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Oral Answers to Questions
(6 years ago)
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Chris Green (Bolton West) (Con)
Stephen Kerr (Stirling) (Con)
The Secretary of State for Work and Pensions (Amber Rudd)
May I take this opportunity to thank my predecessor, my right hon. Friend the Member for Tatton (Ms McVey), for her great leadership of this Department and particularly for her work on the Disability Confident campaign, which she set up?
The number of workless households has decreased by 964,000 since 2010, and currently stands at 3 million; this is a decrease of 24%. As the Office for National Statistics reported last week, the employment rate now stands at a near record high of 75.5 %, with a record 23.93 million people in full-time employment. In fact, there are now more than 3.3 million more people in work than in 2010.
Chris Green
I thank my right hon. Friend for that reply and welcome her back to her place on the Front Bench. Worklessness can hold people back in so many ways. Does my right hon. Friend agree that having people in employment can broaden the horizons not just of the person in work, but of the whole household?
Amber Rudd
My hon. Friend is absolutely right. We know that children in workless families are disadvantaged in their development, as well as in their future prospects, which is why we will continue to develop policies that support and encourage employment, strengthening parents’ incentives to move into and progress in work.
Stephen Kerr
May I also express my appreciation to my right hon. Friend the Member for Tatton (Ms McVey) for her service and welcome the Secretary of State to her new position? I look forward to welcoming her to Stirling in due course.
Children in workless households are five times more likely to be in poverty than those in working households. Does the Secretary of State agree that work is always the best route out of poverty and that our reforms are beginning to transform lives for old and young?
Amber Rudd
I very much look forward to my visit to Stirling. My hon. Friend has made a good point; work is the pillar of a strong economy and a strong society. We believe that work should pay, but we need a welfare system that helps people into work and then supports them when they are in work. Universal credit will result in an extra 200,000 people moving into work and will enable people to work extra hours during the year, empowering a great working nation.
Emma Reynolds (Wolverhampton North East) (Lab)
I welcome the new Secretary of State to her position.
Regrettably, unemployment in Wolverhampton is going up and the numbers in my constituency remain stubbornly high. What are the Government’s policies and what are they going to do to bring down unemployment in areas such as mine?
Amber Rudd
The best way to bring down unemployment is to have a strong economy. The Government are focused on making sure that that is what we deliver, but I also hope that the roll-out of universal credit, with the benefit of work coaches, will help the hon. Lady’s constituents to find the work that they want to do.
Tim Farron (Westmorland and Lonsdale) (LD)
I welcome the Secretary of State to her position.
There are only 220 registered unemployed people in my constituency and nearly 2,200 children living below the poverty line, which tells us that poverty is far more complex in its causes than we sometimes think. Would the Secretary of State consider introducing mandatory poverty impact assessments for all Government policies, including those that have a specific impact on rural communities such as excessive transport and housing costs, as well as the likely impact of withdrawing the basic payment system for farmers?
Amber Rudd
The hon. Gentleman has raised quite a few points. Let me start by congratulating his constituency and celebrating the fact that there are only 220 people there without work. I hope that the roll-out of universal credit will help them to find the additional work that they seek. He has raised a number of issues about the cost of living in his constituency. If I may, I will come back to him on those matters.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
The Parliamentary Under-Secretary of State for Work and Pensions (Justin Tomlinson)
The Welfare Reform and Work Act 2016 froze the majority of working-age benefits for four tax years from 2016-17. Those provisions will lapse in 2020, and the pre-existing statutory arrangements will come back into force.
Mr Carmichael
According to the Resolution Foundation, the value of working-age benefits has fallen by 6.4% since 2014. What does the Minister think it tells us about the Government of which he is a part that the Chancellor’s priority in the Budget was to give a tax cut to higher rate taxpayers like him and me, rather than addressing that?
Justin Tomlinson
The reality is that the poorest fifth in society are £400 a year better off in real terms, and the richest fifth in society are £800 worse off.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
The report from the UN special rapporteur on poverty in the UK was scathing. Professor Alston referred to a
“punitive, mean-spirited, and often callous approach”
and the “misery” that it caused, in relation to the cuts and changes to the social security system, including universal credit and the freeze on benefits. Does the Minister agree with him that in the UK, poverty “is a political choice”?
Justin Tomlinson
We disagreed with the findings, but we did take the opportunity to share our record of delivering record employment, a simplified benefits system that helps some of the most vulnerable people in society and 1 million fewer people in absolute poverty, as well as our proactive work with stakeholders, which is delivering real life opportunities for all in society.
Chris Philp (Croydon South) (Con)
Sir Desmond Swayne (New Forest West) (Con)
The Secretary of State for Work and Pensions (Amber Rudd)
The regulations were laid before the House on 5 November, following consultation with the Social Security Advisory Committee. We are working with a wide range of stakeholders on processes to ensure that vulnerable claimants are moved smoothly on to universal credit.
Chris Philp
May I add my congratulations to the Secretary of State on her well deserved return to the Front Bench? Croydon South is one of the constituencies with the highest level of universal credit roll-out, at 43%, and in general it is helping people back into work. There are, however, some technical anomalies relating to the timing of the assessment period as people come off work and into benefits or where they receive two salary payments in the same assessment period. Will the Secretary of State look into that particular anomaly and, if appropriate, make some small technical adjustments?
Amber Rudd
I have a number of matters that I will be looking into, having taken on this important new role. My hon. Friend raises an important point. I would point out to him that universal credit is successfully a dynamic assessment, so if somebody is paid twice during one month, the benefit payments will reflect that and then be adjusted the following month, but I am quite prepared to look at any issues he wants to bring me.
Sir Desmond Swayne
I am very glad that my right hon. Friend is back. Another thing to look into is the case of Emily Lydon, reported in The Sunday Times, because it is vital that the roll-out of universal credit is both measured and continually improved.
Amber Rudd
I thank my right hon. Friend for his welcome. I share his view that it is vital that as universal credit is rolled out, we learn from any errors and adjust it, to ensure that it properly serves the people it is intended for. Of course I will look into that case—I saw the report—and, if appropriate, come back to him.
Frank Field (Birkenhead) (Ind)
I welcome the Secretary of State to her position. I will ask her an easy question. The Government will bring forward regulations on the migration of beneficiaries of the existing benefits to universal credit. Will she not bring forward the debate on those regulations until we have received the Select Committee report and the Social Security Advisory Committee has had another chance to look at the Government’s important amendments?
Amber Rudd
I am not sure that the right hon. Gentleman has properly badged that as an easy question. I will have to take a look at that and come back to him, I am afraid.
Emma Hardy (Kingston upon Hull West and Hessle) (Lab)
In Hull, we have the amazing Welfare Rights service, which gives free and impartial advice to the people of Hull, but one of its concerns at the moment is a decision to move all universal support to the citizens advice bureau, which will take funding away from fantastic services such as Welfare Rights. Will the Secretary of State meet me to discuss how giving the money to the CAB will have a negative unintended consequence on our wonderful Welfare Rights service in Hull?
Amber Rudd
I am very interested in responding to specific cases such as the one the hon. Lady raises. It is important that we provide the additional service. That is why we are working with Citizens Advice to provide a consistent service, but certainly she should come to the Department and meet either me or the Minister to discuss that.
Huw Merriman (Bexhill and Battle) (Con)
I welcome my right hon. Friend and neighbour back to the Front Bench, and I pay tribute to her predecessor, whom I enjoyed working for over many months. The Secretary of State will be well aware of Hastings Direct, a company that employs her constituents and mine. Will she pay credit to that company for holding a universal credit surgery with our jobcentre teams, which has helped people to find more access to benefits? One couple with a young child found that they were entitled to an extra £600 per month. Does that not show that universal credit works as a signpost, to help people into the benefits structure and increase their earnings?
Amber Rudd
I thank my hon. Friend and neighbour for raising the important work that Hastings Direct has done. It is a really good example of a public-private partnership making sure that the benefits of universal credit are set out for employers in an environment in which the employer and the employed can work closely together to get the best outcome.
Neil Gray (Airdrie and Shotts) (SNP)
I welcome the new Secretary of State to her place. Her predecessor suggested that a range of expert charities had welcomed the Chancellor’s intervention on universal credit, when in actual fact they wanted him to go further—much further. This new Secretary of State wields significant power, more than any of her five predecessors in the past three years, by virtue of the Prime Minister’s precarious position. Will she use that power to listen to those expert charities and halt universal credit until it is fixed?
Amber Rudd
I would not want to overstate what the hon. Gentleman calls my power, but I am certainly going to be listening very carefully. Part of the benefit of the universal credit roll-out will be making sure we get the expert guidance from the people who have been working in this field for many years, and we will certainly be doing that.
Margaret Greenwood (Wirral West) (Lab)
I welcome the Secretary of State on her return to the Government Front Bench.
The report of the UN special rapporteur on extreme poverty and human rights said, when asked about the problems that universal credit claimants are facing, that:
“Government ministers were…entirely dismissive”.
Thus far, the Government have been determined to press ahead with the next phase of the roll-out, despite clear warnings from over 80 organisations working with disabled people who will be affected that many people could fall out of the social security system altogether and be in risk of destitution. Will the new Secretary of State end the Government’s state of denial, scrap the managed migration regulations and stop the roll-out of universal credit?
Amber Rudd
I have seen the report by the rapporteur—I read it over the weekend—and I must say that I was disappointed, to say the least, by the extraordinary political nature of his language. We on the Conservative Benches will always engage with professionals, experts and non-governmental organisations—we are not so proud that we do not think we can learn as we try to adjust universal credit for the benefit of everybody—but that sort of language was wholly inappropriate and actually discredited a lot of what he was saying. We look forward to working with experts in the area to make sure that we get the right outcome for the people whom we want to look after.
John Howell (Henley) (Con)
The Parliamentary Under-Secretary of State for Work and Pensions (Justin Tomlinson)
This Government are committed to supporting care leavers. We have introduced a £1,000 bursary to those starting an apprenticeship, extended paid internship opportunities across Government, launched a care leaver covenant and are upskilling our Jobcentre Plus staff.
John Howell
What work is the Minister doing with Barnardo’s, and what impact is the See Potential programme having?
Justin Tomlinson
I would like to take this opportunity to pay tribute to my right hon. Friend the Member for Tatton (Ms McVey), who made it a personal priority of hers to introduce Barnardo’s not only to help train and improve the guidance for all of our frontline staff, but to offer a comprehensive work experience programme and opportunities for care leavers. This is a vital part of our See Potential work, as we unlock their undoubted potential.
Melanie Onn (Great Grimsby) (Lab)
What more can be done for constituents such as mine living in YMCA properties who are still going to college, yet cannot afford the bus fare or to feed themselves? That is exactly what has happened to a constituent of mine.
Justin Tomlinson
We are looking very carefully at all of the ways that we can make sure care leavers have the same opportunities that others take for granted. For example, through second chance learning, care leavers aged 18 to 22 are still able to access full benefits while having a second opportunity to learn. There is the £1,000 bursary for those who choose an apprenticeship, and the £2,000 bursary for those who choose higher education.
Layla Moran (Oxford West and Abingdon) (LD)
The Minister for Employment (Alok Sharma)
Under the universal credit business case, we expect universal credit to deliver an economic benefit of £8 billion a year in steady state, and result in 200,000 more people moving into work. We published a labour market evaluation strategy on 8 June, setting out how these impacts will be measured.
Layla Moran
I thank the Minister for his answer, but a recent Public Accounts Committee report on universal credit found that the Department, as it has in fact admitted, cannot empirically measure the number of people who are going back to work. I welcome the new Secretary of State to her place, but may I encourage her to read this report? How on earth, if the data are not reliable, can we meaningfully achieve any kind of target?
Alok Sharma
I encourage the hon. Lady to look at the document we have published about what we will be doing to measure this number. However, I also point her to the record levels of employment: the fact that there are more people in work in the economy right now than ever before, and that unemployment is at a 43-year record low. Jobs are being created and people are moving into work, and that is largely due to the welfare reforms that we have introduced.
Rachel Maclean (Redditch) (Con)
Will the Minister elaborate on how much better off families on universal credit are now as a result of measures introduced in the Budget?
Alok Sharma
My hon. Friend raises an important point. Earlier this year we introduced £1.5 billion of support, and in the Budget there was £4.5 billion of support. I say to Opposition Members that it is all very well calling for support, but they also have to vote for these measures, which they never actually do.
Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)
The Minister knows that there are huge problems with the roll-out of universal credit in terms of debt, hardship and rent arrears. The new Secretary of State, whom I congratulate on her new post, needs to take time to look at those problems and address the severe poverty that is being caused, not to dismiss the UN report. I urge her and all the Work and Pensions Ministers to halt the roll-out. It will hit my constituency at the end of this month, and frankly, people are deeply worried that we are going to see delays, debt and hardship at Christmas. I urge Ministers: halt this roll-out now.
Alok Sharma
I hope that the right hon. Lady would also recognise that there are 1 million fewer people living in absolute poverty now than in 2010, when she was in government. If she is concerned about her constituents, I would be happy to talk to her and her local jobcentre to provide them with the assurances that they need.
John Cryer (Leyton and Wanstead) (Lab)
The target is getting 200,000 extra people into work through universal credit. How many have been delivered so far?
Alok Sharma
Since the hon. Gentleman is keen to talk about the number of people in work, I point him to the universal credit claimant survey, which we published in June. It showed that under universal credit, employment levels almost double between the point of the claim and nine months into it.
Kevin Foster (Torbay) (Con)
The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)
The pensions dashboard is the great leap forward for the pensions industry, and the Government are 100% behind it. We have consulted the industry at length and will publish our feasibility study very shortly.
Kevin Foster
I thank the Minister for his answer. The pensions dashboard will be a welcome addition to the information available to Torbay residents about their retirement plans. What work will the Government do, though, to ensure that pension schemes relating to employers of all sizes are included?
Guy Opperman
In Torbay, 7,000 people now have the benefit of an auto-enrolled pension. We want to ensure that my hon. Friend’s constituents have online access to as much of their retirement savings in one place as is humanly possible through the pensions dashboard, and that is what we are going to do.
Alan Brown (Kilmarnock and Loudoun) (SNP)
Many of my constituents contacted me to express concern that the Government were going to scrap the pensions dashboard. I welcome the Minister’s 100% commitment, but can he tell us exactly when it is going to be delivered?
Guy Opperman
The hon. Gentleman will understand that a feasibility study and consultation are pending, but I will be happy to discuss the dashboard with him in more detail if he will bear with me. There is no question but that the thousands of people in his constituency who have had the benefit of auto-enrolment, and the many thousands of employers supporting those employees, will be benefiting from the process.
Mr Gary Streeter (South West Devon) (Con)
James Heappey (Wells) (Con)
The Minister for Disabled People, Health and Work (Sarah Newton)
In the Budget, my right hon. Friend the Chancellor announced a £1,000 a year increase in the work allowances under universal credit, which will provide a £630 boost to working disabled people and families on low incomes. That is in addition to the additional support for claimants in receipt of severe disability premium announced in June.
Mr Streeter
I thank my hon. Friend for her reply. Will she join me in welcoming the success of the Disability Confident programme, which many employers in both the private and public sectors are embracing with enthusiasm? Is it making a difference to the number of disabled people who are in employment?
Sarah Newton
I am delighted to echo my hon. Friend’s words. We are determined that every disabled person has the opportunity to fulfil their potential, and Disability Confident has helped many employers recruit and retain talented disabled people. The latest data indicates that there are now 3.9 million disabled people in work, which is an increase of 973,000 since 2013.
James Heappey
Somerset’s economy is characterised by tens of thousands of small businesses and start-ups. How many start-up loans have been granted to people with disabilities, and what steps is the Department taking to help to ensure that those with disabilities across the Wells constituency have the support that they need to start their own small business?
Sarah Newton
That is an excellent question. The new enterprise allowance supports people to set up a business, and a quarter of the 220,000 new entrepreneurs have a self-declared disability. The personal support package, the Work and Health programme and Access to Work all support self-employed disabled people. A record 33,860 people were supported through Access to Work this year, an increase of 13% on last year.
Dr Paul Williams (Stockton South) (Lab)
That may be so, but the charity Scope reports that the disability employment gap has remained stubbornly at 30% for about a decade. Will the Minister make a bold commitment to disabled people up and down the country and reinstate the previous target of halving the disability employment gap?
Sarah Newton
I hope that the hon. Gentleman will, like Scope, welcome data published last week by the Office for National Statistics showing that, for the first time since records were kept, there are more disabled people in work than out of work. We are utterly determined to close that unemployment gap to make sure that the whole nation draws on all the talents of disabled people.
Carol Monaghan (Glasgow North West) (SNP)
The Department for Work and Pensions was due to bring forward regulations to protect the severe disability premium. Can the Minister tell the House when we expect to see them published?
Sarah Newton
A very good question. The regulations will be published before Christmas, and I hope that everyone in the House will vote for them so that people on the severe disability premium will have that protected in universal credit.
Marsha De Cordova (Battersea) (Lab)
The DWP has repeatedly ignored evidence of the devastating impact of cuts to social security on disabled people. The UN report into extreme poverty found that
“compassion...has been replaced by a punitive, mean-spirited, and...callous approach”
to social security. The Government have a history of dismissing UN recommendations on disabled people, but the Department now has a chance to end that. Will the Minister finally listen and accept the conclusions of the most recent UN report?
Sarah Newton
We are putting in place record levels of funding to support people with disabilities. In every single year of this Government we increase our expenditure for people with disabilities. I published a very full response to the previous UN report, and I utterly repudiate the conclusion that this country does not support disabled people. I am determined to make sure that every disabled person in our country has the opportunity to fulfil their potential.
Marsha De Cordova
The UN report condemned the Government’s sanctions regime as “debilitating”, “draconian”, “harsh” and “arbitrary”, and urged the Government to conduct an independent review, yet Ministers recently admitted that they broke their promise and failed to carry out such a review. Has the Department learnt its lessons about creating a hostile environment, and will the Minister commit to carrying out an independent review of sanctions and conditionality on disabled people?
Sarah Newton
The benefit system is there to provide personalised and tailored support for its recipients. There were factual errors in the reporting by the UN rapporteur. For example, on mandatory reconsiderations, he absolutely denied the fact that decisions were overturned, yet 19% of mandatory reconsiderations found in favour of disabled people. We have undertaken a huge number of independent reviews of our benefit system and we do not hesitate in making improvements when they are identified.
Julie Elliott (Sunderland Central) (Lab)
The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)
Universal credit allows claimants to work and earn more, and the evidence is that people on universal credit are moving into work faster. We believe that everyone who can work should be given every support to get into work. That is what the job coaches are doing.
Julie Elliott
The Child Poverty Action Group found that almost half of those moving on to universal credit needed support, which is often not available, to set up their claim. If they miss their deadline, they receive no transitional protection and no back-dated credit, and they have to wait a further five weeks for payment. With the new Secretary of State leading the Department, is it not time for the Government to pause the roll-out of this benefit and look again at wiping out these very, very serious wrongs in the system?
Guy Opperman
If the individual claimant is vulnerable, there can be backdating, but for those who need extra support, there are advances of 100% from day one and also budgeting support. We are creating a brand new partnership with Citizens Advice to deliver a better universal support service.
Ms Karen Buck (Westminster North) (Lab)
New figures confirm that one in five jobs in London is now low-paid—below the London living wage. That is the highest proportion there has ever been, so working people are also in poverty and need the protection of universal credit, yet the qualifying period is casting many families into very severe hardship. What action will the Minister take to deal with that problem so that people can understand that work will pay, rather than casting them further into hardship?
Guy Opperman
The hon. Lady will be aware that the Government introduced the living wage, which is enhanced annually, and that we raised the tax threshold, which assisted individuals. She will also be aware that there is child support for education and that we are freezing fuel duty. All these cost-of-living measures have been of assistance to local people.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
The UN’s damaging report highlights Wales as having the worst poverty rate in the UK, but because social security powers are not devolved to Wales, the Welsh Government are scarcely able to replicate the Scottish Government’s excellent work in alleviating Westminster-driven poverty. Will the Minister commit to stopping the roll-out in Wales until the present problems are resolved and propose the devolution of universal credit powers to enable our country’s Government to reduce poverty and suffering?
Guy Opperman
My understanding is that 46 out of 59 offices in Wales have now rolled out the full UC service. The hon Lady will be aware that household incomes have never been higher and that 1 million fewer people are living in absolute poverty compared with in 2010, including 300,000 children.
Helen Hayes (Dulwich and West Norwood) (Lab)
Stuart C. McDonald (Cumbernauld, Kilsyth and Kirkintilloch East) (SNP)
The Parliamentary Under-Secretary of State for Work and Pensions (Justin Tomlinson)
We welcomed the recent report by the Social Security Advisory Committee and have accepted nearly all its recommendations. We are determined that all claimants are supported through this process, particularly the most vulnerable, and we will be working collaboratively with our stakeholders to ensure that those in need of additional support receive the assistance they require.
Helen Hayes
None of the changes to universal credit managed migration that were announced in the Budget will help people whose debilitating mental illness means that they are too anxious and unwell to open their post and are deeply fearful of any new assessment process. I welcome the new Secretary of State to her post, but what will she do to ensure that no one is left without income during the managed migration process, and will she commit to halt the roll-out until such a guarantee can be given?
Justin Tomlinson
I know that the new Secretary of State is very passionate about focusing on this particular area. There will be four to six months of comprehensive preparation for those looking to migrate. There will be personalised communication and information on the support available, and our highly trained and experienced staff will identify vulnerable claimants, such as those with mental health conditions, so that we can instead offer home visits or telephone calls, or even delay or stop the migration process if that is appropriate for the individual claimant.
Stuart C. McDonald
Does the Minister agree that the system of implicit consent is absolutely essential for claimants with high support needs under the legacy system, and that it must be rolled out and extended to universal credit urgently and before managed migration begins?
Justin Tomlinson
There is real merit in that point. From talking to stakeholders, particularly social housing companies and local authorities, I think that when we can find a way to connect up stakeholders, including the most vulnerable claimants in particular, it increases the chance of making the process as smooth as possible.
Mike Amesbury (Weaver Vale) (Lab)
I welcome the new Secretary of State to her post.
On 13 November, Mind wrote to me to outline its fears about how the approach of the then Secretary of State for Work and Pensions to the managed migration of universal credit created a real risk that many people with mental health problems could be left without an income altogether in the move to universal credit. Will the new Secretary of State take the opportunity to make a clear statement of independence from her predecessor, take note of the grave concerns of Mind, Macmillan and others, and withdraw these regulations immediately?
Justin Tomlinson
No, because these migrations will bring in very important additional supports, as each and every Member needs to bear in mind when the vote comes forward. We work closely with stakeholders, and I remind Opposition Members that under legacy benefits, more than 700,000 people, who include some of the most vulnerable claimants—the people who contact us as constituency MPs—are, on average, missing out on £285 a month because those legacy benefits are complex and not personalised. It is absolutely right that we do this, but in a controlled and sensible manner.
Diana Johnson (Kingston upon Hull North) (Lab)
The Parliamentary Under-Secretary of State for Work and Pensions (Justin Tomlinson)
Many claimants come on to universal credit with pre-existing rent arrears, but we have introduced new measures to make additional payments of two weeks’ housing benefit to support claimants as they transition to universal credit, and to extend trusted partner status to social landlords to further support our claimants.
Diana Johnson
Universal credit rolls out in Hull just before Christmas, and the council is already preparing for expected increases in rent arrears. I am sure that the Minister will have watched Sean McAllister’s film “A Northern Soul” on BBC 2 last night. It featured Steve Arnott, a low-paid worker, and his work on the Beats Bus inspiring children on the council estates of Hull. The film showed in-work poverty, food poverty and child poverty. Can the Minister guarantee that the families in that film and in Hull will be better off when universal credit is introduced in December?
Justin Tomlinson
The key to universal credit is that, for the first time, a claimant will get personalised, tailored support that can help them navigate all the forms of support available. Under legacy benefits, more than 700,000 people, among whom are some of the most vulnerable people, miss out on an average of £285 a month. Those on universal credit will typically spend 50% longer looking for work. This is key to unlocking the potential of all claimants to improve their life chances.
Alison Thewliss (Glasgow Central) (SNP)
Thenue housing association in my constituency tells me that errors in universal credit, such as the system retaining the wrong landlord details despite the claimant having asked for that to be corrected, have meant that some tenants have ended up two months in arrears through no fault of their own. What will the Minister do to fix the system before people end up in debt as a result?
Justin Tomlinson
I am very sorry to hear of that. If there are specific cases, please do not hesitate to highlight them. Through the roll-out of the landlord portal, which has been warmly welcomed by social housing companies and local authorities, there is an opportunity for claimants and housing bodies to work together to manage this migration process smoothly.
Stephen Timms (East Ham) (Lab)
The Minister knows that the five-week delay under universal credit forces people into debt right at the start of their claim, which too often leads to rent arrears and other hardships. I welcome the new Secretary of State to her post. Will the Minister encourage her to take a fresh look at this indefensible five-week delay in particular?
Justin Tomlinson
As we have pointed out, those transitioning from legacy benefits will get the additional two weeks of housing benefit and, with the new measures announced, two weeks of either their employment and support allowance, their jobseeker’s allowance or their income support, as well as access to advance payments from day one. The key thing is that this system mirrors the world of work. For the vast majority of people, their aim is to get into work, and in work they would expect to be paid in arrears. They would have to deal with that at the same time as going back into work, whereas now the personalised work coach can provide support by giving them access to advance benefits and pointing them to the support offered by Citizens Advice and our wider universal credit support network. It is about providing that support as people prepare themselves for the world of work.
Toby Perkins (Chesterfield) (Lab)
The Minister for Disabled People, Health and Work (Sarah Newton)
In the first six months of 2018, 71% of PIP decisions and 51% of UC decisions heard and decided at appeal were revised. For context, of the 3.5 million PIP decisions made to date, 9% of all decisions have been appealed and 4% have been successfully appealed. We remain utterly committed to ensuring that we get decisions right first time and reduce the number of appeals.
Toby Perkins
The Minister may be committed to reducing the number of appeals, but the statistics she has just revealed show how awfully the system is working for many of the most vulnerable in our society. As she says, 71% of appeals are successful. That is putting a huge financial strain on the system but, more importantly, some of the most vulnerable are going through incredibly stressful processes. Will the new Secretary of State work with the Minister to improve the system so that the people who come into our surgeries every single week and tell us how awful the system is can stop going through the process as they are currently having to?
Sarah Newton
I am sure that I will have the support of the Secretary of State in continuing our comprehensive plan for improving PIP. However, I hope that the hon. Gentleman will welcome the fact that, according to the most recent data from the Ministry of Justice, there has been a 15% decline in the number of appeals, and the customer satisfaction rating for PIP has risen from 76% to 87%. I have always said that one person’s poor experience is one too many, but we will continue to do everything that we can to get it right first time.
Vicky Ford (Chelmsford) (Con)
If 9% of PIP decisions are being appealed against, does that mean that more than nine out of 10 people do not appeal against theirs because they do not wish to challenge them? Will the introduction of video recording improve that rate so that there is even more confidence that the decisions are right?
Sarah Newton
My hon. Friend makes a very good point. As I have said, the customer satisfaction ratings are high, and the assessments themselves consistently meet our quality target, which is over 90%. I am pleased to say, however, that our plans for the video recording of the assessments are going very well, and the live testing trial will start later this month.
Henry Smith (Crawley) (Con)
The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)
Nearly 10 million people are enrolled in a workplace pension thanks to the success of automatic enrolment. In the Crawley constituency, approximately 48,000 eligible jobholders have been automatically enrolled, and thanks are due to the 1,600 employers who have fulfilled their duties locally.
Henry Smith
Will my hon. Friend join me in paying tribute to Crawley-headquartered B&CE and its People’s Pension for playing such an important role in that roll-out of pensions?
Guy Opperman
It was a delight to visit The People’s Pension with my hon. Friend, to see the hundreds of local staff who are doing such a fantastic job and the work that the company is doing as a great local employer, to receive a Crawley Town football shirt—I must confess that I have not yet worn it—and to support a great local business.
Jack Dromey (Birmingham, Erdington) (Lab)
Auto-enrolment was a landmark achievement, a creation of the last Labour Government. I welcome the progress that has been made, but does the Minister agree that the threshold is too high—37% of female workers, 33% of workers with a disability, and 28% of black, Asian and ethnic-minority workers do not enjoy auto-enrolment—and that it cannot be right for workers under the age of 22 to be excluded?
Guy Opperman
I think that the hon. Gentleman will accept that while auto-enrolment has been a cross-party success story, it was this Government who actually introduced it. The issue that he raises was comprehensively addressed by the 2017 auto-enrolment review, which was conducted by three independent support organisations, and the key points that he raises are being addressed in the current AE review.
Victoria Prentis (Banbury) (Con)
The Minister for Employment (Alok Sharma)
In the Budget, the Chancellor announced a £1,000-a-year increase in work allowances from April next year. It will provide an annual boost of £630 for about 2.4 million working families across the country.
Victoria Prentis
Does my hon. Friend welcome those announcements in the Budget? Does he agree that not all Labour’s legacies were as effective as those mentioned in the previous question, and that a system which penalised hard-working people with marginal tax rates as high as 90% was not effective?
Alok Sharma
My hon. Friend is absolutely right. Under the legacy benefits system, some people faced punitive marginal tax rates. The fixed taper rate under universal credit ensures that work always pays, and that is why we are seeing more people getting into work.
Grahame Morris (Easington) (Lab)
Work does not always pay—that is the problem. A million more children whose parents are working are living in poverty, and a million and a half people are relying on food banks. Why do the Government not implement Labour’s plan for a £10 minimum wage and ensure that work truly does pay?
Alok Sharma
As I said, we introduced a £1,000 increase in work allowances in the Budget. The Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Hexham (Guy Opperman), talked about the living wage, which was introduced by this Government and has risen by 4.4% this year. At the end of the day, however, we also want to ensure that people are getting into work. If the hon. Gentleman is particularly focusing on children, he will know that children living in workless households are five times more likely to be living in poverty than those in households in which the adults work.
Sir Edward Leigh (Gainsborough) (Con)
Michael Tomlinson (Mid Dorset and North Poole) (Con)
The Minister for Disabled People, Health and Work (Sarah Newton)
Employment has increased by more than 3.3 million people since 2010 to a record high of 32.4 million. This is on average 1,000 more people in work every day under this Government. In the recent Budget, the Chancellor was able to confirm that our economy is growing strongly and that we will see increases in opportunities for people to be able to work.
Sir Edward Leigh
Surely it is not enough for us to stress the record number of new jobs created; we have to convince people that these are real jobs, with workers’ rights being protected, and above all we have to convince people that the pay of indigenous workers is not being undercut by mass immigration.
Sarah Newton
My hon. Friend is quite right to say that it is really important that we want to build on our strong record of protecting and enhancing employment rights. We are determined to grow full-time high-quality jobs, and that is just what we are doing. The latest labour market statistics show that the number of full-time jobs is up 82,000 on the quarter, up 416,000 on the year and up almost 2.7 million since 2010. That is a record high. The statistics also show that average earnings are rising in real terms.
Michael Tomlinson
Notwithstanding the previous question, this country remains the jobs factory of Europe, creating more jobs than almost 12 other nations combined. Will my hon. Friend update the House on the youth employment figures and tell us how they compare with those of our European allies and neighbours?
Sarah Newton
My hon. Friend makes an important point. This is the future of our country. I am proud to say that the overall level of youth unemployment in the UK has nearly halved since 2010. Our youth unemployment rate is lower than that of France, Spain and Italy. The UK youth unemployment rate is 5.8 percentage points below that of the euro area, and 3.9 percentage points below that of the EU28 average.
Paula Sherriff (Dewsbury) (Lab)
As the Minister knows, many of the jobs created since 2010 are low paid and insecure, and the number of people in in-work poverty has risen. Will she therefore tell us what assessment her Department has made of the increase in the use of loan sharks and other illegal money lenders?
Sarah Newton
I am afraid that the hon. Lady is just factually incorrect. The vast majority of jobs have been full-time, well-paid jobs. I have the honour of representing my home, the area where I grew up, and I can tell her that I have seen at first hand the growth of full-time well-paid jobs all around my constituency since 2010. That is what this Government are delivering all over the country.
Matt Western (Warwick and Leamington) (Lab)
We have seen an exponential increase in underemployment since 2010, through the growth of part-time jobs and zero-hours contracts. Does the Minister therefore agree that what we have actually seen is a jobs mirage rather than a jobs miracle?
Sarah Newton
I am afraid that the hon. Gentleman is just factually incorrect. We have seen the growth of many full-time jobs, and the number of zero-hours contracts is going down. Speaking as a woman who raised her family, I can tell him that part-time employment can be an extremely good option for many people in our labour market.
Theresa Villiers (Chipping Barnet) (Con)
The Minister for Employment (Alok Sharma)
I want to start by thanking my right hon. Friend for the engagement and support that she gives to her local jobcentre. As I have noted, we recently announced in the Budget a £1,000 increase in work allowances. We also have the single taper to ensure that claimants are better off working, and working more. Evidence also shows an increase in earnings for those in work and on universal credit by an average of £600 a year.
Theresa Villiers
Can the Minister confirm that claimants on universal credit are more likely to move into work and more likely to make progress towards longer hours in work under this system, compared with the old system that we inherited from Labour?
Alok Sharma
My right hon. Friend makes an important point. Under the legacy benefits system, around 1.4 million people spent almost a decade trapped on benefits instead of being helped into work, and much of that time was under the last Labour Government. Under universal credit, people get into work faster, they stay in work longer and, very importantly, they earn more.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
Alok Sharma
As we have pointed out, under universal credit people are able to get the one-to-one support with their work coach that was not possible under the legacy benefits system. Again, I reach out to the hon. Gentleman. If he has concerns in his own constituency, I am very happy to have a discussion with him and his local jobcentre, because we want to support absolutely every single person who is in the welfare system.
Richard Graham (Gloucester) (Con)
The welfare system undoubtedly encourages our constituents into work and rewards them in work, but the system does not always capture that because of the anomaly of the claimant count being used as a proxy for unemployment, whereas in fact many people who are on universal credit are working. What can the Minister do to try to improve the statistical way in which this is recorded?
Alok Sharma
My hon. Friend raises an important question. As he will know, we had a consultation on this particular point. We have published our findings, and I would be very happy to share those with him. Perhaps it would be appropriate for me to write to all colleagues setting out the changes that we are proposing.
Lucy Powell (Manchester Central) (Lab/Co-op)
Is it not obvious how few questions we have had from Conservative Members today on some of the biggest changes to welfare reform in a generation? I have raised with Ministers many times now the fact that those who are getting a change of circumstance as they move on to universal credit do not have the transitional protections at the moment. Ministers keep telling me that they do, but they do not. I have had universal credit in my constituency for a long time, and I could give them a catalogue of cases where people are worse off on universal credit as a result of this. With the new leadership at the Department, can the tin ear now be opened a little?
