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Oral Answers to Questions
(5 years, 3 months ago)
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Kevin Foster (Torbay) (Con)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Richard Harrington)
Happy new year to you, Mr Speaker, and to everyone else. The two local enterprise partnerships covering the area—Cornwall and Isles of Scilly LEP, and Heart of the South West LEP, which includes Devon—are receiving £317 million through the local growth fund to drive regional development. That includes a £3 million investment in the Electronics and Photonics Innovation Centre at the White Rock business park in Paignton, which helps to support skilled jobs in a key local growth sector.
Kevin Foster
As my hon. Friend mentions, Torbay’s £8 million EPIC centre will open later this year, helping to boost our vital photonics industry. What further support can his Department offer to help boost Torbay’s high-tech sector?
Richard Harrington
I congratulate my hon. Friend on everything he does for employment in this area and in his constituency. He knows that my Department is working with Heart of the South West LEP, which is leading the development of our local industrial strategy. Torbay is actively engaged in that work. I believe the strategy will identify the particular strengths of the region and future opportunities for increased productivity, including in sectors such as photonics.
Luke Pollard (Plymouth, Sutton and Devonport) (Lab/Co-op)
The development of marine industries in Plymouth and across Devon and Cornwall is a really important part of our local economy. Will the Minister agree to meet a delegation from Plymouth to look at how the creation of the UK’s first national marine park could trigger more investment in our marine technologies and industries in the west country?
Richard Harrington
It would be a pleasure. The hon. Gentleman and I have met before to discuss such subjects, and I am happy to do so again.
Derek Thomas (St Ives) (Con)
In my constituency, 85% of employees are employed in small businesses, which tell me they struggle to find the skilled workers they need. What can my hon. Friend’s Department do with the Treasury and the Department for Education to ensure that small colleges in particular have the funding they need to provide those skills?
Richard Harrington
As my hon. Friend knows, my Department is part of the picture; he correctly says the DFE is responsible for skills, but that is an important part of our industrial strategy, both nationally and locally. We are really pushing to put the skills agenda at the top of LEP programmes and everything else to do with that, because we realise, as he says, that small business will power the economy of the future.
Scott Mann (North Cornwall) (Con)
The south-west is one of the fastest growing economic areas in the country, predominantly in tourism and tech. With the devaluation of the pound, many people have decided to have holidays in Cornwall, and we have tech-based businesses such as Microtest, a health-based solutions company in my constituency. People are making lifestyle choices about where in the country they want to live. What more can we do to facilitate moves away from the city to the coast?
Richard Harrington
As someone with previous experience of business in the south-west, in the tourism industry, I understand exactly what my hon. Friend says. The Government’s strategy is very much based on regional devolution—LEPs in particular—and areas such as his will see the benefits of that in the future.
Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)
The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)
Supply chains between the UK and the EU are vital—they support at least 200,000 UK traders and around 55,000 manufacturing jobs in Scotland alone. The deal the Government have negotiated with the EU, by avoiding customs checks, will protect supply chains and jobs right across the UK.
Jamie Stone
I ask this question against the background of yesterday’s unthinkable dry run for a no-deal Brexit— 80 lorries is hardly the same as 6,000. I represent the furthest-away part of the UK mainland. I have mentioned before in the Chamber Mr William Calder, who runs a fish food company in Scrabster. Half a day’s extra delay in getting his fish products to the European market will ruin the gentleman. Does the Minister see just how dangerous the future could be for my constituents?
Greg Clark
I agree with the hon. Gentleman. That is why there has been consistent support, especially in Scotland, from organisations such as the National Farmers Union of Scotland and the Scotch Whisky Association. Those who depend on the export trade, including the logistics he describes, have urged the House to back the deal, and I hope he joins us in doing that.
Sir Patrick McLoughlin (Derbyshire Dales) (Con)
The importance of Dover-Calais is unquestionable. What estimates has the Department made of the implications for the supply network of any reduction in capacity between Dover and Calais?
Greg Clark
My right hon. Friend knows that much of the just-in-time production goes through the strait of Dover, and estimates suggest an impact of a reduction of about 80% of capacity between the narrow strait. In my view, it is essential that we avoid that disruption, which would have implications right across the United Kingdom, including in Derbyshire and indeed Scotland, as we have heard.
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)
This week, I received correspondence from a small business owner and constituent of mine who shared his fears about the issues Brexit could cause his chemicals business. The EU is where the majority of his sales are made and where he sources his raw materials. Can the Secretary of State tell us why his Government will not rule out a no-deal Brexit now, which is putting so many businesses in my area and across the country at risk?
Greg Clark
The hon. Lady is right that the chemicals industry is a good example of a very integrated industry across Europe. I met the leaders of the chemicals industry in the week before Christmas, and they were very clear that what has been negotiated in the withdrawal agreement and political agreement achieves what they need, which is, first, to avoid no deal and, secondly, to be able to continue what has been a very successful industry, including in the area she represents.
Michael Fabricant (Lichfield) (Con)
With the worrying news that German output has fallen by 4.7%, what can Britain do, post Brexit, to help the German economy with a thriving British economy?
Greg Clark
It has always been my view, and I know it is my hon. Friend’s view, that the more we can trade on what has been a very successful model the better. He represents a west midlands constituency and knows how important it is in the west midlands that we have flourishing trade, to the benefit of our economy and those of our neighbours and friends on the continent.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
From Airbus in Bristol to Nissan in Sunderland, millions of British jobs depend upon supply chains that crisscross the channel. Ministers fantasise about replacing them with American or Australian ones, and then, as they did yesterday, hire 80 trucks to drive around Kent in a ghost of Brexit future pantomime of the chaos to come. The Minister for Business, Energy and Industrial Strategy has acted honourably in saying he will not be part of a Government who allow a no-deal Brexit, so will the Secretary of State reassure Aston Martin, Brompton the bicycle manufacturer, and the other businesses stockpiling parts—spending money that could be spent creating jobs—by saying he understands the requirements of business and geography and rule out a no deal now?
Greg Clark
I completely understand the requirements of business, including the manufacturers the hon. Lady mentions. It is essential that we be able to continue to trade, which is why I have always been clear—representing very strongly the views of small business and large business—that no deal should not be contemplated, but the way to avoid no deal is to do what the motor manufacturers, the Institute of Directors, the Federation of Small Businesses, the British Chambers of Commerce and all the business organisations say we should do, which is vote for the agreement that will come before the House next week.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
Lang may yer lum reek, Mr Speaker.
One way the Government are looking to maintain cross-border supply chains is by Government tender to shipping companies, but is the Secretary of State happy about the precedent set for UK businesses? His colleague the Secretary of State for Transport has awarded a £14 million contract to a company with negative assets of nearly £400,000, no ships and terms and conditions copied from a takeaway, while the contract itself seems to have been awarded on questionable legal grounds. Is this the standard he expects for all UK businesses tendering for UK Government contracts?
Greg Clark
It is evident that avoiding no deal is an essential task for all of us in the House, and I hope that in the days ahead the hon. Gentleman and other hon. Members will take the opportunity to obviate the need for those contingencies. The Secretary of State for Transport has an opportunity to come to the House later today, but it seems to me prudent and responsible for every Department to prepare, on a contingency basis, for no deal, while also being firmly resolved to avoid it.
Drew Hendry
The Secretary of State has not answered the question. Will all UK businesses see such largesse from the Government in respect of procurement contracts? One of Seaborne’s directors ran a business that went into liquidation owing HMRC nearly £600,000, using employee benefit trust tax avoidance schemes. According to the director, the Government did not even consider the money owed to Her Majesty’s Revenue and Customs to be relevant. Is that a sign of a Government who are out of control over Brexit?
Greg Clark
I hope the hon. Gentleman will agree that, as I have said, every Department should make preparations against the avoidable contingency of no deal. The Secretary of State will describe the procurement processes for which the Department for Transport opted, but it is fair to observe that not a penny of Government money has been paid to the company, and I understand that it will be paid only on receipt of services provided.
Mr Philip Hollobone (Kettering) (Con)
Given that nearly all the roll-on/roll-off lorry traffic between the Irish Republic and the EU travels across the UK motorway network to Dover, what co-operation has been offered by the Republic to mitigate a no-deal Brexit?
Greg Clark
My hon. Friend is right to point out that the impact of the Dover strait extends to our trade across the Irish sea. He knows that the negotiation has been with the European Commission and the European Council rather than through bilateral negotiations with individual member states, but I agree with him that the disruption that would occur would affect our trade across the Irish sea as well.
Several hon. Members rose—
Mr Speaker
Order. May I gently say to colleagues that we have a lot to get through? We need to speed up.
Toby Perkins (Chesterfield) (Lab)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Kelly Tolhurst)
We will be undertaking a statutory review of the effectiveness of the pubs code and the Pubs Code Adjudicator. I welcome the recent publication by the adjudicator of arbitration decisions, which will increase transparency in relation to how the code is working in practice.
Toby Perkins
At a recent meeting of the all-party parliamentary group on pubs, we heard from many tenants who had attempted to avail themselves of the “market rent only” option under the pubs code, but whose attempts had been frustrated. Will the review to which the Minister has referred involve a full and open consultation to which members of the public will be able to contribute, and which we will all be able to read afterwards?
Kelly Tolhurst
I recognise the hon. Gentleman’s commitment to this issue. We are currently working out how we will carry out the review, and, under statutory regulation, we need to do that until the end of March. Of course we understand some of the concerns that have been raised by people who have been affected; we will take account of their views, and I will ensure that those views are heard.
Dr Sarah Wollaston (Totnes) (Con)
As the Minister will know, in the case of tenanted pubs the rent is partly set according to the volume of beer sold. However, there is a long-standing grievance about a discrepancy between the amount of drinkable beer in a cask and the volume of the cask itself. Will the Minister meet me—and some of my constituents, who are deeply concerned about the issue—to discuss the “72 pints” campaign?
Kelly Tolhurst
We recognise that a number of issues affect the pubs community. The Government have taken some important measures relating to beer duty and business rates to help pubs, but I should be happy to meet the hon. Lady and her constituents to discuss the position.
Gill Furniss (Sheffield, Brightside and Hillsborough) (Lab)
Between April and September 2018, 33 pubs a week closed and were either demolished or converted to homes or offices. The pub industry is in free fall, and communities are suffering as they see their vital community hubs diminished. What strategy, if any, have the Government to secure a long-term sustainable future for the industry?
Kelly Tolhurst
The Government have taken action to secure the future of pubs. We have frozen beer duty, with the result that a regular pint of beer is 2p cheaper than it would have been if we had increased the duty in line with inflation. We have offered the business rate discount to retail properties, and we estimate that 75% of pubs will be eligible for it. That has cut pubs’ bills by a third for two years. We recognise the importance of pubs to our local communities, and we are taking action. For instance, as I have said, we will be reviewing the pubs code and the success of the Pubs Code Adjudicator.
Danielle Rowley (Midlothian) (Lab)
Dr Rupa Huq (Ealing Central and Acton) (Lab)
The Minister for Energy and Clean Growth (Claire Perry)
All of us in this House should celebrate the UK’s global leadership in decarbonising our economy: we have had the fastest rate of decarbonisation in the G20 since 1990, and part of that leadership has been through very substantial investment in renewable technology, including subsidies totalling £52 billion since 2010 and auction design and research and development investment. It is paying off: in the third quarter of last year we generated over a third of our energy from renewables, and our support is continuing with over half a billion pounds committed to the contracts for difference process and almost £200 million for cost-reducing innovations.
Danielle Rowley
Scottish businesses such as the innovative Artemis in my constituency have developed world-leading tidal and wave energy technologies, but requiring these early-stage businesses to compete with the more mature offshore wind industry for CfD subsidies means there is often no viable route to market for emergent technologies. Will the Minister consider having a three-pot auction for new technologies, including wave and tidal, so there is no direct competition with more established technologies?
Claire Perry
The hon. Lady raises an important point. We want to continue to invest in technologies that have the potential both to decarbonise and drive global exports, and that is certainly an area that could contribute, although not at any price: we will not rerun the debate over Swansea, which would have been the most expensive power station the country had ever built and created just 30 jobs. There are potentially better, more valuable projects and I am always happy to look at innovative proposals coming forward to see how we might support this technology.
Dr Huq
As well as the obvious, 31 March sees the end of the export tariff on electricity exported into the grid by solar photovoltaic systems. After that, big firms will end up receiving free electricity from all new solar PV installations, which are mainly small businesses and individual households, so they will effectively be subsidising the giants. Will the Government consider a net metering scheme, whereby the difference between electricity consumed and exported into the grid only is paid for, to rectify this burning injustice?
Claire Perry
I admire the hon. Lady’s passion. I feel I am rather front-running my answer to Question 9, which I know the hon. Member for Swansea West (Geraint Davies) is teed up to ask, but I will publish today the consultation on the Government’s proposals for a smart export guarantee to bring forward this valuable source of energy at a price so that people are not providing it to the grid for free, and to support its development in what we want to call our smart systems plan going forward.
Rebecca Pow (Taunton Deane) (Con)
While supporting new energy technologies is of course important, so too is supporting technologies that make our energy production more efficient, and many of these technologies are low carbon so they help us meet our climate change targets and cut consumers’ household bills. Can the Minister update us on progress made in this area and on the call for evidence I have asked for on this subject?
Claire Perry
My hon. Friend has been a doughty campaigner on this issue and will know that we have contributed almost £20 million to the industrial strategy heat recovery fund, and the low-carbon heating technology innovation fund is also receiving funds of up to £10 million. I entirely agree with my hon. Friend’s principle. I am not convinced that a further consultation is required, but I am always happy to discuss it with her.
Sir Desmond Swayne (New Forest West) (Con)
Is it fair to continue to subsidise solar panels by charging higher prices to other customers who could not possibly afford that investment?
Claire Perry
No, and that is why the intention to close the feed-in tariff scheme was signalled many years ago: it has cost to date over £5 billion and we have a legacy cost of over £1.5 billion to fund that scheme going forward at a time when the price of solar is tumbling. We know that many companies are bringing forward large-scale solar installations without needing subsidy.
Alan Brown (Kilmarnock and Loudoun) (SNP)
Claire Perry
I have regular discussions with my right hon. Friend the Scottish Secretary regarding all the support we are providing for the BEIS Scottish energy sector. I hope that the hon. Gentleman will join me in celebrating the fact that we have opened up the CfD mechanism to the offshore wind provision that is coming for remote island projects—[Interruption.] He used to think that that was a very good thing. We should also never forget that it is UK bill payers collectively who have invested in the success of UK renewable energy. We will continue to review the potential for onshore wind, but the hon. Gentleman will know that the Scottish Secretary and I were both elected on a manifesto that said that further subsidy for large-scale onshore wind was not required or necessary.
John Lamont (Berwickshire, Roxburgh and Selkirk) (Con)
I very much support renewable energy, but many of my constituents in the Scottish borders feel that we now have our fair share of onshore wind, so can the Minister assure me that nothing in Government policy will promote onshore wind farm developments over other forms of renewable energy sources?
Claire Perry
That is exactly the point about technology neutrality. I refer my hon. Friend to the Scottish Government’s own onshore wind policy statement, which suggests that the number of onshore wind applications is expected to increase by more than 70% on the basis of current planning applications. The current system is clearly working to bring forward onshore wind in the windiest parts of the United Kingdom.
Sir Edward Davey (Kingston and Surbiton) (LD)
Given how vital offshore wind is to Britain’s future electricity supply, and how it is increasingly providing good value for money, how can the Minister justify allocating just £60 million to next spring’s CfD auction?
Claire Perry
I thank the right hon. Gentleman for recognising the incredible contribution that offshore wind can make, and I hope he will join me in wishing great success to our negotiating teams in bringing forward the vital sector deal. The point is, given that the price has tumbled since he was one of the people who designed the excellent auction structure, that we should be able to bring forward the amount of capacity we have said we need—1 GW to 2 GW—with that amount of subsidy. The system is working to get us to subsidy-free provision of this extremely important offshore wind energy.
Dr Alan Whitehead (Southampton, Test) (Lab)
The Minister will be aware that the recent EU Court judgment, which effectively freezes the capacity market in the UK, turned substantially on the lack of level playing field access to capacity market support for new low-carbon energy technologies such as demand-side response. Does she intend to respond positively to the judgment by recasting the capacity market to reflect remedies for this lack of equal access, or is she perhaps hoping that, after a decent interval—and a lot of damage to existing participants in the capacity market—normal service will be resumed?
Claire Perry
The hon. Gentleman raises an incredibly important point. We have been working on this issue closely with the industry for several months since the judgment came forward, and it is absolutely right that we reassure the industry and investors of our commitment to holding auctions in the near future to ensure electricity supply for next winter, and that we do all that we can to ensure that this market is put back on a legal and orderly basis. It does work—it is the envy of many countries around the world—and we are working closely with Ofgem and the industry to ensure that we can take that market capacity structure forward.
Peter Aldous (Waveney) (Con)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Richard Harrington)
The Government support businesses throughout the UK by encouraging innovation, investing in infrastructure and skills and, more importantly, building long-term partnerships with businesses as part of our modern industrial strategy. We have demonstrated our support for the importance of our supply chain through the automotive, aerospace and nuclear sector deals.
Peter Aldous
I am grateful to the Minister for that reply. Fabrication yards in UK ports have supply chains that extend throughout the UK, but there is real concern for their future. Can the Minister confirm that the oil and gas and the offshore wind sector deals will make provision for realising the full potential of those yards and their supply chains?
Richard Harrington
I certainly can, and I welcome the deal proposals that have been put forward by both the offshore wind and the offshore oil and gas sectors.
Debbie Abrahams (Oldham East and Saddle- worth) (Lab)
Richard Harrington
I am sure that the hon. Lady will be delighted to know that we are working closely with the sector. I have some experience of project bank accounts in the construction sector and I have seen them work. We will look very carefully at this.
Nic Dakin (Scunthorpe) (Lab)
Precisely what support is being given to the steel industry and its supply chain?
Richard Harrington
The hon. Gentleman and I frequently speak about the steel industry, and I meet regularly with the trade body, UK Steel, and all the different companies to monitor the future carefully. The industry is important to us, and I am still hopeful that we can work on a sector deal, so I am interested to hear proposals from the various companies.
Mark Garnier (Wyre Forest) (Con)
The Minister for Universities, Science, Research and Innovation (Chris Skidmore)
The UK plays a leading role in space science and exploration, and our commercial sector is globally competitive, underpinned by Government support of up to £370 million a year. We have further committed £92 million to develop options for a possible UK global navigation satellite system to maintain the UK’s security capabilities, and £31.5 million to kick-start small satellite launch from the UK as part of our modern industrial strategy.
Mark Garnier
I can tell from that answer that my hon. Friend recognises the increasing importance of the space sector in our everyday lives, particularly for communications and broadband. Does he therefore agree that elements of the space sector should be designated and treated as part of the UK’s critical national infrastructure, thus receiving the extra support and potential financing that such designation would provide?
Chris Skidmore
My hon. Friend is right that space capabilities are fundamental to UK prosperity and security. Every day, we rely on telecommunications, earth observation, position navigation and timing services from space. Many of the parts of the UK’s critical infrastructure—from telecommunications to transport—also depend on services from space to operate effectively, and that is why the space sector is designated as a critical national infrastructure sector, with efforts focused on improving the security of our critical assets.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
Does the Minister not understand that the aerospace industry is crucial to the future of our country? A company that operates in my constituency made components for the Mars probe, and such firms, which are at the leading edge of technology, are terrified by the chaos of the possible no-deal Brexit that the Government are leading. The supply chains are so complex that the company in my constituency faces ruin, as does the country’s whole aerospace industry under this Government’s watch.
Chris Skidmore
I congratulate the company in the hon. Gentleman’s constituency on its success with the Mars landing. I recently went to Imperial College to congratulate the team that created the sensors that detected the first sounds on Mars. It is crucial to say that our commitment to the European Space Agency is independent of our relationship with the EU. We put in support of £370 million a year that allows us access to a market worth £6 billion. When it comes to ensuring that we have stability and security for the company in the hon. Gentleman’s constituency, I look forward to seeing him in the Lobby next week supporting the Government’s deal.
Vicky Ford (Chelmsford) (Con)
Last week, while the Chinese were exploring the dark side of the moon, NASA was 6.5 billion km away on the far side of Neptune taking photos of Ultima Thule, and the sensors that took those images were made in Chelmsford. Will the Minister therefore join me in giving a massive shout-out to everyone at Teledyne e2v and congratulating them on this world-first achievement?
Chris Skidmore
Absolutely. I join my hon. Friend in congratulating Teledyne e2v on its involvement in NASA’s New Horizons mission. The stunning image of that distant world showcases UK technology at the leading edge of space exploration. As I said, we have already detected the first sounds from Mars through a project led by Imperial College and the University of Oxford, and Surrey Satellite Technology will unveil tomorrow its completed build platform for the Eutelsat Quantum—the first geostationary telecommunications satellite that will be fully reconfigurable in orbit—which highlights the UK Space Agency’s continual successes.
Jim Shannon (Strangford) (DUP)
Will the Minister outline how many new jobs have been created to meet the need for 30,000 new employees that was highlighted in last May’s “Prosperity from Space” report?
Chris Skidmore
The sector currently employs around 38,500 people and has grown significantly since 1999-2000, when 14,651 were working in the sector—that represents an annual growth rate of 6.7%. The UK has committed to ensuring that we grow our share of the global space market to 10% by 2030. That offers huge potential for increasing not just our share of the market, but the UK’s prosperity and productivity. I hope that the “Prosperity from Space” report, which was published by the space sector and my predecessor, my hon. Friend the Member for East Surrey (Mr Gyimah), whom I thank, will lead to a deal for the space sector and, potentially, to investigation of a national space programme—
Mr Speaker
Order. I do apologise, but progress is not just too slow; it is too slow.
Stephen Morgan (Portsmouth South) (Lab)
Janet Daby (Lewisham East) (Lab)
The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)
The Government’s good work plan represents the largest reform to employment rules in over 20 years. It includes measures to boost transparency and tackle one-sided flexibility for those in insecure work, and I have already tabled legislation in Parliament to take forward the programme.
Stephen Morgan
A recent Resolution Foundation report shows that barely half of agency workers remain in one job beyond six months, making the Government’s arbitrary timeframe of 12 months before the right to request a direct contract kicks in totally meaningless. Labour has committed to giving all workers equal rights from day one; why have the Government not committed to doing the same?
Greg Clark
The hon. Gentleman will welcome the reforms that have been made to deal with insecure work and, in particular, to do something that has been campaigned for by the trade union movement and supported by many employers, which is to remove the Swedish derogation that has provided a loophole for employers to avoid those rights. That legislation is now before the House, and I hope he will support it.
Janet Daby
Does the Secretary of State agree that the recently introduced right to request guaranteed working hours is not sufficient to protect workers on zero-hours contracts?
Greg Clark
No. This is a very important extension of the rights of people on zero-hours contracts. It is important to recognise, first, that the number of employees on zero-hours contracts remains very small and, secondly, that most of those on zero-hours contracts want to have that flexibility. Those who do not want that flexibility and prefer a longer and more stable contract will now have the right to request one.
Rachel Reeves (Leeds West) (Lab)
Greg Clark
The hon. Lady will recognise that our package immediately introduced legislation for those rights that can be legislated for with secondary legislation. Primary legislation will shortly be brought forward for the Business, Energy and Industrial Strategy Committee, which she chairs, and the Work and Pensions Committee to scrutinise.
Mr Speaker
Order. I was not looking for the right hon. Gentleman, although it is always a pleasure to be reminded of the fact of his presence.
Rebecca Long Bailey (Salford and Eccles) (Lab)
I wish you and the Secretary of State a happy new year, Mr Speaker, but the sad fact is that the good work plan does little to change the lives of precarious limb (b) workers, who will still not be entitled to statutory sick pay, maternity pay or the right to claim unfair dismissal. For those on a zero-hours contract, all the requests in the world will not legally oblige their employer to provide more stable employment. I have asked this question time and again to no avail: can the Secretary of State confirm what happens when an employer refuses a request for more stable working hours?
Greg Clark
It is very clear that we are not making it mandatory for people not to have a zero-hours contract. Such contracts are available to employers, but employees will have the right to request. Reasonable employers have offered more stable contracts to employees, but the Taylor report is very clear that the flexibility that zero-hours contracts offer is valued by many of the people who use them.
Rebecca Long Bailey
I am glad the Secretary of State has clarified that the right to request a more stable contract is, in fact, a meaningless proposal on paper. What is worse is that the Government also rejected recommendations from their own director of labour market enforcement to increase fines for companies that breach the minimum wage and for that money to be used to increase enforcement resource. The Government also rejected his recommendation that public procurement contracts should compel compliance with labour market regulations. With reports that the average employer can expect an investigation once in every 500 years, does the Secretary of State really think he is being serious about enforcing workers’ rights?
Greg Clark
I am working closely with Sir David Metcalf, the director of labour market enforcement. On his particular recommendation about increasing penalties, we just have increased the penalties and it is reasonable to look at their effectiveness. I have made the commitment to the House that, of course, we will increase them if that proves necessary, but one of the other reforms that we are making is to boost the enforcement of workers’ rights by bringing together the different enforcement bodies so that such employers—the minority that do play fast and loose with the rights to which employees are entitled—should expect justice to be brought about. This will be part of the package that we have tabled.
Mr Virendra Sharma (Ealing, Southall) (Lab)
The Minister for Energy and Clean Growth (Claire Perry)
I want to pay tribute to our UK negotiating team, which did such a fantastic job at the recent conference of the parties in developing a robust set of rules that will take us forward to achieve what we need, which is further hardcore nationally determined contributions in 2020. We want to use our leadership in this space to continue progress, which was why I was pleased to announce our expression of interest in hosting the 2020 COP right here in the UK. I hope the hon. Gentleman will support that.
Claire Perry
We do not have the power to sanction under international law—or, indeed, under the current United Nations proposals—but we can work positively through initiatives such as the Powering Past Coal Alliance, which I was pleased to set up with my Canadian equivalent last year, to encourage all countries that, like us, are committed to phasing coal out of their energy system in a short period. We now have more than 80 members a year after launch, so we can continue to lead by example.
Geraint Davies (Swansea West) (Lab/Co-op)
The Minister for Energy and Clean Growth (Claire Perry)
I want to give the hon. Gentleman the good news that I will be publishing today the next stages of our proposals for a smart export guarantee to reflect two principles: that nobody should be providing energy to the grid for free, or indeed at negative pricing, as has happened in some countries; and that the value of community energy projects, which is real and significant, can be recognised. That consultation will be published later today and I look forward to his response, because I know he is a long-standing campaigner in this area.
Geraint Davies
It would have been useful to have had that publication before Question Time to enable informed questions to be asked. I put it to the Minister that some 60 MW of solar energy in Wales alone rely on the export tariffs. Will she be looking at differential tariffs for existing versus new providers, so that there is no breach of contract with existing providers, and ensure that tariffs are set so as to encourage solar rather than fracking and so that we are in accordance with our Paris commitments, which have just been referred to?
Claire Perry
The hon. Gentleman should know that we have signalled for many years how the closure of the feed-in tariff will work. We have spent almost £6 billion on existing contracts, and those contracts will of course be honoured. We have also announced with the closure of the scheme that there is a limited application period for projects for the next couple of months. There will be some that are brought forward, but it is only right that, as the price of this power provision has tumbled, we stop using other people’s money to subsidise something that we do not need to do in order to bring forward solar.
Douglas Ross (Moray) (Con)
While we have been in the Chamber, the Minister’s consultation has gone online, and Members and the public have until 5 March to respond to it. What reassurance can she give that those responses will be listened to? There is concern in the solar industry and among others that 91% of responses to a previous consultation by her Department were against the end of export tariffs, yet that went ahead. Will she meet me and an excellent local business, AES Solar, which has concerns but would like to discuss them with her and community representatives?
