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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.