Alok Sharma
If the hon. Lady is keen on protecting people who move from legacy benefits on to universal credit under the managed migration process, I would invite her to vote for the regulations, with me and my colleagues, when they come through Parliament later this year.
Alison McGovern (Wirral South) (Lab)
The Parliamentary Under-Secretary of State for Work and Pensions (Justin Tomlinson)
Lone parents are the primary beneficiaries of the Government’s decision to increase the help provided for childcare from 70% to 85%, which will help us to enhance the record levels of lone parent employment in this country.
Alison McGovern
The whole House will be aware that lone parent employment increased radically under the last Labour Government, but unfortunately lone parents now face being worse off because of universal credit. So can the new Secretary of State and her ministerial team guarantee that as part of their review they will make sure that no lone parent family in this country is worse off because of universal credit?
Justin Tomlinson
The lone parent employment rate is now at 67.6%, which is a record high and something this Government are very proud of. We will continue to try to push to see that figure go up further. We have made announcements on increasing the national living wage, which has seen a real-terms increase of 8% over the past three years, and changes to the income tax threshold worth £1,200, while the national living wage in itself, for somebody working full-time, is worth £2,000. That is making sure that lone parents who are working are getting the support to have more money available at the end of every month.[Official Report, 28 November 2018, Vol. 650, c. 2MC.]
Liz McInnes (Heywood and Middleton) (Lab)
The Secretary of State for Work and Pensions (Amber Rudd)
Three days in, and I know that the Department for Work and Pensions is a force for good. It helps people in need, helps people into work and out of poverty, and gives support at the end of their lives. This is what we want for our families, our friends and our neighbours. This is the country we are; this is who we are. It is good that employment has risen to record levels of 75%, as stated just recently.
But I know that there are problems with universal credit, despite its good intentions. I have seen them for myself. I will be listening and learning from the expert groups in this area that do such good work. I know it can be better. I will make it my role to ensure that we deliver that through our discussions within the DWP and through discussions with the Treasury. We will have a fair, compassionate and efficient benefits system.
Liz McInnes
I thank the new Secretary of State for that response and add my congratulations to her on her return to the Front Bench. In her new role, will she, unlike her predecessor who was described by the UN rapporteur as
“almost entirely dismissive of criticisms of welfare changes and universal credit,”
take seriously his report on poverty in the UK and heed his calls for changes to the universal credit system?
Amber Rudd
The rapporteur does no credit to his report by making personal comments about the former Secretary of State in this Department, who did a fantastic job. Having said that, I have already acknowledged that we can make changes to the UC system: despite the tremendous good that it does, I know that there are problems with it and we will be focusing on fixing them.
Maggie Throup (Erewash) (Con)
The Minister for Disabled People, Health and Work (Sarah Newton)
I thank my hon. Friend for asking that really good question. People who qualify for PIP before retirement age are able then to carry on claiming PIP, so long as they are eligible, into retirement. That is in addition to pension or any other benefits to which they are eligible.
Margaret Greenwood (Wirral West) (Lab)
The UN special rapporteur on extreme poverty and human rights said in his report that the rising level of child poverty is not just a disgrace but is a
“social calamity and an economic disaster”,
and that Government policies are locking millions of children
“into a cycle of poverty from which most will have great difficulty escaping.”
According to Joseph Rowntree Foundation research published today, the current freeze on working-age benefits is the single biggest driver behind rising child poverty levels. Will the new Secretary of State end the benefits freeze and make tackling child poverty the priority it should be once again?
Amber Rudd
Of course, tackling all poverty is a priority for the Department for Work and Pensions, and we know that the best way out of poverty is to make sure people get into work. But more than that, we know that a strong economy will deliver the higher paid jobs, and that is what this Government are going to focus on, and we will listen and engage with non-governmental organisations and others to make sure we can deliver that.
Vicky Ford (Chelmsford) (Con)
The Parliamentary Under-Secretary of State for Work and Pensions (Justin Tomlinson)
My hon. Friend is being very active in this area, and it is a key priority for us that access to support is available from day one. We have 137 work coaches in prisons to help prepare for UC claims, and we now have three pilots—in Norwich, Wayland and Belmarsh prisons—to make sure we can test the difference that completing UC claims will make. This is a real priority.
Neil Gray (Airdrie and Shotts) (SNP)
We have always known that austerity is a political choice, but now, thanks to Philip Alston, we know that poverty is also this Government’s political choice as we consider his findings into areas like the near-£5 billion benefit freeze cut next year, the 1950s women who have been impoverished by pension changes, and targeting children with austerity via the two-child limit. What different choices can we expect from this new Secretary of State?
Amber Rudd
I have to say that I think the hon. Gentleman’s comments are outrageous. It is in no way our intention to do any of the things he set out in that way. The purpose of this Department—[Interruption.] It is what the hon. Gentleman said, and I think I have made my views on the UN rapporteur absolutely clear. The hon. Gentleman need only listen to what we are saying and actually look at the evidence—look at the evidence of people getting back into work, of people getting higher paid jobs. The political choice that we are making on the Government Benches is for a stronger economy to deliver the jobs that are wanted by his constituents and mine.
Jeremy Lefroy (Stafford) (Con)
May I welcome my right hon. Friend to her post and suggest she pays attention to what the right hon. Member for East Ham (Stephen Timms) said a bit earlier, because that is very important in terms of cash flow and the position facing people coming on to universal credit? The Under-Secretary of State for Work and Pensions, my hon. Friend the Member for North Swindon (Justin Tomlinson), made some welcome points in response to that question, but we need to build on that for the future and also build on the work my right hon. Friend’s predecessor did in this respect.
Amber Rudd
I thank my hon. Friend for his comments, and he is absolutely right: I am well aware of the need to ensure that people have access to those cash benefits as soon as possible. We have already made some adjustments to that, and I will do all I can to ensure that we do better.
Alex Cunningham (Stockton North) (Lab)
The Minister for Employment (Alok Sharma)
I am very happy to meet the hon. Gentleman and discuss that particular case.
Henry Smith (Crawley) (Con)
Amber Rudd
I congratulate my hon. Friend on his work with the jobcentre in Crawley to ensure that claimants get the best benefits. We have had some changes from the Budget, as he will be aware, and will bring forward more details of regulations to help to deliver those outcomes as soon as possible.
Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)
Amber Rudd
Yes, it is a very important point and one that we are well aware of. We cannot assume that everybody can, as the hon. Gentleman puts it, work a computer. We have made provision in the arrangements to ensure that people can have access and that job coaches can work with people remotely via telephone and also engage in their communities, perhaps in different places from the jobcentre. However, I will keep a careful eye on this issue to ensure that we are delivering a truly comprehensive service, so that everybody, whether they can work a computer or not, can access it.
Ms Esther McVey (Tatton) (Con)
May I warmly welcome my right hon. Friend to her position and wish her every success? She will know that youth unemployment has fallen by half since 2010, so does she agree that ours is the party of opportunity and the party for young people?
Amber Rudd
Let me take the opportunity again to thank my right hon. Friend for the extraordinary work that she did in this Department, particularly on the Disability Confident campaign, but also on encouraging women into work. She is a particular champion of women and social mobility, so yes, I agree with her: it is this party that is the party of opportunity.
Dr Paul Williams (Stockton South) (Lab)
Alok Sharma
If the hon. Gentleman has a particular case to raise, I am happy to discuss it, but I should say that I and my colleagues go up and down the country to jobcentres, and I am afraid that the characterisation that he described is not the one we find. We find work coaches who are really enthusiastic about delivering universal credit and supporting people on a one-to-one basis. When it comes to payments, 80% of people get their full payment on time for the first assessment period and 90% will be receiving at least part-payment, but of course we require information to be provided to us—for instance about childcare or other costs—before we can make those payments.
Sir Mike Penning (Hemel Hempstead) (Con)
I have sat here patiently through questions, and there have been lots of congratulations from across the House, particularly to the Secretary of State and the previous Secretary of State, quite rightly, but the people who should be congratulated are those in jobcentres and those who have got the jobs. In my constituency of Hemel Hempstead, which is a new town—it is 70 years old, but we are a new town—we have the lowest unemployment ever. In 2010 it was 2,460; it is now 820. Those people should be congratulated.
Amber Rudd
I thank my right hon. Friend for pointing out the real benefits seen over the past few years and how important it is that the system helps individuals into work. It is the people who have got the new jobs who need the congratulations, but also the work coaches, who for the first time provide a personal service to ensure that every individual is helped into work.
Dan Carden (Liverpool, Walton) (Lab)
Professor Philip Alston talks about things that those of us who choose to see them see in our constituencies every time we are back there. The new Secretary of State comes into a Department where her Ministers are on autopilot, denying the real, lived experiences of my constituents. Instead of showing the signs of Stockholm syndrome, why does she not give us a break from the past and not misrepresent reports, but actually listen to the UN special rapporteur?
Amber Rudd
The fact that I think that the UN rapporteur’s report is wrong does not mean that we do not listen to other reports and experts in the area. The hon. Gentleman does not seem interested in the facts surrounding the success of the scheme. We can hold these two things in our heads: overall, UC is being successful and work is at record levels—these are good things—while also acknowledging that there are not insignificant areas that need changing and addressing. We can do both those things.
David Morris (Morecambe and Lunesdale) (Con)
In Morecambe, we have had universal credit for the past two years; we were one of the very first places where it was rolled out. It is a success. I congratulate my right hon. Friend on going from the Back Benches to the Front Bench again, and I invite her to Morecambe to see Gary Knowles and his fantastic team, to hear from them at first hand how they are making universal credit a success in Morecambe.
Amber Rudd
I thank my hon. Friend for his invitation, and I would be delighted to take him up on it. I encourage all colleagues from across the House to take the opportunity, if they have not done so yet, to go into jobcentres and speak to the work coaches, who will show them how the system works and how this personal approach is so different from what has happened in the past and so much more constructive for individuals.
Several hon. Members rose—
Mr Speaker
The hon. Member for Stoke-on-Trent North (Ruth Smeeth) has perambulated within the Chamber, but there is no dishonour in that.
Ruth Smeeth (Stoke-on-Trent North) (Lab)
In advance of the imminent urgent question, I want to say that universal credit is due to be imposed on the north of my constituency just before Christmas. I wrote to the Secretary of State’s predecessor twice asking for it to be delayed, if only until the new year. Will the new Secretary of State please look favourably on this request?
Amber Rudd
We are not stopping, ceasing or pausing the system, but we always make sure that we change it where it needs to be changed, to ensure that it operates in people’s best interests.
Alex Burghart (Brentwood and Ongar) (Con)
I am delighted to welcome the new Secretary of State to her place, and I thank the old Secretary of State—[Hon. Members: “Former!”] My apologies—I thank the former Secretary of State for all she did, not least in acquiring the additional money for universal credit. I am delighted to say that we now have record disability employment in this country. Will the Minister confirm that the Department will continue to work on giving assistive technology to disabled people to help them to find work?
Sarah Newton
I thank my hon. Friend for that question about a really important matter. It is great to see the use of the tech fund in access to work. We are always working on this, and on Wednesday we should have a really good announcement to make on expenditure through the challenge fund, which will enable even further use of technology to support people into work.
David Hanson (Delyn) (Lab)
In congratulating the new Secretary of State, may I commend to her the “Panorama” programme that was filmed in my constituency last week? It showed chaos in the universal credit system, poverty and people being evicted, as well as landlords not accepting that the system worked in their interest. Will she watch that programme and report to me on its contents?
Amber Rudd
I am always grateful for suggestions of programmes to watch. I will try to do so, but I cannot promise to report to the right hon. Gentleman, as he requires.
Tom Pursglove (Corby) (Con)
Youth unemployment is at record lows; more women are in work; and we have the lowest unemployment rate in this country since the 1970s, with unemployment down by more than half from 2010 in Corby and east Northamptonshire. What role does my right hon. Friend believe universal credit has played specifically in delivering that success?
Amber Rudd
I thank my hon. Friend for reminding the House of the tremendous benefits of universal credit and the tremendous advantages of an economy that is growing and providing so much new work for our constituents. Yes, of course universal credit has an important part to play in delivering those advances.
Stephanie Peacock (Barnsley East) (Lab)
In March, I wrote to the DWP regarding a systematic error in the housing element of universal credit that was incorrectly deducting £70 from claims. I was assured that the fault was known and the fix was on its way, but eight months later my constituents are still having their money taken. When will the Government sort out this mess?
Alok Sharma
If the hon. Lady would like to have a discussion about this case, I will of course look into it. Quite a lot of the time, I find that when Opposition colleagues raise issues, they do not always follow up with the individual cases. I hope that on this occasion, she will do so.
Several hon. Members rose—
Mr Speaker
Order. I am sorry to disappoint remaining colleagues, not for the first time and assuredly, I predict, not for the last. Demand massively outstrips supply, but time is our enemy and we must now move on.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
On a point of order, Mr Speaker.
Mr Speaker
The point of order will come after the urgent question. [Interruption.] I hope that it is not a point of argument or of advocacy, but a point of order requiring an authoritative ruling from the Chair. I am sure the hon. Lady is an honest seeker after truth.
Debbie Abrahams
On a point of order, Mr Speaker. Although I was very disappointed with the dismissive response from the Secretary of State and Ministers to the UN rapporteur’s report on poverty in the UK, it was nothing compared with the remarks made by the hon. Member for Spelthorne (Kwasi Kwarteng) on “The Andrew Marr Show” yesterday in response to a question regarding the report and the dire circumstances faced by Emily Lydon. Emily is brain damaged, following her mother contracting Creutzfeldt-Jakob disease when she was pregnant. She is being forced to sell her home as a result of transferring on to universal credit. The hon. Gentleman absolutely dismissed her plight, and he brought shame not only on the Government, but on this House by the type of remarks he made. Have you had any indication that he will be making an apology to Emily and to this House? If not, how can I take this further?
Mr Speaker
The short answer is: no, I have received no such indication of any plan on the part of the Minister or any other Minister to make a statement on that matter. However, the hon. Lady, using the parliamentary guile she has nurtured over a period of years in this place, has registered, with some force, her—and possibly others’— concerns, to which I feel sure, through parliamentary means, she will return before long. If there are no further points of order flowing from questions, or purporting to flow from questions, we come now to the urgent question.
Johnston Press: Administration
(6 years ago)
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Tom Watson (West Bromwich East) (Lab)
(Urgent Question): To ask the Secretary of State for Digital, Culture, Media and Sport if he will make a statement on the impact of Johnston Press going into administration.
The Secretary of State for Digital, Culture, Media and Sport (Jeremy Wright)
As the House will know, on Friday Johnston Press confirmed that it was going into administration. Johnston Press has debts of £220 million that were due to be repaid in June next year. It operates, as the House knows, titles at local, regional and national levels. It has explored a range of refinancing options over the past 18 months, including a debt-for-equity swap with bondholders. In October, it entered into a formal sales process, but no suitable buyer was found. On Saturday, it was announced that the newspapers and assets owned by Johnston Press would be acquired by JPI Media, a new consortium established of Johnston Press creditors. JPI Media has said that the operation of the newspapers and websites will continue. It has also said that the debt will be reduced to £85 million, repayable by the end of 2023, and that it will be injecting £35 million into the company to help it operate, including supporting the transition to digital. It has also released a statement saying that the situation will have an impact on employees and pension holders on the defined pension scheme, and that it is working through what this will mean for about 250 current members of staff who are impacted. The Pension Protection Fund has been notified. As the House knows, this is a fund set up by the Government to provide pension benefits to members of defined-benefit schemes whose sponsoring employers have become insolvent. The PPF, with the assistance of the trustees of the scheme, will assess whether the scheme needs to enter the PPF.
Over the weekend, I spoke to David King, formerly the chief executive of Johnston Press and now the chief executive of JPI Media, and today I spoke to its head director. They set out that they believed this move was the best course of action for the long-term future of their staff and titles and that the only alternative would have been liquidation and redundancies. Like Members from across the House, I am committed to a vibrant and free press. Johnston Press, with more than 200 titles and 2,000 staff serving communities across the UK, plays a significant part in that—three of these titles serve my constituency. Its future sustainability is therefore very important to us all.
My deepest sympathies are with anyone who is facing uncertainty as a result of the changes. However, it is important to note that the takeover may come under the rules as set out in the Enterprise Act 2002. Under that legislation, where it appears that a relevant merger or takeover situation arises, the Secretary of State can consider, in a quasi-judicial capacity, whether it raises media public-interest considerations. As such, I am sure that the House will understand that at this stage I will not set out any views on the impact of this specific transaction.
What is clear is that this is an example of the challenges faced by the newspaper industry more broadly and in particular of the challenges faced by local papers. Such papers help to bring together local voices and shine a light on important local issues, in communities, courtrooms and council chambers. It is clear, though, that such papers have to make difficult decisions to try to adapt to the changing market. At this challenging time for print journalism, we are working hard to ensure its sustainability. In March, we launched an independent review, chaired by Dame Frances Cairncross. It will look into how the production and distribution of high-quality journalism can be sustained in a changing market, with a particular focus on the online space. Dame Frances’s report and recommendations will be published early next year. Next week, the Minister for Digital and the Creative Industries will host an open session with Dame Frances, so that Members of this House and of the other place can share their views on these important issues.
At national and local levels, a press that can hold the powerful to account remains an essential component of our democracy. That is what this Government are working to support.
Tom Watson
I, too, spoke to David King this weekend. Like many right hon. and hon. Members from Government and Opposition parties, I was alarmed at the plans for Johnston Press to go into administration. This centuries-old British company has more than 200 newspapers that report vital local, regional and national news and hold the powerful to account. Although, as the Secretary of State says, the buy-out by JPI seems to have averted the imminent closure of those publications, their long-term future, and that of hundreds of jobs, is far from certain.
This is part of a bigger, long-term global strategic question: in this digital age of information abundance, how can local democracy be preserved through quality local journalism? Since 2005, 200 local newspapers have closed and we have lost half all local journalists. For 10 years, we have seen the impact of digital disruption on local journalism. After eight years of the current Administration, all we hear is the Secretary of State referring to a process that they currently articulate as the Cairncross review.
Whilst Ministers prevaricate and hold open sessions, the tech oligopolies have consolidated their media advantage by dominating digital ad revenues. They continue to avoid fair taxes and will pay less once the Government’s corporation tax cuts are introduced under the Finance Bill. Some have even allowed criminal data breaches on their platforms. Worse still, they sneer at Parliaments around the world that try to hold them to account. I remind the House again that even Rupert Murdoch showed greater respect for our democratic institutions than Mark Zuckerberg, who refused to appear before our Digital, Culture, Media and Sport Committee.
Specifically on the Johnston Press, which is a victim of the long-term strategic changes in the media market that the Secretary of State’s colleagues, including the Parliamentary Private Secretary, the hon. Member for West Aberdeenshire and Kincardine (Andrew Bowie), who is chuntering from a sedentary position, seem to think are funny—
Tom Watson
Or the hon. Member for Mid Worcestershire (Nigel Huddleston), sitting next to him, then.
Will the Secretary of State confirm that no one currently on a pension from Johnston Press will receive a shortfall in payments? Will the Government step in if they are going to? Will the pension regulator assess what obligation the new entity has to those employees set to lose out?
I understand that JPI Media was apparently established back in September. When was the Secretary of State made aware of that, because, clearly, the writing was on the wall for Johnston Press when the new entity was established, and what meetings has he or his ministerial team had since the creation of JPI Media, to protect the interests of Johnston Press workers?
There is a crisis in local newspapers that we have known about for many years and that, whatever our politics, it is all our civic duties to address. The Secretary of State has been in post for only 134 days. In that time, he has overseen the resignation of a respected Minister, made an obvious and humiliating policy climbdown on fixed odds betting terminals, while ignoring what everyone knew would be the inevitable crisis in local news. He should have given a statement to the House today, not been dragged here to give a woeful answer in an urgent question. After 134 days in post, he needs to wake up and stop sleeping on the job.
Jeremy Wright
Let me start by agreeing with the hon. Gentleman that this is indeed a long-term problem that requires some long-term solutions. As he rightly says, local papers have been closing since 2005, but, if my memory serves me correctly, it was not my party in government in 2005; it was his. It really will not do for him to bring what is a serious issue—and a long-term one, as he says—to this House and try to make it into a bit of political point scoring against the current Secretary of State. I do not mind, but those who are affected by these changes will want to hear something a little more constructive from him and the Labour party.
Let me answer the pensions question. The hon. Gentleman asks me about current pensioners. As far as I understand it, they will not be affected. Anyone in receipt of their pension now will continue to be paid. The changes will affect those who are currently in employment, and we believe that there are 250 or so in total.
The next point that the hon. Gentleman makes is that this problem was apparent for some time. He is right, of course, and, as I said in my response to him, the problems affecting local media have been apparent for some time. They are structural problems, which is precisely why we believe that the right approach to take is to ask for an independent assessment of those structural problems, which Dame Frances Cairncross is carrying out and which will be completed shortly. When it is, we have asked Dame Frances to give clear indications of what she believes the answers may be so that we can consider what action a Government can properly take. That is the right approach to what is a structural and long-term problem, as he says.
In answer to another of the hon. Gentleman’s questions, I indicated to him in my initial response that I have had a conversation with David King, as he did over the weekend, and I spoke to JPI’s lead director today. Those are the conversations that I have had since this announcement was made on Friday. He seems to suggest that the Government should do more. He will be aware that, in addition to the Cairncross review, we have made concessions on business rates for newspapers, and we have looked at other ways in which we can help. He will be well aware that local papers were very clear that if the Government had brought into force section 40 of the Crime and Courts Act 2013, they would be significantly affected by it. Indeed, Johnston Press itself responded to the consultation on this matter. The hon. Gentleman may have seen what it said, but, in case he missed it, let me remind him. It said that the impact of section 40 could cost its business £6.7 million. It went on to say that it would force many of its papers that operate on the slimmest of margins to become unprofitable and that they would therefore have to be closed.
I respect the hon. Gentleman’s position on section 40. It is long held and, by him, deeply felt. What he cannot do is come to this House and accuse the Government of doing too little to help local papers when he himself would take action that would profoundly damage them.
Mr John Whittingdale (Maldon) (Con)
I welcome my right hon. and learned Friend’s recognition that the economic difficulties facing Johnston Press are the same ones that are now affecting all local newspapers, and that this situation is contributing to a real threat to the proper functioning of local democracy. Will he consider that one way of addressing this is to build on the BBC’s local democracy initiative, which is already funding 150 journalists? The obvious people to make an extra contribution towards this initiative are the internet technology giants, which are responsible for at least some of the problems now affecting newspapers.
Jeremy Wright
I will first address my right hon. Friend’s second point. He is right that we need to consider the impact on local news of the increasing transfer of particular advertising to online platforms. Of course, it is also important to consider how we ensure that content is properly paid for when it is used. He is also right that local democracy reporters have a part to play. It is important to note that the content they produce is made available to local newspapers, and I am sure that this assists those local newspapers in producing copy.
Hannah Bardell (Livingston) (SNP)
Local journalism and local journalists are the lifeblood of our media. I welcome much of what the Secretary of State has said, although we have not heard enough about the guarantee for pensions, workers’ rights and jobs, and I have spoken to a number of journalists who are deeply concerned. He will know that the National Union of Journalists has voiced significant concerns about the long-term intentions of the company’s new owners, amid fears that it has been purchased with a view to asset stripping. Does he believe that it would be prudent for the new owners to make a commitment to staff regarding their motivations for taking over and to offer assurances about their long-term plans for Johnston Press?
Much has been said about what can be done, and the demise of Johnston Press has largely been put down to the rise of digital media, so I am sure that the Secretary of State will find it more than passing strange that the previous chief executive will be the new chief executive in that new company. A company has failed, and I think we all find it very strange that it has shut down, moved on some of its debts and pension liabilities, and popped up with a shiny new name. We must be sure that the workers’ rights and pensions are protected.
The Secretary of State may know that Norway has the strongest penetration of digital news subscriptions of any country, as almost two thirds of Norwegians mostly find news by going directly to traditional news providers. He may therefore also find it strange that one of the major shareholders—the Norwegian investor, Christen Ager-Hanssen, who is in Parliament today—has been shut out and that his shares are now valueless. Will the Secretary of State meet me, the hon. Member for West Bromwich East (Tom Watson) and Mr Ager-Hanssen to discuss the issues? I recommend Lesley Riddoch’s film, “Nation”, which looks at Norway’s model of funding the second newspaper in every region of Norway. Will he look at that model and compel Frances Cairncross to include it in the review in order to look at the options available for workers, who we think of today?
Jeremy Wright
Let me pick up three of the hon. Lady’s points. First, she mentioned pensions. As I said, the Pension Protection Fund is now engaged with this, and the action it now takes is a matter for that body. It is important that the fund and the Pensions Regulator have the chance to consider this properly, as they are now doing.
Secondly, the hon. Lady asked about the long-term commitment of the new owners. Again, that is a matter for them. What I should have said is that, as she will appreciate, the headquarters of Johnston Press are in Edinburgh, so it is of course necessary for us to work with the Scottish Government to ensure that, if further actions are necessary, we take them in conjunction with the Scottish Government.
Finally, the hon. Lady invited me to meet her, the shadow Secretary of State and a shareholder. Earlier, I mentioned the risk that there is a quasi-judicial role for me to complete in this process. We do not yet know whether I will need to do so, but I think it best that I am prudent about that at this stage so, if she will forgive me, I will not accept her kind invitation at this point.
Mr Edward Vaizey (Wantage) (Con)
I refer the House to my entry in the Register of Members’ Financial Interests, in case it is relevant. I am well served in my constituency by an excellent local paper, The Herald, and an excellent local radio service, provided by BBC Oxford. We have done a lot to try to support local newspapers, not least through the BBC reporting initiative and the alleviation of business rates. Can the Secretary of State comment on whether local councils and, indeed, Government will continue to place statutory advertising in local newspapers, which is a source of valuable income?
Jeremy Wright
I am grateful to my right hon. Friend. He has personally done a great deal in this space, which the House should note. He makes a good point about what local government in particular can do. It is important that, in addition to putting pressure on central Government, as the House is doing now, we also seek to speak to our respective local authorities, to ensure that they play any role they can in the preservation of our important local newspapers.
Lisa Nandy (Wigan) (Lab)
We do not need a review to tell us that this is a story of pure greed. A handful of people have creamed off huge profits and left a debt-laden struggling company in the hands of hedge funds, with staff yet again paying the price. That hedge fund rescue package will be of little comfort to smaller titles like the Wigan Evening Post and the Wigan Observer that will not prove lucrative for asset strippers and face a very uncertain future at best. Will the Secretary of State intervene to ensure that long-term guarantees are provided for those smaller titles? They are not just the lifeblood of local democracy, as he rightly said; they are also the only talent pipeline left for young working-class people to break into journalism, and those young people are today left wondering what on earth the future holds for them.
Jeremy Wright
These titles are important, for the reasons that the hon. Lady gives. As I have explained, there are good reasons why I must be cautious at this stage in what I say about this particular transaction, but she has my assurance that I will be looking for the new owners of these titles to give what assurance they can that they recognise what she has said, what I have said and what we have all said so far in this exchange about the importance of these local titles and the need to maintain them where we can.
Mr Shailesh Vara (North West Cambridgeshire) (Con)
May I first pay tribute to my two local newspapers, the Hunts Post, whose editor is Daniel Mansfield, and the Peterborough Telegraph, which is now owned by JPI Media, and in particular the editor, Mark Edwards, and his staff, who do a fantastic job serving the local community?
My right hon. and learned Friend spoke of the need to reduce debts by £85 million and the possibility of job losses. Will he give the House an assurance that the next time he speaks with Mr David King, he will press him not only to do the statutory minimum to help these people, but to do anything else that can be reasonably expected to help those who are unfortunate enough to lose their jobs?
Louise Haigh (Sheffield, Heeley) (Lab)
Following the news, there was widespread public support for the Sheffield Star, the Sheffield Telegraph and the excellent Yorkshire Post, and particularly for the staff who work for those papers. The Secretary of State said earlier that he believed that all those in receipt of a pension would be protected. There is concern that those in receipt of a final salary pension will not be protected when they move over to the new company. Can he provide clarity on that?
Jeremy Wright
My understanding is that all those currently in receipt of their pension will not be affected by this change. As the hon. Lady will see, the Pensions Minister, my hon. Friend the Member for Hexham (Guy Opperman), is sitting next to me, and if that is incorrect, one of us will write to her to explain, but that is my understanding.
Rebecca Pow (Taunton Deane) (Con)
Having worked in the media for a great part of my life and for many years as a freelancer, I really understand the importance of our local newspapers and the type of publications that Johnston Press publishes, for not only disseminating news but training journalists. It is a place for people to start learning their trade, and they then go on to national papers. We need these people. Can the Secretary of State give an assurance that he is taking high-quality journalism to heart and that the review will look at the balance between traditional publications and online publishers? We need balance and fairness.
Jeremy Wright
Yes, I am happy to do that. In fact, the first newspaper I ever appeared in was my hon. Friend’s local newspaper, so it has a particular place in my heart. She is right: one thing that we expect Dame Frances Cairncross to do, and upon which we will wish to act, is to preserve good-quality, well-sourced, authoritative journalism at local and national levels. It is fundamental to the way in which we hold power to account, and it is an important part of the antidote to so-called fake news, on which my hon. Friend’s Select Committee has done such good work.
Rachel Reeves (Leeds West) (Lab)
I refer to my declaration in the Register of Members’ Financial Interests.
May I pick up on the point made by my hon. Friend the Member for Sheffield, Heeley (Louise Haigh), who asked what will happen to people who are currently in receipt of pensions? I do not think it is correct to say, as the Secretary of State has said, that their pensions will not be affected, because they will be uprated in line with consumer prices index inflation rather than retail prices index inflation for years to come. If someone expects to carry on taking a pension for 20 years, they will lose out on thousands of pounds if their pension is uprated at this lower rate. Will the Secretary of State confirm that people who are currently in receipt of final salary pension schemes at JPI Media, to which they have now been transferred from Johnston Press, may indeed lose out to the tune of thousands of pounds because of these changes?
Jeremy Wright
Again, I must I am afraid remind the House of what I said earlier. There are good reasons why, at this stage at least, I need to be cautious about what I say about the detail of this transaction and the background to it. What I would say to the hon. Lady is that it is very clear that this business was having significant difficulty before this transaction was carried out over the course of the weekend, and were these businesses to have been liquidated there would have been very serious consequences for all concerned. As I say, it is important that I am cautious at this stage about what I say.
Sir Peter Bottomley (Worthing West) (Con)
I am occasionally able to write in a local newspaper, and such newspapers occasionally write about me.
May I put it to my right hon. and learned Friend that Sir Ray Tindle, the founder and president of the Tindle Newspapers Group, is right in saying that from daily national newspapers we expect speed and from local newspapers we expect detail? As well as our concern for the journalists and the pensioners, should we not be concerned for local communities? Local papers cover catastrophe and they cover celebration, and they provide the details of ordinary community life that matters so much to so many of our constituents.
Jeremy Wright
Yes. My hon. Friend puts it extremely well, and that is exactly why we are all concerned for the future of local journalism. We are concerned about the titles that we are specifically discussing this afternoon, but also for the broader future of local journalism. That is precisely why the Government are taking the actions I have laid out.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
As we all know, it is the pensioners and the workers whom we care about, as well as the communities and, as my hon. Friend the Member for Wigan (Lisa Nandy) said, the pipeline of journalists, with people from ordinary backgrounds getting into journalism. However, if we are looking at this whole media area, will the Secretary of State bear in mind the question whether the Cairncross review is broad enough, and as other hon. Members have said, the remit is right for looking at something like taking money from the BBC, to which another Member referred? I do not want us to take money from the BBC; I want to take money from Google, Facebook and all those people who do not pay their taxes.
Jeremy Wright
We certainly expect Frances Cairncross to talk about online companies, too. That is a very important part of her remit, and she will look very specifically at what they do, particularly with regard to online advertising, which is a major component of the issue we are discussing. I can give the hon. Gentleman that reassurance. We will of course await what she says. I commend to him the opportunity next week, which I described earlier, of going to talk to her himself and to express his views directly.
Kirstene Hair (Angus) (Con)
Does my right hon. and learned Friend agree that we must look carefully at the impact that online platforms are having on these titles, such as the Arbroath Herald and the Brechin Advertiser? What role can his Department play in trying to underpin a sustainable model for local news?
Jeremy Wright
Yes, I agree with my hon. Friend. As I have said, the online presence of different kinds of news and different kinds of advertising is a structural challenge to the way in which local papers are operating. That is precisely why we have asked Dame Frances Cairncross to do what she is doing, and I very much look forward to hearing what she has to say.
Frank Field (Birkenhead) (Ind)
Is the Secretary of State happy with the policy that is developing of companies running up a white flag, dipping into administration and then very quickly reappearing minus their pension duties?
Jeremy Wright
No, if that is the intention I am certainly not happy. The right hon. Gentleman will know that the PPF and the regulator will need to look at this transaction and decide what they make of it, and there may come a time when I need to do so too. We will wait first for the PPF and the regulator to make their judgments.
Mr Robert Goodwill (Scarborough and Whitby) (Con)
The first page that many of my constituents turn to when they open their Whitby Gazette or Scarborough News is the family notices—the births, marriages and deaths—if only to check that they are still alive themselves. Does the Secretary of State recognise the importance of that element of local newspapers, particularly for those who do not have access to digital media?
Jeremy Wright
Yes, I do, and that is one of the many reasons why we are all concerned to ensure that local papers have a presence in the media landscape and a long-term future.
Diana Johnson (Kingston upon Hull North) (Lab)
May I stress to the Secretary of State the importance of regional newspapers? The Yorkshire Post, founded in 1754, has been essential in making the case for Yorkshire and the north in the latest rail timetabling shambles. It is important that we have regional journalism that allows pressure to be put on the Government, so what does the Secretary of State think he can do to ensure that there is strong, independent regional journalism in this country?
Jeremy Wright
I rather agree with the hon. Lady that there is a significant role for the regional press as well as the local press. It is a part of the landscape that we need to consider carefully. She will be aware of the Hull Daily Mail, which does good work online. That is an important point, because we must accept, as the local press does, that people are increasingly consuming their news online. Local papers need to be able to adapt to that. Some, such as that paper, are doing so very successfully, and others need to learn similar lessons.
John Howell (Henley) (Con)
Does the Secretary of State agree that we should be celebrating a good news story today, in that all operations have continued and will continue in the future? Does he agree that the company has spoken clearly about both keeping employee rights and ensuring that the newspaper titles continue to be printed?
Jeremy Wright
My hon. Friend is right—the alternatives available to Johnston Press at this stage were immeasurably worse. As I set out to the House at the outset, a number of steps were taken to seek an alternative course, none of which was successful. He is right to recognise that, at this point at least, all the titles continue and all jobs have been retained, but of course, as we have discussed this afternoon, there are many long-term challenges facing not just that company but others in the same space.