Claire Perry
I would be delighted to meet my hon. Friend and I am also very interested in the consultation results. I want to make the point quickly that the era of crude subsidy is over, partly because the price of renewables has dropped so significantly. We are trying to ensure that bringing forward the decentralised energy that we believe is so important to our system is also the objective of this tariff, and I would be interested to hear his views as well as those of his constituents.
Bridget Phillipson (Houghton and Sunderland South) (Lab)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Richard Harrington)
The automotive sector is one of the great success stories of our country, and our sector deal is a good example of how we will continue to support it going forward. We have committed around £1 billion over 10 years up to 2023 through the Advanced Propulsion Centre to research, develop and commercialise the next generation of low-carbon technologies, to keep us at the cutting edge of the automotive industry’s development.
Bridget Phillipson
The UK car industry is under huge pressure, yet far from providing the certainty that the sector needs, we will be debating our trading relationship with the European Union for years to come. Is it not the case that the deal that the Government are putting forward fails to protect tens of thousands of highly-skilled automotive jobs in my region? Not only that, but it is far worse than the deal we have now.
Richard Harrington
I am sure the hon. Lady knows that the deal has been backed by everybody in the automotive sector. I meet regularly with them and they have been outspoken about the perils of defeating the Prime Minister’s deal. I hope that the hon. Lady will think about that when she goes through the voting Lobby.
Stephen Kerr (Stirling) (Con)
What is the Minister’s response to the report published last month by the Business, Energy and Industrial Strategy Committee—the membership of which, by the way, includes the Scottish National party Front-Bench spokesperson, the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry)—which concluded:
“The consistent and overwhelming message expressed by”
business
“is that to make…decisions they need certainty and it is for that reason they support the Withdrawal Agreement”?
Richard Harrington
As ever, my hon. Friend has absolutely nailed this. The automotive sector, like the BEIS Committee, is totally in favour of the Prime Minister’s deal. I am sure that the SNP spokesman has listened carefully to what my hon. Friend said, and I am sure that he will be supporting the deal next week.
Carol Monaghan (Glasgow North West) (SNP)
Richard Harrington
I must remind the hon. Lady of my answer to the previous question: the best thing for the Scottish economy is the Prime Minister’s deal. I hope the hon. Lady will consider that when she votes next week.
Mr Speaker
I am very saddened that the right hon. Member for Birkenhead (Frank Field) is departing our midst. I know he has many pressing commitments and a very full diary, but if he stayed, he might get called. It would be very sad to lose the right hon. Gentleman’s pearls of wisdom.
Fiona Bruce (Congleton) (Con)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Richard Harrington)
You are racing ahead, Mr Speaker; we had got so far behind.
My hon. Friend should know that we are strongly supporting the aerospace industry through our aerospace growth partnership, which includes supporting business with nearly £2 billion of public research and development funding from 2013 to 2026. The sector deal for aerospace includes £125 million of funding to support the electrification of flight, developing new aircraft technologies and transport concepts. I am sure that will be excellent for your future holidays, Mr Speaker.
Fiona Bruce
What plans do Ministers have to extend the Sharing in Growth scheme in the aerospace industry? It has helped Congleton business Senior Aerospace Bird Bellows to improve productivity and secure new orders. The company is very much looking forward to receiving the Minister on his planned visit to Congleton in March.
Richard Harrington
I am very much looking forward to seeing my hon. Friend on that visit. We are in dialogue with senior management at Sharing in Growth about the scope to extend the programme further, and that will continue ahead of the comprehensive spending review.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
The Space Studio School in Feltham, started by the Rivers Academy, continues to innovate, bringing about high-quality science education and industry-related work, and engaging with the National Space Centre, the European Space Agency, NASA and the aerospace industry around Heathrow. Does the Minister agree that even stronger relationships between schools and industry are vital to ensure that we stay competitive? Will he agree to visit the Space Studio in west London to see what is being done there and what more can be done to improve opportunities for young people?
Mr Gregory Campbell (East Londonderry) (DUP)
The Minister will be aware of the problems as well as the possibilities for Bombardier in east Belfast, as my hon. Friend the Member for Belfast East (Gavin Robinson) has raised them consistently. Given the job loss announcements several weeks ago, will he undertake to do whatever he can on the possibilities for expansion next year?
Richard Harrington
The hon. Gentleman knows, I hope, that Bombardier is a company close to my heart. I speak regularly to him and his colleagues and to the company, and I will do anything I can to ensure that company’s prosperity.
Tommy Sheppard (Edinburgh East) (SNP)
The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)
I have regular discussions with the Chancellor of the Exchequer. The best outcome for Scotland is to deliver the deal that we have negotiated with the EU. That will provide the certainty that Scottish businesses need and protect jobs and prosperity.
Tommy Sheppard
A recent report by the Fraser of Allander Institute found that three quarters of Scottish businesses felt that they did not have adequate information to prepare for Brexit. Given that, do the Government now regret rejecting the Scottish National party’s proposal for a £750 million small business support scheme to help them prepare for the eventuality of Brexit?
Greg Clark
Advice and support is available to businesses right across the UK, but it remains the case that the best certainty that business can have is to know that the agreement that has been reached with the European Union, which rules out no deal and involves a substantial transition period, will be approved next week in the House of Commons. I hope that the hon. Gentleman will support that.
Jeremy Lefroy (Stafford) (Con)
Henry Smith (Crawley) (Con)
The Minister for Universities, Science, Research and Innovation (Chris Skidmore)
A total of 390,000 18 to 24-year olds are involved in starting businesses in the UK, and the British Business Bank has provided £52 million in start-up loans to young people since 2012. In December we launched a youth engagement programme, including a celebration of UK science, technology, engineering and maths projects and an industrial strategy competition to inspire 13 to 19-year-olds.
Jeremy Lefroy
I welcome that and I welcome the start-up loans scheme, which has helped a lot of young entrepreneurs, but will the Minister talk with his counterparts in the Department for Education to see how we can embed entrepreneurship and life skills in business into the school curriculum?
Chris Skidmore
Absolutely. Indeed, as a Minister also in the Department for Education, I work with that Department and understand the importance of ensuring that young people develop entrepreneurial skills. Our careers strategy launched in 2017 places a strong emphasis on our interaction with entrepreneurs. We have connected more than 2,000 schools and colleges with enterprise advisers, launched a £2.5 million investment fund to support employer encounters, and created 20 new career hubs.
Henry Smith
Sam’s Kitchen was set up by a young entrepreneur in Crawley several years ago. On meeting him recently, he reported a large number of frequent and, it seems, unnecessary inspections. How can we make sure that we get the balance right between necessary regulation and not imposing too much of a burden on young, growing businesses?
Chris Skidmore
I understand that Sam French is a young entrepreneur selling homemade gingerbread men and women. I congratulate him on his success. Perhaps he may like to send some to you to sample, Mr Speaker. I am pleased that he shares his experience with other young entrepreneurs. It is important, however, that inspections in the food industry are based on a national code of practice and are intended to give the necessary reassurances to business and consumers so that they can buy products with absolute confidence.
Vernon Coaker (Gedling) (Lab)
Is not part of the problem of encouraging youth entrepreneurship that vocational education is seen as second rate? How will we change that?
Chris Skidmore
The hon. Gentleman raises a very important point, which is why the Government have commissioned the Augur review to look at post-18 education. In addition, we are developing a full range of T-levels that will soon be operational. It is absolutely important that we level the playing field and ensure that the 50% of people who are not going to university have that opportunity to develop their skills going forward, particularly around technical education.
Alison Thewliss (Glasgow Central) (SNP)
The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)
Since we last met, I have been delighted to be in Bristol, a hub of brilliant technological innovation, to launch the aerospace sector deal with a commitment from business and Government to invest a quarter of a billion pounds in the aircraft of the future. I announced a life sciences sector deal, featuring £1 billion of industry investment from the global biopharmaceutical company UCB. My right hon. Friend the Minister for Energy and Clean Growth has been in Katowice representing the UK at COP 24. At home, we published our Good Work Plan, and, just last week, the energy price cap came into effect, ensuring that all customers get a fair deal.
Alison Thewliss
I thank the Secretary of State for that answer.
A meeting of stakeholders was recently held in Pollokshields in my constituency to discuss the problems of fireworks in the community, as they really cause local residents a huge amount of distress. The Minister wrote to me last year saying that a meeting would be set up with me and other MPs to discuss the matter further. Will he give me more information as to what progress has been made to set up the meeting, as my constituents do not want to be forgotten about?
Greg Clark
The hon. Lady is quite right that the issue is a matter of concern not just in her constituency, but in others. I will ensure that the meeting happens in the next two weeks.
Kevin Hollinrake (Thirsk and Malton) (Con)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Kelly Tolhurst)
It is right that the FRC refers any concerns it has relating to the insolvency case to the ICAEW, which is a recognised professional body that regulates insolvency practitioners. In this case, I understand that the ICAEW has considered the issues put forward and is investigating a number of matters. I will happily meet my hon. Friend to discuss this issue again, as I already have. It is right that we investigate any concerns that British businesses have about the regulations.
Mr Clive Betts (Sheffield South East) (Lab)
The Minister for Energy and Clean Growth (Claire Perry)
I think I have answered a similar question before, although not from the hon. Gentleman. I have absolutely no plans to change the traffic lights system. The current fracking proposals being tested in Lancashire right now were developed with that system. The fact is that that system is working and being triggered even by micro-tremors; the hon. Gentleman will know that we have had some great evidence from the University of Liverpool as to how small the tremors actually are. If we are to take forward what could be a very valuable industry, it is only right that we do so with the toughest environmental regulations in the world, so I say again that there are no plans from the Government to change the traffic lights system.
Peter Aldous (Waveney) (Con)
Kelly Tolhurst
We continue to work closely with the Treasury and the Ministry of Housing, Communities and Local Government to ensure that the needs of high street retailers are understood. In the 2018 Budget we announced a reduction in business rates worth £900 million over two years for small businesses. The digital services tax, a 2% tax on revenues specific to digital businesses, will ensure that they pay tax reflecting the value that they derive from UK users. We have also established the Retail Sector Council, which has now decided on its future work programme, as part of which business costs and taxation are one topic being considered.
Laura Pidcock (North West Durham) (Lab)
New research from the TUC shows that household debt is at its highest ever level, with average debt per household now at over £15,000. It is blatantly obvious that the cause is years of austerity and wage stagnation. Millions of workers are now reliant on borrowing, making up for low wages by increasing their debt—not for holiday or luxuries, but through using credit cards for everyday essential such as nappies and food. That is so stressful. Will the Minister please explain what the Government are doing to address this crisis, and why Conservative Members refuse to join the Labour party in advocating a real minimum wage of at least £10 an hour and a return to serious collective bargaining for workers in the UK?
Claire Perry
I heard the news reports of this particular analysis, but I also heard that the analysis had been entirely discredited because it included student debt, which does not accrue to every household. If we were to strip that out, the rate of accrual—[Interruption.] Would the hon. Lady like to listen, rather than chunter? I will carry on. If we strip out student debt, which does not accrue to every household, we see that the growth of consumer credit has actually slowed. Once again, I am proud to stand here and represent the Government who finally did what the hon. Lady’s Government had 13 years and did not do—introduce a national minimum wage and ensure that it goes up well ahead of inflation. [Interruption.] A living wage.
Mr Speaker
I call Will Quince. [Interruption.] I am sure that the hon. Gentleman is delighted to have excited such a reaction, but I would like to hear what he has to say.
Will Quince (Colchester) (Con)
Kelly Tolhurst
I am delighted to join my hon. Friend in welcoming this recent measure, which has benefited small businesses so well. We have cut corporation tax to 19%. As a result of cuts made by this Government since 2017 through the small business rate relief, over 655,000 small businesses—the occupiers of a third of all business properties—pay no rates at all.
John Spellar (Warley) (Lab)
Greg Clark
In the “Road to Zero” strategy document, it is very clear that diesel engines, especially the new generation, are a perfectly acceptable choice environmentally as well as economically. The right hon. Gentleman will know that diesel sales are falling across the whole of Europe, but we have been very clear in this country that it can play an important role in the transition to zero-emission vehicles.
Mark Pawsey (Rugby) (Con)
Greg Clark
I do indeed welcome the representation from my hon. Friend. The automotive sector is one of our most successful, and it is globally admired. Its success depends on having the just-in-time production that makes it so competitive. In my view, it is vital that we pose no threat to that in our new relationship with the European Union.
Steve McCabe (Birmingham, Selly Oak) (Lab)
Claire Perry
I had an inkling that the hon. Gentleman might ask a question about this, because he has been a long-standing campaigner in this area. I am pleased to report that the programme is accelerating; I know he will welcome that. I welcomed extensively the National Audit Office report on the cost profile, which showed, effectively, a cost overrun but still a very, very substantial net benefit to both consumers and the economy. I believe that we are minded to accept almost all of the recommendations that were made. This is a vital programme for upgrading our energy system. I hope that he has had his smart meter installed. I saw over Christmas quite how much electricity cooking the Christmas turkey cost, and it was a very valuable exercise.
Tom Pursglove (Corby) (Con)
What role does the Minister see for the push on technical skills in boosting youth entrepreneurship?
The Minister for Universities, Science, Research and Innovation (Chris Skidmore)
As I have stated before, technical skills are absolutely important when it comes to boosting youth entrepreneurship. I take this opportunity to mention to my hon. Friend the launch of the new year-long youth industrial strategy competition at the industrial strategy fair that will be held in March this year, with prizes being awarded at the Big Bang fair in March 2020.
Martin Docherty-Hughes (West Dunbarton- shire) (SNP)
Greg Clark
As I said to the hon. Member for Edinburgh East (Tommy Sheppard), that advice is available to businesses right across the country. But in supporting business confidence, the hon. Member for West Dunbartonshire (Martin Docherty-Hughes) should reflect on the fact that Scotland has now become the highest-taxed part of the United Kingdom, and that is, in itself, undermining the confidence that investors have in Scotland.
Andrea Jenkyns (Morley and Outwood) (Con)
Associated Waste Management is a successful business based in my constituency. It has recently been acquired by Beauparc, one of Ireland’s leading waste management companies, but it is keeping its head office in my constituency. The new arrangements have secured the long-term growth of this locally founded business. Does my right hon. Friend agree that such investments are a vote of confidence in the UK economy and send a clear message that we are open for business post-Brexit?
Greg Clark
My hon. Friend is right that the fundamental attractions of the UK economy are as strong as ever. We have some of the best skills in the world, some of the most innovative people and some of the best scientists and researchers, but we also have access to a substantial European market that has proved attractive to businesses from around the world. We should continue with that, and we should have both.
Christine Jardine (Edinburgh West) (LD)
Greg Clark
I might ask the hon. Lady what she is doing to address that. The Scotch Whisky Association has been very clear; it has said that the withdrawal agreement is a compromise but a positive step towards much needed business certainty. If she cares about the industry, she should vote for the deal.
Bill Grant (Ayr, Carrick and Cumnock) (Con)
Sadly, my constituency has an unemployment rate of 6%, which is twice the UK average. What progress has been made or can be made on the Ayrshire growth deal, which is essential to Ayrshire’s future prosperity?
Greg Clark
I know that my hon. Friend has been a vociferous champion of the Ayrshire growth deal, which was referred to in the Budget. I hope that we will see some progress on it in the next few weeks. For Cumnock in particular, the prospects will be very attractive. For a town that has contributed significantly over the years, including to UK energy supplies and industrial goods, it will be a fitting tribute—
Marion Fellows (Motherwell and Wishaw) (SNP)
The Association of Accounting Technicians’ recent survey found that 73% of MPs agreed with its recommended changes to the prompt payment code, which are making the code compulsory, ensuring that larger businesses pay in 30 days and implementing a penalty regime. Will the Minister introduce those changes in legislation, to help the many small businesses that will benefit?
Kelly Tolhurst
I thank the hon. Lady for her question. As she will know, we launched the call for evidence in October, and it finished in November. We are reviewing the evidence presented. In October we made announcements to underpin, secure and make better the prompt payment code. The small business commissioner has delivered £2 million of collections for small businesses over the first year in his position. We will continue to work to ensure that small businesses get the payments they need when they should.
Maggie Throup (Erewash) (Con)
Prior to Royal Assent for phase 2b of High Speed 2, will my hon. Friend consider establishing a cross-departmental taskforce with the Department for Transport, to provide businesses that are being forced to relocate with the necessary advice and support, including financial support?
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Richard Harrington)
My hon. Friend should know that I have listened carefully to her question. In the first instance, a meeting between myself, herself and a representative from the Department for Transport might be a way to get that moving.
Frank Field (Birkenhead) (Ind)
Last week I wrote a letter to the Secretary of State about the taskforce in Liverpool and Birkenhead that wishes to save Cammell Laird from any further redundancies. Will he meet us this week, as a matter of urgency?
Greg Clark
I am grateful for the right hon. Gentleman’s advice and his advocacy for a solution to the difficulties that Cammell Laird faces. We are meeting the trade unions and others on Thursday, and I hope he will be able to come to that meeting.
Mr Speaker
I will take the point of order, and I would appreciate it if the ministerial team waited to hear it because it relates to Question Time.
Laura Pidcock
Under her breath, the Minister for Energy and Clean Growth mentioned the living wage, but of course in practice there is no such thing. The Minister could correct the record in that it was indeed the Labour party that in 1998 introduced the minimum wage, which her party strongly opposed.
Claire Perry
Further to that point of order, Mr Speaker. Sorry; I am blaming the excitement. Of course I am happy to correct the record. The hon. Lady is absolutely correct: the Labour party introduced the national minimum wage. It was quite clear that that was inadequate for many people on the lowest incomes, particularly women who were underpaid, which is why we introduced the national living wage—something I wish she would support.
Mr Speaker
I say to the hon. Lady that it must not be a continuation of the argument. I will give her the benefit of the doubt. However, on that matter the Minister has been very clear, and we thank her for that clarity.
Anna McMorrin
On a point of order, Mr Speaker. Given that climate change is the most pressing and urgent issue facing us and future generations, may I seek your advice about how I can ask the Minister for Energy and Clean Growth, who has responsibility for climate change, to make an oral statement on her recent attendance at COP 24 at Katowice?
Mr Speaker
The hon. Lady has achieved her own salvation. It seems to me that she has used the device of an entirely bogus point of order to register a point that she probably would have wanted to register if she had been called to do so, but could not because she was not.
Claire Perry
Further to that point of order, Mr Speaker. I was delighted to answer a question on this very point, because our negotiation team was, as always, excellent. I was also happy to accredit the hon. Lady; I do not know whether she managed to attend our superb stand and entire presence at Katowice. My door is always open to her, as an expert in this area, to discuss this. I do not think an oral statement will be necessary. Perhaps she and I could grab a cup of tea, as this is dry January, and have such a conversation.
Petition
Tom Tugendhat (Tonbridge and Malling) (Con)
What a huge pleasure it is to be here this evening. May I start by paying tribute to some people in the Gallery just above us? Up there we have Paula Hudgell and her family. On her lap, we can see Tony. Tony is four years old, and he is an incredibly courageous young man. He was, sadly, incredibly brutalised by his birth parents, before his real parents took care of him. He was so cruelly treated in their care, and the assault on him was so great, that he lost both his legs. That is an extraordinary situation for anybody in our society to find themselves in, but where it happens to a child, at the hands of their parents, it is a wrong that screams out for justice.
That is why I am here this evening with a petition of 12,000 names—if I may, Madam Deputy Speaker, I will show you just a few of them—that Paula and Tony have collected to ask for a change in the law. How can it be right that, had Tony been an adult, and his attackers been charged with grievous bodily harm, they could have received a life sentence, but because he is a child, and because they were his parents, the maximum sentence was 10 years?
That is clearly wrong, and this petition expresses the wishes of the people not just of Kent, and not just of Kings Hill and Tonbridge and Malling, but of the whole country, who are speaking out for justice, speaking out for Tony, speaking out for the whole Hudgell family and, most of all, speaking out clearly about the wrong that we see today in our country and asking why it is not more severely punished.
Madam Deputy Speaker, thank you for letting me lodge this petition this evening. This is the first of a long series of parliamentary steps that I shall take alongside the Hudgells to change the law and to see justice done for children.
Following is the full text of the petition:
[The petition of residents of Tonbridge and Malling,
Declares that the sentence given to the abusers of Tony Hudgell will not act as a serious deterrent considering the life changing injuries Tony suffered at their hands; the reasons for this petition is not to change the sentence already given, but for Parliament to raise the threshold of maximum sentences for future cases.
The petitioners therefore request that the House of Commons urges the Government to introduce tougher sentences for child cruelty offences.
And the petitioners remain, etc.]
[P002308]
Speaker’s Statement
Mr Speaker
Before we proceed to the urgent questions, I would like to say something that relates to the events that unfolded outside this place yesterday.
In the course of proceedings at various times yesterday, the hon. Members for Cardiff South and Penarth (Stephen Doughty), for Grantham and Stamford (Nick Boles) and for Wakefield (Mary Creagh) and the right hon. Member for Wolverhampton South East (Mr McFadden) all raised with me their very grave concerns about aggressive, threatening and intimidating behaviour by demonstrators at Abingdon Green and, in many instances, between Parliament and Abingdon Green.
To those points of order, I responded, I hope, sympathetically and as effectively as I could. Colleagues will realise that I had not myself witnessed the behaviour, which was taking place while the House was sitting and I was in the Chair, but I was extremely concerned to learn of those developments. Moreover, it was clear beyond doubt both that there was an intensity of feeling on the matter and that that intensity of feeling was across the House. I undertook to look further into the matter.
Of course I am aware—as colleagues will know, for it has been reported—that a very large number of Members have written to the commissioner of the Metropolitan police. I thank them for doing so. I have myself today written to the commissioner of the Metropolitan police, Cressida Dick, in support of those representations, and my letter has been published. We respect the operational freedom of the police, and we absolutely understand that they have difficult judgments to make in balancing the precious right of peaceful protest on the one hand and the right of Members of Parliament, journalists and others to go about their lawful business unimpeded and unthreatened. My sense of the opinion of colleagues, and they have considerable evidence for their view, is that, as things stand, the balance is not right.
I must say to the House that, frankly, it is intolerable if Members of Parliament and journalists go about their business in fear. This situation cannot stand. I have written with force, passion and politeness to the commissioner of the Metropolitan police seeking a review of policy. I hope that that is regarded by colleagues across the House as helpful. I would like to thank all those Members yesterday—on the Floor of the House and in conversations with me—who registered their concerns. I share them, and I will do my best to ensure that those concerns are properly addressed without delay.
Sir Nicholas Soames (Mid Sussex) (Con)
On a point of order, Mr Speaker. May I thank you very much for your response and the sense of what you have said, which the whole House will have appreciated? However, will you add to the list not just politicians and journalists but ordinary members of the public, who themselves have been grossly abused just by being present?
Mr Speaker
I entirely accept what the right hon. Gentleman has said. In making that powerful point, he prompts me to add a reference to schoolchildren coming on to the estate to visit the education centre, for a wider tour or both. They should not have to witness such insulting and, frankly, toxic behaviour. It is one thing to observe such behaviour, but it is another actually to do something to seek to prevent it, and it is, I think, for the latter that we in this House are looking. I thank the right hon. Gentleman.
Chris Bryant (Rhondda) (Lab)
On a point of order, Mr Speaker. I fully concur with all the things that were said yesterday and, indeed, by yourself just now, but I do not think this is just about policing, if I might say so. The arrangements at Abingdon Green, with the barriers placed in the way they are, mean that Members going from this palace can take only one route. That is making things more difficult and worse. I urge the House authorities to look at how they can relate better with the broadcasters to make sure that that area, which is part of our parliamentary estate, is better protected.
Mr Speaker
It may be, and I say this in all seriousness, with no frivolity or levity, that there is a symbiotic relationship between the House authorities and the hon. Gentleman, for I am able to say to the hon. Gentleman that we are seized of that point. It did not seem to me to be relevant to my letter to the commissioner, and I did not want to give what would, in any case, on that point, be only a holding statement to the House today. If I can say so with great politeness and respect to the hon. Gentleman, we have got that point—he is right—and we are looking to do something about it.
Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
On a point of order, Mr Speaker. Thank you for the comments you have made and the action you have taken, and I certainly agree that your view is shared across the House by Members of all parties and all views—nobody wants to see this behaviour going on. May I just add that, of course, threats have also been directed at the police themselves? Earlier this morning, I spoke with some of the police officers protecting us all—they are doing a fantastic job. They, too, are being subjected to racist abuse and threats, and we all saw the tragic events here at the House, with the death of PC Keith Palmer. Nobody wants to see that situation again, so I hope that those conversations will be fruitful and that we can ensure that all of us can go about our business safely.
Mr Speaker
Thank you. It is a type of fascism, let us be quite clear about that—it is a type of fascism. Women and ethnic minority citizens, in particular, are being targeted. I do not say that they are the only people on the receiving end of this completely unacceptable behaviour, but they have been, and are being, deliberately and disproportionately targeted. That is not acceptable, and we have to ensure that something is done about it.
Matt Western (Warwick and Leamington) (Lab)
On a point of order, Mr Speaker. Thank you for your intervention and for writing to the Metropolitan Police Commissioner. Is there not also a responsibility among the leaderships of our parties, and among Ministers and shadow Ministers, when they speak in the media, to reiterate what you are saying and not to seek to inflame some of the heightened tensions we are going to witness over the coming days and weeks? If I may say so, I was slightly surprised by an interview this morning with the Secretary of State for Brexit, in that I thought he could have been more forthright in his condemnation of what happened yesterday.
Mr Speaker
I hope the hon. Gentleman will forgive me, because I did not hear that interview. I must, in passing, observe that I was told that the Secretary of State for Brexit—presumably because he was asked about the subject—did reference the concerns that exist about this totally unacceptable behaviour. Beyond that, I think it is fair to say that I should not comment, because I did not hear the interview, but we all have a responsibility to use moderate language and to treat each other with respect. I really do think that this is something that can unite the House, whatever people’s views in this Chamber on Brexit or indeed anything else. We all believe that we and everyone else should be able to go about our lawful business unimpeded. Denying someone’s personal space, shouting abuse, swearing at them, making sexist, racist or misogynistic remarks, or implying or stating directly that someone should lose his or her life because of the view that that Member holds is wrong—period. If there are people out there, as clearly there are, who do not get that point, well, they will have to be made to get it.
Universal Credit: Managed Migration
(5 years, 3 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Urgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
Each Urgent Question requires a Government Minister to give a response on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Margaret Greenwood (Wirral West) (Lab)
(Urgent Question): To ask the Secretary of State for Work and Pensions if she will make a statement on the Government’s plans for the managed migration of people claiming legacy benefits to universal credit.
The Minister for Employment (Alok Sharma)
Universal credit is a vital reform that overhauls a legacy system that trapped people out of work; with six different benefits, administered by three different Government Departments, it was utterly confusing for claimants. All new claimants now receive universal credit. In the future, we will move claimants who have not changed circumstances from legacy benefits to universal credit in an approach known as managed migration. It is right that the Government should seek to align provision for all, in order to eventually operate one welfare system. The Department has long planned to support initially 10,000 people through this process in a test phase, before increasing the number of those migrated. The first phase will give us an opportunity to learn how to provide the best support, while keeping Parliament fully informed of our approach. Universal credit is proceeding as planned, with no change to the timetable of completing managed migration by December 2023.
Margaret Greenwood (Wirral West) (Lab)
Over the weekend, it was widely reported in the media that the Government had decided to ask for powers from Parliament for a managed migration pilot to move 10,000 people from legacy benefits to universal credit, rather than the managed migration as a whole of about 3 million people. One headline read:
“Threat of revolt forces rethink of ‘catastrophic’ universal credit”.
The Minister’s response does nothing to clarify the situation.
