsened over the past five years, and nearly half said that people were waiting an average of six months or more to start lessons. One provider had 800 people on their waiting list and another said that learners could wait three years to be assigned to a course. Those timescales have adverse effects on the mental health of refugees, who are likely to be experiencing social isolation. The longer they have to wait to get an English-language class that enables them to learn the language and break that isolation, the harder it becomes.
Nicky Morgan (Loughborough) (Con)
I congratulate my right hon. Friend on securing this debate on such an important topic. She is setting out very powerfully the argument in favour of enabling those who have come to this country to integrate, which is particularly important for women in many of those communities. She started with an analysis of the vote in June 2016. We know that fears about immigration were a powerful factor affecting the way that many people voted. Does she agree with the conclusions of the Casey review, which showed that 95% of people living in this country think that to be considered “truly British”, a person must be able to speak English? This is not just about the integration of communities, but about people living here—often white Brits—welcoming those who come here. The longer they are not integrated, the more the problems can escalate.
Dame Caroline Spelman
I could not agree more, and I agree with Dame Louise Casey on that point. It is a two-way process. The settled community here must reach out to the newcomers, make them welcome and recognise their contribution and the great benefit they bring to our society and economy, but for that to happen we have got to speak the same language.
Women in particular are vulnerable to the isolation that results from not being able to speak English. At present, women face even greater barriers. Research conducted by the University of Sussex this year found that women, older refugees and those with poor health face particular challenges, are most likely to struggle to learn English and are most at risk of isolation. Without a basic grasp of English, women find it exceptionally difficult to live empowered and independent lives. Many come to rely on extended family members to communicate for them, which leaves them particularly isolated and without a voice of their own. Dame Louise Casey highlighted that issue, which requires dedicated and targeted action.
One of the biggest barriers to women accessing ESOL is the lack of childcare. Currently, 77% of ESOL providers are unable to offer childcare, which is frequently cited as a reason why women are not able to get to language classes. A higher proportion of women are single parents or have caring responsibilities in their family. Limited childcare provision has a greater impact on women and tips the balance even further against them. I welcome the Government’s commitment to spend £2.3 million over the next four years to fund schemes that remove barriers such as the lack of childcare facilities. They are also being innovative and are looking at new approaches such as teaching English alongside crèches and playgroups, and providing family learning events to help adults who are unwilling or unable to leave their children to learn English. That is a positive start to tackling this area of disadvantage, but further action is required.
In January 2016, the Prime Minister announced a one-off £20 million fund to provide English tuition to Muslim women, with the aim of combating radicalisation. It is a welcome initiative, but we need a similar fund to give women who are refugees equal access to ESOL.
Informal ESOL learning groups run by volunteers, faith groups and community organisations across the country offer a vital service for refugees—not least because they are an informal way to put into practice what has just been learned in a class—but they can only complement formal ESOL classes, not replace them. First, refugees need the certification that comes with completing formal English-language learning to enter employment or further study. Secondly, to become proficient in a language, people need both conversation practice and formal professional teaching on grammar and structure. That said, I believe that the Government can join up the informal ESOL provision in our country. There is currently no means of identifying and sharing the innovative ideas and good practice that are to be found at by grassroots level. Although regional ESOL co-ordinators are starting to map informal and formal provision for the first time, we need central co-ordination to bring it all together and maintain it.
In recent years, Government funding has been targeted at specific groups such as Syrian refugees and Muslim women, but that short-term project funding has not been accessible to the majority of refugees entering the country. Indeed, for many, access to English classes has become more difficult. Investing in ESOL makes sound economic sense. The cost of two years’ ESOL classes for each refugee will be fully reimbursed to the taxpayer after an individual’s first eight months of employment at the national average wage. I hope the Minister will consider creating a fund to help all refugees learn English and ensuring a minimum of eight hours of lessons per week for the first two years that a refugee is in England. That would require an investment of about £42 million a year, but it would take into account the current scale of need outside the vulnerable persons resettlement scheme.
It is evident that a clear ESOL strategy for England would give greater direction in this area and would enable a proper assessment of need to be undertaken. It is always helpful to set clear objectives so we can measure progress against the targets. This is a devolved matter. Scotland published its own ESOL strategy in 2007 and Wales did the same in 2014.
We must ensure that women have full and equal access to ESOL. For women, there can be unique challenges to resettlement, so it is critical that we enable them to develop a strong voice for their ultimate benefit and empowerment, which would lead to more education and employment opportunities. We must ensure access to childcare facilities and continue to invest in this area. The Government’s forthcoming response to the Casey review and the new integration strategy will give us an ideal opportunity to invest in ESOL and acknowledge the key part it plays in ensuring successful integration and community cohesion, unlocking the enormous potential that the refugees who come to our country have to boost our economy and bring together communities in a post-Brexit Britain.
Several hon. Members rose—
Mr Philip Hollobone (in the Chair)
Order. This hour-long debate will finish by 5.30 pm, and Dame Caroline has the opportunity to sum up the debate as the last speaker. I am obliged to call the Front-Bench spokespeople before then. The guideline limit is five minutes for the Scottish National party, five minutes for Her Majesty’s Opposition and 10 minutes for the Minister. That means that I have to call the Front-Bench speakers no later than seven minutes past five, which gives the two Back-Bench speakers, if they are fair to each other, 10 minutes each. That is not a formal time limit, but if you both want the full time, it is 10 minutes each. It is going to be ladies first. I call Alison Thewliss.
Alison Thewliss (Glasgow Central) (SNP)
It is a pleasure to see you in the Chair, Mr Hollobone. If my voice holds out, I will be doing well to reach 10 minutes.
I am delighted to be able to speak in this debate, because I am proud that Glasgow, the city I am glad to represent, welcomes refugees. That is a cross-party commitment: a Labour administration first put a banner above the door of the City Chambers, and it has been honoured by the Scottish National party administration and all of us who represent the city. It is not just the elected officials but the people of Glasgow who have taken it to their hearts. For example, Selina Hales founded Refuweegee, which encourages people in Glasgow to give a welcome pack to refugees coming to the city including, among other things, a letter from a local person welcoming them to the city. It is a brilliant initiative, and other cities should take it up.
It is important that we do not just say that we want to make people welcome, but follow that through with deeds and practical action to make people feel at home. Imagine a person fleeing a situation of chaos, violence and fear—perhaps persecution and torture. It has been a long and difficult journey to sanctuary, but they are now in Glasgow—they had never heard of Glasgow before. It is raining. There are unfamiliar sights, smells, and they cannot understand the language, not least because the little English they understand does not seem to be what the people around them are speaking. We must not forget for a second how challenging that can be, not just because English—particularly Glaswegian English—can be hard to master, but because those people have come far and experienced so many things beyond our ken in coming here.
St Albert’s Primary School in Pollokshields recently put together a wonderfully moving theatre piece with Baldy Bane Theatre in the Tramway called “Unpathed Waters, Undreamed Shores” to bring the school community together in exploring exactly what that journey might feel like. Multiple languages were used, reflecting the diversity of languages used in the school, and expression through dance and images. My favourite part of the performance by far was when a table where food had been shared was pushed away and a ceilidh began. As the music and dancers whirled, I saw a parent from the school standing at the side of the hall agape in amazement at the spectacle. It was clearly new to him. To see our traditions through the eyes of someone new gave me pause for thought—how best do we welcome people, and what do we show them about our country? How do we encourage them to share and take part?
Helping people to improve their English is absolutely crucial to integration. Without it, people cannot speak to their neighbours or find their way in their new home. I am glad that the SNP Scottish Government have underpinned the commitment to welcome refugees with a strategy—the document is entitled, “Welcoming Our Learners. Scotland’s ESOL Strategy 2015-2020”—and with funding of some £1.46 million in 2015-16. That is a renewed strategy, continuing one that has been going for some time.
Refugees and asylum seekers who have been granted a form of leave to remain, such as humanitarian protection, do not have to pay fees for ESOL courses in Scotland. They may also be eligible for help towards their living costs, for example from colleges’ discretionary funding and from the childcare fund. Asylum seekers who are waiting for a decision on their application are also eligible for free ESOL courses, as the right hon. Member for Meriden (Dame Caroline Spelman) said. There is no waiting period, and they may be eligible for support for travel and study costs.
ESOL provision in Scotland is also offered by a range of other providers, including in community-based settings, voluntary organisations and in the workplace. In my wonderfully diverse constituency, there are many providers of English language teaching, not just for refugees but for the full range of new Glaswegians. I was quite taken aback at the huge range of classes available on the Learn ESOL Glasgow website—so many communities are hosting sessions: Pollokshields community centre; Govanhill neighbourhood centre; Gorbals, Pollokshields and Govanhill libraries; Toryglen community base; Guru Granth Sahib gurdwara; the Youth Community Support Agency, specifically for young people; the Marie Trust and the Glasgow City Mission, which often deal with people facing homelessness; Glasgow women’s library and other specialist women’s groups; groups in Garnethill; and groups run by the fantastic Radiant and Brighter, which works towards getting people into employment. That is not even all the classes offered, but just the tip of the iceberg.
St Mungo’s Academy has been running classes for parents and carers to give them further opportunities to develop their English language skills through an evening ESOL class, which challenges the issue of children learning English but parents perhaps not. Instructors from Glasgow Clyde College provide targeted support for those learning English for the first time and for those improving their skills with a view to furthering their education or getting into employment. Those learners can then obtain a recognised Scottish Qualifications Authority qualification on completion of the 10-week course. In this past year there was a 100% pass rate. There is also a higher ESOL, which is a good standard, and the numbers taking it are growing. I pay tribute to Janet Cardle and Jessica Longo, who are the teachers at St Mungo’s Academy taking that on.
Nan McKay Hall has also been providing English language teaching for at least 14 years now, in the wee community hall in Pollokshields. The service is very much in demand. The beauty of a community base, as opposed to the formality of a classroom in a college, is that the learners become well integrated into their community. Nan McKay Hall works closely in partnership with Glasgow Clyde College, which provides the tutors. I am sure it would not be out of order to thank Wendy, the students’ kind and patient teacher, whom they really take to their hearts. They have a lot of love for the time and patience she takes with them.
On Friday, after my surgery, I asked the staff at Nan McKay Hall to tell me more about the classes. They said the classes worked well because people became friends—they were not just coming into the class and leaving. Nan McKay now has people on its board who first entered the hall to join the ESOL class. People have gone on to other educational classes, computer courses and art classes, to be very much part of the life of the community. The community hall runs trips to the seaside and various different places. A whole range of people use the hall and ESOL class attendees are part of the trips too. Those are brand-new Glaswegians from Afghanistan, Iran, Iraq, Poland, Greece, Sudan, and many more places besides, alongside senior citizens who have lived nowhere else but Glasgow. They are all going away and enjoying the best of Scotland together. That is an absolute credit to that community and to those types of initiatives.
That is the kind of model we need to look at. We have seen cuts to ESOL in England and other places, but we have invested in it in Scotland because we know that we cannot afford to leave any of those communities behind. They have so much to give to Glasgow. They are glad to be here, they want to be part of the community and learning English is key to making that happen.
Paul Blomfield (Sheffield Central) (Lab)
I join with others in congratulating the right hon. Member for Meriden (Dame Caroline Spelman) not only on securing the debate but on the powerful and comprehensive way in which she scoped the issue. I also congratulate the hon. Member for Glasgow Central (Alison Thewliss) on the wonderful way in which she described what it must be like to be a new arrival in our country and the journey that people follow.
I represent one of the Sheffield constituencies, and my city became the first ever city of sanctuary in 2007, when we made a powerful statement that we wanted to welcome those fleeing persecution and war throughout the world. Since then, we have participated in many programmes and have an increasingly diverse city. I am proud that our move was followed by, I think, 90 similar initiatives in towns and cities throughout the country.
As the MP for the heart of Sheffield, I have a number of constituents who are asylum seekers and refugees. I have seen the hugely empowering impact of English language teaching. Those who run the city of sanctuary project in Sheffield advise me that learning English is the most common request they receive from new arrivals at the city’s welcome project. As the right hon. Member for Meriden has pointed out, learning English enables refugees to navigate life in the UK, to deal with the various and sometimes complex systems that they will have to come into contact with, and to live more easily and independently.
Mrs Helen Grant (Maidstone and The Weald) (Con)
I will be very quick. Does the hon. Gentleman agree with me that learning the language creates respect for difference, which is one of the fundamental factors in dealing not only with some of the causes, but with the root causes of racism?
Paul Blomfield
The hon. Lady makes a useful intervention and I certainly agree with that. I was going on to make the point that learning English is critical to integrating more effectively into communities. We need to see integration as a two-way process: the responsibility is not simply on those who arrive to integrate; we have our contribution to make to ensure that they can integrate most effectively.
Nicky Morgan
I was really pleased to hear the hon. Gentleman say that. Does he agree that in the national debate about immigration the words that are never heard are “community cohesion” and “integration”? He represents a big university, as I do, and we have many international students coming to be part of our towns and cities, and there are people coming for much longer, but settled communities feel challenged by that. What we are hearing today to a degree is that speaking a common language is a really important part of building strong, cohesive and long-lasting communities.
Paul Blomfield
I could not agree more with the right hon. Lady on that—as indeed on many other things. The importance that she places on integration and effective community cohesion is endorsed by Dame Louise Casey in the review that she is conducting on behalf of the Government. That enables refugees not only to integrate but, through integration, to become valued members of our society and to make a real contribution to it. We are talking about people who in many cases bring many skills and have much to contribute to our country. Learning English is the key to releasing that potential, for them and for those of us in the host communities.
The Government recognise the importance of that. In September 2016, when they put £10 million into ESOL teaching for newly arrived Syrian refugees—as the right hon. Member for Meriden mentioned—the then Minister, the hon. Member for Scarborough and Whitby (Mr Goodwill), said it was
“to help refugees learn English and integrate into British society”.
Furthermore, as the right hon. Lady and her colleague, the right hon. Member for Loughborough (Nicky Morgan), pointed out in an excellent piece in The Times today, the Prime Minister in her first year as Home Secretary said:
“We know that speaking English is key to integration.”
Why the need for this debate if there is so much cross-party consensus? I think it comes down to a question of funding, although not simply funding. Refugee Action concluded last year in its report, “Let Refugees Learn”, that funding reductions
“have resulted in shortages of provision.”
However, the fragmentation of provision and the lack of a clear strategy also limited opportunities.
The right hon. Member for Meriden was right to highlight and to welcome those pockets of money that have been made available to support ESOL teaching. In July 2015, however, the Department for Business, Innovation and Skills cut £45 million from 47 colleges that taught 47,000 students, and between 2009-10 and 2015-16 the Department for Education cut £113 million from ESOL funding.
Although I accept the right hon. Lady’s point about refugees’ entitlement to funding, asylum seekers are not eligible for free tuition from statutory sources. Free classes are informal and, as the brilliant community project in my constituency, Learn for Life Enterprise, has found, greatly over-subscribed. There is a real patchwork of local provision. The report by Refugee Action revealed that 45% of prospective ESOL learners have to wait an average of six months or more to access classes, and that there have been cases of people waiting up to three years. It found a waiting list of more than 6,000 people across 71 providers. A further problem, which the right hon. Lady highlighted, is the lack of childcare provision, which affects women in particular.
The report also found that the different strands of ESOL funding are disjointed. The right hon. Lady acknowledged that there are different practices in the different nations that make up the UK. England is lagging behind Scotland, Wales and Northern Ireland, and even Manchester—if it can lag behind a city. They have all developed strategies for ESOL teaching. We need a strategy that will ensure that all refugees receive free and accessible ESOL provision. Analysis by Refugee Action indicates that two years’ provision would cost £3,200 per refugee, which is a relatively small price to pay for the benefits that they and we will receive from that investment.
The lack of a coherent national strategy and the underfunding fail the refugees who come here to rebuild their lives, and as I said, it is an incredible waste for us as a country to fail to give them the opportunity to fulfil their potential. I hope that the Minister will indicate whether the Government’s response to the Casey review will address the lack of a national strategy for English language teaching, as well as the underfunding. The response should not simply focus narrowly on tackling extremism but recognise the necessity of ESOL provision for integration, for tackling isolation and for unlocking the potential of those who come here to contribute to our communities.
Mr Philip Hollobone (in the Chair)
We now come to the first of the five-minute Opposition Front-Bench speeches. I call Stuart C. McDonald for the Scottish National party.
Stuart C. McDonald (Cumbernauld, Kilsyth and Kirkintilloch East) (SNP)
It is a pleasure to serve under your chairmanship, Mr Hollobone. I, too, congratulate the right hon. Member for Meriden (Dame Caroline Spelman) on securing the debate. One of the issues that has been most badly neglected since we became all-consumed with Brexit is the refugee and migration crisis, so the opportunity to debate one small aspect of how we respond to that crisis and how we go about helping refugees to integrate is very welcome. The right hon. Lady made an excellent speech, as did my hon. Friend the Member for Glasgow Central (Alison Thewliss) and the hon. Member for Sheffield Central (Paul Blomfield), both of whom are experts in this policy area.
Three or four main points have emerged from the debate. First, Members have been unanimously positive about the impact of learning English on promoting integration and allowing refugees to rebuild their lives. Secondly, we have heard criticism of the Government’s lack of a strategic and joined-up response, with a particular focus on funding. Thirdly, we have heard a range of ideas for what a better response and strategy might look like. If I get the chance, I may mention that although learning English is hugely significant, it is just one part of a broader range of policy issues that need to be addressed if the Government are to be seen to be taking the integration of refugees seriously enough.
There is such consensus about the first issue that I do not need to say too much about it. It is obvious to us all that, overwhelmingly, refugees want to rebuild their lives, to be part of the communities that they find themselves in and to continue with their education and find good work. That is almost impossible without a decent level of English. The right hon. Member for Meriden mentioned a variety of reports that come to the same conclusion, from the Casey review to the report by the all-party parliamentary group on refugees, “Refugees Welcome?”, and the all-party parliamentary group on social integration, which has expressed similar views. In short, learning English is a matter of empowerment. It is good for refugees and it is good for the communities in which those refugees live.
Let me turn to the call for a more coherent and joined-up response from the Government. There are different aspects to that critique, but the one that has been mentioned most often is funding. As Refugee Action pointed out in its May 2016 campaign Let Refugees Learn, refugees
“have great determination and desire to learn English”
but are finding it harder to access ESOL classes because of funding reductions that have resulted in shortages of provision, waiting lists and other barriers to participation, particularly for women. That organisation subsequently gave evidence to the all-party parliamentary group on social integration and reported waiting lists stretching to more than 1,100 people. There have been reports in newspapers of three-year waiting lists in parts of London.
Hon. Members have already gone through the different pots of funding that have been announced at various times, but that is offset by the overall 50% or 60% funding cuts to ESOL provision. The hon. Member for Sheffield Central used the word “disjointed”, which is absolutely appropriate. Whenever there is one step forward on funding, there seem to be two or more steps back.
We should be clear that investing in ESOL now means making savings later. If we invested in ESOL now, we would not have to spend as much on interpreters, there would be fewer missed medical appointments and less reliance on social security benefits, and more taxes would be paid through work—another point that the right hon. Member for Meriden made. That is all indicative of a lack of a joined-up strategy. As has been pointed out, there is a strategy in Wales, and there has been one in Scotland for 10 years. That strategy, which was refreshed in 2015, sits alongside the broader New Scots integration strategy for refugees and asylum seekers, which is currently being refreshed. That we need an equivalent strategy at Westminster has been well established during this debate. Such a strategy is long overdue, and I look forward to hearing what the Minister has to say about that.
What would a better ESOL integration strategy look like? First, it is important that any strategy seeks to ensure integration from day one, as the hon. Member for Sheffield Central said. ESOL experts have long said that people’s motivation to learn tends to be at its highest, and provision tends to be most effective, immediately following their arrival in our country. If people do not learn English then, they learn to cope with not being able to speak the language to any significant degree and, having realised that they can get by without it, just tend to muddle on regardless.
Secondly, as hon. Members have said, it is vital that the whole panoply of possibilities for learning English is available so that we can tailor learning to every person’s needs. Obviously, people’s ability to learn and their personal circumstances are incredibly different. The example of parents—particularly mothers—has already been given; childcare provision has to be involved there. We have to co-ordinate all the different responses and use all the technology that is now available.
We are not here to write the Government’s strategy. There have been a lot of good ideas, but the fundamental point is that a strategy is needed. We look forward to hearing what the Government have to say about that.
Afzal Khan (Manchester, Gorton) (Lab)
Let me start, as others did, by thanking the right hon. Member for Meriden (Dame Caroline Spelman) for securing this debate and for her powerful points about why this issue is important and about the obstacles that we face.
I also want to acknowledge the many other Members who have contributed to the debate. Everyone seemed to make similar points; we seem to be on the same page. Members mentioned the impact on children of their parents not speaking the language and the importance of language training so that people are not isolated. My hon. Friend the Member for Sheffield Central (Paul Blomfield) hit the nail on the head when he mentioned the lack of a national strategy. I hope that we will hear a bit more about that.
Speaking English is one of the first and most important steps to integration for a refugee. Apart from the Casey review, the all-party parliamentary group on social integration, the all-party parliamentary group on refugees and a report by Refugee Action have all demonstrated the importance of ESOL courses and the vital need for investment. Learning English is a gateway to work, study and getting to know your neighbours. It is also instrumental to refugees’ mental health, staving off isolation and loneliness. The vast majority of refugees want to learn English and in theory they are eligible for fully funded ESOL classes. However, the reality is not matching up to the theory. As we have heard before, there are long waiting lists—in some cases three years long—and many refugees cannot access the classes they are entitled to.
The Casey review identified some of the difficulties faced by women from minority backgrounds in accessing English language courses. This is another point that has been highlighted. Three quarters of ESOL providers have either no provision for childcare or not enough for the needs of most learners, which disproportionately affects women’s ability to attend classes. The overwhelming message is that is a lack of funding is the biggest issue for ESOL providers. Two thirds of providers told Refugee Action that an increase in Government funding is the one thing that would most improve their ability to provide a high standard and quantity of ESOL classes.
The Conservative Government’s actions have been a classic case of rhetoric not lining up with reality. At the same time as the former Prime Minister was calling for migrants to learn English, the Government were cutting funding for courses. From 2009 to 2016, funding for ESOL classes dropped from £203 million to only £92.5 million: a 60% cut. Where we have seen extra funding, it has been tiny compared with the cuts that ESOL has already faced. The extra £10 million over five years for ESOL provision announced in 2016 was to be used only for Syrian refugees resettled through the vulnerable persons resettlement scheme. While that was welcome, why are the Government seemingly only interested in integrating one group?
When David Cameron announced £20 million for Muslim women to learn English, his announcement had the potential to do more harm than good. By tying language classes for Muslim women to the fight against radicalisation, the Government’s clumsy, simplistic approach managed to stigmatise a whole community rather than encourage integration. It was also of no benefit to refugees. The Government say that they value and promote integration, while at the same time slashing funding to one of the most important branches of it.
What should we do? A Labour Government would make further education courses free at the point of use, including ESOL courses. As we do not have a Labour Government, Members in the Chamber have made a strong case for specific investment in ESOL classes for refugees. As the Minister considers his response to the Casey review, I urge him to invest in ESOL funding for refugees, to ensure that women have equal access to classes, and to let the Government’s actions live up to the rhetoric they have been peddling for years.
Mr Philip Hollobone (in the Chair)
If the Minister would be kind enough to conclude his remarks no later than 5.27 pm, that will give Dame Caroline enough time to sum up the debate.
The Minister for Immigration (Brandon Lewis)
It is a pleasure to serve under your chairmanship, Mr Hollobone. I join others in congratulating my right hon. Friend the Member for Meriden (Dame Caroline Spelman) on securing the debate. I look forward to seeing her and, I think, some of her panel tomorrow for a further conversation about some of these issues. As always when listening to Members, hon. Friends and right hon. Friends around the Chamber, it has been interesting to hear not only the number of valuable points that have been made on this hugely important topic but that there has been almost—I say almost—a breakout of consensus around where we are. I will come back to why I said “almost” in just a moment.
I agree with much of what I have heard this afternoon. A number of hon. Members, including my right hon. Friend, have commented on Dame Louise Casey’s work and the integration strategy, to which we will respond in due course. My experience of working with Dame Louise Casey in my previous roles at the Department for Communities and Local Government is that she is not only a force of nature but someone to be taken hugely seriously, with important points to raise. Her experience and how she has commented in her review on the things we have to look at raise the profile of the subject and make a powerful case. We will respond in due course.
Nicky Morgan
I know that the Minister is personally committed to this agenda, but may I press him a little further? “In due course” is a phrase that Ministers use when they are not entirely sure or are not going to tell the House when the response will be. Dame Louise Casey’s report was published in December 2016. We are now at the end of October 2017. I think we all agree that it is a hugely important report, with recommendations and actions that will take some years to implement. May I press him further on a likely timescale for a response from the Government?
Brandon Lewis
My right hon. Friend is always free to press me for a response. I appreciate her point, but I am afraid she will have to be a bit more patient with me and my colleagues across Government before we respond fully.
We recognise the point made this afternoon that the ability to speak English is a key enabler for integration and participation in society. As my right hon. Friend says, I feel very strongly about that. It is fundamental for someone to be able to play a part in British society and to get on. Being able to speak English is also a necessary stepping-stone skill for those who are resettled here as refugees or granted refugee status on arrival. Once someone has that status, they are given access to the labour market and to benefits and are encouraged to access the provision that is there to support UK residents in developing the relevant skills. The ability to speak English is an important skill.
Stuart C. McDonald
The Minister mentioned the importance of English for Syrian and other refugees who are resettled here and for those who arrive spontaneously. Will he answer the question asked by the right hon. Member for Meriden (Dame Caroline Spelman) about why access to ESOL and funding are different for those who are resettled and for people who might be from the same street in Syria but arrive here spontaneously?
Brandon Lewis
I will come to that point in a moment. Obviously there is a different process for people whom we have brought here from the region through a scheme and people who arrive here. We have to make sure they are from the region before we go through that process. There is a different approach, for a very logical reason.
Just as we were getting to the harmony of complete agreement, some hon. Members, including the shadow Minister, the hon. Member for Manchester, Gorton (Afzal Khan), made the point about funding. I gently say to some Members that I have a different view. It is not always about how much we have to spend. We have to live within our means, so it is about how we spend the money we have. That is an important focus. It is not always about finding a magic money tree. I am not sure if his announcement on free education for such people was another spending commitment that Labour will step away from.
We must be able to live within our means. It is important, as hon. Members have said, to pick up on how we are spending the money that is there. My right hon. Friend the Member for Meriden outlined a number of schemes and the funding that is coming through. English language skills provision is funded mainly by the Department for Education and is accessed in a variety of ways. Training has been developed to improve adult literacy and get people into jobs. It is available to the resident UK population to meet their needs, but under Skills Funding Agency rules it is also available to those with refugee and humanitarian protection status, discretionary leave, exceptional leave and leave outside the rules, as well as indefinite leave to remain. They do not have to wait the three years that other migrants have to wait, and their family members are also eligible. That is a good deal.
There is also ESOL, which we have been talking about for much of this afternoon. That is funded by the Department for Education, which invested around £90 million in 2015-16 in those courses, and in doing so supported some 110,600 adult learners. By definition, that is for those for whom English is not their first language.
Stuart C. McDonald
Does the Minister not recognise that that is something like a 40% decline in the numbers from just three or four years ago? Is that not the effect of funding cuts? It is all very well to say that we need to look carefully at how we spend the money, but those cuts have had a pretty drastic effect.
Brandon Lewis
There is obviously a job we have to do to make sure we direct the funding we have in the most efficient manner to deliver the best outcomes for the people who are coming to this country. I will outline some of the provision now.
Brandon Lewis
I will make a little more progress, and then I will give way.
The courses are delivered by local educational institutions, which usually have a contract to do so through the local authority. Refugees are also able to access Jobcentre Plus assistance in obtaining employment, and the employment assessment that follows may determine that the refugee needs additional help with English. As part of assisting those people to become employment-ready, the jobcentre can also refer them to fully funded English language training. Its aim is to meet the needs of refugees seeking employment in our job market, and also of those who are not seeking employment but have an ambition to learn English to participate in the society around them, as was rightly outlined.
There are other sources of available funding for English language training, such as where the local authority feels that migration, whether resulting from more refugees or not, is having a local impact that it wishes to address. As my right hon. Friend the Member for Meriden outlined, the controlling migration fund was set up for that purpose: a £140 million fund with £100 million specifically to help local authorities.
Ross Thomson (Aberdeen South) (Con)
The Minister talks about support from local authorities. Does he welcome the approach taken in Aberdeen, through the work of the Aberdeen Community Planning Partnership, which has helped to resettle more than 60 Syrian refugees who have made Aberdeen their home? For example, a couple fled from their home in Daraa near the border with Jordan and arrived in Aberdeen in March last year. To support their integration into the community, they took up English lessons provided by the city council, involving a volunteer project. The family were so well supported by the local volunteer paired with them, Maria Fowler, that they named their second child after her. Does the Minister agree that such support from local authorities is crucial to helping resettle many people who have fled conflict?
Brandon Lewis
My hon. Friend makes a good point. That is exactly the kind of story we all want to hear. When meeting refugees around the country, I have noticed the disparity of experience with different local authorities. We have communities and local authorities around the country doing some absolutely fantastic work, giving people a brilliant experience and enabling them to integrate into, become part of, and have a valued role in their local community and society. We must do better in sharing best practice. I spoke to the cross-party leaders of the Local Government Association, and I will meet them again later this week to talk to them about how we share best practice better.
Brandon Lewis
I will give way to the hon. Member for Manchester, Gorton, but then I must make progress.
Afzal Khan
The Minister talks about best practice. Earlier, he talked about efficiencies, then he talked about looking at doing things differently. We have no objection to that, but how does he explain the longer waiting lists we are seeing? Is a 60% cut what he calls efficiency and doing things differently?
Brandon Lewis
I will answer that before completing the point I was making. It is more complicated than that. The accounts that we have heard from ESOL co-ordinators are not about over-subscription and waiting lists—they have challenged that to an extent, saying that it sometimes masks the fact that they run open waiting lists. Some people who in theory are on a waiting list have found provision elsewhere, so the waiting list issue can be misleading. However, we are working with ESOL suppliers and providers to see what more we can do.
In that context, and to finish the point I was making, all of us across the House can play a part in our local communities and with our local authorities. When we speak to a large cross-party group of leaders, as I did last week with the Local Government Association, the people in the room are those who are most interested and are generally already doing the work. I thanked them for doing so. The challenge is how to get the message to other local authorities that it can be done, and to get them to learn best practice from others.