Christine Jardine (Edinburgh West) (LD)
I declare an interest: I write a weekly unpaid column for The Scotsman, which despite its troubles is possibly still the proudest title among daily newspapers in Scotland. Along with its sister the Edinburgh Evening News, it is one of the titles affected by the changes. I have had communications over the weekend from executives of the former company and from the new owners, and from former colleagues, now constituents, who are concerned about exactly the issue that has been raised today. They fear that they stand to lose tens of thousands of pounds from their pensions now that they have left the company, because under PPF rules they could lose 10%. I appreciate the Secretary of State’s possible quasi-judicial position, but can he assure the House that he will bear in mind the position of both the staff and former staff of the titles affected?
Mr Speaker
I was hoping that the question mark was approaching, and fortunately it did, just in time.
Jeremy Wright
I entirely understand the concern that the hon. Lady and others have expressed. We are particularly concerned for those employed now and those in receipt of their pensions. As I have said, the PPF will need to determine its view of the transaction first, and then, in conjunction with the trustees of the current pension scheme, it will need to determine what action should be taken. She is right to express concern, and we have too. We will continue to pay close attention to what all the relevant bodies say.
Sir Mike Penning (Hemel Hempstead) (Con)
The Hemel Gazette in my constituency is a Johnston Press paper. Although no people in my constituency work on it, my thoughts are with those who are concerned about their future and their pensions. May I ask about a group of people we have not heard about, the small suppliers and the small creditors? They will have heard about everything going on this weekend, with the big creditors taking over the same management team. That must be of real concern to the small creditor—whether that is legal. They stand to lose thousands and thousands of pounds and may well go under because the big companies will get all the money, while the company will operate in exactly the same way as before but under a slightly different name.
Jeremy Wright
I hope my right hon. Friend will forgive me—I am going to sound like a cracked record by the end of this urgent question—but there are reasons why I need to be cautious at this stage about what I say about the transaction and the way it has been conducted. There will be inquiries made into the way in which this has transpired, including the effect on small creditors. At this stage, we must await some of those conclusions before taking matters further.
Ian Murray (Edinburgh South) (Lab)
Johnston Press pursued a very aggressive acquisition strategy over the past 10 years, which has partly put it in this position. It has left titles such as The Scotsman and the Edinburgh Evening News operating on very, very small numbers of staff. Can the Secretary of State tell us whether there is any liability to the public purse and if so what he will be doing to pursue the new company to ensure that the public purse is repaid?
Jeremy Wright
For the reasons I have just given, I will not comment on the nature of the transaction itself. The hon. Gentleman is right that over the preceding years Johnston Press has acquired a number of different titles. That, of course, is a matter for its judgment. In the process of looking at the transaction, it will have to answer for judgments and decisions it has made. At this stage, however, we must await what the various bodies I have described conclude.
Maggie Throup (Erewash) (Con)
The Ilkeston Advertiser, part of the JPI Media group, is the last remaining weekly local newspaper in my constituency. What more support can my right hon. Friend offer such local titles to help them to survive, because they play such an important part in our communities?
Jeremy Wright
We can all do our bit to ensure we support our local titles. It is right that some titles move more online, as that is where the reader is going, and it is right that the Government do what they can. We have mentioned some of the financial incentives that the Government have already brought forward. Beyond that, I look forward to more structural and long-term solutions emerging from the Cairncross review and our considerations of it.
Gavin Robinson (Belfast East) (DUP)
Mr Speaker, your encyclopaedic knowledge should include the Belfast News Letter, the longest continuously printed English language daily paper, printed from 1737. It notably revealed that America had struck independence in 1776. It is one of the titles under consideration with Johnston Press. I hope the Secretary of State understands that there is more to this than just currently employed staff and future and current pension holders; there is an historical legacy and a contemporary contribution to the principle of a free press.
Mr Speaker
It is a notably illustrious organ, I feel sure. I also feel sure that the organ concerned will get to hear of the hon. Gentleman’s intervention.
Jeremy Wright
The hon. Gentleman makes a very good point—one that had not yet surfaced in this conversation. As he says, it is not just about those who work on these publications now, or even those who read them now; it is about those who have worked on and read them, over preceding centuries in the case of the publication he mentions. They are an important part of the fabric of our local communities. For that reason, we wish to see them preserved. As I have said, it may be that they are not preserved in quite the form they were in the 1770s, but there is an opportunity for local papers to grow with the times and for us to continue to support them even into the 21st century.
James Heappey (Wells) (Con)
My constituency is served by seven local newspapers, all with separate circulations. Time means I cannot, like some colleagues, get them all into Hansard. However, five of them are owned by the Mirror Group. Last week, the editors of those five titles were made redundant. In the light of what has happened with the Johnston Press, will the Secretary of State say what conversations he might have had with the Mirror Group to check on its ongoing commitment to local newspapers?
Jeremy Wright
I am now alerted to that. The process that we described—in the form of the Cairncross review—is designed to confront some of the systemic challenges that affect not just Johnston Press, but many other companies in this space. There is nothing particularly unique, I think it is fair to say, in the experience that Johnston Press has been having. It is a structural challenge for local newspapers and one that we must address in a structural way.
Tracy Brabin (Batley and Spen) (Lab/Co-op)
The Batley & Birstall News has been serving my constituency for 140 years and, with the Spenborough Guardian, is a much loved title. They have fantastic campaigns such as “Love Your High Street”. My concern about the reconfiguration is that there will be some asset stripping and only the most profitable titles will remain. While The Yorkshire Post is fantastic—I applaud it for its journalism, which is very rigorous and wide-reaching—my concern is that the smaller titles, which provide a counter-narrative to some of the harshest, most polarising voices elsewhere, will be lost to our communities.
Jeremy Wright
Again, I understand the hon. Lady’s concern and her enthusiasm for her local titles. As has been said, it is right to point out that at this stage all titles are preserved by this move. The alternatives, as far as Johnston Press could see, were all immeasurably worse, but both she and I will want to hear from the new owners about their plans for the longer term. It is only fair to give them space to develop those plans, but once they have done so, she and I will wish to seek further information about what they intend to do.
John Lamont (Berwickshire, Roxburgh and Selkirk) (Con)
The Johnston Press group has four titles in my constituency—The Southern Reporter, The Berwickshire News, the Hawick News, and the Selkirk Weekend Advertiser, which provide excellent local news to my constituents—but in an increasingly competitive environment, particularly with BBC local platforms, which I know cause them great concern, what more can the Government do to support local journalism?
Jeremy Wright
We can do more and we seek to find inventive ways of doing more to account for the changing circumstances in which all these newspapers find themselves. If I may, I will make a conditional point that my hon. Friend brings to mind. Those observing these proceedings might be surprised that Members of this House, who are held to account by local newspapers, would mourn their passing, but it is credit to our democracy that all of us believe that it is right that those in power should be held to account. That applies not just to those in Whitehall, but to town halls up and down the country and, dare I say it, to local Members of Parliament, who are held to account in some cases by four publications at once.
Sir Kevin Barron (Rother Valley) (Lab)
Johnston Press at Dinnington in my constituency was a crucial part of a £163 million coalfield regeneration project under the Labour Government in 2006. It currently boasts The Yorkshire Post—I believe it to be a national newspaper—and prints many other national titles for the north of England as well. The Minister said what he would like to do to make sure that the jobs are there—that is right and proper—but will he tell us what influence he has on the Pension Protection Fund and the regulator?
Jeremy Wright
As the right hon. Gentleman will appreciate, both are independent. They make their own judgments and we must let them do that, but the Government will want to consider the position once they have done so, and to seek to know whether there is further action we can take. The right hon. Gentleman is right, as was his hon. Friend the Member for Kingston upon Hull North (Diana Johnson), that there is an important regional component to our press. We might, as he says, argue that that verges on the national in some cases—[Interruption.] We should certainly not miss the argument that there is a regional layer to our press which adds considerably to oversight and scrutiny, and we must seek to preserve it where we can.
Kevin Foster (Torbay) (Con)
Torbay is well served by a mix of media, including a traditional newspaper, the Herald Express, a community-owned hyper-local newspaper, the Torbay Times, and the more citizen journalism-based The People’s Republic of South Devon, which is online—I suspect Opposition Members might prefer its editorials. Will the Minister look at how we can sustain local newsrooms by perhaps reviewing how local media operations can become more cross-platform, particularly by looking at such things as small-scale digital audio broadcasting?
Jeremy Wright
Yes, we will look at that. We want to consider all possible ways of assisting the more general landscape that my hon. Friend describes. There may well be more that online companies can do to help, more that companies elsewhere can do, perhaps more that the BBC can do, and certainly more that local and national Government can do. We will look at all the possibilities.
Bill Esterson (Sefton Central) (Lab)
This is just the latest example of what the Work and Pensions Committee described as “ripping off pensioners” using pre-packs. I understand that the Government announced they were holding a review into the impact on pensions of pre-pack administrations. Has the Secretary of State discussed when that review and its results are likely to be published, and when some of the pressure on the Pension Protection Fund will be relieved, as it is under enormous strain and going way beyond what it was intended to do?
Jeremy Wright
The Pension Protection Fund has over £30 billion-worth of assets and can cover these liabilities. On the hon. Gentleman’s broader point, again I am fortunate that my hon. Friend the Pensions Minister is sitting along the row from me. I am sure he will write to the hon. Gentleman with the timescales he seeks.
Matt Warman (Boston and Skegness) (Con)
As a former journalist, it strikes me that the party that stopped section 40 and facilitated local democracy reporters has a great deal to be proud of in this House. On the subject of local democracy reporters, it occurs to me that the Cairncross review has a huge opportunity to propose far more of that sort of thing, and it would be much more profitable for all of us if we ended up with a set of measures that resulted directly in local democracy reporters, for instance, rather than a simple fund.
Jeremy Wright
My hon. Friend speaks with considerable expertise, as he says, and I hope he will find time next Wednesday, or on another occasion, to come and speak to Dame Frances and discuss with her the matters he has raised.
Helen Goodman (Bishop Auckland) (Lab)
I am very glad that neither the highly esteemed Northern Echo nor the excellent Teesdale Mercury is affected. Given that there is a structural problem, will the Secretary of State consider extending the Localism Act 2011 to local newspaper titles so that local communities and journalists can take them over, run them on a co-operative basis and protect them from this asset stripping?
Jeremy Wright
That is an interesting idea. If the hon. Lady will forgive me, I will consider it.
Henry Smith (Crawley) (Con)
Although Johnston Press being in administration is a source of concern, will the Secretary of State join me in welcoming JPI Media’s statement that existing titles, such as the Crawley Observer, will continue? In his dealings with the new company, will he continue to press that point?
Jeremy Wright
Yes, I will. As my hon. Friend says, those who work in publications such as the one he mentions could have found themselves redundant today, so this is a good start, but we will need to know a good deal more about the new owners’ intentions, and as I have indicated, I will continue to seek further reassurances from them.
Judith Cummins (Bradford South) (Lab)
The Yorkshire Post is a great example of the role that regional newspapers play in strengthening our democracy at all levels. What concrete steps has the Secretary of State taken to strengthen the industry, protect jobs and secure current pension rights at Johnston Press?
Jeremy Wright
I have mentioned some of the things the Government have already done, such as introducing concessions on business rates and ensuring that section 40 of the Crime and Courts Act 2013 does not come into force and damage local journalism considerably, and we will do more. It is important that we consider these issues in the round, because they are structural problems that have been around a long time, as we have already discussed. I am sure that the hon. Lady will look carefully at Dame Frances Cairncross’s findings, as will the Government. We do not have long to wait, and when we have them, I think we will have a clearer idea of what the structural solutions might be to these structural challenges.
Huw Merriman (Bexhill and Battle) (Con)
Like its Johnston Press stablemate, the Buckingham Advertiser, the Bexhill Observer hosts a fine selection of local contributors, as well as the occasional musings of its MP. I chair the all-party group on the BBC. What further steps can the Secretary of State take to discuss with the BBC how more content can be shared—not just writers’ content, but perhaps video packages as well?
Mr Speaker
In respect of the journals to which the hon. Gentleman referred, for personal and family reasons it is fair to say he has a foot in both camps.
Jeremy Wright
My hon. Friend is right: there are further conversations that we can have with the BBC. Local democracy reporters have already been mentioned. I know that the BBC is very proud of what it has done in that regard and is keen to see what more might be done, and my hon. Friend’s suggestion is a very interesting and practical one which we will take up with it.
Danielle Rowley (Midlothian) (Lab)
When I graduated from Edinburgh Napier university with a first-class degree in journalism, I was told that I would be hard pushed to find work in a rapidly declining industry, but I was lucky enough to get work experience at my local Johnston Press-owned newspaper, the Midlothian Advertiser. Such local titles are essential for young people starting out, particularly—as was pointed out earlier by my hon. Friend the Member for Wigan (Lisa Nandy)—those from working-class backgrounds. What is the Secretary of State doing to support those young working-class journalists?
Jeremy Wright
I agree with the hon. Lady. The point about the talent pipeline is very important. We all know, from our experience as constituency Members of Parliament, very good young journalists who are starting their careers on local publications, and who will hope and expect to move on to national publications thereafter. That is one reason why it is important for us to maintain a route through local journalism, which is what we seek to do. As I have said, we have already taken a number of measures, but there are a further number that we can take. It is important for all those journalists who start where the hon. Lady did to see not just a future for themselves in local journalism, but a real career path that will excite them and make them want to continue.
Mohammad Yasin (Bedford) (Lab)
Do the Government think that social media giants such as Facebook and Google should do more to support local and regional journalism, and what action are they taking to protect the future of the local and regional press?
Jeremy Wright
You will not forgive me, Mr Speaker, if I answer the second part of the question all over again, but in relation to the first part, the hon. Gentleman is right: we expect companies such as Facebook and Google to engage with this argument. They are not entirely separate from it. It is fair to say that both those companies have already taken some actions to support local journalism—quite right too—but we shall expect them to do more. We shall want, in the course of the broader review that we are conducting, to look not just at the effect of the prioritisation of news on digital platforms, but at the way in which online advertising is working. All that has an effect.
Matt Rodda (Reading East) (Lab)
I refer Members to my entry in the Register of Members’ Financial Interests.
As a former local newspaper journalist, I pay tribute to local newspapers, particularly the Reading Chronicle, the Henley Standard and The Wokingham Paper. When the Secretary of State’s review ends, will he commit himself to using all his powers to try to level the playing field between these very worthy but struggling local newspapers and the tech giants?
Jeremy Wright
As I have said, I think that we need to look carefully at the balance between the elements that the hon. Gentleman has mentioned. It is undoubtedly part of the structural challenge that we have been discussing this afternoon, and I do not believe that we can come up with the appropriate structural answer unless we have considered those elements properly.
Alex Sobel (Leeds North West) (Lab/Co-op)
There are three Johnston Press titles in my constituency—
Alex Sobel
Thanks. One of those papers, The Yorkshire Post, is vital to our campaign for One Yorkshire devolution. Without The Yorkshire Post, we would not have been able to bring forward a diverse set of parties.
On 14 October, in The Observer, Roy Greenslade produced a devastating critique of the way in which what has happened to Johnston Press came to pass. When the banks failed, they were deemed to be too big to fail. Now the same thing has happened. When Johnston Press ceased to be a family firm, huge acquisitions were made based on debt. Will the Secretary of State be looking at future acquisitions, whether they are debt-backed or not, and will he be looking into the media industries?
Jeremy Wright
I think we must be concerned with all similar transactions in this space, because that is important for the reasons that we have given. The hon. Gentleman will understand why—as I have already said—I will not comment specifically on the way in which this transaction has been conducted.
Jim Shannon (Strangford) (DUP)
There are Johnston Press publications in my constituency. My hon. Friend the Member for Belfast East (Gavin Robinson) referred to the Belfast News Letter, which is a provincial paper. The unions have expressed concern about the defined-benefit pension scheme, and have also warned that any changes in future payments in line with Pension Protection Fund payment rules would be a terrible blow to affected staff. Will the Secretary of State keep the feet of JPI Media to the fire to ensure that pensions are protected?
Jeremy Wright
Yes, I will certainly seek to do that. As I have said, I am grateful to the Pensions Minister, the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Hexham (Guy Opperman), who has been present throughout this urgent question. Many of the points that have been raised relate to matters surrounding the pension scheme, and my hon. Friend has been listening attentively to them. I know that he will wish to pick up on some of the points that have been made.
Points of Order
(6 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Tom Watson (West Bromwich East) (Lab)
On a point of order, Mr Speaker. I asked the Secretary of State if he could confirm that no one currently on a pension from Johnston Press would receive a shortfall in payments. He said to me that current pensioners would not be affected, but I am afraid that during the course of this discussion the National Union of Journalists has contradicted his account and said that some pensioners who retired under the age of 65 would indeed be affected. Is there a remedy by which the Secretary of State could check his facts and come back to the House before Hansard hits the presses tonight so that we can have an accurate account of the facts of the Johnston Press administration?
Mr Speaker
The short answer is that every hon. and right hon. Member is responsible for the veracity of what he or she says in the House. The corollary of that is that if any Member has erred, and if it is a matter not of opinion but of indisputable fact, it is incumbent upon that Member to correct the record. I do not know whether the Secretary of State thinks he has erred, but there is recourse available, either now, if the facts of the case are clear, or after reflection. The Secretary of State is not under any obligation to come to the Dispatch Box, but if he wishes to do so, he can.
The Secretary of State for Digital, Culture, Media and Sport (Jeremy Wright)
Further to that point of order, Mr Speaker. Perhaps I should simply say this. I, too, will check the record, but I recall saying that I gave my understanding of the current situation. I think that I also undertook to make sure that that was correct, and I shall do so.
Mr Speaker
Very well. We cannot have an ongoing exchange on this, but the generosity of spirit for which I am renowned in all parts of the House gets the better of me, and I shall indulge the hon. Gentleman at this point.
Tom Watson
I have an account of exactly what the Secretary of State said. He said, “The hon. Gentleman asked me about current pensioners. As far as I understand it, they will not be affected. Anyone in receipt of their pension now will continue to be paid. The changes will affect those who are currently in employment and we believe 250 or so in total.” So if it is in fact the case that current pensioners will receive a shortfall, will he agree to come back to the House and put the matter right?
Mr Speaker
The shadow Secretary of State is nothing if not persistent. His terrier-like quality is well known to all throughout the House and to many beyond it. I do not think anything he has said is incompatible with what the Secretary of State said. The hon. Gentleman quoted the Secretary of State as saying, “As far as I understand it”. I think that what I gleaned from the Secretary of State is that he will go away and check whether what he said was correct. In the event that a correction is required, there are many witnesses to his willingness to correct the record. I think we will leave it there for now. I hope that honour is served. The shadow Secretary of State has made his point with considerable force and alacrity, and the Secretary of State has displayed his customary courtesy.
Pete Wishart (Perth and North Perthshire) (SNP)
On a point of order, Mr Speaker. You have no doubt been observing with alarm and great concern the events in the House of Lords in which Members of the other place have overturned a decision of the Lords Privileges and Conduct Committee to suspend one of its Members for the most serious of sexual allegations. This sends the appalling message that these Houses of Parliament are not serious in tackling sexual harassment, and that we as an institution are prepared to defend our own and not take complainants seriously. Mr Speaker, I know that you have no responsibility for that undemocratic disgrace of an institution down the corridor, but there were allegations that a place in the House of Lords, in our legislature, was offered in return for sexual favours. You will know that the appointment of places in the House of Lords is a matter for the Prime Minister, supplied by lists from party leaders who all have a place in this House. What can this House do to ensure that this matter is robustly and effectively investigated?
Mr Speaker
I am grateful to the hon. Gentleman for giving me advance notice of his intention to raise this point of order. Let me begin by saying what I suppose will be universally acknowledged—namely, that these are serious matters. I know that there are strongly held views in the House, and outside it, on the case to which he has referred and on Thursday’s proceedings in the Lords. I hope he will not object if I note, en passant, that he is well known for having strong views on the nature, composition and source of membership of the other House, which he frequently expresses in colourful terms. However, I do not think that this House would be well served by itself pursuing serious personal allegations against a Member of the Lords, especially where the House of Lords has itself not decided on any outcome. The House of Lords has, as I understand it, referred this matter back for consideration. I am not justifying that; nor am I criticising it. I am simply noting what I believe to be the factual position. These are matters for the House of Lords. I urge Members to think how we would resent it if Members of that place raised an equivalent matter about a Member here that had been remitted to the Standards Committee for its further consideration. The issue is important, and it will be considered elsewhere. I respect the integrity of the hon. Gentleman in raising his legitimate concern.
Pete Wishart
Further to that point of order, Mr Speaker. I understand that, but appointments to the House of Lords are a matter for this House, and there is a serious allegation that an offer of membership of the House of Lords was based on sexual favours. Surely that must therefore be a matter for this House that must be vigorously investigated.
Mr Speaker
The case will have to be determined. In so far as the hon. Gentleman is drawing to my and the House’s attention the fact that there is a role for Members of this House in relation to the other House, I think it fair for me, in neutral terms, to acknowledge that what he has said, as a matter of fact, is true. Perhaps we can leave it there for now. I hope that the hon. Gentleman feels that he has made his point with force. On the assumption that the appetite of colleagues to raise points of order has now been exhausted, the Clerk will now proceed to read the Orders of the Day.
Finance (No. 3) Bill
Monday 19th November 2018
(6 years ago)
Commons ChamberRead Full debate Finance Act 2019 View all Finance Act 2019 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Committee of the whole House Amendments as at 19 November 2018 - (19 Nov 2018)
19:40 - The Committee divided: - Ayes: 292 / Noes: 10 - Question accordingly agreed to.
19:57 - The Committee divided: - Ayes: 262 / Noes: 293 - Question accordingly negatived.
20:12 - divided: - Ayes: 287 / Noes: 292 - Question accordingly negatived.
20:27 - divided: - Ayes: 34 / Noes: 290 - Question accordingly negatived.
22:20 - divided: - Ayes: 271 / Noes: 295 - Question accordingly negatived.
22:34 - The Committee divided: - Ayes: 41 / Noes: 296 - Question accordingly negatived.
Kirsty Blackman (Aberdeen North) (SNP)
I beg to move amendment 6, page 2, line 24, leave out subsection (4).
This amendment would take out provisions removing the legal link between the personal allowance and the national minimum wage.
The Chairman of Ways and Means (Sir Lindsay Hoyle)
With this it will be convenient to discuss the following:
Clauses 5 and 6 stand part.
Clauses 8 to 10 stand part.
Clause 38 stand part.
That schedule 15 be the Fifteenth schedule to the Bill.
Clauses 39 to 42 stand part.
New clause 1—Additional rate threshold and supplementary rate—
“The Chancellor of the Exchequer must, no later than 5 April 2019, lay before the House of Commons a distributional analysis of—
(a) the effect of reducing the threshold for the additional rate to £80,000, and
(b) the effect of introducing a supplementary rate of income tax, charged at a rate of 50%, above a threshold of £125,000.”
New clause 2—Impact of provisions of section 5 on child poverty and equality—
“(1) The Chancellor of the Exchequer must review the impact of the provisions of section 5 and lay a report of that review before the House of Commons within six months of the passing of this Act.
(2) A review under this section must consider the impact of the changes made by section 5 on—
(a) households at different levels of income,
(b) people with protected characteristics (within the meaning of the Equality Act 2010),
(c) the Treasury’s compliance with the public sector equality duty under section 149 of the Equality Act 2010,
(d) different parts of the United Kingdom and different regions of England, and
(e) levels of relative and absolute child poverty in the United Kingdom.
(3) In this section—
‘parts of the United Kingdom’ means—
(a) England,
(b) Scotland,
(c) Wales, and
(d) Northern Ireland;
‘regions of England’ has the same meaning as that used by the Office for National Statistics.”
New clause 3—Review of the effectiveness of entrepreneurs’ relief—
“(1) Within twelve months of the passing of this Act, the Chancellor of the Exchequer must review the effectiveness of the changes made to entrepreneurs’ relief by Schedule 15, against the stated policy aims of that relief.
(2) A review under this section must consider—
(a) the overall number of entrepreneurs in the UK,
(b) the annual cost of entrepreneurs’ relief,
(c) the annual number of claimants per year,
(d) the average cost of relief paid per claim, and
(e) the impact on productivity in the UK economy.”
New clause 7—Review of changes to entrepreneurs’ relief—
“(1) The Chancellor of the Exchequer must review the impact on investment in parts of the United Kingdom and regions of England of the changes made to entrepreneur’s relief by Schedule 15 to this Act and lay a report of that review before the House of Commons within six months of the passing of this Act.
(2) A review under this section must consider—
(a) the effects of the provisions on business investment,
(b) the effects of the provisions on employment, and
(c) the effects of the provisions on productivity.
(3) In this section—
‘parts of the United Kingdom’ means—
(a) England,
(b) Scotland,
(c) Wales, and
(d) Northern Ireland;
‘regions of England’ has the same meaning as that used by the Office for National Statistics.”
This new clause would require a review of the impact on investment of the changes made to entrepreneurs’ relief which extend the minimum qualifying period from 12 months to 2 years.
New clause 8—Review of geographical effects of provisions of section 9—
“The Chancellor of the Exchequer must review the differential geographical effects of the changes made by section 9 and lay a report of that review before the House of Commons within six months of the passing of this Act.”
This new clause would require a geographical impact assessment of income tax exemptions relating to private use of an emergency vehicle.
New clause 9—Report on consultation on certain provisions of this Act—
“(1) No later than two months after the passing of this Act, the Chancellor of the Exchequer must lay before the House of Commons a report on the consultation undertaken on the provisions in subsection (2).
(2) Those provisions are—
(a) section 5,
(b) section 6,
(c) section 8,
(d) section 9,
(e) section 10,
(f) Schedule 15,
(g) section 39
(h) section 40,
(i) section 41, and
(j) section 42.
(3) A report under this section must specify in respect of each provision listed in subsection (2)—
(a) whether a version of the provision was published in draft,
(b) if so, whether changes were made as a result of consultation on the draft, and
(c) if not, the reasons why the provision was not published in draft and any consultation which took place on the proposed provision in the absence of such a draft.”
This new clause would require a report on the consultation undertaken on certain provisions of this Act – alongside new clauses 11, 13 and 15.
New clause 18—Review of public health and poverty effects of Basic Rate Limit and Personal Allowance—
“(1) The Chancellor of the Exchequer must review the public health and poverty effects of the provisions of section 5 to this Act and lay a report of that review before the House of Commons within six months of the passing of this Act.
(2) A review under this section must consider—
(a) the effects of those provisions on the levels of relative and absolute poverty in the UK,
(b) the effects of those provisions on life expectancy and healthy life expectancy in the UK, and
(c) the implications for the public finances of the public health effects of those provisions.”
New clause 19—Personal allowance—
“The Chancellor of the Exchequer must, no later than 5 April 2019, lay before the House of Commons an analysis of the distributional and other effects of a personal allowance in 2019-20 of £12,750.”
This new clause would require a distributional analysis of the effect of increasing the personal allowance to £12,750.
Kirsty Blackman
What a pleasure it is, Mr Deputy Speaker, to speak first in this debate. I very much appreciate the way the selection has worked out in my favour today. I rise to speak to amendment 6 and new clauses 7, 8, 9 and 19 in my name and the names of my SNP colleagues. For the avoidance of doubt, should the Opposition press new clause 1, new clause 3, or new clause 18, we will support them.
As I am sure that you, Mr Deputy Speaker, and those on the Treasury Bench will be unsurprised to hear, I would like to start by raising my concerns about the process. It is the case that the personal allowance is reserved while matters relating to the upper limit of basic rate taxation are devolved. I therefore have issues with the way that clause 5 is constructed. I request, as I did on Second Reading, that in future years these two sections of the Finance Bill are split and considered separately. I hope that the Minister and officials will take that on board in drafting future Finance Bills. It would make the debate cleaner and easier to follow for MPs and for those outside the House. As I have said previously, there are real issues with the way that the House scrutinises both tax and spending measures, and this would be a simple change that would ensure that better scrutiny could be brought to bear on these matters.
Amendment 6 would take out provisions removing the legal link between the personal allowance and the national minimum wage. The legal link between the two was put in place to kick in in years where the personal allowance was below £12,500. I have two concerns with the removal of this link. First, we have no guarantee that the personal allowance will not in future be reduced to less than £12,500, because this House cannot bind a future House of Commons and a future Government might decide to reduce, rather than increase, the personal allowance.
Alison Thewliss (Glasgow Central) (SNP)
I of course support my hon. Friend’s point on increasing the minimum wage for under-25s. Is she aware that the gap between the rate for 16 and 17-year-olds and the higher rate has widened over the past three years?
Kirsty Blackman
I am not surprised that that has happened, because any Government who believe that a 16-year-old can live on less than an over 25-year-old are not going to make rational decisions in relation to pay for those at the younger end of the age spectrum. It would be a very good move if the UK Government were to change their policy and move to a situation where 16 and 17-year-olds, and those all the way up to 25, and in fact those over 25, were paid an amount they could actually live on, rather than an amount that does not enable them to buy the day-to-day essentials.
Richard Graham (Gloucester) (Con)
This is a small, but I think important, point: does the hon. Lady accept that that minimum level is exactly what it says—a minimum level? Many people, including my apprentice, earn far more than that, but if we set the level much higher, we are likely to reduce the number of opportunities available to 16 and 17-year-olds.
Kirsty Blackman
I do not believe that that is true. I know somebody who went for a job interview, and at the end of it they were offered the job. The person offering them the job actually said, “How old are you, because I want to see how little I can pay you?” Those decisions are being taken because of the discriminatory nature of the way the minimum wage is set. What we should have—and this is an argument I have made to the Government on a huge number of occasions on a number of different things—is a situation where those on the bottom of the pile are protected first, and then we should get rid of discriminatory practices where people might discriminate against 16 and 17-year-olds. I would raise the bar, rather than lower it; that is generally an argument I have made to the UK Government.
New clause 19, which we hope to push to a vote today, proposes that the Chancellor brings forward a report that analyses the distributional and other effects of a rise in the personal allowance to £12,750 in 2019-20. It is Scottish National party policy that the personal allowance be raised to £12,750. Given the increasing, and staggering, levels of in-work poverty, given the UN report criticising the UK Government’s implementation of austerity, and given the fact that millions of families across the UK have savings of less than £100, increasing the personal allowance even by a small amount will have an impact on the individuals and families who are struggling the most.
It is no incentive to work if we know that when we work we will still not be able to get out of all-consuming poverty. We need a UK Government who recognise that those who earn the least are suffering the most. In Scotland, the SNP has recognised that and we have made progressive changes to the tax system.
I do not want to live in a country where children are going hungry. The UK Government have got their head firmly in the sand on this issue. I do not understand how they can continue along this track when we are having people come into our surgeries in tears because they have not eaten in days.
Mr Jim Cunningham (Coventry South) (Lab)
The hon. Lady is right. There are probably between 3 million and 4 million people in this country on poverty wages and a large number of them are driven to use food banks. Food banks were introduced for people waiting to get their refugee status sorted out, not for this purpose. Does the hon. Lady agree that they have, however, now become an institution in this country?
Kirsty Blackman
I absolutely agree and will come on to food banks, but on refugees and those seeking leave to remain in the UK, these are the people I see in my surgeries in the highest levels of poverty. They cannot work because the UK Government are not allowing them to, even though they have a valid immigration application. Concerns have been raised with me about individuals whose children are literally starving as a result of the UK Government saying that they cannot work or have recourse to public funds. This is a hostile environment that is impacting directly on the lives of children. The UK Government need to rethink. The bar should be set where children are not starving as a result, and then we can take action against those who are trying to swizz the system.
The only decent meal that some children receive is the meal that they have at school. The UK Government cannot continue to say that food bank use is increasing in European countries too, as if that somehow makes it okay. They have a responsibility to step up and to change the tax system, the minimum wage and the social security system to ensure that no child ever goes hungry.
Our new clause 7 would require a review of the impact on investment of changes to entrepreneurs’ relief, which extend the minimum qualifying period from 12 months to two years. Given that we have Brexit hanging over us and the massive uncertainty that that brings, putting another hurdle in the way of businesses is probably not the right course of action. Both the Chartered Institute of Taxation and the Association of Taxation Technicians have raised concerns about the unintended consequences of the change. I believe that a review is the only sensible option going forward. The Treasury regularly makes tax changes, but it does not regularly review their effectiveness, even after they have been in place for a number of years, and when it does it rarely makes those reviews public. It is all well and good to think that something may have a certain effect, but it is necessary to check whether the intended effect has come about. If such changes are made, a review should be undertaken regularly—certainly in the following two years—and it should be made public, in the interests of transparency and good policy making, so that everybody can see not just that the change has taken place, but what its effect has been, so that we are up front and honest and everybody is clear.
New clause 8 concerns the geographical effect of clause 9. The UK Government often fail to recognise the rurality of many of Scotland’s communities, and I am not clear that this change will not have a significant effect on those in our most remote communities. These are places where it is hard to get the staff we need for our life-saving services and where depopulation is a real and ever-present concern. They are also places that will be hit incredibly hard by ending freedom of movement. Given the hit to our crofters over the convergence uplift that was supposed to be given to rural communities in Scotland but was allocated elsewhere, it is clear that the UK Government are not prioritising our rural communities. They need to sense-check any such proposals and change them to ensure that they do not cause further difficulty for those living in our most remote areas, not just in Scotland but in other areas of the UK where being far from centres of population is an issue.
New clause 9 would require a report on the consultation undertaken on certain provisions of the Bill. Glyn Fullelove, the chair of the Chartered Institute of Taxation’s technical committee, has been critical of a number of measures in the Bill that were not previously consulted on, saying:
“The effects of inadequate scrutiny in the past are visible in the amount of tinkering in the new Bill”.
That is something I raised on Second Reading. He goes on:
“would all these tweaks have been necessary if there had been adequate consultation and more thorough scrutiny in the first place?”
If the Government intend to take back control, they need to ensure that control is in the hands of MPs, with adequate advice provided by expert stakeholders. It cannot be appropriate for tax changes to be drafted by officials and put into a Bill by the UK Government, with no opportunity for stakeholders to give oral evidence, no amendment of the law resolution and a total lack of a review of these clauses. That is not a sensible way to run anything, let alone a country. I have severe concerns about this part of the Bill. My concerns are mostly about transparency and process, as well as the lack of scrutiny of many of the measures.
In relation to the changes to personal allowance, the Government have not been progressive. We would expect that from a Conservative Government, but if they look up the road in Scotland, they will see that the changes that we have made have benefited the people at the bottom of the pile. The UK Government need to do more to benefit those people.
Lastly, the UK Government need to take seriously the fact that the personal allowance is not devolved to Scotland but the basic rate is, and changes need to be made. I would appreciate it if the Minister committed to considering making changes in the drafting of the Bill to separate out the devolved and reserved issues, so that we can have proper debates and better read-across, so that we can have transparency in the discussion of tax and spend in this place and so that we can make better laws as a result.