This is a matter of very real concern. Under so-called managed migration, the Government intend to switch off the vital financial support received by millions of people and leave them to apply for universal credit. There are very real fears that vulnerable people will be put at risk of falling out of the social security system altogether. Over a third of these people are currently claiming employment and support allowance because they are ill and disabled. In some cases, they will have been claiming it for a long time and may find it extremely difficult to make a claim for universal credit. A policy change of this significance, which was indicated in the press, clearly should have been announced in the House but the Government failed to do so. The Secretary of State failed to clarify the situation when she was asked to do so yesterday.
Will the Minister—it is disappointing that the Secretary of State is not in her place—tell the House whether the Government intend to ask Parliament initially for powers to carry out a pilot for the managed migration of 10,000 people or for the process as a whole, which would affect nearly 3 million people? Will the Government pledge, as they did before Christmas, to debate the regulations, in whatever form they take, on the Floor of the House? If the Government seek powers for a pilot in the first instance, will the Government address the fundamental concern of numerous voluntary organisations that nobody’s claim for a legacy benefit will be ended until they have either made a new claim for universal credit or have said that they do not wish to do so?
The result of putting back the timetable for managed migration, as the Government already did in the Budget, will mean that many more people will transfer to universal credit through natural migration. Can the Minister tell us how many people the Government estimate will move to universal credit through natural migration, and what savings that will make for the Treasury?
The Government announced in June that those in receipt of severe disability premium would not have to transfer to universal credit without transitional protection. Will the Government compensate those who have already done so and missed out as a result? What action will the Government take to ensure that those affected are fully compensated? The Government have chosen to shift the burden of what should be the Government’s responsibility to ensure continuity of social security on to claimants, forcing them to apply for universal credit. Will the Minister explain precisely what the Government are going to do and will they stop the roll-out of universal credit?
Alok Sharma
May I just clarify, if it was not clear yesterday when we had oral questions, that the Government had previously committed to hold a debate on the affirmative regulations in relation to the managed migration regulations? That will happen in due course, and we will debate them as and when parliamentary time allows. We will of course, as we have set out previously, meet our commitment to severe disability premium recipients. We will also ensure that the start date for the July 2019 test phase involving 10,000 people is voted on.
The hon. Lady raised a number of issues. She raised the issue of vulnerable people. I hope she will have seen our response to the Social Security Advisory Committee’s recommendations, in which we set out very clearly—I am sure we will have a chance to talk about them—how we will be looking to move people across, working with stakeholders to ensure protections are in place for the vulnerable.
The hon. Lady talked about voluntary organisations. We will be working with voluntary organisations. We have already had meetings with 70 stakeholders and we have plans for further discussions. We want to design the process together with them. The timetable is as set out. We will have a pilot phase starting in July 2019. In 2020, we will then move on to volume migration.
I want to end on one point, which is that every time the hon. Lady gets up she talks about stopping the roll-out of universal credit. To be clear, we have now rolled it out across the country. If she wants to support people, she should vote with us when we bring forward support for the most vulnerable. She voted against the £1.5 billion of support. She also voted against the £4.5 billion. When the regulations are debated, she should support them and not oppose them. Let me clarify once more that we will hold a debate on affirmative regulations in relation to the managed migration regulations.
Damian Green (Ashford) (Con)
If the Government do proceed on a pilot basis with moving people across from existing benefits, that would be extremely sensible. Does my hon. Friend share my experience of talking to job advisers and other staff in jobcentres? They are very enthusiastic about universal credit, as opposed to previous benefit systems, precisely because it helps them to better help other people into work in ways they were not able to do before. Can he reassure me that for all the issues with transition, which we all know are there, the Government are as committed as ever to making sure this new and better benefit system is rolled out fully?
Alok Sharma
My right hon. Friend is absolutely right. That is the experience of colleagues on the Government Benches when we talk to people—[Interruption.] Well, I would just say to the hon. Member for Wallasey (Ms Eagle) that she ought to go out there and talk to work coaches. I would say that to all colleagues, because in my experience they are telling me that for the first time they are doing what they came into the Department for Work and Pensions to do, which is to provide one-to-one support rather than having to explain an incredibly complicated legacy benefit system where people have not been able to claim all the money due to them.
Neil Gray (Airdrie and Shotts) (SNP)
Thank you for granting this urgent question, Mr Speaker. I commend Labour for securing it. It is important because at the weekend, reading any of the papers, it would have seemed that everything had changed in the minds of Ministers on universal credit, with the Work and Pension Secretary’s apparent U-turn. In actual fact, however, nothing had changed. I am sorry that the Secretary of State is not here to respond, given that the misleading headlines were in her name.
The Government were of course quite happy to ride that wave of publicity, but yesterday at DWP questions the scale of that so-called U-turn became clear. We now know that at present there are no plans to make any changes to universal credit, which is what everyone is really interested in.
Delaying the vote on the managed migration of people from legacy benefits to universal credit is a small acceptance from the Government that things may not be well with universal credit. We have six years of evidence and lobbying to show the Secretary of State that. She knows she cannot get away with kicking the can down the road. She knows that changes need to be made and that what is on the line is not just her credibility but the lives of recipients who desperately rely on that support. After all, we never know when it might be us relying on that safety net.
My question to the Minister is clear and unambiguous, and I hope he will be, too. Will he commit, with the Secretary of State, to putting pressure on the Chancellor to release the money to repair universal credit, starting with ending the two-child policy, stopping the benefits freeze and overhauling the punitive sanctions regime?
Alok Sharma
The hon. Member for Wirral West (Margaret Greenwood) asked earlier why the Secretary of State is not here. The reason is that she is in Cabinet. Her commitment is absolutely clear. She has visited jobcentres and talked to stakeholders and organisations that care about getting universal credit right, so there should be no indication in the House that she is not taking her duties incredibly seriously. She is hugely committed to this.
As I said, earlier this year, we brought forward £1.5 billion of funding to help people by allowing advances of up to 100% on day one if individuals require that and having a two-week run-on for housing benefit, and another £4.5 billion was announced in the Budget. This is all about making a difference and helping the most vulnerable in our society—something the Opposition should welcome.
James Cartlidge (South Suffolk) (Con)
We have had a very successful roll-out in Sudbury. I urge my hon. Friend not to pause the overall roll-out of the system. I well remember as an employer the problems of staff who refused to work more than 16 hours under the old system. He is doing the right thing. If this takes a bit longer to introduce, personally, I will welcome that.
Alok Sharma
I have set out our timetable, but my hon. Friend is absolutely right that the legacy benefits system is incredibly complicated. I mentioned that we have £2.4 billion under-claimed under the legacy benefits system because it is so complicated. That of course is changing under universal credit.
Ms Angela Eagle (Wallasey) (Lab)
Will the Minister be up front with the House and admit that universal credit has been a disaster right from the beginning? It has been delayed, it has cost money and the Government are having to delay it further because they are worried about its effect. In Wallasey, there was a 39% increase in food bank usage after the roll-out of universal credit. It is causing real distress, and there are still £4.7 billion of benefit cuts to be administered between now and 2020. Will he admit that this is a rolling disaster area and commit to properly reviewing it and doing the right thing?
Alok Sharma
Perhaps the hon. Lady was not listening. I have already set out the extra funding we have brought forward. I wish she would support this. Of course, as we go through this process we learn and make changes as appropriate, but the reality is that we now have a much simpler system, under which people are able to get the one-to-one support they were not able to get before. She should welcome that.
Sir Oliver Heald (North East Hertfordshire) (Con)
Does my hon. Friend agree that it was necessary in the roll-out of universal credit to learn the lessons of the failed introduction of tax credits, which left many people on low incomes right across the country in a big-bang situation where they were faced with large debts? Does he agree that, contrary to that approach, this Government have taken time and tested the system as they have gone? They continue to do that with the test involving 10,000 people, which I strongly support. I suggest they continue that approach.
Alok Sharma
I thank my right hon. and learned Friend for his support. We have always said there will be a test phase, and that is what we will have. He is absolutely right to highlight that the introduction of tax credits was not a success, whatever Opposition Members may say. It is absolutely right that we listen and learn, and that is precisely what we will do as we go through the test phase.
Stephen Timms (East Ham) (Lab)
Tax credits were a great success. In answering my question yesterday about the five-week wait before claimants are entitled to their benefit, the Minister pointed out that advances are available. That is true, but of course that means people are indebted to his Department right at the start of their claim. Press reports at the weekend stated that the roll-out would be paused because of worries about growing indebtedness. Are Ministers concerned about rising indebtedness among benefit claimants because of universal credit?
Alok Sharma
As I said yesterday, I know the right hon. Gentleman takes these issues extremely seriously, but so do we. That is why we introduced a change last year to ensure that advances of up to 100% are available on day one. Some 60% of those who come on to universal credit now take advantage of those advances. There is also the two-week run-on for housing benefit and, as he knows, we set out in the Budget further measures, which will come into place in 2020, when those moving across from out-of-work DWP legacy benefits will also get run-on.
Martin Vickers (Cleethorpes) (Con)
We must not lose sight of the fact that inevitably there are problems during the transition phase, but I draw the Minister’s attention to an email I received yesterday from Brian Herzog, one of my constituents, who wrote that
“my mental health did a complete nose dive and it was Universal Credit that saved me in so many ways.”
He added:
“Please trust me…it’s a great system. I’d be happy to be used as an example of why it does work”.
Well, I have done that. Does the Minister agree that we must do all we can to ensure that the transition phase moves smoothly and to support the staff who do an excellent job of delivering universal credit, but we must not lose sight of its successes for the vast majority?
Alok Sharma
I thank my hon. Friend, who works incredibly hard for his constituents. He is right to highlight that universal credit works extremely well for the vast majority of people, and of course we wish his constituent well, but I accept that we need to get this right for everyone. That is why, when it comes to managed migration, we will have a test phase.
Kate Green (Stretford and Urmston) (Lab)
Will the Minister clarify whether the regulations he proposes to bring forward before July will cover only those encompassed by the pilot, or whether they will be the comprehensive managed migration regulations? Will they also deal with the severe disability premium?
Alok Sharma
The hon. Lady takes a great deal of interest in this area, so she will have seen the regulations that are currently before the House. If I may repeat myself, we have committed to holding a debate on any affirmative regulations, we have said we will meet our commitment to those in receipt of severe disability premium, and we have said we will ensure that the regulations are in place so we can start the test phase in July 2019.
Alex Burghart (Brentwood and Ongar) (Con)
In Brentwood, the roll-out of universal credit has been very successful thus far. I congratulate the Government on their use of test and learn to ensure that universal credit learns lessons that previous benefit systems did not. Will the Minister commit to sharing with the House the details of the pilot of 10,000? When does he expect to be able to do that?
Alok Sharma
My hon. Friend is very knowledgeable about these matters, as a former member of the Select Committee on Work and Pensions. We are in the process of designing the pilot. As I have said very clearly, we are having discussions with key stakeholders to make sure we get it right. Clearly, there will be plenty of opportunity in the future to debate it. Let me be very clear that we will, at the end of that phase, set out how it went.
Maria Eagle (Garston and Halewood) (Lab)
Many of my constituents have been left without money and food—effectively destitute—for extended periods during the roll-out of universal credit. Can the Minister guarantee that those of my constituents due to be migrated on to universal credit, whether as part of a pilot or more generally, will not be left in this condition?
Alok Sharma
We want to make sure that the process of moving on to universal credit works for everyone. I am sorry if I repeat myself when I talk about the extra £1.5 billion. I said earlier that we brought that forward earlier this year—I meant, of course, during 2018. I have talked about the extra money made available in the Budget as well. Of course, we want to get this right in order to help all our constituents. That is what we are here for: to ensure we help people, but also to help people to progress into work.
John Howell (Henley) (Con)
Does my hon. Friend agree that, in my constituency, which neighbours his, our feedback on universal credit has been generally positive, and would he accept my appreciation for the positive response that he and his colleagues have given to me when I have raised implementation problems with him as we have gone along?
Alok Sharma
I thank my hon. Friend for his kind comments. I hope it is clear to colleagues on both sides of the House that my door is open. When colleagues come with individual cases, I do take them up. I am always open and ready to have meetings on individual cases, and I will continue to be ready to do that.
Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)
When universal credit was initially rolled out some time ago, people living in the highlands were the unwitting guinea pigs in this experiment. Now that some of the flaws in universal credit are becoming apparent, is there not a case for financial compensation for these people for all they have undergone?
Alok Sharma
As I have said—I am sorry if I have to keep repeating myself—we want to make sure that universal credit works for absolutely everyone. Wherever we sit in the House, we want our welfare system to work for everyone. We will continue to work with stakeholders and others to make sure we get this absolutely right.
Alex Chalk (Cheltenham) (Con)
Piloting managed migration for universal credit is an entirely sensible approach, as it means that lessons can be learned, but can the Minister assure me that, when learning those lessons, he will consider the evidence from charities and other experts so that the best possible evidence base is available and we can have the best possible system?
Alok Sharma
My hon. Friend raises an important point. We talk about stakeholders. We held an event for 70 stakeholders in October. We are working on work streams with stakeholders looking at how to create a successful claimant experience, what the role of delivery partners and external organisations might be in migration, how we communicate and engage with claimants, and how we identity and support our most vulnerable claimants. That work is going on right now. We will continue to do that to get this right.
Ruth George (High Peak) (Lab)
The Minister says he wants to make sure universal credit works for absolutely everyone, but there are still 2.4 million households that will be more than £2,000 a year worse off under universal credit, of which 1.6 million will be moving on to universal credit in the next 12 months, under natural migration. What will the Government do to support those people and make sure it works for them?
Alok Sharma
As the hon. Lady will know, once universal credit is rolled out, there will be £2 billion more in the system than under the legacy welfare system. I know she cares deeply about these matters, but if she wants to support her constituents, she should have voted to support the measures we introduced to help people—I have talked about the extra money. Unfortunately, she has not been able to support them.
Sir Desmond Swayne (New Forest West) (Con)
How does the generosity of the Minister’s arrangements compare internationally?
Alok Sharma
Different countries will have different welfare arrangements. It is important for us to have a welfare system that not only provides support but is sustainable and ultimately helps people into work. That the employment rate now is at a joint record high is testament to the work the Government have done, including on welfare reform.
Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
The problem is that the individual cases keep coming and coming because of the Government’s failures on universal credit. A constituent contacted me because of an issue about early payment from her employer before Christmas. She was forced to go to a food bank—over Christmas! Surely, the Minister does not think that that situation is acceptable.
Alok Sharma
As I have said, we want to get this right for everyone, and where there are individual cases, of course we will take them up, but the hon. Gentleman seems to imply that, under the legacy benefits system, the world was entirely rosy. He and I know, as Members of Parliament, that the legacy benefits system is inferior to universal credit.
Kevin Foster (Torbay) (Con)
I welcome the tone of the response from the Minister so far—it is always good to see him at the Dispatch Box—but could he confirm how the Department will go about selecting the 10,000 to take part in the pilot, how it will monitor it and how it will report back on its evaluation?
Alok Sharma
My hon. Friend raises an important point. During the test period, we will be testing a number of approaches to moving claimants on to universal credit safely and in the most effective way. This will include testing a non-mandatory approach, where claimants will be invited to go through the process. We will be testing claimants on all benefits and in a range of circumstances to make sure that we move all claimants on to universal credit safely.
Dame Louise Ellman (Liverpool, Riverside) (Lab/Co-op)
The reality for many people in my constituency is that universal credit is plunging them deeper into poverty. What specifically will the Minister do about this, and when?
Alok Sharma
I visited Liverpool last year and talked to colleagues in jobcentres who told me that universal credit was working well, that they supported it and that it enabled them to offer help. The hon. Lady talks about providing support for individuals. The best support we can provide is helping them to get into work, and that is what is happening under universal credit.
Neil O'Brien (Harborough) (Con)
Universal credit is solving some serious problems in the benefits system. It is helping people to move into work more quickly and, together with the national living wage, is helping to drive down unemployment. The Minister is right to take a cautious approach to rolling out universal credit but, further to the question from the hon. Member for Stretford and Urmston (Kate Green), can he assure me that he will move as quickly as possible to introduce regulations that solve the problem for people on severe disability premium? I have a constituent whose disabled son has lost money because he has moved local authority. It is obviously an indefensible situation. He will want to fix it. Can he assure me that we will move quickly to solve this problem?
Alok Sharma
My hon. Friend is right to highlight the issue of the recipients of severe disability premium. We recognise that issue, which is why we have committed to putting in place a hard gateway so that people are not naturally migrated across.
Steve McCabe (Birmingham, Selly Oak) (Lab)
If there is to be a pilot, will the Minister look again at the advice of Sir Ian Diamond, the chair of the Social Security Advisory Committee, who says it is not necessary for all those on legacy benefits to make fresh universal credit claims, which is bound to increase administration costs and undoubtedly will result in some of the most vulnerable losing out on the benefits they are entitled to? He says it is not necessary because the Department already has the key data for most of those claimants.
Alok Sharma
Of course, we are in regular contact with the Social Security Advisory Committee and the hon. Gentleman will know that in our response to it we highlighted the limitations of pre-population, which I think is what he is talking about. I ask him to look at when we moved people from incapacity benefit to employment and support allowance. We did not have all the appropriate information and this led to the Department estimating the need to spend about £1 billion on historical underpayments. We want to ensure we get this right, but of course it is important to build in safeguards, particularly for the vulnerable, and that is what the test phase is all about.
Mr Philip Hollobone (Kettering) (Con)
One of the aims of universal credit is to more accurately target financial support to the most vulnerable people, who need it most. As I understand it, when fully rolled out, up to 1 million disabled people will be able to claim something like £100 a month more than they currently receive. Is my understanding correct?
Alok Sharma
My hon. Friend is absolutely right. There will be that extra money. As I have said, this is about making sure that we target funds at those who need it most. That is why we introduced changes in work allowances in the Budget, which will make a difference to people with children and, of course, those with disabilities as well.
Chris Stephens (Glasgow South West) (SNP)
Will the pilot just move 10,000 people on to the existing system, or will there be meaningful changes before it begins, as requested by the Select Committee and by stakeholders? Will the Minister look at the position of individuals who turn down jobs involving zero-hours contracts, who are liable to be sanctioned under universal credit but would not be sanctioned under legacy benefits?
Alok Sharma
I am always happy to have a detailed discussion with the hon. Gentleman on any issues, but let me commend to him our response to the Social Security Advisory Committee’s recommendations. As he will see, we have taken on the vast majority of those recommendations—and, of course, we have committed ourselves to working with stakeholders, which we are already doing.
Tom Pursglove (Corby) (Con)
On Friday, it was great to be interviewed by a university student from Corby, Bethany Kilgallon, about universal credit. What message would my hon. Friend want me to pass on to her about the successes of universal credit so far, and the way in which the roll-out will be handled in future?
Alok Sharma
My hon. Friend has raised a fundamental point. Universal credit replaces a very complicated legacy benefits system, and is ensuring that people get into work faster and stay in work for longer. That, ultimately, is what we should all be trying to do, as well as helping people to progress when they are already in work.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
For the record—I know that you are aware of this, Mr Speaker—tax credits lifted 1.1 million children out of poverty, whereas the Government’s policies are set to increase the number of children in poverty by more than 1 million. We know that disabled people who are out of work will be worse off even after the Budget. The High Court decided last summer that transitional protections were needed, and that the Government were acting unlawfully and discriminating against disabled people. The Minister has been asked this three times: when will those transitional protections be put in place?
Alok Sharma
The hon. Lady talks about poverty. May I point out respectfully to her that since 2010, 1 million fewer people are living in absolute poverty, including 300,000 fewer children? [Interruption.] The hon. Lady may not like the answer, but she cannot argue with the facts. As for the regulations, we have been very clear about them, as was the Secretary of State yesterday.
Neil Coyle (Bermondsey and Old Southwark) (Lab)
Happy new year, Mr Speaker.
Five years after the roll-out of universal credit and two years after it was meant to finish, it is costing three times as much as the legacy benefits, and the Government have had to announce a pilot to test whether it even works. Is this not an admission of colossal failure, with equally colossal human and financial costs?
Alok Sharma
I do not know whether the hon. Gentleman is arguing against our conducting a pilot, but that would be irresponsible. We have always made it clear that we need to get this right, which is why we will organise a pilot.
Christine Jardine (Edinburgh West) (LD)
I was delighted to hear the Minister say that he would listen to what is said about the changes that will have to be made. Does that mean that he will accept the necessity for a guarantee that vulnerable people on existing legacy benefits need not apply, that there will be some way of ensuring that they are being moved successfully on to universal credit before their legacy benefits are stopped, and that someone from the DWP will visit them at home to ensure that they are receiving what they are entitled to, and are completely aware of the changes?
Alok Sharma
As the hon. Lady will know, home visits are already available under the welfare system and the universal credit arrangements. However, she has raised an important point about the need to ensure that no one who is vulnerable falls through the cracks. We want to ensure that as well, which is why we are working with health charities and others to make certain that we get this absolutely right.
Alison McGovern (Wirral South) (Lab)
A quarter of households in receipt of universal credit are lone-parent households, and we know that as people move on to universal credit, 50% more of those households will lose rather than gain. Given the tax cuts that the Government have handed out to the richest households, can the Minister give me a single reason why any lone-parent household should be worse off rather than better off? Can he give me a single justification for that?
Alok Sharma
If the hon. Lady is so keen to support lone-parent households, she should have supported us and voted for the work allowances that we introduced in the Budget.
Hywel Williams (Arfon) (PC)
It has long been the Department’s intention to allow universal credit applications to be made through the medium of Welsh in Welsh-speaking areas, particularly in north and west Wales, but that facility has been denied to people so far by deficiencies in the computer system. What will be the impact of the “managed migration test phase”, restricted to 10,000 claimants, on that rather larger and more long-term policy intention?
Alok Sharma
I will double-check and write to the hon. Gentleman if I am wrong, but I believe that we have put in place the arrangements required to enable people in certain jobcentres in Wales to communicate in Welsh.
Liz Kendall (Leicester West) (Lab)
It sounds as if the Minister thinks that all the lessons have been learnt and all the problems with universal credit have been solved, but let me tell him that in Leicester, one of the areas in which the roll-out has occurred later, too many people are still waiting too long. They are getting into debt, and there has been a huge increase in demand for food banks. May I urge the Minister, even before any pilot involving people on existing legacy benefits, to stop and carry out a fundamental review with all the experts and charity groups, so that we can secure the reform that we need and my constituents do not have to fear the future?
Alok Sharma
Payment timeliness may be one of the issues to which the hon. Lady refers. The position has improved. When people cannot receive their full payments at the end of the first period, it is often because we have been unable to obtain verification because no information on housing or childcare costs has been provided, but support is available in the system. If there are individual cases in which the hon. Lady thinks that things have not gone well, she should come and talk to me: I would be very happy to have that discussion.
Grahame Morris (Easington) (Lab)
Yesterday, during DWP questions, the hon. Member for Clacton (Giles Watling) said that he struggled with online applications, which caused some mirth on the Government Benches. May I pursue the question asked by the hon. Member for Edinburgh West (Christine Jardine)? I tabled some written questions about the number of requests for face-to-face assessment interviews. I was told that since March 2015 there had been 144,000, of which only 308 had been home consultations. Can the Minister explain why so few people have been offered home assessments? If he cannot do so, will he conduct an investigation in the Department to find out why so many sick and disabled people are being denied such assessments?
Alok Sharma
There are a number of ways in which people can claim universal credit. There is, of course, the online process, and help with that can be provided in jobcentres. There is also the Freephone telephone line, and people can also have appointees. As the hon. Gentleman has said, there are home visits, but, again, I would be happy to discuss the issue with him.
Mr Kevan Jones (North Durham) (Lab)
Many people going on to universal credit find it difficult to manage their finances. May I ask the Minister to give serious consideration to local working with credit unions? I am a director of NE First Credit Union for the North East, which offers people simple bank accounts and affordable finance. Would the Minister consider linking credit unions with the DWP so that people can not only receive advice, but stop getting into the hands of loan sharks?
Alok Sharma
I would be happy to meet the hon. Gentleman to discuss that suggestion and see what is possible, but, as he will know, we have a new arrangement with Citizens Advice and Citizens Advice Scotland to ensure that advice is given to people to help them as they move on to universal credit. That arrangement will kick off formally in April. We have made £39 million available, and of course we want the process to work well.
Patrick Grady (Glasgow North) (SNP)
The Minister must accept that he is kicking the can down the road and that managed migration is of no comfort to people in Glasgow North who are making new claims, are on a natural migration waiting weeks for the first payment or are subject to the mendacious two-child policy. If the UK Government cannot fix the flaws they themselves admit exist in UC, is it not time to devolve these powers fully to the Scottish Parliament and Government, who will put fairness and dignity at the heart of social security?
Alok Sharma
I would like to think that I have a good working relationship with my opposite number in the Scottish Government and of course we will continue to work with them on a range of issues. It is important that we get this process right for everyone and that is our intention.
Ms Karen Buck (Westminster North) (Lab)
I served in 2011 on the Welfare Reform Bill which paved the way for UC, and it is clear that the questions the Government could not answer then about UC they still cannot answer now, eight years later—and a little humility on the part of the Minister would be very welcome. Does he recognise that managed migration clients will not for the most part be the same as roll-out clients? There will be a higher level of vulnerability, with many people unable—and will continue to be unable—to work because of sickness and disability? What extra provision is he building into the system to make sure even this pilot does not leave people with a debt crisis and at risk of losing their home?
Alok Sharma
The hon. Lady gets to the point of the pilot phase, as that is precisely what we want to make sure happens: we want to get this right particularly for the most vulnerable. We are working with a range of stakeholders. I set out in an earlier answer the work-streams we are working on, and we will continue to do that until we get this right.
Richard Burden (Birmingham, Northfield) (Lab)
In an area such as mine where UC has already been rolled out, if somebody on legacy benefits who has more than two children reports a change of circumstances, they are told they must migrate on to UC only then to be told that because they have more than two children that migration cannot take place. By the time they have been told that, their housing benefit and council tax benefit and other benefits will have been stopped. It takes weeks to sort that out and real hardship is caused in the meantime. Small wonder therefore that food bank use and indebtedness are rocketing. Can the Minister say plainly that there are practical problems with the current system of roll-out, and what will he do to sort it out?
Alok Sharma
We have been fixing problems, and we will continue to do that. Again I say—I make this offer in all sincerity, not least because this is how we will learn in this process—that where the hon. Gentleman has a specific case I will be happy to sit down with him and talk it through and see what we can do to make sure that the system works for others who come after his constituent.
Laura Pidcock (North West Durham) (Lab)
The Government always try to individualise our constituents’ problems, but these are systemic flaws in the system. People every single day are made deliberately worse off under this scheme which makes them wait five weeks. Deep design and administrative flaws have been listed exhaustively in numerous reports. Is it acceptable to continuously test and learn on people? Is it acceptable that every single day we have people naturally migrating on to UC, because they are no less vulnerable and deserving of protections than those on managed migration? Will the Minister please halt the natural migration and the managed migration?
Alok Sharma
The roll-out of UC has already taken place across all jobcentres. UC is continuing; I have set out the timetable, as the Secretary of State did yesterday. But the hon. Lady is right that we need to make sure we get this right and that is why we have the test phase. I am pleased that at least some colleagues on the Opposition Benches have acknowledged that this is an important part of making sure we get this right in terms of managed migration.
Chris Bryant (Rhondda) (Lab)
There is a fundamental flaw that I think is utterly pernicious in terms of UC—the first five-week wait. I had a constituent in my surgery before Christmas who was in tears, because, she explained, “I have never been in debt in all my life, and now I have had to go into debt, and it is the system that is encouraging me to do that. In fact, I heard the Prime Minister on television last night say that it is a good thing that I can take out a loan which I pay back.” We must stop pushing the poorest people in our country, who are often the proudest people in our country, into debt.
Alok Sharma
Of course we do not want to push anyone into debt, but may I just be clear that these advances are interest-free, so over a—[Interruption.] Over a 12-month period people will get their monthly payment and then their additional advance which they pay back over that period, and of course we will be extending that to allow people to pay that back over 16 months. Many people have welcomed the advances and now about 60% of those coming on to UC are taking out advances.