Brandon Lewis
I am sorry, but I have already taken a couple of interventions. I will make progress and then let my right hon. Friend the Member for Meriden respond.
The challenge is sharing our best practice to ensure that we are learning from the best and that local government is able to do so in a cohesive way. We have put in funds to recognise the challenge raised earlier regarding issues for women, whether those are childcare issues or, for those seeking to work, commuting and access issues. The challenge is not always just about ESOL provision for those with young children in facilities with childcare, although we are doing that and want to see more of it. There is also a cultural challenge. We recognise that there can be a cultural challenge for women learning with men, and we are working with ESOL providers to find a positive solution.
I think that we should be proud of the work that we do as a country to make sure that people have the best possible welcome and opportunity to integrate, but that does not mean that we cannot do better. I am determined to work with other Departments to find out how we can do better at bringing this together in a more cohesive way to make it simpler to access, as well as sharing best practice.
Nicky Morgan
As we are in the mood for praising organisations, I invite the Minister to praise Baca, a refugee charity in my Loughborough constituency that works with young refugees who are not yet ready to work because they are completing their studies. Does he recognise that the need to ensure that young men who come here, particularly, but also young women, do not lose out on their studies is also an issue?
Brandon Lewis
My right hon. Friend makes a very good point. This is about making sure that we give easier access to people, who may also have health or mobility challenges, which can make it hard for them to have that kind of access.
When I have met refugees, one point they make to me, which was also made in our debate, is that children in school pick up the language phenomenally quickly—especially where they have access to really good provision, such as a few hours a week doing a much more intensive programme, which some people will want to do to more quickly develop their skills. I do not want to give anybody particular a plug, but with online learning facilities in the modern world, we must be capable of looking at how we work with local authorities and providers to give much wider access to those who want to do that kind of informal work—some of our communities and voluntary groups are doing really ground-breaking work on that—then share that best practice in a much better way, learn from it and deliver it more widely.
Brandon Lewis
No, I am not going to take any more interventions.
We should be very proud of what we do, but that does not mean that we cannot be better. I am determined to make sure that we do better and share that best practice better, and that we do everything we can to break down those barriers to access wherever we find them.
Dame Caroline Spelman
We have had a good debate. I thank all colleagues for contributing—particularly the hon. Member for Glasgow Central (Alison Thewliss). I liked her point that people of different nationalities become friends for life at these classes. That is life-changing for them.
I also thank the hon. Member for Sheffield Central (Paul Blomfield) for highlighting the importance of the settled community being able to communicate with the incoming community, so that they can live and work among them, and that that is a two-way process. The hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East (Stuart C. McDonald)—I probably need elocution lessons to pronounce his constituency right—gave inspiring examples of people who come to Scotland being embraced by communities.
We want to make sure that rhetoric matches reality. I, for one, am really keen to reach out to the Muslim community in this country and find what will work for them. We need to work together to reach those in the community who cannot speak English; there is no desire to stigmatise but to integrate and be helpful. We need to listen carefully to what will work.
The Minister made the important point that it is not only about the money but about how we spend it. I am very receptive to that. We need to look at best practice where it exists—he has a great heritage in local Government—and we can point to local authorities that were cited earlier that are doing a good job. My local authority is in a dispersal area for asylum seekers. I will never forget the transformation of an Afghan child seeking refuge in this country who went on to become the BBC national children’s story-teller of the year. That is just one highlight of the amazing contribution that migrants make to our country.
I will end on a sobering note. Those of us who are in this room have a big job to do. The social media comments my right hon. Friend the Member for Loughborough (Nicky Morgan) and I received on an article released today that we co-signed are salutary reading. I will read one out to impress upon the Minister and the Government how much work has still to be done:
“Taxpayers money should not be used to help immigrants speak English. If they cant or wont learn English, how/why are they here?”
That tells me and every person in this room who supports the consensus on the need to facilitate learning English that many of our countrymen and women do not understand the positive contribution that migrants make to this country, or that refugees come here to be safe. There are countries that have signed up to international treaties to provide safe haven to people coming from unsafe countries, and learning English is a part of that.
The Minister is right. However, I ask him to take away this message and to make the case for the benefits of migration, what it brings to our economy and society and why learning English is such an integral part of making that a success.
Question put and agreed to.
Resolved,
That this House has considered English language teaching for refugees.
Written Statements
(6 years, 6 months ago)
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Construction Payment Consultations (Publication)
(6 years, 6 months ago)
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The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Margot James)
My noble Friend the Parliamentary Under-Secretary of State for the Department for Business, Energy & Industrial Strategy (Lord Prior of Brampton) has today made the following statement:
Today we are publishing two consultations on payment practices within the construction sector. In publishing these consultations, the Department is delivering two commitments.
The first is to undertake a non-statutory post implementation review of the 2011 changes to part 2 of the Housing Grants, Construction and Regeneration Act 1996 (the “Construction Act”). The consultation will gather evidence on the effectiveness of the 2011 changes, the framework of rules created by the amended Act, the affordability of these changes for business, relevance and misuse of adjudication.
The second is to complete a review of the practice of cash retention under construction contracts. The review, of which the consultation is a part, is being published alongside independent research carried out by Pye Tait Consulting. The research draws a number of conclusions and also identifies areas for further investigation, which the consultation will seek to gather evidence on.
The consultations run in parallel, with a response period of 12 weeks, closing on the 19 January 2018.
Prompt and fair payment has long been an issue in the construction industry and many consider that some practices can be a barrier to investment, productivity improvement and growth in the sector. Both consultations and supporting documentation will be used to assess the extent of the issues; and whether and what further intervention is needed.
[HCWS194]
ECOFIN: 10 October 2017
(6 years, 6 months ago)
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The Chief Secretary to the Treasury (Elizabeth Truss)
A formal meeting of the Economic and Financial Affairs Council (ECOFIN) was held in Luxembourg on 10 October.
Ministers discussed the following items:
Early morning session
The Eurogroup President briefed Ministers on the outcomes of the Eurogroup meeting held on 9 October, and the Commission presented its regular update on the economic situation in the EU. Ministers also discussed the European Commission’s use of discretion in assessing member states’ compliance with the preventive arm of the stability and growth pact (SGP).
Definitive VAT system
The Commission presented its legislative proposals for a definitive VAT system and the creation of a “single EU VAT area”.
Current financial service legislative proposals
The Council presidency provided an update on current legislative proposals in the field of financial services.
Digital taxation
The Commission presented its communication of 21 September on “A Fair and Efficient Tax System in the EU for the Digital Single Market”, and the presidency provided a follow-up to the Tallinn digital summit held on 29 September.
European semester 2017
The Council exchanged views on lessons learnt from the 2017 European semester process.
Preparation of the G20 meeting of Finance Ministers and Central Bank Governors and of the IMF annual meetings between 12 and 15 October in Washington
Minsters agreed the EU’s G20 terms of reference and International Monetary and Financial Committee (IMFC) statement, ahead of the annual meetings in Washington.
Climate finance for C0P23
The Council approved Council conclusions on climate finance ahead of the UN climate change conference of parties (COP23) which will take place in Bonn on 6 to 17 November.
Implementation of financial services legislation
Ministers received an update from the Commission on the status of implementation of existing financial services legislation.
[HCWS196]
Double Taxation Convention (UK and Ukraine)
(6 years, 6 months ago)
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The Financial Secretary to the Treasury (Mel Stride)
A protocol to the 1993 double taxation convention with Ukraine was signed on 9 October 2017. The text of the protocol has been deposited in the Libraries of both Houses and has been made available on HM Revenue and Customs’ pages of the gov.uk website. The text will be scheduled to a draft Order in Council and laid before the House of Commons in due course.
[HCWS195]
General Affairs Council: October 2017
(6 years, 6 months ago)
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The Parliamentary Under-Secretary of State for Exiting the European Union (Mr Steve Baker)
My right hon. Friend, the Baroness Anelay of St Johns, DBE, Minister of State for Exiting the European Union, has made the following statement:
I represented the UK at the General Affairs Council (GAC) meeting in Luxembourg on Tuesday 17 October. The main items on the agenda were: preparations for the October European Council on 19 and 20 October; and a discussion on the rule of law and media pluralism.
A provisional report of the meeting and the conclusions adopted can be found on the Council of the European Union’s website at:
http://www.consilium.europa.eu/en/meetinqs/qac/2017/10/17/
Preparation of the European Council, 19 to 20 October 2017
The heads of the EU’s 28 member states, the European Council President and the President of the European Commission assembled at the European Council meeting on 19 and 20 October 2017. To prepare for this meeting, the General Affairs Council examined the draft of conclusions on the proposed agenda for the European Council. The agenda included: migration; digital Europe; defence; and external relations.
The discussions on migration covered both external and internal migration and the reform of the common European asylum system. The Council’s exchanges on digital Europe included: proposals on the digital single market, the free flow of data, digital taxation and cyber security. The Council debated the progress of preparations for the launch of permanent structured co-operation (PESCO) and the complementarity between EU defence measures and NATO under the defence agenda item. As part of the external relations exchanges, Ministers discussed specific foreign policy issues, including relations with the Democratic People’s Republic of Korea, Iran and Turkey.
I intervened to welcome the ambition of the language on the digital Europe conclusions and supported the focus on cyber security, combating terrorism online and information sharing. I pressed for references to counter-terrorism to be treated as a separate issue and not conflated with cyber-security. On defence, I underlined the need to ensure that mechanisms such as PESCO, the European defence fund and the co-ordinated annual review on defence enabled enhanced collaboration between member states in addition to co-operation with non-EU partners. I also welcomed the new text on the Democratic People’s Republic of Korea and Iran.
Annual Rule of Law dialogue
Ministers discussed media pluralism and the rule of law in the digital age. The dialogue was overshadowed by the murder of journalist Daphne Caruana Galizia in Malta on the previous day. I joined the condolences expressed by all member states and emphasised the importance of protection for journalists and quality journalism in safeguarding media pluralism.
[HCWS198]
Aviation Update
(6 years, 6 months ago)
Written StatementsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Secretary of State for Transport (Chris Grayling)
This time last year, the Government selected a new north-west runway at Heathrow as its preferred scheme for delivering much-needed new airport capacity in the south-east. This was a move made in the national interest—to spread the opportunity to travel and trade throughout the UK, through more flights between our global aviation hub and our regional airports.
In the last 12 months we have published a draft airports national policy statement (NPS), and been listening to views through a major consultation exercise. We have also published a new national air quality plan and taken steps to address the impact of noise around our airports, which are set out below. Heathrow airport has been working with airlines to bring down the cost of the proposed scheme, in line with the ambition I set out to keep landing charges as close as possible to current levels. Now that the Select Committee has been reconstituted, we remain on track to bring forward a final airports national policy statement for a vote in this House in the first half of next year.
Today I am publishing updated aviation demand forecasts which show that the need for additional runway capacity is even greater than originally thought. They show that all five of London’s main airports will be completely full by the mid-2030s, and four of them within a decade. Crucially, they also show us that the north-west runway scheme at Heathrow is the one which delivers the greatest benefits soonest. In addition, it continues to offer the greatest choice in terms of destinations and frequency of vital long-haul routes. Heathrow handles more freight by value than all other UK airports combined and it has superior connections to the rest of the UK through road, rail and domestic flights.
Today I am beginning a short period of consultation on the draft airports NPS to allow people to consider these updated forecasts, alongside other new evidence which was unavailable at the time of the initial consultation. This includes the national air quality plan which was published in July 2017. Updated analysis of this shows that the Heathrow north-west runway scheme can be delivered without the UK breaching its air quality obligations. We will continue to ensure that if expansion goes ahead at Heathrow, it is delivered according to air quality obligations through a suitable package of mitigation and policy measures.
This period of consultation will focus on those elements of the draft airports NPS affected by the updated evidence and will run for eight weeks until 19 December. I have asked Sir Jeremy Sullivan to continue in his role as an independent adviser to oversee this process, and I am grateful to him for his work.
The revised draft airports NPS has been laid in the Library of the House and will also receive Select Committee scrutiny. The recommendations they make will be an important consideration as we move forward. As required by section 9(6) of the Planning Act 2008, I am specifying a “relevant period” for Parliamentary scrutiny. This will start today and end on 23 March 2018.
Alongside this, our work to develop a new aviation strategy will look beyond a potential new runway at Heathrow, and will set out an ambitious long-term vision for the sector, which will support economic growth across the whole UK. In addition to considering how we can make best use of existing capacity at all airports around the country, it will look at any future need for new capacity away from Heathrow, whilst tackling environmental impacts.
The impact of noise from aircraft is a national issue, and alongside the initial consultation on the draft airports NPS, we also consulted on proposals to support modernisation of the way UK airspace is managed. Today I am also publishing the response to that consultation, and confirm we will be establishing a new independent noise body to ensure communities around our airports have a say in airspace changes which may affect them. Along with a new call-in power for the Secretary of State for Transport on airspace changes of national importance, this is designed to rebuild the trust lost in the industry by communities and provide democratic accountability for the most significant decisions.
In addition, the measures I am outlining today will enable us to make much greater use of new technology, giving us the ability to manage our airspace more effectively to tackle delays, cut emissions and reduce the need for stacking above our busiest airports. They will also help support the airspace changes we need in our skies to meet future demand—including a potential third runway at Heathrow.
Today’s announcement marks another important step as we work to ensure the UK has the connectivity we need right now to lead on the world stage.
[HCWS197]
Grand Committee
(6 years, 6 months ago)
Grand CommitteeRead Full debate Read Hansard Text
Telecommunications Infrastructure (Relief from Non-Domestic Rates) Bill
Tuesday 24th October 2017
(6 years, 6 months ago)
Grand CommitteeRead Full debate Telecommunications Infrastructure (Relief from Non-Domestic Rates) Act 2018 View all Telecommunications Infrastructure (Relief from Non-Domestic Rates) Act 2018 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 65-I Marshalled list for Grand Committee - (20 Oct 2017)
The Deputy Chairman of Committees (Baroness Stedman-Scott) (Con)
My Lords, if there is a Division in the Chamber while we are sitting, the Committee will adjourn as soon as the Division Bells ring and resume after 10 minutes.
Clause 1: Relief from local non-domestic rates: occupied hereditaments
Amendment 1
Baroness Pinnock
“(aa) the hereditament is wholly or mainly located within a local authority area where the average broadband speed is 10Mbps or less, and”
Baroness Pinnock (LD)
My Lords, I have wondered from the outset of the Bill’s proceedings why companies with billion-pound turnovers require business rate relief, as stated in the Explanatory Notes, of £60 million over a five-year period to provide an incentive for laying fibre to provide fast broadband. My amendment relates to concerns about the lack of focus for the expenditure of public funds. When, as is the case, resources are extremely limited, it is important that they are spent in the most effective way. In this instance, the focus should be on providing incentives where broadband speeds are already poor.
At the last Budget in 2016, the Chancellor emphasised the importance of fibre-to-property broadband to meet future needs, especially of businesses, where improving broadband speeds is probably the single, and simplest, change that will improve this country’s lagging productivity. A report in August of this year assessed that the UK was behind 30 other countries in accessibility to fast broadband. The Government’s current assessment is that 90% of properties have access to fast broadband; however, this figure includes properties that are 1 kilometre distant from the cabinet—not the Cabinet but the street cabinet—and consequently have barely a connection at all.
The Bill simply gives an incentive for broadband providers, both large and small, to lay fibre. The major companies have billion-pound turnovers, so the question has to be asked whether an incentive at the level provided for in the Bill will be significant. Obviously, it will make a difference for smaller providers but the Bill does not distinguish between large and small providers. The Bill makes no requirement for companies to focus on laying new fibre where broadband speeds are currently below the Government’s standard of 10 megabits per second, where the need is greatest.
Hence the amendment, which will limit the business rate relief to laying fibre where broadband speeds are already poor. I have deliberately not made the distinction between rural and urban, as some rural areas such as Cornwall have already benefited from EU investment in improved broadband access, while some urban areas have very poor broadband speeds. Even in London, some areas such as parts of Southwark suffer from having below 10 megabits per second.
I should like to explore further a concern that the largest provider of fibre, BT, has a business plan based on laying cable to the cabinet in the street and not to the premises. From there to the premises the link will be by copper, which in itself degenerates the speed. The further the premises are from the cabinet, the worse the broadband speed. At 300 metres distant, the broadband speed is not much improved from the old copper connections. As I said earlier, at 1 kilometre the connection is barely accessible. A further factor that results in broadband speeds reducing, even with fibre, is the number of properties connected to the cabinet. None of these issues is addressed in the Bill.
My final concern, which is admittedly outwith the Bill, is the cost to families and individuals of accessing broadband. Fibre cable can be laid to provide access but if the cost is prohibitive, some families will not be able to access the better-quality broadband. Since it is becoming, in my view, one of the utilities—like water, electricity and fuel provision—it is really important that we start thinking about how all families are able to afford broadband. I put this into the equation to ask the Government whether they will, at some point, be willing to address that increasingly significant concern. My amendment would encourage the Government to focus public funds on incentives that will make areas with poor connectivity see significant improvements. I beg to move.
Lord Kennedy of Southwark (Lab)
My Lords, I refer the Committee to my registered interests as a local councillor and a vice-president of the Local Government Association. I support Amendments 1, 5 and 11 in this group, tabled by the noble Baroness, Lady Pinnock. They highlight some real problems for communities—be they urban or rural—which suffer from poor connectivity, and there has been no real incentive to improve the situation for them by improving speeds. The amendments add the condition that, for the relief to apply, it has to be focused on areas within a local authority where the average broadband speed is 10 megabits per second or less. I think I am right when I say that about 93% of homes and businesses in the UK are able to receive superfast broadband, but it is the copper version. The Bill is generally welcomed.
The noble Baroness is right to focus her amendments on areas with poor connectivity. There is a good argument for this as reliefs provide an incentive to do something that a business might otherwise not want to or be keen to do. The view may be taken that it is not economically beneficial, or something else could be more beneficial. The noble Baroness raises the important issue of how to ensure that those parts of England and Wales, urban and rural, which suffer from poor connectivity can benefit from the relief provided to companies. Otherwise, such areas run the risk of falling further behind. We can all agree that the benefits that fibre can bring could be enormous for all parts of the UK.
Can the noble Lord, Lord Bourne, respond to the concern expressed by the noble Baroness, as we do not want to see parts of the country falling further behind? How can we ensure that this relief, welcome though it is, actually benefits those areas with the worst connectivity?
The Parliamentary Under-Secretary of State, Department for Digital, Culture, Media and Sport (Lord Ashton of Hyde) (Con)
My Lords, my noble friend Lord Bourne has left this one to me. I thank the noble Baroness and the noble Lord for their contributions. I realise the point that some of these issues raise. I will make some general comments on the points made by the noble Baroness, Lady Pinnock, and then come to the substance of the amendment.
The noble Baroness referred to billion-dollar companies—I presume she meant BT. The relief applies to all companies, large or small, because fibre-optic cable is the way of the future. We regard laying fibre-optic cable as a good thing, regardless of where it is and who lays it, so we leave it up to the market. This Bill is a fairly blunt instrument—merely an enabling measure; it was announced by the Chancellor and it is merely to allow the relief to take place. On the very understandable issue of where it should be directed, we have carried out a number of measures to effect that. We understand the issue about rural and hard-to-reach areas—and, indeed, some of the areas in our cities that do not have adequate broadband. The specific amendments do not necessarily address the broad thrust of some of the remarks made by noble Lords, and I will explain why we do not think the amendments are particularly helpful. They would mean that the reliefs provided for in the Bill on new fibre applied only to those areas that currently receive an average speed of less than 10 megabits per second. They would undermine a fundamental part of what we seek to achieve through the Bill. We want to ensure that businesses and households throughout the country, including rural areas and cities, have access to faster broadband. In fact, by the end of this year, 19 out of 20 premises will have access to superfast broadband.
The universal service obligation will provide a digital safety net by giving everyone in the country the legal right to request a connection to broadband speeds of at least 10 megabits per second by 2020. As noble Lords will know, we are also considering a voluntary proposal from BT in that respect. I stress that the 10 megabits per second is a safety net; we want as many people as possible to have access to superfast broadband or better, which is why we have set a target of 95% superfast coverage by the end of 2017, which will continue to be extended beyond that to at least 97% of premises.
We have delivered a series of measures to ensure that all areas can and do have access to the broadband speeds that they need. For example, Defra has just made available £30 million of funding under the rural development programme for England, targeted at supporting rural businesses and growth for broadband services in those areas with speeds of 30 megabits per second or faster where that is not currently available or planned. In the 2016 Autumn Statement, the Government announced more than £1 billion to support digital infrastructure, targeted at supporting the rollout of full fibre connections for future 5G communications. The first wave of projects for our local full fibre networks programme has been launched, and includes a mixture of urban and rural areas. We are soon to launch a challenge fund for local bodies to bid for access to £200 million, with all parts of the UK free to participate, and we anticipate a significant number of applications from predominantly rural areas. We think that those projects will encourage further commercial interventions to build and extend fibre networks.
We support better broadband in all areas, but we believe that the amendment would limit the rate relief to only those local authority areas with an average of less than 10 megabits per second, which would damage the rollout of faster broadband across the UK. First, it would mean that much of the new fibre to be installed to the premises—FTTP—would be excluded from the relief. To deliver a network that is fit for the future, we need more fibre everywhere, including in areas that currently get more than 10 megabits. This amendment could deter significant investment and have the perverse result that less full fibre—the gold standard of broadband technology—was actually deployed.
Secondly, the amendment would exclude from the rate relief new fibre in those villages and rural areas that do not currently have high-speed broadband but happen to fall within a local authority area which does on average have high speed broadband. It would mean excluding from the relief whole areas where support is needed and where the measures provided for in the Bill would make a difference. At the moment, less than 3% of premises across the UK receives under 10 megabits per second, so the amendment potentially excludes up to 97% of premises from the relief.
Therefore, I hope that the Committee will recognise that the amendments should not be included in the Bill. However, we agree that improving broadband in those areas with less than 10 megabits is a priority, which is why we have put in place the universal service obligation. The new fibre rate relief as proposed through the Bill will support that objective. I hope that, with this in mind, the noble Baroness will withdraw her amendment.
Baroness Pinnock
My Lords, I thank the noble Lord, Lord Ashton, for his detailed response to the amendment, which I tabled to explore how the Government’s intentions could result in better focused expenditure of public money. I accept his criticism that using local authorities as a geographic unit is, to use the phrase he used earlier, a blunt instrument.
I was trying to say to the Government that if we are to spend public funds, which are in short supply, let us make really good use of them by connecting to higher speeds those parts of the country that currently have very poor broadband. I accept the very detailed response the noble Lord has given, but to be honest he has not responded to the question of focusing on improving accessibility, apart from saying we need fibre connections everywhere. We all agree with that, but let us incentivise companies to do it where it is needed. I would welcome the Government coming forward with an amendment that enables that to happen, with the vast support they have working these things out, but given the response I have had, at this moment I beg leave to withdraw the amendment.
Lord Kennedy of Southwark
“(4FA) Conditions prescribed by the appropriate national authority by regulations under subsection (4F)(b) must include the condition that new fibre is part of the hereditament under subsection (4F)(a).”
Lord Kennedy of Southwark
My Lords, Amendments 2, 3, 6, 7, 9, 10 and 12 are all in my name and form group two in our deliberations. This group seeks to address one of the principal concerns expressed by people and smaller companies in the industry: that the way the Bill is written does not provide enough protection from companies ripping out old fibre and laying new fibre solely to benefit from the relief, which would pay for itself in less than two years. I think that was one of the points the noble Baroness, Lady Harding of Winscombe, made at Second Reading after her discussion with colleagues and people in the industry. I am convinced that there is a real risk of this happening, which would be absolute madness and not what the relief was intended for. It would, in effect, become a subsidy for old networks. Can the Minister address this particular point: how will we ensure this does not happen?
My amendments seek to prevent this in three ways. They would put in the Bill the words,
“must include the condition that new fibre is part of the hereditament”.
They would add a subsection that would put in the Bill the meaning of “new fibre” and what would not be covered by this relief. They would go further to address the point that laying, affixing, flying or attaching should not be solely to gain relief. Amendment 9 makes the specific point that the relief should not be there just to “replicate existing” telecoms structures. The Bill is about providing business relief to encourage and to speed up additional fibre telecommunications infrastructure.
There may be other ways to do what I seek here, but the Bill as drafted has people in the industry concerned. They are unhappy with the protections that the Bill affords at present, or fails to afford. The purpose of these amendments is to raise the issue with the Minister, and to get a response and, I hope, a commitment from the Government that these issues will be looked at seriously. Further, would he be prepared to meet me and representatives of the industry between now and Report? That would be helpful, because it is a serious problem. Somehow the Government, either with these amendments or by regulation, have to address these points further. I beg to move.
Baroness Pinnock
My Lords, I support the amendments tabled by the noble Lord, Lord Kennedy, because he, like I did in previous amendments, seeks to focus the relief provided in the Bill on those places and areas that need it most. He is asking to put in safeguards to prevent some companies deliberately laying cable with no purpose and to ensure that what is done on rate relief achieves the outcome the Government seek, which is to provide more domestic premises and businesses with fast broadband connectivity. I look forward to the response from the Minister—I am not sure which one, perhaps it will be a double act. The questions that the noble Lord, Lord Kennedy, has raised are important and need an answer.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government and Northern Ireland Office (Lord Bourne of Aberystwyth) (Con)
My Lords, on this occasion I am genuinely grateful to the noble Lord, Lord Kennedy, for raising this matter. I am not always grateful to him for raising matters but I am today. I am grateful also to the noble Baroness, Lady Pinnock, for her comments. We have a shared interest here, in that I cannot believe that anybody wants to see gaming in the system.
Concerns about gaming in the proposed rate relief for new fibre were raised by a small number of operators in August, when we first shared with them our proposals for the draft regulations. As the noble Lord has said, my noble friend Lady Harding raised this issue at Second Reading. I think she went on to say that she was not by any means convinced that there would be gaming but she raised it as a concern, so we share an interest in ensuring that there is not gaming.
Other operators have told us that they do not believe there is scope for gaming and support the proposed scheme. Nevertheless, we take this matter seriously and have been investigating these claims. Overall, our initial view is that it is unlikely gaming will be used in this tax relief. As I have said, we continue to discuss this with the sector and we are still gathering evidence.
However, if it will help the Committee, I will explain in a little detail why concerns as to gaming have arisen, why we believe such gaming is unlikely, in practice, and how I propose to deal with the matter between now and Report. What is being seen as the potential risk of gaming comes from the line we propose to draw in regulations as to when the relief should apply. New fibre installed after 1 April 2017 will receive the relief. However, some operators will choose instead to use existing fibre optic cable which was installed prior to 1 April 2017 but has not yet been activated. This is known as dark fibre. The objective of the measure in the Bill is to support investment in new fibre broadband infrastructure. Therefore, previous investment in existing fibre, including dark fibre, is not considered to be new fibre, has not been incentivised by this measure and will be outside the relief.
We have heard concerns that the proposed different treatment in the relief scheme of new fibre, which gets the relief, and dark fibre, which does not, could lead to some gaming in the system. It has been suggested that telecom operators may replace or duplicate existing dark fibre with new fibre merely to secure the rate relief. It has also been suggested that some operators may install new fibre in existing locations to gain a competitive advantage over existing operators in that location, merely because of the rate relief.
To understand this better we are investigating the costs and operational implications of installing new fibre into existing infrastructure, such as ducts. By comparing these costs to the potential saving on business rates from the new fibre relief we can identify where, in principle, the scope for gaming exists. To help us with that work we have held discussions with telecom companies regarding this matter and are now considering evidence provided by one operator, Gamma Telecom, which I mentioned at Second Reading. The consultation on the draft regulations runs until 21 November, and during this time we would like to hear views from other operators regarding the risk of gaming. This work is at an early stage and noble Lords will understand that some of the data we are using in this study is commercially confidential.
Our initial findings are that in the vast majority of cases—perhaps covering more than 99% of the telecom network—it will not be financially viable for operators to install new fibre merely to gain the relief. In those cases, the cost of purchasing the fibre and the labour costs associated with opening existing ducts—putting the fibre through those ducts and then connecting the fibre—exceeds the saving from business rates. In those situations it will be cheaper to use existing dark fibre, so gaming would not occur. Our focus, therefore, is on smaller networks where the business rates paid in respect of each kilometre of network are higher than for larger networks. The potential for making a saving in business rates is therefore also higher.
We are looking closely at the circumstances in which new fibre may be installed in existing smaller networks and exploring more of the costs associated with accessing existing ducts. These circumstances account for a very small fraction of the telecoms network—probably less than 1%. That said, I cannot see why 1% should be ignored and if there is evidence of the possibility of gaming, I would want to ensure that we act. But even if there are circumstances where, in principle, the rates saving exceeds the costs, it does not necessarily follow that, in practice, gaming is viable. For example, it may not be possible to add new fibre to ducts which are already in use, while switching from one fibre to another may cause interruption or disruption to the customer, which may be especially unacceptable for business customers and unattractive to the operator. But, as I have said, we agree with the noble Lord and the noble Baroness that we do not want a tax system that is open to gaming in the way that has been suggested. If from our work with the sector we conclude that gaming is likely, I assure the noble Lord and the noble Baroness that we would consider how to amend the draft regulations to prevent it.
The amendments we are considering would move the definition of new fibre into the Bill. This would in fact significantly limit our ability to tackle any gaming. The approach in the Bill of defining in regulations the meaning of new fibre gives us the scope to first identify the circumstances in which gaming might arise before we devise the solution. It allows us to ensure that any solution is practical and to respond quickly to any future circumstances where gaming might arise.
Moving on to the practical points put by the noble Lord and echoed by the noble Baroness about meeting the sector, as I have indicated, I intend to meet Gamma between now and Report, which will probably be towards the end of November. I will certainly keep the House—including the noble Lord and the noble Baroness—informed about how the discussions are going. I would be happy to include them in the thrust of what is happening, and expect to act on any concerns about gaming which indicate that this issue needs addressing. As I say, we are as keen as they are to tackle any potential gaming. I hope with that assurance and the guarantee that I will keep the noble Lord and the noble Baroness involved with what is happening, that the noble Lord will feel able to withdraw his amendment.
Lord Kennedy of Southwark
My Lords, I thank the Minister for that helpful response. I am happy to withdraw my amendment at this stage. I am delighted that the Minister is meeting representative of the industry, particularly Gamma. That is very good.