Julian Knight (Solihull) (Con)
It is an enormous pleasure to speak in this Committee stage of the Finance (No.3) Bill, and it is an even greater pleasure to follow the hon. Member for Aberdeen North (Kirsty Blackman) in today’s debate. There are always many responses to a Budget and a Finance Act, and people often look at them and pull them apart over time. In this case, however, I think most people would say that the Budget and Finance Bill have been tremendously well received among financial commentators and many pressure groups. One of the areas that have been most well received is the bringing forward by a year of the increases to personal allowances. The increase to £12,500 for basic rate taxpayers and £50,000 for the higher—40p—taxpayers will make a direct impact on the lives of 32 million of our fellow residents.
Leo Docherty (Aldershot) (Con)
Is my hon. Friend absolutely delighted, as I am, that this means that a basic rate taxpayer is paying some £1,200 less in tax, on an annual basis, than they were in 2010?
Julian Knight
My hon. Friend is correct. The very recent change will benefit basic rate taxpayers to the tune of £120 a year—a direct tax cut for millions of hard-working Britons—and that is to be welcomed.
Rebecca Pow (Taunton Deane) (Con)
Does my hon. Friend—I nearly called him my right hon. Friend, but he is not yet; perhaps he will be in the future—agree that the difference in the figures is stark? The personal allowance was £6,475 when this policy kicked in in 2010, and it has gone way up to £12,500. Surely, that is of huge benefit to the people we want to give more money to.
Julian Knight
I thank my hon. Friend for that short intervention. She makes a really good point, and it is almost the next point that I was going to make. The personal allowance will have nearly doubled in just eight short years. That is against a backdrop of trying to get the public finances under control from a debt of £152 billion a year—11% of GDP—which is an astronomical level outside wartime. It represents a real achievement for the Government to have been able to put this amount of money into the pockets of millions of hard-working Britons each year, so that their living standards can rise, despite the difficult decisions we have had to make.
Members from all parts of the House will probably know that I am no particular lover of the Liberal Democrats, and I am pleased to say that in my constituency of Solihull, we are now 24,000 votes ahead of them. However, I pay tribute to them in one respect. In the 2010 coalition agreement, we took on board what the Lib Dems had been proposing, and it was an excellent idea. I am pleased that the Conservative party was open enough to take on that idea and follow it through, from the coalition agreement, to raise those standards of living and raise personal allowances. I pay tribute to that sort of ideas process from the coalition. We have carried it on, as we see it as a key way in which to reduce inequality and expand opportunity.
Alex Chalk (Cheltenham) (Con)
My hon. Friend talks about the incentives created by reducing the tax on individuals, but does he agree that this has an impact on businesses, too? Where high street businesses such as my local ones in Cheltenham now have a lower tax burden, with one third coming off their business rates, that provides an incentive for them to take on new employees, grow their business and deliver a more prosperous high street?
Julian Knight
My hon. Friend is completely correct. The realities are that the more tax people keep in their pockets—the more of their earnings they keep, without that money going through the Government filter—the more efficient it is, the better it is for the economy, and the better it is for what is known as the multiplier effect through a local economy. My hon. Friend’s on-the-ground view, reported here in Committee, is testament to why the process really benefits high streets and wider local economies.
Rebecca Pow
My hon. Friend has not yet touched on this, but the Government have kept down the corporation tax rate. Does he agree that in areas such as the south-west, where productivity is on average lower than it is in the rest of the country, it is crucial that we leave more money in local businesses so that they can invest, which will help with skills and eventually raise productivity?
Julian Knight
My hon. Friend is absolutely correct. Not only does cutting corporation tax increase the tax take, as we know, but in the round it allows companies to employ more people—I think that it has made a major contribution to the jobs miracle in this country—which then feeds through the taxation system and the multiplier and into the economy more widely, thereby boosting growth and productivity, plus the tax take down the line.
The abolition of stamp duty for first-time buyers of shared ownership properties worth more than £300,000 is an important step for our economy and for strivers in our country. We all know the difficulties that come about in respect of home ownership. I got my first home when I was 31—many years ago, I hasten to add—but I had to buy outside London to get on to the ladder. Even then, people were making enormous sacrifices to find their way on to the property ladder.
Frankly, the situation that I faced is nothing compared with what younger people face now. Not only is it now more difficult in respect of having the income required to get the amount of loan needed to buy, but many people have to rely on what is known as the bank of mum and dad. All that has a damaging effect on equality in our society and the passing down of wealth through the generations if we end up in a situation where those who gain housing wealth do so only if their fathers or mothers had that housing wealth themselves.
Alex Burghart (Brentwood and Ongar) (Con)
My hon. Friend is giving an important speech. Does he agree that in this context it is extremely important that we have embarked on the biggest programme of house building since the 1950s?
Julian Knight
That is exactly right. The point may not be specifically germane to the amendments we are debating, but my hon. Friend is absolutely correct about the context. This is just part of one strand of the strategy that we have to bring about an increase not only in home ownership but in the number of properties available to rent and basically for housing throughout the country. We know from the number of households that are forming that we need to build much more than we are building. This measure is part of considering the issues in the round, so I congratulate the Government in that respect.
We are now seeing the effects of things such as Help to Buy and of measures that—pardon the pun—build on Help to Buy, such as the abolition of stamp duty for shared ownership properties worth more than £300,000. According to the Financial Times—such an august newspaper that it never actually employed me—the rate of home ownership among first-time buyers is now at its highest in a decade. There is a long way to go before we get anywhere near where we were in the 1980s, for instance, but it has been a remarkable turnaround compared with where we were in 2010. The abolition of stamp duty for these properties sends a strong message, not only to people in shared ownership homes but to people more generally, that opportunities are out there and that we will help them by not imposing stamp duty.
Let me turn to tax fairness for individuals, which, I think, overarches the clauses and amendments to the Bill. We would not know this from hearing some of the arguments in this place, but the tax gap in the UK is one of the lowest in the developed world. That does not mean that there is not more to be done. Although we took some first steps in this Budget with internet companies and with organisations such as Amazon, everyone recognises that we need to go further, and we hope to move together in an international context to ensure tax fairness.
Since 2010, we have seen a cracking down on evasion—for example, in film investment schemes and schemes that collectively invest in property to avoid stamp duty. There has been a real concentration by Her Majesty’s Revenue and Customs and Treasury Ministers to ensure that people are aware that everyone should be paying their fair share in society. The hon. Member for Aberdeen North (Kirsty Blackman) mentioned tax equality and how much people are paying at the top end. I find it very telling that the top 1% in our society currently pay 28% of the tax, whereas the top 10% pay 60% of the tax. People would not believe that given the discussions that go on so often. However, this Government have done more towards closing that tax gap and towards ensuring equality in the tax system than anyone else in my lifetime. They have been very laser-like in their focus, and they should be congratulated on that.
Stephanie Peacock (Barnsley East) (Lab)
Does the hon. Gentleman agree that that gap will get wider if answers to my written questions are correct? In answer to a parliamentary question that I tabled, the Government admitted that the majority of their tax cuts would go to upper-rate taxpayers. Is that not exactly why we need the Government to publish the distributional impact of the tax cuts they are making?
Julian Knight
I am afraid that I really do not see the hon. Lady’s point. What I do see is the fact that we are giving tax cuts to 32 million people across the board, and, instead of being so churlish, the Labour party should welcome that.
Leo Docherty
Does my hon. Friend agree that the hon. Lady should check Hansard to see my question of a few moments ago in which I said that, since 2010, a basic rate taxpayer will pay £1,200 less in tax, which clearly shows that this Government are on the side of the hardest working?
Julian Knight
My hon. Friend answered the hon. Lady’s intervention better than I did, so I do welcome what he said.
Let me sum up. In its treatment of tax thresholds and stamp duty, the Bill lays out a fairer tax system. It is a tax system predicated on a better society, and it is a system where people who can pay have to pay their fair share, but where that is achieved without being punitive and without, frankly, trying to put dogma over the reality of the situation.
Peter Dowd (Bootle) (Lab)
I am glad to have this opportunity to debate the issues surrounding new clauses 1, 2 and 3 in my name and the names of others in the Committee of the whole House, and to discuss them in the context of the Government’s attempts to distract attention from their woes. We have just had a lesson in voodoo economics from the hon. Member for Solihull (Julian Knight).
Members need to pay attention to Labour’s proposals in relation to new clauses 1, 2 and 3, but I must first point out that, in response to the Government’s authoritarian restrictions on amending this Bill, we had asked whether the entire legislation could be debated on the Floor of this House. That would at least have ensured a scintilla of constructive discussion among Members on the whole Bill. Alas, our request was denied by the Government, and we are left yet again asking for reviews and assessments as set out in our new clauses. It is important none the less to get these issues about child poverty out into the open. The Government increasingly seek to implement their austerity agenda—for that is what it is—behind closed doors. They will no doubt see our new clauses as an irritant that would highlight the differences between a slash-and-burn approach to public services by the Government juxtaposed with a policy of investment, renewal and rebuilding from this party based on a fair taxation system, as identified in our new clauses.
The Government have practised their manoeuvres in Committees that they have stitched up to give themselves the majority, which they do not deserve, and they do not have the guts to allow proper amendments to their Bill. No Minister has had the decency to defend that position and it is pretty pathetic. The electorate did not give them that mandate, but they arrogantly take it in any event, so it is important that we debate and tease out the issues that we have set out in new clauses 1, 2 and 3.
Leo Docherty
The hon. Gentleman mentions tax cuts. Will he describe whether the Opposition support the tax cuts laid out in the Bill?
Peter Dowd
The hon. Gentleman was that busy talking about sizzling sausages and Marxism last week that he did not hear what I had to say. Now, it is not for me to constantly repeat myself—although I know the Tories do it all the time—so I suggest he reads last week’s debate in Hansard.
Luckily, I am pleased to see that even these mendacious measures are not enough to prevent this Government from a slow-motion collapse. The twists and turns continue. If the weekend reports in the media—specifically The Sunday Times—are anything to believe, if this House votes against the deal, No. 10 has a
“dark strategy to twist arms.”
So what is the cunning plan? Well, No. 10 seeks to
“encourage a crash in financial markets after losing a first vote in the hope this stampedes MPs into voting for it a second time”.
This is ordinarily known as extra-parliamentary activity. The fact that the media are actually putting that scuttlebutt into print, however bizarre, simply shows the desperation in No. 10, so it is important that we do tease out the issues, as we will with new clauses 1, 2 and 3, but this situation bears witness to the siege mentality now at pathological—some might even say clinically obsessive—levels in Downing Street.
Emma Hardy (Kingston upon Hull West and Hessle) (Lab)
I am sure that my hon. Friend, like me, was glued to the television at 10 o’clock last night, watching a documentary “A Northern Soul”, about a man called Steve living in poverty in Hull and his inspiring work to help the children living in that city. I therefore give my hon. Friend my wholehearted support in particular for new clause 2, which would provide for a tax impact assessment to look at how we can genuinely help people like Steve who have suffered so badly under this Government.
Peter Dowd
My hon. Friend is right. I am afraid that the Government are in denial over the question of child poverty; I will come back to that point shortly.
Quite simply, the Prime Minister and those around her have lost the plot; and there have been plenty of plots recently. This Government would not know progress if it stared them in the face, which is why we need new clauses 1, 2 and 3. It is little wonder that the Government have presided over eight years of economic ineptitude that have seen our tax system and society becoming increasingly unequal.
As I said on Second Reading, Labour will not stand in the way of any change that would put additional income into the pockets of low and middle earners. Maybe that answers the question of the hon. Member for Aldershot (Leo Docherty), so he might not have to look at Hansard. Low and middle earners have borne the brunt of the economic failure of this Government and we will not take that cash out of their pockets. However, we believe that the richest in our society and those with the broadest shoulders should pay more tax to help support our public services and finally end austerity. This is not a controversial view, at least among the morally orthodox.
Leo Docherty
The hon. Gentleman mentions tax increase. If Labour were to put in its plans for a wholesale renationalisation of major parts of our economy, how much extra tax would the average British taxpayer be paying?
Peter Dowd
Dear, dear—none. The hon. Gentleman really has to take his nose out of the Tory voodoo economics book, widen his horizons and look at Labour’s “Funding Britain’s Future”.
One only needs to look at our European neighbours to see that the rate of tax on higher earners in this country is relatively low compared with Germany, France, Sweden and even Ireland. To set the ball rolling, Labour’s new clause 1 would require the Chancellor to lay before the House a distributional analysis of the effect of reducing the tax threshold for the additional rate to £80,000 and introducing a 50% supplementary rate for those earning more than £125,000 a year.
These are Labour’s policies, committed to in Labour’s very, very popular manifesto of 2017. They will put—[Interruption.] I know that Government Members do not like to hear this, but these policies will put the country on a much fairer fiscal footing, ensuring that the wealthy pay their fair share for the restoration of our social fabric, which is crumbling after eight years of gruelling Tory austerity.
The fact is that since the financial crash a decade ago, the very rich have only become richer. The Institute for Fiscal Studies identified that the top 1% have received an increase in share of total income from 5.7% in 1990 to 7.8% in 2016. In response to the hon. Member for Aldershot, it is no wonder they are paying more taxes—they have had the biggest share of total income.
Rachel Maclean (Redditch) (Con)
Does the hon. Gentleman not accept that this Government are determined to tackle these important issues of income inequality, to the point where income inequality and inequality of disposable income are now at their lowest level since before the financial crisis, when his party were managing the economy?
Peter Dowd
Well, they are not making a very good job of it—there are 4 million people in poverty. That is the fact. Conservative Members can deny that until they are blue in the face, but that is the reality.
Let us move on to the issue of infant mortality. Infant mortality has risen for the first time since the 1990s, when the Tories were last in government, and, as I indicated, there are 4.5 million people living in poverty. That is a fact, and they should not pretend otherwise. They should at least have the guts to admit that their policies have got us into this situation.
This stark contrast in living standards has been driven by the Government’s remorseless austerity agenda, which has chopped away at our fiscal checks and balances. By narrowing the tax base while continuing austerity, they have entrenched poverty and inequality across the nations and regions, leaving vulnerable groups—particularly women—worse off.
Louise Haigh (Sheffield, Heeley) (Lab)
My hon. Friend is making a really important point, and it is reflected in the changes to life expectancy that we have seen over the last eight years. Life expectancy for the poorest women in Sheffield has fallen by four years since the Conservatives came to power in 2010. Is that not a further reflection of the devastating impact of austerity on inequality in this country?
Peter Dowd
Quite simply, it is shameful—it is as simple as that.
New clause 2 would require the Treasury to undertake an equalities impact assessment of the changes to the personal allowance and its impact particularly on child poverty. This assessment will include households at different income levels, groups protected by the public sector equality duty and the regions and nations—this is the Labour party speaking for the whole of the United Kingdom.
Such an assessment is needed now more than ever. The Social Metrics Commission recently found, as I indicated before, that 4.5 million children are living in poverty in the United Kingdom. That is shameful. The Government claim that none of this matters as long as parents are finding work, which ignores the fact that work is no longer a sustainable route out of poverty. Indeed, the Joseph Rowntree Foundation found that more than two thirds of children in poverty live in a working family.
We know that the assessment set out in new clause 2 will further justify the United Nations special rapporteur’s investigation into this Government’s policy of austerity last week. The poverty envoy found that the policies of austerity had inflicted “great misery” on our citizens, and he went as far as to say that the “fabric of British society” is falling apart as a result. That is absolutely damning.
Alex Chalk
The hon. Gentleman is talking a lot about the politics of austerity. The United Kingdom last lived within its means in 2001. Under a Labour Government, when would the United Kingdom next live within its means?
Peter Dowd
I do not accept the premise of these trumped-up ideas from voodoo economics presented by the Tory party. The reality is that the report was absolutely damning. It was absolutely devastating, and Government Members should be ashamed that somebody from the United Nations should come to this country and objectively lay out the facts as they are.
Sadly, in true Trumpian style, the Government chose to ignore the UN special rapporteur. Live on “Channel 4 News”, the Financial Secretary to the Treasury buried his head in the sand, saying
“there is a…strong push to reduce poverty”.
Well, it is not getting pushed hard enough. The Financial Secretary refused to acknowledge that there are 1.5 million people living in destitution, despite repeated questioning. A cursory look at this Government’s policies demonstrates that, for eight years, they have felt it was reasonable to punish the poorest to let the bankers off the hook. How can this Government be so out of touch?
I now turn to new clause 3. According to HMRC’s own statistics, over £400 billion a year is spent in tax reliefs. Entrepreneurs’ relief costs £2.7 billion a year alone, and benefits only 52,000 people.
Alex Chalk
The hon. Gentleman is very generous in giving way a second time. If Labour Members were to get back into power, would they change the tax system so that people had to pay tax from £6,750, as in 2010? Does he agree that that would cost working people an additional £1,000-plus a year?
Peter Dowd
I suggest that the hon. Gentleman reads the shadow City Minister’s article on LabourList, which sets that out very clearly.
Peter Dowd
My hon. Friend will send the hon. Gentleman a copy and he will sign it—and Conservative Members might actually learn something. I know it is difficult for my hon. Friends to grasp the concept that Conservative Members might learn something, but they actually might.
Entrepreneurs’ relief costs £2.7 billion a year alone, and benefits only 52,000 people. This bloated relief—and it is bloated—is overwhelmingly spent on a small number of wealthy individuals, with 6,000 claimants receiving relief on gains of over £1 million. I will repeat that: 6,000 claimants receive relief on gains of £1 million. It is no wonder then that the IFS and the Resolution Foundation have called for it to be scrapped. Clause 38 and schedule 15 represent yet another Conservative half-measure.
Rachel Maclean
As a former entrepreneur, as in my entry in the Register of Members’ Financial Interests, I did not benefit from this particular relief, but many in that community do benefit from it. Does the hon. Gentleman believe that this should be scrapped, which would penalise people who start businesses in this country and go on to employ people who then pay taxes and put food on the table for their families? Is the position of the Labour party to be completely anti-entrepreneurs?
Peter Dowd
The Treasury has not reviewed the relief and does not know whether it is working, but it has chucked £2.7 billion—I repeat, £2.7 billion—at a relief that affects only 52,000 people. There is something not quite right with that. I get that and my hon. Friends get that, but Conservative Members are in denial about it, as they are about child poverty.
Leo Docherty
Given that the hon. Gentleman is against relief for entrepreneurs, will he tell the Committee whether he is also against small businesses being relieved of their rates, with business rates being slashed by one third? [Interruption.]
Peter Dowd
Out of courtesy I will respond to the hon. Gentleman. What we want is a fair taxation system, which is completely and utterly alien to the Government. It is as simple as that.
Stephanie Peacock
My hon. Friend pointed out that the Government are in denial on child poverty. That is absolutely clear in my constituency in Barnsley, where 6,000 children live in poverty. Does he agree that poverty is a political choice caused by the Conservative party?
Peter Dowd
My hon. Friend is right, and for the Tories that choice comes first, second and third, and it always will.
On one hand the Government are lengthening the qualifying time for investors from one year to two, but on the other hand they are ensuring that shareholders will be protected from falling below the 5% threshold needed to claim the relief when a company is sold. It is hard to see how this confused measure will tackle the growing cost of the relief.
Naturally, the Opposition, the Resolution Foundation and the IFS are not the only ones who have found this measure perplexing to say the least. The Chartered Institute of Taxation has raised deep concerns about its retroactive nature, its lack of clarity and the likelihood that the reforms will hit small businesses the hardest—the businesses that the hon. Member for Redditch (Rachel Maclean) no doubt had in mind in her intervention. Far from making the relief more equitable, this measure will instead insulate wealthier claimants who can rely on expensive tax advisers to navigate red tape, ensuring that the cost of the relief will continue to bloom.
The cost of corporate welfare has risen steadily under this Conservative Government. In fact, I would go so far as to say that it is the one form of welfare that Government Members support. In contrast, the Labour party is committed to undertaking a full and comprehensive review of corporate tax reliefs when—not if—we reach government. That is why we have tabled new clause 3, which would require the Government to undertake a full review of entrepreneurs’ relief. The review would consider the overall number of entrepreneurs in the United Kingdom, the annual cost of the relief, the cost per claim and the impact of the relief on productivity in the UK—productivity that is 15% below our comparators in the G7 and 35% below the Germans. The Government should be getting to grips with that fact, not fiddling around with entrepreneurs’ relief.
Government Members should ask themselves how they can justify the amount of money going to 52,000 people while our public services are falling into disrepair. This relief is clearly in need of urgent review to ensure that the taxpayer is not being ripped off. They should be clear that if they choose to vote against new clause 3, they are voting against the interests of taxpayers across the country. Again, this is £2.7 billion for 52,000 people.
I hope that Government Members will support our new clauses 1, 2 and 3, for the reasons that I have outlined. This authoritarian Government of the rich, by the rich, for the rich have lost all credibility to manage the affairs of this country. They no longer know what they stand for, nor do they have the courage to find out. This Bill of broken promises takes us no further forward in meeting this country’s mounting challenges, so I call on Members throughout the House to support Labour’s proposals to create a fairer society and a fairer tax system. If we are unable to change the Government’s course, we will challenge the Bill at every step of the way, notwithstanding the authoritarian shackles put on us by this authoritarian Government, and we will use it to put an end to this aimless and divided Government.
Richard Graham
It is a pleasure to follow the hon. Member for Bootle (Peter Dowd), although there were moments during his speech when I found myself wondering whether history was being rewritten in a remarkably creative way.
The changes that the Government have proposed come against a background of remarkable achievement in cutting the deficit by four fifths, reducing the unemployment rate to its lowest since the 1970s, giving 32 million people tax cuts and taking 1.7 million out of income tax altogether. Some of those things were denied by the hon. Gentleman, who claimed at one point that the rich were only getting richer. I think it therefore falls to me to offer a few statistics to put his comments into context.
The first comes from the Institute for Fiscal Studies analysis of what went on under the previous Labour Government. The hon. Gentleman, who is chuntering with his colleague the shadow Chancellor, should focus on that IFS analysis. The independent analysis from the IFS shows very clearly that on most measures income inequality during the 13 years of the previous Labour Government went up. Part of the reason for that was explained, helpfully, by the hon. Member for Norwich South (Clive Lewis) in an interesting interview with The Guardian the other day. He pointed out that the attitude of the previous Labour Government was, to quote the former deputy Prime Minister, Lord Mandelson, “intensely relaxed” about the filthy rich. The hon. Member for Norwich South rightly went on to say that during the 13 years of the Labour Government:
“The huge fortunes of those at the very top…were left almost untouched.”
That is why the work done by this Government, which for example includes scrapping child benefit in 2013 for those earning over £50,000, has led to the lowest tax gap for a very long time. The percentage of income tax paid by the top 1% has doubled under the Conservative Government. The hon. Member for Bootle therefore needs to think hard about that IFS analysis. Income inequality went up under the 13 years of the Labour Government and it has gone down in eight years under the Conservatives.
There are other points worth highlighting. For example, people on lower and middle incomes actually have more money in their pockets now than at the start of the financial crisis under the previous Labour Government. The gap, as I pointed out, between those on the lowest and highest incomes is lower than it was when the Labour Government left power in 2010. In fact, income inequality is now close to its lowest point since 1986. That is a remarkable achievement. Over the past 30 years, which include 13 of a Labour Government, income inequality narrowed sharply under this Conservative Government.
Labour Members have made a lot of points about employment, so it is worth highlighting that the growth in employment benefits most the poorest 20% of households. The employment rate is now up by more than seven percentage points on where it was before the financial crisis under Labour in 2007. Thanks to the national living wage, the income of the lowest earners has actually grown by almost 5% since 2015, higher than at any other point across the earnings distribution. The actual situation today in our economy for those working is therefore very different from that painted by those on the Opposition Benches and by the hon. Gentleman.
A crucial and major difference between the Labour party and the Government is on taxing business. The uncomfortable truth for Opposition Members who would like to tax business more is that since the Government cut corporation tax in 2010 receipts have gone up by 50%, generating an extra £20 billion in 2016 over what was generated in 2010. The extra £20 billion we found for the NHS above inflation for this five-year period does not come from nowhere; it comes from increased receipts and growth in the economy. That extra £20 billion raised from corporation tax, as a result of cutting corporation tax, is one of the critical economic differences between those on the Government side of the House and those on the Opposition side. The Opposition still believe that if they tax businesses more they will get more tax. The truth, however, is that if we tax businesses less we incentivise business and entrepreneurs, generating more tax receipts to put into our vital public services.
Julian Knight
Does my hon. Friend recognise that £20 billion happens to be exactly the same amount of extra money that the Government have pledged to put into our national health service?
Richard Graham
Exactly. The figures are a coincidence, but my hon. Friend is absolutely right to highlight that we are putting the same amount of extra money into the NHS—the largest ever amount invested into our national health service.
Leo Docherty
My hon. Friend is painting a very lucid picture of how the Government differ from the Opposition with regard to tax, but does he agree that that also applies to our approach to private property? The discussion that the Labour party is having about the wholesale renationalisation of major parts of our economy is deeply alarming, and it should come clean to the public about how much that would actually cost.
Richard Graham
My hon. Friend is absolutely right. The remark made by the shadow Chancellor earlier that the public—all our constituents—would have to pay zero extra to fund the widespread nationalisation of all the utility companies, the train companies and anything else was really quite extraordinary. To be honest, I would be surprised if somebody did not raise that on a point of order in terms of misleading the House and the nation, because clearly those figures are a mile away from what independent analysts have calculated.
Rachel Maclean
Has the shadow Chancellor not been on record stating that it does not matter if his sums do not add up, and that it is largely irrelevant, which demonstrates my hon. Friend’s point?
Richard Graham
My hon. Friend is absolutely right. As she knows well, the truth of the last Labour Government—during their 13 years—was that although they promised no more boom and bust, they gave us the biggest bust in peacetime history as a result of wildly overspending. I am afraid the net result of that is, as always, that the poorest feel the effects worst. In my constituency of Gloucester, 6,000 people lost their jobs during the great recession under Labour. Only since the Conservative Government came back have we seen employment rise sharply and youth unemployment and unemployment fall sharply.
Jonathan Reynolds
I will not repeat the debate that we always have about a global financial crisis not being solely contained in the UK, but on the earlier intervention that the hon. Gentleman took, the shadow Chancellor is not on the record as saying that his sums do not add up and that that does not matter. Let us remind the Committee that the only party that published costings of its policies at the election was Labour. It is genuinely misleading the Committee to claim that the shadow Chancellor said anything other than that.
Richard Graham
I thank the hon. Gentleman for his intervention, but will he confirm to the Committee what I heard the shadow Chancellor say earlier in answer to a question from one of my colleagues? He said that there would be zero additional cost to the taxpayer from the enormous, widespread renationalisation policy of Labour; will the hon. Member for Stalybridge and Hyde (Jonathan Reynolds) confirm that there will not be a single penny of additional cost?
Jonathan Reynolds
The shadow Chancellor did not speak from the Dispatch Box. I think the hon. Gentleman is thinking of the shadow Chief Secretary, my hon. Friend the Member for Bootle (Peter Dowd)—the two should not be confused. On nationalisation, I think the point that my hon. Friend was trying to make is that we can simply look at British history to see how this works. If we take an asset into public ownership and the return from that asset is greater than the cost of the borrowing to take it on, there is no net cost to the taxpayer, and certainly, income tax will not have to rise to cover that.
The Chairman of Ways and Means (Sir Lindsay Hoyle)
Order. We are not having a debate on party policy. We have amendments and clauses before us and we are straying from them—I know you wanted to get through your speech very quickly, Mr Graham.
Richard Graham
You are entirely right as always, Sir Lindsay. It was helpful to have it exposed that there is clearly a significant difference of opinion between the shadow Chief Secretary and the shadow Chancellor on whether there will be any additional costs from the policies of the Opposition—[Interruption.] I have taken a lot of interventions, so I will cease from taking them so that I can come, as you suggested Sir Lindsay, to a rapid closure, which I am sure will be welcomed by Opposition Members.
Having made the crucial point on our approach to investment in business, let me finish on the annual investment allowance, which is a crucial part of the Budget and the clauses under discussion. This is important because it encourages businesses to invest in expensive technology that, over time, will allow them to grow and employ more people. I could give a dozen examples from my constituency of where this has been true. To give it some flavour, I will highlight just one area. The hon. Member for Stalybridge and Hyde will know, having visited China with me last week, how far we have gone in increasing our exports to China. From Gloucester alone, we are exporting a huge number of manufactured goods, including the landing gear on all Airbus aircraft.
Peter Dowd
If the hon. Gentleman is so sure of his position, what is wrong with providing for a review of the effectiveness of entrepreneurs’ relief, as new clause 3 would do?
Richard Graham
The hon. Gentleman is kind to mention that, but the fact is that we on the Government side of the House believe strongly in incentivising the entrepreneurs. They are the ones producing the technologies of the future—Fintech, Edtech, every sort of tech—and the reason why this country has seen more investment in technology in London alone in the last year than Germany, Spain, Ireland, the Netherlands and France put together. These incentives to businesses are what generate the additional tax revenue I highlighted earlier.
The changes to gambling tax are among the most significant measures proposed. These are fundamentally about what is morally right, and I am delighted that the Government have found a way to do the right thing, not just by reducing the maximum stake for fixed odds betting terminals from £100 to £2, but by introducing it rapidly and by raising the remote gambling duty from 15% to 21%. If I could make one request of the excellent Minister, it would be that he consider other ways to reduce the amount of online gambling advertising and to raise more tax revenue from it.
This is an important discussion. Some of the facts offered earlier by the Opposition were completely astray from reality, and I strongly support what the Government are doing to incentive business, encourage more people into work and, above all, benefit the lowest earners. It is worth finishing with one last statistic from the OECD: the proportion of jobs that are low-paid is at its lowest level in this country for at least 20 years. That is a significant achievement on which we can hope to build yet further in the future.
Sir Vince Cable (Twickenham) (LD)
I wish to say a few words about amendment 18, which would remove clause 5. I spoke on this at length on Second Reading, so I do not need to say a great deal.
The difficulty with clause 5 is that it combines two very different measures, the first being to lift the low earners threshold. As the hon. Member for Solihull (Julian Knight) reminded us a few minutes ago, this was a policy that I and my colleagues pursued in government, and it is not something I at all disagree with. The second, however, is a much more substantial measure to lift the tax threshold for middle earners. I do not pretend for a moment that people at the higher rate threshold are rich people—at the bottom end, they are paid less than Members of Parliament—but we need to get beyond the headlines and look at the actual numbers.
The lower threshold is to be lifted by £650, and 20% of that is £130, so the people solely on standard rate tax will get £130 in their pocket as a result of this measure. Of course, that is welcome. It is about a 2% increase, which is roughly in line with inflation, and is unquestionably a good thing. For the high earners threshold, however, we are talking about much bigger sums of money—a £3,650 increase in the threshold. Multiplied by 20%, and we are talking about £730, but of course high earners also benefit from the standard rate threshold increase. Add the two together and we have got £860. This measure, which is badged as a measure to help low earners, helps low earners to take home £130 a year and high earners £860 a year. On no conceivable measure could that be described as some enlightened policy for helping the low paid.
Having said that, I should add that there are things that the Government could have done as part of the policy of reducing fiscal drag. I fully understand the need at the margin to stop people being dragged into higher tax rates, and something could have been done to offset that. The Chancellor himself has acknowledged that there are extremely expensive and lavish tax reliefs on pension contributions for upper earners, which cost the country about £25 billion a year. I think that if he had chosen to offset the upper-rate threshold measure by some reduction in pension tax relief for the high paid, such that it neutralised it, many of us would have thought that that was quite a reasonable way of making progress, but he did not, despite the urgent need for revenue.
In an ideal world we would be looking at tax cuts for everyone, but we are not in an ideal world. There are issues of priorities. As several Conservative Members have reminded us—former Chancellors, among others—we are living in a world of severe fiscal restrictions, despite the proclamation of the end of austerity. There are other purposes for which the money could have been better used. We are talking about £2.8 billion in the first year, tapering to about £1.7 billion a year, of which roughly half is for the upper rate threshold. We can all think of many, many ways of spending that money, but for me the priority would have been fully restoring the cuts in universal credit that were made two years ago. The Government have partly done that, but with the additional sum of £1.3 billion, the Chancellor could have returned universal credit to the levels at which it was placed two years ago, in the Osborne Budget. The money could also have been used to end the benefits freeze a year early. The continuation of that freeze means that the poorest 30% in the population are being dragged down as a result of the Budget, but ending the freeze a year early could have offset that. Obviously there are many other purposes for which the money could have been used, but those would have been my priorities.
This measure, politically, was obviously intended to enable the Chancellor to proclaim that the end of austerity is not just about public spending, but about cutting taxes. There is nothing wrong with that general proposition, but the problem is that it is dishonest: that is not what is actually happening. The revenue line in the Red Book shows clearly that as a result of revenue measures, council tax will rise by £6 billion over the next five years—that it will rise by considerably more than income tax is being cut. What, essentially, is happening is that as a result of the reduction, or the freezing, of spending on support for local councils, the councils are making up their revenue through council tax increases to the maximum extent allowed. The Government, according to their own numbers, believe that council tax revenue will rise by £6 billion to about £40 billion. That, as I have said, more than cancels out the income tax cuts, most of which in any case accrue to higher-rate earners. So this is not a tax-cutting Budget at all. It is, indirectly, a tax-raising Budget, and I hope that that will be pointed out to members of the Government when they use such rhetoric in future.
I simply wish to move my amendment, and we will seek to oppose clause 5 stand part.
Leo Docherty
It is an honourto follow the right hon. Member for Twickenham (Sir Vince Cable).
I welcome the Bill. As we consider the amendments, we are faced with a stark choice that faces all politicians and members of the public when they consider the basic question of how we manage our economy and how we manage tax and spending. It is the stark choice between responsibility and recklessness. If we cast our eyes back over the last eight years, we see the benefits of the responsible, balanced approach of the Conservatives. Since 2010 the deficit has decreased by 80%, and the economy has grown for eight consecutive years, by a total of 17%. Unemployment is at its lowest rate since 1975—the year before I was born—and the Government are managing to boost public spending while simultaneously cutting tax. I am particularly pleased about the almost doubling of basic-rate tax relief: those on the basic rate are paying £1,205 less every year than they were paying in 2010, which is a tremendous step forward.
Julian Knight
The increases in the minimum wage and the living wage have also had a fundamental impact on the earning capacity of people at the lower end of the income scale in our society.
Leo Docherty
Absolutely, and the bottom line is that that allows more people to spend more of their own money doing what they want. That is what this Government deliver.
Grant Shapps (Welwyn Hatfield) (Con)
Does not the rise in the tax-free allowance from £6,475 to £12,500 also mean that the tax collector will no longer have to waste time chasing and trying to track down people who are earning the basic salary to secure very small amounts that probably cost more to collect than they constitute in receipts?
Leo Docherty
My right hon. Friend has made a very good point. The rise is not just good for the taxpayer, but good for the Government.