Alison Thewliss (Glasgow Central) (SNP)
Will the Minister look at a serious flaw in debt repayment between legacy systems and the UC system? A constituent of mine has been diligently repaying an historical tax credit debt but that debt also moved when she moved on to UC. HMRC deducted £11 a month, but the DWP wants to take £79.46 from an income of only £317.82 per month after housing costs. Will the Minister meet me to discuss this case and the unfairness in the system, because people cannot live on this amount of money?
Alok Sharma
Of course I will meet with the hon. Lady, as I have done previously on issues she has raised. As a general rule, one would not expect deductions to be more than 40% of a standard allowance, and of course that figure will come down to 30%.
Diana Johnson (Kingston upon Hull North) (Lab)
May I express to the Minister my concern about the worry and anxiety that people face when making UC claims? We had the roll-out in December in Hull. If there is a pilot from the middle of 2019 will some of the pilot numbers come from Hull, and will people in Hull be in any way penalised if they do not make a claim in time?
Alok Sharma
Of course we want to support people as they come on to UC, whether they are naturally migrating or in the test phase. We have now put in place a provision with Citizens Advice to make sure people are provided with that consistent support across the country and I want that to work well.
Mr Paul Sweeney (Glasgow North East) (Lab/Co-op)
My constituent lost his job in October and waited five weeks for his first payment of UC, receiving £149 at the beginning of December, which has to last him until the middle of this month. He received an advance payment of £549.79 in November which he used to pay for his rent. This has been deducted from his future payments, hence causing hardship to him, and the DWP is unable to reduce the repayments during the current assessment period and has not agreed to do so from January. However, he was left over Christmas with no money to live on and no access to other possible funding. What will the Minister do to make the assessment period more flexible in order to protect claimants from suffering such obvious hardship?
Alok Sharma
The assessment period is five weeks. We of course did away with the seven-day waiting period that was in place previously, and of course 100% advances are available on day one if people require them. The hon. Gentleman raises a detailed individual case, however, and I would be very happy to talk to him about it, perhaps after this urgent question.
Ged Killen (Rutherglen and Hamilton West) (Lab/Co-op)
Nearly 30% of eligible households in my constituency are already on UC, but many cases that I deal with involve people whose legacy benefit was incorrectly withdrawn and who are then forced to apply for UC and find themselves with a lower award, and there is no transitional support for these people. What will the Minister do to address that? Surely at a minimum they should be allowed to stay on the legacy benefit?
Alok Sharma
Without knowing the individual cases the hon. Gentleman raises I cannot comment in any detail—[Interruption.] I have been asked to answer on policy, and that is precisely what I am doing. The reality is that we have now rolled out UC across the country, so new claimants or those who have a change of circumstance will move on to UC. But again, I am happy to discuss individual cases.
Martin Docherty-Hughes (West Dunbartonshire) (SNP)
The regulations that the Government intended to lay did have provision for back payments for those who transitioned through natural migration and lost their entitlement to severe disability premium. Given that both women’s aid organisations in my constituency, Clydebank Women’s Aid and Dumbarton District Women’s Aid, are gravely concerned about the impact of transition not just on those vulnerable women fleeing domestic abuse but those who have children who are disabled, will the Government now bring forward regulations to initiate these back payments and ensure no one loses out in the future? A yes or no answer would be helpful.
Alok Sharma
I am very happy to talk to the hon. Gentleman about this. I assume that he refers to the run-on of the DWP legacy benefits from 2020, and of course this will apply to claimants on managed migration and to those who naturally migrate, provided that they do not have a break in their claim.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
Since as far back as 2013, Inverness and then the rest of my constituency suffered through the pilot and on through the full-service roll-out of universal credit. The new year front page of The Inverness Courier newspaper described the rise of poverty in our community, and that was directly attributed to universal credit. Over nearly six years, the UK Government have failed to listen to any of the agencies, the charities, the council or the people who have been affected. What does the Minister say to those people who have suffered directly over all that time from having their plight ignored by this Government?
Alok Sharma
I have a lot of respect for the hon. Gentleman, and I am sorry that we are ending this urgent question on a discordant note, but respectfully, I do not agree that we have not listened. That is precisely what we have been doing, and we will continue to do so through the test phase and beyond.
Seaborne Freight
(5 years, 3 months ago)
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Andy McDonald (Middlesbrough) (Lab)
(Urgent Question): To ask the Secretary of State for Transport if he will make a statement on the awarding of a contract to Seaborne Freight as part of his no-deal contingency planning.
The Secretary of State for Transport (Chris Grayling)
The Government are working towards ensuring that we leave the European Union in March with a sensible agreement for the future, through the withdrawal agreement that the House will consider next week, but any responsible Government need to plan for all eventualities. As part of that work, the Department for Transport has been undertaking a wide range of activities to mitigate the impact on the transport system of a potential no-deal EU exit, particularly around the movement of freight. For example, my Department has been delivering measures such as the Haulage Permits and Trailer Registration Act 2018, which puts systems in place if a permit system is required to ensure that UK heavy goods vehicles can continue to be used in the EU.
We have also put in place Operation Brock as a replacement for Operation Stack, in order to deal with disruption at the channel ports. This is not simply a Brexit-related measure. We do not want to see any repeat of the issues that Kent faced in 2015, with the closure of the M20. If there is any disruption at the ports, for whatever reason, Operation Brock should keep the motorway open while we prepare the long-term solution of a lorry park. Yesterday, Kent County Council and my Department carried out a live trial of one part of Brock, on the route from Manston. We were satisfied with the number of vehicles that took part, which was more than enough to determine a safe optimum release rate from Manston to the port of Dover via the A256 and caused minimal traffic disruption along the route.
This is a range of examples of the sensible contingency planning that a responsible Government are carrying out to ensure that we are prepared for a range of outcomes. We remain committed to ensuring that movement across the UK border is as frictionless as possible, whatever the outcome. However, without planning, there could be significant disruption to the Dover strait, particularly if no agreement is reached. Given the importance of these routes to the UK economy, it is vital that we put in place contingency plans to mitigate any disruption that might occur in a no-deal scenario.
The Department is working with the port of Dover and the channel tunnel—as well as with our French counterparts, at both official and ministerial level—to ensure that both operate at the maximum possible capacity in all instances. Those discussions are positive and I am confident that everyone is working constructively to ensure that the Dover-Calais route—particularly at the port of Dover—and the tunnel continue to operate fluidly in all scenarios. However, in order to ease any pressure on those routes, my Department has completed a proper procurement process to secure additional ferry capacity between the UK and the EU. Following this process, three contracts were awarded to operators, totalling a potential of £103 million. Almost 90% of that was awarded to two well-established operators: £46 million to Brittany Ferries and about £42 million to DFDS. These contracts provide additional capacity on established routes, and through additional sailings and, in some cases, additional vessels, into ports in northern Europe and other parts of France.
A third, smaller contract, which is potentially worth £13.8 million, was awarded to Seaborne Freight, a new British operator, to provide a new service between the port of Ramsgate and Ostend. Let me stress that no money will be paid to any of these operators unless and until they are actually operating ferries on the routes we have contracted. No money will be paid until they are operating the ferries. No payment will be made unless the ships are sailing, and of course, in a no-deal scenario, money will be recouped through the sale of tickets on those ships.
As I believe the House knows, Seaborne is a new operator looking to reopen that route, which closed five years ago. As a result of this, we ensured that its business and operational plans were assessed for the Department by external advisers, including Slaughter and May, Deloitte and Mott MacDonald. These included Seaborne’s plans to charter vessels for service, as is common across many transport modes including airlines and rail operators. We also conducted searches on the directors of Seaborne via a third party, and found nothing that would prevent them from contracting with the Government.
I make no apology for being willing to contract with a new British company, particularly one that has a large number of reputable institutional backers. We contracted with Seaborne Freight because the service it proposes represents a sensible contingency in the event of disruption on other routes. I am also pleased that this award supports the port of Ramsgate, which operated as a commercial ferry port as recently as 2013 and has taken roll-on roll-off services as recently as last year. I am looking forward to seeing ferry services resume from this port. The infrastructure work required to make that possible has already started, and it is one of the most visible and symbolic elements of how seriously my Department is taking contingency planning for all Brexit eventualities.
Andy McDonald
The Transport Secretary has awarded a £14 million contract to a company with no money, no ships, no track record, no employees, no ports, one telephone line, and no working website or sailing schedule. Two of Seaborne Freight’s directors would not pass normal due diligence requirements. One of them, Ben Sharp, is already under investigation by a Government Department. Did the Department for Transport consult other Departments about Mr Sharp’s fitness as a company director? Ben Sharp quit his business activities in the Gulf leaving a trail of debt behind him. His company, Mercator, was merely a shell finding vessels for security companies. Is it correct that he operated without the licence he needed pursuant to the Export Control Order 2008? Did he operate without that licence? Yes or no?
It is abundantly clear from the promissory note published by “Channel 4 News” that Sharp owed and still owes Mid-Gulf Offshore more than $l million, and many more companies besides. How is it that Slaughter and May, Deloitte and Mott MacDonald were instructed to restrict their due diligence examination to the face value of the presentation put to them by Seaborne? Why on earth have they been allowed to restrict their investigation to the present company and not to consider the trading history of the individuals concerned, particularly Ben Sharp? The mayor of Ostend has made it clear that Seaborne cannot berth at his port as it has no bank guarantees and no contract with Ostend. It is without capital. Who is investing in Seaborne? Who is paying for the dredging of Ramsgate?
This is a shoddy and tawdry affair, and the Secretary of State is making a complete mess of it. This contract is likely to be unlawful and it violates every current best practice guidance issued by Whitehall. When will he realise that this country cannot continue to suffer the consequences of his gross incompetence? Why is this calamitous Secretary of State still in post?
Chris Grayling
I am not even going to address the idiocy that the hon. Gentleman has just come up with. He has made a number of allegations, which I suggest he goes and makes elsewhere. I am simply going to say this: the Government have let a contract for which we will pay no money until and unless ferries are running. That is responsible stewardship of public money. On other matters, from the due diligence we have done, there is no reason to believe that anyone involved in this business is not fit to do business with the Government. I say this again: we are not spending money unless these ferries operate.
Mr Owen Paterson (North Shropshire) (Con)
Many of us would agree that much the best end solution for the talks between the Government and the EU would be a wide-ranging free trade agreement, as offered by President Tusk in March, with zero tariffs. However, to bring the EU to the table, to counter the arrogant boasting of Mr Selmayr in the Passauer Neue Presse, which many of us have been reading since we heard about it yesterday, and to show that we are deadly serious, it is obvious that we must prepare for World Trade Organisation terms. I therefore commend the Secretary of State for his various actions to show that we are serious about preparing this country to work under those terms, through which we work with the rest of the world.
Chris Grayling
I am grateful to my right hon. Friend. It is absolutely right and proper that we prepare for all eventualities. The sad thing is to see the Labour party trying to destroy Brexit and taking a destructive approach to any sensible measures that this Government take to prepare for all Brexit eventualities. Frankly, Labour is not fit to be in opposition let alone in government.
Alan Brown (Kilmarnock and Loudoun) (SNP)
Seaborne Freight has no boats, negative equity of £374,000 and no history of running ferry or freight services. The current director, Brian Raincock, and chief executive Ben Sharp both had companies liquidated owing Her Majesty’s Revenue and Customs money, with Raincock’s debt at £600,000. HMRC is us, the taxpayer, so what constitutes due diligence? What red flags were identified? How did that company get handpicked for direct negotiations for operating out of a port that is not even ready?
The Secretary of State’s written statement indicated that direct negotiation was possible under regulation 32 of the Public Contracts Regulations 2015, which relates to emergency situations brought about by unforeseeable events. However, the Government claim to have been planning for no deal for over two years. What legal advice was provided? What level of madness exists to contract contingency planning to a company with no track record of such service?
Saying that the company will get paid only if it can deliver misses the point, because if it does not deliver the so-called emergency contingency service, that would leave us high and dry. Is that the project for which the ministerial direction was required? Is there a central Government instruction and process for the awarding of such no-deal Brexit contracts? If so, can we see it? Does this contract comply with that guidance? If so, that highlights the shambles of this Government’s no-deal preparations. When will the Secretary of State do the right thing and go?
Chris Grayling
This procurement was done properly and in a way that conforms with Government rules. It secures the position of the taxpayer by ensuring that no money will change hands unless and until the ferries are running. The hon. Gentleman does not seem to listen.
Sir Bernard Jenkin (Harwich and North Essex) (Con)
I join my right hon. Friend the Member for North Shropshire (Mr Paterson) in supporting my right hon. Friend the Secretary of State’s determination to be prepared for all eventualities. He has succeeded on aviation services, the transit convention and other things that will ensure that trade keeps flowing. However, what lessons can be learned from this situation? No matter how good this company might be, this is a difficult contracting environment in which things must be done quickly under intense political and public scrutiny. Will my right hon. Friend ask the permanent secretary to conduct a quick lessons-learned exercise so that companies with which the Government are contracting are better prepared than this one for the scale of public scrutiny to which it has been subjected?
Chris Grayling
My hon. Friend makes a valid point about public scrutiny. This contract was properly signed off by my Department’s accounting officer, and it was done in the best possible way when dealing with a new business, which is to ensure that the business will be paid only when it delivers the service. That is a responsible use of taxpayers’ money.
Lilian Greenwood (Nottingham South) (Lab)
I have already written to the Secretary of State with a long list of questions about his Department’s procurement of additional ferry services as part of no-deal planning, and I look forward to receiving his response. Yesterday, however, Lloyd’s Loading List reported some extraordinary remarks from the CEO of Seaborne Freight, Jean-Michel Copyans, about the proposed Ramsgate to Ostend route. He said:
“Then we’ve had to identify the vessels best suited to the type of crossing, which we’re keeping a secret for the moment.”
With no crew, no signed contracts in place with Ramsgate or Ostend, no clear plans to bring the infrastructure back into service and now “secret” ships, is there not a huge question mark over the deliverability of the service?
Chris Grayling
My officials and I have confidence in the deliverability of the service, but if the firm fails to deliver it, we do not pay.
Charlie Elphicke (Dover) (Con)
Does my right hon. Friend agree that no-deal contingency planning is very much in the national interest? Will he join me in condemning those who want to try to prevent no-deal planning through parliamentary wrecking tactics and sabotage, and through Trump-style Government shutdown threats? Does he agree that such tactics from the Labour party would make problems in Kent and elsewhere more likely, and that they are irresponsible, reckless and wrong?
Chris Grayling
I completely agree with my hon. Friend. He will agree that it is right and proper that we do everything we can to keep trade flowing through the port of Dover and the channel tunnel as smoothly as possible. We are taking prudent measures to ease potential pressures on those ports, which is the sensible thing to do. The risk to the taxpayer is not there, because we will not pay unless the service is delivered. The Labour party does not seem to believe in no-deal Brexit planning.
Hilary Benn (Leeds Central) (Lab)
The Secretary of State takes a rather unusual approach to contract letting, because as soon as he is questioned about the ability of the firm with which he has contracted to deliver on what it has promised, he tells the House, “If they don’t do it, we won’t pay.” He said a moment ago that he is confident that the company will be able to run the service, so will he answer a very simple question? Has Seaborne Freight told the Department which vessel it has acquired in order to provide the service, which could be needed in just over two months’ time?
Chris Grayling
The company has told my Department in great detail about its plans, which are being finalised commercially. We are confident that the firm will deliver the service.
Sir Nicholas Soames (Mid Sussex) (Con)
My right hon. Friend will be aware that Seaborne Freight has had it in mind for well over two years to start the Ostend-Ramsgate route. Does he agree that the constant denigration of the contract, which means that the contractor will not get a single penny of anyone’s money until it fulfils the contract, is damaging to sensible work? Finally, if we were—God forbid—to crash out on WTO terms in the extreme circumstances mentioned by my right hon. Friend the Member for North Shropshire (Mr Paterson), will the Secretary of State tell the House whether he would have any arrangements to take up shipping from trade?
Chris Grayling
My right hon. Friend makes a good point. There seems to be visceral hatred of small business on the other side of the House and a visceral belief that the Government should not be willing to contract with small business. The Government are told time and again that we should contract and work with small business, and help small businesses to develop, but when we do so, we get nothing but a wall of criticism from Opposition Members. The Labour party hates business. This new Labour party is very different from the one of 10 years ago—it simply hates business.
I say to my right hon. Friend that if we find ourselves in a no-deal situation, there are other measures that we can bring forward. We are actively looking at how we would do so.
Diana Johnson (Kingston upon Hull North) (Lab)
I have never seen a Minister bluster and bluff quite as much as this Minister has today. Following everything that the Secretary of State has heard from the shadow Secretary of State and the Chair of the Transport Committee, does he not have one iota of concern about the contract being let to this shyster?
Chris Grayling
Mr Speaker, that is an inappropriate thing for any Member to say, and I am not going to respond to it.
Mr Speaker
I simply say that the Secretary of State is perfectly entitled to his assessment of whether it is appropriate in political terms. No breach of order has taken place procedurally, but the Secretary of State has made his judgment, and I accept that.
Dr Sarah Wollaston (Totnes) (Con)
I am glad to hear the Secretary of State confirm that no money will change hands, but there will undoubtedly be vast manpower and bureaucracy costs in no-deal planning, and we know that there are actual costs when it comes to commissioning refrigerated warehousing and special air freight. All that could be avoided if the Government ruled out no deal. No deal would be catastrophic, and no sensible Government should inflict that on their people.
Chris Grayling
Of course, the best way of avoiding no deal is to ensure that the deal passes through this House, and I will vote for it next week.
Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
It feels like we are on the set of a film called “Carry On Brexit”. Le Figaro described the contract as ferries “sans bateaux”. The firm’s terms and conditions are from a pizza delivery company, so we wonder whether the MV Hawaiian and the MV Pepperoni will be sailing the route. To get away from “Carry On Brexit”, the serious point is that the Secretary of State is saying that if the company does not deliver ferries, there will be no payment, but if it does not deliver the ferries, what will be the fall-back, stopgap or contingency? If there are no ferries, the whole thing falls apart—it is “Carry On Brexit”!
Chris Grayling
What a load of absolute tripe. I can tell the hon. Gentleman has not been listening to me. Ninety per cent. of this contract has been awarded to substantial and established ferry operators—DFDS and Brittany Ferries. We did not have a reason to exclude a small business from taking a small part of the contract with a legitimate, valid bid.
Craig Mackinlay (South Thanet) (Con)
It is remarkable, is it not? If the Government were to do no planning for all Brexit eventualities, they would be condemned. Now they are doing sensible planning, they face derision. I have met Seaborne Freight, which has shown itself, over a number of years, to be the only party interested in running new services between Ramsgate and Ostend—that was even before this contingency planning. Personally, I welcome the dredging and improvements now taking shape at the port of Ramsgate at no cost to local taxpayers. We will have a regeneration bonus, no matter what, and I welcome that.
Thanet District Council and the people of Ramsgate will do all they possibly can for Brexit provision, so I welcome the measures the Secretary of State has taken, but there are people in this House who do not seem to be listening. Will he say once more that there will be no cash for Seaborne Freight if it does not run the services?
Chris Grayling
I am very happy to reiterate that. It is a responsible approach to a new contract with a new business that we will pay when the business delivers. It is disappointing to hear that the Labour party is so opposed to the regeneration of the port of Ramsgate. It was not so long ago that the Labour party represented Ramsgate in Parliament but, given this negative attitude, it does not deserve ever to do so again.
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)
One of the directors of Seaborne Freight has been named by the Financial Times as Brian Raincock, whose previous company went into liquidation in April 2017 owing £585,000 to its main creditor, HMRC, which is essentially the British taxpayer. Is the Secretary of State content that this excruciating fact apparently did not come up during his Department’s due diligence on Seaborne Freight before it awarded the contract? Whether or not Seaborne Freight delivers the ships, it has still been awarded a £14 million contract, so hon. Members on both sides of the House rightly have an issue with the Secretary of State and his response today.
Chris Grayling
I keep telling the hon. Lady that the £14 million will not be paid unless Seaborne Freight delivers a service. I will not comment on the tax affairs of an individual, and nor should she. The due diligence on all those participating in the company found no reason why they are unfit to do business with the Government.
James Duddridge (Rochford and Southend East) (Con)
I congratulate the Secretary of State on his detailed preparations, but will he also consider how south Essex can support those preparations at Tilbury, London Gateway and London Southend airport? London Southend airport has experience of just-in-time delivery to Dagenham and is run by Stobart Group, an excellent freight haulage firm.
Chris Grayling
I absolutely agree. Of course, if we find ourselves in a no-deal scenario, a number of other ports, including Tilbury, will play a part. I hope we do not reach that point, and I think we all agree that we want a sensible free trade agreement with the European Union after 29 March, but the reality is that we need to make sure we are prepared for all eventualities. In such a situation, many of our ports up the east coast and along the south coast will play an important part in making sure that trade flows freely.
Joanna Cherry (Edinburgh South West) (SNP)
I am very concerned about the legality of this procurement process. In his statement yesterday, the Secretary of State said that he had proceeded under regulation 32 of the Public Contracts Regulations 2015, which allows the Government to circumvent the normal, transparent and EU-mandated procedures. I have a copy of the contract notice here, which is freely available on the internet, and it says that the basis for proceeding under regulation 32 is “extreme urgency.” As my hon. Friend the Member for Kilmarnock and Loudoun (Alan Brown) said, the idea that no deal is a possibility and, to quote the Prime Minister, that no deal is better than a bad deal has been around for some time, so how can the Government, at this late stage, justify proceeding with procurement that is appropriate only in the case of extreme urgency?
I have two questions for the Secretary of State and, just for once, my constituents would like to hear an answer. First, will he release the legal advice that permitted him to proceed under regulation 32? Secondly, as he will be aware, if he has proceeded wrongly under regulation 32, his Department and the Government are open to legal action. How much money has been set aside for the contingency of court action about the illegality of the procurement process and a claim for damages?
Chris Grayling
It is my view that, as we move towards leaving the European Union, preparing for all eventualities is a matter of extreme urgency, which is also the advice that my Department has received and has given to me.
Mr Steve Baker (Wycombe) (Con)
If Opposition Members had an ounce of sense and concern for the national interest, they would welcome the fact that the Department for Transport is preparing to leave the European Union under all circumstances and they would recognise the courage of the Secretary of State, his Ministers and his officials in testing and operationalising their plans. Does he share my disbelief at the policies that are being urged on him by Opposition Members, and will he reassure me that he will continue his excellent work to prepare this country for leaving?
Chris Grayling
I am very grateful to my hon. Friend for his comments. I give him an absolute assurance that I will continue that work. Frankly, the tragedy is that the Labour party seems to have abandoned interest in the national interest.
Tom Brake (Carshalton and Wallington) (LD)
The train timetable fiasco, the drone disruption, the Manston lorry park carry-on and, now, ferrygate—the Secretary of State is the embodiment of the Peter principle.
On the earlier point about competition, can the Secretary of State explain the
“extreme urgency brought about by events unforeseeable by the contracting authority”?
Can he explain what was unforeseeable about no deal, for which the Government have been planning for the past couple of years and to which they have referred many, many times in this place? What was unforeseeable about that?
Chris Grayling
Sadly, what was unforeseeable is the attitude of many hon. Members, mostly Opposition Members, towards the Prime Minister’s sensible agreement. The agreement meets all their requirements, and they are now saying they oppose it anyway.
Mr Simon Clarke (Middlesbrough South and East Cleveland) (Con)
The shadow Secretary of State and I both represent Middlesbrough, which voted overwhelmingly to leave, so I found his comments attacking the Secretary of State for making robust preparations for no deal very surprising.
Will the Secretary of State commit to engaging Teesport in the preparations for any scenario that may arise from Brexit? It is important that we make all the preparations required for all contingencies.
Chris Grayling
I am very grateful for my hon. Friend’s comments. I reiterate that we are looking to involve other ports across the country as we make preparations for an eventuality that I hope will not happen. The reality is that the people of Middlesbrough voted clearly to leave, and they will not understand why the hon. Member for Middlesbrough (Andy McDonald) is letting down their 2016 vote.
Mr Chris Leslie (Nottingham East) (Lab/Co-op)
If this contract fails, our country will have even greater problems with the continuity of trade, so it will be the public who pay the price—it will not be just the central contractor that loses money.
I seek a bit of accountability from the Secretary of State. The front page of today’s Financial Times says that the Department for Transport commissioned a study showing that just an extra 70 seconds of analysis or discussion of each truck crossing the channel could lead to a six-day queue for vehicles getting on a ferry. Has he seen that study? Is the study accurate, and will he publish it now?
Chris Grayling
We have made it very clear to the House that queues will be caused if the French seek to impose maximum control and put in place limited checks. Why on earth does the hon. Gentleman think we are putting some of these contingency measures in place? He asked what happens if the contract does not go ahead, but I have said that 90% of the extra capacity is being provided by two established operators that will continue to deliver the services we have contracted.
Bob Stewart (Beckenham) (Con)
Will my right hon. Friend reassure the House that the Port of Dover and Eurotunnel are making detailed contingency plans in case of no deal?
Chris Grayling
I give my hon. Friend that assurance. We are working with both organisations, and we are also having detailed discussions with the French. The leadership in Nord-Pas-de-Calais and Paris, and the leadership of the port and the tunnel on the French side, are as keen as we are to see fluidity continue through those ports. We are taking contingency measures, but our prime focus is on making sure that trade flows freely, whatever checks are required.
Alison Thewliss (Glasgow Central) (SNP)
The Transport Secretary’s colleague the Home Secretary has been trying to stop people getting across the channel while the Transport Secretary is busy contracting with companies that have no ferries at all. Is his next whizzo move to contract people who are doing people smuggling in dinghies?
Chris Grayling
That is an absurd question that does not merit an answer either.
Damian Collins (Folkestone and Hythe) (Con)
If there are delays in processing freight through the channel tunnel in my constituency or the port of Dover, is the Secretary of State convinced that his contingency planning means that we will not see a return to Operation Stack and that the M20 motorway will remain open in both directions if there are delays? Will he also update us on when he expects his Department to produce its site list for the potential long-term off-road lorry parking solution in Kent?
Chris Grayling
It is my belief that Operation Brock will prevent the closure of the M20. That is my prime concern—what happened in 2015 should not be repeated. I think there is sufficient capacity to ensure that that will not take place. We have completed the infrastructure works that are necessary on the motorways to ensure that the flow in both directions can continue, and we are now doing the detailed testing to understand flows of traffic and how to manage them to make sure that we do not see the kind of disruption we saw in 2015. I am hopeful that we will move quickly from the consultations we are having now to being able to decide a permanent location and get the thing dealt with once and for all.
Grahame Morris (Easington) (Lab)
Any members of the public watching this debate will be absolutely amazed. They will think it is bizarre that we have a Transport Secretary who signs a shipping contract with a shipping company with no ships. Given that the company is going to hire in ferries, does he have any idea what plans it has to crew its ferries and whether UK crews would be used?
Chris Grayling
There is a complete lack of understanding of business models on the Opposition Benches. Opposition Members should understand that when they go on holiday next summer there is a fair chance they will be flying with an airline that owns no planes. The reality is that transport operators do not always own their own assets; they contract or charter them in and they operate the service. I do not think that Opposition Members understand that. As to the crewing of the ships, that is a matter for the company itself.
Victoria Prentis (Banbury) (Con)
Will the Secretary of State confirm to me that it is normal to award contracts, in a small part, to new operators and that while perhaps 90% of operators used by the Department are established, it is perfectly normal for the Department properly—acting legally as part of its procurement process—to include new operators as part of the consideration?