I hope the Minister is right on all these things and that there is no issue with gaming at all. My only concern is that we should pass the legislation in a way that eliminates it. We are often told by the Government that parliamentary time is precious. It would be a shame to get the Bill through and then find, in a year’s time, that there was a problem after all and people are doing the things which we do not think they will now. I like the idea of putting something in regulations as a good way forward. They can be amended a bit more easily. I was at a meeting this morning on a completely different subject: a very good initiative that the Government had come forward with many years ago, when I first joined the House, but now there are some concerns about how it is operating. To get that initiative changed, we have to go back and get the law changed. That is not always easy. I thank the Minister for his response and look forward to further discussions. I beg leave to withdraw the amendment.
Lord Kennedy of Southwark
“(4FC) Providers of telecommunications benefiting from the relief under subsections (4E) and (4F) must give due consideration to providing high quality telecommunications services to rural and hard to reach areas.”
Lord Kennedy of Southwark
Amendments 4, 8 and 13 in my name and Amendment 15 in the name of the noble Baroness, Lady Pinnock, concern how we help rural areas and communities benefit from improved connectivity with fibre, to address the concerns that rural and other hard-to-reach areas have.
Amendments 4, 8 and 13 are in effect the same amendment placed in three different parts of the Bill. They would place a requirement on those companies benefiting from the business rates relief to give due consideration to providing high-quality telecoms services to such areas. These are very reasonable amendments—I always table reasonable amendments in your Lordships’ House—and they would place a duty only to give due consideration. There is nothing onerous or anything that would put the viability of a business at risk, but they propose that connectivity must be given proper consideration and significance.
If a particular area is benefiting from an upgrade to fibre, the company doing the work should give proper weight to the proposition that, as a beneficiary of the rates relief, it should also look at whether the work in the village down the road could be done at the same time—the risk being that if it is not done then, it will never be done at all. The community would then be as disadvantaged, as it was previously.
I fully support the amendment in the name of the noble Baroness, Lady Pinnock. It asks that a report be laid before Parliament 12 months after the Act comes into force, to look at various issues, which I am sure she will refer to in her contribution. I beg to move.
Baroness Pinnock
My Lords, obviously I support Amendments 4, 8 and 13 in the name of the noble Lord, Lord Kennedy, which draw attention to the issues that he has just spoken about. Amendment 15 in my name asks for an impact study after 12 months to see how effective the provision is. In this instance, there have been difficulties that I have struggled with, as with the earlier amendment proposing a local authority boundary for an assessment of an average 10 megabits per second.
In Amendment 15, I have used “rural” as an accepted definition of areas which, on the whole, have poor broadband connectivity. If this was accepted by the Government, obviously it could be extended to all parts of the country. I am focusing again on the need for the Bill to use public funds effectively, by targeting their impact where they can make the most significant difference. Subsection (2)(c) of my proposed new clause refers to mobile phone connectivity. This relates to the fact that until we get 5G coverage, which I believe will be in 2020—it could be a year or two later—connectivity will depend on fibre-optic cables going as far as the mobile phone masts. This will have a big impact on those many families who cannot afford broadband but rely on mobile phones for their connectivity everywhere. They rely on them for accessing public services, which are now digital by default. If they can, they also make job applications via their phones, rather than having broadband to the house. That is why I raise these issues today.
The fundamental part of the amendment is to have a pause or period in which the Government assess the impact of this rate relief and ask: is it doing what we hope it will do? Can we improve the quality of mobile phone coverage by ensuring that some of the fibre-optic cable that is laid goes to mobile phone masts, in preparation for 5G coverage?
Lord Ashton of Hyde
My Lords, I am grateful to noble Lords for laying out their amendments clearly. As the noble Lord, Lord Kennedy, said, these amendments are very much linked to the last group on which I answered—the first group today.
Amendment 4, which was moved by the noble Lord, Lord Kennedy, seeks to ensure that there is a requirement for recipients of the relief to,
“give due consideration … to rural and hard to reach areas”.
In a similar vein, the noble Baroness, Lady Pinnock, proposes an amendment to require a report on the impact of these measures on rural connectivity. Although I might support the spirit of these apparently reasonable amendments, I do not believe that they are necessary. I share the concerns of many noble Lords that rural and remote areas should not be left behind in the drive to improve and extend high-quality broadband connectivity. I declare an interest: I live in a rural area and am absolutely aware of the problems to which noble Lords have alluded.
The relief provided for in the Bill is available across England and Wales. No area is excluded or exempted, and we have engaged with the Welsh Government to support the application of the measure in Wales. Providers deploying fibre connectivity in the countryside will receive the same rates relief as those deploying in the hearts of our great cities. That is important because the problems of slow speeds are the same, regardless of where the household is located. When we talk about social deprivation, for example, it is still a problem in an inner city as well as a rural area.
Providers are free to deliver connectivity wherever the market allows. However, to ensure that people living and working in rural and remote areas can and do have access to the broadband speeds that they need, the Government have delivered a series of measures, which I mentioned in my previous answer—but I shall remind noble Lords of them just briefly. There is the superfast rollout programme, which is worth about £1.7 billion of public money. We are currently consulting on the broadband universal service obligation, which will apply across the United Kingdom, with at least 10 megabits per second. Then there is the local full fibre networks programme, worth £200 million, and the rural development programme for England at £30 million for broadband. Those measures have been a great success, with 45% of households with superfast in 2010 rising to 95% by the end of this year.
It is clear that the relief will be alongside a package of measures put in place by the Government to help spread to those living and working in rural and remote areas the benefits of economic growth and access to services that better broadband connectivity will bring. Together, they will also lay the foundations needed for the next generation of mobile technology, known as 5G, to which the noble Baroness, Lady Pinnock, referred.
The noble Baroness’s proposed new clause in Amendment 15 would require a report on the impact of the measure on rural connectivity. I support the outcome—that is, an understanding of the impact of Government’s action in this area—but my concern is that requiring a report on the impact on rural connectivity may have an adverse effect. Telecoms networks take time to plan and build, and investors rely on certainty. A report on the relief after 12 months is premature, given the time taken to deploy networks. My noble friend Lord Bourne will cover reporting arrangements in greater detail later, but my concern is that if the Government are required to report so soon, it could create uncertainty over whether the relief will continue, and lead to unintended consequences.
On subsection (2)(c) of the noble Baroness’s proposed new clause, on mobile coverage, I note that the main benefit of the measure to mobile will be in aiding the deployment of 5G. It will take longer than 12 months for the next generation of mobile technology to appear; we do not quite know what it is yet.
Of course, we will monitor the effectiveness of the scheme in providing new fibre, which will include rural areas, but we need to allow the sector appropriate time to build networks in all areas. Ofcom reports on infrastructure deployment every year, and we should see the impact of all the Government’s measures in this field in due course. In view of those explanations, I hope that the noble Lord will withdraw his amendment.
Lord Kennedy of Southwark
The Minister made the point, with regard to the amendment of the noble Baroness, Lady Pinnock, that 12 months may be too soon. After what period of time does he think a report would be useful? Would it be 12 months, 24 months or 36 months?
Lord Ashton of Hyde
Ofcom reports every year, so I do not think it would matter whether it is 12 months or 24. My point was specifically on mobile coverage for which the 12 months would not be appropriate, because 5G has not really been invented yet, so there certainly will not be any visible signs on mobile coverage. Essentially, we are saying that we want fibre-optic cable to be laid over all areas of the country to improve future mobile reception and also fibre to the premises, which is what the future gold standard is. We need it everywhere, not just in rural areas. While we accept that rural and hard-to-reach areas have a problem, I have laid down a series of other measures to deal with those areas specifically.
Lord Kennedy of Southwark
I thank the Minister for that response and for his response to my other question. I am happy at this stage to withdraw my amendment.
Lord Kennedy of Southwark
“Assessment of rate relief: reporting
(1) The Secretary of State must, within the period of 12 months beginning with the day on which this Act has effect, lay a report before both Houses of Parliament containing an assessment of the operation of the relief provided under this Act in the 2017-18 financial year.(2) The report must include an account of—(a) the impact of the relief upon the level of local authority income raised through non-domestic rating;(b) the level of investment likely to have been stimulated by the relief, and the scope for extending the relief to other forms of investment;(c) whether the duration of the relief is appropriate;(d) the views of those subject to the charges of non-domestic rates on the relief; and(e) the efficacy of the mechanism for the distribution of the relief.”
Lord Kennedy of Southwark
My Lords, I will be brief, as we have rehearsed some of the points made earlier. Amendment 14 in my name and that of the noble Baroness, Lady Pinnock, puts a requirement on the Secretary of State to lay a report before both Houses of Parliament. A similar amendment was tabled in the other place to get the Government to make an assessment of the operation of the relief proposed under this Bill. The amendments list, in paragraphs (a) to (e) in subsection (2) of the proposed new clause, the areas that the report should cover. I hope that the Minister can address the concerns raised by the amendment. It seeks to ensure, among other things, that the issues we have been discussing today and in previous debates do not arise. It would be a major disappointment if we failed to address these concerns and also failed to take any measures to keep ourselves informed about the effect of the relief and how it is working.
I like to base my decisions on evidence. As I said, I was at a meeting today on a completely different matter, where, after many years down the line, we have not got a mechanism to change things. I hope we can get a positive response. I do not accept that having a report to Parliament, whether next year or in 24 months’ time, in itself creates great problems for business in terms of uncertainty. We are in very uncertain times on a whole range of issues, and I am sure businesses would be much happier with other things. I am sure the point can be made for the moment, but I do not accept the inference made. I beg to move.
Baroness Pinnock
As I have put my name to this amendment, clearly I support it. The specific parts of this amendment that I would like the Government to consider are paragraphs (a) and (e) of subsection (2). The first is the impact of the relief upon the level of local authority income raised and the second is, importantly, the mechanism for the distribution of the relief, whether it is going to be a speedy one and how carefully it can be calculated. I can see quite a lot of room for dispute about the cabling, such as which part of local authority boundaries it crosses and so on. What we would like is an assurance that there will be an appeal mechanism for local authorities if the distribution of the relief is not what they anticipate. The reporting would enable that to happen.
Lord Bourne of Aberystwyth
My Lords, I thank the noble Lord and the noble Baroness for their contributions on this amendment dealing with the possibility of a review. I welcome the opportunity to return to this proposed new clause, which, as the noble Lord rightly says, was discussed in Committee in the other place.
We have said throughout the passage of the Bill that we intend to work with the sector and the Valuation Office Agency to ensure the smooth implementation of this relief. I happily restate that. We have published draft regulations for consultation; they are up for consultation until 21 November. I hope that noble Lords will see from the debate that we have just had in relation to gaming that my department and the Government as a whole are looking very closely at the detailed operation of the scheme. We all share the objective of wishing to see this scheme implemented effectively and quickly from the outset. This in turn will lead to new fibre growth and improved broadband. That is the aim, which I know that noble Lords share.
However, I fear that the proposed new clause would not achieve that aim and, if included in the Bill, could threaten the success of this scheme. I note what the noble Lord says about business uncertainty elsewhere, but that hardly means that a bit more uncertainty is a good thing or something that we should not be concerned about. Sending a clear signal to investors in the telecoms sector is critical to the success of this measure, which is why we have moved quickly to bring forward the Bill and why we are consulting early on the draft regulations. Investors need to see a clear intention on the part of the Government to deliver relief from 1 April 2017 for five years up to 2022.
One suggestion is about the length of the relief being provided. Any suggestion that it might not last the full five years is not desirable. Those sorts of signals can make the difference to decision-makers in telecoms companies in deciding whether to proceed with an investment. Businesses thrive on certainty. Decisions in telecoms companies are being made now on the basis of the promise made by the Chancellor that new fibre will have relief until 2022.
I understand the objective of the amendment, but it would create uncertainty in the sector and damage the prospects for success of the measure. By providing for, in effect, a review of the rate relief after only one year, we will sow the seeds of doubt in the sector. The sector may fear that the Government might cancel or otherwise negate the relief after a year—especially when, as the amendment clearly states, the review should consider the duration of the relief. We could expect telecoms companies to react in only one way to the prospect of such a review: they will be less likely to invest, which would damage the rollout of broadband. Therefore, I am afraid that the Government cannot accept the amendment.
We will, of course, continue to monitor the effective operation of the scheme to ensure that it is indeed providing relief on new fibre. We will work with the sector and the Valuation Office Agency to do that. The powers in the Act will allow us to adjust the scheme where necessary such as to reflect changing and new technologies. Any suggestion that the relief might last less than five years is something that we cannot subscribe to.
The amendment would also require the Government to assess the impact of the relief on local government. In fact, that is information which we already plan to collect and publish. I can give that undertaking. Each year, the department publishes non-domestic rating returns containing the information about the business rates income and relief in each local authority area, which this seems to ask for. I can ensure access to that; we can provide the link so that that information is readily available. Those returns are based on information provided to us by local government, and they can be found in full on our website. As I say, I am very happy to provide guidance on how that can be accessed. Those returns will in future include information about the level of new fibre relief. We expect the first returns to include this information to be the outturns for 2017-18, published in autumn next year. I am happy to provide that information and, indeed, to meet the noble Lord and the noble Baroness, with officials, to explain how a lot of the information that has been requested is already available.
Throughout the passage of the Bill through this House and the other place, we have been clear that we would compensate local government for the cost of its share of the relief, and I give that assurance again today. In view of these assurances, I hope the noble Lord will feel able to withdraw his amendment, with the undertaking that I am happy to meet him and the noble Baroness to go through this, perhaps to explain how at least some of this information is available at the moment.
Lord Kennedy of Southwark
I thank the Minister for his helpful response. I am happy to withdraw my amendment. I think that brings us to the end.
House of Lords
Introduction: Baroness Fairhead
Retirement of a Member: Baroness Trumpington
The Lord Speaker (Lord Fowler)
My Lords, I should like to notify the House of the retirement, with effect from today, of the noble Baroness, Lady Trumpington, pursuant to Section 1 of the House of Lords Reform Act 2014. On behalf of the House, I should like to thank the noble Baroness for her much-valued service to the House.
Animal Welfare Offences
(6 years, 6 months ago)
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Lord Allen of Kensington
To ask Her Majesty’s Government what plans they have to increase the current penalties, including custodial sentences, for animal welfare offences in England to bring them into line with the European average.
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Gardiner of Kimble) (Con)
My Lords, on 30 September the Secretary of State announced that the Government will increase the maximum penalty for animal cruelty from the current six months’ imprisonment to five years’ imprisonment. My understanding is that the European average is 2.04 years’ imprisonment.
Lord Allen of Kensington (Lab)
I am particularly encouraged by that response, but we should put it in context. Germany three, Ireland five, Latvia five, Finland four, Spain three and Northern Ireland five—those are not the football scores but the number of years that people would spend in prison if convicted of animal welfare offences. As the Minister said, we have six—a shameful six months, not years. Could the Minister explain why we have been out of line for so long with our European neighbours, with public opinion and with the wishes of the Select Committee, which recommended five years? However, I am particularly encouraged that there is a process in place to make those changes and would be interested to understand the timeframe in which we will see these changes being put into practice.
Lord Gardiner of Kimble
My Lords, I said what the European average is. Before the Bill is brought forward, there will be a draft Bill which I very much hope we will publish later this year—not very long—so that we can get this done as soon as parliamentary business permits.
Viscount Hailsham (Con)
My Lords, as one who is very concerned about overcrowding in prisons, I urge my noble friend to extend custodial sentences only to the most serious offences and, whenever possible, to use non-custodial alternatives.
Lord Gardiner of Kimble
My Lords, I understand that and indeed we considered it, but we think that for the most heinous crimes we should increase the sentence from six months. It would be helpful if your Lordships knew that currently an average of three people per year have been sentenced to the maximum, which gives an indication of the numbers involved.
Baroness Miller of Chilthorne Domer (LD)
My Lords, if Brexit happens, will the Government ensure that it remains a criminal offence to import animals or birds captured in the wild? Before the EU brought in a ban, the UK was a ready market for people who pillaged other people’s jungles and wild places.
Lord Gardiner of Kimble
My Lords, it is very important that we are understanding of the importance of not importing animals and birds that we should not. Indeed, we want not only to maintain what is going to come back from European law but in many cases to advance it.
Lord Trees (CB)
My Lords, I welcome the strengthening of the sanctions for animal welfare offences. More than that, though, there is an increasing realisation that people who abuse animals frequently abuse, or go on to abuse, human beings. I pay tribute to the Links Group for drawing attention to that relationship. Given that, does the Minister agree that not only will strengthening the sanctions reduce the abuse of animals but it may also help to protect vulnerable people from abuse?
Lord Gardiner of Kimble
My Lords, whether it is abuse against animals or against human beings, we must do all that we can to reduce the scope for it. With this proposal, we are sending the very strong message that for heinous crimes there will be, among other things, the sanction of a custodial sentence of five years.
Earl Cathcart (Con)
My Lords, I welcome the increased sentences for the most heinous cruelty to animals but, given what my noble friend Lord Hailsham said, should we not also be banning these people from keeping animals for life or, if not for life, then for a very long time?
Lord Gardiner of Kimble
My Lords, it is the case that in addition to imprisonment we can impose through the courts an unlimited fine. My noble friend is right: one of the ways to protect animals is the disqualification route, and indeed that can be for life. It is very important that that includes having any influence over the way that an animal is kept, and obviously that could include an animal that belonged to another family member. The most important aspect of our sanctions is to reduce the scope for cruelty and to root it out.
Baroness Jones of Whitchurch (Lab)
My Lords, we very much welcome the Secretary of State’s recent announcement of an increase in maximum sentences, as the Minister has described, but does he accept that the law is only as good as the people who will need to enforce it? For instance, the Dogs Trust has repeatedly highlighted the scandal of puppy smuggling into the UK. It is done not by individuals but by organised gangs which, as we know, frequently keep underage puppies in appalling conditions. Does he accept that more police and border control resources are needed to stop this cruel practice, otherwise the law becomes meaningless?
Lord Gardiner of Kimble
My Lords, what the noble Baroness has said is absolutely on the dot: we need to drive down on the illegal smuggling of puppies. That is why I endorse what the Dogs Trust has done in working with Kent County Council, Border Force and the transport companies. We absolutely want to rout out the illegal smuggling of puppies. That is one of the reasons why it is so important that we invite people who wish to have pets to consider rehoming and make sure that, if they want to buy a puppy, they see it interacting with its mother—look to those sources and do not go for puppies that very often arrive in this country ill.
Baroness Masham of Ilton (CB)
My Lords, will the Minister tell us whether there are going to be CCTV cameras in slaughterhouses to help prevent cruelty?
Lord Gardiner of Kimble
My Lords, as the noble Baroness has suggested, we have just closed our consultation on the mandatory nature of CCTV in all slaughterhouses. We think that this is important: we have been consulting with industry and stakeholders because we think that this is necessary. We will bring forward secondary legislation on this matter before Parliament early next year.
Baroness Jones of Moulsecoomb (GP)
My Lords, in response to a Question that I asked on 1 March this year, the Minister told me that legislation to prevent wild animals being used in circuses was going to be brought forward by this Government. Seven months later, however, there is still no legislation, despite there being cross-party support for it and huge public support. Will the Minister tell us when this legislation is going to come through? Last time, the Minister was kind enough to give me a list of the animals that are still in circuses, which included a racoon, so there is no need to repeat that.
Lord Gardiner of Kimble
I do have a list of 19 animals, but I will not enumerate them. Clearly, we have a desire to prohibit the use of wild animals in circuses. I am not in a position to say when parliamentary time will permit, but we wish to do this. That is why, in the meantime, the regulations we have for the two travelling circuses to look after the care of the 19 animals is so important.
The Lord Bishop of St Albans
My Lords, in the light of the Brexit debates on agriculture and other matters, can the Minister assure us that Her Majesty’s Government will ensure that in future, after Brexit, the regulations requiring very high standards of care for animals that are being bred and transported in this country will continue to be applied to animals that are brought in from other countries with lower standards?
Lord Gardiner of Kimble
My Lords, I think that my Secretary of State has made it very clear that we wish to enhance animal welfare standards. That means precisely that we do not wish to see produce or animals coming into this country that are not looked after to the same standards that we would expect from our own farmers and producers.
Parliamentary Voting System and Constituencies Act 2011
(6 years, 6 months ago)
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Lord Rennard
To ask Her Majesty’s Government whether it remains their policy to reduce the number of MPs to 600 in accordance with the Parliamentary Voting System and Constituencies Act 2011.
Lord Young of Cookham (Con)
My Lords, we are committed to ensuring fair and equal representation for the voting public across the UK. The independent Boundary Commissions are proceeding with the boundary review in accordance with laws already passed by Parliament, which provide for the number of constituencies to be reduced to 600. The Boundary Commissions are required to submit their final proposals in autumn 2018.
Lord Rennard (LD)
My Lords, figures from the Cabinet Office itself suggest that about one in six voters are missing from the electoral registers, making it very hard for the Boundary Commissions to produce fair boundaries. Since they began work, millions of extra voters were added to the electoral roll during the course of the EU referendum and the recent general election. Will the Minister consider convening all-party talks aimed at producing a Bill to amend the 2011 legislation in order to allow the Boundary Commissions to include these voters in time for a general election in 2022, and to reconsider the appropriate number of MPs to be elected?
Lord Young of Cookham
On the last point, I see from the Liberal Democrats’ 2010 manifesto that they committed themselves to cutting the number of MPs by 150, so I am not sure why the noble Lord is so squeamish about reducing the number by 50. There are a record 46.8 million people on the register, and what he has proposed is yet another Liberal Democrat delay to the Boundary Commission proposals. The dates for the current boundary review were approved by an amendment—to which the noble Lord put his name—to the Electoral Registration and Administration Bill back in 2013. The amendment made it clear that the electoral register as at 1 December 2015 would be used in this review. That was an amendment to which the noble Lord put his name.
Lord Blunkett (Lab)
My Lords, I put my name to none of this. I simply say to the Minister, who is a very reasonable person, that if there are 46.8 million people on the register but a substantial number of them are not counted in the reconfiguration of boundaries, that would be unacceptable to any political party.
Lord Young of Cookham
The date for the boundary review is inevitably a snapshot. During the period of all boundary reviews, people are added to the register. As I said, the date of 1 December 2015 was approved by this House when the relevant legislation went through, and any interference with the current review would mean that the next election would be fought on boundaries dating from the year 2000. That cannot be in the interests of democracy.
Lord Cormack (Con)
My Lords, some people would think that the noble Lord, Lord Rennard, was brazen; others that he was brave. Does my noble friend remember that it was the former Deputy Prime Minister and leader of the Liberal Democrat party who scuppered all this in a fit of pique when he lost his Bill on reform of the House of Lords?
Lord Young of Cookham
My noble friend uses language which I would not dream of using at the Dispatch Box, but it is indeed the case that the coalition agreement, which was ratified by Liberal Democrat MPs and the membership of the Liberal Democrat party, committed them to reducing the number of MPs by 50, and that that legislation was taken through the other place by the Deputy Prime Minister, the leader of the Liberal Democrats. I cannot understand why the Liberal Democrats now seek to distance themselves from a measure which their former leader piloted through Parliament.
Lord Kennedy of Southwark (Lab)
My Lords, we have four parliamentary Boundary Commissions, one for each of the constituent parts of the United Kingdom. Can the Minister confirm that at the conclusion of the reviews, there will be brought before this House and the other place one Motion to approve all four reports, so there is no risk of, say, three reports being approved and one not, and it will be all or nothing, with no risk of cherry-picking the reports we like, as opposed to those we are not so keen on?
Lord Young of Cookham
I am happy to confirm that the position is exactly as the noble Lord said. The legislation requires the Minister to produce a single order to introduce the reports of all four Boundary Commissions, so there can be no cherry-picking—which would never have occurred to our side, but might conceivably have occurred to others.
Lord Tyler (LD)
My Lords, assuming that Brexit actually happens—the Minister will have noted that Donald Tusk says that we do not have to do it—does the Minister not recognise that there will be a considerable increase in the workload of our House of Commons Members of Parliament, but, at the same time, a wonderful saving in costs when MEPs such as Mr Nigel Farage and his freeloading UKIP Members are abolished and removed from the European Parliament? Is this not a good opportunity to change the Government’s mind?
Lord Young of Cookham
Yet again, we have a plea from the Liberal Democrat Benches to go back on an agreement which they were party to. When we passed the legislation in this House, the date of 2018 was endorsed by members of the noble Lord’s party. Basically, this is special pleading to revisit a measure that, if everyone was sensible, they would put their minds behind this and just get on with it.
Lord Naseby (Con)
My Lords, is my noble friend aware that when I stood for a marginal seat, despite the efforts of Mr Callaghan to postpone a review of the boundaries, nevertheless I won my seat? Later, there was another review and I lost my seat. Against that background, it is not vital for all of us who believe in democracy to try to hit the target of each voter’s vote being of equal weight?
Lord Young of Cookham
My noble friend came into the other place on the same day as me. My majority that year was 808—I am not sure whether that was more or less than his—and my seat was also subsequently abolished. My noble friend has put far more eloquently than I did a few moments ago the imperative of getting on with legislation that has been through both places to ensure that the next election is fought on up-to-date boundaries, not on boundaries that date back to the year 2000.
Brexit: Devolved Administrations
(6 years, 6 months ago)
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Lord Foulkes of Cumnock
To ask Her Majesty’s Government what discussions they have had with the devolved administrations regarding Brexit.
The Minister of State, Department for Exiting the European Union (Baroness Anelay of St Johns)
My Lords, we are clear that the devolved Administrations should be fully engaged in our exit from the European Union. We are in discussions with them—both on our negotiations with the EU and on the domestic implications of exit—bilaterally and through the Joint Ministerial Committee on EU Negotiations, which met most recently this month. We will continue to engage the devolved Administrations as we seek a deal that works for the entire United Kingdom.
Lord Foulkes of Cumnock (Lab)
My Lords, since the Irish border is the most intractable of the many problems of Brexit, and since a resolution needs the approval of the Northern Ireland Executive and Assembly, neither of which is attending these joint ministerial meetings, how can any agreement be achieved while they remained suspended?
Baroness Anelay of St Johns
My Lords, the noble Lord points to one of the issues of concern to all Members of both Houses. It should be possible as soon as maybe to achieve a resolution to the constitutional position in Northern Ireland. It is for everybody’s benefit that they do so. In the meantime, with regard to engagement with the devolved Administrations, we continue to work closely with the Northern Ireland Civil Service at an official level on all the technical aspects.
Baroness Anelay of St Johns
The noble Lord thinks it is not good enough. As a Government, we stand ready to assist as far as possible in resolving the position in Northern Ireland. Clearly it is not a matter to be taken lightly, and we do not.
Lord Forsyth of Drumlean (Con)
My Lords, does my noble friend not think it extraordinary that the Scottish nationalist Government should prefer our fishing and agriculture policy to be decided in Brussels and not by this United Kingdom Parliament in the interests of the United Kingdom?
Lord Morris of Aberavon (Lab)
My Lords, is it not a principle of good governance that powers once devolved should not be lightly withdrawn? Does the Minister agree that it is not beyond the wit of parliamentary counsel, properly instructed, to draft proposals to maintain the status quo and to provide for the interregnum in the meantime?
Baroness Anelay of St Johns
The noble and learned Lord, as ever, makes an important contribution on these matters. We are listening to discussions about the drafting of the European Union (Withdrawal) Bill arising out of amendments tabled in another place. It is the intention of this Bill that no decisions currently taken by the devolved Administrations will be removed from them. Each and every part of the noble and learned Lord’s intervention is key to our decision to draft the Bill as it currently stands.
Lord Bruce of Bennachie (LD)
My Lords, is the Minister aware that the LSE has produced figures which show that the Scottish economy could lose £30 billion as the result of Brexit? My own city of Aberdeen could lose 7% of its economy over the next five years. Will the Government now acknowledge that leaving the single market and the customs union cannot be a deal for the United Kingdom, but would betray the United Kingdom and put it at risk?
Baroness Anelay of St Johns
This Government will never betray the United Kingdom, and we will not betray the fact that, when the referendum was held, over a million more people in the United Kingdom voted to leave than to remain. We will continue to negotiate for a deal that is best for the whole United Kingdom. That is why, in her Florence speech, the Prime Minister set out the importance of making further progress, of having an implementation period and of ensuring that there is certainty as we move to the next phase of being able to make our own decisions in our own way.
Lord Sugar (CB)
My Lords, it was the UK which made the decision to leave the EU. The other 27 members were not asking us to leave. They were sitting around minding their own business when we decided to go. We are now trying to negotiate an exit with 27 entities which have no urgency or incentive to provide us with a good deal. Applying commercial logic—
Lord Sugar
Yes, it’s coming, if you hold on a second. Be patient.
Will the Minister advise the House what negotiation experience and skills those who are handing this important matter on behalf of the UK have? Please correct me if I am wrong but, from my perspective, it seems that they are politicians and civil servants who have spent their whole lives in politics and, with respect, possibly have no clue about negotiating tactics.
Baroness Anelay of St Johns
My Lords, the United Kingdom negotiating team is several hundred strong and has already shown great expertise. I have had the benefit of briefings from lawyers and accountants and all those with expertise both outside and inside Whitehall. I cannot say whether they would meet the standards set by the noble Lord on his television programme but they certainly meet mine.
Baroness Hayter of Kentish Town (Lab)
As the Minister will know, without changes to the Government’s land grab over what is coming back from Brussels that ought to be going to the devolved Administrations, the Scottish and Welsh Governments have said that they will withhold consent to the Bill. Will the noble Baroness go a little further than she did and give an undertaking that the Government will accept the amendments tabled in the other place to Clauses 10 and 11 so that we respect and retain the devolution settlement?
Baroness Anelay of St Johns
My Lords, the way in which the Bill is drafted does precisely that: it protects the current constitutional arrangements. It is important that we achieve agreement on a common framework. There has been real progress at a technical level in the discussions with the devolved Administrations on how we may achieve that. I put on record my great appreciation of all those I have met in non-Brexit negotiations when I was talking about ongoing business with the devolved Administrations in the JMC Europe meetings. I know that that very constructive approach has been maintained through JMC (EN). We are all working together to achieve the best for the whole United Kingdom.
Lord Hay of Ballyore (DUP)
My Lords, the noble Lord is correct: at this moment in time Northern Ireland has no power-sharing devolved Government. There is an urgency to resolve the current big impasse. The Secretary of State for Northern Ireland has set a new deadline of 6 November. However, that deadline will pass and there will be no resolution. It is sad for me to have to say that in this House. Negotiations are all about compromise but one political party in Northern Ireland is insisting on a take-it-or-leave-it approach and is saying very clearly that there has to be a stand-alone Irish language Act or there will be nothing. I say to that party in that case there will be nothing. The Government need to look at other methods of properly informing politicians in Northern Ireland about Brexit. I say to them that there is a feeling in Northern Ireland that politicians are not being properly informed.