This balanced, responsible approach is in stark contrast to the reckless and ideologically driven approach of the Opposition. Members will probably need no reminding that in 2016 the shadow Chancellor declared, “I am a Marxist”. He pursues—well, let us call it a policy of half-based Marxism mixed with 1970s-style union militancy.
Rachel Maclean
Does my hon. Friend recall that, along the same lines, the Labour Opposition were preparing for capital flight and a run on the pound, and does he share my alarm at that prospect?
The Chairman of Ways and Means (Sir Lindsay Hoyle)
Order. May I share my wisdom with you both? The debate is about the clauses and new clauses before us. Members tried to go down this route once before. The new clauses are quite clear, and the clauses are quite clear. I am sure Mr Docherty wishes to stick to that, and I am sure Members will not tempt him again.
Leo Docherty
You are absolutely right, Sir Lindsay. I certainly will not be tempted to stray from the clauses and new clauses that we are considering.
It is, of course, important to consider the approach to ownership of private property that the shadow Chancellor and his party laid out last year in a document that Members can obtain from the Library, entitled “Alternative Models of Ownership”.
Leo Docherty
It is relevant because it puts renationalisation at the front and centre of the Labour party’s economic policy. Regrettably, there are no figures in the document. That is because the cost of renationalisation, calculated by the Centre for Policy Studies, would be £176 billion: £6,471 for every single household. That is a deeply alarming fact.
That approach was given further voice when, just last week, the shadow Chancellor made a speech at an event hosted by Red Pepper. He discussed his broad economic approach, and his approach to tax and private property. He promised that the Labour manifesto would be even more radical than the last. This is relevant because, referring to Labour’s approach to the private ownership of land, the shadow Chancellor said:
“One of the big issues we’re now talking about is land, how do we go about looking at collective ownership of land”.
The Chairman of Ways and Means (Sir Lindsay Hoyle)
Order. We have strayed completely from where we should be. If the hon. Gentleman wants a debate on the Opposition, he needs to wait until the right moment. Today is not that moment. This is about the new clauses that we are discussing, and what he is talking about is not relevant. I have allowed him a little leeway, but we have now strayed too far. I would like him to concentrate on the new clauses.
Leo Docherty
I am grateful to you, Sir Lindsay. I will come back more pertinently and conclude by bringing the debate back to the effect on small businesses. I hugely welcome the cut in business rates in the Finance Bill.
Julian Knight
Enterprise relief is the subject of one of the amendments. Does my hon. Friend agree that it is wrong-headed to say that only 52,000 people would benefit from the said changes proposed in the Bill? Does he agree that we should take account of the fact that many employees and others will benefit from entrepreneurs bringing about these businesses, and does he therefore support the changes to enterprise relief?
Leo Docherty
I am wholehearted in my support for the changes to entrepreneurs’ relief. I was in my constituency of Aldershot on Friday, visiting one of the many small and medium-sized enterprises that are the backbone of our economy there. Gemini Tec is one of the leading manufacturers of short circuit boards in the country, and that business is successful because of the entrepreneurs who have been driving it forward for the past 40 years. They do not ask any special favours from the Government. Indeed, they want the Government to keep out of their way and let them thrive. However, if the Government can in some way create an ecosystem and an atmosphere, through measures such as entrepreneurs’ relief, that is wholeheartedly to be commended. We have a tradition of tremendous innovation and creativity—not least in Aldershot, north Hampshire, the Blackwater Valley and Farnborough—and this drives a lot of the job creation that we are now seeing in this country. As I have said, this has led to the lowest rates of unemployment since 1975, the year before I was born.
Ruth George (High Peak) (Lab)
Does the hon. Gentleman believe that money to support entrepreneurs is being well spent through the Government giving an average of £450,000 in entrepreneurs’ relief each to just 6,000 entrepreneurs? Does he acknowledge that the Government will take £1.5 billion off the 300,000 small businesses that will lose out through the universal credit minimum income floor, which the Government are driving through?
Leo Docherty
This is not a debate on universal credit. This is actually about job creation. That is the more important point when it comes to entrepreneurs’ relief.
Kirsty Blackman
New clauses 3 and 7 both ask the Government to say exactly what the effect of entrepreneurs’ relief will be. Does the hon. Gentleman agree that it would be best for reliefs to be targeted to ensure that the most jobs are created, the most people benefit and the most businesses can grow as a result of the changes? Does he therefore agree that it would be good for the Government to explain why their proposal is better than any other proposals?
Leo Docherty
Of course the best way to measure the effect of this is in employment growth. I expect these changes to further deepen the positive impact and the positive growth in employment that we have seen recently. Having considered these amendments, I am delighted to welcome the Bill wholeheartedly. Government Members must be confident about supporting our balanced approach, in contrast to the reckless and ideologically driven approach of the Labour party. We must consider this not just in economic or fiscal terms, but in human terms. Free-market capitalism has been one of the greatest forces that the world has ever seen. It has lifted 1.5 billion people out of poverty in the past 30 years. We should be confident about that, and we should be confident in our balanced and responsible approach. I am delighted to welcome the Bill this evening.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
Before I speak to my new clause 18, I want to gently chastise the hon. Member for Gloucester (Richard Graham). He is not in his place at the moment, but I am sure that someone will respond to this for him. He very inappropriately raised quite selective data on inequalities, a subject that I spent nearly 20 years working on before I came to this place. He should know that we are the seventh most unequal country of the 30 developed countries in relation to income inequality. By some measures, we do worse than others, but overall, economic equality is not just about income; it is also about pay and wealth. We need to be mindful of this fact, and selectively reporting data is not a practice that we should be indulging in.
I should like to declare an interest as the chair of the all-party parliamentary group for health in all policies and as a fellow of the Faculty of Public Health, following more than 20 years of national and international work in this field prior to becoming an MP. It is lovely to see you in the Chair, Madam Deputy Speaker. New clause 18 would require the Government to commit to undertaking an assessment of the effects of the personal taxation measures in the Budget—including changes in the personal allowance and the higher rate threshold—on poverty, on the public’s health, including their life expectancy and healthy life expectancy, and in turn on public services.
The reason I have tabled this new clause is that, over the past eight years or so, I have seen the gains made under the previous Labour Government being totally reversed by this Government. Those gains included the reduction in the number of children and older people living in poverty and the improvements in health including an increase in our life expectancy and reductions in health inequalities. As the UN’s special rapporteur on extreme poverty and human rights, Philip Alston, said on Friday, the cuts and reforms introduced in the past few years have brought misery and torn at our social fabric. He went on:
“British compassion for those who are suffering has been replaced by a punitive, mean-spirited and callous approach”.
As I mentioned in my point of order earlier, I am afraid the Under-Secretary of State for Exiting the European Union, the hon. Member for Spelthorne (Kwasi Kwarteng) demonstrated this exact point in his comments on the “The Andrew Marr Show” yesterday. The lack of humanity he showed in his response to the plight of Emily Lydon, who is being forced to sell her home because of issues with transitioning on to universal credit, shamed not only himself and the Government of which he is a Minister, but this whole House.
Peter Dowd
Does my hon. Friend agree that the massive cuts in the public health budgets that are now controlled by local authorities have simply made matters considerably worse in the public health field?
Debbie Abrahams
My hon. Friend is totally right. Those budgets were ring-fenced to start with, but they are now absolutely emaciated. This is stopping us doing the prevention work that we should be doing. We made massive investments in public health, and they were having a real impact in terms of health gain. I am afraid that that is now going by the bye.
We know that there are 14 million people living in poverty in the United Kingdom, 8 million of whom are working—the highest level ever. It is fine for Conservative Members to speak on a positive note about employment rates, but they should be asking themselves why we have such high levels of in-work poverty. That, too, brings shame on us. Two thirds of the 4 million children living in poverty are from working households. How on earth are young people expected to learn and to excel at school if they are constantly hungry?
Alison Thewliss
The hon. Lady might not have had a chance to read it yet, but the all-party parliamentary group on infant feeding and inequalities, which I chair, produced a report that came out last week. It found that even working families are now struggling to meet the cost of infant formula, so they are having to stretch it out, to the detriment of their children’s health. So this problem is starting even before children go to school, because babies are not getting the nutrition that they need.
Debbie Abrahams
That is absolutely right. I will come on to some of the really worrying figures about how, from birth, our children are being affected because of the poverty that they are experiencing.
What about disabled people? Disabled people are twice as likely to live in poverty as non-disabled people because of the extra costs that they face around their disability. We have seen their social security support become absolutely emaciated. Given that we are the fifth richest country in the world, that is shocking—absolutely shocking. Four million disabled people are already living in poverty, with many now continually finding that they are becoming more and more isolated in their own homes.
Since 2015, as analysis from the Institute for Fiscal Studies and others has shown, those who are in the lowest income decile have lost proportionately more income than any other group as a consequence of personal taxation and social security changes. That is the important thing. My new clause is not just about taxation. We cannot see that in isolation from how we then ensure, as a country, that we are supporting people on low incomes—and that support is completely inadequate. What was put forward in the Budget does not go anywhere near repairing the damage that was done in the summer Budget of 2015.
Last month’s Budget produces only marginal gains to the household income of the poorest, while reducing the number of higher-rate taxpayers by 300,000. The Government’s regressive measures have done nothing to reduce the gap between the rich and the poor. When cuts to household incomes are combined with the cuts to public spending and services, the impact is even more dramatic, and again with disproportionate cuts to Government funding to towns and cities across the north, as evidence has repeatedly shown.
The effects of all this on life expectancy are now being seen, with health gains made over decades now falling away. Life expectancy has been stalling since 2011, and it is now flatlining, particularly in older age groups and for older women. In the same week—the very same week—that these data came out last year, the Government actually increased the state pension age. We know that our life expectancy is flatlining. For women—think about the 1950s-born women—it is going backwards, yet we are still putting up the state pension age. What is going on?
On top of this there are regional differences in how long people will live, with these health inequalities reflecting the socioeconomic inequalities across the country. Life expectancy for men in Windsor and Maidenhead stands at 81.6 years, while in my Oldham and Saddleworth constituency it is 77. Even within these areas, there are differences in how long people will live. Again, in the Windsor and Maidenhead local authority area, the life expectancy gap is 5.8 years for men and 4.8 years for women, while in my constituency it is 11.4 years for men and 10.7 years for women. These health inequalities are reflected right across the country. The gains Labour made in reducing health inequalities are now being reversed.
Similarly, the Royal College of Paediatrics and Child Health reported last month that infant mortality has started to increase for the first time in 100 years. Four in 1,000 babies will not reach their first birthday in the UK, compared with 2.8 in the EU. These are the unacceptable consequences of austerity. I welcome the Department of Health and Social Care commissioning Public Health England to investigate the causes of this declining health status, but it is very late in the day. Public health specialists—renowned epidemiologists such as Professor Sir Michael Marmot, Professor Martin McKee and many others—have been calling for this for the past 18 months. We already know from the work that they have been doing that they are pointing the finger towards austerity. It is imperative that in addition to stopping austerity, and the misery and poverty that is being wrought, we tackle the inequalities within and between regions and communities.
An analysis of the effects of the Budget’s personal taxation measures is part of this, but it should not be seen in isolation. This would be outside the scope of the Bill, but the Government should be doing an analysis of their social security and public spending cuts. Reducing the gap between the rich and the poor is not just good for the economy. As evidence from totemic reports such as “The Spirit Level” shows, life expectancy then increases, as well as educational attainment, social mobility, trust, and much more. Fairer, more equal societies benefit everyone. Inequalities are not inevitable—they are socially reproduced and they can be changed—but to tackle them in all their forms takes commitment, it takes courage, and it takes leadership.
Jack Brereton (Stoke-on-Trent South) (Con)
It is a pleasure to speak in this part of the debate. I really do think that this is the best Finance Bill that we have seen in some years. I return to the point that I made on Second Reading: Governments do not have their own money, only taxpayers’ money. It is absolutely imperative to remember that and to remember that taxes are paid in the expectation that they will be spent wisely and necessarily. Where the Government can find a way to enable taxpayers to keep more of their own hard-earned money, they should do so.
Helping families in constituencies like mine better to meet the costs of living is absolutely critical. I am therefore a strong supporter of clause 5, raising the personal allowance for us all and the scope of the basic rate to more of the middle earners who have previously been dragged into higher rates of taxes than they should have faced. These are not the top earners, but will often be the likes of middle management, senior nurses, or lower-rank inspectors in the police, and they have previously been penalised by this punitive higher rate of tax.
The increase in the personal allowance is the latest in a line of such increases. This will mean that a typical basic-rate taxpayer will pay £1,205 less tax in the next tax year than they did in 2010-11. Importantly, the increase to £12,500 comes a year earlier than planned. That can happen because the public finances are in a better shape than had been predicted, thanks to the hard work of the British people and the sound fiscal management of my right hon. Friends the Chancellor and the Chief Secretary, and the Ministers on the Front Bench. They know that taxpayers’ money is taxpayers’ money, and they have rightly allowed taxpayers to keep more of it as soon as it has been possible to do so, as we see in these clauses. This is combined with inflation coming back under control and wages rising again in real terms. The lowest paid have not only been taken out of income tax altogether but enjoy an increased national living wage.
Leo Docherty
I share my hon. Friend’s thoughts about the increase in the personal allowance. Does he agree that one of the very significant positive things in this Finance Bill is also the—I am sorry; I will let him continue.
Jack Brereton
I thank my hon. Friend for his comments.
As I was saying, allowing taxpayers to keep more than it would have been possible to do previously is combined with inflation coming back under control and wages rising again in real terms. The lowest paid have not only been taken out of income tax altogether but enjoy an increased national living wage, thanks to this Government. We are seeing the lowest paid paying less tax but also bringing home more money. The annual earnings of a full-time—
Alison Thewliss
Does the hon. Gentleman not accept that the national living wage is not actually a wage that one can live on, and that it does not apply to those under the age of 25? In fact, the gap for those aged 16 and 17 has been going up every year.
Jack Brereton
The national living wage is a critical part of ensuring that some of the lowest paid in our society earn much more and take home more pay. Earnings for a full-time minimum-wage worker will have increased by £2,750 since it was introduced in April 2016.
Leo Docherty
I am very grateful to my hon. Friend for giving way and giving me another chance. He mentioned inflation. Does he share my view that the fact that the annual deficit has been reduced by 80% since 2010 is another very significant piece of progress with regard to inflation?
Jack Brereton
I agree with my hon. Friend’s comments, which show the responsible approach we on this side of the House have taken to the economy, compared with the approach the previous Labour Government took.
Jack Brereton
And now the hon. Gentleman is going to tell us about Labour’s future approach if they ever get back into office.
Peter Dowd
As the hon. Gentleman is talking about borrowing, does he agree that the Tory party in the last eight years has borrowed more money than all Labour Governments put together?
Jack Brereton
The hon. Gentleman will have seen the figures that show that debt is now coming down to lower levels than ever before, and we have seen the deficit back under control after the failings of the previous Labour Government who got us into an horrendous mess that working families in this country ended up paying for.
We are now seeing the numbers of low-paid workers at a record low, and we are seeing low taxpayers now paying record low levels of tax. The astonishing turnaround achieved in making work pay, not least through tax measures like those before us today, means that the Office for Budget Responsibility has now revised up its assumptions for the trend labour market participation rates and revised down its estimate of the equilibrium rate of employment. As the Treasury rightly highlights in the Red Book paragraph 1.15, both of these revisions raise the level of potential output, which is good news for the sustainability of the labour market boom which has undoubtedly been the greatest achievement of the policies pursued by this Conservative Government.
Ruth George
Would the hon. Gentleman not agree with the Institute for Fiscal Studies that the cumulative impact of personal tax and benefit reform since 2015 has been that the bottom two thirds of society is far worse off and that the only people who are better off under this Government’s policies are the top third?
Jack Brereton
I totally disagree. We have seen increases in the national living wage and reduced tax in this Budget, and further measures in this Budget to support UC.
Vicky Ford (Chelmsford) (Con)
Does my hon. Friend agree that the fact we should be looking at is the fact reported by the OECD that the proportion of jobs that are low paid is at the lowest level for the past two decades? We should be celebrating that.
Jack Brereton
That is absolutely right. We should be looking at those figures, not some of the figures being used by Opposition Members, who want to keep people on a level of pay that is lower than it would ever be, because they want to keep people out of work and keep people in the workless society we saw under the previous Labour Government.
We on this side of the House have made work pay, and the long-term benefits of doing so are clear in the expansion of our non-inflationary production potential. The last time unemployment was so low, 40 or more years ago, there were massive peaks in inflation. The contrast with today is stark and we should be proud of our work as a country in digging ourselves out of the mess left by the Labour party.
For people in Stoke-on-Trent making work pay has added to the renaissance of our fine, proud city and its industries, and the situation is the same in once-forgotten manufacturing towns across the country, which are seeing a revival in real jobs for real levels of take home pay. Indeed the ONS estimates that real household disposable income per head was 4% higher in quarter 2 of 2018 than at the start of 2010, and the OBR expects it will increase by a further 3.2% by the end of 2023. At the same time, income inequality is down, and is lower than it was in 2010. To refute a number of the claims made from the Opposition Front Bench, the number of children in absolute low-income poverty has fallen since 2010.
Peter Dowd
I hear what the hon. Gentleman says, but if he is so convinced of his policies in relation to the issues he is talking about, why will he not support the provision in section 5 of the Act of an impact assessment on child poverty and equality? What has he got to fear?
Jack Brereton
The reason is that the facts show that the number of children living in absolute poverty has fallen since 2010 and will continue to fall, because of the policies of this Conservative Government.
Vicky Ford
Does my hon. Friend agree that for every £1 those on low income pay in tax, £4 of public spending goes towards them, whereas for those on higher income, for every £5 they pay in tax they receive only £1 back in public spending, and that is because we are a fair society, which means that well-off people contribute to helping those on lower incomes?
Jack Brereton
I thank my hon. Friend for those comments, which show that the highest earners are paying their fair share, while the lowest paid in society are being supported as much as we can. That is what this Government have been doing: reducing taxes for the lowest paid in society and ensuring that the lowest paid can be paid more.
I reject many of the views of the hon. Member for Oldham East and Saddleworth (Debbie Abrahams). She made some comments about statistics and then used statistics in her own way. I will also refer to the G7 by saying that only in the UK and Japan have the lowest paid seen their wages grow in that time, and income inequality is lower than it was previously.
Debbie Abrahams
On a point of order, Dame Eleanor. The hon. Member for Stoke-on-Trent South (Jack Brereton) suggests that I have used statistics inappropriately. I can cite all my sources of evidence; can he?
The First Deputy Chairman of Ways and Means (Dame Eleanor Laing)
Order. The hon. Lady knows that that is not a point of order for the Chair; it is a point of debate, and, as I have said many times in here—and so has Mr Speaker—fortunately it is not the duty of the Chair to decide between one set of statistics and another. It all depends on how one applies the statistics, and the hon. Lady is perfectly at liberty to intervene on the hon. Member for Stoke-on-Trent South (Jack Brereton), as is he to take an intervention from her, where they can continue the argument between them, but I will take no part in it.
Jack Brereton
Thank you, Dame Eleanor. The statistics I have used show that income inequality is lower than it was before the crash, and this is all alongside our continuing to reduce the deficit and debt, and meeting our targets three years early, while continuing to invest more in our vital public services. This responsible approach to public finances has seen our economy and the number of jobs boom, compared with the spiralling-out-of-control economy under Labour.
I was pleased that the Minister with responsibility for high streets—the Under-Secretary of State for Housing, Communities and Local Government, my hon. Friend the Member for Rossendale and Darwen (Jake Berry)—visited my constituency on Friday and talked about some of the measures we are taking in this Budget to support towns like Longton and Fenton in my constituency, helping to address some of the issues on the high street. I hope we can get some of the £650 million pot announced in the Budget to convert many of their empty premises back into use and help with business rates to ensure that retailers with a rateable value of under £51,000 will receive relief, as that will be hugely welcome by the smallest retailers in our towns.
I also want to comment on some of the views expressed by Opposition Members about entrepreneurs’ relief. I was shocked that some of the views were so anti-business and anti-enterprise. We must condemn those views, which are damaging businesses in constituencies up and down the country.
Peter Dowd
The hon. Gentleman must not misquote. We are looking for an assessment of entrepreneurs’ relief, and if he believes that what he suggests is good value for money for taxpayers he would support a review of that relief. What is wrong with that?
Jack Brereton
I just wanted to talk about the relief in Stoke-on-Trent as well. Entrepreneurs’ relief in my constituency will help many businesses that are starting up. We have some fantastic retention rates in Stoke-on-Trent; we have some of the highest new business start-up retention rates in the country, and that relief is critical in helping those businesses.
The measures introduced in the Budget to increase the time period from 12 to 24 months will help to ensure that it is businesses that are genuinely contributing to our economy that will receive the relief, making a huge contribution to the development of new technologies and innovation that we so much support in our economies throughout the country.
The proposed reductions in corporation tax in the Budget and the relief on capital allowances, which my hon. Friend the Member for Gloucester (Richard Graham) spoke about, will also be a huge support for many of the businesses in my constituency, particularly manufacturers. Around 15% of the economy in Stoke-on-Trent is made up of manufacturing businesses. Those measures will be a huge support for those businesses, increasing the amount of machinery and equipment that they can buy. Increasing relief on capital allowances and the investment allowance up to £1 million will help more of those businesses to buy new equipment and invest in the plant in their factories. I welcome that measure, which will help not just those manufacturing businesses, but the huge number of businesses up and down the country that produce that machinery and the workforces in those industries, which are so valued up and down the country.
Rachel Maclean
Does my hon. Friend agree that when we are talking about support for businesses, through entrepreneurs’ relief and all these other measures, we are talking not just about the people who own those businesses, but about the people working in them who have a job because of these measures?
Jack Brereton
Absolutely, and we want to see the number of those workers and the opportunities and jobs in those industries continue to grow. That is why it is so shocking to hear views from the Opposition that would damage the jobs miracle that we have seen over the last few years in this country.
Wages are rising, inflation is stable, unemployment has been so low for so long that the Office for Budget Responsibility believes that the equilibrium rate has fallen, income inequality is down and disposable income is up. This is the extraordinary record of making work pay. It is a huge economic success story, after the financial meltdown that the Labour party presided over. I want to see the success continue, and I know that to do so this House must support the Bill. I shall continue to do so, not least because of the concrete measures it contains for putting money in the pockets of Stoke-on-Trent’s very many hard-working people.
Thelma Walker (Colne Valley) (Lab)
I begin by reflecting on the purpose of our society—the purpose of our communities, locally and nationally. The great Labour Prime Minister Clement Attlee said:
“No social system will bring us happiness, health and prosperity unless it is inspired by something greater than materialism.”
I agree with Clement Attlee. To me and many others in this House, the aspiration is to create and be part of a community and society that cares for one another and enables everyone to succeed in life, in whatever form success takes—a society that is safe and secure from cradle to grave and that provides accessible healthcare, quality housing, outstanding education and secure employment. A Government’s ultimate goal should be the wellbeing of its citizens, and there is much evidence to suggest that higher levels of wellbeing can lead to higher levels of job performance and productivity and greater job satisfaction. That is the society I want to live in.
Unfortunately, to say that that is not a reality under the current Government is an understatement. This Finance Bill does nothing to deliver the people of this country’s wellbeing. On new clause 2, a UN report just last week told us that the Government have inflicted “great misery” on our people, with
“punitive, mean-spirited and often callous”
austerity policies, driven by a political desire to undertake social re-engineering rather than by economic necessity. This is from the United Nations poverty envoy. We are told that levels of child poverty are
“not just a disgrace, but a social calamity and economic disaster”.
The Budget was an opportunity to make some attempt to right those wrongs. Did it offer full and fair funding for our teachers and education service? No. Did it offer reassurance for those suffering the consequences of the cruel and callous roll-out of universal credit? No. Did it attempt to put an end to the causes of homelessness and destitution? No. Did it commit to funding our police services to help halt the massive increase in violent crime? No. Did it commit to funding our local councils, suffering 50% cuts, which are damaging the very fabric of our society? No. Did it do anything to relieve the hardship felt by so many women across our country? No.
Some 14 million of our citizens—our people; a fifth of the population—are living in poverty. One and a half million are destitute, with no money for even basic essentials. Up to 40% of children will be living in poverty by 2022. This Finance Bill is about lip service and rhetoric—pretending to care about the poor and vulnerable, but doing nothing substantial to address the misery and suffering felt by so many in our society. There is so much poverty and inequality in our country, and our country has never been more miserable or divided—divided geographically, generationally and economically. We have poverty in our cities, towns and villages, but under this Government there is a poverty of compassion, a poverty of empathy and a poverty of insight into what real, ordinary people’s lives are like.
My mum said to me a few years before her death, having lived through the depression in the 1930s and survived the Manchester blitz in the second world war: “I’m glad I’m at the end of my life and not at the start when I look at what this Government are doing to our society. They’re punishing people for being poor”. Enough now. The people of this country have had enough. Labour will keep up the pressure and fight for those who are stuck in poor-quality housing, those who are struggling to feed their families and those who are not yet old enough to understand what poverty is and how it may impact their life. They deserve better.
I would like to finish with a quotation from the philosopher Thomas Paine:
“It is error only, and not truth, that shrinks from inquiry.”
It is interesting that the Government are currently facing so many questions and inquiries, both within this House and beyond.
Alex Burghart
It is an honour to speak in this debate and to follow the hon. Member for Colne Valley (Thelma Walker).
One of the most striking things about the Chancellor’s Budget speech was the moment in history that it reflected. As the Committee will know, in 2010 the Government—the coalition Government, as then was—inherited the largest peacetime deficit in our history, yet the Chancellor was able to stand at the Dispatch Box and say that the deficit had fallen by four fifths, from just under 10% to 1.9%, and that it would be less than 1% by 2023-24. This is an extraordinary achievement, not of this House or even this Government, but of the British people, who, yes, have had to cut their cloth to make it happen. However, it has been an essential task, yet sometimes, listening to some hon. Members, we can be led to believe that it could have been wished away, that it did not matter or that it was something that the Conservative party invented.
But that is not so. The deficit is a real, serious thing. The deficit is the debt that we pass on to our children and to our children’s children. It is the debt that we have not cleared ourselves. We have a responsibility to the future. We have a responsibility to pass on a natural environment that is not polluted and we have a duty to pass on an economy that is not polluted.
Kevin Foster (Torbay) (Con)
I am listening to my hon. Friend’s opening remarks with great interest. He is right to talk about the importance of tackling the deficit, yet we sometimes hear comments from the Opposition about debt going up. If they are so concerned about the level of debt, can he confirm to me how many deficit reduction measures he believes they have supported?
Alex Burghart
I thank my hon. Friend for his comments. I believe that the answer to his question is none, but I stand to be corrected.
Alongside the Budget, we heard the remarkable news last week that wage growth is at its highest level for a decade. That welcome return to growth benefits people in my constituency and around the country. In addition, we have the best employment figures in my lifetime. Sometimes, we are given the impression that such figures are idle statistics that mean nothing—that the Government are just chirruping on about that silly little thing, employment—but employment is not a marginal thing. Employment is what gives our constituents the opportunity to work, to support their families, to play their part in society and to have independence and choice. It is the greatest gift that the economy can bestow.
I always enjoy Finance Bill debates, because I am a genuine fan of the hon. Member for Bootle (Peter Dowd). I assure Hansard that I am not being sarcastic when I say that I genuinely enjoy his company and his speeches. Over the years we have shared in the House, we have enjoyed some debates on the Beatles, on Plutarch and on sausages. Today, I shall add to that list by picking him up on voodoo economics.
The hon. Gentleman has accused us of voodoo economics when it comes to reducing corporation tax and thus bringing greater revenue into the Exchequer. I encourage him, in the spirit of friendship, to go and talk to some of the businesses that have onshored to the UK to take advantage of our extraordinarily competitive corporation tax rates. That is why people are coming to this country to do business. It is why they are choosing to raise revenue here and pay taxes here. That is good for them, it is good for our economy and it is good for the people who use our public services. I respectfully suggest that if anyone wants an example of voodoo economics, they should look to the attempt to dig up the dead and rotting corpse of socialism, reinvigorate it with magic spells and have it wandering the streets, looking to bring rack and ruin. We find real voodoo economics in the suggestion that it will cost nothing to renationalise a range of utilities and services. As my hon. Friend the Member for Aldershot (Leo Docherty) has pointed out, it will not cost nothing; it will cost at least £176 billion. Contrary to what the shadow Chancellor says, it will not pay for itself. It will be paid for by British taxpayers.
Leo Docherty
My hon. Friend is making an eloquent speech. He is right to point out the voodoo economics surrounding the Labour party’s plan for nationalisation. As he has said, we are not simply talking about the fact that it will cost £176 billion across the whole country; if we divide that up per household, my constituents in Aldershot are deeply alarmed at the prospect of having to pay £6,471 for this madness.
Alex Burghart
I imagine that they are; they have every right to be very concerned—nay, furious—about it.
Several clauses in the Finance Bill have been misrepresented. They put more money in people’s pockets and make more money available to businesses, not for the sake of some blind ideological exercise, but because Conservatives know that growth matters most to our economy. We would all like to have more money for public services today, but if we get that additional money by raising taxes, there will be less money in the economy and, ultimately, less revenue, so less money for public services. The only way to increase the size of the slice of the pie that goes to public services is by increasing the size of the pie. The only way to do that effectively is by giving people opportunities to spend more of their own money, and by giving businesses opportunities to set up, survive, grow, employ people and share wealth.
Peter Dowd
The hon. Gentleman refers to things being virtuous. I am sure that he believes that new clause 1 is virtuous, in that it sets out an assessment of the effect of reducing the threshold for the additional rate to £80,000, which is the Labour party’s policy. If he wants the facts and the evidence, why does he not support new clause 1, which will enable us to get all the facts and the evidence? Then we can have another debate, in which we can talk about Plutarch and Cicero until the cows come home.
Alex Burghart
I would certainly take up the hon. Gentleman’s offer to talk about Cicero, but I am sure that I would be ruled out of order.
The First Deputy Chairman of Ways and Means (Dame Eleanor Laing)
For the sake of clarity, no—Cicero is always pertinent to everything.
Alex Burghart
Cicero, as the hon. Gentleman knows, was one of the great minds of the Roman senate, and I can say with full certainty what he would have made of new clause 1. He would have said that it was a waste of time. We can rely on the Treasury to keep us informed of all the ins and outs of Government policy. We do not need additional laws and additional bureaucracy to achieve that. I know that the hon. Gentleman is a great lover of reviews. We have sat in many Committees together over the years, and he has tabled amendments calling for review upon review, which Parliament has always, sadly, declined to accept.
Kevin Foster
I am very much enjoying my hon. Friend’s speech. Does he agree that many analyses must have been done in the Treasury between 1997 and 2010 about why it was sensible to keep the tax rates as they were? The highest earners now pay slightly more, in terms of percentage rate, than they did throughout most of Labour’s 13 years in government, except for the last couple of months. It is quite strange to hear Labour Members’ enthusiasm for this type of taxation now that they are in opposition.
Alex Burghart
As ever, my hon. Friend puts it extremely well. “Wise after the event” might be one of the Labour party’s mottos.
I am pleased to welcome, in clauses 41 and 42, further improvements to stamp duty to help more people to get on the housing ladder and buy the homes that they so richly deserve. Those measures will put more money into the system and encourage the building of more homes, to allow us to progress down the route of building what must be built for the home owning democracy.
Alongside that, I was pleased to see an additional £1.7 billion being put into universal credit, to give the poorest people in society more money in their pockets—money that benefits them and flows straight into the economy. I take this opportunity to thank my right hon. Friend the Member for Tatton (Ms McVey), who is not in her place, for her service as Secretary of State for Work and Pensions. She did her job extremely well. It was under her leadership that a number of improvements were made to universal credit and this decision to put an additional £1.7 billion into the service was concluded. That Secretary of State bore her unfair share of personal criticism while she was in that job; the person rather than the issue was often played. Although I fully take on board the remarks made by the hon. Member for Colne Valley (Thelma Walker) about the desire of that great Labour Prime Minister Clement Attlee for a caring society, when I have seen and heard some of the slander thrown at my right hon. Friend the Member for Tatton, I have had to wonder whether all parts of the left are really as caring as Clement Attlee would have had them.
Rachel Maclean
Does my hon. Friend agree with Cicero on this point: when you have no basis for argument, you should abuse the plaintiff?
Alex Burghart
My hon. Friend quotes Cicero far better than I ever could, and I regret only that she did not do so in the original Latin—we can hope for such things next time.
John Howell (Henley) (Con)
I am not going to quote Cicero, although I am perfectly able to do so, but I think the debate needs to progress as it should do. Is the cut in stamp duty, particularly for shared ownership schemes, going to have a major impact? Has my hon. Friend done any assessment of how much that is going to affect the people who are trying so desperately hard to get on to the housing ladder in his constituency and in mine? Does he have anything to support this argument?
Alex Burghart
I have no doubt that a cut in stamp duty will help homebuyers across the country, in my hon. Friend’s constituency and in mine. I am lucky to represent a constituency in Essex, near London. Our area has much to recommend it, but the price of housing is high. We are going through a programme of home building, reflecting the Government’s broader ambitions. I know from knocking on doors and speaking to young people and their parents that it is difficult to get on that housing ladder. Every incremental improvement that this Government can make on things such as stamp duty helps to make the dream of home ownership a reality for those young people and their families.
Neil O'Brien (Harborough) (Con)
On my hon. Friend’s point about incrementalism, does he recognise that the welcome cut in stamp duty for first-time buyers comes on top of ending the crazy slab-based system of stamp duty land tax which was built up under Gordon Brown? This Government got rid of it, so that we no longer had a situation where paying £1 more for a house triggers a tax increase that could be worth thousands and thousands of pounds.
Alex Burghart
My hon. Friend is too modest; I know not only that it was an excellent reform brought about under a Conservative Administration, where we went from the LEGO building-block approach to stamp duty that he described to something much smoother and more pristine, but that he was working in the Treasury at the time and was instrumental in bringing about that excellent reform. It has made stamp duty not only fairer, but much more sensible for anyone seeking to buy a property.
Let me turn to business, clause 38 and the necessary additional relief being given to entrepreneurs. As a number of hon. Members have made clear, these are people who are looking to start businesses, so as to employ people, and to create an economic dynamism in their communities and their areas. I go back to remarks made by my hon. Friend the Member for Stoke-on-Trent South (Jack Brereton) about how he has seen employment and business growth in his area. I was having a conversation earlier with another hon. Friend from the north-east, where the Conservatives again have seats in Parliament—that is no accident. We have seats in Parliament in the north-east because of the record levels of jobs growth and business growth that have happened in those constituencies since 2010. Voters understand success and successful policies when they see them, which is why people such as my hon. Friend are capable of winning seats such as Stoke-on-Trent South. This happened because of the enormous benefits of Conservative policy since 2010.