Chris Grayling
My hon. Friend is absolutely right; that is normal, and we do not actually do enough of it. The Government are frequently criticised for contracting only with big business and not with small business. Ironically, now we are contracting with small business for a small part of a package we need, we are getting criticised for it, so we cannot win either way.
David Hanson (Delyn) (Lab)
Further to the question asked by my hon. Friend the Member for Liverpool, Wavertree (Luciana Berger), will the Secretary of State confirm that one director of this company owes £580,000 to HMRC from a previous failed administration? Will he say what due diligence was undertaken on that contract? Will he also tell us how we are going to repay that money to the Treasury?
Chris Grayling
I am not going to comment on individual tax affairs. All I am going to say is that due diligence was carried out into the participants in this business and no reason was found why they should not contract with Government.
Mr Marcus Fysh (Yeovil) (Con)
It is very reassuring to hear about my right hon. Friend’s discussions with the ports of Dover and Calais and the contingency plans that he is putting in place. Will he tell us more about how companies can get to know what they have to do to make sure that their declarations are appropriately communicated to the port? That seems to me to be a potential pinch point that we need to look at.
Chris Grayling
Certainly one part of the no deal preparations that we are now going through—HMRC is very actively engaged in this—is about the declaration processes that businesses would need to go through. The reality is that this happens already. Goods are shipped from this country to Switzerland, for example, through established processes in this country and on the continent. We will need to ensure in the run-up to a no-deal Brexit that business is up to speed with what it needs to do. A huge amount of work in this respect is already happening.
Sir Mark Hendrick (Preston) (Lab/Co-op)
Things are getting bad when a former Conservative party chair accuses this Government of using Dr Strangelove tactics. This is a perfect example. Instead of trying to prepare for a no-deal scenario, why do the Government not just look at extending article 50 so that we can avoid this catastrophe?
Chris Grayling
Two things: first, I think it would be wrong to block Brexit. Secondly, I think it is right that the Government prepare for all eventualities. They would be accused of being irresponsible if they did not do so.
Helen Whately (Faversham and Mid Kent) (Con)
The view from my constituency, which has the M20 and the M2 running through it, is that we must not have another Operation Stack, so I welcome all contingency measures that my right hon. Friend is taking, but the reality is that whatever happens, the vast majority of our freight will have to continue to go through Dover-Calais. Therefore, the flow of that route is absolutely critical. Will he advise us of how ready the French are to carry out any customs checks that might be required in the event of a no-deal Brexit?
Chris Grayling
We have had detailed discussions with the French. I am very optimistic that they have the same ambition that we do, and they are putting in place plans to ensure that happens. I have had personal commitments from the leadership in Nord-Pas-de-Calais, and of course there is a legal requirement for them put those plans in place, particularly with regard to the tunnel, as the treaty of Canterbury requires them to keep trade and traffic flowing smoothly through the tunnel. I have every reason to believe the French will uphold that commitment.
Richard Burden (Birmingham, Northfield) (Lab)
In April 2018, Seaborne Freight issued in writing an investor briefing that claimed:
“Detailed port agreements with Ramsgate and Ostend negotiated and agreed”,
but it is now clear that no such agreements exist to this day. Indeed, the Mayor of Ostend has given an interview in which he said:
“A start-up in March is simply impossible. There is currently no agreement with Ramsgate and also with Ostend”.
If the Secretary of State has satisfied himself that due diligence checks have been carried out that confirm the suitability of Seaborne Freight to receive a £13.8 million Government contract, will he tell us what weight he has attached to the fact that Seaborne Freight has issued inaccurate investor briefings? Will he also finally answer the question asked by my right hon. Friend the Member for Leeds Central (Hilary Benn), the Chair of the Brexit Committee, and name just one ship that due diligence checks have revealed Seaborne Freight is likely to be able to bring into service by March?
Chris Grayling
I am not sharing, nor is it my responsibility to share, the company’s commercial information. I simply remind the hon. Gentleman that no money will change hands unless the company is running this service. That seems to me to be the best possible protection for the taxpayer’s money.
Stephen Metcalfe (South Basildon and East Thurrock) (Con)
Will my right hon. Friend expand on the discussions he has had with the management team and what expertise and experience they are bringing to the table to operate this service?
Chris Grayling
My officials have had detailed discussions with the management team and have gone through their plans in detail. My hon. Friend might have seen the article in Lloyd’s List, which has also been shown the business plan and gave it a thumbs-up as being a viable option. This is a team of people who have experience in this industry and who we believe will deliver this service, but of course they will be paid only if they do so.
Stephen Morgan (Portsmouth South) (Lab)
Some 95% of fresh produce in the Channel Islands gets there via Portsmouth international port. Delays at our port would mean empty shelves in the Channel Islands in 48 hours. What guarantee can the Secretary of State give today to ensure uninterrupted delivery from all our ports of critical goods such as fresh food and medicine?
Chris Grayling
On incoming freight, we intend not to put in place complex checks at the border. We have been clear all along that the Government’s priority, apart from security, will be to ensure free movement of trade. Of course, goods arriving from the Channel Islands will not be subject to the kind of constraints we might see going in at Calais, and the issues around transport blockages really relate only to the short straits around Dover and the tunnel, not to other ports, where the movement of ships is not on a sufficient scale to cause significant blockages.
Matt Warman (Boston and Skegness) (Con)
It would be irresponsible not to prepare for no deal, of course, but would it not be even more irresponsible to be spending money where we did not need to?
Chris Grayling
That is why we are not going to spend the money until the ships are available and running. The reality is that we do need to spend money to prepare for a no-deal Brexit. I hope that money proves not to be needed—I want us to have a sensible partnership in the future—but believe me, if we were here now facing a no-deal Brexit and no preparation had been done, the shouting from the Labour party would be enormous.
Mr Paul Sweeney (Glasgow North East) (Lab/Co-op)
The Secretary of State talks about supporting entrepreneurialism. I am a big fan of “Dragons’ Den”, and I think this is one of those pitches that everybody would have been cringing at had they actually seen it, but it seems to be good enough for the Secretary of State. He talks about a no-deal Brexit. I think the Government should rule out a no-deal Brexit, but if he is insistent on planning ahead for it he needs sure delivery of freight capacity on shipping routes. The Ministry of Defence has immediate access to four roll-on roll-off ferries. Why on earth has he not committed to using those assets, which are immediately available to him, instead of insisting on a highly risky contractual arrangement with a dubious private contractor?
Chris Grayling
What I have done is insist on a highly substantial commercial arrangement with two very established cross-channel ferry operators and given a small amount of business to a new operator. If there is a no-deal Brexit, which I hope will not happen, we have several other measures that we can bring into place.
Rebecca Pow (Taunton Deane) (Con)
Will my right hon. Friend assure the House that he is in consultation with not only Dover and Calais but other ports about what would happen in the event of no deal, which I sincerely hope will not happen? The way to avoid no deal, of course, is to vote for the deal. In Taunton Deane, many businesses, lots of them small, rely on exporting and ferries. They must not be hampered and we must act responsibly to give them assurances.
Chris Grayling
The clearest assurance that I can give is that I have been to Calais and met my French counterpart to talk about this issue, I have met the president of the Nord-Pas-de-Calais, and officials have had discussions, and I have had no sense from any of those conversations that the French want anything other than to maintain the fluid movement of trade through the channel ports. That is something to which we should all aspire.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
Does not this sorry episode clearly indicate that the absurd mantra of a managed no deal is a contradiction in terms?
Chris Grayling
As I say, the Government do not aspire to a managed or an unmanaged no deal—we want to secure a deal—but it is not responsible not to prepare for all eventualities.
Mr Philip Hollobone (Kettering) (Con)
I commend the Secretary of State for recognising that it is absolutely in the national interest to make preparations for a no-deal Brexit, not least because it strengthens our negotiating hand, even at this late stage. Will he tell the House what the common transit convention is, not only for the benefit of the House but in particular for the benefit of those on the Opposition Front Bench, and explain how it will mitigate the worst effects of impeded traffic flows in the event of no deal?
Chris Grayling
The common transit convention is the international agreement by which trade flows across multiple countries. It has already been announced that in leaving the European Union the United Kingdom will remain part of that convention, which will play a significant part in ensuring that trade flows freely in all situations. None the less, we need to make sure that we cannot get blockages at key ports, and that is what we are working to do.
Wayne David (Caerphilly) (Lab)
In the interests of transparency, will the Secretary of State indicate to the House which companies were considered for the contracts?
Chris Grayling
We received three compliant bids, all of which we judged acceptable and accepted. Two of them were from major operators that will provide around 90% of the capacity, plus there was this small additional contract. Should we choose to return to the market, there is also potential interest in the provision of extra capacity. I hope we will not need that, because I hope that we will have a proper deal come next week.
Douglas Chapman (Dunfermline and West Fife) (SNP)
It has certainly been an “I see no ships” sort of week, but what consideration has the Secretary of State given to utilising ports in other parts of the UK—namely, the high-exporting country of Scotland? I hear really good things about the potential for a Rosyth-Zeebrugge ferry link, for which potential ships have actually been identified. Is not Scotland losing out? How can we realise Scotland’s potential in this Brexit fiasco?
Chris Grayling
I appreciate that the Scottish National party does not support Brexit and, indeed, would like to do everything it can to stop Brexit, but we will work to make sure that every part of the United Kingdom, including Scotland, is able to continue to trade freely around the world and gain from the benefits that will be achieved in this country in a post-Brexit world.
Kevin Brennan (Cardiff West) (Lab)
I see no ships, but I do smell something fishy, and I think other colleagues do as well. Is the Secretary of State really saying to the House that the best choice for the contract was a company that cut and pasted its terms and conditions at the last minute from a fast-food company? Is his new Brexit mantra “A meal deal’s better than no deal”?
Chris Grayling
Of course, it is not a single contract. There are multiple contracts, of which 90% is going to two of the biggest cross-channel operators—something the Labour party appears to be completely ignoring. The fact is that we have chosen to give a small proportion of the business to a legitimate bid from a small start-up business, and I think that is something the Government should do more often, not less.
Chris Stephens (Glasgow South West) (SNP)
I think our plea to the contractors is that we want these ships, not excuses. Quite astonishingly, in answer to a question from the hon. Member for Easington (Grahame Morris), we heard from the Secretary of State that there will somehow be driverless ferries—that there will be no staff—so presumably there is no national minimum wage requirement in the contract. First, will the Secretary of State publish the legal advice that he says he was given? That seems sensible, given the House’s concerns. Secondly, will he tell us what were the procurement requirements in relation to equipment, such as ferries, or indeed in respect of the socioeconomic impact in relation to wages, for example?
Chris Grayling
In effect, what we are doing is buying tickets in advance on cross-channel ferries on a number of routes around the country. That is what we are doing. It is no more and no less than that.
Alex Sobel (Leeds North West) (Lab/Co-op)
It is quite incredible that the Secretary of State has awarded a contract to a company with no ships, no investors, no customers, no credible business plan, no employees and no premises. Is he aware that Seaborne Freight tried to get an option to purchase the following four ships: the Hartmut Puschmann, the Espresso Catania, the Espresso Ravenna and the Via Adriatico? They all operate in the southern Mediterranean and would need a complete refit to be able to operate in the channel. In addition, two of the ships failed EU safety inspections. On top of that, Tirrenia, which owns the ships, said that it would not sell them because it did not believe that Seaborne Freight had the money. I visited Tirrenia’s website and found that I could go on a Mediterranean cruise on the four vessels in April. Was the Secretary of State aware of that?
Chris Grayling
I am not going to comment on the commercial plans of Seaborne Freight. I am satisfied that it will have the ships necessary to operate the service, but if it is not able to deliver them, it will not be paid.
Luke Pollard (Plymouth, Sutton and Devonport) (Lab/Co-op)
Brittany Ferries has been awarded a no-deal ferry contract but, unlike Seaborne, it actually has ferries. No-deal sailings into Millbay port in Plymouth will increase traffic by 50%. Will the Secretary of State point to where on the 200 metres of tarmac between the ferry port and Plymouth city centre he expects facilities to be built for the lorry park, the customs checks, the veterinary checks and the environmental health checks?
Chris Grayling
Let me say two things. First, I thought it would be good for the port of Plymouth to have more traffic; I am sorry that the hon. Gentleman does not agree. Secondly, the reality is that, as I said earlier, we do not intend to impose a hard border for traffic coming into the United Kingdom. We intend to focus on the fluidity of trade as our priority. It will be security first and fluidity second, and other matters will come well afterwards. We are not imposing a hard border on this side of the channel.
Points of Order
Danielle Rowley (Midlothian) (Lab)
On a point of order, Mr Speaker. Following the revelation by a former universal credit helpline employee that call handlers are instructed to use “deflection scripts” to hurry people off the phone when they have phoned up for help with universal credit, my office submitted a freedom of information request to the Department for Work and Pensions to ask to see the scripts. The response I received was that there are no scripts, but that there are “agent-led processes” and “supportive lines available”. The Department did not provide any detail of those lines, which was the clear intention of the FOI request. I do not think that the Department should be able to use semantics to avoid scrutiny. I have requested a review of the response and asked whether I could be provided with the relevant materials.
The code of practice on FOI rules states that requests should be acknowledged and replied to within 20 days. Even accounting for the Christmas break, that date has now passed and I have not received a response. The Government appear to be flouting the mechanisms set up to ensure that they are transparent and can be held to account by Parliament. Will you please advise me, Mr Speaker, on what I should do to receive this important information, to which I am entitled under freedom of information legislation, as the Government have not complied?
Mr Speaker
I am grateful to the hon. Lady for her point of order and for her characteristic courtesy in giving me advance notice of her intention to raise it. I am sorry to disappoint her, but I am not sure that I can help her today. The reason is that responses to freedom of information requests by Government Departments are a matter for those Departments; the Chair has no locus in relation to the subject. It is perfectly open to the hon. Lady to continue to pursue the matter, but she does so under a regime that is informed by statute and in relation to which she will, I imagine, have rights, and quite possibly rights of appeal. As I am sure the hon. Lady will know, the issues fall within the purview of the Information Commissioner. However, whereas in relation to answers to parliamentary questions there is a direct parliamentary ownership and the Chair does have locus, in this case I do not. That said, the hon. Lady has made her point with force and alacrity, and it will have been heard on the Treasury Bench.
Mr Steve Baker (Wycombe) (Con)
On a point of order, Mr Speaker. I am absolutely certain that if in the urgent question anything disorderly had happened you would have immediately corrected it, but I wonder whether there is any way that the House could be asked to reflect on how much longer privilege can survive in a democratic society if it seems to appear that privilege is used for party political purposes to smear those who, perhaps, do not deserve to be smeared.
Mr Speaker
I note what the hon. Gentleman says and I thank him for his courtesy in accepting that I would rule out of order something that, under our procedures, warranted such a decision.
The hon. Gentleman, who is both a noted intellectual—sometimes an iconoclastic intellectual—and someone who always likes to explore new subjects, has raised a most interesting matter appertaining to privilege. He could usefully busy himself by reading the literature on the subject of privilege. There is, for example, an ongoing debate about whether the House should work, as it does, using traditional methods in relation to privilege, or whether there is a case for a modern statute on the subject. I do have views on that matter, but I will not burden either him or the House with them at this time, but I just have this image of him beetling off to the Library and reading scholarly tomes on the subject, and ere long we will probably hear his thoughts on the future of privilege.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
On a point of order, Mr Speaker. During Business, Energy and Industrial Strategy questions this morning, the hon. Member for Stirling (Stephen Kerr), who is no longer in his place but who has been notified that I am making this point of order, asked the Minister what his response was to the conclusion of the report of the BEIS Committee, published last week, which includes myself as a Front-Bench spokesman. The report said:
“The consistent and overwhelming message expressed by these sectors is that to make business decisions they need certainty and it is for that reason they support the Withdrawal Agreement.”
What he failed to do, I am sure inadvertently, was to add that it said:
“Leaving the EU without a deal would have catastrophic consequences and must be avoided. That said, no businesses that we have taken evidence from held the view that—from an industry perspective—the Withdrawal Agreement and Political Declaration provide a deal as good as the one we already have with the EU.”
How do I go about correcting the record, Mr Speaker?
Mr Speaker
I think the hon. Gentleman knows that he has found his own salvation—he has just done that. I am bound to say to him—I hope that he will take this in the right spirit—that over the past three and a half years or so, certainly since the 2015 election, spats between members on the Scottish National party Benches and on the Government Back Benches, particularly involving those on the Scottish Government Back Benches, have become an increasing sport. They have become not merely an increasing spectator sport, but, increasingly, a participant sport. The hon. Gentleman has corrected the record as he sees it, and I hope that, as a consequence, he will go about his business for the rest of the day with an additional glint in his eye and a spring in his step.
Mr Paul Sweeney (Glasgow North East) (Lab/Co-op)
On a point of order, Mr Speaker. It relates to the point of order raised by my hon. Friend the Member for Midlothian (Danielle Rowley) about parliamentary scrutiny. I tabled a written question to the Government—in this case the Home Office—asking them when they intend to announce the new contracts for the asylum seeker accommodation in Scotland and I received a reply yesterday saying that they would be announced in “due course”. I have now heard through the press and through social media that they have in fact announced the contracts today, and the Mears Group will take over from Serco. Surely that sort of ambiguity and obfuscation is really disrespectful to Members. It also flouts the whole process of having written parliamentary questions if the Government can be so vague in their responses.
Mr Speaker
I will go so far as to say that I agree with the hon. Gentleman that the answer to his question was not helpful. Moreover, I hope that he is with me when I say that, ordinarily, the deployment of the three words, “In due course,” tends to suggest and to be interpreted by Members to mean not for quite some time. It is therefore at least mildly surprising that the hon. Gentleman got such an uninformative response, but one that perhaps suggested that progress would not be speedy only to discover indirectly, rather than at first hand, that the announcement had in fact been made. I do understand his discontent, and I can only repeat my view that ministerial replies to parliamentary questions should be both speedy and substantive. In providing such replies, it would always be helpful if Ministers saw it as a proper courtesy to answer Members first. If there are no further points of orders—
Sir Desmond Swayne
If I might offer an observation, Mr Speaker, on your response to the point of order raised by my hon. Friend the Member for Wycombe (Mr Baker).
Mr Speaker
I am now all agog. I am always excited and in a state of eager anticipation to hear what the right hon. Gentleman has to say on everything.
Sir Desmond Swayne
I just wish to offer the opinion that, with respect to the answer that you gave to my hon. Friend, Mr Speaker, change is always for the worse.
Mr Speaker
I cannot say that I am entirely surprised to hear the right hon. Gentleman volunteer that view. He and I came into the House together in May 1997, so I have known him for nearly 22 years. I think that he is probably well familiar with, and even given to regularly reciting to himself, that old adage of Lord Falkland, which is that if it is
“not necessary to change, it is necessary not to change.”
I think we will leave it there for now, but I will always profit from the right hon. Gentleman’s counsels.
International Development Assistance (Palestinian National Authority Schools)
Tuesday 8th January 2019
(5 years, 3 months ago)
Commons ChamberRead Full debate International Development Assistance (Palestinian National Authority Schools) Bill 2017-19 View all International Development Assistance (Palestinian National Authority Schools) Bill 2017-19 Debates Read Hansard Text
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Dame Louise Ellman (Liverpool, Riverside) (Lab/Co-op)
I beg to move,
That leave be given to bring in a Bill to prohibit international development assistance to schools operated by the Palestinian National Authority that do not promote values endorsed by the United Nations Educational, Scientific and Cultural Organization; to require the Secretary of State to publish an annual report on the extent to which such development assistance for schools operated by the Palestinian National Authority supported the promotion of those values; and for connected purposes.
I know from the many speeches that I have delivered in this House on this topic that the conflict between Israel and the Palestinians provokes strong passions. Tragically, the past five years have seen the total absence of a political process that brings both sides together to make painful but necessary compromises to resolve this conflict. There is still vital work that we can do to strengthen the civic society foundations on which any lasting settlement must be built. We must recognise the threat posed to these peace-building efforts by those who incite hatred, glorify violence and promote terror. The reality is that the Palestinian Authority is at the heart of this threat. We can no longer turn a blind eye to what British aid is helping to foster: not the infrastructure of a democratic, independent and peaceful Palestinian state, but a body promoting values that are inimical to the establishment of that state.
My right hon. Friend the Member for Enfield North (Joan Ryan) suggested in her debate last July that
“it is vital that old hatreds and prejudices are not passed on to new generations of children and young people.”—[Official Report, 4 July 2018; Vol. 644, c. 165WH.]
The Palestinian Authority is acting as a transmission belt for those very hatreds and prejudices.
The focus of my Bill is education, which is crucial in shaping young minds and it is the focus of the Department for International Development’s aid to the Palestinian Authority. The memorandum of understanding that governs this British aid is explicit: as a condition of funding, the PA must adhere to the principles of non-violence and respect for human rights. Ministers tell us repeatedly that their unpublished reviews suggest that the PA upholds those principles. The facts show otherwise.
For example, take the naming by the Palestinian Authority of schools, summer camps and sports tournaments after terrorist murderers and Nazi collaborators. At least 20 PA schools in the west bank and Gaza are named after terrorists, and three after Nazi collaborators. Those include Salah Khalaf, the head of Black September, a terror group whose name will forever be associated with the torture and murder of 11 Israeli athletes at Munich in 1972; Nash’at Abu Jabara, a member of Hamas, who built the suicide belts used by bombers in numerous terror attacks on Israeli civilians; and Amin Al-Husseini, the Grand Mufti of Jerusalem during the British mandate, a Nazi collaborator who moved to Berlin during the second world war, was responsible for an SS division and fought against the release of 5,000 Jewish children who perished in the gas chambers. These are not choices made by obscure local officials. They are deliberate decisions taken by the Palestinian Authority at the highest levels.
Ministers in this country do not appear concerned. Last year, the Department for International Development claimed ignorance on whether any of the thousands of teachers and public servants whose salaries it pays work in schools named after these purveyors of hate, whose names should be consigned to the history books. Outside the classroom, too, children are subjected to a barrage of vicious antisemitic propaganda. Children’s programmes on official PA TV feature children reciting poems calling Jews “barbaric monkeys”, “the sons of pigs” and the “most evil among creations”.
According to the Institute for Monitoring Peace and Cultural Tolerance in School Education, or IMPACT-se, the reformed school curriculum for primary and secondary schoolchildren introduced last September is
“more radical than ever, purposefully and strategically encouraging Palestinian children to sacrifice themselves to martyrdom”.
Five-year-olds are taught the word for “martyr” as part of their first lessons in Arabic, 11-year-olds are taught that martyrdom and jihad are
“the most important meanings of life”,
and teenagers are taught that those who sacrifice themselves will be rewarded with
“72 virgin brides in paradise”.
Arabic language books describe terrorists such as Dalal Mughrabi—who led the infamous coastal road massacre in which 38 Israelis, including 13 children, were massacred—as “heroes”.
These lessons in hate are all-pervasive, infesting every aspect of the curriculum, and this curriculum drips with vile antisemitic tropes—that Jews sexually harass Muslim women and that they attempted to kill the Prophet Mohammed. There is no suggestion that peace with Israel is desirable or possible. References to peace agreements, summits and proposals previously present in school books have been expunged. In their place are lies about the al-Aqsa mosque being under threat and calls to “eliminate the usurper”—to conquer Haifa and Jaffa.
Young Palestinian minds are being poisoned. The opportunity for Britain to help promote the values of peace, reconciliation and coexistence is being squandered. This is not about a peaceful future. It is a scandal.
DFID Ministers were warned 18 months ago about the content of the new curriculum. They dismissed those concerns. Promised reviews have never materialised. Last September, the Minister of State, Department for International Development, the right hon. Member for North East Bedfordshire (Alistair Burt), claimed that the PA had
“taken action to help address concerns raised”.
IMPACT-se research shows that there have been no major changes in the current school year. Indeed, the PA has deceived international donors for nearly 20 years with the suggestion that controversial schoolbooks are simply being “piloted”. Ministers have been repeatedly asked to suspend all aid to the PA that directly or indirectly finances those teaching and implementing this curriculum until fundamental changes are made. They have refused to do so. It is now time to require them to act.
My Bill calls for two actions: first, that teaching programmes in Palestinian Authority schools financed by the UK should promote common values such as peace, freedom, tolerance and non-discrimination; and secondly, that Ministers should conduct and publish an annual review to ensure that UK funds are spent in line with UNESCO-derived standards of peace and tolerance in education. British aid should support the goal, shared by Members across this House, of a two-state solution. It cannot and must not make that goal harder to achieve, but that is precisely what our support for these lessons in hatred is currently doing. It is time to stop this pernicious policy that works against a peaceful future for Palestinians and Israelis.
Sir Hugo Swire (East Devon) (Con)
I rise to oppose this Bill and start by drawing the attention of the House to my chairmanship of the Conservative Middle East Council. Proceedings Time for conclusion of proceedings New Clauses, new Schedules and amendments relating to the effect of any provision of the Bill on child poverty or equality Two hours after the commencement of proceedings on the Motion for this Order New Clauses, new Schedules and amendments relating to the subject matter of any of Clauses 68 to 78, 89 and 90 Three and a half hours after the commencement of proceedings on the Motion for this Order New Clauses, new Schedules and amendments relating to tax thresholds or reliefs; new Clauses, new Schedules and amendments relating to tax avoidance or evasion; remaining new Clauses, new Schedules and amendments to Clauses and Schedules; remaining proceedings on Consideration Five hours after the commencement of proceedings on the Motion for this Order
The British Government have already agreed to a proper review of the Palestinian curriculum that is due to report by September this year. Surely, it makes sense to wait for that investigation to run its course and only then to consider—when we have seen all the evidence—whether there is any need to legislate on this difficult matter.
It is worth reminding the House that, according to DFID,
“no UK taxpayers’ money to the Palestinian Authority goes to schools or to fund education materials that incite violence.”
I do not completely understand where the hon. Member for Liverpool, Riverside (Dame Louise Ellman) is coming from—whether she wants to assess the overall curriculum and textbooks used by the Palestinian Authority, or whether she wants to assess each individual’s teaching and interpretation of the curriculum. In 2013, a team of American, Israeli, Palestinian and international education experts carried out a study funded by the US State Department, finding that dehumanising or demonising is rare in both Palestinian and Israeli textbooks.
With the United Nations Relief and Works Agency facing its greatest financial crisis ever and the PA nearing a financial breakdown, surely this is not the time to add pressure by making further cuts. Both the PA and UNRWA are in serious financial trouble after the completely misguided recent US termination of support for UNRWA and of its wider assistance to the Palestinians, as well as new Israeli legislation aiming to withhold Palestinian clearance revenues as of 2019.
According to DFID,
“UK financial assistance to the Palestinian Authority…has paid the salaries of up to 39,000 teachers, doctors, nurses, midwives and other health and education public servants”
in the west bank and Ramallah in 2018. These staff have
“immunised up to 3,700 children and provided around 185,000 medical consultations annually; and educated around 24,000 young Palestinians.”
If the Department for International Development—I would be very interested to hear the Minister’s answer to this point—were to withdraw funding for education, as is suggested, this would inevitably create a vacuum. Given the law of unintended consequences, I think that people need to be very aware of who might fill that vacuum. For example, countries such as Qatar could well exploit the vacuum created if DFID were to withdraw its funding, and we all know what the inevitable results of that could be.
No one in this House would doubt that education is a major tool for international development. Most Israelis I know pride education above almost everything else, not least because of its ability to transform lives, and many of the moderate Israelis I know would be appalled by the suggestion that this funding should be cut.
Once, when I was a Minister of State at the Northern Ireland Office, we took a group of former loyalist paramilitaries to Jerusalem to talk about reconciliation and people living together and alongside each other. I took time off and visited the Hand in Hand school—the Max Rayne-funded school in Jerusalem where Jews and Arabs are funded and educated alongside each other; they have a shared education. That, surely, is something we should be concentrating on, rather than penalising the Palestinians, who, after all, are penalised enough as it is at the moment.