Baroness Anelay of St Johns
My Lords, I simply reflect upon the fact that Members around this House feel passionately about our United Kingdom and ensuring that the Northern Ireland peace agreement, which was achieved at such cost, is maintained for our lifetimes and well beyond.
Daphne Caruana Galizia
(6 years, 6 months ago)
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Lord Robathan
To ask Her Majesty’s Government whether British detectives will travel to Malta to assist with the investigation into the murder of Daphne Caruana Galizia; and if so, whether they will also investigate the reason for her murder.
The Minister of State, Home Office (Baroness Williams of Trafford) (Con)
My Lords, the UK is looking to identify how best we can support Malta at this time. We have not received any requests for UK officers to support the investigation into the murder of Daphne Caruana Galizia. Should a request be received, the Government would of course consider it.
Lord Robathan (Con)
My Lords, the United Kingdom has a very historic relationship with Malta, which is of course a member of the Commonwealth and the EU. After her murder, Ms Galizia’s son said the state in Malta had become “indistinguishable from organised crime”. She was investigating corruption at the highest level, probably involving the Mafia, who may have been the people who killed her. Therefore, could Her Majesty’s Government encourage the involvement of Europol, as it is important for all of Europe that the rule of law is observed, and seen to be observed, throughout the continent?
Baroness Williams of Trafford
My noble friend is absolutely right that we have a long-standing and close relationship with Malta. We have offered some initial advice to the Maltese and are considering with them how we can support the investigation in the long term.
Lord Lester of Herne Hill (LD)
My Lords, Malta is one of four countries, including the UK, whose system is based on the common law. It is also party to the European Convention on Human Rights. This extraordinary, courageous and investigative journalist wrote articles accusing the Maltese Prime Minister and the leader of the opposition of abuses of power. In those circumstances, will the Government please remind Malta of its obligations under the European Convention on Human Rights to hold a truly independent and truly effective investigation?
Baroness Williams of Trafford
My Lords, I hope an effective investigation takes place—we will encourage that to happen. The noble Lord’s point about journalists being free to express their views on what they perceive as wrongdoing in the country should absolutely be preserved. The state may not like it, but we welcome the preservation of free speech.
Lord Howell of Guildford (Con)
My Lords, Malta is not only the current chair of the Commonwealth—it has held the presidency of the Council of the European Union. It also has a very close relationship with us and we need to take this matter very carefully and seriously, and give every possible support to the Government and leadership of Malta in clearing away all these accusations and rumours that have circulated and been much exaggerated in the press. They need to be cleared up that by clear, individual and strong evidence and examination. It is important to us as a nation to see that Malta is given fair understanding and support in this very difficult matter.
Baroness Williams of Trafford
I totally agree with my noble friend. Malta has great standing in the Commonwealth as its chair. We stand ready to support Malta should it request it, but also to encourage it, as the previous speaker suggested.
Baroness Stroud (Con)
My Lords, I pay tribute to Daphne Caruana Galizia for her courage as a journalist. I had the privilege until recently of having her son Paul working with me at the Legatum Institute.
Only one in seven people in this world lives in a nation with freedom of the press. What steps is this country, where we do enjoy freedom of the press, taking to preserve our own freedoms and to see them extended worldwide?
Baroness Williams of Trafford
My Lords, my noble friend makes a very important point. The UK supports freedom of expression as both a fundamental right in itself and as an essential element of a full range of human rights. The freedom of expression is required to allow innovation to thrive and ideas to develop. People must be allowed to discuss and debate issues freely without fear of repression or discrimination.
Lord Rosser (Lab)
I refer to the question of the noble Lord, Lord Robathan, about British detectives travelling to Malta—we certainly welcome his enthusiasm for Europol. I ask this as a serious question: unless there is some evidence that the murder of Daphne Caruana Galizia—shocking though it is—was also connected either directly or indirectly to corruption or other criminal activity in this country, do we any longer have detectives available to go to Malta following cuts in police numbers? We have now seen here a dramatic increase in hate crime and violent crime. The director-general of MI5 has said that the terrorist threat is operating,
“at a scale and pace we’ve not seen before”,
and police forces here are now no longer in a position even to start investigating some reported crimes. Do we really have detectives available to go elsewhere?
Baroness Williams of Trafford
My Lords, in the aftermath of Hurricanes Irma and Maria, the Home Office authorised the deployment of 63 police officers to support local police forces in the British Overseas Territories of the BVI and Anguilla, so we certainly have the capacity should it be requested. As for police funding and police numbers, police funding has been flat since 2015 and the police carry reserves of over £1 billion to be deployed as they see fit. There is also the point made by HMIC that there is scope for further efficiencies within the police, so that should be borne in mind.
Data Protection Bill [HL]
(6 years, 6 months ago)
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Lord Ashton of Hyde
That it be an instruction to the Committee of the Whole House to which the Data Protection Bill [HL] has been committed that they consider the bill in the following order:
Clauses 1 to 9, Schedule 1, Clauses 10 to 14, Schedules 2 to 4, Clauses 15 and 16, Schedule 5, Clauses 17 to 20, Schedule 6, Clauses 21 to 28, Schedule 7, Clauses 29 to 33, Schedule 8, Clauses 34 to 84, Schedules 9 and 10, Clauses 85 to 110, Schedule 11, Clauses 111 and 112, Schedule 12, Clauses 113 and 114, Schedule 13, Clauses 115 and 116, Schedule 14, Clauses 117 to 147, Schedule 15, Clause 148, Schedule 16, Clauses 149 to 171, Schedule 17, Clauses 172 to 190, Schedule 18, Clauses 191 to 194, Title.
Raqqa and Daesh
(6 years, 6 months ago)
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The Minister of State, Foreign and Commonwealth Office (Lord Ahmad of Wimbledon) (Con)
My Lords, with the leave of the House, I shall now repeat in the form of a Statement the Answer to an Urgent Question asked in the other place on the liberation of Raqqa:
“Raqqa was officially liberated on 20 October. The Syrian Democratic Forces—the SDF—supported by the global coalition against Daesh, began operations to liberate Raqqa in June 2017. Military operations are ongoing.
My right honourable friend the Secretary of State for Defence has highlighted the continued leading role that the UK is playing as part of the global coalition’s counter-Daesh campaign. The UK is the second-largest military contributor to the global coalition and plays a leading role in the humanitarian response.
The liberation of Raqqa this month follows significant Daesh territorial losses in Iraq, including Mosul in July. Daesh has now lost over 90% of the territory it once occupied in Iraq and Syria. The Foreign Secretary will in due course provide a full update to the House on the counter-Daesh campaign, including the operation to liberate Raqqa”.
Lord Collins of Highbury (Lab)
My Lords, I thank the noble Lord for repeating the response to that Urgent Question. I note that the Foreign Secretary will be giving a further, more detailed report to the other place and I hope that the noble Lord will be able to do likewise here. I have two brief questions. First, in the other place the Minister said that discussions about the future of the coalition were ongoing. Can the noble Lord tell us what role the armed groups that helped liberate the city from Daesh will play in its future administration and what we can do to assist? Secondly—I raised this point in the House last week, I think—we have seen horrendous crimes against humanity from all sides. It is important that the Government continue to support those who are gathering evidence so that ultimately we hold those responsible fully to account.
Lord Ahmad of Wimbledon
I thank the noble Lord for his continued support on these issues. He asked, first, what happens next. Our partner forces will close in on Daesh elsewhere in Syria. He will know that it is still present in the Euphrates river valley and on the border with Iraq. There, the Syrian efforts will meet up with those of the Iraqi security forces, closing in on Daesh from both sides. The noble Lord’s second point is well made, as I have acknowledged previously. He is right to say that those on all sides who have committed crimes should be brought to justice. On Daesh-specific issues, in 2017 I was pleased to report back from the UN General Assembly that a resolution was passed specifically on the UK’s efforts, including £1 million allocated by this country, to ensure not only evidence-gathering but the quick creation of a full investigation under the auspices of the UN to deal with Daesh. Other elements of the Syrian regime should also be fully accountable before international law.
Baroness Northover (LD)
My Lords, I understand that 80% of Raqqa has been destroyed in the attempt to root out Daesh. What does the Minister think is the likely timescale for reconstruction? When might refugees be able to return and how might they be protected against any risks from the Assad Government?
Lord Ahmad of Wimbledon
This is an issue about which the noble Baroness and I have spoken on several occasions. She is right to point out the destruction in Raqqa. It is terribly regrettable that, because this was urban warfare, many buildings and much infrastructure were destroyed, and let us not forget that Daesh destroyed much of the remaining infrastructure. That said, she will know that we have stepped up our humanitarian support in this regard. At the weekend, my right honourable friend the Secretary of State for International Development announced an additional £10 million to restore crippled health facilities and deliver much-needed medical support and relief. On her final point, safety and security remain the primary concern. As I have mentioned to the noble Baroness before, we will not engage in large-scale redevelopment of infrastructure in Syria until we can ensure both the political settlement and the safety and security of all citizens.
Lord Alton of Liverpool (CB)
My Lords, regardless of what the Government have done at the Security Council in ensuring that evidence will be collected to bring those responsible for these crimes to trial, and building on the point made by the noble Lord, Lord Collins, what will happen next? What structures are we putting in place, either for a referral to the International Criminal Court or to a specially appointed regional tribunal to try those responsible for genocide and crimes against humanity? Surely our belief in the rule of law and perhaps the invocation of something like the Treason Act would be more appropriate in bringing British nationals to justice than yesterday’s statement from Rory Stewart, according with statements from the White House, that people could be shot on sight if they had participated in these heinous crimes.
Lord Ahmad of Wimbledon
On the final point the noble Lord raises, let us be clear that people— certainly those of British nationality—who have travelled from anywhere in the world into the region and taken part in the crimes committed by Daesh were doing so at their own risk and were putting themselves into the line of fire. There is the important issue, he says, about bringing people to justice. He will be fully aware of the structured programme in which the CPS and the police are making criminal charges against those returning to the UK. Secondly, there is the issue of the International Criminal Court and other such bodies. As I have already alluded to, we have passed a resolution in the UN and we are currently looking at the governance structure, exactly as the noble Lord suggests. The final structure is to be determined, but it will respect all the norms of international law.
Viscount Hailsham (Con)
My Lords, while I accept that lethal force can properly be used against those fighting for ISIS, including British citizens if they pose an immediate and real threat to the interests of ourselves or our allies, does my noble friend agree that this policy should be exercised with great caution and that it would be helpful if we had a fuller explanation of both the criteria and the controls?
Lord Ahmad of Wimbledon
I agree with my noble friend, of course. In any such situation, any intervention or military action should be exercised with strict rules of engagement. As I alluded to earlier in response to the noble Baroness, Lady Northover, we seek first of all to minimise civilian casualties in any action our military is taking. Secondly, on holding those to account, the important thing is that international law and rules of justice are upheld, whether for those surrendering themselves to coalition forces or to the Syrian coalition forces on the ground, or indeed those returning to any part of the world.
The Lord Bishop of Salisbury
My Lords, I thank the Minister for his statement and point out that the Christian presence in Iraq is integral to that country’s cultural identity. A reconstruction committee composed of Chaldean, Syriac and Syriac Orthodox churches has restored over 1,700 properties, but that will restore fewer than a quarter of internationally displaced people. What can the Government do to help those displaced Christians to return safely to that space, like Jonah returning to Nineveh, a place where they belong and are called? How can the Government support them in that process where there is a real threat in terms of faith?
Lord Ahmad of Wimbledon
The right reverend Prelate is right to raise the issue of minorities and particularly the Christian minorities in Syria. The crimes committed in Aleppo have been a tragic example of the regime of Bashar al-Assad. I revert to the point I made earlier that any support that the British Government give to those returning is done to ensure their safety and security. We have begun to do exactly that in ensuring that, in the areas where people are returning, medical facilities are available including to all minorities who have been displaced. Let us not forget that over 50% of the Syrian population has been displaced. It will take time to ensure that they can return to their homes. Underlining our approach, both safety and security must prevail.
Lord Reid of Cardowan (Lab)
My Lords, I am sure the whole House welcomes the liberation of Raqqa, but deeply regrets both the physical and human cost of Daesh’s control of that area. Is the Minister in a position to say more about the breakdown and balance of the anti-Daesh forces now in control of Raqqa and that area, and anything about the co-ordination and co-operation between them for the future?
Lord Ahmad of Wimbledon
The noble Lord raises an important point. We have been supporting the coalition forces and the SDF. I acknowledge that the Russians have also been engaged directly in support of the regime forces. We are clear that the Assad regime initiated this conflict. Although a lasting resolution is very much a matter for the Syrian people, we do not believe it is right that the person who initiated this conflict should be involved in the final, lasting solution. Various international players are working on the ground. I reassure the noble Lord on our actions. The United Nations resolution specifically on Daesh was passed with unanimity, including support from Russia.
Lord Wright of Richmond (CB)
Did the Minister see a letter in the Financial Times yesterday, saying that Raqqa is in Syria and reminding its readers that the Syrian regime bears a heavy responsibility for the clearance of ISIS from the city? Does he agree?
Lord Ahmad of Wimbledon
I have not seen the letter, but I align myself with the sentiments expressed in it and by the noble Lord. The responsibility for the larger conflict—not just in Raqqa—lies firmly on the doorstep of the Assad regime which created it in the first place. Daesh emerged as a symptom, created by what was happening on the ground. Wherever there is a vacuum and vulnerability, Daesh has reared its head. Although we all breathe a large sigh of relief on its defeat, we are not complacent in any way. Let us not forget that Daesh has recreated itself before and I am sure it is looking to regroup and do so again.
Financial Guidance and Claims Bill [HL]
Tuesday 24th October 2017
(6 years, 6 months ago)
Lords ChamberRead Full debate Financial Guidance and Claims Act 2018 View all Financial Guidance and Claims Act 2018 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 1-R-I Marshalled list for Report - (20 Oct 2017)
16:30 - Division on Amendment 1 - Ayes: 263 / Noes: 208 - Amendment 1 agreed.
16:47 - Division on Amendment 2 - Ayes: 253 / Noes: 205 - Amendment 2 agreed.
19:04 - Division on Amendment 12 - Ayes: 80 / Noes: 167 - Amendment 12 disagreed.
Lord Sharkey
“( ) the consumer protection function;”
Lord Sharkey (LD)
My Lords, in moving Amendment 1 I will also speak—eventually—to Amendments 2 and 7. They form a linked package of consumer protection measures enabled by, and consequential upon, Amendment 1. I am grateful to the noble Lord, Lord McKenzie of Luton, the noble Baroness, Lady Altmann, and the noble Earl, Lord Kinnoull, for adding their names to the amendments and for their support for them. Amendment 1 simply adds consumer protection to the functions of the SFGB. The notion of consumer protection is implicit in the other functions set out in the Bill, but the amendment gives it statutory life. In doing this, it allows a broader definition of the reach of the SFGB. It widens its remit to something closer to the real-world situation for consumers and enables it to deal more comprehensively with the dangers and risks that consumers face.
Pensions guidance, debt advice and money guidance are all aimed at doing this, of course, but there are related areas where intervention would be of direct benefit: cold calling is one. One effect of Amendment 1 would be to allow cold calling to be dealt with in the Bill. We have discussed cold calling many times during the passage of the Bill and on many other occasions in this House. On several occasions I have described it as an omnipresent menace—and no one has disagreed. It is clear that there is a firm and widely held dislike of and dissatisfaction with cold calling, extending well beyond this Chamber. It is not only a thoroughgoing social nuisance; it is often a threat, directly and comprehensively, to consumers’ financial well-being. It is often an invitation—or more exactly, an inducement —to criminal activity.
The figures are remarkable and very alarming. There are now 2.6 million cold calls every month; that number has increased by 180% in the last 10 months. I noted that the Minister, when presented with these figures—and even larger ones—at an earlier stage in the debate, prayed in aid the ICO and the FCA. I am afraid that whatever the ICO is doing, and whatever the noble Baroness hopes the FCA might do at some unspecified time in the future, the problem is not only terrifyingly large but continuing to grow very rapidly.
On the fourth day of Committee, the noble Earl, Lord Kinnoull, made a very telling intervention; I am sure he will not mind me repeating it here. He quoted a Which? report from November 2016, which he described as detailing,
“the full horror of nuisance calls in the UK”.—[Official Report, 13/9/17; col. 2491.]
The report found that in 17 of the 18 cities surveyed, more than a third of all private phone calls were nuisance calls, and four in 10 people in the Scottish sample were intimidated by these calls. It is not easy to intimidate people in Scotland. In the same debate, the noble Earl, Lord Listowel, pointed out and emphasised the fact that many old people are particularly vulnerable to cold callers.
Then there is the successor to the whiplash scandal: the absolutely huge, and rising, number of claims for alleged holiday sickness. In July and August 2016 alone, one operator took 750,000 British, 800,000 German and 375,000 Scandinavian customers to Spain. The Scandinavians lodged 39 claims; the Germans lodged 114; but the British lodged around 4,000 claims for holiday sickness—essentially, food poisoning. That kind of thing not only costs our travel industry a huge amount and raises prices for everyone but directly encourages criminal acts on a large scale. As the noble Lord, Lord Deben, said in Committee, this a huge industry which,
“encourages fraud and leads people to do things which they would never have done without this pressure”.—[Official Report, 13/9/17; col. 2489.]
The Earl of Kinnoull (CB)
My Lords, my name was added to the three amendments. I declare my interests as set out in the register of the House, particularly in respect of the non-life insurance industry. I pay tribute to the noble Lord, Lord Sharkey, for his drafting skills—I shall make one or two points in a moment about the drafting, which I think is particularly elegant.
The dataset of 9 million telephone calls to UK cities to which the noble Lord, Lord Sharkey, referred had one other gem within it: 42% of those 9 million calls were nuisance calls. That dataset was gathered over three years, so it is fairly robust and it gives the House yet another sense of how inherent this problem is in our society. We stand here today with the opportunity to do something about that.
Keith Brown MSP, the relevant Minister at Holyrood, said when the report originally came out—it is a very good quote—that:
“These calls are a serious problem that can cause both emotional and financial harm, particularly to some of our most vulnerable citizens”.
Indeed, as the noble Lord, Lord Sharkey, pointed out, Citizens Advice Scotland, in data mining the same 9 million calls, said that four in 10 Scots had felt intimidated. That is a form of mental harm. In our society, if I do or threaten to do physical harm to people, we have protected our citizens under Section 47 of the Offences Against the Person Act 1861—he says, looking at a noble and learned Lord—but we have been less good at protecting them from mental harm. This is one of the ways in which we can begin to redress that balance.
These are subtle amendments because they seek to empower Ministers to go along that path by way of a double trigger. The first trigger is for the SFGB to state that there is a problem worth addressing and to make a report. The second trigger is that the Secretary of State concerned can then decide, yes or no, whether to make an order. The double trigger is particularly subtle because it means the problem will be considered in a complete way. Given that, ultimately, the order will have to come here, we can be assured that there will be plenty of debate.
This mechanism, which will enable the apparatus of government to protect people, will strengthen the legislation. I can see no down side but a strong upside, given that Citizens Advice Scotland particularly noted that these nuisance calls weigh on the most vulnerable in our society.
Viscount Brookeborough (CB)
I was on the Financial Exclusion Committee. When we talk about targeting the vulnerable, it is not a matter of someone taking all the numbers or addresses out of a book; it is done scientifically. These people look at the vulnerable and consider when they will be vulnerable and how they will get at them.
The amendment includes digital. We were given evidence that single, older and vulnerable people were especially targeted digitally in the middle of the night. So if they are not sleeping well and switch on their computer, what comes up? We should not think that this is just blanket coverage and some of these people picked it up. The high numbers we have been given are targeted numbers and therefore the response rate, sadly, is very high. These are the people we are trying to protect.
We would like to reduce the number of cold calls that people receive purely by chance and do not listen to, but far too high a proportion of these cold calls are listened to because they are targeted on vulnerable individuals in our society.
Lord Faulks (Con)
My Lords, I join this debate relatively late and I hope the House will forgive my intervention. I speak from the position of having been a Minister in the Ministry of Justice. One of my tasks was to try to do something about cold calling and the frustrations and distress it can cause. The noble Lord, Lord Sharkey, was right to identify whiplash injuries and, more recently, the problem with holiday sickness. It is a scandal and one is acutely conscious that the vulnerable should be protected from this offensive practice.
My question to the Minister about the amendment is this: is this really the right body for this particular function? I note that the drafting by the noble Lord, Lord Sharkey, the skill of which I admire, tacitly acknowledges this by giving the body a consumer protection function which seems, on the face of it, rather beyond its original remit; albeit it includes a consumer protection function, I accept. Then there are the various stages which are included in Amendment 2 and the riders in Amendment 7. This is quite a cumbersome method of achieving what I think all the House will agree is a satisfactory aim, which is to prevent cold calling.
I understand that the Government are committed to doing something about cold calling. Various attempts have been made before and I acknowledge that they have not been as successful as they should have been, but this does not seem to be the obvious fit for such an initiative. Can the Minister satisfy me and the House that the Government intend to bring forward appropriate legislation if they believe, as I suspect they may, that this is not the right vehicle for that process?
Viscount Trenchard (Con)
My Lords, I understand the motives of the noble Lord, Lord Sharkey, and other noble Lords in seeking to introduce a consumer protection function to the Bill. However, I believe that it places too broad and onerous a responsibility on the single financial guidance body. If noble Lords look at the functions already included in the Bill, the first three are specific. The fourth, the strategic function, seeks to improve the financial capability of members of the public by supporting the provision of financial education to children and young people—although I think that should perhaps be widened. I believe that the strategic function enables consumers to protect themselves better than they would be able to do without it.
Proposed new subsection (3E) would define cold calling as,
“unsolicited real-time direct approaches to members of the public carried out by whatever means, digital or otherwise”.
This is too all-encompassing. I would be delighted if cold calling by direct telephone and text were banned, but I am not sure that banning all unsolicited approaches is a good idea. If all unsolicited approaches were made illegal, including those by letter or email, how would a business market its services to new potential customers? Would such a draconian measure not result in severe restriction of choice for consumers? How would they know what products and services were available in the marketplace?
I suspect that the 2.6 million nuisance calls made every week—or 9 million a month; I am not sure what the figure referred to in the debate was—is a serious underestimation. What do the Government intend to do to protect the consumer from unsolicited telephone and text approaches?
Baroness Kramer (LD)
My Lords, perhaps I can be helpful on a couple of the points just raised by the noble Viscount, Lord Trenchard. These amendments ban solicitations in real time, as he will have noticed. That obviously excludes letters. It means that you can send information through the post; no one would wish to prohibit proper kinds of marketing. It is the nuisance and intrusion and the element of pressure that comes from that real-time activity that is the pernicious side of solicitation. That, essentially, is cold calling and is exactly what this is intended to deal with.
The noble Viscount suggested that financial education and capability are the way to go; indeed, many in the Government feel that that is the route to deal with cold calling, so that people know to hang up. However, the noble Viscount, Lord Brookeborough, was very clear in illustrating that, while we all get cold calls, we are merely the tip of an iceberg. For those who pursue this, the real focus is on people who are absolutely the most vulnerable. Being realistic, financial education and capability, even on the most extraordinary scale, would be very unlikely to provide adequate protection to that group of people who are now constantly being abused.
On the point made by the noble Lord, Lord Faulks, if this body is not associated with consumer protection, quite frankly I wonder what this body is for. That is the underlying premise that sits behind both the predecessor groups that are now being put into the single financial guidance and advice body. It is essential to bring this on to the face of the Bill in a very clear way, as it is the underlying motivation and characterisation of this body, and certainly it is a responsibility.
The noble Lord, Lord Faulks, also suggested that the Government do intend to move in this area. We have been hearing that for an incredibly long period of time and, with constant pressure, perhaps one day the Government will move. The problem is that we need protection now. We need protection in the near term because, as my noble friend Lord Sharkey, the noble Earl, Lord Kinnoull, and others have illustrated, this has grown in such scale and momentum that there are daily victims. Every day that we wait there are more victims. Since it is completely unnecessary to wait because the language in this Bill serves the purpose, then in a sense it would be extraordinary to say we will sit back and wait 18 months or two years or whatever else, allowing people to be abused. We can bring a stop to it now in a very simple and straightforward way.
If I understand the Government correctly, they are willing to look at certain targeted areas in which to stop cold calling but not to provide a stop to cold calling in each area where there is clear detriment, which is what the amendment allows through use of this new single body to identify and communicate that detriment. These organisations are so slick and quick they can move from one topic to another very rapidly—you close one door and another door gets opened. For example, we stopped cold calling on mortgages. That is an excellent example that tells you we can do it. It is straightforward. The dimensions are understood. The complexities are well-considered and we have plenty of track record to look back at to make sure that it is done well. We have all of that in place. However when cold calling on mortgages was banned, it shifted on to the next issue—currently, it is pensions, claims management and holiday sickness. Everybody can be absolutely sure there will be something new, provided loopholes are left, by simply attacking one issue here and one issue there. That is the beauty of this particular amendment: it gives us the power to deal with this whole industry, the same people and the same players.
I shall make one last remark and then sit down. I want particularly to congratulate the four noble Lords whose names are on this amendment, all of whom have been working so hard in this area. Three of them are here today, able to speak for themselves, but one of them cannot. The noble Baroness, Lady Altmann, as we know, has been a real mover and shaker on these issues, not just over cold calling for pensions—pensions are her area of real expertise and we have heard her on that—but we have also heard her in this House speaking around the much broader issue as well, which is why she has put her name to the amendment. She had a speaking engagement at lunchtime in the Midlands which she felt she could not cancel. She has not eaten lunch but run to the train station. She is on the train which pulls in to the station at 4.30 and had been greatly hoping there would be a Statement today that would delay this long enough that she could be here to join in with this particular section of the debate. I am sure she will speak in later parts of this Report.
The noble Baroness should not be left out when we recognise that the movers and shakers on this are from every side of the House. This is not a partisan or party-political set of amendments. This is a set of amendments by Members of this House who recognise their responsibility to protect those who are most vulnerable now, before more damage is done, and I hope the Government will see it that way.
Lord Faulks
Before the noble Baroness sits down, will she clarify one thing? She was critical of my suggestion that the insertion of the consumer protection function is in some way an attempt to expand the scope of the SFGB. She said, quite correctly, that it is part of the SFGB’s function to protect consumers, but surely the purpose of this amendment is to expand the scope of its activity beyond that which is already in the Bill so that it can deal with matters that are beyond what is apparently in other parts of the Bill.
Baroness Kramer
I thought that we could only speak once on Report, but I hope that the House will excuse me if I get to my feet again. Fundamentally, I disagree with the noble Lord. Consumer objectives are merely bringing to the face the underlying discussion and the ethos which sits entirely behind this body and every one of its instructions. If the noble Lord reads all the roles and responsibilities and the debates about those roles and responsibilities, he will understand that this meshes perfectly with these activities. It strengthens its hand in an obvious way, rather than leaving it in a slightly awkward, ambiguous situation.
Lord Elystan-Morgan (CB)
My Lords, I am full of respect for and sympathy with the amendments and the spirit in which they have been moved. We are facing massive social abuse that is complicated and extremely extensive. I doubt very much whether in the complicated and convoluted society in which we live it is humanly possible to rid us of all of it. I am sure that is beyond us.
The remarks made by the noble Lord, Lord Faulks, triggered two thoughts in my mind. The first relates to the Offences Against the Person Act 1861 and how well that Act has served society. We are still dealing with it day in and day out in the courts, and with the help of judicial interpretation it is as fresh in many respects as it was the day it was passed. In so far as the offence of assault occasioning actually bodily harm—Section 47—is concerned, the noble Lord is absolutely right. There should be a parallel offence that is not confined to an assault and does not concentrate upon a physical consequence. There have been attempts in the past to widen that offence, but they have been rather vague and less than totally successful. It has to be revamped completely so that the concept of assault is not basic to it and it is not confined to bodily harm.
My other point relates to the higher end of the scale with regard to cold calling. At the very bottom of the scale there is the fishing exercise, the hopeful prospect that something might come of what is not of itself a criminal act. At the other end of the scale, there is a very serious criminal act where A says to B “Let us pretend that an accident occurred—we know nothing like that ever took place—and you are the claimant in regard to that matter and that you are prepared to put forward a statement of facts about a fact that you know to be totally false. I will support you, and we will split the profits between us. You should be prepared, of course, to commence an action in the courts”. The moment you do that, you have probably committed a very serious offence. You have attempted to pervert the course of justice. I believe that as a proposition of law, exceptional to the usual law of attempts, every attempt to bring about a perversion of the course of justice is of itself a perversion of the course of justice. It is at that end that we should start concentrating. Very few of these cases are brought to court, and very few of them are successful, but it would be marvellous to be able to make an example of some of the very worst cases, and by such example a very considerable social lesson would be taught.
Lord Mackay of Clashfern (Con)
I would like to ask whether the “direct approaches” referred to in proposed subsection (3E) need to relate to financial matters.
Lord Sharkey
That would fall within the ambit of the consumer protection function of the SFGB.
Lord Kirkwood of Kirkhope (LD)
My Lords, I will be quick, as the House obviously wants to make progress on this. As a former business manager, I can see where all this is going and can anticipate what the Minister is going to say. The position was warmed up rather nicely by the noble Lord, Lord Faulks. He is an honest man, whose opinions always have to be weighed in the balance, but anybody who seriously suggests that there is going to be legislative time in the future for some other vehicle lives on a different political planet.
The noble Viscount, Lord Brookeborough, made an important speech, and I agreed with my noble friend Lady Kramer when she said a lot of colleagues have done a lot of serious work on this. I was first alerted to the extent of the evidence while serving as a colleague of the noble Viscount, Lord Brookeborough, on the Financial Exclusion Committee. There is a sense of rage and anger about this, which has been going on for far too long. The evidence is there, and as an institution we have a chance of changing it. I for one think it is inconceivable that any Minister in the position that the noble Baroness finds herself can convince this House—certainly me—that this is something we can do another day. We will be deep into European withdrawal for the next two years, and the DWP will be lucky if it gets any Bills during that time—I assert that based on my experience over many years. We have to deal with this now, and I support these amendments. I hope they will be pressed to a Division and passed.
Lord McKenzie of Luton (Lab)
My Lords, I start by thanking the noble Lord, Lord Sharkey, for his comprehensive introduction of this important package of amendments, which we support in its entirety. As we have heard, fundamentally it would enable a ban on cold calling across the piece, together with related reporting functions to the FCA on consumer detriment. We should congratulate the noble Lord, Lord Sharkey, on his drafting, which would enable us to proceed now with a ban. We know the detriment that cold calling can bring, not only by CMCs but in the pensions arena, and the harm that can produce.