A measure in the Budget that has meant a great deal to my area has been the substantial improvement in business rates. As I say, Brentwood and Ongar is a hive of Thatcherite prosperity. It has a huge number of small, medium-sized and large enterprises within its boundaries, most of which have been built by the sweat of local people, and are the product of good, old-fashioned British graft and nous. People in my area are proud of their high streets and want to see them do well. They want their local retail areas to be bustling and thriving. These measures are an enormous shot in the arm for those smaller businesses, which add not only vibrancy and character, but employment and economic opportunity to our local areas. I cannot praise them highly enough.
In conclusion, this is a Budget to help the people who drive the economy. It is a Budget for the businesses that help drive the economy. It offers dynamism to the economy. It will help deliver the growth we need to grow our revenues and our public services, and offer a future for our children which has jobs and is not shackled by an enormous debt left by the previous Government.
Ruth George
With such disagreement on statistics between hon. Members on both sides of the House, it would be helpful to refer to an impartial observer from the United Nations who has spent the past two weeks going across the United Kingdom and looking at our levels of poverty and the associated political choices. It is a damning indictment of not just our country but our Government that he concluded:
“The experience of the United Kingdom, especially since 2010, underscores the conclusion that poverty is a political choice. Austerity could easily have spared the poor, if the political will had existed to do so. Resources were available to the Treasury at the last budget that could have transformed the situation of millions of people living in poverty, but the political choice was made to fund tax cuts for the wealthy instead.”
I find that absolutely shocking in this day and age, given that there is so much evidence on this, not just from the likes of the Institute for Fiscal Studies, but in every region and on every street in our country. I live in a relatively affluent constituency, but I have had thousands of constituents come to me suffering from poverty.
Lyn Brown
I am grateful to my hon. Friend for mentioning this, because the rapporteur came to my constituency last week and I sat through a harrowing three hours listening to the testimonies of people who are really in need and suffering. So I am genuinely grateful to her for raising this issue now.
Ruth George
I find it hard to believe that any of us, as Members of Parliament who are seen to be compassionate and caring people who represent our constituents, do not have struggling constituents coming to them. A single parent came to me who has had to give up his job because his child is disabled. He has found that he is going to lose the disability element of child tax credit and will be £1,500 a year worse off. He said, “This Government says that it will protect the most vulnerable in society. If they cannot protect disabled children, who is more vulnerable? Who are these people that they claim to be protecting?” Answers are there none.
As I said, the Institute for Fiscal Studies has shown that since 2015, the overall impact of tax and benefit reforms has hit the poorest two thirds of the population. They are the ones who have lost out—the poorest have lost out by a shocking 10% of their income. The only section of society to have gained is the richest third. The only difference the Budget will make to the incomes of the poorest 10% is that instead of their losing 10% of their income, they will now lose 9.8%. I am sorry, but when we are the fifth richest economy, that is just not good enough.
The previous speaker, the hon. Member for Brentwood and Ongar (Alex Burghart), praised the previous Secretary of State for Work and Pensions, the right hon. Member for Tatton (Ms McVey). Admittedly, she argued for Budget redistribution to people on universal credit, but the increase in the work allowance gives £630 a year to 2.4 million families. That will not make anyone better off: 3.2 million families were due to lose an average of £2,500 a year; now, those families will lose an average of £2,100 a year. The Budget will not make those people better off; it will make them very slightly less worse off.
When 14 million people—a fifth of the population—are in poverty, what do the Government have to say to them? What do they have to say to the 4 million people who live 50% below the poverty line, or to the 1.5 million who are destitute? Are they proud of those figures? Are they proud to meet people like my constituent Billy, who is doing his best? He suffers from a disability and has taken on some self-employed work, with tax credits. He has done his very best and recently took on an afternoon shift with Royal Mail, delivering the Christmas post. He has just found out that when that job ends after Christmas, he will be put on to universal credit. Because of the minimum income floor, he will have absolutely no income whatsoever to see him through until the months when he can work again as an entertainer. What do the Government have to say to people like Billy? How is he supposed to get by? He has sought to do his best and to do what the Government have asked people to do—go out and get a job—but people like him are punished for it.
When 8 million working people are in poverty, that is not a benefit to them. Two thirds of children living in poverty are in working households. Does the hon. Member for Brentwood and Ongar think that their parents’ employment is a gift? These children are still in poverty. Employment is a benefit only where it can lift a household and children out of poverty.
Alex Burghart
I fully respect the hon. Lady’s position on welfare—I often think it is a gift to the Government that she does not serve on the Front Bench—but it is slightly absurd to suggest that people are not better off in work. They are better off in work. We would all like people to earn more money in work, but to suggest, as Opposition Members often do, that work is no benefit is ludicrous. Work does help. It is a route out of poverty. The first stage of getting into work is not the conclusion of the journey.
Ruth George
I am afraid that for constituents like mine, about whom I was speaking earlier, work is not a route out of poverty. For them, trying a temporary job and moving into work is a fast route on to universal credit and into absolute poverty.
In spite of all the promises made to the House when cuts to universal credit were forced through after the 2015 Budget, not everyone will be protected as they move from legacy benefits to universal credit. Not even half the people who transfer from legacy benefits to universal credit will be protected from the average £2,100-worth of cuts. Managed migration has been delayed and reduced, and the criteria for transferring people from legacy benefits to universal credit have been widened so much that 4 million people will move on to universal credit naturally, with no protection whatsoever. Fewer than 3 million people will move over under managed migration. That is contrary to the promises that were made to the House when those cuts were brought in.
Some absolute anomalies in universal credit will seriously increase the amount of child poverty, which is why at the very least the Government have a duty to measure the impact of the provisions in their Budget. Some 3.2 million children are due to be affected by the two-child limit, and 1.4 million of those children live in families with four children or more, who will lose an average of £7,000 a year. That is a huge amount of money, which no family with children can afford to lose, much less the poorest and those households bringing up children on such low incomes. According to the Office for Budget Responsibility, £3.2 billion will be taken off people with disabilities by 2023.
What about the self-employed? The Government claim to support entrepreneurship, but their entrepreneurs’ relief enables 6,000 people making profits of more than £1 million on the sale of their business to benefit by an average of almost half a million pounds each. That costs this country and its economy £2.7 billion. People starting out in self-employment, on low earnings, such as my constituent Billy, are among the 430,000 who will lose an average of £3,000 a year, mostly because of the minimum income floor.
Neil O’Brien
Is the hon. Lady calling for entrepreneurs’ relief to be completely scrapped?
Ruth George
I believe that the relief should be reviewed, which is what new clause 3 would require. We could then see its impact on the most well off and on the poorest, and in particular its impact among those who aspire to be entrepreneurs and who aspire to bring themselves out of—
Ruth George
That is what the new clause would require. If the Government wanted us to abolish entrepreneurs’ relief and had given us a Finance Bill that we could actually amend, and if they had the courage to put their policies to votes on the Floor of the House and to give us any alternative, other than to amend the Bill to require reviews, we would gladly do so. Perhaps the Minister could indicate from his sedentary position whether he is prepared to allow the Committee to make such an amendment to abolish entrepreneurs’ relief.
The First Deputy Chairman of Ways and Means (Dame Eleanor Laing)
Order. It is not for the hon. Lady to ask questions of the Minister at this point. When the Minister is speaking, she might wish to try to intervene at that point, but she cannot require the Minister to answer her question at this point. She can expect him to answer it when he addresses the Committee later. Having said that, if the Minister wishes to jump up at this point, I will not stop him. It is an interesting matter.
Mel Stride
I was just going to say that, as the hon. Lady will know, all amendments need to be in scope and that that is ultimately a decision for Mr Speaker. I am sure that he has taken the appropriate decisions in this case—[Interruption.]
Ruth George
My hon. Friend the Member for West Ham (Lyn Brown) has just said from a sedentary position that the Government have set the parameters for the scope of amendments in this Bill. The same happened with the previous two Finance Bills that they brought to the House. They have not allowed any substantive amendments to the Bill. They will not allow their policies to be tested on the Floor of the House, because those policies have been found wanting in terms of redistribution of wealth from the best off in our society to the poorest. It is actually the poorest who pay 42% of their income, while the richest pay just 34%. How is that fair?
This Budget has done nothing to support the poorest people. After raising VAT to 20%, the Government have doubled insurance tax and are raising council tax across the country by 5% a year, hitting the poorest in our society and hitting those who can afford it the least. They are also hitting those who are homeowners with universal credit. We have heard that the Government aspire to support homeowners, so why is it that, under universal credit, 74% of people who lose out are actually homeowners? They have seen their clawback of income nearly doubling from 39% under the Labour Government to 63% under this Government, and it is going up to 75% for taxpayers.
If the Government disagree with our analysis that this Budget is not helping people in poverty and that it is actually entrenching the serious divides and the serious destitution and poverty within our society, they should prove their case by supporting our amendment for an equalities impact assessment. But they have form on this. I have been calling for an equalities impact assessment of universal credit changes since 2015 and since I first came to this House, and it has been refused. They are now refusing to hold one in this Budget. Anyone would think that this Government had something to hide. I know from people around my constituency, which is relatively affluent, that it is not just the poorest people who are appalled at the level of food bank use, the level of homelessness and the level of evictions that are being inflicted on the poorest people in our society. People across my constituency are writing to me, imploring me to stand up for the poorest, because otherwise we are poorer as a society.
Rachel Maclean
It is a pleasure to follow the hon. Member for High Peak (Ruth George). I rise to speak in favour of the Bill and against the Opposition amendments. I will start by correcting a comment that I made earlier. Just to correct the record, let me say that I incorrectly said—I apologise to the House—that the shadow Chancellor was on record saying that the fact that Labour’s numbers did not add up was largely irrelevant. I offer my apologies as it was not the shadow Chancellor who said that, but a Labour party adviser who wrote it in a book that was endorsed by the shadow Chancellor.
Peter Dowd
The actual author of that article called the Prime Minister a word that would be unparliamentary if that is what he said. He called her that particular word. If the author is calling the Prime Minister a particular word, should the hon. Lady not accept the fact that the author did not say that?
The First Deputy Chairman of Ways and Means (Dame Eleanor Laing)
Order. The hon. Gentleman is rightly respecting parliamentary language. Rather than refer to language that is unparliamentary, if he simply wants to say that the alleged author of those alleged words denies them, he is at liberty to do so.
Peter Dowd
Thank you very much, Dame Eleanor. That is precisely what I wanted to say.
Rachel Maclean
I thank the hon. Gentleman for his intervention, but I fear that we are getting bogged down and dragged into areas that I do not wish to go into, given that I do not have very much time. I merely wish to make the point that Labour’s record demonstrates its disregard for managing public finances responsibly. What it also does, as we have heard from Members, particularly from those on the shadow Front Bench, is help us to see their approach to entrepreneurs—those people who sacrifice and work, sometimes for decades, to start businesses. They seek to attack and punish those people who often put their lives on the line and who often take considerable sacrifices to start businesses. Those entrepreneurs up and down the country may not be paying themselves for many, many years because they have to meet the payroll of their workers. We see the approach from the Opposition to those people. We are talking about entrepreneurs’ relief that will come to fruition only when that entrepreneur wishes to sell or dispose of part of a business that may have lasted over a lifetime during which they have paid tax, contributed to our economy and created jobs.
Rachel Maclean
I am sorry, but as much as I enjoy debating with the hon. Gentleman, I will not take any more interventions because I do not have much time and I have taken one already.
We have heard a lot of philosophy tonight. I will not quote Cicero again, but I will draw the House’s attention to the Jewish philosopher Maimonides who said more than 2,000 years ago that the greatest form of social justice and charity is to start a business and to create jobs. Therefore, I reject the Opposition’s amendment on the entrepreneurs’ relief. However, we should definitely keep it under review, and I am absolutely sure that the Treasury will do so because we on the Government Benches want to ensure value for taxpayers’ money in all the things that we do. We recognise that we are spending not the Government’s money, but our constituents’ money, and we need to do that carefully.
I now wish to address the movement on the tax thresholds, because this relates to a fundamental Conservative value.
Rachel Maclean
I am sorry but I will not give way. I only have a couple of minutes left. Please forgive me.
The movement on the tax thresholds is a fundamental point at the heart of our Conservative philosophy, which is freedom of the individual to spend their own hard-earned money how they wish. What this Budget and this Finance Bill are doing is taking people out of tax. A basic rate taxpayer will pay £1,205 a year less than in 2010, when Labour left office, and that is, effectively, a pay rise for those people, leaving them with more money in their pockets.
Let me say this to the Opposition: they often talk about how they want people to pay more tax. Well, people are free to pay more tax voluntarily, but, surprisingly enough, that is not often what people do. What we do see as a result of our tax policy of lowering tax rates is a greater tax take coming into the Exchequer. We see that fundamental principle illustrated time and again because of the policies advocated and enacted by the Government. It is right to lower the tax thresholds for low and middle-income earners. In fact, the shadow Chancellor and the shadow Chief Secretary do not even oppose that; they agree that we should keep those tax thresholds low. We need look no further than corporation tax, as those receipts are up 50% to £53.6 billion because of the lowering of the rate that has happened under this Government. That is £53.6 billion more for this Government to spend on strong public services up and down the country.
Anneliese Dodds (Oxford East) (Lab/Co-op)
Surely, the hon. Lady is aware that just about every analysis that has been done regarding the reason for the increase in corporation tax revenue says that it is due not to the reduction in rates, but to factors such as the banks’ return to profitability after the financial crisis, so it is not right to link the two.
Rachel Maclean
I do not accept those comments because we have seen new businesses in my constituency and in the constituencies of many other hon. Members. In Redditch, we have record rates of business start-ups because of measures in this Budget, this Finance Bill and other Budgets. I am a great supporter of the Bill because it will drive more revenue into the Exchequer that I would like to see spent on strong public services in Redditch.
Mel Stride
May I say what a pleasure it is to serve under your chairmanship, Dame Eleanor?
Let me first pick up on some of the comments made by the hon. Member for Aberdeen North (Kirsty Blackman), speaking from the Scottish National party Front Bench. She raised the issue of the higher rate threshold in clause 5 and asked whether the Bill might be organised in a slightly different manner. The most important thing is that we have put forward the information in a simple and straightforward way. As I am sure she is aware, the rise to the basic rate limit is dealt with in clause 5(1), with the amendment to £37,500 in the Income Tax Act 2007. That of course gets added to the personal allowance. The higher rate threshold is UK-wide for both dividends and savings income, which is what the amendment to the Income Tax Act deals with and focuses on.
Clause 5(2), Dame Eleanor—as I know you and other Members of the House will be aware, having read this Bill in significant detail—deals with the rise in the personal allowance to £12,500, which once again is a UK-wide scope. Therefore, it is appropriate that it is in a clause that is not subject to the provisions of English votes for English laws.
Clause 5(4)—I notice the hon. Member for Aberdeen North looking at this quite closely—also breaks the link between the personal allowance and the national minimum wage, which is once again a UK-wide measure. On the hon. Lady’s very specific point, it is appropriate that all these measures are contained within one clause.
The hon. Lady also mentioned the national minimum wage and the level at which it is set for those aged 16 to 24. She will know that a review is currently being conducted by the Low Pay Commission, which will report in spring 2019, although the commission has said in the past that increases up towards the level of the national living wage—which is what I think the hon. Lady is seeking—may have a detrimental impact on the level of employment. Of course, this Government have overseen a halving of the level of youth unemployment since 2010, something of which we are justly proud.
The hon. Lady brought up the issue of raising the personal allowance to £12,750, in line with her party’s new clause 19. The important point is that we have been able to raise the personal allowance from around £6,500 in 2010 right the way up to £12,500, taking about 4 million of the lowest paid out of tax altogether. That comes at huge cost, and the estimated cost of going still further, to the level that hon. Lady suggests, would be of the order of £1.5 billion. For that reason, we believe that the very significant rise that we have put in place is proportionate and should be welcomed by many of the lowest income earners, whom the hon. Lady quite rightly seeks to protect.
The hon. Lady raised the issue of poverty, as did a number of other hon. and right hon. Members. I remind the Committee that there are 1 million fewer people living in absolute poverty than in 2010, including 300,000 children. It is also the case that there are two thirds of a million fewer children living in workless households. We have heard a great deal about the importance of employment and our record on employment, with virtually the highest level of employment in our history and the lowest level of unemployment since the mid-1970s. Work is a very important route out of poverty and we have a strong record in that respect.
A number of Members mentioned entrepreneurs’ relief. The hon. Member for Aberdeen North suggested that the shift from the one-year to the two-year qualifying condition might actually impose a hurdle to entrepreneurship—I think that was the expression she used—but we see it as important that we at least have entrepreneurs who are not in and out within a period of 12 months, but who are actually there for the longer term. Of course, the Labour party seems to be entirely hostile to the whole notion of an entrepreneurs’ relief, which is not surprising given the general approach it seems to take towards business.
John Howell
Will my right hon. Friend comment on the fact that entrepreneurs’ relief is aimed at securing longer-term investment? This country has been very used to short-term investment, but it has done nothing for us. We need people to invest in the longer term.
Mel Stride
My hon. Friend is exactly right. This is why we also have the enterprise investment scheme and the seed enterprise investment scheme, and why we have made this change to entrepreneurs’ relief. An interesting fact is that of those who benefit from the entrepreneurs’ relief, around a third go on to reinvest in further businesses, so those tax savings are being reinvested in further economic activity.
I turn to the comments of the hon. Member for Bootle (Peter Dowd), who made a number of important points—or, should I say, he made a number of points about important matters? That might be slightly more to the point. However, I agree entirely with my hon. Friend the Member for Brentwood and Ongar (Alex Burghart), who is no longer in his place; I have a great affection for the shadow Minister, particularly the Plutarch and Cicero quotes of which he is most fond. In fact, I will share one with him that does not apply to him in any way, of course:
“Any man can make mistakes, but only a fool persists in his error.”
I think that is probably more appropriate to the leader of his party than to the hon. Gentleman himself.
The hon. Gentleman raised the issues of the amount of tax burden shouldered by the wealthiest in the country. I remind him that under this Government the wealthiest 1% pay a full 28% of all income tax; it was about 24% when the Labour party was in power. As my hon. Friend the Member for Gloucester (Richard Graham) pointed out, the lowest 20% of earners have benefited the most since 2010, from the combination of changes to tax, the national living wage and other factors.
The hon. Gentleman mentioned the UN rapporteur and my appearance on Channel 4. I have to point out that the rapporteur produced, I think, a 24-page report based on around two weeks’ fact-finding in this country. The Government’s view is that the conclusions drawn were disproportionate to say the least. The hon. Gentleman suggested that I did not answer the questions put to me on that particular occasion, which I dispute. However, it is indisputable that he failed to answer the question of my hon. Friend the Member for Cheltenham (Alex Chalk) as to exactly what the Opposition would do with the personal allowance, given the exception that they are taking to our tax measures in the Budget.
Debbie Abrahams
Can the Minister recollect whether there has been a UN report in the last eight years that this Government have agreed with?
Mel Stride
Well, I am not here to debate UN reports of any description and whether the Government agree with them, other than to make the point that this particular report is rather disproportionate, given the remarks that I made earlier about what has happened to absolute poverty and children of workless households and so on.
Kirsty Blackman
This has been an interesting and wide-ranging debate, although I cannot say that I share the enthusiasm of the First Deputy Chairman of Ways and Means (Dame Eleanor Laing) for Cicero.
I want to pick up the comments of Government Members about hard-working people. They regularly use that term to mean people who are earning above the higher rate threshold, and it sounds as though they are saying that people who are on the minimum wage—people who are retail workers, hospitality workers, carers, cleaners—do not work hard, when in fact they do. They work incredibly hard, and our lives would not be the same if it were not for those people working incredibly hard on the minimum wage. We will push new clause 19 to a vote for that reason.
Lastly, I beg to ask leave to withdraw amendment 6.
Amendment, by leave, withdrawn.
Question put, That the clause stand part of the Bill.
The Temporary Chairman (Sir George Howarth)
With this it will be convenient to discuss the following:
Clauses 69 to 77 stand part.
Amendment 10, in clause 78, page 51, line 32, after “may”, insert—
“(subject to section (Review of expenditure implications of Part 3))”.
Antecedent to new clause 10.
Clause 78 stand part.
Amendment 14, in clause 89, page 66, line 30, at end insert—
“(1A) The Chancellor of the Exchequer must, no later than the date provided for in subsection (1C), lay before the House of Commons a statement of the circumstances (in relation to the outcome of negotiations with the EU) that give rise to the exercise of the power.
(1B) The statement under subsection (1A) must be accompanied by—
(a) an assessment of the fiscal and economic effects of the exercise of those powers and the circumstances giving rise to them;
(b) a comparison of those fiscal and economic effects with the effects if—
(i) a negotiated withdrawal agreement and a framework for a future relationship with the EU had been agreed to, and
(ii) the United Kingdom had remained a member of the European Union;
(c) a statement by the Office for Budget Responsibility on the accuracy and comprehensiveness of the assessment under paragraph (a) and the comparison under paragraph (b).
(1C) The date provided for in this subsection is—
(a) a date which is no less than seven days before the date on which a Minister of the Crown proposes to make a motion for the purposes of section 13(1)(b) of the European Union Withdrawal Act 2018 and after the passing of this Act, or
(b) a date which is no less than seven days before the date on which a Minister of the Crown proposes to make a motion for the purposes of section 13(6)(a) of the European Union Withdrawal Act 2018 and after the passing of this Act, or
(c) a date which is no less than seven days before the date on which a Minister of the Crown proposes to make a motion for the purposes of section 13(8)(b)(i) of the European Union Withdrawal Act 2018 and after the passing of this Act, or
(d) the date on which this Act is passed,
whichever is the earliest.”
This amendment requires the first use of the powers intended to modify tax legislation in the event of a no deal Brexit to be accompanied by a statement of the circumstances and a comparative analysis of their impact, accompanied by an OBR assessment.
Amendment 15, page 66, line 30, at end insert—
“(1A) No regulations under this section may be made until the Chancellor of the Exchequer has laid a statement before the House of Commons setting out—
(a) a list of the powers in relevant tax legislation that the Treasury has acquired since June 2016 in connection with the United Kingdom’s withdrawal from the European Union,
(b) a list of the powers in relevant tax legislation the Treasury expects to acquire if—
(i) a withdrawal agreement and a framework for a future relationship with the European Union have been agreed to, or
(ii) the United Kingdom has left the European Union without a negotiated withdrawal agreement.
(c) a description of any powers conferred upon the House of Commons (whether by means of the approval or annulment of statutory instruments or otherwise) in connection with the exercise of the powers set out in subsection (b).”
Amendment 22, page 66, line 30, at end insert—
“(1A) The Chancellor of the Exchequer must, no later than a week after the passing of this Act and before exercising the power in subsection (1), lay before the House of Commons a review of the following matters—
(a) the fiscal and economic effects of the exercise of those powers and of the outcome of negotiations for the United Kingdom’s withdrawal from the European Union giving rise to their exercise;
(b) a comparison of those fiscal and economic effects with the effects if a negotiated withdrawal agreement and a framework for a future relationship with the EU had been agreed to;
(c) any differences in the exercise of those powers in respect of—
(i) Great Britain, and
(ii) Northern Ireland;
(d) any differential effects in relation to the matters specified in paragraphs (a) and (b) in relation between—
(i) Great Britain, and
(ii) Northern Ireland.”
Amendment 7, page 67, line 1, leave out subsection (5) and insert—
“(5) No statutory instrument containing regulations under this section may be made unless a draft has been laid before and approved by a resolution of the House of Commons.”
This amendment would make clause 89 (Minor amendments in consequence of EU withdrawal) subject to affirmative procedure.
Amendment 20, page 67, line 2, at end insert—
“(5A) No regulations may be made under this section unless the United Kingdom has left the European Union without a negotiated withdrawal agreement.”
Amendment 2, page 67, line 13, at end insert—
“(7) This section shall, subject to subsection (8), cease to have effect at the end of the period of two years beginning with the day on which this Act is passed.
(8) The Treasury may by regulations provide that this section shall continue in force for an additional period of up to three years from the end of the period specified in subsection (7).
(9) No regulations may be made under subsection (8) unless a draft has been laid before and approved by a resolution of the House of Commons.”
Clause 89 stand part.
Amendment 8, in clause 90, page 67, line 16, after “may”, insert—
“(subject to subsections (1A) and (1B))”
This amendment is antecedent to Amendment 9.
Amendment 9, page 67, line 18, at end insert—
“(1A) Before proposing to incur expenditure under subsection (1), the Secretary of State must lay before the House of Commons—
(a) a statement of the circumstances (in relation to negotiations relating to the United Kingdom’s withdrawal from the European Union) that give rise to the need for such preparatory expenditure, and
(b) an estimate of the expenditure to be incurred.
(1B) No expenditure may be incurred under subsection (1) unless the House of Commons comes to a resolution that it has considered the statement and estimate under subsection (1A) and approves the proposed expenditure.”
This amendment would require a statement on circumstances (in relation to negotiations) giving rise to the need for, as well as an estimate of the cost of, preparatory expenditure to introduce a charging scheme for greenhouse gas allowances. The amendment would require a Commons resolution before expenditure could be incurred.
Clause 90 stand part.
New clause 10—Review of expenditure implications of Part 3—
“(1) The Chancellor of the Exchequer must review the expenditure implications of commencing Part 3of this Act and lay a report of that review before the House of Commons within six months of the passing of this Act.
(2) No regulations may be made by the Commissioners under section 78(1) unless the review under subsection (1) has been laid before the House of Commons.”
This new clause would require a review within 6 months of the expenditure implications of introducing a carbon emissions tax. It would prevent Part 3 coming into effect until such a review had been laid before the House of Commons.
New clause 11—Report on consultation on certain provisions of this Act (No. 2)—
“(1) No later than two months after the passing of this Act, the Chancellor of the Exchequer must lay before the House of Commons a report on the consultation undertaken on the provisions in subsection (2).
(2) Those provisions are—
(a) sections 68 to 78,
(b) section 89, and
(c) section 90.
(3) A report under this section must specify in respect of each provision listed in subsection (2)—
(a) whether a version of the provision was published in draft,
(b) if so, whether changes were made as a result of consultation on the draft,
(c) if not, the reasons why the provision was not published in draft and any consultation which took place on the proposed provision in the absence of such a draft.”
This new clause would require a report on the consultation undertaken on certain provisions of this Act – alongside new clauses 9, 13 and 15.
New clause 17—Review of the carbon emissions tax (No. 2)—
“Within twelve months of the commencement of Part 3 of the Act, the Chancellor of the Exchequer must review the carbon emissions tax to determine—
(a) the effect of the carbon emissions tax on the United Kingdom’s carbon price in the context of non-participation in the European Union emissions trading scheme, and
(b) the effect of the carbon emissions tax on the United Kingdom’s ability to comply with its fourth and fifth carbon budgets.”
The Exchequer Secretary to the Treasury (Robert Jenrick)
In these parts of the Bill, we make sensible preparations for our exit from the European Union. While right hon. and hon. Members across the House may well disagree on Brexit, I would hope that all would wish to see us prepare as carefully as possible so that we can maintain the stability of the tax system; provide as much certainty for the taxpayer as possible; in respect of carbon pricing, meet our commitments to the environment; and do all those things in all eventualities, including in the event of no deal, which is clearly not the Government’s preference but remains a possibility.
At Budget, the Government announced essential provisions to ensure that the tax system can continue to function in any outcome.
Neil Gray (Airdrie and Shotts) (SNP)
The Minister talks about preparations for no deal. In the OBR’s “Blue Book”, it quoted assessments made by economists who suggested that the economy had already shrunk by between 2% and 2.5% since the referendum, and the Library has suggested that that has cost the UK economy anywhere between £40 billion and £50 billion. Does he agree with that assessment, and what work has been going on in the Treasury to account for it?
Robert Jenrick
What I can tell the hon. Gentleman is that the economy has been growing for eight years—for five years, in every successive quarter. Unemployment is at its lowest rate in my lifetime and employment is at its highest. The British economy is sound and robust, and that is exactly why in the Budget the Chancellor was able to make the tax cuts for 32 million of our citizens and the increased spending on the NHS.
Robert Jenrick
I will not give way again at this stage, but I could come back to the hon. Gentleman later.
The changes that we have outlined in these clauses will, I hope, signal that the UK is committed to maintaining stability and certainty for taxpayers and for businesses across the economy, especially in respect of the environmental tax provisions that I will talk about in a moment. Clauses 69 to 78 will allow the Government to introduce a carbon emissions tax to replace the EU emissions trading scheme—the ETS—in the event of no deal. Clause 90 will allow for essential preparatory expenditure to begin work on a domestic emissions trading scheme in the event that one is required. Clause 89 will introduce a power to make minor technical amendments to UK tax legislation—essential for maintaining the continued effect of the tax system.
Let me turn first to clauses 68 to 78 with respect to the carbon emissions tax. These clauses will take effect only if the UK leaves the European Union in 2019 without a deal. The clauses will give the Government the power to introduce a no-deal carbon emissions tax. The rate for 2019 would be set at £16 per tonne of carbon dioxide equivalent, and the tax would cover the same electricity generators and industrial businesses that currently participate in the EU ETS. The tax would provide the same protections against carbon leakage as the EU ETS. Operators would pay the tax only on emissions of carbon dioxide and other greenhouse gases emitted above an allowance set for each installation in advance of the tax year. This is in line with the EU ETS system of free emissions allowances.
In effect, the carbon emissions tax would seek initially to replicate the effects of the EU ETS as closely as possible, in the event of no agreement. This is important, as I hope hon. Members in all parts of the House will agree, for two reasons: first, because we want to provide certainty for businesses and for the energy industry to enable them to make investment and business decisions with confidence, as the industry has asked us to do; and secondly, because maintaining a carbon price is a key component of meeting our legally binding climate change commitments.
Dr David Drew (Stroud) (Lab/Co-op)
Does the Minister accept that now that the Government have greater freedom of operation, this is fairly timid? We have an emissions crisis in this country, as we do across the rest of the world. Why are the Government not being more ambitious in trying to bear down on emissions, as seen in the Intergovernmental Panel on Climate Change report?
Robert Jenrick
I appreciate the point the hon. Gentleman makes, but perhaps he has missed the argument I have tried to make, which is that this is not prejudging the later outcome of how we should handle our carbon pricing as we leave the EU; it is trying to ensure that in the unlikely event, which the Government wish to avoid, of a no-deal Brexit we can maintain the system as close as possible to the present one. We chose the price of £16 because that is broadly the same as where the EU’s floating price has been in recent months. Of course the price has floated very widely from as low as £6 to as high as over £20, so making that assessment is not a precise exercise, but we believe that £16 is a reasonable figure to maintain stability, and that seems to have been well received by the industry and environmental groups.
Clause 90 is about preparatory expenditure. Alongside preparing for no deal, the Government are developing long-term alternatives to the EU emissions trading scheme. As set out already in the outline political declaration on the future relationship between the EU and the UK, we are considering options for co-operation on carbon pricing, including, if possible, linking a UK national greenhouse gas emissions trading system with the EU ETS. Clause 90 will allow Departments to begin preparatory expenditure on a UK ETS, which is included in the Bill, to prepare for a linked or unlinked domestic trading scheme. It does not mean, as I said earlier, that a final decision has been made as to which option to implement, but it does ensure that all the options are kept open and we can proceed with the kind of planning that one would expect.
I shall now turn briefly to amendments 8, 9 and 10 and new clause 10 tabled by the SNP. Amendments 8 and 9 propose that the Government must table a statement on the circumstances that require expenditure in the case of clause 90 and an estimate of the expenditure to be incurred and that the House would come to a resolution to approve that expenditure. New clause 10 and amendment 10 would require the Chancellor to review the expenditure implications of the carbon emissions tax and lay a report of that review before the House within six months of the passing of the Bill, and no regulations could be made by the commissioners unless that had taken place.
A statement of circumstances, as required by amendments 8 and 9, is in our opinion unnecessary. We are legislating because the UK is leaving the EU, and as part of that we have to prepare a domestic ETS, as mentioned in the outline political declaration, and for a carbon emissions tax only in the event of no deal.
More importantly, with all these amendments, the Finance Bill is not and has never been the place for detailed questions of expenditure. The Finance Bill is primarily a Bill about tax. Parliament gets other opportunities to review and vote on departmental expenditure, and if that is important to the hon. Member for Aberdeen North (Kirsty Blackman), I suggest that she direct her scrutiny to the estimates process when it arises in due course.
New clause 17 would require the Chancellor to review the carbon emissions tax to determine its effect on the UK carbon price and the UK’s ability to comply with its fourth and fifth carbon budgets. We are confident that the carbon emissions tax would be similarly effective to the EU ETS, and I can assure Members that there are already robust requirements to report on progress towards the UK’s emissions reductions targets. For example, the Climate Change Act 2008 provides a world-leading governance framework that we certainly support. First, it ensures that the Government are required to prepare and lay before Parliament an annual statement of emissions, setting out the total amount of greenhouse gases emitted to, and removed from, the atmosphere across the UK and the steps taken to calculate the net UK carbon accounts. Secondly, the independent Committee on Climate Change is required to prepare and lay before Parliament an annual report on the Government’s progress towards meeting the UK’s carbon budgets, which the Government are required to respond to. Thirdly, the Government are required to prepare and lay before Parliament a statement setting out performance against each carbon budget period and the 2050 target. We believe that, taken together, these are strong existing mechanisms, which are respected and understood, to ensure that we monitor and report to Parliament on greenhouse gas emissions. I therefore urge hon. Members to reject new clause 17.
Let me turn to amendments 2, 7 and 21 to clause 89, which deals with minor amendments in consequence of our EU withdrawal. We need to ensure that the tax system continues to work effectively and that we maintain stability and certainty, including in the event that the UK leaves without a deal. To allow us to do that, clause 89 will allow minor technical amendments to be made to UK tax law to keep it working as it does now and to update it to continue to work with changes made to other areas of law on account of EU exit. Clause 89 will provide the Government with the power to make such minor amendments.
These are, I stress again, minor and technical changes that are absolutely necessary to maintain the continued effect of tax legislation in the unlikely event of no deal. I can reassure the Committee that the power is not being taken to make changes to do anything other than ensure that existing tax legislation continues to have effect in the event of no deal. It will not be used to change tax policy or the tax paid by taxpayers. To reassure the Committee of that, I have placed a list of changes that the Government intend to make under the power in the Library and sent a copy to the shadow Chief Secretary to the Treasury.
Vicky Ford
I thank the Minister for reaffirming that it is not the Government’s intention to leave with no deal. It is the intention to leave with a deal. On tax, there seemed to be some confusion over the weekend about the draft withdrawal agreement. Some people seemed to suggest that the UK would be bound into the EU tampon tax for a further five years. Can he confirm that under the withdrawal agreement, VAT on goods sold after the transition period will be subject to rates set by the British Government, not EU law?
Robert Jenrick
My hon. Friend, who is always well informed, is correct on both counts.