For those of us who are genuinely committed to a two-state solution and genuinely concerned for the plight of the Palestinians, not least in Gaza—we will talk about that at some other point—this Bill would be a regressive step. We really do fundamentally believe that the best hope for the people of that region, and indeed for peace in the wider world, is a two-state solution. Those of us in this House who are genuinely committed to justice for the Palestinians alongside justice for the Israelis want some kind of solution rather than just subscribing to the vague concept of it by kicking the ball ever forwards to avoid having to address it. We should be looking towards better ways of supporting a stable Palestinian Authority that can act as a creative partner for peace with Israel in preparing the ground for a two-state solution before it is finally too late.
Question put (Standing Order No. 23) and agreed to.
Ordered,
That Dame Louise Ellman, Joan Ryan, Ian Austin, Theresa Villiers, Stephen Crabb, Jim Shannon, Rachel Reeves, John Howell, John Spellar, Andrew Percy, Guto Bebb and Bob Blackman present the Bill.
Dame Louise Ellman accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 8 March and to be printed (Bill 311).
Finance (NO. 3) Bill (Programme) (NO. 2)
Ordered,
That the Order of 12 November 2018 (Finance (No. 3) Bill (Programme)) be varied as follows:
1. Paragraphs 10 and 11 of the Order shall be omitted.
2. Proceedings on Consideration shall be taken in the order shown in the first column of the following Table.
3. Each part of the proceedings shall (so far as not previously concluded) be brought to a conclusion at the times specified in the second column of the Table.
4. Proceedings in legislative grand committee shall (so far as not previously concluded) be brought to a conclusion five hours after the commencement of proceedings on the Motion for this Order.
5. Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion six hours after the commencement of proceedings on the Motion for this Order.—(Mel Stride.)
Finance (No. 3) Bill
Tuesday 8th January 2019
(5 years, 3 months ago)
Commons ChamberRead Full debate Finance Act 2019 View all Finance Act 2019 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Consideration of Bill Amendments as at 8 January 2019 - (8 Jan 2019)
16:52 - The House divided: - Ayes: 294 / Noes: 312 - Question accordingly negatived.
18:23 - The House divided: - Ayes: 292 / Noes: 314 - Question accordingly negatived.
18:39 - The House divided: - Ayes: 303 / Noes: 296 - Question accordingly agreed to.
18:57 - The House divided: - Ayes: 292 / Noes: 303 - Question accordingly negatived.
19:53 - The House divided: - Ayes: 289 / Noes: 312 - Question accordingly negatived.
20:09 - The House divided: - Ayes: 288 / Noes: 311 - Question accordingly negatived.
Peter Dowd (Bootle) (Lab)
I beg to move, That the clause be read a Second time.
Madam Deputy Speaker (Dame Eleanor Laing)
With this it will be convenient to discuss new clause 5—Review of public health and poverty effects—
‘(1) The Chancellor of the Exchequer must review the public health and poverty effects of the provisions of 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 of this Act on the levels of relative and absolute poverty in the UK,
(b) the effects of the provisions of this Act on life expectancy and healthy life expectancy in the UK, and
(c) the implications for the public finances of the public health effects of the provisions of this Act.’
Peter Dowd
I rise to speak to new clause 1 in my name and that of my right hon. Friend the Leader of the Opposition and other Members.
In opening for the Opposition today, I shall start with a few general comments on the Bill before moving on to my substantive remarks on child poverty and equality. First, I must mention the new schedule the Government have tabled, at this late stage, on intangible fixed assets. It is yet another example of the Government’s absolute contempt for parliamentary processes—a result of their desperation to cling to power. Although the Chancellor announced this proposal at the Budget, the introduction of this detailed schedule at this stage of the Bill guarantees that Members are denied the opportunity to scrutinise it properly. It circumvents the Public Bill Committee process, which was created to ensure that technical measures such as this one receive forensic and detailed analysis. This is no way for any Government to conduct legislation. With that in mind, perhaps the Minister could explain why this measure has been included at the final stage of this Bill, denying Members the opportunity to properly scrutinise it. Is it a deliberate decision to once again circumvent parliamentary process? Will he consider withdrawing the schedule and including it in the next Finance Bill later this year, ensuring that it receives the proper parliamentary scrutiny it actually warrants?
It appears that Ministers are hellbent on starting this new year in the same fashion that they ended the last—by treating Members of this House as a peripheral part of the law-making process, bypassing parliamentary processes and breaking long-established conventions. The vast majority of Members in this House are fed up to the back teeth with the Government’s attempts to avoid parliamentary scrutiny.
Simon Hoare (North Dorset) (Con)
Given the heinousness of the charges that the shadow Minister has laid against Her Majesty’s Government, I presume that this is further grist to his party’s mill for a no-confidence vote. When will that be tabled and debated in this place?
Peter Dowd
My hon. Friend is absolutely right. We are here debating the Finance Bill and the Government’s dreadful performance in bringing legislation to the House for much-needed scrutiny. They seem to be incapable of doing that. They seem to be incapable of doing very much these days.
Has it not occurred to the Government that had they entered this place in a spirit of co-operation, they might not have suffered defeat after defeat on this legislation? This Finance Bill is the product of a Government on the run—a Tory party totally consumed by its Brexit civil war, unable and unwilling to posit even the feeblest domestic agenda here for fear of upsetting its nasty, hard-right faction. The Prime Minister’s speech about fighting burning injustices has turned to ash. Her claim that she would end austerity lies in tatters. She occupies our highest public office, and yet the public have no confidence in her—neither do many of her own Back Benchers, for that matter.
Meanwhile, the view is even worse from the Treasury. The Institute for Fiscal Studies said that the Chancellor was gambling with the public finances at this Budget, and it seems that even before the Bill has left this place, he has already lost that bet. The Office for National Statistics recently blew a £12 billion hole in the Chancellor’s spreadsheets by returning student debt to the Government’s books.
So one has to wonder, what is the point of the Tory party—unable to deliver a competent Brexit deal, unable to secure our economic future, unable to meet its own fiscal rules, and unable to deliver a domestic policy programme? It is a party still reliant on the old dogmas of neoliberalism and austerity, unable to see the evidence of its failures. An example of this absurd neoliberal dogma came over the break when, as we heard today, the Transport Secretary awarded a ferry contract to a company with no ferries. If he is looking for expertise in this matter, perhaps I can invite him down to Merseyside, where we have been running ferries since 1330, very successfully—and they are publicly run, I have to say. I invite him to have a go on a ferry up the River Mersey and get the feel for how it works, basically. He will have diplomatic immunity and will not be thrown overboard—I can guarantee that as well.
Mr Jim Cunningham (Coventry South) (Lab)
Did my hon. Friend notice yesterday that the Government are beginning to backtrack on universal credit? Although they say they will introduce it for 10,000 people, in essence they are backtracking. He may also have noticed the announcement today by an independent organisation that we need to build something like 3 million social houses, not in the private sector, over a 10-year period. Does he agree that that should be looked at and done through council housing?
Peter Dowd
My hon. Friend is right, and the reality is that we are not going to get it from the Conservative party—it is as simple as that. It seems incapable of doing anything that is in any way constructive for the social fabric of our country.
The Government now pick and choose whichever target provides cover for their devastating treatment of children across the UK, including—when it suits them—using the very targets that they themselves scrapped. That is why new clause 1 is so important. The Government can no longer be allowed to ignore the plight of millions of children across the country.
The statistics do not lie. They show quite clearly that, prior to the Conservative Government coming to power in 2010 with their Liberal Democrat partners, child poverty in the UK was falling. The new Social Metrics Commission, which draws on the widest possible set of poverty measures, states concretely that there are now half a million more children living in relative poverty than there were just five years ago. The whole country knows that austerity is to blame, and we all know who introduced austerity—it was the Government.
Alison Thewliss (Glasgow Central) (SNP)
I completely agree with the point that the hon. Gentleman is making. Does he agree that the two-child cap, which will apply to all new universal credit claimants from 1 February this year, and other measures that the Government are pushing mean that up to an additional 3 million children will apparently go into poverty?
Peter Dowd
The hon. Lady is right. The Government appear to want to put misery upon misery on families and children.
Despite the claims from Conservative Members, austerity was not some necessity nobly chosen by the Government of the day, but a political and ideological choice—it is as simple as that. If it was the only option, why did the United States not embark on a similar venture? Why did the likes of Germany and France not undertake a similar level of spending cuts, or Japan, or, for that matter, Australia? [Interruption.] Conservative Members are chuntering, but those are the questions that we need answering.
Kevin Foster (Torbay) (Con)
The shadow Minister referenced public spending in the United States of America. Is he seriously arguing that we should look to adopt its system of welfare and healthcare spending?
Peter Dowd
The hon. Gentleman knows that I am not saying that. He can twist his party’s policies if he wants, but he should not twist Labour’s policies.
Mr Jim Cunningham
We should remind those on the Government Benches that the crash, if we want to call it that, actually started in America with the Lehman Brothers and that the Obama Administration pumped $80 billion into the motorcar industry. The rest is history, as we say.
Peter Dowd
My hon. Friend makes an excellent point and backs up the point that I was making.
Those countries acknowledged a hard economic fact that appears to have stumped this Government: we cannot cut our way to growth. That has failed repeatedly, from its early use under US President Herbert Hoover, which turned the stock market crash into the great depression, to the International Monetary Fund programmes that have been imposed in developing countries and the economic and social devastation inflicted on Greece. This Government’s austerity agenda is yet another failure to add to that list. They have missed every economic target they have set, and it is the poorest in society who have paid the price.
Chris Elmore (Ogmore) (Lab)
It is interesting to listen to my hon. Friend’s informed explanation of how austerity has not worked across history. Does he agree that up until the 2010 general election, because of the fiscal stimulus put in place by the Chancellor Alistair Darling and the Prime Minister Gordon Brown, those first two quarters were successive periods of growth, and the economy fell off a cliff because of the austerity introduced by the Conservative party?
Peter Dowd
My hon. Friend is right. The economy thereafter, with the help of the Liberal Democrats, started to go down the pan. To this day, we have not recovered, and the Government’s own figures indicate that this will go on for many more years. We will have more of the same, and it is not working. When will they learn the lesson? They seem to be incapable. Even the IMF recognises the failure of austerity and has called for increased public spending to offset the negative economic effects of Brexit.
Simon Hoare
I am grateful to the hon. Gentleman for this fascinating tour de force on the period since 2010. If the Labour party in government was doing so fantastically well, growth was going so well and its economic management was prized highly by the electorate, why did it lose the general election in 2010 and then in 2015? If all was going so well, why did it lose?
Peter Dowd
I am sure the House would be delighted to hear my psephological analysis of the general election, but we are talking about the Finance Bill. You are very generous, Madam Deputy Speaker, but I do not think even you would be sufficiently generous as to hear my psephological comments.
Madam Deputy Speaker (Dame Eleanor Laing)
It gives me great pleasure to agree with the hon. Gentleman. He was doing very well on new clause 1.
Peter Dowd
Thank you, Madam Deputy Speaker.
The UN special rapporteur has concluded that the rising level of child poverty is a result of political choices, underpinned by the Government’s callous austerity agenda. I will draw my comments to a conclusion because I know that lots of Members want to comment on how dreadful the Government are, how they try to stitch up Committees, how they do not allow us to have proper debates and how—for the first time since Winston Churchill introduced the notion—they have circumvented the amendment of the law motion. They talk about bringing back control to the House of Commons, but they are bringing back control to about two or three people on the Front Bench, and that does not include the Treasury Ministers.
The Finance Bill before us is yet another Bill of broken promises. It offers further tax reliefs for the rich and for multinational corporations, and it prolongs austerity for yet another year, condemning many families and many children to abject poverty. Labour’s new clause 1 would require the Government finally to assess the impact of their economic policies on the most vulnerable in our society. It would require the Government to face up to their responsibility to come and explain to this House why they are not yet changing their economic policies, despite the obvious evidence that they are doing dreadful—I repeat, dreadful—damage to this country and to our communities.
Vicky Ford (Chelmsford) (Con)
I am grateful, Madam Deputy Speaker, for the opportunity to speak at this stage of our proceedings. I am extraordinarily concerned about new clause 1, because it would delay the implementation of clause 5, which is a key part of the Bill because it sets the very level at which people in this country start to pay tax. If we are to address the issues that affect those in our country on the lowest incomes, the best way to help them will to be allow them to keep more of their money in their pockets.
That is why a key part of this Government’s economic strategy has been to make sure, year after year, that those on the lowest incomes are able to keep more of what they earn and to help themselves to build their way out of poverty. That means that 34 million people in this country are paying less tax than previously, and many millions of people have been taken out of tax altogether. This was the No. 1 recommendation of the tax reform commission, which I worked on back in 2006, and I am absolutely delighted that it was among the first steps taken first by the coalition Government, then by the 2015 Government and now by the 2017 Government. This Finance Bill means that raising the level before anyone pays tax to £12,500 is being introduced faster than we ever thought possible.
Mrs Anne Main (St Albans) (Con)
Given the Front-Bench speech that we heard from the Opposition, it is worth noting that the allowance was only £6,475 when Labour left power, but is now £12,500 under this Conservative Government.
Vicky Ford
Absolutely. That is exactly the point, because we know that the best way to address poverty is to make sure that more people can earn their way out of poverty. That does not work for everyone, but for those who can do so, this makes a significant difference, and that is exactly why poverty is now at record lows.
Bob Stewart (Beckenham) (Con)
According to Department for Work and Pensions figures, there are 1 million fewer people in absolute poverty since 2010, with 300,000 fewer children in the same situation.
Vicky Ford
Absolutely. That is exactly the point: absolute poverty is now at record lows. That also has an impact on children—my hon. Friend made that point— because the number of children living in workless homes has fallen to the lowest level since records started.
Maria Caulfield (Lewes) (Con)
Would not the situation for working families be even worse under a Labour Government, with the proposal announced at the Labour party conference of £500 billion of public spending, which would mean a doubling of VAT, a doubling of national insurance, a doubling of income tax and a doubling of council tax? They are not my words, but those of a Labour MP, the hon. Member for Nottingham East (Mr Leslie).
Vicky Ford
I thank my hon. Friend for that precise contribution. I cannot understand why the Labour party has voted against increases to the level at which people start to pay tax, because helping people to keep more of their earnings in their own pockets is fundamental to increasing house ownership and to building a fairer economy.
Simon Hoare
I trust that my hon. Friend’s question was not a rhetorical one, but perhaps I can try to answer it. As far as socialism is concerned, it is absolutely fine until Labour Members have run out of other people’s money to spend. That is why they are opposed to these things.
Vicky Ford
I thank my hon. Friend for that point.
I also want to talk about fairness. Yes, it is true that the provision also increases the rate at which people start to pay a slightly higher rate of tax, but the biggest impact is on those on the lowest level of tax. That is why the tax gap—the difference between the highest and lowest levels of income—has actually fallen. The ratio of the average income of the top fifth to that of the bottom fifth of households has fallen, after taking into account all benefits and taxes.
Peter Dowd
The hon. Lady has got two facts wrong. First, we did not vote against these proposals, as she suggested. Secondly, I was actually talking about the new schedule, not clause 5. If she is going to attack us, she should get her facts right, for goodness’ sake.
Vicky Ford
Perhaps this should be better drafted on the amendment paper, because the Opposition’s explanatory statement clearly refers to the “impact of clause 5”.
I agree that one should always take impacts into consideration, but I strongly believe that the issue raised by the hon. Gentleman of needing to address poverty is best addressed by allowing this Bill to go forward today, especially the elements that involve raising the level at which people start to pay tax, so that they can keep more money in their own pockets. That is fundamental to building a fairer economy, to having a lower gap between those on the highest incomes and those on the lowest incomes, and to encouraging more people in this country to take up the work opportunities available to them under this Conservative Government, with the continuing growth of the economy.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
It gives me great pleasure to speak to new clause 5, which is in my name and those of colleagues. As I have previously stated, I declare an interest as chair of the all-party group on health in all policies, and as a fellow of the Faculty of Public Health, following 20 or so years of national and international work in this field.
Under new clause 5, the Chancellor
“must review the public health and poverty effects of the provisions of this Act and lay a report of that review before the House of Commons within six months of the passing of this Act…A review…must consider…the effects of the provisions of this Act on the levels of relative and absolute poverty in the UK”.
There has been a lot of talk about absolute poverty levels, and we would of course welcome any reductions in absolute poverty levels. Those are the most severe levels of poverty, when people are unable to meet basic physiological needs, such as for food, water and shelter. However, relative poverty is a really important measure that we must reflect on, so I want to stress that the review would look at both relative and absolute poverty in the UK. I also want the review to assess
“the effects of the provisions of this Act on life expectancy and healthy life expectancy in the UK, and…the implications for the public finances of the public health effects of the provisions of this Act.”
Yesterday, the Government announced their new 10-year plan for the NHS. In his statement to the House, the Health Secretary talked about the importance of reducing health inequalities—absolutely, I could not agree more—and how we need to reduce the demands on health services. I do hope that the Government will take new clause 5 seriously as an opportunity to ensure that their policies actually meet the objectives they have set out, because it will help to do exactly that.
As important as the 10-year NHS plan is to improve our nation’s health, overwhelming evidence shows that the most important thing we can do is to reduce the poverty and inequality that too many of our citizens face today. The most effective way to do that is to focus upstream by assessing policies, as they are developed, for their effects on poverty, inequality and, ultimately, the health of our citizens. That was why I tabled the new clause.
As the UN special rapporteur on extreme poverty and human rights said recently, the cuts and reforms introduced in the past few years have brought about misery and torn at the social fabric of our country. There are 14 million people living in relative poverty in the UK, 8 million of whom are working. That is the highest level ever—I advise those who may not be familiar with the most recent data to refer to the Joseph Rowntree Foundation report published last month. Two thirds of the 4 million children living in poverty are from working households. How are young people who are living in extreme poverty and who are hungry going to excel at school?
What about disabled people? They are twice as likely to live in poverty as non-disabled people, because of the costs associated with their disability. As we heard from Labour’s Front-Bench spokesman, policies on not just taxation but public spending and particularly social security are having a devastating impact on disabled people, and that includes universal credit. More than 4 million disabled people are living in poverty today. They are increasingly isolated and confined to their homes, and I am afraid that the situation is going to get worse, because we have had no real confirmation from the Government of how they will protect disabled people in relation to universal credit.
As analysis from the Institute for Fiscal Studies and others has shown, the lowest income decile has lost proportionately more income than any other group since 2015 as a consequence of personal taxation and social security changes. Last autumn’s Budget had only marginal impacts on 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 poor.
Last week’s Fat Cat Friday heralded the fact that top executives now earn 133 times more than their average worker; it was 47 times more in 1998. In the first three days of January, FTSE 100 bosses earned what an average full-time worker will earn in a year. That is the unequal society that this Government have allowed to run rampant.
When cuts to household incomes are combined with the cuts to public spending and services, the impact is even more dramatic. We have seen disproportionate cuts in Government funding to towns and cities across the north. The effects of all this on life expectancy are now being seen, with gains made over decades falling away. Life expectancy has been stalling since 2011 and is now flatlining, particularly in older age groups, for older women and in deprived areas.
The regional differences in how long people live reflect the socioeconomic inequalities across the country. People may be aware of these figures, because I mentioned them when I spoke in November, but life expectancy for men in the Windsor and Maidenhead local authority, which covers the Prime Minister’s constituency, stands at 81.6 years, while in my Oldham and Saddleworth constituency, it is 77 years.
Even within those areas there are differences in how long people will live. In Windsor and Maidenhead, the life expectancy gap is 5.8 years for men and 4.8 years for women, while in my constituency there is an 11.4-year difference for men and a 10.7-year difference for women. We should really concentrate on those figures. Those health inequalities are reflected across the country.
Inequalities in life expectancy are mirrored by inequalities in healthy life expectancy—how long somebody can be expected to live in good health. Healthy life expectancy at birth across local authority areas varies by 21.5 years for women and 15.8 years for men. In addition, according to the Office for National Statistics, women’s healthy life expectancy at birth decreased by three months between 2009 and 2011. How have the Government responded? They have actually increased the state pension age: people are living shorter lives, and living shorter lives in good health, but we are increasing the time they will be expected to work.
The gains Labour made in reducing health inequalities are now being reversed. The recent Royal College of Paediatrics and Child Health report showed 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. Those are the unacceptable consequences of austerity.
Last month’s report by Public Health England investigating these inequalities in life expectancy confirmed what many of us have been saying: austerity has wrought misery and poverty, and has ultimately brought an early death for too many. If the Prime Minister is committed to tackling burning injustices and ending austerity, she needs to commit to her policies being independently assessed for their effects on poverty, inequality and public health, as my new clause outlines.
Reducing the gap between rich and poor benefits not just those who are lifted out of poverty. As the International Monetary Fund’s report five years ago showed, if we increase inequality, we reduce growth, and if we reduce inequality, we increase growth. Trickle-down economics has been shown not to work. As evidence from totemic reports such as “The Spirit Level” shows, society as a whole benefits from decreased inequality, with increases in life expectancy, educational attainment, social mobility, trust between communities and much more. Fairer, more equal societies benefit everyone. Inequalities are not inevitable; they are socially reproduced. They are about political choice, and they can be changed.
Several hon. Members rose—
Madam Deputy Speaker (Dame Eleanor Laing)
Order. Before I call the next speaker, I should take the opportunity to inform the House—this is not very exciting; it is just to set the record straight—that some names that were intended for amendments to the Agriculture Bill were added in error to amendments to this Bill. [Interruption.] I did warn the House that it is not very exciting, but it is important to keep the record straight. For the sake of clarity, let me tell the House that the name of Mike Gapes should not appear on new clause 1, and the name of Kerry McCarthy should not appear on new clauses 10, 17, 8 and 18, and amendments 39 to 41. Having got that important matter straight, I will happily call Mr Kevin Foster.
Kevin Foster
Thank you, Madam Deputy Speaker. Hearing your announcement that the hon. Member for Ilford South (Mike Gapes) is not in fact a signatory to new clause 1 has, of course, completely changed my view. Clearly that has changed the whole speech I was about to give.
It is useful to be here for this debate on new clauses 1 and 5. I found the speech by the hon. Member for Bootle (Peter Dowd) of interest, as always. I know from one of our previous exchanges in the Chamber he will be very disappointed to hear that I am not going to give that promised talk on unpacking the holy trinity today. Even in the two hours available, that is probably not quite something that I can effectively manage. I am, however, going to go through an issue on which Members across the House generally have strong views and about which they are passionate: how we best tackle equality issues so that our policies are effective in ensuring that those who are in poverty have a route out of it.
It was not in pure jest that I made a comment in my intervention on the shadow Minister about spending levels in the United States. People talk about the US not having gone down the austerity route, but instead having had a spur or fiscal stimulus. To spend the same as the US, we would have had to make significant cuts to the public sector to get down to US levels of social spending, and in particular healthcare spending. The US has bizarre outcomes from its healthcare system: it spends more of its GDP on healthcare while achieving worse outcomes. No one in the House would wish to implement that system in this country given that failing of spending more and, bluntly, getting a lot less. It is therefore bizarre for that spending to be cited as a great stimulus. It most certainly was not. The US was still spending far less than us after our programme of austerity to bring the deficit under control.
Kirsty Blackman (Aberdeen North) (SNP)
Is that not a slightly bizarre argument? I think the Opposition are trying to ask the Government to take into account in the review the priorities we have, rather than the Government’s priorities. For example, they may be putting policies in the Finance Bill to raise taxes to do something specific, whereas we are asking them to look at public health impacts.
Kevin Foster
New clause 1 says what it says: it asks the Chancellor to produce a review of the impact of provisions and to lay a report of that review before the House. It does not require anything to be done. It does not set out a detailed list of policy changes and how they would be paid for. I do not really see where the hon. Lady is coming from. Members can generally debate all matters that are put before the House, what they believe their impact will be and whether they will make a difference.
I have to say—my Scottish colleagues like to raise this point—that in some areas, for example the Scottish education system, it would be interesting to look at how help is being provided to children so that they have a route out of poverty. In the past, the Scottish education system was one of the highest rated in the world, but I think the Scottish National party has now pulled Scotland out of the global rankings—not because it is going up them, it is safe to say. We can certainly have reviews both ways, and it will be interesting to hear whether comments from SNP Members reflect the impact that aspects of Scotland’s domestic policy, for which it has been responsible for most of the past decade, have had on some of the statistics they wish to complain about.
I welcome the fact that the Bill again increases the earnings that someone can receive before becoming an income tax payer.
Kevin Foster
In a moment—I did not intervene on the hon. Lady.
Again, those with the lowest incomes will be able to keep more of what they earn. The days when earning £6,500 was considered enough for someone to start paying tax have disappeared. We were actually able to bring forward the increase in tax-free earnings for millions of people. That is a positive measure, which really makes work pay and helps the lowest earners the most.
Debbie Abrahams
What will be the effects of the Government’s increase in the personal allowance on the life expectancy of citizens of this country?
Kevin Foster
Any policy that encourages people to be in work and keep more of what they earn, and allows them to save, will help improve their overall health. One of the things that most improves someone’s life outcomes is being in employment. [Interruption.] It is bizarre to be heckled for saying that.
Luke Graham (Ochil and South Perthshire) (Con)
My hon. Friend is giving an insightful speech. One impact of the Government’s policies is the improvement in our Gini coefficient, which is widely recognised as an objective international measure of inequality. According to that objective international measure, our inequality has reduced since 2009-10. Nothing is perfect, but it seems that the direction of policies is working.
Kevin Foster
As always, my hon. Friend makes a well argued and succinct point. He demonstrates the positive difference that Government policies are making for his constituents and the UK as a whole. It must be said that that difference is being made by a whole package of policies, not just by the Bill. I know that a range of measures will help tackle the health inequalities in my patch, including intervention, better services, better urgent care, ensuring that we realise the benefits of technology in primary care, dealing with things such as rising obesity, ensuring that people have proper diets and continuing the welcome decrease in the smoking rate. It is bizarre that those who can least afford to smoke end up being impacted most by it, worsening already poor health inequalities.
The Bill is welcome. I do not think either new clause brings much to the debate, other than highlighting that people want reviews and statistics. With a genuine review, we think about our policy conclusions at the end, yet we hear Opposition Members say, “We want a review—but by the way, here are all our conclusions about the policies we believe should be adopted, even though we can’t really outline how we would pay for them, other than with a massive borrowing splurge that would need to be paid for by a future generation.”
It is welcome that, as has been pointed out, the number of people in absolute poverty is at a record low —1 million fewer people overall and 300,000 fewer children are in absolute poverty. [Interruption.] We hear a groan, but those are the statistics—the sorts of statistics the Opposition seek through their new clauses. The number of children living in workless homes has fallen to its lowest since records began. Being in work makes a positive difference to people’s lives.
Kevin Foster
If the hon. Lady wishes to argue with that, I am only too happy to give way.
Debbie Abrahams
No, I would like to ask the hon. Gentleman whether he believes in policy-based evidence or evidence-based policy. He seems to be talking about policy-based evidence. His argument is absolutely facile. He has no evidence to support it. It is absolutely ridiculous.
Kevin Foster
For policy-based evidence, we need only look to those who continue to argue that the Leader of the Opposition and the shadow Chancellor should be leading this country, despite the increasing evidence of what their economic policies would do to this nation. Anyone who takes a trip to Caracas will see the outcome there, and still some argue that we should bring those policies to this country. [Interruption.] It is lovely to be heckled all the way through my speech. I sometimes do it myself.
It is somewhat strange for the Government to be accused of not basing their policies on evidence by a party that crashed the UK economy eight years ago, and to continue to hear the excuse that the financial crash merely happened because of bankers in the United States, despite it being a former Labour Prime Minister who, just before the problem with the banks, predicted that a golden era for the City of London was about to start and set up the regulatory system that so badly failed to prevent this country from being exposed to the financial risks and shockwaves. It is somewhat strange to get that lecture on evidence, when there is plenty of evidence of what went wrong a decade ago, when we were left needing to make savings that Labour was planning to make anyway.