A number of noble Lords touched on this. The noble Viscount, Lord Brookeborough, talked about vulnerability in the digital age and how damaging that can be. The noble Earl, Lord Kinnoull, spoke about the opportunity to do something today to help deal with a process that causes real mental harm. We agree with that. The noble Lord, Lord Sharkey, talked about the scams around holiday sickness and the impact of the advance of technology if we do not get stuck into this sooner rather than later—the need to deal with the “omnipresent social menace”, as he put it. I agree with the noble Lord, Lord Kirkwood, on his challenge to the noble Lord, Lord Faulks. If it is not in this piece of legislation, when will it happen?
The FCA recently published its Financial Lives Survey 2017, which identified that in the last 12 months, 23% of adults, or 11.6 million, received an unsolicited approach, although of course that does not mean that they would all have necessarily suffered detriment from that. Banning cold calling is not only an opportunity to deal with a nuisance, it is an effective way of disrupting the business models of the scammers and fraudsters. Perhaps this would be an opportunity to get to those higher-end activities to which the noble Lord, Lord Elystan-Morgan, referred.
I know the Minister is supportive of a ban on “every type” of call, because she told us so in Committee, but the strenuous efforts of Ministers have apparently failed to deliver on that aspiration. Notwithstanding the asserted complexity that the legislation might entail, we were told that if it was in scope, it would be in the Bill. It seems that it is in scope. That hurdle has been overcome, so what is the problem? We accept that there may be some complexity in drafting, but surely nothing beyond the wit of parliamentary counsel.
We urge the Government to make progress. Every day that goes by without the ban holds the risk that someone somewhere will be defrauded of their savings, their life turned upside down. We may hear from the Government, as we have before, that there are already restrictions on cold calling and unsolicited direct marketing, but this has not prevented consumer detriment continuing. On several occasions during our debates the Minister has told us she has disconnected her landline. If there is such confidence in the current framework, why on earth would that be necessary?
This is a hugely important issue, which is why we have common cause around the Chamber from pretty much all Benches. This is an opportunity to do something now. If we do not do it now, when will it be? I urge the whole House to support the amendments of the noble Lord, Lord Sharkey.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Buscombe) (Con)
My Lords, I thank all noble Lords who have taken part in this important debate with which we begin our Report stage on this important Bill. Amendments 1, 2 and 7, tabled by the noble Lords, Lord McKenzie and Lord Sharkey, my noble friend Lady Altmann and the noble Earl, Lord Kinnoull, would introduce a consumer protection function for the body and a statutory duty in respect of cold calling. I want to say straightaway that we do not believe that Amendments 1, 2 and 7 would depend on each other to work.
Amendments 1 and 7 would set a statutory function for the Financial Conduct Authority to pass on casework from consumers to the FCA on inappropriate, misleading or harassing approaches by financial services providers to consumers, as well as poor behaviour by providers in the areas of activity related to the body. The Government agree with the logic behind this but the Bill already gives the body the power to share information with the FCA under its information-sharing provisions. Specifically, Clause 12 contains a two-way information-sharing gateway between the single financial guidance body and the FCA that allows the disclosure of information, provided it is pursuant to the functions of either organisation. This would include information relating to cold calling on debt advice, debt management and pension access services.
The single financial guidance body will not exist in a vacuum. It will need to work closely with key stakeholders, and Clause 12 is designed to facilitate close working between the body and its sponsor department, the devolved authorities, the Financial Conduct Authority and the body’s delivery partners. The clause allows these key stakeholders to share information with the body and vice versa. The intention is to allow unpublished data, such as performance-related statistics and confidential insights gained into the financial guidance landscape, to be shared. This information may include personal data as long as any disclosure is in accordance with the Data Protection Act. The clause also allows information to be shared regarding suspected dishonest, unfair or unprofessional conduct by those supplying financial services so that the FCA can take appropriate action against the offending firm.
The powers would enable casework to be passed between the body and the FCA. We would expect that, subject to provisions in Clause 12 and the Data Protection Act, the body would share this with the FCA if that were the right thing to do for the individual. The Bill does not require the body to supply information of this kind to the FCA because there will often be circumstances in which it would be more beneficial for the customer to be signposted elsewhere—for example, to the Pensions Ombudsman Service or the Financial Ombudsman Service. As such, it is best for the body and the FCA to work out how this handover could take place using the powers in Clause 12.
To illustrate, let me give an example of what a consumer’s journey looks like today when impacted by fraud or scams, and what we see as the new body’s role to support the consumer. Where the body believes there has been wrongdoing, we would expect it to contact the FCA or other appropriate authorities. If an individual feels that they have been subject to inappropriate approaches or misconduct by an authorised firm, we would expect the new body to recommend to the individual that they contact the Financial Ombudsman Service or the Pensions Ombudsman Service, depending on the particular nature of their complaint. If an individual suspects that they have been contacted by an unauthorised firm or individual carrying out an FCA-regulated activity, it is already possible for the new body to transfer the casework to the FCA.
Furthermore, organisations involved with Project Bloom, a multi-agency group dedicated to tackling pension fraud scams—of which the FCA is part—have an agreed customer journey to which we would expect the new body to sign up. Part of this journey is that, if the individual or the body believes that a customer may have been a victim of a scam, the body should encourage them to contact Action Fraud, which is the UK’s national fraud reporting centre. The body would also recommend that customers contact Action Fraud when a customer or the guider suspects that the customer has been a victim of types of fraud other than pension scams. Action Fraud will collect information from the customer about the alleged fraud, and then act as a co-ordinator to cascade the information to the City of London Police or other relevant local police forces to investigate the issue further.
When you report a fraud to Action Fraud, you are given the option for your contact details to be passed on to Victim Support, a national charity that helps those affected by crime. If you take up this option, you will then be contacted by someone from the charity and offered free and confidential emotional support and practical help. Indeed, the Pensions Advisory Service currently encourages those who have been a victim of a pension scam to come back and contact TPAS for support in rebuilding their retirement savings, and offers a bespoke appointment where they discuss rebuilding pension funds and potential next steps. We would expect that the body would perform a similar service.
I hope this illustrates that a blanket obligation to share casework with the FCA would be unnecessary. A requirement for the body to share the casework could lead to adverse consequences; at worst, this could result in the customer being hindered in getting the right help that they need. I hope this reassures noble Lords that there is provision in the Bill for individuals to be channelled to the appropriate services if they have been victims of fraud or scams. It is of paramount importance that the body helps customers in this situation.
Amendment 2 introduces a statutory duty in respect of cold calling, which has been the subject of most noble Lords’ interventions this afternoon. The amendment seeks to do a number of things: to require the new body to publish an annual assessment of consumer detriment as a result of cold calling; to require the body to advise the Secretary of State to institute bans on cold calling if it thinks that would be conducive to its functions; and to give the Secretary of State the power to introduce a ban on cold calling, if recommended by the guidance body. I assure the House that the Government already do work to consider the impact that unsolicited calling has on consumers. Indeed, we have been clear that there is no place for nuisance calls or texts and there are already a number of measures in place to protect consumers from the impacts of such nuisance calls.
As I noted in Committee, the Information Commissioner’s Office enforces restrictions on unsolicited direct marketing. We have already increased the amount that regulators can fine those breaching direct marketing rules. On top of that, we have forced companies to display their number when calling people, and made it easier to prosecute wrongdoers.
As noble Lords will be aware, cold calling is already illegal in certain circumstances, such as where a person has registered with the Telephone Preference Service or has already withdrawn consent. Furthermore, the Bill already provides the possibility for the body to alert other organisations to any issues relating to cold calling. Clause 12 contains a two-way information-sharing gateway between the single financial guidance body and the FCA that allows the disclosure of information to each other, provided it is pursuant to the functions of either. This would include, for example, information relating to cold calling on debt advice, debt management, and pension access services. This information may include personal data, as long as any disclosure was in accordance with the Data Protection Act. The clause also allows information to be shared regarding suspected dishonest, unfair or unprofessional conduct by those supplying financial services, so that the FCA could take appropriate action against the offending firm.
Lord Rooker (Lab)
My Lords, I am sorry to interrupt, and I have listened to the whole debate, but how can a Government bring forward an amendment in the other place unless there is a vehicle sent from this place to allow them to do so? You cannot simply amend on the exchange like that without an amendment from this place.
Baroness Buscombe
My Lords, I beg to differ. Despite the noble Lord’s extensive experience in another place, it is entirely possible for us to bring forward an amendment in the Commons to introduce such a ban.
As I was saying, we want to ban pensions cold calling because a private pension plan is often an individual’s most valuable asset. A ban will send a powerful message to consumers to put the phone down. My officials recently met a range of stakeholders to explore the details of the ban and are currently working on developing the details of the policy arrangements.
Pensions cold calling is also a complex area which we want to get right. Indeed, the recent discussion with stakeholders uncovered interesting questions around how to define existing relationships and express requests for information. The Government will continue to finalise these complex policy details and we intend to publish draft legislation for scrutiny in early 2018. Following this, we will legislate at the earliest opportunity. This gives us the opportunity to develop legislation which is more carefully targeted and allows us to make proper provision for enforcement which this current draft does not allow.
The Government have listened and want to work at pace to introduce a targeted response which will strengthen the arrangements already in place. However, the proposed approach in this amendment could delay implementation of any such ban. If this amendment were passed, the Government would first have to wait for the body to be set up. It is not expected to be set up and operational until October 2018. Then, recommendations would have to be made to the Secretary of State. No doubt, this would not be immediate because this body will have a huge amount of work to undertake when it is first set up. So it could be at least another year or two before any consideration could be made, prior to a recommendation being put to the Secretary of State to introduce such a ban. Then the Secretary of State would have to make and lay affirmative regulations.
The noble Baroness, Lady Kramer, said that we need protection now. If Amendment 2 were passed, there would be much more delay than if the Government were to wait.
Baroness Kramer
I think the Minister distinctly said that she was considering a ban being introduced in the Commons on cold calling for claims management but not for pensions. So the timetable she has described becomes rather complicated compared with the alternative for which she has not given a timetable.
Baroness Buscombe
I have already made it clear, as we did in Committee, that we intend to bring forward a ban on pension scams. We cannot be entirely accurate on timing because, as the noble Lord, Lord Kirkwood, made clear, we have to find a legislative opportunity. As I have just said, we will introduce draft legislation early next year and that will go through a process of pre-legislative scrutiny. I hope noble Lords will accept that this is very sensible in order to get it right. Indeed, some years ago, this House introduced the possibility of draft legislative scrutiny in important situations such as this. We do not want to get it wrong.
I also say to the noble Lord, Lord Kirkwood, that it is not without this planet to expect and hope that there will be opportunities—gaps in the timetable—for legislation to come forward. Given the timetable for setting up the body and for the many things it will have to undertake in its early months, I suspect that passing this amendment would mean a protracted delay in introducing a ban on CMCs. The noble Baroness knows perfectly well that we cannot introduce the ban on pensions cold calling in this Bill because it is out of scope. CMCs are actually in scope.
Baroness Kramer
This amendment is in scope. It allows the banning not only of cold calling, but of a broader range of issues. The point made from the Labour Benches was that the Government always said they would have done it in this Bill had there been any mechanism for it to be in scope. It is now in scope, which is why we are debating it on the Floor today. We are not debating an out-of-scope amendment.
Baroness Buscombe
That is why I am making it clear that banning pensions cold calling is out of scope of this Bill, but the CMCs are in scope. I am sorry; this is very confusing for noble Lords. I shall focus on what really matters—namely, whether this amendment would bring forward a ban on cold calling. I must stress that that is not the case; there would be a protracted delay.
To reiterate, the Government agree with the spirit of these amendments and will bring forward legislation in this Bill, in the other place, in relation to cold calling for claims management activities. Along with our pre-stated commitment to ban pensions cold calling, I hope that reassures the House.
My noble friend Lord Faulks asked whether the SFGB is the right body to handle cold calling. I stress that I do not believe this is the right duty to place upon this body. It should be the subject of primary legislation. However, the Government intend to bring forward the appropriate legislation that will work in practice. That is the important thing here. My noble friend Lord Trenchard questioned whether this amendment was right and said that we needed to take care to avoid unintended consequences with a complete outright ban that could possibly work to the detriment of the consumer.
I shall detain noble Lords no longer. I hope that the amendment will be withdrawn.
Lord Skelmersdale (Con)
My Lords, before my noble friend sits down, she has given a commitment to legislate, or move an amendment, in another place to cover something like 90% of what is required by this amendment. Since when, the noble Lord, Lord Rooker, questioned the ability of the Government so to do. Surely to goodness, this Bill started in this House and has not even touched another place. Therefore, surely to goodness the Government can do what they like.
Baroness Buscombe
I am very grateful to my noble friend for clarifying that point.
Lord Sharkey
My Lords, I am grateful to all noble Lords who have spoken in this debate. I am particularly grateful to the Minister for her close engagement with the matters in these amendments and for her willingness to discuss the issues involved both inside and outside the Chamber. However, I am afraid that the Minister’s objections to Amendment 1 did not have much conviction or force at all, not even when supported by the noble Lord, Lord Faulks. The simple fact is that the SFGB should obviously be in the business of consumer protection. Its remit should allow it to consider, for example, the effect on consumers’ financial well-being of cold calling for financial services. That is what Amendment 1 does, thereby allowing the consequential Amendment 2 to tackle financial harm caused by cold calling. I was grateful for the Minister’s proposals to ban cold calling for CMCs via a Commons amendment, which clearly could be done. However, Amendment 42, which is only a week away, would do exactly the same thing. Why do we have to go round to the other place to do what this Bill would do if Amendment 42 were accepted? I look forward to the Government’s support for Amendment 42 as a means of saving time in the Commons.
I was also grateful for the commitment to publish—I think I heard it correctly—draft legislation on a pensions cold-calling ban. I am sorry that the train of the noble Baroness, Lady Altmann, is due to arrive in only two minutes. However, I think I heard the Minister say that she would publish this in early 2018, which is government-speak for probably June. But I note that there was no indication at all of the timetable for such a Bill, and I refer the House again to the remarks made by my noble friend Lord Kirkwood when it comes to the probability of such a Bill. I am afraid that I did not feel the objections aimed at Amendment 7, though extremely extensive in length, were at all compelling. They were full of “shoulds”, “expects” and “mays”, when in fact “must” is better, which is what the amendment does.
With these amendments we have an opportunity to increase significantly the financial protection of consumers —particularly vulnerable and financially stretched consumers. We can, with this Bill and these amendments, bring about bans on cold calling—not just for pensions, but also for CMCs and DMCs if there is evidence of consumer detriment, as there clearly is. We have argued about preventing cold calling for a very long time, during which the problem has become significantly worse. These amendments would finally address the problem and would address it for whatever creative cold-calling scam comes next off the cold-calling scam production line. These are simple, effective and linked measures which will reduce nuisance, reduce harm and significantly increase the protection of consumers. I would like to test the opinion of the House.
Lord Sharkey
“(3A) In exercising its functions the single financial guidance body must have regard to the effect of cold-calling on consumer protection and must make and publish an annual assessment of any consumer detriment.(3B) If the single financial guidance body considers that there are products or services where a ban on cold-calling would be conducive to its functions it must advise the Secretary of State to institute bans on such cold-calling and the commercial use of any data obtained by such cold-calling.(3C) On receipt of advice from the single financial guidance body under subsection (3B), the Secretary of State may by regulations made by statutory instrument introduce a ban on cold-calling and the commercial use of any data obtained by such cold-calling as recommended by the single financial guidance body.(3D) A statutory instrument containing regulations under this section may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.(3E) For the purposes of this section “cold-calling” refers to unsolicited real-time direct approaches to members of the public carried out by whatever means, digital or otherwise.”
Baroness Buscombe
Baroness Buscombe
My Lords, before turning to Amendment 3, it may be helpful to the House if I were to say now that, in the light of earlier Divisions, the Government will accept Amendment 7 as it is consequential on Amendment 1.
Amendments 3, 5 and 6 address concerns raised by the noble Baroness, Lady Drake, and referred to by other noble Baronesses, including the noble Baroness, Lady Coussins. They provide certainty that the information, guidance and advice services provided by the single financial guidance body and its delivery partners will be impartial and free to members of the public.
As we stated in the Government’s response to the consultation on the single financial guidance body—and as I confirmed in Committee—it has always been the Government’s firm intention that the body’s information, guidance and advice services should be provided free to members of the public. We recognise the concerns that often the people most in need of financial guidance or debt advice are already in financial difficulty. The existing organisations already provide free services and we are clear that this should not be any different when those services transfer to the new body.
In Committee, the noble Baroness, Lady Drake, made a number of very pertinent points about the importance of the new body being wholly customer-focused and not influenced by commercial interests. She highlighted that, in the case of guidance, the body needed to be trusted to take the customer up to, but not into, the “decide and buy” or “decide and act” moment. She stressed that a commercial comparison website that takes commission is very different from a factual comparison table that provides information based on customer needs.
We agree that guidance from a provider with a vested interest in the decision a customer makes carries a greater risk of being partial. Impartiality—ensuring that the person or organisation giving the information, guidance and advice has no vested interest, whether that be the single financial guidance body itself or its delivery partners—should be central to the new body’s ethos. This amendment provides certainty on these two important matters. It places impartiality at the heart of the body’s culture and ensures that its services will be free to members of the public. For these reasons, I beg to move.
Baroness Drake (Lab)
My Lords, I support and very much welcome these government amendments. I thank the Minister for the consideration she has given to the arguments put forward in Committee. These amendments would make the guidance and advice free to the user and impartial. It is very important that it should be free to the user and not vulnerable to ministerial discretion to decide to charge a fee at some later point for three important reasons.
I do not want to prolong the debate, having got the amendments but, just in case there were ever to be reconsideration of the point, I say that if the new body is to be effective in meeting its objectives it needs to be trusted and universally recognised for supporting members of the public and those most in need. To charge for information and guidance would make the relationship transactional, which risks undermining trust and public perception of the purpose and ethos of the service. It also needs to be free to the user if it is to reach the people who need it most. Charging a fee could deter many people on low and moderate incomes. In many instances, getting customers even to seek guidance often needs a pull, and charging just makes that problem more difficult. If the service is not free to the user but subject to a fee, the new body’s priorities and impartiality could be compromised because of potential conflicts over where to put resource from the organisation—towards those most in need or to the services with the greatest potential to raise revenues.
The requirement in the Bill that guidance and advice given must be impartial is very important. The Minister referenced arguments used in Committee that there are so many providers of information and guidance that they nudge or encourage the consumer in directions that are not driven solely by their needs. It will be the fact that the new body is impartial in the advice and guidance it gives that will distinguish it and allow it to build trust and to deliver its statutory objectives. I thank the Minister for bringing these amendments forward.
Baroness Kramer
My Lords, I join in thanking the Minister for bringing these amendments forward. I think she recognises that the three existing bodies to be merged all have a reputation for impartiality. Their services are free and she is making it absolutely clear that those vital elements which she respects and appreciates so much in the existing bodies will carry through into the new body. It seems to me that stating it clearly, rather than leaving it to be read and potentially misconstrued, is exceptionally helpful.
Lord Stevenson of Balmacara (Lab)
My Lords, I thank the noble Baroness for making the statement she did at the Dispatch Box at the start of this debate. We are very appreciative of the acceptance of Amendment 7, which goes with the spirit of the way we have conducted the discussions over the Dispatch Box and in meetings over the period of the Bill. It has been one of the happiest Bills I have been involved in and I have been involved in some very happy Bills. I extend the thanks to the Bill team for their good supportive work. It has been a very good experience all round. This amendment is another example of that, because Members will recall that in Committee the Government’s line was that—although they absolutely agreed that advice, guidance or information given by the new body or by its contracted other bodies must be free at the point of use—they did not think it necessary to amend the Bill. However, over the time we have been talking about it, it has grown on them that there might be an advantage in doing so, for all the reasons my noble friend Lady Drake gave. Having those words at the heart of its mission statement and affecting all the work it does will make it a much better body, so we are very grateful and we support the amendment.
Baroness Drake
Baroness Drake
My Lords, the intent of Amendment 4 is to require that the introduction of a pensions dashboard shall be as a single, public service dashboard overseen and hosted by the single financial guidance body, a safe viewing space where an individual can see all the information on their state and other pensions savings. I welcome the Government’s recent statement that the Department for Work and Pensions is to take ownership of the dashboard project and take it forward to the next phase. Releasing data on individuals’ state pension entitlement to the dashboard is a key criterion for its success. The DWP being now responsible for the database of state pension entitlements and taking ownership of the project is in itself reassuring, because the department could never allow release of this personal state data through the dashboard unless it was completely satisfied with the governance, standards and protection of individuals.
The industry has done a good job in driving the dashboard project forward and the recent report on the project from the ABI asserts,
“that it is possible to build the ‘plumbing’ to connect multiple pension schemes to dashboards and for people to see their pensions in one place … infrastructure can be delivered, and a data standard for sharing information can be agreed … industry can work successfully with FinTech providers to make this happen”.
That is good and it has done good work, but the project now needs to move into a new phase, owned and driven forward by the Government, engaging a wide body of stakeholders, including, importantly, consumer groups. The public need to see clear proof of concept from the perspective of the consumer’s interest and the public good.
Within the dashboard there will be a pension finder service: the engine that sends out messages to search the records of all providers and schemes records to see if there is a match to the customer details. The engine then collects that data to populate the consumer’s front-end viewing space. If introduced, the data of millions of people will be accessible through the dashboard—high standards, tough regulation and sound governance will be required. To be successful, a dashboard requires all providers to release their data, but there are some big and significant questions still to be answered on governance, implementation and consumer protection before the Government can move to compel all providers to provide their data, which the industry is calling for.
There is a major governance challenge to be addressed: the consumer protection of millions of people in both the provision of the dashboard and the infrastructure that supports it. Issues such as identify validation and security, data matching and pension-finding consent need to be overseen and policed.
The ABI report acknowledges,
“the need for strong governance to make clear what obligations, liabilities and controls are in place … to oversee the setup and maintenance”,
of the dashboard. Under what circumstances should individuals’ data be shared with third parties? What will be the requirements around consent and protection? What happens if those parties are not regulated? Certainly, any unregulated party must be excluded from using dashboard data. After all, the consumer will be giving permission for the use of their personal data to search for pension savings, and for the provider or scheme to share that data with the dashboard.
The dashboard, in requiring near-universal coverage, raises the governance bar on protecting consumers from bad behaviour by both regulated and unregulated providers, scammers and consumers’ own vulnerability when all their pensions and savings data can be identified and viewed in one place, accessible through a digital identity. Oversight of that governance must rest with a public body with the right powers to work with regulators and industry to deliver what is required.
The potential scale of the dashboard raises the importance of public control over its implementation and rollout. There will be the constraint of the minimum viable product, but a staged implementation approach to full coverage will reduce the risk to the consumer. I recognise the dashboard is only as useful as the data that populates it, so a pathway to full coverage is needed for its success, but that needs public control.
The Government need to give clarity on the consumer benefits and public policy outcomes that a pension dash- board is expected to deliver. Any decisions on the project must be benchmarked against these desired benefits and outcomes. The dashboard may provide people with the information they need to consider their options but, of itself, it will not enable them to make informed decisions. It is important that support structures exist around the dashboard to avoid people making poor decisions with the information they have accessed.
Baroness Kramer
My Lords, I congratulate the noble Baroness, Lady Drake, on such an extraordinarily comprehensive but succinct speech framing the future structure of the kind of pensions dashboard that I think everybody in this House feels consumers deserve. I also congratulate the Government on their willingness now to step forward and take ownership of this process. As the noble Baroness, Lady Drake, said, the two key underlying issues that will be crucial to the public are protection of data—the whole issue of access to data—and quality guidance to enable them to make use of the information that comes to them through that dashboard as they try and structure their future financial circumstances.
I assure the House that although very often we on this side will try to write an amendment that we think is comprehensive and will basically create the legal framework we want the Government to follow, there are times—this is one of them—when we recognise that the need for development and the underlying complexity of the issue mean that the far better route is government ownership of the policy and the project to take it forward. The Minister will know from having listened to the noble Baroness, Lady Drake, and others in the House that we will always be here with scrutiny and with recommendations to the Government, but it will be exciting to see the process that they now put in place to make sure that this goes from merely a possibility enabled by technology to a very real service for consumers in this country.
Baroness Altmann (Con)
My Lords, I too congratulate the Government on their decision to host the pensions dashboard and to put in place the necessary measures for the dashboard to be held in one place. I congratulate the noble Baroness, Lady Drake, on her persistence and her excellent description of why it is so important that this measure is implemented in the manner she set out.
The public need a single dashboard. If individual private sector organisations each released their own dashboard, it would be too confusing for the public. One thing that will certainly assist in any dashboard is standardised statements, required perhaps by the FCA and the Pensions Regulator, whereby anyone who receives a statement about what pension they have—what terms it has and so on—has to be given a piece of paper. Sometimes called a pensions passport—although it does not matter what it is called—this will be a standardised, simple statement that tells people in one place what they have and clearly explains the kind of terms that the pension has, its value and any special features. Sadly, too often, the private sector has not been able to achieve that. Very often the statements that people get are almost unintelligible. They are sometimes far too long and use different language for the same type of pension, so that people struggle. I support this amendment and congratulate the Government and the noble Baroness.
Lord McKenzie of Luton
My Lords, I too thank the Government for the announcement that the dashboard is to be taken forward and acknowledge the role that has been played by several Members of your Lordships’ House, particularly my noble friend Lady Drake, who with her impeccable logic and powers of persuasion has really led the charge on this. I also acknowledge the noble Baroness, Lady Altmann, who has long campaigned on this issue.
We know that the delivery of the dashboard will be a huge challenge, but it is an opportunity for individuals to see all their savings and pensions in one place, including the state pension. As my noble friend Lady Drake said, the key fact is that it is a single, public service dashboard, so that individuals who use it can have confidence that there will not be a conflict of interest between those seeking to use information and data to sell products and those who are genuinely attempting to help people to understand the pension pots that they have. The data shows that over their lifetime people could change their jobs 11 times. I am not sure how current that is, but 11 changes of jobs could mean as many as 11 pension pots. We know the challenges of small pension pots and how difficult it is for people to access those—they forget where they are. It is particularly an issue for women.
Hearing that the dashboard is to be taken forward makes this a good day. There is lots of hard work to do, and there are many governance issues for your Lordships’ House and others to keep an eye on as it gets developed.
Baroness Buscombe
My Lords, this amendment, tabled by the noble Baroness, Lady Drake, is identical to the one tabled on 17 July 2017, which I have to say sounds an awful long time ago and feels it too. It would require the body to provide a pensions dashboard as part of its pensions guidance function. The purpose of pensions dashboards is to provide a clear picture of all an individual’s pension savings in one place, accessible online. Pensions dashboards are potentially an important tool to help people to take control of their retirement planning. With automatic enrolment, more people than ever before are saving into workplace pensions, and we know that the nature of work is changing, with more people taking a number of jobs in their lifetime—the noble Lord, Lord McKenzie, has just talked about 11 times possibly becoming an average. The ability of people to view their pension savings in one place could make a real difference in assisting them to plan and save for their retirement, including making better-informed choices on the financial impact on their pension provision of working longer if they choose to do so.
I promised to come back on Report with a full statement on the Government’s position on the dashboard project. The Government are firmly committed to the delivery of pensions dashboards and have restated our commitment, as announced last week at the Pensions and Lifetime Savings Association conference in Manchester by the Parliamentary Under-Secretary of State for Pensions and Financial Inclusion in another place. It was announced that, to take forward this work, the Department for Work and Pensions will take lead responsibility for the policy within the Government and manage the next phase of the project. Working with industry, consumer organisations and regulators, the department will conduct a feasibility study to examine the complex issues that still need to be addressed, such as those highlighted by noble Lords today, particularly the noble Baroness, Lady Drake. We will share an update on this work by spring next year.
The very helpful report published on 12 October by the ABI-led pensions dashboard project sets out many of the key questions to be explored, and we will look at its research findings and recommendations in detail as part of the feasibility work. We are grateful to all those organisations involved in the project so far. The aims of the feasibility study will include the following: exploring in more detail what will be of the most use to individuals to help them plan effectively for their retirement, as consumers’ needs must be at the heart of our approach; the viability and implications of different delivery models; determining a suitable framework of governance for pensions dashboards; ensuring that consumer interests are safeguarded and their personal information is protected—as the noble Baroness, Lady Drake, has said several times today, we are talking about providing a safe space for public good so it is incredibly important to get this right—and thinking through issues of regulation, standards, data security and identity verification; establishing how to ensure the widest possible contribution of data from pension providers, bearing in mind that effectiveness will be linked to how much information individuals can see in one place, while also taking account of the potential impact on industry; determining the indicative costs of potential models and how they might be funded sustainably; and setting out a pathway for delivery with provisional milestones and recommendations around communications and publicity.
Baroness Drake
My Lords, I am grateful to the Minister for her reply. I tabled my amendment for two reasons: the first from conviction, and the second to ensure that I could secure the fullest possible statement from the Government on Report. I recognise that ownership is being transferred to the DWP. I consider that to be very positive, first, because of its remit and experience; and secondly, because it has an alignment of interest over its own database, which is the state database. The Minister has already confirmed that the Bill would not preclude having a public governor of the dashboard in the single financial guidance body if that was the policy decision. In her statement, she has quite clearly said that the Government accept that the dashboard must be of use to individuals; that consumers must be at the heart of the design; that it has to be viable, and that the framework of governance must hold public confidence. The Minister referred to a report being produced in spring next year, and I recognise that there is a lot of work to be done, but I think she can assume that there will certainly be several Members of this House who will be looking to scrutinise what the Government say in the report. On that basis, I beg leave to withdraw the amendment.
Baroness Buscombe
Lord Sharkey
“( ) The consumer protection function includes the obligation for the single financial guidance body to pass on casework from consumers to the FCA relating to—(a) suspected inappropriate, misleading or harassing approaches with regard to debt advice, debt management, pension access and claims management services; and(b) suspected dishonest, unfair or unprofessional conduct by those supplying financial services relating to the areas of activity of the single financial guidance body.”
Lord McKenzie of Luton
Lord McKenzie of Luton
My Lords, I will also speak to Amendment 17. Together, these amendments revisit the issue that we raised in Committee concerning the SFGB’s role in financial inclusion and add as a specific objective of the body contributing,
“to the reduction and elimination of financial exclusion”,
particularly for vulnerable people. Our amendments spring in particular, as will be recognised, from the House of Lords Select Committee report on financial exclusion, which regrettably has still to receive the Government’s response. I would press the Minister on when this might be forthcoming, but can anticipate that the answer will be some variation of “soon”, “in the near future”, “imminently”, or perhaps even “before Christmas”.