Vicky Ford
I thank my hon. Friend for confirming that from the Dispatch Box. Does he therefore agree that, before jumping to conclusions about what the draft withdrawal agreement says, colleagues should instead look at No. 10’s response to Steerpike’s 40 so-called horrors and at the true facts and answers from the lawyers who negotiated it before coming up with their own concerns?
Robert Jenrick
I would obviously advise all right hon. and hon. Members to read the withdrawal agreement, unlike the Leader of the Opposition, and not to rush to conclusions. The document produced by No. 10 to which my hon. Friend refers, which rebuts over 40 suggested flaws in the agreement, was very instructive, and I certainly found it helpful.
To finish on this point, I re-emphasise that I have laid before the House a comprehensive list of the changes that will need to be made to tax legislation. I advise right hon. and hon. Members who are interested to take a look at it. They will see that the changes are indeed minor and technical items that are not, I hope, controversial.
Amendments 14 and 22 would require the Government to publish an economic and fiscal analysis of the effects of our exit from the European Union before using the powers in clause 89. I can reassure the Committee that the Government have already confirmed that before we bring forward the vote on the final deal, we will ensure that Parliament is presented with the appropriate analysis in good time to make an informed decision. The Chancellor set that out in his letter of 23 August to the Chair of the Treasury Committee, a copy of which is in the public domain. He said that that analysis would look at the economic and fiscal effects of leaving the EU.
To provide Members with further detail today, I can confirm that that analysis will bring together evidence from across the Government, insight from external stakeholders and a range of data and analytical tools. The analysis will consider the long-term costs and benefits of moving to new trading relationships with the EU and the rest of the world. Having considered the amendment and spoken to several right hon. and hon. Members, I am happy to confirm that the baseline for this comparison will be the status quo—that is, today’s institutional arrangements with the EU. The analysis will consider a modelled no-deal scenario, or World Trade Organisation terms; a modelled analysis of an FTA scenario; and a modelled analysis of the Government’s proposed deal. Each will be compared against the status quo of the current institutional arrangements within the EU.
Amendment 14 would not require the analysis to be published until after the Bill receives Royal Assent. As a result, the Bill would not be binding on the Government until after the meaningful vote had taken place. I hope that the commitment that the Government have made today and the conversations that I have had with Members from across the House will provide reassurance that we will publish an appropriate analysis—the analysis that right hon. and hon. Members seek—in good time before the meaningful vote.
I turn briefly to the OBR’s role, which is mentioned in amendment 14. The House will know that the OBR’s remit is clearly defined in the Budget Responsibility and National Audit Act 2011, and that the amendment, which asks the OBR to assess our analysis of the effects of a deal, goes beyond its statutory responsibilities. That would set an undesirable precedent, with Parliament being able to commission specific pieces of work from the OBR on an ad hoc basis outside the clear and bounded remit set in the OBR’s charter. That would effectively transform the OBR into a parliamentary budget office, fundamentally changing its purpose and potentially damaging its credibility. Such a decision should be taken only after a full and frank debate on its own merits.
The House will be aware that the Treasury Committee, which is headed by my right hon. Friend the Member for Loughborough (Nicky Morgan), has appointed Sir Stephen Nickell, formerly of the OBR, to provide an independent view of the Government’s analysis. My officials have already had initial conversations with Sir Stephen about the scope and scale of his review, to ensure that we can provide him and his team with the necessary information in due course. I hope that that gives further reassurance to Members that scrutiny, of the nature that they seek, of the Government’s work will be undertaken by the Treasury Committee.
Furthermore, the OBR has already published a detailed review of the approach taken in the analysis provided across Whitehall, comparing it with other academic publications since the referendum. We believe that extending the OBR’s remit, as proposed by amendment 14, would require the OBR to analyse alternatives to Government policy. That would draw the OBR into political debate and expose it to a significant risk to its credibility and that of the UK’s fiscal framework. It remains highly unlikely that the OBR could, in the time available, go beyond the points it has already made in its discussion paper in any assessment of the Government’s analysis, bearing in mind its capacity and modelling today.
As for the effects of the power mentioned in amendment 20, I hope that my previous assurances will reassure right hon. and hon. Members that the Government intend to use the power not to introduce tax policy changes, but merely to secure the continued effective operation of the tax system. I hope that my right hon. and hon. Friends who sought this amendment will see that we have listened and engaged and that the reassurances that I have provided today achieve the amendment’s purpose. I therefore urge them not to proceed with their amendments.
I turn to amendment 15, which calls for the Government to provide a list of powers in relevant tax legislation that the Treasury has acquired since June 2016, or that it expects to acquire, relating to any EU exit scenario. All such powers have been passed as primary legislation. They have been scrutinised by this House and were voted through accordingly. As with all legislation, that which relates to these powers is in the public domain, should anyone wish to examine it. I do not think that it is necessary to reprise this list. I hope that hon. Members will see that amendment 15 is therefore entirely unnecessary, and I encourage them not to proceed with it.
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
It is lovely to see you in the Chair, Dame Rosie, and thank you for calling me to speak for the Opposition on our second grouping, which includes clause 89. As the Minister has helpfully explained, this group deals with the operation of tax law in the UK after our withdrawal from the EU, with a consequential set of Brexit-related amendments. This week, we have all seen the complete chaos the Government have unleashed on the country with their disastrous handling of the Brexit negotiations. We are just months away from the UK’s exit, and it seems the Conservative party remains as divided as ever over what to do next. As the Leader of the Opposition explained in his address to the CBI earlier today, this proposed Brexit deal offers no certainty at all and in many ways is the worst of all worlds, offending remain and leave voters in equal measure. So after two years of negotiations, we are teetering dangerously close to a no-deal Brexit, which should simply never have been an option. It would be bad for individuals, for businesses and for the economy, and Labour will do all we can to prevent it.
As we have said repeatedly, Labour wants the Government to negotiate a comprehensive and permanent customs union that gives the UK a say in future trade deals and ensures that there will be no hard border in Northern Ireland. We would protect workers’ rights, block any race to the bottom and negotiate a strong single-market relationship that gives businesses continued access to European markets for goods and services.
I would like to think that we are heading for a more stable time, but that seems unlikely. I was appalled to read press reports at the weekend that Downing Street’s alleged strategy is to encourage a crash in the financial markets should the deal fail to pass through Parliament, to pressure MPs into voting for it a second time. I can only hope that those reports were false. We should never forget that the markets reflect people’s savings, investments and pensions. They should not be used as a political device by the Conservative party.
It is also worrying that the Government are steadfastly using Brexit to substantially transfer powers from Parliament to the Executive. The Opposition have warned about this repeatedly, throughout the passage of each piece of legislation connected to the UK’s withdrawal from the EU. We should be deeply worried about this unprecedented transfer of powers.
We see another example in this Bill. In clause 89, which is rather innocently named “Minor amendments in consequence of EU withdrawal”, Ministers give themselves the power to make amendments to tax law outside the normal due process. Good checks and balances make for good government, which is why the Opposition have tabled a series of amendments that would help to address the democratic deficit that the provisions in the Bill would create, if passed unchecked. We do not believe it is possible to make a democratic case for the transfer to the Treasury of powers to make changes to tax law in perpetuity, which is why Labour’s amendment 2 proposes a sunset clause to the Brexit powers that the Bill will confer on the Treasury. It would ensure that those powers can only be used within two years of the passage of the Bill. Surely that offers sufficient time for the Government to use them as is required.
As the Minister outlined, the Government’s case is that during our withdrawal from the EU there may be a situation in which some elements of tax law need changing urgently or at short notice. However, we do not believe that there is a case for the powers, unless the UK crashes out of the EU with no deal. The agreement of a deal, with an attached transition period, should provide room for preparation, without the need to furnish the Executive with powers to make changes to the law unilaterally.
The number of Treasury-related statutory instruments that are currently being passed to create a new financial regulatory regime proves the point. Although it has been far from ideal for Ministers and their shadows, the use of secondary legislation is an improvement on the taking of such decisions behind closed doors in the Treasury.
Kevin Hollinrake (Thirsk and Malton) (Con)
The hon. Gentleman said earlier that in his relationship with the European Union he would expect to have a say in trade deals by being part of a customs union, but even when we were full members of the European Union and it agreed the Comprehensive Economic and Trade Agreement with Canada, his party refused to vote for that deal in this House. How on earth does he think that that will work on a completely third-party, third-nation basis?
Jonathan Reynolds
I am happy to take that point, which although a little outside the remit of the Bill is none the less interesting. For us, the relationship that we would seek with the EU would be based quite simply on a solid cost-benefit analysis of what is in the UK’s best interests. If we look at the various options on offer, given that half the world is already in a regional trading bloc or a customs union of some sort, it is absolutely clear that what we would risk losing by losing frictionless trade with the European Union would never be gained by external trade deals with the rest of the world. A customs union is therefore the right way to go forward. Were the UK to enter one, we clearly could not have a situation in which we were unilaterally exposed to the deals that the EU did with other countries without having a say, so it is a pretty logical position. That does not mean that those deals would always receive the backing of all parts of this House. Elements of those deals might be unacceptable.
The point about sovereignty, which comes from Brexiteers in the main, is so important, because people say, for instance, “Let’s not do a customs union, let’s do a deal with Donald Trump’s America,” but would our constituents really accept unilateral access to the NHS for American healthcare providers? Of course they would not. Would our constituents accept hormone-treated beef in the supermarkets? Personally, I do not think they would. The question is always about the balance between what is in the proposed economic relationship and the political oversight that should go with it. That position is fairly logical and straightforward.
James Cartlidge (South Suffolk) (Con)
The hon. Gentleman has just said that he would have a customs union and a say in those trade deals. How would we have a say if we were in a customs union run by the European Union yet not in it anymore? I do not understand that.
Jonathan Reynolds
We are not proposing to remain in the customs union but not be a member of the EU. We are discussing joining a new customs union that we would negotiate with the European Union. I will say to the hon. Gentleman—I do not think that I am revealing any secrets here—that for a large number of Conservative MPs and, indeed, perhaps for the Treasury itself, that is their preferred solution; they are just not in a position to negotiate that or to request that because of the parliamentary arithmetic of the Conservative party. It does also have the very substantial benefit of our being able to honour our commitments under the Good Friday agreement. That is something that should have been a much bigger part of the referendum negotiations, and it should certainly be a paramount concern for this House going forward. I will get back to the Finance Bill, but I hope that that allays the concerns of Conservative colleagues and makes it quite clear what we think the relationship should be going forward.
James Cartlidge
How would the hon. Gentleman have a say? This would be a customs union with the European Union which we would have left. How would he have a say in it? We would not have a vote anymore.
Jonathan Reynolds
That is what we are proposing that we would negotiate. That is the entire basis of the proposal. I have no doubt that such an arrangement was on offer and may still be on offer from the European Union. The hon. Gentleman is well-informed and I always look forward to his contributions in these debates. I am sure that he has contacts as we do in other European Parliaments or perhaps in the Commission itself. If he does some investigations, he will see that that was always a preferred option for many people and it is, without question, the right way of going forward for the national interest of this country.
Kevin Hollinrake
The hon. Gentleman mentioned earlier in his remarks that a certain deal might be a betrayal of the leave voters. There were plenty of myths flying about during the referendum campaign, but one area that probably was quite plausible was that if we left the European Union, we would be able to do independent trade deals—not through the European Union, but independent bilateral trade deals. Does he not see that his customs union would effectively mean that we could not do independent trade deals and that would be a real betrayal of leave voters who expect to be able to do exactly that?
Jonathan Reynolds
I think quite the reverse. What leave voters were promised was that the economic relationship would not leave anyone worse off and, in effect, would not be ruptured at all. That was the promise made in explicit terms by leading leave campaigners. Where there were concerns that motivated that leave vote, they were heavily about sovereignty and also about immigration. I do not think that the specific trading relationships that this country has with other parts of the world were a particularly paramount issue in the campaign. I know that it is a sensitive issue for leave campaigners to talk about the fact that immigration was a big part of that campaign, but, without question, it was in my constituency. In terms of that future trading relationship, it is by far the best thing to focus on what is simply in the best economic interests of the country once we leave the political side of the European Union with all of the objections that leave voters had to it. I do not think that leaving in such a way that preserves the best of our economy, minimises the disruption and honours our commitments under the Good Friday agreement is a betrayal at all. Many people want to see that economic relationship continue, even if they were of a position and a viewpoint that we are leaving the political side of the European Union with all that entails.
I will now get back to amendment 15, Dame Eleanor, before we are all rightly admonished for straying from the Finance Bill. The measure lays out a stipulation to provide clarity around which powers in relevant tax legislation have been transferred to the Treasury since June 2016 in connection with the UK’s exit. It also covers the powers that the Treasury expects to acquire, and, most importantly, it requires Ministers to set out a timeline for when these powers are to be returned to Parliament—I think the Minister missed off that last point in his speech.
Dr Rupa Huq (Ealing Central and Acton) (Lab)
My hon. Friend is doing a good job on amendment 15, but I think that he has missed the good news of my hon. Friend the Member for Streatham (Chuka Umunna) following his tenacious work. It looks like we have some movement on amendment 14 from the Government, and we will get these impact assessments before the meaningful vote. Will my hon. Friend, the shadow Minister, comment on the fact that the last time we saw such a thing was in the horrors of the Reading Room? We were shown that in every region of our nation, even in London where my own seat is, every sector of our economy will be worse off under every form of Brexit. Will he comment on that?
Jonathan Reynolds
I thank my hon. Friend for that intervention; I always welcome good news from my hon. Friend the Member for Streatham. Yes, it is very welcome that the Government have conceded on this point, reflecting the parliamentary arithmetic. I am not sure that they did it voluntarily, until they saw the names on the Order Paper. Transparency about the consequences of different types of Brexit arrangements has to be a good thing, because the country and all Members of this House should be as well informed as possible. It is extremely pleasing to see the Government concede on this point.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
I also pay tribute to the work of the hon. Member for Streatham on this issue. I was happy to support him, as he has led a very valid endeavour that I hope will inform our decision making in the weeks to come.
Will the hon. Member for Stalybridge and Hyde (Jonathan Reynolds) confirm that if these assessments indicate quite clearly that the status quo offers the best economic prospects for every part of the British state, the Labour party will support the status quo as the preferred Brexit option as we approach the next few weeks?
Jonathan Reynolds
The points I made about transparency are relevant, as every Member of this House will make different assessments. We all know that Brexit is not just an economic concern; political concerns about sovereignty and issues such as immigration form part of the decision that each of us would make. But it has to be a good thing for every part and region of the UK to have the maximum degree of transparency on the economic options available to us. Surely, transparency is the best way forward.
I return to amendment 15, which goes to the heart of what I was trying to articulate—that is, our concerns about the unprecedented power grab that this Government are undertaking. The Government have spent the last two years seizing all manner of tax powers with no regard to the constitutional role of this House. Meanwhile, Ministers have refused to honour any level of transparency, and outline once and for all a clear list of the powers that the Treasury has acquired since the referendum in June 2016 and those it expects to acquire by the time the UK leaves the EU. Amendment 15 would address this and oblige the Chancellor to publish a comprehensive list of the powers the Treasury has acquired and the powers it will then expect to acquire, and to state when we might see those powers returned to the House, where they surely belong.
Amendment 21 would provide a further important element of accountability. This would oblige the Government to deliver a review of the impact of using the powers conferred by clause 89 on tax receipts. This amendment would deliver greater transparency around the true impact of the Brexit deal that the Government have negotiated. It is vital that we have that data available so that we can discuss this in depth and quickly identify if a particular impact has occurred.
In amendment 22, the Opposition are also calling for a review of the Brexit powers being handed to the Treasury. This amendment would require the Chancellor to publish a statement assessing how the powers handed to the Treasury in this Bill would be applied respectively to Great Britain and Northern Ireland. We tabled this amendment because we need urgently to establish whether these powers will cause disparity in the treatment of Northern Ireland in comparison to the rest of the UK. Members may ask why there is urgency on this point, but it is clear from the draft withdrawal agreement that under the so-called backstop arrangement Northern Ireland will maintain a regulatory alignment with the European Union. This is the case in particular in relation to EU customs law, but it also applies to compliance with elements of single market regulation in areas such as the technical regulation of goods, agricultural production, environmental regulation, state aid and other areas of north-south co-operation between Northern Ireland and the Republic. Northern Ireland will also be included in parts of EU VAT and excise regimes and in the EU single electricity market, so Northern Ireland’s compliance with EU rules and regulations will be enforced by the EU Commission and the European Court of Justice.
With this in mind, it is clear that the powers handed to the Treasury by this legislation may not be applicable to Northern Ireland in the legal and regulatory areas under which EU authority remains supreme. We therefore seek a review of where each of the powers being granted to the Treasury can be applied in the event that the Prime Minister’s draft agreement successfully passes. This is clearly a very important amendment, and one which we hope Members of the Democratic Unionist party will also see value in passing. We therefore call on all Members of the House to look carefully at amendment 22 and support it in the Lobby.
Finally, new clause 17 would require the Government to publish a review of the effectiveness of introducing a UK carbon emissions tax in the event of a no-deal Brexit, in terms of helping the UK to meet its carbon emissions targets and carbon reduction commitments. The new clause builds on Labour’s commitment to ensure that 60% of the UK’s energy comes from zero-carbon or renewable sources by 2030.
It is worrying that making provisions for collapsing out of the European emissions trading scheme and all the benefits and economies of scale that it brings is one of the scant mentions of green issues in this Finance Bill. Our exit from the European Union cannot be used as an excuse to take a step back from action on climate change, as was outlined starkly in the report published last month by the Intergovernmental Panel on Climate Change. As I highlighted in my Second Reading speech last week, we are already lagging behind our European counterparts on green finance, as they are forging ahead with sovereign bond funds and mandatory climate disclosure laws. Our new clause would ensure that the Government were held accountable for making progress on reducing emissions, without using Brexit as an excuse to stall.
Joseph Johnson (Orpington) (Con)
I have arrived late to the debate, relatively speaking, having been detained by the trains in my previous role.
I wish briefly to address amendment 14, tabled by the hon. Member for Streatham (Chuka Umunna). We stand at a critical moment in our nation’s post-war history, and the decisions we take in the next few days and weeks will shape not just what happens over the next few months and years but our entire lifetimes. It is vital that we take these decisions in full possession of the facts and that we are answering the right questions. I believe amendment 14 will help us to do exactly that.
The Government are attempting to frame the choice before us in a binary way: the Prime Minister’s deal or no deal at all, which is effectively vassalage as rule takers on the one hand, or chaos and disruption on the other. As I said in my resignation letter last week, I believe that to present the country with this narrow choice represents the single greatest failure of British statecraft since the Suez crisis in the 1950s, for neither choice is in the national interest. Amendment 14 rightly seeks to expose this for what it is and will make clear everything to full public scrutiny. Both options—deal and no deal—are significantly worse for the UK than our present arrangements, and the amendment will make that clear by requiring the Government to be transparent.
Any serious appraisal of a major policy change needs to measure the costs and benefits against a clear economic baseline. Indeed, the Green Book—the Treasury manual on how to appraise policies, programmes and projects—states clearly that the Government’s preferred course of action must always be assessed against a “do nothing, business as usual” benchmark. If the business as usual option—in this case, staying in the EU—were not to be included in any such appraisal, the process would be contrary to the Government’s own manual, in addition to being clearly below the standard applied in any well-run business.
I am worried and concerned that it appears to have taken an amendment that the Government would have been in no position to overturn to secure their commitment that this full appraisal will eventually be published in time for it to be fully considered by Members of this House before the meaningful vote. Members need to know detailed information about this appraisal. We need to know the impact, region by region and sector by sector, because the impact, as hon. Members have made clear, will vary sharply around the country. We also need to know which groups in society will suffer the most, relative to other courses of action available to us as a country. I would be grateful if the Minister, in his winding-up speech, could confirm that that will form part of the appraisal that the Government publish and that the OBR will provide an independent assessment of the Government’s appraisal.
If we have learned anything from the chaos of the past 30 months, it is that facts are sacred. This debate has been characterised by falsehoods and misinformation from day one. It is extraordinary that we have now had to force the Government, at this relatively late stage, to publish the vital information necessary for an informed public debate. Some may say that this horse has long bolted, but I say it is better late than never. I believe that amendment 14 will go some way to righting this wrong.
Given that the reality of Brexit has proved to be so far from what was once promised during the campaign, the democratic thing to do is not just to accept amendment 14, as my hon. Friend the Minister has done, and to publish the like-for-like economic analysis showing how costly this Brexit will be, but to give the public the final say about whether they really want to proceed on this hopeless basis.
Chuka Umunna (Streatham) (Lab)
It is a pleasure to follow the hon. Member for Orpington (Joseph Johnson), who kindly spoke in favour of amendment 14. The amendment is in my name and in those of the right hon. Member for Broxtowe (Anna Soubry) and 70 other Members from all parts of the House. I want to take this opportunity to thank all the Members who have supported this amendment.
As the Minister said, what we were seeking to do with this amendment to clause 89—as he says, the clause allows the Government to make amendments to UK tax law—is to ensure that this House is provided with all the information needed for it to come to an informed decision. The Prime Minister made a very important admission last week, both outside No. 10 and in this House, where she moved on from the falsehood that has been peddled by too many, which is that this House has only two choices: the withdrawal agreement that has been presented by the Government, or leaving without an agreement at all. She moved on from that to the very clear choice that we now know faces this country: no Brexit, no deal or the agreement that the Government are putting forward. As may already have been said in this debate, this is arguably the biggest decision that this House will be making since the second world war, and it is absolutely vital that we are provided with the requisite data in order to come to an informed decision.
For the benefit of the record, our amendment seeks to make the exercise of the powers sought in clause 89, which the Minister mentioned, subject to the publication of a proper economic impact assessment of, and comparison between, each of the three scenarios the Prime Minister has set out before any meaningful vote on the withdrawal agreement takes place under the provisions of the European Union (Withdrawal) Act 2018. It is true, as the Minister said, that this Bill is likely to become an Act after the meaningful vote, but the amendment we have tabled is worded in such a way that its provisions will need to have been complied with before the meaningful vote in order for the powers under clause 89—to keep the tax system running in the event of no deal—to be usable.
I want very quickly to explain why we felt it was necessary to table this amendment and to deal with the three principal objections, which have been made in the House before, standing in the way of providing the information that this House needs to make a decision.
Kevin Hollinrake
I think it was Mark Twain who first said, “You should never make predictions, particularly about the future”. The hon. Gentleman refers to these forecasts as data, but does he accept that they are not data? They would simply be predictions, and as predictions they are inherently unreliable because they cannot take into account the reaction of business to the different scenarios we may be in. Does he accept that they are simply a forecast and cannot be relied on as facts?
Chuka Umunna
The hon. Gentleman intervened at precisely the moment when I was about to deal with that point, which is one of the three objections that are raised to our being provided with this important information. I will go through each of them, and I will address his point.
The first argument that is usually put up as to why the House should not be provided with the relevant economic impact assessments, which the Government are producing internally in any event, is that publishing that analysis would undermine the ongoing negotiations. That is clearly ridiculous. The leaking of the cross-Whitehall economic impact assessments by BuzzFeed in January had no obvious impact on the Government’s negotiating position vis-à-vis the European Commission, and frankly it is not as if those on the other side of the negotiating table will not have access to similar economic forecasts and models so that they can come to similar conclusions.
Luke Graham (Ochil and South Perthshire) (Con)
The hon. Gentleman talks about statistics. Does he not agree with me that many Members—this is shared across the House—use statistics as a drunk man uses a lamppost: for support, rather than illumination? Will he join me in trying to strengthen the Office for Budget Responsibility, so it can have more resources and ensure the statistics presented to the House are objectively verified?
Chuka Umunna
I have to say that when I gave way to the hon. Gentleman I did not imagine I would actually end up agreeing with what he said. He pre-empts my final point, which is that I understand the general worry about the accuracy of official forecasts. The bottom line is that we are never going to get forecasts that are 100% accurate, but we have to work with a certain number of assumptions to make policy, as I am sure he will discover if he has the privilege of serving in government.
On the point he makes about the OBR, I was quite careful in how I drafted the amendment. Its powers and capacity from a resource point of view are circumscribed, but there is no reason why we should not change the statutory remit of the OBR. At the very least, for those who worry about the accuracy of forecasts, we could see whether the OBR would be prepared to do an evaluation on the methodology and the techniques it uses to produce the forecasts by the Treasury.
Dr Sarah Wollaston (Totnes) (Con)
Does the hon. Gentleman agree that this issue relates not just to future forecasting? The Health and Social Care Committee has been hearing that hundreds of millions of pounds are already being spent by pharmaceutical companies on no-deal contingency planning—money that would be far better invested in our NHS.
Chuka Umunna
I could not agree more with the hon. Lady.
I will finish by saying this: the reason we tabled the amendment, and why I think so many colleagues on all sides of the House supported it, is because ultimately it is an assertion of parliamentary sovereignty. If the House were denied this really important information in order to come to a considered informed view, it would make a mockery of the argument that says the reason for withdrawing from the European Union is to assert parliamentary sovereignty.
I did not expect to be in this position at the beginning of today. I am grateful to the Minister for making this important concession and for making the promise, at the Dispatch Box, that we will get the economic impact assessments that we sought to secure through the amendment. Given the firm commitment he has made to the Committee, I will not be pressing the amendment to a vote. I would like to take this opportunity to thank all Members who supported it. Ultimately, we have done this because we think it is important that our constituents understand why we make the big decision that we are going to have to make in the next few weeks.
Justine Greening (Putney) (Con)
I was a signatory to amendment 14 because I think that good policy making needs good evidence at its heart. That is what the amendment sought to do. I think we all recognise that the debate on our future relationship with the European Union has often been characterised by facts that have turned out not to be facts, and, far too often, by lofty ideals and phrases that have had little meaning to back them up in practice. It is now time, as we come to possibly the most crucial parliamentary debate in 50 or 60 years, for Members to have the information they need to be able to take an informed decision—and, dare I say, for members of the public to have the information they need to be able to convey to their own Members of Parliament what they think about that information and why they want their MP to vote accordingly.
I welcome the statement the Minister made at the beginning of this debate, in which he set out his plans to provide more information to the House. Along with the rest of the Treasury, he will play a vital role in ensuring that we have an informed debate. I was one of those MPs who earlier this year went to the Reading Room—I actually went three times—to wade through the Treasury analysis. I would like a similar level of detail so that, again, Members are able to analyse the impact of the three different choices facing our country, as the Prime Minister has now set out: whether we have the deal that she proposed, whether we leave effectively with no deal, or whether we keep the existing deal with the European Union. I would like a level of analysis that includes a sectoral split in relation to the different impacts of the different deals on different sectors, as well as a regional and geographical split, so that we, as Members of Parliament representing very different communities in very different parts of the country, can really understand what the geographical impact of Brexit and the options will be.
I would like the analysis perhaps to go beyond what we originally had from the Treasury, so that we can understand what the impact on GDP might be for employment and jobs. There will be many MPs who do not believe that unemployment is a price worth paying for some of the options on the table. I believe that MPs and communities have a right to be informed about the risks to local jobs before casting their votes in favour of different options. Of course, we need to see, for all the options, the impact on public finances, both in the short and longer terms. I know that the Minister has in mind a period of 15 years for forecasting. I think that that is absolutely necessary for us to see not just the immediate shorter-term effect, but the medium and longer-term structural impacts of any route forward on our economy.
Kevin Hollinrake
I know that my right hon. Friend is in favour of a people’s vote that would have three different options—deal, no deal, or remain—but as she will concede, it was difficult enough to explain the different implications to people in the first referendum, even with a binary choice, and there were a lot of different opinions about those implications. How easy does she think it will be to explain what the outcomes and implications of all those three different options might be?
Justine Greening
I have no doubt that at the last election, at which my hon. Friend was elected, there were many different candidates on his ballot paper, and I do not think that his constituents were prevented from making the very fine choice they made. They were quite capable of working their way through the different options. This House has MPs representing very different parties and communities, and again, the electorate have been perfectly capable of working their way through what, as we all know, are often very lengthy and different party manifestos. Like any election, this is a choice about the future. There are different choices, just like in any election, and we should not limit the choices to two just for the sake of it. Arguments can be made for having a two-choice referendum, but saying that it is too complicated for the British public is not one that holds in practice. This is a British public who regularly choose between many different alternatives and indeed, in some elections, are sophisticated enough to vote tactically to get the outcome that they want.
My proposal, as my hon. Friend may be aware, is that people have not just one but two other choices. That will enable them to pick their own compromise, because it is clear to me that this House will not be able to reach a compromise and will just vote against all the different paths. I have no doubt that we will come back to that debate and I very much respect the different views that people have in this House. This is an important debate and we need to get a route forward. I simply reflect on the fact that my view remains as it was back in July. Regrettably perhaps, this House is gridlocked, and my advice now, as it was back then, is that, rather than ignoring that fact, we have to confront it as a Parliament, however difficult that is. We need to make a proposal on how to get through it, so that ideally, we do not reach that moment of crisis when we have seen every single option ahead of us on Brexit voted down.
I was quite surprised, when the Treasury did its previous impact assessment, that more MPs did not go to the Reading Room to look at it. As I understand it, about 60 MPs out of 650 booked themselves time to look through the analysis. It is crucial that MPs look at it. I thought it was important to do so, but clearly if MPs find it hard to go to the Treasury, the Treasury must go to MPs. I would very much recommend that that analysis be sent out to every Member and, if he can, that the Minister finally sets out what he means by publishing analysis “in good time”. If Members have parliamentary questions to submit, clearly it is important that the House should have time to scrutinise it all properly.
Kirsty Blackman
I rise to speak in favour of SNP amendments 7 to 10 and new clauses 10 and 11. I would also like to mention amendments 14, 15, 22, 20 and 2 and new clause 17, all of which we would be comfortable supporting, if any of them are pushed to the vote.
There has been a lengthy discussion across the Committee on trade deals. People are confusing free trade agreements and trade deals. It is perfectly possible to make arrangements that improve the flow of trade without signing an FTA; they are two very separate things. It is not understood widely enough that any trade agreement between countries involves compromise. Whatever is signed up to between, let’s say, the UK and the USA will involve the UK having to give some things away as well as gaining something.
The consultation on trade deals looked at trade deals with New Zealand and Australia, with the comprehensive and progressive agreement for trans-pacific partnership, and with the US. However, despite the fact that UK Government Members have talked about how important our trade is with countries such as South Korea and how fast it has grown, the Government have not consulted on that and they did not do so because we have those trade deals already, as a member of the EU. That is why our trade has grown so quickly with South Korea.
Thank you for your indulgence, Dame Rosie. I will move now to the actual subject of the debate. Our amendment 7 asks that clause 89 be subject to the affirmative resolution procedure. I appreciate that the Minister has put a list in the Library, and I will take a look at the list of tax changes he proposes to make under the clause, but I am on the Committee that is sifting the statutory instruments the Government are bringing forward, and some of those SIs that the Government think should be taken under the negative procedure should never have been so proposed. Some are fairly dramatic changes to the law—to powers or new institutions, for example—and yet are being put to the statutory instrument sifting Committee as negative instruments.
I hope that the Minister will forgive me, but I do not trust the Government to introduce only measures in the category that we believe should be subject to the negative procedure. I will look carefully at that list, but I will still press amendment 7, because, given my experience of Ministers, I do not yet have the level of comfort that I need.
Robert Jenrick
I hope that in due course the hon. Lady will have an opportunity to read the letter that is in the Library and see that these are truly minor technical amendments, changing, for example, a reference to the EU to a reference to the EU and the UK, and a reference to euros to a reference to pounds sterling. I hope that, in due course, she will be comfortable with those minor technical changes.
Kirsty Blackman
As I have said, I will definitely read the letter. However, I draw the Minister’s attention to the House of Lords Committee that met, I understand, on 17 November—or possibly not, as that was at the weekend, but very recently—to discuss the Finance Bill 2019. Someone drew my attention to an article by Wendy Bradley, which talks about HMRC’s powers and about power creep. Wendy Brady says that
“it is incumbent on Parliament to determine whether the powers it has given HMRC are sufficient and being exercised correctly”.
That, in my view, is important in relation not just to HMRC, but to the powers of the Treasury and the powers of Ministers. I think it important for Parliament to consider what delegated authority we are handing over, whether to the Minister, to the Treasury, to the Chancellor, or to HMRC directly. As I have said before, the Government do not adequately review these matters, publicise those reviews and repeat them regularly. It is important to have a handle on this, especially now, when so much delegated authority is being given to various institutions. It is important for someone to have an idea of how much power has been taken away from Parliament and ceded to those institutions and for there to be a regular review of whether it is still necessary for it to be in their hands.
Let me now say something about the release of the analysis and the changes that the Minister has said he will make. I praise the hon. Member for Streatham (Chuka Umunna) for his work and his amendment and for creating the real change that we have seen in the Government’s position today. It is important for us to be able to support and trust that analysis—to believe that it is accurate. Mention of the OBR was positive in that regard, because people trust that the OBR is an impartial observer of these matters.
The hon. Member for Ochil and South Perthshire (Luke Graham) initiated a debate in Westminster Hall about the OBR’s remit, and I found it incredibly interesting. I learnt a huge amount about the workings of other organisations around the world. We do not have an organisation that reviews Government policy impartially across the board because the OBR’s remit is so tight, being confined to scrutiny of budgetary matters. I was pleased to support the hon. Gentleman that day. Widening the OBR’s remit would be extremely useful, because, as I have said, people out there trust the OBR to get this right.
A status quo baseline against which all the options should be compared is important, and I am pleased that the Minister referred to it. What was said about whether the analysis will be produced in good time was also important, especially given the lack of time that we had to scrutinise the Bill and the short period during which it was in our hands before we had to talk about it on Second Reading. It was only published on the Wednesday, and then we had to stand up and talk about it on the Monday. Let me say again that if the Government want us to trust, they need to gain that trust, and they must therefore produce legislation in what is actually good time, rather than what they say is good time.
Obviously, everything in the Bill is a prediction. Everything in the Red Book is a prediction for future years. Everything that the Government predict, in terms of their tax take for the changes to entrepreneurs relief or anything else in the Red Book, is a prediction. We have to work on that basis, but we must have the best possible predictions, and, as I have said, they must be looked at by an impartial observer so that we can be absolutely sure that they are as close to accurate—or as close to a best guess—as they can possibly be.
Jonathan Edwards
A number of Members have talked about the upcoming votes being the most important votes that we will ever undertake as Members of Parliament. Does the hon. Lady therefore agree that it is vital that the independent assessment should be published in the public domain, so that our constituents can understand the decisions that we are making? We should not have to have one of those Reading Room scenarios, as we did with previous assessments.
Kirsty Blackman
I agree. The Reading Room provided for the cross-Whitehall analysis was not fit for purpose, in that I could not go there and mull over the papers in the way that I would normally do. Generally, if I am presented with a Finance Bill, for example, I will sit at home and read it. That is what I like to do on a Saturday night. I will sit at home and read these things. We have to be able to access any analysis that is published in a way that suits us, and releasing it publicly would be the best possible way to do this. Another reason for doing that is that the external stakeholders could provide their comments in the best possible way, so I entirely support the hon. Gentleman’s suggestion.