Kevin Foster
Absolutely. We could spend a long time analysing the decision to flog the gold reserves. It was the same Chancellor who claimed to have abolished boom and bust—to be fair, he was right: he managed to end the boom at the end of his term, although he did very little to take us away from the bust. The economic cycle is still there, and those who pretended it did not exist were deluding themselves. They kept betting that things would always go up and then things started to go down.
The other thing that has made a difference in Torbay, whose economy has many jobs in the service sector, the hospitality industry and the care sector, is the introduction of the national living wage, because of which many people have had a salary increase. It is easy for an Opposition to pledge all sorts of things, but it is very different to actually deliver in government an income rise for the lowest earners. More people are being paid more than the national living wage—local employers in Torbay are paying beyond that level to attract the staff they need, given the fall in unemployment. We cannot say that the Government’s fiscal policies have had nothing to do with that; they have made a positive difference to the lives of people in my community and others across the UK.
Colin Clark (Gordon) (Con)
Does my hon. Friend agree that it is this Government who are trying to build a fairer economy and that, in my constituency and his, the gap between the highest and the lowest incomes has fallen since 2010?
Kevin Foster
Absolutely. It is worth remembering, when we hear how the Opposition want to tax people and what our tax policies are, that the highest earners in this country are paying a higher percentage today than they did for all but the last few weeks of the previous Labour Government. The claim that the Government are being much more generous to the highest earners through income tax is completely false. Sadly, my hon. Friend now represents the highest-taxed part of the United Kingdom. I refer to the work of the SNP in making Northumberland a tax haven from its policies, which have hit a range of people on middle incomes. I am concerned that the impacts in Scotland of that policy will see its representatives here in Westminster blaming those impacts on Bills such as this one, when they are due to policies that the SNP, not this Parliament, has imposed on the Scottish people.
Kirsty Blackman
The Scottish Government’s Budget ensures that 90% of businesses will pay less in business rates than they would if they were anywhere else in the UK. Does the hon. Gentleman believe that his Government should change their policies to match Scotland’s?
Kevin Foster
I certainly do not believe that the Westminster Government should change their policies to match the SNP’s income tax raid on middle earners and those who drive the economy. On business rates, anyone who has sat through my speeches on the high street will know that I have taken the view for some time that we need to look at how we tax the high street in future. The era of large corner premises being the most profitable place to sell goods and wares is long gone. I have to say that I do not think I will be looking at the SNP’s record for much inspiration when it comes to the question of how to stimulate the economy and boost people’s earnings.
Luke Graham
The hon. Member for Aberdeen North (Kirsty Blackman) made a point about being able to lower business rates in Scotland. That has been fantastic. Will my hon. Friend join me in thanking the Chancellor for putting more than £40 million into the Scottish budget so that we could fund such a business rate cut?
Kevin Foster
Absolutely. That support was very welcome. However, one of the issues that I am surprised SNP Members do not want to be raised—although perhaps it is not a surprise, when I think about what would be said—is what the impact would be in all these areas if the Bill included a border between England and Scotland, making it harder for business to be done between those two parts of our great United Kingdom. What would be the impact on the economy if Scotland had to experience SNP Members’ overall economic and fiscal policies? Surprisingly, I do not think that they want that kind of analysis to be included in the review.
Colin Clark
I was quite surprised by what my constituency neighbour the hon. Member for Aberdeen North (Kirsty Blackman) said. She is well aware that the north-east of Scotland—its very engine room, and the area that she represents—has ended up picking up half the business rates in Scotland. Does my hon. Friend agree that it is dangerous for business rates to damage particular parts of the economy and to unbalance it disproportionately, whether in Scotland or in England?
Kevin Foster
I could not have put it better myself. If business rates unbalance the economy, that is clearly a real issue. It is no surprise that two years ago, when voters in the north-east of Scotland—which is, as my hon. Friend says, the powerhouse of Scotland’s economy—had to decide which party would be the best to drive forward economic policies and represent their interests, the area, funnily enough, suddenly turned quite a pleasant shade of blue, with only a dot of yellow in the middle. That reflected the confidence of those voters in this Government’s policies.
I am conscious that I have been speaking for a little while, and that others wish to contribute. Let me end by saying that I do not believe the two new clauses add anything to the Bill. They were tabled by Members who regularly like to give us policy-based evidence, and who advocate a form of economic management for the country that has failed many times in other countries. There is no reason why it would not fail again here if they were given the chance to implement it. I hope that the House will not accept the new clauses, but will accept that the Bill will make a difference to working families across the country, will help to drive our economy forward, and will have a positive effect on the country overall.
Vernon Coaker (Gedling) (Lab)
I support the two new clauses. Unlike the hon. Member for Torbay (Kevin Foster), I think that they are very measured. They simply ask the Government to review the impact of the Bill on poverty and inequality.
I do not know what other Members think, but let me describe what I think the vast majority of people in all our constituencies believe, and what they believe this Parliament should be saying and doing. They believe that the current levels of inequality in our country are simply and utterly unacceptable. They believe that the levels of child poverty are simply and utterly unacceptable. They are not interested in someone being able to tell them that there are 2 million children living in terrible poverty, or 1,850,000 children living in absolute or, indeed, relative poverty. That is what those people are sick of, and what I am sick of, and what this Parliament should be reflecting.
Across the country, people are asking, “Can you not do any better? Can you not do something about the fact that there are still pensioners in one of the richest countries in the world who cannot heat themselves properly in cold weather, including at Christmas?” They are asking, “What is Parliament doing when we see children living in absolute poverty who cannot afford to go to school, with shoes and clothes and food being given to them as an act of charity by people in those schools?” They are not interested in whether the figures have gone up by 0.5% or down by 1%. They are interested in what this Parliament is doing about it, and what we are saying.
All these new clauses do is say to the Government, “If you believe, for example, that clause 5, through allowing people to keep more of their income when in work, addresses some of those issues, let’s have a review to see whether or not that is the case.” That is what people would expect.
I am sick of this myself. When I drive around, not just my constituency but the country, I see enormous wealth. I am not talking about people who have worked hard and done well, which we all want to see; I am talking about massive accumulated wealth—not just income—with people able to afford to pay astronomical sums on different ways of life, while half a mile down the street there is a kid in a household that cannot afford to put any proper food on the table.
Catherine West (Hornsey and Wood Green) (Lab)
Does my hon. Friend agree that it is terrible to think of all the many places in the country where there are so many more food banks, and that the year-on-year increase the Trussell Trust has told us about is deeply worrying?
Vernon Coaker
That is right. Every Member of this House would no doubt say, “Isn’t it great that there are food banks and so many volunteers at them?” I agree with that; I agree that it is good to see in communities across this country, in every part of the UK, so many people who volunteer their time with others donating to them. What I object to is that food banks, which are there as a charity, are used as an instrument of public policy—they are used as a way of tackling poverty. What on earth have things come to in 2018 and 2019 when food banks are a public policy mechanism for dealing with poverty? They are supposed to be charitable organisations for people who have somehow slipped through the net, not places where someone at the DWP sends people with tokens. That is an absolute outrage, and this Parliament should be seething about it. In saying that, I do not decry the volunteers; this brings the very best out of people, but—goodness me—is that public policy now?
That is what the Minister should be addressing. The challenge that I think every Member of this House would make to the Government would be to ask what is being done to address these issues. We do not want some academic debate about a bit of research here or there which means that the hon. Member for Torbay can say, “There’s 1,000 fewer here and 2% less there.” The levels of poverty and inequality in our country are a fundamental disgrace; why are the Government not raging about that and doing something about it through their Budget?
Laura Smith (Crewe and Nantwich) (Lab)
Does my hon. Friend agree that when he speaks to the food bank volunteers they say to him that they do not want to be doing this work as it should not be necessary because people should be able to pay for the food for their families without having to rely on handouts? They do not want to be volunteering for this because this problem should not exist in 2019.
Vernon Coaker
I agree with my hon. Friend.
In my relatively brief contribution I just want to ask the Government why there is disagreement about these perfectly reasonable new clauses that ask the Government to review the impact on poverty and inequality. When the Minister responds, will he say whether he refuses to keep under review any of the budgetary measures to be implemented through this Finance Bill to see whether they impact on poverty and inequality? Is that honestly what he is saying? If he is not saying that, why cannot he accept a new clause that is asking him to review this? Who disagrees with looking at whether our Government’s policies are actually tackling poverty and inequality? I find this absolutely incredible.
The Minister can say that this is all rhetorical nonsense, but let us see what he says about how he intends to review the impact of the Government’s policies. For example, he knows that one of the key challenges for Government policy is that, despite what they have tried to do, the number of working people in poverty is increasing. That is a policy challenge. It is not a Labour-Tory thing; it is a policy challenge. If the Minister simply retrenches on this, he is not acting as a Minister of the Crown or a Government Minister responsible for our country; he is acting as a Tory party politician, and that is not what a Minister of the Crown should be doing.
Martin Whitfield (East Lothian) (Lab)
I find it sad to have to ask this, but does my hon. Friend agree that perhaps the reason why the Government will not accept the new clauses is that they would provide the evidence that these policies are wrong and that they are harming our citizens?
Vernon Coaker
I agree. I am not sure if the Minister is listening, but that is the point. Surely the Government would want to know whether their policies were working, so that they could do more of them. And if their policies were not working, all of us would want the Government to change tack.
Poverty and inequality should be at the heart of everything the Government do and of everything this Parliament demands. All that the new clauses and amendments are doing is saying to the Government, “Look at what your policies are doing. Look at the impact out there. What are you doing to tackle the utterly unacceptable inequality, child poverty and increased use of food banks that we see in our country? How are your policies going to address this?” That is the purpose of the new clauses, which I totally support.
Helen Whately (Faversham and Mid Kent) (Con)
It is a pleasure to follow the hon. Member for Gedling (Vernon Coaker). In fact, I agree with some of the sentiments that he has expressed. The level of poverty is still unacceptable, and that makes me unhappy. I am also unhappy about the level of inequality across the country and in my own constituency, but I want to support a Government who are doing something about it, not just through words but through actually taking steps to make these things better.
I have enormous respect for the hon. Member for Oldham East and Saddleworth (Debbie Abrahams), who introduced her new clause 1 earlier. It proposes a review of the impact of clause 5 on child poverty and equality—that is, the impact of raising the level of the personal allowance after which people start paying tax. She also spoke to new clause 5, which proposes a review of the public health and poverty impact of the whole Act. It is enormously tempting to say yes, we should do this. All of us in this Chamber care enormously about poverty and inequality levels. I have a background in healthcare, and I feel very strongly about reducing health inequalities. I am also conscious of the different life expectancies within my own constituency, which are substantial, but we must be careful not to be lured into a sense that reviewing a specific part of an Act will give us an accurate picture of all that is being done and of its impact on, for example, reducing health inequalities.
Debbie Abrahams
I want to reciprocate by expressing my respect for the hon. Lady and for the work that she does in this place on mental health. I have huge experience in this area. I spent more than 20 years working on health inequalities and specifically on the assessment of policies to ensure that we get them right. That is part of the reason that I came into Parliament, and I know that this can be done. As my hon. Friend the Member for Gedling (Vernon Coaker) said, if we are all so committed to reducing poverty and inequality, let us assess our policies before they are implemented, to ensure that they do just that.
Helen Whately
I thank the hon. Lady for her intervention, but we should be a little cautious about assessing a particular bit of policy in isolation without considering other policy areas, because that might result in false information. For instance, if we examined a specific bit of Government spending, it may appear to be doing a fantastic job, but if we do not consider the counter-effect and the money that is being taken away from people elsewhere, it does not provide the whole picture and might lead to poor policy decisions.
I want us to look at the overall impact of Government policy in the round. For example, we should look not only at the impact of raising the personal tax allowance, which is positive because it enables people on low incomes to retain more of what they earn, but at where the Government are investing money. For health inequalities, we should look harder at the extra £20.5 billion going into healthcare and the impact of the NHS long-term plan, published yesterday, which has a particular focus on directing funding to reduce inequalities and increasing funding for primary and community care. Those things will particularly help those in the most deprived areas and those with some of the worst health outcomes.
I know that it is enormously controversial, but universal credit—I will probably get booed by the other side of the Chamber—is helping people into work and is doing so hand in hand with an economy that is strong overall, leading to unemployment in my constituency halving since 2010.
Dr Philippa Whitford (Central Ayrshire) (SNP)
I totally support what the hon. Lady is saying about importance of inequalities and health inequalities, but does she not recognise that two thirds of children in poverty have a working parent? People are trapped in low-paid work, and they are still poor, and she knows from her time on the Health and Social Care Committee that poverty is the biggest driver of ill health and health inequalities.
Helen Whately
I recognise that there is poverty in working families, but I do not agree with her use of the word “trapped”. It is important to ensure that people are in work, because that is the best way out of poverty, and then to ensure that we support people to raise their earnings. One way of doing that is through the support available through the jobcentre when people resume universal credit, which now tends to help people to move up and earn more money, and the other is by looking at the wider economy. As the hon. Lady will know, the minimum wage has risen and is rising, but we are also seeing wages rising independent of the minimum wage as a result of a more productive economy. What is actually key to a better level of wellbeing and fewer people being in poverty is having more people in work, which is the case, and a more productive economy, which means that people earn more. We can achieve that through driving up skills and technology, increasing exports and a swath of other things that would take me into a whole other conversation.
Mrs Main
My hon. Friend has mentioned some of the benefits of having a working parent or family member, but it also sets an enormously good example for the children. Children brought up in workless households have low aspirations and ambitions when it comes to obtaining work themselves, so somebody being in work is not just about money, it is about psychological and educative factors, too.
Helen Whately
My hon. Friend is absolutely right. While education standards are rising in our schools—readings levels, for example, are increasing substantially, leading to better opportunities for children—low levels of aspiration are still a problem and, as the teacher I was speaking to at a primary school in a deprived area said the other day, raising young people’s aspirations is key.
Laura Smith
I am completely insulted by the point made by the hon. Member for St Albans (Mrs Main). I grew up in in-work poverty. My parents were working, and I saw them struggle day in, day out, but I assure the House that my aspirations were not stopped. It may do some Members good to understand what people living in such conditions have to go through day in, day out, and Members should not patronise people when they simply do not understand the situation.
Helen Whately
I thank the hon. Lady for her contribution and for the example she sets. Although she has described a very tough childhood, she is a role model and is playing her part in Parliament.
To be clear, what I said was from a conversation with a teacher, who is doing a very good job in a very deprived school, about her experience. The hon. Lady’s experience might be different but, from this teacher’s experience, although there is so much she can do to help children learn to read, write and perform better in their education, what would make the next difference for those children is for their aspirations to be raised and for them to have a sense of the opportunities for them beyond their needs and environment.
Helen Whately
I have already taken an intervention from the hon. Lady, so she has had a chance to make her point.
Vicky Ford
Does my hon. Friend agree that making sure people can keep more of their earnings before they pay tax, introducing the national living wage and reducing the very high taper rate for people on legacy benefits will all contribute to helping people to get out of the in-work poverty trap?
Helen Whately
My hon. Friend is absolutely right, and she reminds me of a constituency case, before universal credit, of a mum who was looking to raise her income but who was coming up against a threshold. If she worked more than 16 hours a week, she would not benefit, so she was trapped in poverty—the hon. Member for Central Ayrshire (Dr Whitford) used the word “trapped” earlier—because it did not make sense for her to increase her hours of work.
Luke Graham
My hon. Friend is making an important point about aspiration. In this House we often get caught on economics and money, but social capital is just as important. In many communities right across the United Kingdom, we need to be helping people to see the true opportunities, both inside and outside their communities, to allow them to realise their true potential. It is important that we consider the social alongside the monetary in all these debates.
Helen Whately
I absolutely agree and that is one reason why we have to look at policies in the round. I completely support the policy of taking people out of income tax, but let us look not just at that. Let us look, for example, at the strong economy, at the opportunities that gives people and, beyond that, at the strength provided by having a family and community around people, which also provides the social capital to be able to make the most of their lives.
Sir Oliver Heald (North East Hertfordshire) (Con)
Does my hon. Friend agree that the challenge for Parliament changes over time? In the Labour years we were very concerned in Parliament about the number of workless households—there were 3 million then. There are now a lot more people in work, but there is this issue, which has been rightly raised, of the quality of that work, of the skills involved and of whether it rewards people adequately. That is the new challenge, but we are making progress.
Helen Whately
I thank my right hon. and learned Friend for his intervention.
The hon. Member for Gedling spoke earlier of his frustration. He did not want people to talk about changes in percentages and there being perhaps a few fewer people in poverty, but actually the numbers do matter. The numbers tell us what is happening, and the numbers are moving in the right direction, which is really important. The fact that the numbers are moving in the direction of our having fewer workless households should not be sniffed at or dismissed. Achieving that has been a challenging job, and it has involved a significant effort from many people.
Helen Whately
I think I should conclude my remarks, as I am aware that I have been speaking for a while.
New clauses 1 and 5, which call for reviews on specific aspects, have been advocated in a way that suggests that one side of the House cares more about poverty, for instance, than the other, but that is not the case at all. Members on the Conversative Benches care very deeply about poverty and equality within society.
What really matters is the track record of governing parties in these areas. I would raise these questions with the House. Which party in government oversaw an increase in unemployment from 5% to 8%? Which party left office with nearly 4 million workless households? Which party left office with rising absolute poverty? All of us know that it was Labour.
In contrast, under this Government, we have more than 3 million more people in work, the lowest unemployment since the 1970s, 600,000 fewer children living in workless households, falling absolute poverty and rising wages. When it comes down to it, this is what matters—getting right those policies that improve people’s lives, reduce inequality, reduce poverty and make life better for everybody. That is what we should all be backing.
Simon Hoare
It is a pleasure to follow my hon. Friend the Member for Faversham and Mid Kent (Helen Whately).
I rise to oppose new clause 1, and I do so for these reasons. If any Members were so inclined, they should please come and visit my constituency of North Dorset. If they visited North Dorset, they could easily be forgiven for thinking that everything in the garden was rosy. There are pretty villages, attractive market towns, lush fields, healthy-looking cattle grazing and a strong local economy where unemployment is virtually zero. If Polly Toynbee or the hon. Member for Bootle (Peter Dowd) were to arrive in North Dorset and say to me, “Simon, would you take me to your most deprived ward?” I could not, because I do not have one, but I know that I have pockets of deprivation and of poverty in each village and market town in my constituency.
One of the big challenges facing any suite of financial policies is recognising that poverty manifests itself in various ways and guises, but right the way across our nation. It is, I would suggest, far easier to identify large pockets of urban deprivation and poverty. The real public policy challenge is also to recognise and address those of rural poverty, often in sparsely populated areas where the instinct—maybe it is part of the rural community DNA—is slightly to shy away from asking the state, either local or national, for support and to demonstrate a strong sense of resilience and smaller communities trying to work together, although that is no excuse for any Government to shy away from focusing like an Exocet on trying to deliver policies that help to address rural poverty.
I am motivated by this every day. I know the figures move around, but the average national salary for the UK is in the region of £24,000 or £24,500 per annum, as I understand it. In North Dorset, when I was first elected in 2015, the figure was £16,500 and it has just risen to about £18,000, but rural jobs always pay less, if people are in the agricultural sector, food production or the hospitality trade. In those rural areas we do not have those big, high-paying employers. That is why we should always focus on trying to deliver support.
Laura Smith
I find myself agreeing with what the hon. Gentleman is saying about rural poverty. I am an MP in Cheshire, and our local food bank expresses real concern about the rise in the number of people who live in rural areas having to access the food bank. He is right about pride, and another relevant group is elderly people, who often will not access help and support, so it is important to mention rural poverty.
Simon Hoare
I am grateful to the hon. Lady for her intervention. I am not entirely sure whether her support of me or my support of her has damaged her career more than it has damaged mine. We will leave our respective Whips to adjudicate on that. Nevertheless, she is absolutely right, and she is absolutely right to highlight that often incredibly annoying sense of pride when a retired person comes to an advice surgery. I say, “Look, we can try to help you to get this, that and the other,” and they say, “No, I don’t want to, Mr Hoare. I don’t think it is right. I have never asked the state for anything.” There is some locked-up pride among some of our retired citizens and we must forever say to them that the state in all its manifestations is there to provide. The second duty of the state, after keeping the country safe, is to provide that safety net that delivers self-respect and the opportunity for people to live with some semblance of dignity and happiness, particularly in their later lives.
Those in later life are a group that is often hard to reach. They will never be contacted through the digital economy; they need to be outreached to. I make the point again—I know the hon. Member for Crewe and Nantwich (Laura Smith) will agree with me—that one of the great challenges in sparsely populated rural areas is that outreach is often harder, because there is not that dense concentration such that at almost every door one knocks on in an area one would say “Yes, this is the area that requires most attention.”
Vicky Ford
I thank my hon. Friend for painting this clear picture of rural poverty, but pockets of poverty occur in urban constituencies such as mine, too. Does he agree that poverty is about not only how much someone earns but the cost of living? That is why it is so important that we focus not just on the relative poverty measures that the Labour party focuses on, but on reducing absolute poverty, which is the measure that this Government have succeeded in dealing with.
Simon Hoare
My hon. Friend is absolutely right to pinpoint the cost of living. Opposition spokesmen sometimes dispute this, but it is more expensive to live in a rural area. It is more expensive to heat one’s home. Travel costs are higher, usually in the absence of public transport, meaning that the running of a car is not a luxury but a necessity if one is to access even the most basic of public or retail services.
Simon Hoare
If the hon. Gentleman will forgive me, I will not, because I want to refer to the speech by the hon. Member for Gedling (Vernon Coaker). I hope that he will not think it is untoward for me to say this, but the passion with which he delivered his speech was powerful and incredibly compelling. He struck on a point that I was going to make and on which I had jotted down a note or two, and it is a point I have been making in recent speeches around the place. I often admire the Labour party—
Simon Hoare
There is always a “but”, though. [Interruption.] My right hon. Friend the Financial Secretary to the Treasury says that my career has definitely gone now. I did not even know that I had a career, so that is going to be interesting.
There is usually no embarrassment on the Labour side at talking with passion about the burning injustices that we see in all our constituencies and having a clear determination to do something about them. There is no inhibition at all on the Labour side. On my side—I say this as somebody who has been a member of our party since 1985—I occasionally find that we get slightly inhibited about talking from the heart. Other Members have referred to this. We can bandy the statistics about—relative or absolute, percentage this versus percentage that, up, down, more in this, fewer than the other—but it does not matter, because if someone is poor, the statistics do not affect them: they are poor. They want to know that their elected representatives, locally, in this place and those in Whitehall are doing their damnedest to make their life just a little better.
I make this plea to my colleagues on the Treasury Bench: we on the Conservative Benches do not talk enough about the whys of politics. We talk a lot about the whats, but we do not say why. We find homelessness gut-wrenchingly upsetting. We find the closing down of hope, aspiration and life expectancy intensely moving, and we burn with the desire to help. It certainly motivates me every morning to get out of bed and to do my best for my constituents in whatever way I can by supporting policies that I fundamentally believe have the power to make our local economy, and therefore my constituents’ lives, better. If anybody in this House is not motivated by that fundamental political passion to stir up the soul to go and do something about it, I say to them with the greatest of respect that they should not be here. That, I think, must be our principal function. Members from both sides of the House want to arrive at a place where aspiration, hope and opportunity are available for as great a number of our citizens as we can possibly facilitate.
We also want to make sure that the economy is buoyant. Why? Because warm words butter no parsnips. The emotional speeches may salve our consciences, but we need the economic policies that deliver the taxes and pay for the safety net below which, I am determined, none of my constituents should, or will, ever fall on my watch. We need to be ever vigilant to make sure that our economic policies are delivering that growth.
Martin Whitfield
I am very grateful to the hon. Gentleman for giving way. I say with the greatest respect that he is making a very good speech for the two new clauses. The knowledge gained from reviewing policy implementation feeds into the decisions that go forward, so, at this stage, I invite him to support the two new clauses.
Simon Hoare
The hon. Gentleman is—what’s the phrase?—pushing his luck on that. I think that the divide here will be on the theoretical and the practical. I am always conscious that we can go to any Minister’s office, or any Department, or any local council, and find gathering dust, spiders and dead flies on many a window sill reports, reviews and assessments of this, that and the other, and they have a pretty short shelf life. I would much prefer to spend Government time focusing on delivering those policies of hope and growth.
Simon Hoare
The hon. Lady has winked at me in such a beguiling way that of course I will give way to her.
Laura Smith
I would just like to put it on the record that I absolutely did not.
Laura Smith
It was just a northern smile; that was all.
Does the hon. Gentleman not see that he has massively contradicted himself? His speech, as my hon. Friend the Member for East Lothian (Martin Whitfield) has said, would indicate that he should really be supporting these new clauses, and yet, when pushed on it, he is not. Does he not agree that that is why people in the outside world become frustrated with politicians who are very good at speaking in one way, but who act in another?
Simon Hoare
It was all going so well, wasn’t it? I agree with the hon. Lady that many people become incredibly frustrated when a Minister of any political persuasion delivers a speech that makes them think, “Something good is going to flow from this”, but then very little has actually happened when they come to think about it.
I would prefer to do the doing rather than the reviewing. I do not need a whole series of reviews to tell me that there are poor, deprived people who live in North Dorset. I do not need tables of statistics to tell me that I am going to hold the Government to account to ensure that policies are delivered to provide support for those who need it, to encourage a ladder of expectation and aspiration for those who wish to scale it, and to put policies in place to ensure that we remain a civilised and humane society. I do not need a whole bookcase of learned treatises to tell me this. It was strange that the hon. Member for Gedling made exactly that point—that he did not need a whole load of statistics and reviews—when that is actually what new clauses 1 and 5 are calling for.
I do not need these pieces of paper to tell me that it is the first duty of a Government of any colour—even if it were the hon. Member for Bootle (Peter Dowd) sitting on the Government Benches and my right hon. Friend the Minister sitting on the Opposition side—to try to ensure that the economy grows and that opportunities are presented.
Rachel Maclean (Redditch) (Con)
As well as not needing to do these reviews, does my hon. Friend agree that we should be looking at our track record—at what has actually happened when it comes to getting the deficit and the debt down? Surely that is what people will be looking at. What gives them the most comfort that we will be able to deliver on our promises in the future is that we have delivered on them in the past.
Simon Hoare
My hon. Friend is right, but I think people will look at it differently. I think that most people in this country come to an evaluation of an Administration, irrespective of which party happens to be in power, based on whether they and their family group feel more secure, more prosperous and more confident about their opportunities, and on whether they can see that the opportunities for the next generation of their family are going to be deeper and wider than those presented to them when they were making their first choices.
Victoria Prentis (Banbury) (Con)
If I may say so, my hon. Friend is making the speech of his life. In a finance debate, it is particularly good to hear a speech about burning injustices, and I agree with him that this is the right place to be having this debate. In turn, does he agree with me that employment is at the base of dealing with all those injustices?
Simon Hoare
My hon. Friend is right. I think that the hon. Member for Crewe and Nantwich (Laura Smith) slightly misheard my hon. Friend the Member for St Albans (Mrs Main). My hon. Friend the Member for St Albans said precisely what the hon. Member for Crewe and Nantwich said, which was that although the hon. Member for Crewe and Nantwich was in a tight or low-income household, it was a house of work.
Simon Hoare
Of course, but let me just finish this point with my hon. Friend the Member for Banbury (Victoria Prentis).
Where did we all learn that it was normal and expected to get out of bed in the morning, have a bit of a wash and a tidy-up, get ourselves to school and then on to work, and all the rest of it? It was from our parents. Growing up in Cardiff, I can remember large council estates where worklessness was endemic, and where the welfare state had not been that support, safety net or springboard, but had instead become a way of life for too many people. If that is the case, how on earth can we expect anybody to learn the work ethic?