The amendments raise two particular issues: where are we as a country on financial inclusion and financial exclusion; and what, if any, should be the role of the SFGB in addressing these challenges? Dealing with the latter first, we argue that it should be included in the strategic function of the new body and that it should have as one of its objectives contributing to the reduction—or elimination, although we accept that that is perhaps overly ambitious at the moment—of financial exclusion, especially for vulnerable persons. We should stress that this does not seek to have the SFGB usurp the role of the FCA or the Treasury in these matters—a point made by the Minister on our original amendments—but to support financial inclusion and help reduce financial exclusion.
As defined by the Minister, the noble Lord, Lord Young, financial inclusion is about individuals and businesses having access to useful and affordable financial products and services that meet their needs. If the single financial guidance body does not have a role in addressing these matters through its money guidance function or improving the financial capability of members of the public, then what is its purpose? Will the Government be clear on this issue and say precisely what role they believe the single body should play in promoting financial inclusion and combatting financial exclusion? What is the Government’s view on that?
The need for a strategy to improve financial inclusion in the UK was a key recommendation of the Select Committee. We have already acknowledged the importance of appointing a Minister for financial inclusion and the need to engage across government to lead, co-ordinate and monitor a strategy. We accept that leadership on this might reside primarily outside the SFGB, but to suggest that it does not have a role seems perverse. If financial inclusion is about access to financial services, capacity to manage financial transactions and avoiding problem debt, then financial exclusion would clearly cover circumstances when this is not the case. That more should be done to advance financial inclusion can hardly be in doubt. Promoting financial inclusion was a key recommendation of the Financial Inclusion Taskforce, whose mission was to increase access to banking, improve access to affordable credit, savings and insurance, and improve access to appropriate money advice. It undertook monitoring of financial inclusion initiatives as well as regular research. Unfortunately, the taskforce fell by the wayside when abolished under the coalition Government and thus left a gap. We hope that that gap can be filled with the help of the single financial guidance body.
There are a raft of statistics that identify the levels of financial exclusion in the UK, those at risk of being financially excluded and those at risk of facing significant barriers to engagement in modern society. Some 13.5 million people live in low-income households or in poverty, and 1.7 million adults do not have a bank account. One-third of people over the age of 80 have never used a cash machine or prefer to avoid them; 3.8 million UK households do not have any internet; and 40% of the working-age population have less than £100 in savings. The vulnerable or potentially vulnerable are not a fixed or homogeneous group, but a common characteristic is often poverty—simply not having enough money—and having to transact on the most expensive terms.
The Select Committee outlined some of the particular circumstances that made various groups vulnerable: those with identity verification issues, such as ex-offenders; those with mental health challenges, where financial exclusion can have a variety of negative consequences; and the disabled, where often reasonable adjustments are inadequate. We have very serious issues to confront.
We could debate these important issues all day, but I am aware that we have a further amendment coming up in the name of the noble Baroness, Lady Finlay, which might be a formulation on which the Government can offer a measure of support. It certainly has our support. In the meantime, I beg to move.
Baroness Kramer
My Lords, I was glad to add my name to Amendment 8, moved by the noble Lord, Lord McKenzie of Luton. Amendment 17 is almost the other side of the coin.
I think that most Members of this House, including those in the Government, feel that financial inclusion is sufficiently important that it should be expressed through most of the financial bodies that we create. The noble Lord laid out very well the depth of the problem; others on the committee may speak to that in a moment.
It would be helpful to have clarification under the Bill, in part because we have genuine confusion. I am pretty sure that Ministers have all been under the impression that this matter is wrapped up and dealt with in the context of the powers, responsibilities and objectives of the FCA but, having talked to the FCA, they will now be aware that it has a very constrained role in this area and does not provide capacity to deal with the problem—for example, filling in gaps—that most people assume that it has.
Part of our problem, of course, is that we never consolidate financial legislation, so there is genuine confusion over who does what and assumptions that particular issues are taken care of when they are not. Financial inclusion is one of those that has fallen right through the holes, due to the mismatch of a whole variety of different pieces of legislation. This is an opportunity to provide for a body to consider these issues centrally to everything that it does. What it does is very relevant to that process. That is obviously not a complete answer to the problem of financial inclusion—that involves many others—but we have to make a start somewhere. It should now become a regular habit for financial inclusion to be addressed in each piece of financial legislation.
Viscount Trenchard
My Lords, nobody in this House would disagree with the idea that we must do as much as possible to reduce financial exclusion and promote financial inclusion, but, again, I am not sure that the amendments are practical. Normally, anything proposed by the noble Lord, Lord McKenzie, and the noble Baroness, Lady Kramer, is of the very greatest sense; I know that from experience going back many years.
However, I worry that to amend the strategic function as proposed to strengthen further the obligation on the new body may be just a bit too much of a burden, too onerous, too open-ended and not properly defined. It is very hard to define exactly what is financial inclusion and what is financial exclusion. Obviously, the former is a good thing and the latter a bad thing, but if the strategic function is already there to support improvement in financial capability, the ability of the public to manage debt and the provision of financial education to children and young people—although I think that should probably be to everybody—the amendment duplicates that, makes it too vague, too hard to define and, potentially, too onerous.
Furthermore, I also worry about enshrining in statute the terms,
“vulnerable individuals, families and communities”,
because there is nobody in your Lordships’ House who does not recognise that vulnerable individuals need more help and support than those who are not so vulnerable. Nevertheless, it is very hard to define, and to create a different obligation for an ill-defined set of individuals and communities from the general obligation to all members of the public may be confusing and make the legislation less clear and less effective. For those reasons, although I understand the noble Lords’ objectives, I cannot support their amendments.
Baroness Tyler of Enfield (LD)
My Lords, I rise briefly to add my strong support for the amendments. In so doing, I apologise to the House that I have been unable, for reasons of ill-health, to participate in earlier discussion of the Bill.
As chair of the former Lords Select Committee on Financial Exclusion, I was very pleased when I read the amendments. The noble Lord, Lord McKenzie, and my noble friend Lady Kramer have set out their rationale very well, and I shall not go over that ground again, but if we are setting up a new single financial guidance body, promoting financial inclusion must be clearly set out as one of its key objectives.
On the point referred to by the noble Lord, Lord McKenzie, it would be nice to know when we will receive the government response to the Select Committee report. Correct me if I am wrong, but I think I recall that the noble Baroness, when asked back in July, said that the government response would be available “very soon”. We are now some way off the tail end of July. If the Minister could give any clarification of when the government response will be available, that would be extremely helpful.
Lord Young of Cookham (Con)
My Lords, the co-pilot is in charge for this leg of the journey. I take this opportunity to address the amendments tabled by the noble Lord, Lord McKenzie, and the noble Baroness, Lady Kramer, on the common theme of financial inclusion, and welcome the contributions from the noble Baroness, Lady Tyler, and my noble friend Lord Trenchard, who anticipated in part some of my response.
Having listened to the noble Lord, Lord McKenzie, I would not disagree with what he said about the challenges that confront the Government in this area: the problems of financial numeracy and the serious issues, to use his words, that he identified as needing to be addressed. I will come to that in a moment.
As I said in Committee, we take the issue of financial exclusion very seriously and are grateful for the important work of the Financial Exclusion Select Committee in highlighting this important issue. We have considered the committee’s wide-reaching report, including its recommendations concerning government leadership and the welfare system.
In answer to the two questions about timing, the Government aim to respond to the committee’s report—here I use an option not mentioned by the noble Lord, Lord McKenzie—before Third Reading. I understand noble Lords’ impatience that we did not have our response to the report available for Report, but I hope that there will be adequate time to consider it before Third Reading. I reassure noble Lords that the Government’s response will address the committee’s recommendations and will bring forward new proposals on how better to co-ordinate across government, the regulators and the wider sector on the key issue of tackling the significant issue of financial exclusion.
As was mentioned in our debate, this area has been given new prominence within the DWP ministerial team by the appointment of my honourable friend Guy Opperman. At the same time, it is important that this change is seen in the context of HM Treasury’s ongoing, government-wide policy responsibility for financial inclusion and exclusion. A key part of the Government’s approach to tackling these issues will be to require the relevant departments to work collaboratively, and the response may say something about that.
I stressed in Committee the Government’s understanding of the terms “financial inclusion” and “capability”, and I thought that we had established an element of agreement on this point. At the risk of reopening a theological discussion, financial inclusion refers to ensuring that members of the public have access to financial services. Financial capability is ensuring that the public are best able to make use of the financial services to which they have access. These terms are widely accepted by, for example, the World Bank. It is important that we build on this shared understanding of the terms so that there is clarity about the intentions for the body, which is to build financial capability among members of the public. To put this another way, the new body should not have a role to regulate the supply of financial services and products by the industry. It should, however, play a key role in helping people engage with or consume these products and services.
This does not mean that the supply of these products is not important. The point is that it is the role of the Financial Conduct Authority—not the SFGB—to ensure that appropriate action is taken when the market fails to supply useful and affordable services and products. So the omission of financial inclusion in the Bill is not an oversight; it is deliberately omitted from the body’s functions and objectives which refer to the supply of useful services such as savings, credit and insurance products. The proposed amendments would greatly expand the body’s statutory remit and are also likely to create confusion over the roles of the Treasury and the FCA, both of which have the relevant responsibilities and powers and are better placed to influence the supply of financial services and products.
In terms of financial exclusion, as the noble Lord, Lord McKenzie, rightly observed in Committee, even more important than these definitions is the question: what will the Government do to act in a more co-ordinated way to tackle financial exclusion? I want to assure noble Lords that, following the Select Committee’s work in this area, the Government will propose, in their response, more appropriate and effective ways to address this issue than through the functions and objectives of the SFGB.
With regards to the particular issue of improving access to financial services for vulnerable people—which comes under Amendment 17—we consider that the FCA, and not the SFGB, is more appropriate to deliver that role. The FCA has already carried out a great deal of work in this area. Many Peers had a helpful meeting with the FCA last week. I hope it reassured noble Lords that the FCA takes its responsibility on consumer protection very seriously. The FCA published two pieces of in-depth research, carried out in 2015 and 2016, which supported the development of current initiatives to address access issues for vulnerable people. I came away from that meeting with a slightly different impression from that of the noble Baroness, Lady Kramer.
As discussed in the meeting, issues regarding access and vulnerability are at the core of the FCA’s mission and business plan, published in April this year. To quote from the mission:
“Understanding vulnerability is central to how we make decisions. Consumers in vulnerable circumstances are more susceptible to harm and generally less able to advance their own interests”.
The FCA is due to undertake a number of further projects to understand better the concerns of vulnerable groups, not least through its forthcoming work to develop a consumer strategy by means of its consumer approach paper to be published in the next few weeks. This will provide a means for the FCA to measure outcomes for vulnerable consumers. It will work to develop vulnerability mapping so as to ensure that it has captured the needs of vulnerable consumers when finalising its business priorities.
In Committee, I mentioned the FCA’s TechSprints, so I do not need to do so again. It is also exploring issues for those living with cancer and the problems they face in gaining affordable access to travel insurance. In due course, the FCA will publish a feedback statement with its findings and the next steps in the light of responses to its call for input.
More recently, in September, the FCA published an occasional paper outlining the findings of its ageing population project. This paper reviews the policy implications of an ageing population and the resulting impact on financial services. The FCA highlights risks to older consumers who are more likely than other groups to be vulnerable—an issue raised by the noble Lord, Lord McKenzie. To try and minimise harm, it has suggested areas where financial services firms could give greater consideration to how they treat older consumers.
Finally, even more recently, the FCA published its inaugural, annual financial lives survey—its largest tracking survey of consumers and their use of financial services. This is a huge undertaking, drawing on responses from just under 13,000 UK consumers aged 18 and over. The report tells the financial story of six different age groups to show key themes at each life stage, from those aged 18 to 24 to those aged 60 and over. The survey shows that 50% of UK adults—25 million—display one or more characteristics that signal their potential vulnerability. The FCA will use the results of the survey to prioritise its work. I hope the description of some of what the FCA is doing reassures noble Lords that it takes seriously its responsibility towards those who are vulnerable.
As a result of the FCA's work and its engagement with firms, there have been tangible developments from the industry in this area. This includes work led by the Financial Services Vulnerability Taskforce. In addition, the FCA has also seen increasing evidence that firms identify and then improve outcomes for vulnerable consumers.
To reiterate, as my noble friend Lord Trenchard said, the current amendments would greatly expand the remit of the body and could cause confusion over the role of different public institutions. I hope that, having heard this explanation, the noble Lord might be willing to withdraw his amendment.
Lord McKenzie of Luton
My Lords, I thank the Minister for his reply which does not surprise me in great detail. May I start by saying to the noble Baroness, Lady Tyler, what a great pleasure it is to see you with us this afternoon? I hope we will have another occasion—perhaps before Third Reading—to acknowledge the role that she played in producing this important tome on financial exclusion.
The noble Viscount, Lord Trenchard, said it would be too much of a burden. Throughout our discussions, we have been told that this is a framework Bill. What use is made of this framework will depend on who ends up as the chief executive and the role that they have. From this point of view, these amendments are deliberately non-prescriptive. Are we seriously saying that this body would have no role in relation to a strategy to improve financial inclusion or combat financial exclusion; that this would be off limits and nothing to do with it? I accept entirely what was said about the role of the FCA and the importance of its remit in these circumstances. We may not agree with it in its entirety but are we to say that this new body, which has a range of functions relating to information guidance and the obligation to develop a strategy—particularly on this important issue of financial exclusion—must be silent on these matters; that it has no role at all? This does not seem right.
I have taken on board the debate we had in Committee about it being the role of the FCA to lead on this; or the FCA now and the new Minister across government. I accept that. Perhaps before we had formulated a lead role for the single body; I think we have moved back from that and accepted the points that were made. However, I have difficulty in accepting that it would have no role in the future. The Minister looks as though he is about to spring to his feet.
Lord Young of Cookham
Perhaps I can reassure the noble Lord, Lord McKenzie. Of course, the SFGB is going to work closely with the FCA and the Treasury on issues regarding financial inclusion. As I said, we envisage a partnership, with the FCA promoting access and the SFGB promoting capability; this is where the two meet. We do not see the SFGB leading on inclusion in the way in which it will be leading on financial capability. This is why we have difficulty with the particular amendment that the noble Lord has put forward.
Lord McKenzie of Luton
I thank the noble Lord for that clarification. The amendment does not suggest that the single body would be leading on it. This is the change between the debate we had in Committee and the debate tonight. We recognise that it has a role to play in supporting but not in running the show. Perhaps we had better move on because I am not sure that we are going to reach agreement on this. The Minister’s notes may reflect our original position, but he seems to have acknowledged that there is a role for the SFGB in supporting the activities around financial inclusion and exclusion. At this late stage, I am not sure if there is anything that can be done to reflect this. If we are to get a report, feedback or the Government’s response to the report of the House of Lords Select Committee before Third Reading, I hope that the Minister will acknowledge that this issue will not necessarily be off bounds when we come to Third Reading, as that potential new information runs through a lot of the debate that we have had. I hope that before we conclude on this the Minister will give an assurance that we can raise these issues at Third Reading. If he wants to give that assurance now, that would be good.
Lord Young of Cookham
The noble Lord may be tempting me to say something beyond my pay grade about what is in order at Third Reading and what is not. However, I will reflect on what he said and about the impact of publishing the response. I would be rash to give a commitment at the Dispatch Box that this issue will definitely be addressed at Third Reading but I will do my best.
Lord McKenzie of Luton
Clearly, the Minister is a safe pair of hands in the cockpit. I thank him for that. I am grateful to the noble Baroness, Lady Kramer, for her support. Her remarks mirrored our position. We are not saying that the FCA should not lead on some of this, but it cannot and will not do everything and there is a role for the body we are discussing. Having said that, I look forward to the amendment that will come up soon. I beg leave to withdraw Amendment 8.
Lord Stevenson of Balmacara
My Lords, I will speak also to Amendment 10 in this group. We may repeat some of the ground that has just been covered. Perhaps we can move at the speed of a jet engine rather than that of a turbo prop to expedite things, if I can extend the metaphor a little, as this issue is broadly similar and was raised in Committee.
I make two points. When we raised what is now Amendment 9 in the form of the then Amendment 16A, which I think was in the names of the noble Earls, Lord Kinnoull and Lord Listowel, and the then Amendment 18, which was in the name of the noble Baroness, Lady Kramer, we thought that there was room to explore further the detail that we wanted to see in the wording of the Bill itself. However, we were reassured by many of the Ministers’ remarks in both these debates, so to that extent did not push it. It is interesting to reflect on what might be contained in the Government’s response to the report from the Lords Select Committee which deals with these two important issues. We are talking here not so much about the broader strategic and other issues but particularities about the way in which some of the detailed work that is expected of this body might take place. That work should include care leavers. We had a rich discussion about what care leavers needed in terms of financial strategy and support. The Minister picked that up in her response and we had a sense that there was a government push behind this in view of the recognition that people leaving care who had not been given proper financial support or financial education would need additional help. The hope was that the SFGB would be able to provide that in whatever form seemed appropriate.
As regards Amendment 10, there have been a number of discussions around the question of whether or not one can segment the people who need financial education into groups, perhaps by age or lifestyle. The noble Lord mentioned the report from the FCA on the lifestyles of those who experience difficulties with finance, which I read with great interest and found very interesting. It is a wonderful piece of work which tries to cover the whole United Kingdom. It examines how people live their lives, how difficult and chaotic those lives can be in some cases and how well planned and organised in others—not mine, I should say. It is interesting to reflect on some of the figures mentioned by my noble friend Lord McKenzie. We are talking about a lot of people—4 million people who regularly are at a point where their lives could collapse because of a small incident. That is a terrifying thought. If we cannot provide the education and support necessary for them, we fail as a society.
Amendment 10 attempts to move away from that slightly broad segmented picture to consider the various stages of people’s financial lives when they make major decisions on the purchase of houses, cars or whatever it is we do with our lives. We have learned from those who have spoken in these debates that the educational process that goes on in people’s minds is accelerated and assisted when it is either going through a period of stress or when a particular event is happening. For example, when you buy a house you have to know about mortgage rates, the issues that are going forward and the prospects you have for insuring it, reinsuring it, and all the stuff that goes with that. That tends to fall back once you have done it and you are not thinking of moving again but the point at which the education can take place is tied into an event, not to an age group or particular activity in life. These amendments try to get a sense from the Government of how the SFGB would operate.
The general response which we have already covered, was encapsulated in a previous debate where the noble Baroness said:
“We believe that it is unwise to give the new body a requirement to advise the Secretary of State on explicit issues, as worthy as those issues are. There are several topics that the body may wish to look into as part of its strategic function. Choosing a few could risk limiting the body’s ability to look widely at the sector and have regard to emerging issues in future.—[Official Report, 19/7/17; col. 1726.]
You can agree or disagree with that. I think there is a case for flagging up and embedding certain policies in the Bill. However, sufficient account may be taken of the comments made in the debates in Committee and on Report to allow that to flow naturally into the work that the SFGB will do.
The point about repositioning these amendments for discussion tonight is that time has moved on since July. The Bill itself has changed a bit and some of the thinking around it has benefited from the wider discussions which have taken place, not least the visit by the consumer affairs director at the FCA, who, as the noble Lord said, spoke at a meeting last week and made some very interesting remarks about what the work entailed and what approach would be taken to it. That will complement the knowledge and understanding we have about the SFGB when it comes forward. In that sense it is important that we revisit these areas not because they are important in themselves, although they are, but because of the way in which they tell us more about how the SFGB will operate. If some material on this emerges in the Government’s response to the Select Committee’s report, it would be helpful to take up the issue again at Third Reading, if it should prove necessary. I beg to move.
Baroness Kramer
Obviously, we support these amendments. The Government’s argument has always been that this issue will act as a constraint. However, we think it draws attention to the problem and empowers people. One of our great dissatisfactions historically with the provision of financial education and financial capability is that it does not seem to create people who are more financially capable when they need to be. Amendment 10 raises once again the issue of timing and relevance. We are all human beings and we can go through various forms of training but if we then never use those skills or that information but require it 10, 15 or 20 years later, that is the point at which it needs to be recalled rather than having a tick-box exercise to show that at the age of 16 we took a class on those issues. We want this education to be relevant and to underscore the direction that I hope very much the single financial guidance body will want to take, but is by no means required to take, of looking for relevance and at situations where there is critical need, care leavers being one of the most obvious examples of that. We have known for years that care leavers get themselves into enormous trouble because of their lack of awareness of these issues but no body has felt it necessary to step into the breach. Here we have the perfect body to step into the breach. That would be entirely consistent with what it is doing. That is the mood and spirit of these amendments. I hope very much that the Government take the issues on board because were we not to see results that responded to the spirit and meaning behind these amendments, we would have a body that was very suboptimal. I think the House would agree with that.
Baroness Finlay of Llandaff (CB)
My Lords, I thank the noble Lord, Lord Stevenson, for his very important comments in introducing these amendments. He has covered some issues that I was going to cover in relation to my amendment, which is next. I wonder whether he feels my amendment covers some of the things he is concerned about, because care leavers are just one group in vulnerable circumstances—we all know that—but there are other groups as well. I have a slight concern that once we start to put lots of different lists in the Bill, somebody will be left out. I will explain why our amendment is worded as it is and I am very grateful for the support from his Benches, but I raise that as a question.
Lord Young of Cookham
My Lords, in response to the comments of the noble Lord, Lord Stevenson, about the propulsion available to the co-pilot, it remains the same: the journey may be a little shorter and therefore the destination may be reached more quickly.
Amendments 9 and 10 tabled by the noble Lord, Lord Stevenson, would alter the strategic functional matters relating to financial education. I thank all those who have contributed to this debate for highlighting once again the important issue of financial education. We had a good debate on this issue in Committee and I believe we agreed on both sides that financial education is extremely important at all stages of life—a point made by the noble Baroness, Lady Kramer. A key role of the new body will be to improve people’s financial capability and help them make better financial decisions, and to identify any gaps that there may be at the moment in the provision of such advice and guidance.
The financial education element of the strategic function is targeting a specific area of need, which is to ensure that children and young people are supported at an early age on how to manage their finances, for example, by learning the benefits of budgeting and saving. More specifically, the new body will have a co-ordinating role to match funders with providers of financial education projects and initiatives aimed at children, and will ensure that these are targeted where evidence has shown them to be more effective. This falls within the wider strategic financial capability work of the body and should form part of the national strategy, which we expect it to deliver.
As I explained in Committee, the Money Advice Service has been undertaking that role. It is one aspect that respondents to the Government’s consultations have overwhelmingly agreed it is important for the new body to continue working on. MAS’s work under the financial capability strategy focuses specifically on improving people’s capability, which they need to make key decisions, such as those presented in this amendment. We expect the new body will carry forward and improve the work under the umbrella of the new SFGB. I stress that this does not mean that the new body will not be providing financial education for adults. As I have explained, this is a key role of the body in improving financial capability, as it is for MAS now. For example, MAS currently runs a pilot on adult numeracy with National Numeracy through the What Works Fund. Also, through the work with the Financial Advice Working Group, it is creating a simple portal for employers linking to the MAS website and exploring partnerships for helping employees with money management. Finally, through the financial capability strategy, MAS works with the National Association of Student Money Advisers to test and improve the model for financial education for younger adults. We expect the body to continue and build on work in this space.
Moving to the specific amendments, Amendment 9 would alter this function so that a strategy for the provision of financial education is extended to care leavers. I thank the noble Lord for raising this point. It was also an issue raised by the noble Earl, Lord Listowel, in Committee. As I highlighted to the noble Earl at that point, the Government agree and we expect the new body to consider further initiatives to support care leavers as well as other young people from marginalised backgrounds—for example, those leaving youth detention or those with learning difficulties.
As we heard from the noble Baroness, Lady Finlay, Amendment 11 refers to vulnerable people and I absolutely agree with her: care leavers are vulnerable people. I hope my noble friend will say a little more about how we plan to help vulnerable people, including care leavers, when we debate Amendment 11.
Amendment 10 would make provision specifically for adults contemplating difficult financial decisions, such as mortgages, pensions and vehicle finance plans. As I said in Committee in response to the amendment tabled by the noble Baroness, Lady Kramer, and the noble Lord, Lord Sharkey, this is the role of the SFGB as a whole as it delivers money and pension guidance and debt advice. Also, the strategic function under Clause 2(7)(a) already gives the body a specific responsibility to work to improve the,
“financial capability of members of the public”,
including in these areas. To give the new body a requirement to advise the Secretary of State on explicit issues, worthy as these may be, is unwise. The noble Lord, Lord Stevenson, said that one could either agree or disagree with the point I have just made. I happen to agree with it—he may disagree with it—but there are problems in focusing on specific issues. There are several topics that the body may wish to look into as part of its strategic function and choosing a few could risk limiting its ability to look more widely at the sector and have regard to emerging issues in the future. For those reasons, I hope the noble Lord will withdraw his amendment.
Lord Stevenson of Balmacara
My Lords, I am very grateful to the noble Lord for his comments and for dealing with such speed with the issues concerned. One always has to be a bit suspicious about a pilot who is very determined to be right about what he is doing. We hope they receive messages from outside when they have gone off course to get them back on course.
I think we have given this a fair knock. The issue between us is whether care leavers and others in vulnerable situations should be mentioned explicitly or whether there is another way. I suspect that will be raised in the next amendment—I await that. I broadly agree that the framework and nature of the Bill suggests that we should not be looking at particular details which will just cause difficulty, but I also hope that the words mentioned in these debates are read by those who will take on this position and that they will use them to inform and enhance their understanding of what Parliament wanted out of this process. I beg leave to withdraw my amendment.
“( ) access to financial services for people in vulnerable circumstances,”
Baroness Finlay of Llandaff
My Lords, I am grateful to those who have put their names to Amendment 11: my noble friends Lady Coussins and Lady Hollins, as well as the noble Lord, Lord McKenzie, who addressed these issues in Committee and has been trying to move things forward. I also thank the Minister for meeting me and my noble friend Lady Coussins, for giving so much of her time and paying so much attention to every detail of the arguments that we put to her in that meeting, and for making great efforts to address the points we were making.
I turn specifically to this amendment and the way it is worded. We have used the wording “people in vulnerable circumstances” because people may be permanently deemed vulnerable—such as people with learning difficulties, people who have a permanent speech disorder or those who have difficulty communicating. There are, however, an awful lot more people who have a fluctuating impairment of capacity, either through illness or medication. There are also people who have been coping really well but have something happen to them, such as an acquired brain injury. All find themselves in vulnerable circumstances. To comment again on care leavers’ situation, there is powerful, researched evidence that children who have had four or more adverse childhood experiences are extremely vulnerable to lots of other factors in life, but they, having been in care, are not the only children who are vulnerable. There are a whole lot who were not in care but have had similar adverse childhood experiences and then have a great deal of difficulty handling their adult life and independence, and in responding to things.
Another difficulty now being faced is the closure of some bank branches and the rise of internet banking. People who have a tremor, for example, need assistance, and they may then find that they do not have the privacy they want. The list could go on and on but, one way or another, we would end up including over half the population, to whom things can happen at different times. Everyone in this Chamber must have found that when they are acutely bereaved they are vulnerable for a time. Their thinking is impaired and they cannot cope with some of the decisions they make but they come out of it, and I do not think anyone would label any of your Lordships as having impaired capacity during this debate.
Therefore, our thinking was that improving access to and awareness of financial services for people who find themselves in vulnerable circumstances, whatever those might be, should run right through the core functions. A little like the lettering in Brighton rock, it should go right the way through.
I must declare an interest as chair of the National Mental Capacity Forum. I have been working with banks, building societies and the Equity Release Council, and some of them—I should like to single out the Nationwide Building Society—have done fantastically good work, but there is a need for the whole sector to be taken along. Laws send social messages too. Therefore, I hope the Government will be able to look favourably on the amendment, which is worded to create not a list but a whole philosophy compatible with other legislation, particularly the provisions of the Mental Capacity Act. I beg to move.
Baroness Coussins (CB)
My Lords, I have added my name to Amendment 11. I remind noble Lords of my interest as president of the Money Advice Trust, the charity that runs National Debtline and Business Debtline. I echo my noble friend’s thanks to the Minister for meeting us yesterday to discuss the intentions behind the amendment.
My noble friend has laid out the need to address access to financial services for people in vulnerable circumstances. It is also important to acknowledge the work that is already under way in this area—in particular since the FCA’s paper on vulnerability in 2015. Since then, the British Bankers’ Association’s Vulnerability Taskforce has produced a report challenging the industry to improve, and the issue of vulnerability has remained high on the agenda.
All that is of course very welcome but, as my noble friend indicated, the term “vulnerable people” does not necessarily mean the same as “people in vulnerable circumstances”. Very often in the past, “vulnerability” was used interchangeably with mental health issues, yet there is a growing recognition of the need for financial services and other organisations to consider a much wider range of vulnerable circumstances.
As an illustration of that need, the Money Advice Trust provides training for the sector in supporting customers in vulnerable circumstances, and demand has been growing significantly over recent years. The charity has now trained more than 11,000 staff working in more than 160 firms. Increasingly, this training covers areas way beyond mental health, such as supporting customers with addictions or a serious illness, those suffering a bereavement or redundancy, and people contemplating suicide, to give a few examples. Yet many people in vulnerable circumstances are still excluded from financial services and are unable to access the support they need.
The SFGB provides an ideal opportunity to increase the focus on vulnerability through its national strategy. As I said in Committee, the Department for Work and Pensions, as the sponsoring department, could also provide a very useful link between the body’s work and the broader financial inclusion policy agenda.
This amendment seeks to take the good work on vulnerability that is being done by the industry and the voluntary sector and give it an explicit focus on the face of the Bill. I hope that it will receive careful consideration by the Minister or that something very similar that captures the intention of the amendment but is perhaps better worded can be brought forward by the Government at Third Reading.
Baroness Hollins (CB)
My Lords, I am pleased to add my support for this amendment. My own particular interest relates to people with learning disabilities, who can be presented with significant challenges when it comes to managing money on a daily basis, even where local financial services are readily available to them.
The move to digital banking and even past innovations such as chip and pin present a real risk for people with limited capacity—a risk of exploitation. When bank branches close, the financial services available at the Post Office are often held up as an answer. However, for people with limited mental capacity—not just people with learning disabilities—they are not the answer. For instance, the Post Office no longer provides a paying-in book, and the only way of obtaining cash is through chip and pin. There are hundreds of similar examples, relating not just to people with learning disabilities but to those who are in vulnerable circumstances at different times, as we have heard from my noble friends.