New clause 11 asks for a report on the consultations that have, or have not, been carried out in relation to the tax measures. As I said on Second Reading, not enough of the tax measures in the Bill were consulted on this year. I understand that there were more such consultations in previous years. If we do not want the Government to have to row back next year because they have screwed something up as a result of inadequate consultation, it will be important for these tax measures to be published and consulted on and for us to get the expert advice that we need from the stakeholders.
Clause 90 is just bizarre. I read it, and then I had to go back and read it again because I could not believe that a clause would give the Government the power to spend whatever they liked. It does not cap the spend on the emissions reduction trading scheme’s preparatory expenditure. I was genuinely confused about how the Government could propose that. The clause will give the Government carte blanche. Our amendment 9 and our new clause 10 ask for a Commons resolution and an expenditure review before that expenditure can take place. We think it reasonable—and I am sure the general public would think it reasonable—that if the Government want to spend money on something, they should tell us how much they intend to spend.
The Government are spending money to stand still. This is a cost, and the Government have to spend the money for things to be exactly the same after Brexit as they are today. It is a cost that we would not have if we were not leaving the European Union. The Minister talked about the estimates process. I am pleased that he is as interested and excited by the estimates process as I am. I talk on the estimates whenever I possibly can. There are two parts to the estimates process: one in February and the other in July. I am not sure whether this money counts as in-year spend or as part of next year’s spend. We might be able to discuss it in February, which would be great, because at least that would be before we leave the EU. However, if it is classed as next year’s expenditure, we might not be able to discuss it until July, by which point the money will have been spent.
Patrick Grady (Glasgow North) (SNP)
We can discuss this all we like during the estimates process, but does my hon. Friend agree that it is incredibly difficult to actually vote on any of this? Despite all the promises made when the English votes for English laws system was introduced, it really is impossible for Members of Parliament to have a say on specific aspects of Government spending through the estimates process.
Kirsty Blackman
That is absolutely the case. The Minister’s comments about the lack of ability to scrutinise spend in the Finance Bill were incredibly illuminating. The reality is that we cannot adequately scrutinise or amend spend anywhere. I was talking to some people about the Budget process and the Finance Bill in the last couple of weeks, and about how the two fit together. I explained that we discuss tax in the Finance Bill, but that we do not discuss spend until the estimates process. Some spending measures will come through, at which point we will sanction them. For example, if the immigration Bill comes forward, we would imagine that it would have some spend associated with it, and we will debate that spend at that time. But a huge proportion of the billions of pounds that the Government spend on a regular basis is only ever discussed during the departmental estimates, which we cannot amend or change. I do not understand how we can have a Parliament that is supposed to be so powerful and supposed to be taking back control when we do not have control over Government spend, which is surely fundamental to how the Government behave.
Grant Shapps
I rise briefly to address clause 89, which is on an amendment to tax legislation in consequence of EU withdrawal, and to make one specific comment to the Minister that I hope he will take on board and do something about.
I chair the all-party parliamentary group on general aviation, which has as its membership 177 Members from across this House and other place. There is a particular issue that I am very keen for the Minister to know about in relation to pilot training. According to Boeing, the world will need 790,000 more pilots in the next 20 years. The UK, with English as our language and with our history in aviation, should be in an absolutely key place to train new pilots, but there is a massive problem: in this country, people have to pay for that training themselves. It costs about £100,000, and then the Government charge £20,000 VAT on top of that. The all-party group has taken up this issue with the Chancellor of the Exchequer. He tells us that it is tracked into EU regulations and there is nothing that we can do about it during our time within the EU. However, I want to make an impassioned plea to the Minister to have a really good think about what we could do with regard to clause 89.
It is clear and obvious—one need only travel on an aircraft anywhere to realise this—that the pilots in this country, and indeed worldwide, but in this country generally, are nearly all male, nearly all middle-class and nearly all from backgrounds where families might say, “I’ll tell you what—we’ll remortgage our home and let you go and spend £120,000 on learning to be a commercial pilot.” That puts off too many people from too many hard-to-reach sections of society. That puts off a lot of people, particularly women, who we want to persuade into these very well-paid STEM—science, technology, engineering and maths—jobs, which really should be the future for this country.
Sir Roger Gale (North Thanet) (Con)
The ambassador for the all-party group is Carol Vorderman, who has probably done more than any other single living person to try to encourage young women to take up aviation as a profession, but the young women she is trying to persuade are hitting the buffers all the time because they are coming up against this cost. That is driving our trainee pilots overseas to places like Spain, which does not have the VAT, when we ought to be training them at home. Should this not be taken on board by the Treasury?
Grant Shapps
My hon. Friend is absolutely right. This is a crazy situation. We are driving pilot training out of the UK, but English is the language of the air and should be our natural advantage. Our ambassador for the all-party group Carol Vorderman regularly reminds us that she wanted to go into the Air Force but was rejected, not through any lack of knowledge, STEM education or mathematical ability, but because she was a woman. It cannot be right that our Government are not able to address this.
I am very hopeful that the Minister will take on board clause 89, which will allow the amendment to tax legislation in consequence of leaving the EU, to do what other EU countries have somehow already managed to do—such as Spain, which does not charge VAT on pilot training. This gives us an enormous opportunity as a country to take a big chunk out of the global pilot training market, which should be, in effect, a massive export for the UK.
While we are on the VAT issue, I have one other point. This country has the ability to lead aviation into a much quieter, cleaner and more environmentally friendly future. The future of aviation eventually is to have electricity in planes—electric planes—but that will not happen without having the same dedication and enthusiasm that this Government and the previous one showed towards electric vehicles transferred to electric aviation.
This is a revolution in aviation that is coming, but it would be very encouraging if we saw the UK lead the way, and, again, this is in no small part down to how VAT is treated, in terms of not only pilot training but the inquiry, investigation, research and development that goes into electric aircraft.
The all-party group is starting a STEM aviation working group headed by a fantastic woman called Karen Spencer from Harlow College. It has the aviation STEM college at Stansted airport, where it is training 294 youngsters this year and over 500 young people next year in STEM aviation qualifications. I encourage the Minister to go and see it for himself. I believe that if we work together on this we can make aviation a much more inclusive profession, and it starts with clause 89 and what can be done under these amendments to tax legislation in consequence of EU withdrawal.
Vicky Ford
I too wish to speak about clause 89, which allows the Treasury to make minor amendments to tax legislation after we have left the EU.
EU tax issues are often extremely controversial. I think back to EU tax decisions I have seen in the past, such as the decision not to introduce a financial transaction tax, which this side of the House always strongly objected to but the other side would strongly have proposed at a European level. We objected to it because we felt it would have unintended economic consequences. Then there were the changes to the VAT MOSS—mini one-stop shop—situation for digital tax for small businesses. These decisions were taken without deep consultation or deep impact assessments, but were then found to have a huge number of unintended consequences. There were also the controversial issues to do with VAT on tampon taxes that sometimes came back.
Anneliese Dodds
It is important that Members are not misled, and it is important to say for the purposes of accuracy that a number of EU countries are looking to move forward with a financial transactions tax through the open method of co-ordination that I know the hon. Lady is very well aware of through her expert knowledge of the EU.
Vicky Ford
That brings me back to the point I was making: EU taxation matters can be hugely controversial, partly because decisions affecting tax at an EU level are often unanimous decisions, and therefore it would be very difficult for one member state to change them if a decision has gone wrong. Because they are so controversial it is worth thinking about the delegation of powers given to Ministers here. Indeed, during my time looking at European matters, I long argued for the concept of better regulation before decisions were made. People should be consulted and impact assessments published. Only after the assessments have been made public and the views of stakeholders who might be affected taken into consideration should decisions be made.
That is why I sit on ESIC, the European Statutory Instruments Committee, to which the hon. Member for Aberdeen North (Kirsty Blackman) referred. It was a Committee that I argued we needed. She suggested that when it decides to change a negative instrument to an affirmative instrument, that is because of some controversy with the Government’s decision, but by establishing that Committee, under the excellent chairmanship of my right hon. Friend the Member for Derbyshire Dales (Sir Patrick McLoughlin), we can ensure extra transparency in these complex decisions. I genuinely believe that we should think carefully before giving delegated powers to Ministers. However, clause 89 is very much about making minor decisions. It is tightly worded, and I do not believe that the amendments tabled by Opposition Members are necessary, as they would cause over-complexity. Amendments under clause 89 would be necessary, were we to leave the EU without a deal.
I am absolutely convinced that leaving the EU without a deal is not in the interests of this country, and I am glad to hear Ministers confirm that. However, I would also be glad to hear Ministers confirm that they will give Members a great deal more detail about the impact assessments of a no-deal scenario and a deal scenario, and also how that compares with remaining a member of the European Union, before our final vote on the withdrawal agreement, so that we can all be fully apprised of the impacts and make our decisions wisely.
Kevin Hollinrake
I want to speak first to amendment 14. The hon. Member for Streatham (Chuka Umunna) is no longer in his place, but he said that all the choices before us were the worst possible choices and worse than the deal that we have today. I was certainly not someone who campaigned to leave the European Union—I have my reservations about our departure from an institution of which we have been a member for effectively 45 years—but we should not ignore the opportunities that lie ahead of us.
I do not look at these things through rose-tinted spectacles, but many years ago, following protests by those concerned about the impact on their livelihoods of imports from India by the East India Company and the successful lobbying of their Members of Parliament, legislation was introduced from 1700 called the Calico Acts, which banned all imports of calico—rough-cotton cloth—from India. That gave rise to the industrial revolution, because at that point we could not produce enough calico, so Watt linked his steam engine to Hargreaves’s spinning jenny and mass production resulted.
Martin Docherty-Hughes (West Dunbartonshire) (SNP)
The hon. Gentleman mentions the historical Calico Act. He does know that it also impoverished the people of India, rather than just creating the industrial revolution.
Kevin Hollinrake
The hon. Gentleman may well be aware of that fact, but that is not the point that I was making. I am not keen to impoverish people from any nation; the point is that what happened gave rise to a huge opportunity. Amendment 14 looks at one side of the equation, as if we can rely on a Treasury forecast simply as fact. It does not take into account the other side of the equation, which is that business will respond to the future framework that it is part of. There are concerns about the future, but there are also opportunities.
I want to talk mainly about clauses 68 to 78, which concern our carbon emissions. The hon. Member for Stroud (Dr Drew) seemed to imply that we were not succeeding at reducing our carbon emissions, but actually the UK is fifth in the world in the climate change performance index, a German-based index published every year by Germanwatch. We are ahead of many countries that people might think would be ahead of us, including France, Italy and Germany. I cannot say that our climate change credentials are second to none, but they are second to those of only four other countries. Every other country that we might mention—other than, I think, Norway, Sweden and Lithuania—is behind us on that performance index. We are performing admirably in carbon emissions, but we need the right mechanisms to enable us to continue that success. The carbon emissions tax that the Exchequer Secretary to the Treasury described earlier is a good framework to ensure that the carbon price is right and business has stability in the undesirable event of a no-deal situation.
Vicky Ford
Does my hon. Friend agree that stability in the carbon pricing regime is as important as any other area of business legislation? That is why it is important that we deal with the devil in the detail in the Bill.
Kevin Hollinrake
My hon. Friend makes a good point. Above all, business is looking for stability. It is absolutely right that in the worst-case scenario, in which we end up with no deal, we have a stable framework to enable us to manage our future trading relationship with the European Union.
Vicky Ford
Does my hon. Friend agree that although the clause is helpful in giving some stability, it does not give anything like the level of stability that would be delivered by a negotiated exit?
Kevin Hollinrake
It is hugely important that we have the negotiated exit that we all want. No deal is the worst possible option, and it is not where we want to go. Nevertheless, we cannot take no deal off the table.
I return to my key point about our future energy emissions and ensuring that we reduce our carbon emissions wherever we can. We are world leaders in moving our electricity production away from coal, which we have committed to phasing out by 2025, and into gas.
James Heappey (Wells) (Con)
My hon. Friend has done an awful lot of research into the energy mix that we might require to achieve those targets. Does he agree that carbon pricing sends an important signal to ensure that the phase-out of coal is delivered on time and that other technologies—such as gas and renewables—come online to enable us to hit those targets?
Kevin Hollinrake
My hon. Friend is absolutely right. He has a great deal of knowledge in this area, too, and I absolutely defer to it. This discussion about the most energy-efficient way to produce our electricity has run throughout my parliamentary career. I know that my hon. Friend is not a big fan of shale gas, but there are petroleum exploration and development licences right across my constituency. Over the last three years I have not had a frack-free day; in fact, I spent some time out in Pennsylvania looking at shale gas exploration out there. The US has used shale gas to excellent effect in reducing its carbon emissions.
James Heappey
My hon. Friend is very kind to give way a second time. The issue is not necessarily where the gas comes from, but the fact that it is an important part of our future generation capacity and it is, for now, indispensable to the delivery of heat. Whether it is delivered onshore or elsewhere is not necessarily the important part of that debate.
Kevin Hollinrake
It is interesting; my hon. Friend says that the point is not where gas comes from, but imported gas has a larger carbon footprint. That is particularly true if it is put in large ships that go from Qatar to the UK, in which case its temperature has to be reduced to about minus 156 °C in order to liquefy it. If we produce gas domestically, its carbon footprint is much smaller, and that is why shale gas makes sense. As he knows, we import about half our gas, but by 2030 we will be importing about 70% of it. It makes sense to produce something that we would otherwise have to import. On that point, I am happy to conclude, and I am grateful for the opportunity to speak.
Question put and agreed to.
Clause 68 accordingly ordered to stand part of the Bill.
Clauses 69 to 78 ordered to stand part of the Bill.
Clause 89
Minor Amendments in consequence of EU withdrawal
Amendment proposed: 22, page 66, line 30, at end insert—
‘(1A) The Chancellor of the Exchequer must, no later than a week after the passing of this Act and before exercising the power in subsection (1), lay before the House of Commons a review of the following matters—
(a) the fiscal and economic effects of the exercise of those powers and of the outcome of negotiations for the United Kingdom’s withdrawal from the European Union giving rise to their exercise;
(b) a comparison of those fiscal and economic effects with the effects if a negotiated withdrawal agreement and a framework for a future relationship with the EU had been agreed to;
(c) any differences in the exercise of those powers in respect of—
(i) Great Britain, and
(ii) Northern Ireland;
(d) any differential effects in relation to the matters specified in paragraphs (a) and (b) in relation between—
(i) Great Britain, and
(ii) Northern Ireland.”—(Jonathan Reynolds.)
Question put, That the amendment be made.
Business without Debate
Hon. Members
Object.
Private Members’ Bills
Motion made,
That, notwithstanding the provisions of Standing Order No. 14(8), Private Members’ bills shall have precedence over government business on 25 January 2019, 8 February 2019 and 8 March 2019. —(Amanda Milling.)
Hon. Members
Object.
Delegated Legislation
Motion made, and Question put forthwith (Standing Order No. 118(6))
Constitutional Law
That the draft Tax Collection and Management (Wales) Act 2016 and the Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017 (Consequential Amendments) Order 2018, which was laid before this House on 10 October 2018, be approved.—(Amanda Milling.)
Question agreed to.
Justice
Ordered,
That Ruth Cadbury be discharged from the Justice Committee and Janet Daby be added.—(Bill Wiggin, on behalf of the Selection Committee.)
UK Entry Visas
(6 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Patrick Grady (Glasgow North) (SNP)
I am pleased to have secured this debate. I start with a slight sense of déjà vu, because in June 2016 I led a short debate in Westminster Hall on visas for visitors from sub-Saharan Africa. It was a different Minister in that debate, mind you; he went on to become the Secretary of State for Housing, Communities and Local Government, so who knows what awaits the Minister for Immigration if she can improve on the answers that I received then?
Sadly, many of the issues that I raised that day are still relevant today, and if anything the situation has deteriorated further and goes beyond the experiences of those in one region of Africa. The Minister will know that at Prime Minister’s questions on 24 October I raised the increasing concerns among academics, the creative industries, businesses, non-governmental organisations and basically anyone and any organisation with links to overseas counterparts who might want to travel to the UK. The experience of the visa system of both individuals and organisations stands in stark contrast to Home Office rhetoric and the Government’s stated ambition of building a “global Britain”. The situations that I hinted at in PMQs barely scratch the surface, but they all exemplify the huge frustrations created by both practical failures in the visa application system and the overall policy failure of what essentially remains a hangover of the hostile environment policy.
Throughout the summer of this year, the media were full of reports of festivals disrupted by the denial of visas to artists from different parts of the world. The director of the Edinburgh international book festival described the problems faced by over a dozen authors seeking to attend as “humiliating”. Peter Gabriel, the founder of WOMAD, expressed alarm after at least three acts were unable to perform, saying that
“our UK festival would now have real problems bringing artists into this country,”
many of whom
“no longer want to come to the UK because of the difficulty, cost and delays with visas, along with the new fear that they will not be welcomed.”
That is borne out by the experience of Celtic Connections, which has been a major highlight of Glasgow’s cultural scene for the past 25 years. Its director Donald Shaw has recently said that visa refusals are undermining the festival’s musical internationalism, and that at least two major world acts have pulled out of next year’s festival simply due to the hassle and stress of the visa application process.
Jim Shannon (Strangford) (DUP)
I congratulate the hon. Gentleman on bringing this issue to the House for its consideration and on his endeavours on behalf of universities and students from all over the world. Does he agree that it is essential to our universities that there is a quick but effective visa system, and that every effort must be made to ensure that the system for applications to study here has top security procedures but at the same time is streamlined and quick?
Patrick Grady
Absolutely, and I will have some examples from my constituency in a couple of moments.
In the debate in June 2016 I listed example after example of delays and denials experienced by members of the Scotland Malawi Partnership. I declare an interest, because the partnership provides pro bono secretariat support to the all-party parliamentary group on Malawi, which I chair. The Minister may also know that in February, I and my hon. Friend the Member for Paisley and Renfrewshire North (Gavin Newlands) had to raise an urgent case at business questions, because just days before they were due to fly to Scotland a group of Malawian schoolchildren and priests had been denied visas, which they had been assured would be granted, risking thousands of pounds that pupils and families in Scotland had raised to bring them over.
Martin Docherty-Hughes (West Dunbartonshire) (SNP)
On that point about members of religious faiths, in West Dunbartonshire we have St Margaret of Scotland hospice, run by the Sisters of Charity, who have hospices across the entirety of the UK from Hackney to my constituency. Does my hon. Friend agree that the problems facing us are affecting not only people of religious faith, such as them, but those in hospices across the UK trying to deliver social work, palliative care and frontline services?
Patrick Grady
Absolutely, and I would have thought that if anyone was going to honour their visa requirement to come here for a short period and then go back to their country of origin, it would be members of religious orders whose vows of obedience and stability mean that they need to remain where they are based.
Departments at the University of Glasgow frequently encounter difficulties in bringing over visiting academics. Last year, the Home Office denied a UK entry visa to Dr Nazmi al-Masri, the vice-president for external relations at the Islamic University of Gaza, despite the fact that he had a 30-year history of entering and returning from the United Kingdom, and that he was due to travel to support research programmes funded by the UK Government’s own research councils. The situation is perverse and the list goes on.
Examples emerge from all around the world on a weekly and sometimes daily basis. No fewer than 17 researchers were reported as being unable to attend the Women Leaders in Global Health Conference hosted by the London School of Hygiene and Tropical Medicine last week, which the organisers said was tantamount to discrimination and bad for science research in the UK, and means that they may have to consider hosting events overseas in the future. Pioneering anti-poaching female rangers from Zimbabwe were denied entry to collect humanitarian awards on 3 November. The Syrian journalist Humam Husari was granted entry, again to collect an award, only after high-profile complaints. Here in Parliament, on a weekly if not daily basis, events I have been to recently hosted by the Industry and Parliament Trust and various all-party groups all have similar stories which are heard frankly with embarrassment and cringing by the UK-based participants.
Carol Monaghan (Glasgow North West) (SNP)
Many of the academics my hon. Friend talks about are from sub-Saharan Africa, India and the middle east. Does he share my concerns that post Brexit this may involve academics from across Europe too?
Patrick Grady
That is a very real concern and I will touch on Brexit just before I finish.
It is no wonder that I heard a very senior official from the African Union, who himself had had to produce a marriage certificate and bank statements even though he was invited to attend an event by the Lord Mayor of London, tell one such meeting recently that he is not surprised when he sees business class flights from Addis Ababa to Brussels full, but similar flights to the UK more than half empty. These are not examples of a UK that is open for business. These are not examples of a global Britain. These are not examples of a Home Office that has abandoned the hostile environment. These are examples of failure across the board: failure of policy and failure of practice.
Will the Minister confirm what the Government’s policy on entry visas actually is? Can she explain why so many stakeholders feel that an effective travel ban is in place for certain countries and regions, particularly Africa and Asia? Can she explain why the reality experienced by so many sponsoring organisations is so different from the rhetoric of global Britain? Will she confirm or deny whether there is any connection with the net migration target and the rates of rejection for visitor visas? Do the Government really believe that everything on these islands is so wonderful that they must presume that everyone who applies for a visa secretly wants to abscond; that musicians, authors, academics, scientists, business owners and senior civil servants will take one look at the streets of mother Britannia paved with gold, and abandon their families and careers for a job in the UK’s gig economy? Laughable although that idea is, that is the impression that is being given.
Deidre Brock (Edinburgh North and Leith) (SNP)
As a representative of Scotland’s festival city and as the constituency MP for Edinburgh’s book festival, may I congratulate my hon. Friend on this important debate? Is he aware of any evidence of invited artists absconding during planned visits or festivals, which might explain why things are so much more difficult these days?
Patrick Grady
The short answer to that question is no. Perhaps the Minister has that evidence. Certainly, when I have tried to ask for similar evidence in written questions I have had very little back, because the Government do not seem to keep a track of this data. It is simply a hostile environment hangover.
The policy has to change and that means the practice should also change. The Government need to do more to respect the bona fides of sponsoring organisations. It is not in the interests of festival organisers, universities, churches, or, for example, the City of London Corporation for their guests to abscond. The Government should be prepared, either as a matter of policy or through some kind of formal accreditation, to start from a principle that guests invited by such organisations are coming for good reasons and can be expected to abide by their visa conditions and return in due course.
The Incorporated Society of Musicians has recommended that if freedom of movement for musicians cannot be preserved after Brexit, then the UK and EU should develop a two-year multi-entry touring visa for UK and EU musicians. I know that the City of London Corporation also expects to publish a major report on visas and immigration in the very near future, and I hope the Minister will look out for that and pay attention to its recommendations. I will also send her extensive documentation from the Scotland Malawi Partnership on this issue, which she may already have seen, and I look forward to her response. I hope, most importantly, that she will be willing to meet some of the all-party groups that are particularly interested in this issue. I have mentioned the all-party group on Malawi. I am also secretary of the all-party group on Africa, and I know that they would very much appreciate the opportunity to discuss this in more detail.
Alison Thewliss (Glasgow Central) (SNP)
There is also a huge issue in my constituency with people not getting the visas that they require. The Central Gurdwara Singh Sabha has found it very difficult to get Sikh priests to come over. They have tried on numerous occasions, but they have not got in, which is also a concern of the all-party group on UK Sikhs.
Patrick Grady
There we go, and that goes back to the points made by our hon. Friend the Member for West Dunbartonshire (Martin Docherty-Hughes).
What all the stakeholders have told these groups and what all the evidence shows is that the visa processing system also needs to be fit for purpose. The level of detail being requested, sometimes from very senior or very high-profile individuals, as we have heard, has been described as humiliating. In the case of applicants from developing countries, sometimes the information requested is simply impossible to provide. Priests and pupils in remote villages in northern Malawi or elsewhere in Africa may not have bank accounts or birth certificates and almost certainly do not have credit cards or online access to pay the visa processing fees, and neither would they have the means or resources to travel hundreds of miles to a processing centre, sometimes in another country and often on multiple occasions.
Of course, all this takes place in the context of Brexit. We are told that many leave voters voted leave because they wanted freedom of movement to come to an end, but freedom of movement simply cannot come to an end without having any impact on our economy or society. We can all agree that there are different types of movement of people—for labour, for holiday, for family, and for the longer term or the short term. My concern in this debate is largely around very short-term movement, when people enter the country for specific reasons, such as a festival or an academic conference, for a short period of time before returning. Many of the examples, as we have heard, are in any event about visitors from non-EU countries, so they will not be affected by any Brexit withdrawal agreement.
I also accept that those of us who supported, and still support, remaining in the European Union could and should have done a better job of championing the benefits of freedom of movement and immigration, because after all, many people from the UK benefit significantly from ease of travel to the EU and other destinations around the world. The risk of Brexit and the hostile environment more generally is that perhaps the restrictions that the UK Government place on visitors will be increasingly reciprocated elsewhere. Indeed, many UK residents, not least artists and musicians, are already experiencing increasing difficulty applying for entry visas to the United States.
The consequences may be even more far-reaching and unintended. Last year, Corina Cojocaru, Moldova’s economic counsellor to the World Trade Organisation, and her team were denied entry to the UK, even though they wanted to come to discuss their country’s future relationship with Britain after it leaves the European Union. This year, Moldova was one of several countries to question openly the UK’s re-entry to the World Trade Organisation’s Government procurement agreement. Maybe that was just a coincidence, but the examples mount up—case after case of how to lose friends and alienate people, but that seems to be the overall direction of Government policy in a whole range of Departments.
I will not be surprised if the Minister gets up shortly and tells us that all this is imaginary, that statistics show upwards of 80% of visas are granted in a timely and orderly manner, that feedback on experiences in processing centres is positive, and that all these cases and examples are just isolated and can be easily resolved, but I am not sure that that is really the case. Even if the approval rate is accurate, how many visas are not being applied for in the first place, or how many fall at the first hurdle? If these examples are just rare, isolated, high-profile cases, why are there so many, why are they so frequent, and why should they require high-level intervention in the media or here on the Floor of the House to resolve them? How many denials or delays do not have the luxury of media or political contacts that can cut through the red tape?
The reality is that the whole immigration system needs root and branch reform, and that includes visitor entry visas. The Minister knows full well that if she does not want it to change, the Scottish Government and the Scottish Parliament would be more than happy to take responsibility and build a system that works for Scotland’s economy and society.
As I said at Prime Minister’s questions, Brexit is a small, isolationist retreat from the world stage. The reality experienced by those going through the visa and immigration system is one of suspicion, frustration and all too frequently, rejection. It is not conducive to growing the economy or building a more tolerant society and it will not be without fundamental change.
How would the Minister feel if the situation were in reverse? If she wanted to visit a country in sub-Saharan Africa, or in years to come wanted to travel to promote her autobiography—about how she survived the final days of the May Administration—or had been invited by a major Government-backed non-governmental organisation in the country concerned, and was asked before she could travel to produce her birth certificate, marriage certificate, bank statements and biometric information, to pay an exorbitant fee and to travel hundreds of miles to do so, perhaps multiple times, and all at risk of being denied because there was a presumption that she would stay in the country and never leave, would she even bother applying for the visa? If she would not want to go through that experience herself, why do the Government continue to inflict it on others?
The Minister for Immigration (Caroline Nokes)
I congratulate the hon. Member for Glasgow North (Patrick Grady) on securing this debate on UK entry visas.
We all know that the United Kingdom is an attractive destination for legitimate travel, and the Government are determined that it stay that way. We want people to come here on holiday, to do business, to visit family, and our immigration system contributes to the prosperity of the UK. We are also keen to ensure that the UK continues to attract the world’s brightest, most talented and most innovative people once we leave the EU. We will continue to be a global, outward-looking nation that is home to the best talent in the world, and our immigration system is fundamental to delivering that ambition. For example, the UK is a global leader in attracting international students, and our student offer is already one of the best on the global market.
That said, we recognise the need for an adaptive immigration system to meet the UK’s needs as we leave the EU. As such, we are designing a future borders and immigration system that will incorporate recommendations made by the Migration Advisory Committee, and we plan to publish further details in the autumn. The Government also have a duty to keep citizens safe and the country secure, and our visa requirements are one of the effective means we have in this regard. They are a valuable tool for the UK in reducing illegal immigration, tackling organised crime, protecting national security and safeguarding vulnerable people.
Martin Docherty-Hughes
On the point about safeguarding, how many nuns, monks and priests have absconded in the last 18 months?
Caroline Nokes
I am sure it will not surprise the hon. Gentleman to learn that I do not have those precise figures to hand, but the Home Office is working closely, and will continue to work closely, with the all-party group led by my right hon. Friend the Member for Meriden (Dame Caroline Spelman) on this precise subject, because it has raised concern across the House.
Everyone entering the UK has to meet the same set of entry clearance requirements. Some nationals of non-EEA countries need a visa to come to the UK; others must demonstrate that they meet our entry clearance requirements on arrival at the border. All applications are assessed on a case-by-case basis, according to their individual merits and against the part of the immigration rules that relates to why someone is coming to the UK. Many categories of temporary migration, such as students or those coming to work in the UK, are required to obtain an entry clearance before coming, regardless of their nationality. This allows assessments to be made before someone travels.
I am committed to ensuring that the UK visa service is high performing, customer focused and continually improving, in terms of both products available and the route for application, and there is always room to improve as we respond to evolving demands and requirements, harness new technology and reflect customer experiences and needs. Globally, our international network of over 300 visa application centres manages applications from customers from over 200 countries. In the year to June 2018, 2.7 million visas were issued, and 96% of non-settlement applications were processed within 15 days.
The UK offers a priority visa service that sees applications normally processed within five days in nearly 200 locations. The UK is also the only country to offer a 24-hour service in China and a same-day service in India. Access UK, a new online application service, has been successfully rolled out to visit visa customers in over 200 countries and 19 different languages. This new system means a faster, more streamlined and increasingly automated application process for customers.
The hon. Member for Glasgow North mentioned the creative industries. Of course, that sector is a major cultural and economic success story for the UK. It is a high-value, high-growth sector worth £91.8 billion to the UK economy in 2016. The Government as a whole are committed to supporting and promoting a thriving live music industry and ensuring the continued growth of a vital and vibrant sector. I can reassure the hon. Gentleman that the UK continues to welcome artists and musicians who come here to perform. They make an important contribution to our creative sector, which is a major cultural and economic success story. The Home Office is working with the sector and with the Department for Digital, Culture, Media and Sport to better understand the needs of the creative industries, clarify visa requirements, and ensure that processes are as smooth as possible.
Deidre Brock
Does the Minister accept the reports from cultural festival organisers across the UK that obtaining visitor visas has been increasingly difficult in the last few years?
Caroline Nokes
I am aware of that, and I am certainly aware of some of the challenges that have faced a number of cultural festivals, especially during the summer. Although this was not mentioned by the hon. Member for Strangford (Jim Shannon), performers arriving from Ireland were particularly affected. We are continuing to review the existing operation and legislation to ensure that the tier 5 route is implemented for, in particular, those who come here to work in the creative industries. Across Government, we are working with the sector to understand the concerns and address them accordingly. In response to its feedback, work is under way to identify an acceptable approach to the tier 5 concession route.
The hon. Gentleman mentioned his chairmanship of the all-party parliamentary group on Malawi, and his work with that country. I recently accepted an invitation from the Africa all-party parliamentary group to attend a meeting that it is hosting, I think, next month. Today I received another invitation, from the hon. Member for Ealing, Southall (Mr Sharma), who was particularly keen for me to meet representatives of various gurdwaras in his constituency. I recognise the need for me, as Immigration Minister, to engage with APPGs, and I am always happy to do so.
I can reassure the hon. Gentleman that the visa application centre in Lilongwe is open five days a week. We offer a priority visa service, with a five to seven-day turnaround time for applications. We also offer an on-demand mobile service. Visa application centre staff travel to the customer’s chosen location to accept applications and assist with the process. In the year ending in June 2018, there were 2,515 decisions on applications from Malawian nationals, and 78%, or 1,963, were accepted. Most of the visas granted were for visitors or students, but our latest online performance statistics show that 98% of visitor and student visas are issued within 15 days.
Patrick Grady
As I said earlier, I will send the Minister some of the documents and evidence that have been produced by the Scotland Malawi Partnership, not least the denial form which contains the words “Reason for denial—insert reason here”. Even when reasons are approved, that often happens very late in the application process, sometimes after the flights on which people have been booked have departed. The Minister needs to look into that a little bit more.
Caroline Nokes
I look forward to receiving the information from the hon. Gentleman, but, as I have said, our statistics show that most visas are being granted within 15 days.
The hon. Gentleman also referred to scientists and academics being refused entry to the UK. Of course we welcome the brightest and the best, allow academics on exchange programmes to come to the UK as visitors, and welcome them to conferences. However, they must meet the requirements of the immigration rules, which apply to all visitors to the UK. Applications for visitor visas, or for entry as a visitor, are considered on their merits regardless of the nationality of the applicant. Among the points on which applicants must satisfy the decision-maker is that they are genuine visitors who will leave at the end of their visit, and will not make the UK their main home through frequent or successive visits—for instance, that they have family, work or study ties in their home country. They must also be able to show that they are able to support and maintain themselves during their visit.
Carol Monaghan
Some of the academics who are being refused visas have visited the UK many times in the past, and only now are their visas being refused for what are really trivial reasons. Does the Minister accept that, as many academics are now saying, massive reputational damage has been done to the UK’s academic sector by this visa regime?
Caroline Nokes
As I have said, it is important that we assess each application on its own merits and on the information provided by individual applicants. It is important that we enable academics to come here, but it is also important that applications be completed in a timely manner and with all the information that we have requested.
The hon. Member for Glasgow North mentioned the future for visitors from the European Union and the reciprocal arrangements for UK travellers going to the EU. On 13 November, the European Commission published a proposal to grant UK citizens visa-free travel to the EU after the UK’s withdrawal. This is conditional on the UK also granting reciprocal and non-discriminatory visa-free travel for all EU member states. We welcome the Commission’s proposal, which reflects the future relationship that we want to have with the rest of the EU. In our proposals, we have made it clear that we want to ensure reciprocal measures with the EU on visa-free travel for tourists and short-term business visitors.
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
Will the Minister give way?
Caroline Nokes
No, I have given way several times this evening.
In conclusion, let me reassure hon. Members that the Government are absolutely committed to ensuring that we have a visa system that balances protecting our borders and national security with ensuring that people are welcome and are able to visit, to study and to work in areas where we need their skills. As we leave the EU, we will remain an open and tolerant country that recognises the valuable contribution migrants make to our society and that welcomes those with the skills and expertise to make our nation better still. We will control immigration so that we continue to attract the most talented to work or study in Britain while managing the process properly so that our immigration system serves the national interest. We are carefully considering a range of options for the future immigration system and will set out proposals very shortly. We will want to ensure that any decisions on our long-term arrangements are based on evidence and on engagement.
Question put and agreed to.