This welcome Bill is creating a single financial guidance body that could make a significant difference in improving financial capability, reducing debt problems and helping more people to engage with their pensions. Perhaps providing easier-to-read or pictorial guides to finances would be a useful starting point for the new organisation to consider—for example, covering banking and managing personal budgets—with the aim of helping people with learning difficulties take more control of their finances. It could consider appropriate training so that people with a learning disability and their families can be better supported, as online guides are unlikely to be adequate for these groups.
I must declare my interest here as the chair of Beyond Words, a community interest company which works to empower people with learning disabilities by developing pictorial narratives to help them when circumstances are too challenging.
I hope that the Minister will support the amendment to ensure that the new body keeps in mind the needs of people in more financially vulnerable situations.
Baroness Kramer
My Lords, we on these Benches would gladly have added our names to this amendment but the list was full, which is always good news, particularly when the inspiration and leadership come from the Cross Benches. I just want to make it clear that we are very supportive of the amendment.
I also want to add one comment. I know that sometimes the use of the term “vulnerable” is challenged but, as I know from dealing with legislation in the other place, although that was quite some time ago, there is a long and very established history of using the term “vulnerable”, certainly at least—although, I am sure, not limited to—among the utilities, which obviously have to recognise and identify all kinds of vulnerable customers for a whole range of purposes. It allows what I would call reasonable common sense to apply in identifying the full scope of people who are vulnerable. Some of the examples that we have had today have been around mental capacity issues and learning difficulties, but it seems to me that nothing in the many historical ways in which this term has been used in legislation previously would limit it or prevent it, for example, applying to care leavers or, in terms of financial education, to younger children and to the broader group that we are discussing.
Therefore, I hope that the Minister will accept that there is a well-tried, true and well-trodden path setting out how we identify vulnerable people. The term is frequently used to tackle a variety of needs and there is plenty of legislative precedent that makes this a very effective amendment.
Baroness Altmann
My Lords, I add my support for the amendment and congratulate the Cross Benches and the noble Lord, Lord McKenzie, on tabling it. In a way, it is very sad that the financial services industry is not making more effort to look after vulnerable customers or indeed to present materials in the ways that the noble Baroness described. I think that doing so pictorially could help everybody. So far, financial services are all about dense words and jargon that people struggle to understand.
This body is due to be financed by the industry and the industry has perhaps not always taken enough care. One hears stories from cancer charities where somebody would call up their bank and say, “Look, I am going through some treatment. Is there any chance I could either have a loan or some respite from repayments?”. It simply is not on their agenda to help people in that way, even when people approach them and explain their vulnerability and their circumstances. So it is right that this body should introduce some measures that are designed particularly for vulnerable customers and, indeed, change the narrative and the language used to explain finance, educate people and inform them about finance, in ways that the industry seems not yet to have been able to do.
Lord Kirkwood of Kirkhope
My Lords, following that speech from the noble Baroness, Lady Altmann, I support these amendments. I want to reinforce something that my noble friend Lady Kramer said earlier. Language is very important in this context and the amendment addresses that perfectly. We have to be careful how we use language in terms of social security and social protection, above and beyond some of the specialisms familiar to some of the noble Lords who made powerful speeches on this amendment.
I want to add something to the definition of people in vulnerable circumstances. A couple of weeks ago, I was interested to read some remarks from Mr Frank Field, who as noble Lords will know is the chair of the departmental Select Committee covering the DWP. He said something that I recognised, which is new to me and him, about what we as a country are facing immediately and over the next two or three years, with the conjunction of interest rates, a freeze in benefits and other things, together with the administration of the ultimate safety net that now resides in some but not all local authorities after the abolition some years back of the Social Fund and community care grants. Frank Field characterised that as families falling out of stable situations into destitution, particularly in relation to three very normal things. Their electricity is being cut off; they are being evicted, because their rent is not being kept up, and there is the dimension of universal credit implementation in relation to that in the short term; and there is food poverty. In these three circumstances we are seeing for the first time in this country, certainly in my experience, these things coming together and ordinary families suddenly finding themselves falling out of financial security and stability.
We have nothing. The previous set of social security provisions always had a residual safety net. I am concerned now that that is absent, particularly in certain local authority areas. I hope that we can find some way to capture this, if not by this amendment then with something that captures the sense behind it. There is a timing issue here. Over the next two or three years, we need the Bill to pick up people who have faced the conjunction of circumstances that Frank Field described and embrace them. If it is not done by this amendment, it should be done by something else.
Viscount Brookeborough
My Lords, could I just look at one other aspect of vulnerability? It is looked on as being a disability of some kind, but vulnerability is also down to isolation, where one might live and being on the periphery. Look at banking in particular—the most basic place that somebody goes or would like to go for financial advice or help at first if they live out in the country. Look at the number of banks that are closing branches left, right and centre. Of course it is business, but we have to realise what is really going on there. They say that they have consulted and we had various banks, without naming them, which came in front of our committee and said, “We consulted before we closed”. But we did not find one instance where a bank had changed its mind because it had consulted. It is as simple as that. We have to look at it on those terms.
Actually, we had Nationwide. I must forgive it for a minute, because I rather liked it. Nationwide said, “We are opening some branches”—and it is being novel about it. It could be opening a branch with one man, who will sit in what could be an office or a caravan. He could be visiting a village or whatever. When the customer says to somebody he probably knows, “Bill, listen. What can you do? I need a loan or a mortgage”, he says, “Hold on”, and presses a button. Up comes Peter from the loans office who says, “Just sit down and we’ll have a chat about this”. He says, “Would you like some coffee?” and the guy says, “Yes please”—because he likes getting anything free that he can. He presses a button and the coffee arrives from next door. The whole thing is very homely. He says, “When I have this loan, what about a mortgage?”. He says, “I’ll bring in Charles on that and the three of us can talk about how it will work”.
Ultimately that is no different from what always used to happen—you went into your bank to the man you knew and he then took you into an office to see somebody else—but this is novel thinking. Banks will always worry about their business, but they should not necessarily be closing branches and we have to encourage them to be novel. The internet is there and the banks must watch out. I heard a comment the other day or saw it in the Financial Times. It was something about banks becoming vulnerable, because people might not keep their money there. The sooner the banks catch on to what is going on and come up with novel ideas, the sooner the vulnerable will not be as vulnerable as they appear at the moment.
I live on the border with the Republic, and we will talk about Brexit another time. The banks have literally all come back from the border. Societies in those villages are increasingly vulnerable. They are beginning to be scared. They have to drive 20 miles, so they had better have something good to talk to the bank about. They had better know exactly what they are doing before they go. A lot of them may be older people without the internet. Something like the Nationwide’s idea is the way we should be going. We must treat vulnerability not only as those who may be medically vulnerable but as vulnerable members of our society.
Baroness Drake
I will carry on the spirit of the contribution of the noble Lord, Lord Kirkwood. In Committee, several Peers ran several amendments trying to capture this issue of vulnerability—whether it was vulnerability because of a health shock or because of some standing reason. As the noble Baroness, Lady Finlay, explained in moving her amendment, the attraction of Amendment 11 is that it does not seek to list or define. It just tries to capture the principle that there is a category of people who become or who are vulnerable for a series of reasons, and they need to be addressed.
The purpose of the single financial guidance body is to achieve a series of improved public and individual outcomes by improving a person’s financial capability, but a person’s capability cannot be improved—it just cannot happen—if they are excluded from the market for financial services or denied the access or the means to make good decisions. As my noble friend Lord McKenzie and I frequently say, the fundamental, immutable requirement of financial capability is that you are included and have access. You cannot begin to become capable without it. One feels the sense around the Chamber, which I hope the Minister is able to find a way of recognising, of a wide concern and a very constructive amendment. It is not overprescriptive but allows the financial guidance body to recognise that it needs to address this problem.
Lord McKenzie of Luton
My Lords, this has been a good debate. I emphasise that we support the amendment, which is no surprise given that I put my name to it. I am sorry that we pre-empted someone: I am happy to step back.
This is a very elegant formulation, which stops a whole list being produced. It instinctively recognises that people might be vulnerable for reasons to do with their circumstances but that this is not necessarily something endemic to them. There are fluctuating circumstances which particularly fit that description: in our short debate we have had discussion of learning disabilities, mental capacity and addictions. A broader issue, but still within the key definition of vulnerability, is isolation. The noble Viscount, Lord Brookeborough, made a very telling point on that. The noble Lord, Lord Kirkwood—I keep calling him my noble friend; we have debated too often over the years—spoke about the impact of vulnerability because of destitution. We should recognise that people may be perfectly fit and able-bodied and have all their mental capacity but if they are broke and have no money then they are potentially vulnerable or in vulnerable circumstances.
The formulation is powerful and succinct and we support it. I hope the Minister will find some way of incorporating it into the Bill—even if not in the precise wording, although it seems excellent to me—so that we can support it.
Baroness Buscombe
I thank all noble Lords who have taken part in this extremely helpful debate. A number of issues have been raised about the scope of the term “vulnerability”. This is incredibly helpful to us and to our overall approach to the Bill. The noble Lord, Lord Stevenson, made reference to his hope that the report of our debate in Hansard will be seen and our words read by those who are charged with taking forward the delivery of this body. I assure the noble Lord that, thus far, everyone I have spoken to who is involved in this world, in the three current bodies, is very aware of our debates and I trust that they will be taking on board what is said.
Amendment 11, tabled by the noble Baronesses, Lady Finlay, Lady Coussins and Lady Hollins, and the noble Lord, Lord McKenzie, would add an element to the body’s strategic function, so it could include issues of access to financial services for vulnerable people in the national strategy. I hope that noble Lords will forgive me for being a bit repetitive, following my noble friend’s remarks in previous debates, but it is important to have this on the record. As I mentioned in Committee, the Government take the issue of financial exclusion very seriously. As my noble friend Lord Young mentioned earlier, the Government are grateful for the important work of the Financial Exclusion Select Committee in highlighting this important issue and will aim to publish their response to the committee’s wide-reaching report ahead of Third Reading.
The Government’s response will address all the committee’s recommendations and bring forward new proposals on how to better co-ordinate across government, regulators and the wider sector to tackle the significant issue of financial exclusion. I see that my honourable friend from another place, Guy Opperman, the Minister for Financial Inclusion at the Department for Work and Pensions, is here. We have been working extremely closely on this Bill and on developing our response to the report.
My noble friend Lord Young earlier highlighted the difference between financial inclusion and capability and the Government’s intention that this body will be designed to build financial capability among the public. The Government have therefore deliberately omitted from the Bill references to financial inclusion and individuals’ access to financial services. An appropriate supply to people of useful and affordable financial services and products is very important, and the Government therefore work closely with the industry regulator, the Financial Conduct Authority, to ensure that appropriate action is taken when the market fails to supply services and products. The amendment would greatly expand the body’s statutory remit and we fear it is likely to create confusion over the roles of Her Majesty’s Treasury and the Financial Conduct Authority, both of which have the relevant responsibilities and powers to influence the supply of financial services products.
Baroness Finlay of Llandaff
I am most grateful to the Minister, particularly for those final phrases in her speech, and to all noble Lords who have spoken and contributed to an extremely rich debate. It has become evident that this is not just about vulnerable people, but about everybody who can find themselves in a vulnerable circumstance. There should be no stigmatisation of any sort; this could happen to anybody.
The Bill seems to be a good one, aiming to look after the whole population. Of course, it needs to look after people in bad times as well as good. That is the purpose of the amendment: to have better public outcomes, not just when capability can be increased, but when it cannot be, with services then adapting to meet the needs of the people they are there for. That is what a community is all about.
We can go away and look at the wording again, to think about whether it can go somewhere else or be adjusted slightly in the Bill, then come back at Third Reading.
Lord McKenzie of Luton
I just want to press the point made by the noble Baroness about Third Reading. If we could come back to it at Third Reading, that would be good.
Baroness Finlay of Llandaff
Through being able to come back at Third Reading, we have the assurance that we can tailor the Bill to try to get it absolutely right and to meet all the needs that have been outlined during this rich debate. Because of that, I beg leave to withdraw the amendment.
Lord McKenzie of Luton
“( ) the awareness of scams and frauds relating to financial products,”
Lord McKenzie of Luton
My Lords, the amendment revisits the now familiar theme of creating awareness of scams and fraud relating to financial products as part of the strategic function of the single financial guidance body.
Unfortunately, financial scams are many and varied. We have already heard about that matter, so I will be brief. People who perpetrate such scams are inventive and merciless. According to the Economic Crime Directorate of the City of London Police, financial crime has cost the UK a staggering £50 billion-plus. Techniques encompass scams such as phishing, bogus investment opportunities—particularly for pensioners—intercepting home deposits, freebie scams, fake websites and many more. They can devastate people’s lives, and, as we have heard, destroy a person’s retirement.
Given the so-called pensions freedom, people around the age of 55 are being bombarded with investment opportunities. Citizens Advice calculates that nearly 11 million consumers have received calls about their provision since 2015. The FCA Financial Lives Survey 2017, already referred to by some, gives a fascinating insight into behaviours and the potential harm associated with some of them: 5.3 million UK adults have given a debit or credit card to someone else to use, shared account PIN numbers with another person or provided current account details by email or over the phone following an unsolicited approach; 23% of all UK adults have received unsolicited calls which could potentially be a scam; 8% of them received one or more requests to access a pension scheme before the age of 55 or the chance to unlock a pension early; and 6% were offered a chance to make a high-return investment or buy shares in a company. The survey shows that a smaller proportion of people responded to such offers, but we should be mindful that a small percentage of a big number means many individuals affected.
Citizens Advice report that last year, it helped consumers with a scam or fraud every 17 minutes, with pension scams moving up the table. It recites that pension scams are most frequently initiated by unsolicited telephone calls. The detriment is not only to individuals but to the level of trust that exists in the wider pension scheme. The Government have previously pointed out that the SFGB would have the power, as currently proposed, to focus on awareness of scams and fraud under its money guidance function and the financial capability element of the strategic function. However, we would urge the Government to be more specific. We know from our earlier debate that the SFGB will not be operational for a while. Perhaps the Minister can say what is proposed for and will happen in the interim.
We have heard that the Government have committed to ban cold calling over a wide scope of pension issues, but have been reluctant, notwithstanding the earlier vote, to clarify the legislative programme. In the meantime, the scams and fraud will go on. What is to be done? I beg to move.
Baroness Buscombe
My Lords, I thank the noble Lord, Lord McKenzie, for tabling the amendment. I think we can all agree that raising people’s awareness of fraud and scams relating to financial products is an important matter, and one where the single financial body can, and should, play a role.
All the existing services—the Money Advice Service, the Pensions Advisory Service and Pension Wise—provide information and guidance about fraud and scams and take their role in that seriously. The Pensions Advisory Service—TPAS—has several regularly updated webpages dedicated to pension scams awareness. These provide clear and simple messages warning people to be vigilant and include more detailed information and guidance on, for example, how to spot a scam, how to protect your pension from scams and what to do if you think you have been, or are being, scammed. In addition, TPAS supports a dedicated “identifying a pension scam” tool on its website. It also suggests that people check with it first before proceeding, including by telephone.
Lord McKenzie of Luton
My Lords, I am grateful for the very full explanation that the Minister has given to the point that I raised. It is a very serious issue that is accelerating in its importance. Notwithstanding the work that is going on and is planned, which I acknowledge, I think that the matter is of such significance that it should be specifically mentioned in the Bill. It may seem a little churlish, but I would like to test the opinion of the House.
Misuse of Drugs Act 1971 (Amendment) (No. 2) Order 2017
(6 years, 6 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Williams of Trafford
That the draft Order laid before the House on 17 July be approved.
The Minister of State, Home Office (Baroness Williams of Trafford) (Con)
My Lords, I thank the Advisory Council on the Misuse of Drugs for its advice, which has formed the basis for the order.
The order relates to methiopropamine, commonly known as MPA. The effect of the order is to permanently control MPA as a class B drug under Part 2 of Schedule 2 to the 1971 Act. This will make it an offence to possess, produce, import, export, supply or offer to supply this drug without a Home Office licence.
MPA is a stimulant psychoactive substance similar in structure to methamphetamine. It has similar effects to other stimulants such as MDMA, amphetamine and cocaine. These effects include stimulation, alertness and an increase of energy and focus. Side-effects reported include abnormally fast heart rates, anxiety, panic attacks, perspiration, headaches, nausea, difficulty breathing, vomiting, difficulty urinating and sexual dysfunction.
The National Programme of Substance Abuse Deaths reported 46 cases where MPA was found in post-mortem toxicology between 2012 and April 2017. In 33 of these, MPA was implicated in the cause of death. In November 2015, the ACMD recommended that MPA be subject to a temporary class drug order. This followed reports that MPA had emerged as a replacement drug for the methylphenidate-based compounds which were subjected to a temporary class drug order at the time. The increasing number in use and the number of associated deaths and harms, together with the potential intravenous use, led to urgent advice from the ACMD to control MPA by way of a temporary class drug order.
In September 2016 the desired effect of the temporary class drug order appeared to have been successful, as the prevalence and problematic use had declined. However, the ACMD recommended that MPA be subject to another temporary class drug order to allow sufficient time to gather further evidence to recommend full control under the Misuse of Drugs Act 1971.
On 16 June this year, the ACMD reported that MPA is a drug which is being, or is likely to be, misused and that misuse is having, or is capable of having, harmful effects. As such, the ACMD recommended that MPA be permanently controlled under the Misuse of Drugs Act 1971 as a class B drug. The ACMD also found no evidence that MPA has any recognised medicinal use beyond potential research.
This order, if approved, will provide enforcement agencies the requisite powers to restrict the supply and use of MPA in this country. It will also provide a clear message to the public that the Government consider these substances to be a danger to society. We expect that the permanent control of MPA will continue to offer the notable impact it has provided following its temporary control under a TCDO. It is for these reasons that my honourable friend the Minister for Crime, Safeguarding and Vulnerability accepted the ACMD’s advice that MPA should be subject to the order.
It is intended to make two further related statutory instruments to come into force at the same time as the order, to add these substances to the appropriate schedule to the Misuse of Drugs Regulations 2001 and to the Misuse of Drugs (Designation) Order 2001. I commend the order to the Committee.
Baroness Meacher (CB)
My Lords, I apologise to the Minister—I had not anticipated this debate starting quite so early. I well understand the need to control the supply of methiopropamine, or MPA, and I applaud the Government for seeking the professional opinion of the Advisory Committee on the Misuse of Drugs and for following its recommendations. As we know, Governments have not always consulted the ACMD, nor have they always followed its recommendations, so that is to be commended. It is unfortunate that the ACMD and the Government have decided that the most appropriate instrument for the control of this drug is the outdated Misuse of Drugs Act 1971, rather than the Psychoactive Substances Act. The main consequence of this decision is that the users of MPA will be subject to a criminal record and criminal penalty if found in possession of this drug. Users are likely to be people with severe health problems and in need of help and support.
The Minister will be aware that I and about 100 other MPs and Peers who are members of the APPG for Drug Policy Reform would be grateful for an indication from her, if at all possible, of when the Government will invite the ACMD or another independent body to review the operation of the 1971 Act and, indeed, the Psychoactive Substances Act 2016 and analyse the consequences of these Acts on: the level of addiction to the many banned substances; the substitution of new and perhaps even more dangerous substances for a banned substance immediately following a ban; and the level of use of alcohol and tobacco in response to the bans on these alternative drugs. I would be grateful if the Minister could inform the House whether the Government have any plans to evaluate the efficacy of the 1971 and 2016 drugs laws, particularly in the light of the UN Office on Drugs and Crime proposition at the UNGASS in 2016 that evidence-based public health policies are here to stay.
Does the Minister agree that neither of our drugs laws—neither the 1971 Act nor the 2016 Act—were in any way based on evidence that those legislative propositions would actually achieve the objectives that any Government want? For example, we know that the experience in Ireland of an almost identical law to our Psychoactive Substances Act 2016 was an increase in psychoactive substance misuse and drug deaths—anything but the result that the Government would hope, and that we would all hope, would be achieved by a new drugs law.
The Government refer to monitoring the control measures through the regulatory framework at paragraph 12.1 of the Explanatory Memorandum. I would be grateful if the Minister would indicate whether any analysis of the impact of the ban on this drug, and of the bans on other drugs, will be undertaken. I look forward to the Minister’s comments.
Lord Patten (Con)
In strongly supporting this statutory instrument I have three points. First, the Government have acted with commendable speed to implement the recommendations on MPA given by the advisory committee about four months ago, as the Minister said. However, I seek confirmation that they will always be as swift as possible in the implementation of such future recommendations of these experts. That is provided, of course, that they agree with them—the noble Baroness, Lady Meacher, has pointed out that from time to time they have not necessarily agreed with the experts in their recommendations.
I like, respect and need the views of experts, particularly those of my doctor and my dentist. I value expert advice all the way down the line, but in the end, even they may not always be right, whatever “right” turns out to be. In the end, yet again, Ministers have to decide. It is sometimes difficult for Ministers to turn down expert recommendations, but they have to make their decisions not as experts but in the public interest as members of the Government. I support them also in making those difficult decisions.
Secondly, we have many other experts around to help us, such as those in the World Health Organization’s Expert Committee on Drug Dependence. That committee gave its views on this very matter last November. It advised, just like the advisory committee, that there is no known medical, research or therapeutic use for MPA; it is just used to abuse and there is no get-out in saying that it can be medically helpful in any way. It has all the side-effects that the Minister pointed out, as well as one that I think she missed—talkativeness, something that some would claim sometimes affects Members at both ends of the Palace of Westminster. I would not suggest, of course, that this is due to substance abuse; it is just due to genetic problems or lack of self-control.
Of course, the World Health Organization has its own problem with experts. Having given expert and excellent advice on this issue, its experts then concluded that the elected dictator President Mugabe should be hallowed for a while as its goodwill ambassador, rapidly backtracking when it spotted that on that occasion they had made a major mistake.
Thirdly, the noble Baroness, Lady Meacher, who knows much more about this stuff than I ever will, pointed out that you sometimes get substitution. I worry that there are harder substitutes coming in, particularly the ever-stronger strains of cannabis such as Nova OG, produced by cultivation companies in the United States, and described by one marketing organisation in the United States—hard to resist—as,
“extremely potent, top-shelf, designer bud”.
“Queue up and have this” if you cannot get the other stuff that we are trying to make impossible to get. I apologise, because I am a latecomer to this subject and to this debate, that I did not give the Minister earlier notice, but will she be ready and prepared to ask for the advice of the advisory committee on these much stronger strains of cannabis and to act just as quickly if it is thought to be a danger in the United Kingdom? Of course, a letter in the Library of the House would be a very adequate response to that point.
Lord Rosser (Lab)
Since I, too, was caught out by the earlier than anticipated start of this debate, I can thank the Minister for only that part of her explanation of the reasons for and purpose of the draft order that I actually heard. The purpose of the draft order, as has been said, is to make it an offence to possess, import, export, produce, supply or offer to supply the drug methiopropamine, or MPA, without a Home Office licence. MPA is a stimulant, psychoactive substance that has been subject to temporary control orders, the latest of which is about to expire—at the end of next month, if memory serves me right. There is evidence of MPA having adverse effects when taken, including abnormally fast heart rate, anxiety, nausea and breathing difficulties. I have to say that my list is more abbreviated than that given by the Minister when she introduced the order.
MPA has been associated with a number of deaths in the last five years and, as the Minister said, there were 46 cases where MPA was found in post-mortem toxicology, with MPA being implicated in the actual cause of death in 33 of those cases between 2012 and 2017.
MPA has not infrequently been marketed as a legal alternative to cocaine. In June of this year the Advisory Council on the Misuse of Drugs, the ACMD, indicated that MPA continued to be misused and, as a result, was having harmful effects that could constitute a social problem. The ACMD recommended that MPA should now be permanently controlled as a class B drug under the Misuse of Drugs Act 1971—which means, as I understand it, that among other things, including higher maximum sentences, possession of MPA also becomes an offence, which is not the case for substances controlled under the Psychoactive Substances Act 2016.
The ACMD also found that MPA had no recognised medicinal use, or industrial or commercial benefits other than potentially for research. I simply conclude by saying that we support the decision to accept the ACMD’s recommendation, and hence we support this order.
Lord Paddick (LD)
My Lords, my noble friend Lord Newby made the point last week, when the Leader of the House asked for this House to suspend its Standing Orders in order to consider this matter today, that this legislation has not been scrutinised by the Joint Committee on Statutory Instruments because of the Government’s failure to appoint their Commons members of that committee. This is clearly unacceptable and must be resolved as soon as possible.
In this particular case, the order is the result of a recommendation, as we have heard, by the Advisory Council on the Misuse of Drugs to permanently classify the drug MPA as a class B drug. I am therefore confident in supporting this order as the recommendations of the ACMD are evidence based.
However, the comments of the parliamentary Under-Secretary of State for the Home Office to the first Delegated Legislation Committee in the other place yesterday, which presumably were a repetition of what the Minister said this evening to the House—again, I apologise for being slightly caught out by the early start of this particular debate—draw questions around bigger issues about the Government’s approach to controlling drug misuse.
MPA is a synthetic drug designed to replicate the effects of cocaine or MDMA. MPA started off life as a legal replacement for these class A controlled drugs. Prior to the Psychoactive Substances Act and the temporary class drug order, MPA would have been legal to both supply and possess. As we have heard, the Psychoactive Substances Act permanently made manufacture and supply of the drug illegal, but not possession, while the TCDO and this measure make possession as well as manufacture and supply illegal. Whether it sends a message to users about how dangerous the drug is is questionable.
The development of synthetic alternatives to existing controlled drugs—and in this case I am thinking in particular of things such as spice, the synthetic alternative to cannabis—runs the risk of creating even more toxic, and far more dangerous, drugs than the drugs they are designed to replace. The risk of continuing with a prohibition-based strategy of controlling the misuse of drugs is likely to increase the number of drug-related deaths.
Can the Minister tell the House, or write to me subsequently to tell me, how many deaths have resulted from the misuse of cocaine and MDMA between 2012 and 2017, compared with the 46 cases where post-mortem toxicology showed traces of MPA, and the 33 cases where MPA was implicated in the actual cause of death, as a proportion of arrests for possession of each type of drug—which we can assume is a proxy for how much cocaine, MDMA and MPA is being used? Can the Minister also tell the House how many deaths have resulted from the misuse of cannabis between 2012 and 2017?
If MPA is as dangerous, or more dangerous, than cocaine or MDMA, the question must be: why is it being classified as a class B drug while the others are classified as class A drugs? If MPA is, as I suspect, more dangerous than cannabis, at least in terms of fatalities, why is it in the same class of drugs as cannabis? Assuming, as I do, that the ACMD has made the right evidence-based decision in terms of its recommendations as to which class MPA should be placed in, what does this say about the classification of cocaine, MDMA and cannabis?
The point I am trying to make is that the current classification of drugs under the Misuse of Drugs Act lacks credibility, certainly with users. No one I know who misuses drugs starts from a point of asking, “What class is it in?” when deciding which drug to take.
We should be taking a harm reduction-based approach to the misuse of drugs, which should be treated as a health issue and not a criminal justice issue. That having been said, just because the classification of drugs under the Misuse of Drugs Act lacks credibility and other drugs may be wrongly classified, this does not mean that this evidence-based recommendation from the ACMD is wrong. On that basis, we support the order.
Lord Lexden (Con)
The noble Lord, Lord Paddick, made reference to the unusual circumstances in which this order comes to the House this evening. It has not been scrutinised by the Joint Committee on Statutory Instruments because that committee has not been re-established because of the failure of the other place to provide its members to the committee. I was a member of the Joint Committee in the last Parliament, and I am looking forward to resuming work, I hope, at an early point in this Parliament.
The committee receives advice from a formidable array of legal experts. They invariably find points that need correction—sometimes smaller, sometimes larger. I have just one question for my noble friend. In the absence of the committee, is she satisfied that this order has been subjected to sufficiently rigorous scrutiny by legal experts?
Baroness Williams of Trafford
My Lords, I thank noble Lords for the contributions that they made to the debate, and the helpful points that have been raised. I trust that I made the case based on the available evidence and the advice provided by the ACMD that this order to permanently control MPA as a class B drug, under the Misuse of Drugs Act 1971, should be approved.
The noble Lord, Lord Paddick, rightly makes the point about the JCSI and the failure to appoint members to the committee. My noble friend the Lord Privy Seal apologised for that to this House this time last week. My noble friend Lord Lexden makes the same point and asks if we are satisfied that this order has been given the correct amount of scrutiny before it comes to your Lordships’ House. It has gone to the other place. It has come here on the advice of the ACMD and I am satisfied that, in getting full airing from both Houses, we have given it correct scrutiny. I appreciate that many noble Lords almost did not get here tonight because events moved a lot more quickly than we thought. The timescales for achieving the full control of MPA under the 1971 Act, before the expiry of the temporary class drug order, are very tight. Further delay in attending to JCSI clearance means that there is a significant risk that we would not be able to pass scrutiny and finish debate in time for the Privy Council to make the order at its meeting on 15 November. The noble Lord, Lord Newby, made the point that it is most important that this order is considered in good time. I must reiterate my noble friend the Lord Privy Seal’s apology on this, but I am satisfied that scrutiny is being fully applied to it, particularly as the noble Baroness, Lady Meacher, is in her place.
The noble Baroness, Lady Meacher, talked about the outcome of the ban and asked whether we have done any analysis of it. We have seen a significant fall in the use of new psychoactive substances among 16 to 59 year-olds in the past year, from 0.7% in the 2015-16 Crime Survey for England and Wales to 0.4% in 2016-17.
I was asked why this was being done under the Misuse of Drugs Act, not the Psychoactive Substances Act 2016. Given the reported risks and known harms that this substance has already posed to public health, the ACMD has advised that the MDA is the preferred option for control. Permanent control of MPA under the MDA—this is a real tongue-twister—utilises the stricter offences of production and distribution under any circumstances without a licence. Permanent control of MPA also makes the act of possession an offence under the MDA and increases the maximum penalties for the other offences. The stricter offences and penalties will prove a stronger deterrent to the supply and possession of these substances.
The noble Baroness also asked about plans for the Home Office to review the 1971 Act. We have no plans to do so, but Section 58 of the Psychoactive Substances Act commits the Secretary of State to review the operation of the Act, prepare a report of the review and lay a copy of it before Parliament 30 months after commencement of the Act. This review will therefore report its findings in 2019.
The noble Lord, Lord Paddick, asks why MPA is classed as class B when it is believed to be more dangerous than MDMA and cocaine, and he gave some compelling examples of synthetic versions of traditional drugs, if you can call them that. In the past year, cocaine was related to 371 deaths. That confirms its status as class A drug-appropriate. I will write to him on the other points he raised on the comparisons between the synthetic versions of some of the more traditional drugs and the number of deaths associated with them, particularly cannabis, because I know the noble Baroness, Lady Meacher, is listening with intent.
On that note, I hope I have answered most of the questions. If I have not addressed all of them, I will of course write. I think there was a question from my noble friend Lord Patten about advice from the advisory committee on stronger forms of cannabis. I will write to him on that.
Financial Guidance and Claims Bill [HL]
(6 years, 6 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord McKenzie of Luton
“( ) In seeking to improve the provision of financial education to children and young people, the single financial guidance body may advise the Secretary of State that—(a) Ofsted should take into account the financial education provided by schools when carrying out inspections; and(b) financial education should be added to the primary school education curriculum.”
Lord McKenzie of Luton (Lab)
My Lords, Amendment 13 takes us back to issues of education. The amendment focuses on the narrow aspects of our prior debate, namely a route to having financial education added to the primary school curriculum and having the Ofsted process take into account the extent to which financial education is provided in schools. These proposals were recommendations of the House of Lords Financial Exclusion Select Committee, as so much of our debate has been. Our debates both in the Select Committee and in Committee went wider than this, and the noble Viscount, Lord Brookeborough, in particular was a strong proponent of the benefit of financial education. Given the limited ability to make financial education effectively compulsory in all schools, the recommendation of the Select Committee was viewed as a practical way of effecting this so far as possible.
Noble Lords may recall that we had a positive response from the Minister, the noble Baroness, Lady Buscombe. We were told that we would get a reply to the recommendations in due course and that discussions had already taken place with the Minister for Pensions and Financial Inclusion about joint working with the Minister for Education to take forward the recommendations of the report and to dismiss concerns, particularly those about primary school education. As that was more than three months ago, perhaps the Minister can update us on progress. I beg to move.
Viscount Brookeborough (CB)
My Lords, as a member of that committee, I support this amendment. This is different from some of the other amendments that have come under Clause 2(7), because this is really already there as far as schools go, but it just falls short of doing what it should. For instance it talks about the “provision of financial education” and then says,
“working with others in the financial services”.
Your Lordships might sympathise with what Martin Lewis says:
“We do not ask GlaxoSmithKline to pay for chemistry. This is on the national curriculum. Why are we asking banks to pay for it?”.
Why are we asking financial institutions? I am perfectly happy that, as the Minister will say, “Yes, we do ask them and they do something”, but it is really small and does not begin to touch.
Here are just a few statistics to show why we are talking about education. I will not try to bore your Lordships with them all, but they put this into perspective: 40% of the working population have less than £100 in savings; one in six struggle to identify a single bank balance; around a third of the population, 17 million, cannot even manage a budget; and 26% of postgraduates —that is all—are confident in managing their money. The excellent FCA report which came out at the weekend also shows why it is important. I will come to education in schools in a minute, which is fairly horrifying, but the report says:
“Adults with postgraduate degrees are just as likely to feel uncertain about their abilities as those educated to GCSE level”.
So, with all due respect, there is simply nothing going on. Many do not understand the excessive interest rates on unauthorised overdrafts, for example, or revolving credit card balances and the interest rates that are put on those. They do not understand payday loans very much—although it is interesting to note, since we were ready to condemn them, that payday loans are actually cheaper than some of the other loans available, which is quite surprising. That is not because payday loans are cheap but because interest rates on credit cards and unauthorised overdrafts are not only ridiculous but incredibly unfair, as they do not even notify you. At least when you take out a payday loan, you know that you have borrowed £1,000. With most banks, you would not have a clue until you got the bill. So the question is not straightforward. These statistics are all true; they come from evidence that we took and the survey that I just mentioned, showing how very poor the understanding of basic financial matters is in this country. We are way behind others, including, I believe, China.
This whole problem ultimately causes so much unhappiness and stress and will mean a higher cost than otherwise to the welfare state, purely because of the number of people who could have managed but do not because no one told them how. It is all due to a single cause: the lack of financial education in schools. The Bill talks about,
“the provision of financial education to children and young people”.
Where are children and young people, and where are you going to educate them? Even I went to a school, and that is the only place where you have them all in one place. You do not honestly think that on a Saturday, instead of going to the cinema, they will go to a class on financial education. So there is only one place for it: the schoolroom. You have only to add “in school” to the wording and you almost have the amendment as it stands.
Financial education could be introduced into primary schools. However, although we are aware that there is some excellent work in primary schools—the Minister may come back and say, “There are good stories about primary schools because they teach people things”, and they do—in answer to question 179 in our evidence transcript, Adrian Lyons of Ofsted, who was incredibly useful and very nice about it, said of ex-primary schoolchildren,
“but then the children go to secondary school and hit a brick wall”.
That completely sums it up. What a condemnation that is from Ofsted itself.
What of the addition of financial education to the secondary school curriculum in 2014? The first point is that to most sane people a curriculum is what people have to learn. Believe it or not, though, there are actually two curriculums, one non-statutory and the other, the national one, statutory. You have got it in one: this is on the non-statutory curriculum, because it lies within the PSHE programme. It gets worse, as only 35% of state schools come under that so-called curriculum—all the free schools and academies are outside it. We need not say that financial education is being taught in schools as a curriculum subject; clearly it is not, as we would understand it, and it definitely does not go anywhere.
Financial education lies within PSHE subjects but they are not statutory. Guess what happens. Time devoted to PSHE has been reduced by 32% since 2011 because it is non-statutory and there is not enough time for it. Why? One reason for that was suggested by the PSHE representative, who said that schools,
“have so little time for it”,
characterising the situation as follows:
“We only have 20 minutes, and if we don’t do something on sexual exploitation or online safety we’re going to be in trouble over safeguarding”.
To all intents and purposes, that is the end of your secondary school financial education. Adrian Lyons said that Ofsted produces a state-of-the-nation education report. Our chairman, the noble Baroness, Lady Tyler, asked,
“how much was there on financial education in the last one?”.
Mr Lyons’s answer was:
“I do not know the answer to that, but I would be surprised if there was any, to be honest”.
I think we know that it was zero.
Here we have something that is all about life skills. After all, school, at the end of the day, is concerned with life skills. You are not going to survive on geography alone; you are not going to survive on physics or other things alone. We are talking about very basic financial management; we are not talking about pensions. We are saying: if you save one sweet every day until the end of the week, you will get five sweets; and if you want to borrow five sweets from me, you can pay me 10 next week. As a foundation, it is as simple as that, but the inspectorate does not even look at it. This amendment could change all that.
Of course, Ofsted says that you cannot judge something—I seem to think that this is how it puts it—without having exam marks, and there are no exam marks here. Ofsted is about marking schools. It is also about encouraging schools to do the right thing and to teach life skills, so why not initially find a way of saying, “Do you teach financial education? How much do you teach? Okay, we’ll give you 10 points for that”? At least that would be an incentive to do what they should.
When we talked about education in schools, every reason under the sun was given for why they would not or could not do it. We did not have the teachers in front of us. I am terribly sympathetic about teachers’ time, so I am not getting at them. There is no time. Teachers are not confident to teach this subject but, as I have said, we are talking about the basics. Any teacher on a salary is going to know something about saving or spending or not having enough money or whatever. I just do not believe that that is the reason.
The FCA book shows a really poor record on everything, yet schools are the only place where we have young people’s attention. What are we meant to be doing? If we say that schools should not be the place—we have already had several amendments turned down because they were too well defined or because they have added too many lines—where should it be? It is not going to be in church, so I suggest that it should be in schools and that we do something to make sure that it is done; otherwise, it will not be done. When we talk to people about where it might be done, why it is not done and the problems with that, it is somebody else’s problem. No doubt we will be told that it is the education board’s problem, or whatever there is. I am telling noble Lords that that is passing the buck. The sooner we get “schools” written in the Bill, the better.
Baroness Kramer (LD)
My Lords, I will add just a brief comment in this area, as the noble Viscount, Lord Brookeborough, has really made the case. A few years ago, when I was dealing much more with banking institutions, one of them very proudly showed me its pack for schools. All that I came away with was that its logo and colours were all over everything. Had this been presented to an adult, they would have regarded it as a sales pitch rather than an educational tool. That was rather worrying. We are moving into an era where there is huge disruption of all the traditional players. On a personal basis, many of the people making decisions to save or borrow will be looking at many of the new disrupters—the challengers, the peer-to-peers, the digital bodies and whatever else. If we are looking towards the handful of major high-street players to be the providers of financial education, particularly to the young, they will not be introducing that world, which they very much regard as threatening. Yet that is the world of the future that our youngsters will have to deal with. The Government have to be very cautious about how they use providers as a delivery instrument for this education.
Lord McKenzie of Luton
My Lords, I am grateful to the noble Viscount, Lord Brookeborough, for his contribution to this debate. It is a pity that there were not more people in the Chamber to hear the powerful case that he made.
Actually, I do not think that the Minister has responded yet—my apologies.
Baroness Altmann (Con)
My Lords, I echo the wise words of the noble Viscount. It is absolutely clear that the level of financial education across the country is woefully low, and that stems from the absence of any financial education at the schooling stage. When I was looking at introducing some pension issues into the national curriculum, the main message that I received as to why it could not happen was that teachers themselves did not know enough about those issues to be able to teach even primary or secondary schoolchildren.
There is clearly a role for the single financial guidance body, which is set up to provide information and education for the public, to devise modules that schools could use—but not only schools. I would hope that, given that most people in the workplace did not get financial education in school, such modules would also be useful within the workplace. This is a big gap in our education system. Education needs to provide our students and young people with the tools that they need to manage their lives. If they cannot manage their finances, they will often get into difficulties that they do not need to be in.
I certainly echo the sentiments of the amendment, which would require the single financial guidance body, as the obvious body to do this, to provide education materials that could be used within schools, but even importing that into the workplace alongside auto-enrolment, because all workers will automatically be put into pensions and need to have some understanding of how finance works in order to make the best of that. I support the sentiments expressed.
Lord Young of Cookham (Con)
My Lords, I was hoping for a moment that the noble Lord, Lord McKenzie, was going to wind up the debate and give some cogent reasons why his amendment should be resisted, but that falls to me.
Amendment 13, tabled by the noble Lord, Lord McKenzie, would alter the strategic function on matters relating to financial education. I am grateful to the noble Viscount, Lord Brookeborough, the noble Baroness, Lady Kramer, and my noble friend Lady Altmann for their contributions because, once again, we have highlighted the important issue of financial education, which has been one of the themes running through our debate today. We had a good debate on it in Committee, and there is no disagreement that financial education is extremely important at all stages of life.
In fact, a key role of the new body as a whole will be to improve people’s financial capability and help them to make better financial decisions. Clause 2(7) states:
“The strategic function is to support and co-ordinate the development of a national strategy to improve … the financial capability of members of public”.
Then there is the paragraph quoted by the noble Viscount, Lord Brookeborough:
“the provision of financial education to children and young people”.
The noble Viscount outlined areas where the public need to be better informed, and I agree with all that he said.
The financial education element of the strategic function is targeting a specific area of need, which is to ensure that children and young people are supported at an early age on how to manage their finances—for example, by learning the benefits of budgeting and saving. As I think I said in response to an earlier debate, the new body will have a co-ordinating role to match funders with providers of financial education projects and initiatives aimed at children—those could well be in schools—and will ensure that they are targeted where evidence has shown them to be more effective. This falls four-square within the wider strategic financial capability work of the body, and should form part of the national strategy that we expect the body to deliver.
As has been mentioned, the Money Advice Service has been undertaking that role, and it is one aspect that respondents to the government consultation overwhelmingly agreed is important for the new body to continue to work on, build on, and continue the initiatives already under way.
The amendment makes provision for the new body to advise the Secretary of State on the role of Ofsted and the primary school curriculum. As the noble Viscount, Lord Brookeborough, said, the Select Committee on Financial Exclusion made similar recommendations on the role of Ofsted and the primary school curriculum in its recent report. We will publish a direct response to the House of Lords ad hoc Select Committee report before Third Reading. The Department for Education, which has prime responsibility for this, will be a major contributor to that section of the response.
Again, as I said in Committee, the Government believe that the remit of the new body may cause confusion with regards to the school curriculum. Of course, it can work with schools to help children understand financial education and it can help fund lessons and explore further the barriers to school involvement. The Government are clear, however, that the school curriculum and monitoring of school performance are matters for the departments for education in England and in the devolved nations. Nevertheless, Clause 2(3) states:
“The single financial guidance body may do anything that is incidental or conducive to the exercise of its functions”.
It seems to me that there is nothing to stop the SFGB informally making suggestions to Ministers without the need for the amendment, as long as they relate to its functions. So I do not think that we need the amendment for there to be a dialogue between the SFGB and education providers. In practice, the body will be able to undertake activities to help schools provide financial education but we do not believe the amendment is an appropriate addition to the strategic function. For that reason, I urge the noble Lord to withdraw the amendment.
Viscount Brookeborough
May I intervene for one second? I thank the Minister for his response. At one stage he said: “Well, we might get help, and it might be in schools. Maybe the education board will look at this and maybe the guidance authority will include this and this”. The whole thing is so wishy-washy. There are so many let-out clauses, I am simply not sure that it will happen.
Lord Young of Cookham
That is a fair point, but I ask my noble friend to give the Government the benefit of the doubt until such time as we publish the response to the specific recommendations he has referred to. If he finds that the response is inadequate and does not meet his expectations, I am sure there will be further opportunities for him to raise it. The point has been well made during this debate that further progress should be made. There is an outstanding recommendation to which the Government are about to respond. I suggest that the amendment is withdrawn and the Government given an opportunity to put their case forward when they respond to the Select Committee.
Lord McKenzie of Luton
My Lords, I apologise for my earlier precipitate attendance at the Dispatch Box. For a while, I was transported back to earlier times.
It is clear that we are all in agreement on the need for financial education to tackle the challenges we face. The best way to do it; what the focus should be; how it is going to be funded—these are all issues which will lead to significant debate. It was good to hear the passion of the noble Viscount, Lord Brookeborough. We heard it in the Select Committee and it was the noble Viscount himself who brought particular focus on that in the report. I am looking forward to the Government’s response, and doubtless the noble Viscount is as well—presumably before Third Reading. Perhaps we should keep our powder dry until we see it.
I thank the noble Viscount, Lord Brookeborough, and the noble Baronesses, Lady Altmann and Lady Kramer, for their support. The noble Baroness, Lady Altmann, widened the focus. It is not just about youngsters in schools, which is where, as the noble Viscount said, we have them, but in the workplace and beyond. This is difficult and challenging but no less important. I look forward to the response to the Select Committee report in due course, but in the meantime I beg leave to withdraw the amendment.
“( ) As part of undertaking its strategic function to improve the financial capability of members of the public, the single financial guidance body must carry out research on a periodic basis, in collaboration with other bodies with an interest in debt issues, to determine—(a) the level of unmanageable debt across England, Wales, Scotland and Northern Ireland,(b) the causes of unmanageable debt, and(c) ways to prevent unmanageable debt.”
Lord Stevenson of Balmacara (Lab)
My Lords, I am afraid that I return to the most overworked clause in the Bill, namely Clause 2, subsection (3) of which states:
“The single financial guidance body may do anything that is incidental or conducive to the exercise of its functions”.
Do Ministers genuinely think that that single provision can deal with the breadth of expectation that will be placed on the body, particularly as regards research? It is true that there is a power there, provided that it is “incidental”, whatever that means,
“or conducive to the exercise of its functions”.
Presumably, that can be tested in court if there is any doubt about what it means.
However, let us assume that Clause 2(3) provides the foundation on which a research function will be carried out by this body. The question is then threefold. First, a lot of research is being done in this area, which is all to the good. It is being done by the FCA, which we have talked about a lot, but many others do research which could be brought into scope in this area. Are we confident that the research being done by the commercial sector, banks, the FCA and the SFGB, if it should be able to fund that and start doing it, will fit well within that arrangement? Can Ministers assure us that there will be no blockage if this arrangement is the only way that a body can take that research forward? That is my first general point: do we have competence in this regard and is the constitution sufficient to carry it?
My second and third questions are about scale. Secondly, the problem with this is that we have a lot of information which could perhaps be collated by the body and made available in digestible form. The information that we have been talking about in the FCA report would be slightly indigestible if it was not for the very excellent graphics and graphs it produced which allow us to get into it and make it easier to understand and absorb. However, if we think about the range of issues that could be brought to bear in relation to problem debt and financial capability, we are talking about a very significant volume of activity and work that has to be done.
We should add to that the fact that most of the research is, for good and persuasive reasons, snapshot research—the sort of research which looks at something happening at a particular moment in time. The report from the FCA spans two years but effectively one fiscal year has been chosen, out of which have come the figures. But to understand the causes of unmanageable debt and the way to prevent it we need longitudinal studies. Will the body we are discussing have the resources, the capacity and, most importantly, the constitution to undertake work on that scale? That is very different from being just an incidental part of the function: this is mainstream stuff. It will start now and run for 30 years across a life cycle—perhaps longer—to try to understand what causes unmanageable debt across huge populations, not just in samples. Without that information we will not get the detailed granularity we need to make sure that progress is being made in this area.
Thirdly, we are seeing this through the prism of financial capacity. That, of course, is inevitable given where we are starting from. However, as has been stated in many speeches today, and was certainly raised in Committee, the problem with finance is that it is the end product of a lot of other factors that are going on, all of which I argue also need to be researched. Again, I ask: does the wording,
“The single financial guidance body may do anything that is incidental or conducive to the exercise of its functions”,
really catch the need to look at health data, the Tesco card, the purchase of cigarettes or whatever we will use to build a picture of what is happening in relation to people’s consumption and their use of the funds they have to enable them to do what they want to do in terms of what the Data Protection Bill, which we are about to go on to, describes as human flourishing?
That term has been coined to try to think through the issues relating to individuals and humans in relation to the work of robots. As citizens we will often be unable to determine whether decisions have been reached by robotic means or by persons. Many people who have campaigned on that Bill argue that we have to remain focused on what will help humans to flourish, not just on how automated machines will work. I am sorry about the digression, but I will tackle that Bill next and it is in my mind as I speak.
The issue remains: do we have confidence that the wording will get us to the point where we can make sure that the body will be able to command both the legal personality to do what it is required and also the funding and resources to carry out a really good job of bringing together so much material, over such a large range of activities, to research what is happening in the debt space particularly? I beg to move.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Buscombe) (Con)
My Lords, I thank the noble Lord, Lord Stevenson, for moving Amendment 14—tabled by the noble Lord, Lord McKenzie, in Committee—and for this evening’s debate. The amendment relates to the new body’s strategic function to conduct research on the levels of unmanageable debts across England, Wales, Scotland and Northern Ireland, as well as the causes of unmanageable debt and ways to prevent it.
It is right that this House continues to take a great interest in understanding the causes of debt and how the Government can best help those who are struggling. I thank noble Lords again for their ongoing, important contributions on this matter since the introduction of the Bill and beyond. Problem debt, as the noble Lord has said, is such a serious issue, with wide-ranging consequences for those affected by it. The Bill is testament that the Government take the issue very seriously and recognise that there is more work to do to ensure that fewer households slip into problem debt. I understand the worthy aims behind this amendment: to highlight the importance of research on indebtedness and to ensure the new body gives it all the attention this important issue requires. The strategic function of the new single financial guidance body will play a fundamental role in this area. It will give the new body the responsibility to develop a national strategy to identify the most pressing issues and the most effective interventions in financial capability, personal debt management and financial education, working closely with others in the financial services industry, the devolved authorities and the public and voluntary sectors.
However, the Government’s assessment remains that to specifically reference one area of research over others in legislation is not needed. There are many topics that the new body will need to investigate and I have no doubt that it will conduct research on the very issue that the noble Lord suggests. Significant research is already being undertaken by the Money Advice Service, which is looking at the levels and causes of over-indebtedness across the UK. A great deal of the focus of MAS’s financial capability work, and the work that is envisaged for the new SFGB, will support the aim of preventing and reducing problem debt.
I refer, as I did in Committee, to my visit to MAS recently. I was tremendously impressed by the focus of those working there on research. They are trying to bottom out what it is and find out how we can tackle debt from an early age onwards and really make a difference—not just to be tactical about it, but to ask: what is it that leads to this really difficult issue of problem debt? A lot of this debt starts from an early age—as referred to in the previous debate—but it also has to do with people’s attitude to it and so on. Noble Lords should have every confidence that all these people will be very excited to take this work forward with the new body. However, specifying one issue of research in legislation—as we said earlier this evening, in terms of having lists for things—can always be problematic and could risk hindering the body’s ability to take a wide-ranging, strategic approach across the whole sector.
The legislation has specifically been drafted to enable the body to do anything that is conducive or incidental to the exercise of all its functions, and this includes conducting research. So, yes, in response to the noble Lord, Lord Stevenson, we are confident that doing research is a part of the incidental and conducive function, and I am very happy to give that assurance. This will ensure that the body is future-proof and able to have regard to any unforeseen, emerging issues—ones which we have not even begun to contemplate, I am sad to say, and which may confront us in years to come.
The whole purpose of this new body is to improve the financial capability of the public through its delivery and its strategic functions. To do this effectively, it will need to conduct wide-ranging research to fully understand the issues it is addressing, test what works best and learn new approaches. As I hope I have set out clearly today, the Government believe that the new body should have the ability to choose the specific topics it researches in relation to its function and that these should not be specified in legislation.
The noble Lord, Lord Stevenson, also asked whether the body will have the capacity to do this research on a large scale. Yes, it will have that capacity. I have talked to everybody working across the three existing bodies and they see this very much as a part of their role going forward. Therefore, I hope that, after considering these points, the noble Lord will withdraw his amendment.
Lord Stevenson of Balmacara
I thank the Minister for her ringing endorsement of the role of research in the work of the SFGB. I admire her confidence that it will be able to be done, and I am sure that it will be. We hope that it will be one of the things that will be read in Hansard and used as a way of building up the forward work programme. I am still slightly worried about the breadth of the research and the ability to carry it out on a very long timescale. Longitudinal studies take time and a lot of resources, and they have very few results for a long time, so a real engagement at that level will be required. However, given that that is where we are and it is what we are going to do, I beg leave to withdraw the amendment.
“Objectives and functions
(1) The objectives of the single financial guidance body are— (a) to improve the ability of members of the public to make informed financial decisions,(b) to support the provision of information, guidance and advice in areas where it is lacking,(c) to secure that information, guidance and advice are provided to members of the public in the clearest and most cost-effective way (including having regard to information provided by other organisations),(d) to ensure that information, guidance and advice are available to those most in need of them (and to allocate its resources accordingly), and(e) to work closely with the devolved authorities as regards the provision of information, guidance and advice to members of the public in Scotland, Wales and Northern Ireland.(2) The single financial guidance body must have regard to its objectives when it exercises its functions.(3) The single financial guidance body has the following functions—(a) the pensions guidance function;(b) the debt advice function;(c) the money guidance function;(d) the strategic function.(4) The pensions guidance function is to provide, to members of the public, free and impartial information and guidance on matters relating to occupational and personal pensions.(5) The debt advice function is to provide, to members of the public in England, free and impartial information and advice on debt.(6) The money guidance function is to provide, to members of the public, free and impartial information and guidance designed to enhance people’s understanding and knowledge of financial matters and their ability to manage their own financial affairs.(7) Where the single financial guidance body provides information, guidance or advice to a person in pursuance of one of the functions mentioned in subsection (3)(a) to (c), it must consider whether the person would benefit from receiving information, guidance or advice in pursuance of any other of those functions and the single financial guidance body must ensure that, where information, guidance or advice is provided on its behalf by an SFGB delivery partner, the SFGB delivery partner is under a duty to do the same.(8) The strategic function is to develop and co-ordinate a national strategy to improve—(a) the financial capability of members of the public,(b) the ability of members of the public to manage their debts, and(c) the provision of financial education.(9) In developing the national strategy, the single financial guidance body must work with others, such as those in the financial services industry, the devolved authorities and the public and voluntary sectors.(10) The single financial guidance body also has the function of providing advice and assistance to the Secretary of State on matters relating to the functions listed in subsection (3).(11) The single financial guidance body may do anything that is incidental or conducive to the exercise of its functions.(12) In this section “the devolved authorities” means—(a) the Scottish Ministers,(b) the Welsh Ministers, and(c) the Department for Communities in Northern Ireland.”
Lord Stevenson of Balmacara
It seems rather perverse, right at the very end, to talk about a clause that we have been debating for nearly a whole day and then to propose that it should be struck out and replaced with something else. Also, I wonder whether the clerks understand what we are trying to do here. We have already amended Clause 2 as it currently stands and they have not raised a single eyebrow. Actually, two eyebrows are being raised at the moment but they were not raised earlier when we seemed to stray into the territory of constitutional confusion, although I do not wish to raise that again today.
Let us be quite clear about this. The amendment was meant to be an attempt to aid wider public understanding of what the body is about. When we went through Committee, and certainly when we talked about some of the issues relating to the Bill in meetings, it was felt that we had the wording in the Bill as published before this stage—starting as it did with functions and moving on to objectives—the wrong way round. It was felt that there would be better clarity and a better understanding of what we were about if we could rejig it in a way that focused on the long-term vision of this body, how its constitution and powers supported that long-term vision, and what functions it needed to achieve that objective in the medium term. Amendment 21, in my name, is an attempt to do that. It borrows heavily on discussions with the Bill team, for which I am very grateful, and indeed some of the wording may be rather familiar to the team. It is not far from what appears in the Bill as currently printed, except that it is in a different order. I argue that the way it now reads—and I hope that there will be support for this around the Chamber—provides a much more logical approach to what we are going to do.
In a nutshell, the problem is that if you start with the functions of the body as it may be in the future, you tend to think of those in terms of where we are at the moment with the existing constituent bodies—the MAS, Pension Wise and TPAS. If you detach that from your initial thinking and think only about what will happen to the consumer and the journey the consumer takes in trying to get the information, advice or guidance that they seek, in the appropriate way, it clears up a lot of the confusion that we ran into and the terminological difficulties that we had. They were helpful in that they brought out the problems that we faced, but unhelpful in that they brought us back to confusion about what this body was about.
In Amendment 21, the objectives, coming before functions, are listed in proposed new subsection (1). In proposed new subsection (2) they are now objectives, whereas before they were functions, and then the functions follow. The related powers come after that. It has a clarity of overall shape that commends it, but I doubt that the wording is now sufficient to cope not only with where we might want to see changes coming forward but also in light of what has happened.
I have anticipated an amendment already in the Bill, as of this afternoon, by including within the phrasing of my current amendment the “free and impartial” amendment, which we have accepted. I took a bit of a chance on that but I am delighted that we have agreed that that should go forward, as it should do. There may be others that a little bit of time and work by parliamentary draftsmen could polish up by the time we get to Third Reading. I hope that, when the Minister responds, she might feel it worth taking away this amendment and bringing back something that would substitute for the existing Clause 2 in a way that fulfils some of the objectives that I have set out here today. I beg to move.
Baroness Buscombe
My Lords, I thank the noble Lord, Lord Stevenson, for this amendment to Clause 2. I also want to thank all noble Lords who have spoken today in connection with the functions and objectives of the single financial guidance body. We have had a wide-ranging debate, covering matters including financial inclusion, financial exclusion, financial education, scams and fraud, and unmanageable debt. We were also going to debate, and accept as important, the resourcing of front-line services.
I also thank the noble Lords, Lord Stevenson and Lord McKenzie, for the discussions that we have had outside the Chamber in relation to this clause and how it might be reframed. As noble Lords have rightly indicated, Clause 2 is the foundation that sets the whole tone and ethos for how the single financial guidance body will operate. It provides, as we have discussed today, the framework and lens through which the body will exercise its functions and make progress, working with others towards achieving its objectives.
I think that we are all agreed that establishing the single financial guidance body with a framework of broad core functions and objectives provides a sensible and pragmatic way forward. The amendment that the noble Lord, Lord Stevenson, has tabled does four key things. It restructures the subsections in Clause 2 to bring to the fore the body’s objectives. It places an obligation on the body to consider all a person’s information, financial guidance and debt advice needs, and whether they would benefit from receiving other services that the body provides. It seeks to clarify that the body will hold the pen and have some responsibility for ensuring that all parties involved in developing a national strategy make progress on taking it forward. It also seeks to extend the strategy’s financial education element beyond children and young people. I see the value in the intentions behind this amendment.
There is a certain merit in setting out up front what the objectives behind the activities of the body should be. I also see merit in making it more apparent that the single financial guidance body will take the lead in developing a national strategy to improve people’s financial capability and ability to manage debt. These changes could clarify, not only to the body but also to all those it will work closely with, that these are the Government’s and Parliament’s expectations.
I recall that the noble Lords, Lord Stevenson and Lord McKenzie, raised a similar point in Committee about ensuring that, if a member of the public comes to the new body seeking information, guidance or debt advice from two or more different functions of the body, they will be able to access those different functions if needed, as opposed to only one function. I think we all agree that this is important. While this was one of the Government’s stated aims for the single body, I still believe that it is already encapsulated in the Bill. However, I can see that it may be useful to strengthen that point and make it more obvious in the legislation.
We discussed earlier amendments tabled by the noble Lords, Lord McKenzie and Lord Stevenson, and the noble Baroness, Lady Kramer, on matters relating to financial education which seek to extend the element of the strategic function beyond the provision of financial education to children and young people. I do not think it is necessary for me to reiterate the points which I and my noble friend Lord Young made when discussing Amendments 9, 10 and 13, but I am supportive of much of the intent behind this amendment. I feel that we agree on the broad thrust of much of what it aims to achieve. On this basis, I trust, and very much hope, that the noble Lord, Lord Stevenson, will withdraw the amendment to provide some further time for us to consider and refine it before bringing it back at Third Reading.
Lord Stevenson of Balmacara
My Lords, how could one possibly resist that invitation? I accept it in every way possible. We were joking beforehand that we were so in debt to Ministers that at one point we would have to run round the table and embrace the noble Baroness to thank her for all that she has done on our behalf. I will hold back on that for now—we need to see what happens at Third Reading before we get to the kissing stage. But I thank the Minister very much for what she said. It was also wrong of me not to mention the additional important point about proposed new subsection (7) and I am glad that she was able to pick it up and talk about it. I am sure that we can work together on this. There is time to get it right before Third Reading. I beg leave to withdraw the amendment.