I chaired the all-party parliamentary group for multiple sclerosis, which two years ago held an inquiry into people with MS who were in work and wanted to stay in work. Without reducing employability to a utilitarian argument, for people to feel that, even with a painful degenerative condition, they could still play an active, productive role in their family’s life, in the life of their community and thereby in the life of the economy nationally, had a huge impact on their mental health. I therefore entirely agree with my hon. Friend the Member for Banbury, who speaks with great passion on this issue.
An understanding of employment and the benefits that flow from it has to be rehearsed again and again by Treasury Ministers and other Ministers. We take this for granted, possibly because it is in our DNA and possibly because it is the only thing that we have ever known, but we must be conscious that there are others in our country who have not. We should be advocates, apostles, evangelisers and any other word one could think of in shouting from the rafters the strong benefits of employment.
Dr Caroline Johnson (Sleaford and North Hykeham) (Con)
Does my hon. Friend agree that not only has employment benefited but, since 2010, this Government have delivered a reduction of 661,000 in the number of children living in workless households—so over half a million young people are now growing up in a home where they are getting those lessons on the importance of work—and have also reduced the number of children living in absolute poverty by 200,000?
Simon Hoare
My hon. Friend helps me and my hon. Friend the Member for Banbury by amplifying the point.
I said earlier that I was born and brought up in Cardiff. One of my abiding memories was of my late grandmother, who was born in 1908, and what motivated her throughout the whole of her life. She was the daughter of Irish immigrants. When she was at school—a Catholic primary school called St Patrick’s in Grangetown —a teacher brought a child to the front of the class, theatrically held their nose, and said, “Boy, go home, you smell.”
I can remember, in different circumstances in the 1970s, my Catholic primary school in Cardiff called St Mary’s. It was the school that my mother had gone to as well. It drew from a mixed economic demographic. There was a family with three children—I can see them now. If I sound emotional on this point, it is because I am. I am emotional because I can remember—although this may sound entirely preposterous and pompous—how I felt as an eight or nine-year-old, as I was, seeing this family. The mother always looked underfed. The father always looked harassed to death. The children, one of whom was in my class, had a colour of poverty. They had a smell of poverty. Poverty has a smell about it. It has a posture about it. It says, “We are beaten.” At the age of eight, nine or 10, I can remember looking at my classmate and thinking, “What can I do?” I realised that I could do nothing apart from provide a bit of friendship and support, and I did it as best I could, as I am sure that anybody would.
But that impotence of an eight-year-old has disappeared, and I can now stand here as a 49-year-old—[Interruption.] Yes, only 49—I know. I have had a hard life—that is what I tell my wife, anyway. I burn with the sense of injustice that the hon. Member for Gedling expressed. We are all in a position in this place where we are not impotent—we can actually do something about this. If I thought that Her Majesty’s Government were not as committed as I am on this issue, I would be in the Lobby with Opposition Members, but I do not think that. I think that the strategy of the Finance Bill is right. Our values and our principles must shine through. I urge Treasury Ministers and other Ministers to talk a little more about the why of what we are doing in our politics and a little less about the percentages and statistics.
Kirsty Blackman
I want to talk about a few issues, many of which have been brought up during the debate. The first is the subject of new clauses 1 and 5, both of which I support, and the way in which they have been written. I stress to the Government, and particularly to the hon. Member for Torbay (Kevin Foster), that the reason why the new clauses call for reviews is that we have no amendment of the law resolution, which means that we cannot put forward more robust amendments that ask the Government to do things. If we could have tabled more robust amendments, we would have done so, and I am sure that the Labour party would have done so as well. The Government have chosen to hamstring us and, as I have said before, when Conservative Members are sitting on the Opposition Benches, they will regret this behaviour. The fact that they chose not to move an amendment of the law motion makes it much more difficult for us to table any substantive amendments, but we are doing our best.
The things that we have managed to do during these Finance Bill debates are unparalleled in the Scottish National party’s history. We have managed to have two substantive amendments accepted to the Bill. I had two amendments accepted to the previous Finance Bill, but they were particularly minor. These ones are much more substantive and call for reviews. One of those amendments fits nicely in this section of our proceedings, as it relates to the public health effects of gambling. I am pleased that that amendment continues to be in the Bill, and I look forward to the Minister bringing forward that review in the next six months, as we have called for him to do.
There are various reasons why a Government can choose to change or introduce taxes. They can choose to have a tax to raise funds for the Government. They can choose to have a tax relief to encourage positive behaviour, or a tax to discourage negative behaviour. They can choose to have a tax to do one of the things that the Opposition and the hon. Member for North Dorset (Simon Hoare) have been keen to talk about. They can choose their priorities. They can choose to have a tax system that aims to reduce child poverty, reduce inequality and increase life expectancy, and we are asking for that to be the Government’s focus when they are setting taxes.
The Government should be looking at the life chances of the citizens who live on these islands and doing what they can to improve those life chances. That is the most important thing—it is why these reviews are being asked for. Whether or not the taxes that the Government have set are appropriate, we are asking for a change of focus and a change of priority, and I think the hon. Member for North Dorset was agreeing with that.
Mhairi Black (Paisley and Renfrewshire South) (SNP)
Forgive me if I am stating the obvious, but do we not also need these reviews because we have Brexit coming up, and we have to be able to reflect on and evidence things?
Kirsty Blackman
That is correct. One of the difficult things about looking at the potential outcomes of Brexit is that those stats do not exist. It is all well and good to talk about the fact that there are reviews sitting on shelves gathering dust, but we need stats. We need stats to be able to prove that Government policy does what it says on the tin.
The Minister can stand up and say, “This policy will raise £100 million for the Government,” but I would like to see not only the working beforehand, but the review afterwards that proves that the policy did what the Government intended it to do. I have been clear on a number of occasions that I do not think the Government do enough of that evidencing. The reviews being asked for would allow the Government to provide us with that evidence. Evidence written by the Government, rather than an independent individual, is still a legitimate thing that we can look at. The hon. Member for Torbay seemed to suggest that we would doubt information were it to come from the Chancellor of the Exchequer—surely not! It would be good for him to provide that.
I want to talk about a few things that the SNP has been doing in Scotland and the changes we have chosen to make to not only our tax system, but other systems, and particularly those that affect the issues raised in new clauses 1 and 5. We have mitigated the bedroom tax, which has been a major factor in us having the lowest child poverty rate of any country in the UK. We have increased the number of people from disadvantaged areas who are going to university. We are making major changes to the care system for looked-after children. Those young people have had some of the poorest life chances in the past, and what the Scottish Government are doing on that is hugely important for ensuring that their life chances are improved.
We have increased the pregnancy and baby grant to £600. We are improving access to childcare, and we have the baby box scheme. We are the best country in the UK at paying the living wage—not the pretendy living wage, but the real living wage. People working in Scotland are more likely to be paid the living wage than those working in England. About half of taxpayers in England pay more than they would if they lived in Scotland, and that is the half of taxpayers who are earning the least. We think that that is a progressive measure that is assisting people to get out of poverty.
Luke Graham
The hon. Lady is bringing out the successes of the SNP Administration in Edinburgh, but does it not still stand that, after a decade in power and with powers over taxation and healthcare, men and women in Scotland live for two years less than other people in the United Kingdom? In fact, we have the lowest life expectancy in the whole United Kingdom. There may be some successes—I support those on care—but certainly on the one thing that matters most, which is keeping people alive the longest, the SNP is an abject failure.
Kirsty Blackman
We have not had taxation powers for 10 years, and we do not have the full range of powers. For example, we do not have the full range of powers over public health, so we do not have in Scotland powers such as the public health taxation measures—the sugar tax—that were brought forward in the previous Budget. We do not have the full range of powers, and if Scotland were to be an independent country, with the full range of powers, we would be putting the things we are discussing today at the heart of our Government’s agenda. Our Government have done this and we will continue to do this—we are pushing for fairness.
I will wrap up, because I am aware that I am relatively short of time, but I want to talk about the people who are the poorest and, by the way, the most disadvantaged by the way in which this society is set up. Following the changes to universal credit, those in the bottom 30% of incomes will gain less from the work allowance than they will lose in the benefit freeze. The benefit freeze is costing them more than the changes to the work allowance will give them. Those people, who have no recourse to public funds, are the poorest individuals I see coming through my door, and this Government have caused that situation. This Government have caused a situation in which asylum seekers have got absolutely nothing. This is about the very poorest people, who have got the worst life chances as a result, and this Government are completely failing to do anything to support them or to improve their life chances. This is about people on disability benefits, who are really struggling, and at every turn, this Government have made their lives worse, rather than better. This is about lone parents, who are disadvantaged as a result of universal credit. This is about the increases in food bank usage.
The Government talk about people working their way out of poverty. I do not understand how people can have hope when they do not have enough to eat.
The Financial Secretary to the Treasury (Mel Stride)
I thank everybody who has made a contribution in this very important debate. There have been some extremely passionate and well-argued speeches.
Part of the debate has been exemplified by the hon. Member for Gedling (Vernon Coaker) and my hon. Friend the Member for North Dorset (Simon Hoare), who spoke in effect about who cares about these issues. We need to recognise that Members on both sides of this House—I include the Opposition in my remarks—care very deeply about whether our fellow citizens in our great nation are impoverished, are in dire straits, do not have enough to make ends meet, do not have enough to feed their children, or have children who do not have the opportunities in life that we wish for our children in turn. Those things matter considerably, and I congratulate my hon. Friend on the quality of the speech he delivered, particularly in that respect.
Something else that lay at the heart of the debate between the hon. Member for Gedling and my hon. Friend the Member for North Dorset, is whether the numbers matter. Do the figures matter? I think it was the contention of the hon. Member for Gedling that, in a sense, the figures do not matter. In a curious way, that is rather at odds with the notion of supporting new clause 1, because it calls for more figures to inform our decisions. In one sense, of course, the figures do not matter, because what matters is the condition of the people who live in our country. However, figures do matter when it comes to formulating the policy responses we need to address the situation, and if we are, in any meaningful way, to chart the progress, or otherwise, that Governments—ours and the Labour Governments who preceded us—have made on this extremely important issue.
Debbie Abrahams
I do not know whether the Minister is aware of this, but the European Commission does this sort of analysis every year on its programme of policies, so it is not that this cannot be done. Its work covers not just quantitative but qualitative data, which relates to the points my hon. Friend the Member for Gedling (Vernon Coaker) made. There needs to be more than what the Government are doing—they do not know what the impacts of their policies will be.
Mel Stride
I think I have been misunderstood, and I apologise to the hon. Lady if I was not clear enough. I am certainly not saying that data does not matter—quite the opposite. What I am saying is that we need to have the right kind of data for the exercise to be meaningful and worth while.
New clause 1 would require the Chancellor to report on the impact of changes to the personal allowance and the higher rate threshold on households of different levels of income, on child poverty, on equality and on those individuals with protected characteristics. New clause 5 would require the Chancellor to report on the Bill’s effect on child poverty, life expectancy and public health.
Let me first address the question of the Treasury’s compliance with its public sector equality duty, as referenced in new clause 1(2)(c). Equality and fairness continue to lie right at the heart of the Government’s agenda, and we take our compliance with this duty deeply seriously while deciding policy. That means that Government decisions are explicitly informed by the evidence available of the implications of those decisions for those sharing protected characteristics. I have no hesitation in saying that the Treasury complies with the public sector equality duty.
Further provisions in new clauses 1 and 5 call for the publication of different forms of analysis for clause 5 and for the whole Bill in turn. The Government have been, and continue to be, transparent—more transparent than any other. Changes to the tax system are always accompanied by a tax information and impact note, and each Budget is accompanied by detailed distributional analysis.
TIINs, in particular, are relevant to the questions discussed today. These notes provide Parliament and taxpayers with information on the expected effects of changes to the tax system, and form a vital part of the Government’s commitment to transparency and accountability around tax decisions. In the context of clause 5, for example, the TIIN already sets out the impact on groups of taxpayers according to their age, gender and income tax band, and this data is readily available to HMRC through tax returns.
Vernon Coaker
That is the point: the assumptions on distributional analysis are assumptions. What we want is to see whether those assumptions turn into reality.
Mel Stride
I will come to the very issue that the hon. Gentleman rightly raises.
Clause 5 will benefit households across the UK. Due to the information collected by HMRC through tax returns, we have various pieces of information on geographical distribution, as sought under new clause 1(2)(d). That is an important point, because much of the information being requested is actually already available.
In addition, the distributional analysis published by the Treasury already sets out the impact of tax changes on households with different levels of income. To be completely clear, the analysis shows how the living standards of households in each tenth of the income distribution will be affected by the decisions the Chancellor and Prime Minister have taken since they took office in 2016. Not only does the analysis meet the intention of new clause 5(2)(a) regarding the effects of the Government’s tax changes on different households, it actually goes beyond that by including changes to welfare and spending on public services, and by considering changes in addition to those announced at each fiscal event since the autumn statement in 2016.
There is, as I suggested at the outset of my remarks, much that we can agree on across the House. Child poverty, public health, life expectancy and inequality are among the greatest issues of our age. We have got on with the job. Absolute poverty rates are at record lows. One million fewer people are in poverty now than under Labour. I say to the hon. Member for Gedling that 1 million is indeed a number, but for every one of those million, their lives have been enhanced. That includes 300,000 fewer children in poverty than under Labour. As we know, the best route out of poverty is through work. There are 3 million more people in work now than in 2010, with 637,000 fewer children in workless households. That is a record of which we should be proud. I urge the House to reject the new clauses.
Peter Dowd
If I may rephrase St Augustine, who said “O Lord, make me chaste, but not yet,” what we have here is a Government saying, “O Lord, make me charitable and compassionate, but not just now. Let’s do it in the future.” It comes to something when the British Government, with an expenditure of approximately £840 billion a year, say that it will be difficult to get statistics, either qualitative or quantitative, from which they can make policy. That is how it seems to me, but I tell you what: every day when I am in my constituency I see people who are homeless. What have the Government done about that? Nothing. I see food banks opening up all the time. What are the Government doing about that? Absolutely nothing. What are the Government doing about the 24% of homeless people who are from the LGBT community? Absolutely nothing. And then we heard the dross coming out—that is what it is, dross—about intergenerational worklessness. The Joseph Rowntree Foundation—through evidence, through statistics, through analysis—found that that was not a significant factor in homelessness. So we hear all this talk about charity, compassion and working together, but I am afraid it does not wash when it comes from the mouths of Tories.
Question put, That the clause be read a Second time.
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
I beg to move, That the clause be read a Second time.
Mr Deputy Speaker (Sir Lindsay Hoyle)
With this it will be convenient to discuss the following:
New clause 7—Review of effect of carbon emissions tax on climate targets—
“The Chancellor of the Exchequer must review the expected effect of the carbon emissions tax on the United Kingdom’s ability to meet its internationally agreed climate targets and lay a report of that review before the House within six months of the passing of this Act.”
New clause 12—Review of expenditure implications of Part 3—
“(1) The Chancellor of the Exchequer must review the expenditure implications of commencing Part 3 of 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 (carbon emissions tax) coming into effect until such a review had been laid before the House of Commons.
New clause 13—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 the Bill – alongside New Clause 11, New Clause 14 and New Clause 15.
New clause 19—Review of powers in consequence of EU withdrawal (No. 2)—
“(1) The Chancellor of the Exchequer must, no later than a week after the passing of this Act and before exercising the power in section 89(1), lay before the House of Commons a review of the following matters—
(a) the fiscal and economic effects of the exercise of the powers in section 89(1) 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) England,
(ii) Scotland,
(iii) Wales, and
(iv) Northern Ireland;
(d) any differential effects in relation to the matters specified in paragraphs (a) and (b) in relation between—
(i) England,
(ii) Scotland,
(iii) Wales, and
(iv) Northern Ireland.”
This new clause would require a review of the economic and fiscal impact of the use of the powers in section 89 in the event of no deal and in event of a withdrawal agreement passing.
Amendment 16, in clause 78, page 51, line 32, after “may” insert
“(subject to section (Review of expenditure implications of Part 3))”.
See New Clause 12.
Amendment 1, in clause 89, page 66, line 38, 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.”
This amendment would require the Chancellor of the Exchequer to review the fiscal and economic effects of the exercise of the powers in subsection (1) before exercising those powers.
Amendment 13, page 67, line 7, 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 the affirmative procedure.
Amendment 7, page 67, line 19, at end insert—
“(7) The provisions of this section only come into force if—
(a) a negotiated withdrawal agreement and a framework for the future relationship have been approved by a resolution of the House of Commons on a motion moved by a Minister of the Crown for the purposes of section 13(1)(b) of the European Union (Withdrawal) Act 2018, or
(b) the Prime Minister has notified the President of the European Council, in accordance with Article 50(3) of the Treaty on European Union, of the United Kingdom’s request to extend the period in which the Treaties shall still apply to the United Kingdom, or
(c) leaving the European Union without a withdrawal agreement and a framework for the future relationship has been approved by a resolution of the House of Commons on a motion moved by a Minister of the Crown.”
This amendment would prevent the Government implementing the “no deal” provisions of Clause 89 without the explicit consent of Parliament for such an outcome. It would provide three options for the provisions of Clause 89 to come into force: if the House of Commons has approved a negotiated withdrawal agreement and a framework for the future relationship; if the Government has sought an extension of the Article 50 period; or the House of Commons has approved leaving the European Union without a withdrawal agreement and framework for the future relationship.
Amendment 8, page 67, line 19, at end insert—
“(7) The provisions of this section shall not come into force until the House of Commons has come to a resolution on a motion made by a Minister of the Crown agreeing its commencement.”
Amendment 14, in clause 90, page 67, line 22, after “may” insert
“(subject to subsections (1A) and (1B))”.
See Amendment 15
Amendment 15, page 67, line 24, 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 the 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.
New clause 18—Review of effects on measures in Act of certain changes in migration levels—
“(1) The Chancellor of the Exchequer must review the effects on the provisions of this Act of migration in the scenarios in subsection (2) and lay a report of that review before the House of Commons within one month of the passing of this Act.
(2) Those scenarios are that—
(a) the United Kingdom does not leave the European Union,
(b) the United Kingdom leaves the European Union without a negotiated withdrawal agreement,
(c) the United Kingdom leaves the European Union following a negotiated withdrawal agreement, and remains in the single market and customs union,
(d) the United Kingdom leaves the United Kingdom on the terms of the draft withdrawal agreement of 14 November 2018.
(3) In respect of each of those scenarios the review must consider separately the effects of—
(a) migration by EU nationals, and
(b) migration by non-EU nationals.
(4) In respect of each of those scenarios the review must consider separately the effects on the measures in each part of the United Kingdom and each region of England.
(5) 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 effects on measures in the Bill of certain changes in migration levels.
Jonathan Reynolds
This group of amendments relates to the tax and fiscal implications of the UK’s withdrawal from the EU.
Throughout the last year Parliament has been asked to approve a series of Bills giving the Government the power to deliver every type of Brexit deal conceivable, and this Finance Bill is no different. I said when closing the Second Reading debate on the Bill for the Opposition that this approach was one of “give us the powers now and we will make the decisions later,” and as it currently stands Brexit represents the biggest transfer of power to the Executive in modern constitutional history. That is disappointing for anyone who thought Brexit would see greater powers for this Parliament, but it is also a recipe for very bad decisions, and there is a classic culprit in this Finance Bill in the form of clause 89. Innocently named “Minor amendments in consequence of EU withdrawal”, it gives the Government power to amend tax legislation without any of the usual due process in the event that the UK leaves the EU without a deal.
The Government always tell us—I am sure they will do so again—that this is simply a safeguarding provision that we will never have to use, but all of us here today know that as it stands the Government have absolutely no chance of getting their deal through, because that deal does not deliver the basics of what this country needs. It does not deliver smooth, low-friction borders for manufacturing and supply chains, nor does it deliver market access for financial services. It also fails to resolve the big question: after we leave the EU, will we prioritise market access or trade autonomy? Because of that, we will almost certainly end up in the backstop arrangements, a halfway house without any say for the UK—the very worst of all worlds.
The new clauses and amendments are therefore of seminal importance, and I am extremely grateful to the Chair of the Home Affairs Committee, my right hon. Friend the Member for Normanton, Pontefract and Castleford (Yvette Cooper), for laying amendment 7 before the House today. It is clearly a cross-party amendment, supported by the Chairs of the Treasury, Exiting the European Union and Business, Energy and Industrial Strategy Committees, but it has the Opposition’s support because it offers Parliament a chance to make a clear statement rejecting a no-deal outcome—a statement that cannot come soon enough.
Anyone pretending that crashing out without a deal is simply about resorting to World Trade Organisation schedules is dangerously misinformed. As The Economist magazine said last month:
“A no-deal Brexit is about a lot more than trade—it would see many legal obligations and definitions lapse immediately, potentially putting at risk air travel, electricity interconnections and a raft of financial services”.
It would mean tariffs on trade with the EU, but it would also affect trade beyond the EU as all our current trade agreements negotiated as an EU member would immediately cease to apply. Agriculture, aerospace, the automotive sector—all these major sectors of our economy—would face potentially irreparable damage, and while tariffs may be reduced over time, excise duties and health checks on food, plants and livestock cannot be reduced so easily. Researchers at Imperial College London have calculated that just two minutes more transit time per lorry at Dover and the Channel tunnel translates into a 47 km traffic jam, and for perishable items like food, delays of that magnitude simply could not be sustained. When we add to that higher prices through tariffs and further inflationary pressure from another inevitable fall in the value of the pound, it is a recipe for significant pressure on living standards. That is why the Opposition say that no deal is not a real option.
There has been some suggestion that the Government might accept amendment 7.
Mr John Baron (Basildon and Billericay) (Con)
Does the hon. Gentleman not acknowledge that by ruling out preparations for no deal one is in effect tying the hands of one’s negotiating team, which in effect makes a trade deal—which we all, I think, would prefer to leaving on WTO terms—more difficult to achieve and therefore makes leaving on WTO terms more likely?
Jonathan Reynolds
The facts are as they are. It is far too late for that. Everyone knows the position that this country is in. The Government have run down the clock. They lost their majority through a general election that they did not need to call, and it is far too late to start applying the logic that might have applied several years ago. Because of that, our vulnerability is evident for everyone to see. No one should underestimate the likelihood of a no-deal outcome at this stage. No one should be pretending, through semantics or parliamentary chicanery, that we might be able to present no deal as a way of giving us greater leverage in negotiations. I am afraid that the Government have got us to the point of ruin if that is the strategy that Conservative Members wish to pursue.
Kevin Brennan (Cardiff West) (Lab)
Given that the Business Secretary said in the House earlier that no deal should not be contemplated, and that my hon. Friend is outlining the possibility of the Government accepting amendment 7, would it not be right for the Government to say clearly at the end of business today that they are ruling out no deal because it would be so damaging to this country?
Jonathan Reynolds
I absolutely agree with my hon. Friend. We all know that several members of the Government take that view, even though they may not be able to say it on the record. They are quite clear as to what no deal would mean, and they would not contemplate going down that route. It would be far simpler and far better to get to a position where ruling out no deal was clearly the Government’s intent.
New clause 3 would oblige the Government to publish a review of the fiscal and economic effects of the exercise of the powers in clause 89, as well as the differences between exercising those powers in Great Britain and in Northern Ireland. As we edge closer to the reality of crashing out without a deal, clause 89 is not simply hypothetical. We are now just two and a half months away from the UK’s exit without an agreement. It is therefore of critical importance that we have a full and transparent view of the implications of a clause of this kind.
Crispin Blunt (Reigate) (Con)
I am afraid that the hon. Gentleman is going to have to do a bit better than this. He talks about crashing out without a deal, but he needs to get into the detail of the implications. Perhaps he is going to start talking about planes, but amazingly, the planes are going to keep flying. Amazingly, we are still going to have drugs supplied into the United Kingdom. He needs to get down into the detail of exactly what the implications will be, because if we are faced with the reality of no overall agreement, there will be a barrow-load of minor agreements to ensure that the common interests of the United Kingdom and the European Union survive the transfer to WTO terms on 29 March with minimum impact on the citizens of the EU and the UK. It is time he got real and stopped this nonsense—
Jonathan Reynolds
Thank you, Mr Deputy Speaker.
I have just talked about some of the consequences of crashing out without a deal. I have talked about relationships, about tariffs on products and about the legal definitions under the common agreements that this country has undertaken with other European countries. We all know this—the information is readily available—so I am not quite sure what point the hon. Gentleman is making. I think he is aware of the dangers of taking this course of action.
Mr Kenneth Clarke (Rushcliffe) (Con)
With respect, it is quite right to concede that some of the fears being raised about no deal are grossly exaggerated, but the problems are quite real enough. If we leave with no deal, we will be the only developed country in the world that has no trade agreement at all with anybody and that is having to fall back on WTO rules, which are made to sound marvellous by the Brexiteers but which do not actually amount to very much. We will also be erecting new barriers to trade and investment around the borders of the United Kingdom, including along the Irish border, and that is bound to disadvantage our economy very seriously indeed.
Jonathan Reynolds
The Father of the House is as accurate as ever. Some colleagues are pursuing a dangerous argument that all our trading relationships with countries that are not in the EU are somehow currently under WTO terms, which is an absurd misconception. We have entered into trade agreements as a member of the EU that account for something like 16% of our goods exports.
Regardless of the significant impacts of a no-deal outcome, we could go further and say that to leave the EU having not secured a deal—an acrimonious departure —would damage our relationship with our most important trading partner for years to come and fundamentally undermine our credibility on the world stage. I cannot see how any serious-minded Member of this House could understand that that would not be of severe consequence for the United Kingdom, which is why it is so important that this House makes a clear statement today about the dangers of no deal.
John Redwood (Wokingham) (Con)
Can the hon. Gentleman name a single country that has a free trade agreement with the EU that will not transfer it to the UK under the novation procedures?
Jonathan Reynolds
We simply do not know the answer to that question. I always listen to what the right hon. Gentleman has to say in Treasury and Finance Bill debates, but he is one of the archetypal Members who come to the House and pursues what I call the BMW argument: “Everything will be fine because we buy BMWs and everyone will give us what we want.” That argument is still being pursued in these debates, but it has been proved completely untrue by the stage of the negotiations that we are at. It is simply not good enough to say, “It will all be alright on the night. Everyone will transfer over the benefits we currently have. It will be as straightforward as that.” If that were case, the Government would not be in this morass and the country would be in a far better position.
Chris Philp (Croydon South) (Con)
First, is it not the case that the UK and, indeed, the entire EU currently trade with major economies, such as the USA and China, under WTO terms? Therefore, while not desirable, they can be made to work. Secondly, if we adopt the shadow Minister’s approach and rule out no deal, we have no choice but to remain in the EU or to accept whatever the EU sees fit to give us, which is not a great negotiating position.
Jonathan Reynolds
I thoroughly agree that what the Government have got us into is not a great negotiating position, but that is because the negotiations have been driven by the best interests of the internal politics of the Conservative party. If the national interest had been considered, we would be in a completely different place.
Trade can exist on WTO terms. It is not that the UK would somehow no longer be a trading nation, but that is not the test of good Government policy. The test is to consider the ramifications of that decision and to decide whether it is in the UK’s best interests, but I cannot believe that anyone would look rationally at what a no-deal outcome means and say, “I would find that acceptable for this country.”
Kate Hoey (Vauxhall) (Lab)
Does not my hon. Friend think that it would be irresponsible for any Government not to be making contingency plans for WTO rules in these circumstances? Does he also agree that the Irish Taoiseach has in the past few days looked for the first time at making some changes to his intransigent approach to the backstop, precisely because the Republic of Ireland would suffer so much more from WTO terms than the United Kingdom?
Jonathan Reynolds
The merits of the Government undertaking contingency measures are different from the political case that we must consider, which is whether we would find it desirable to undertake a course of action that would mean that we had to use those contingency measures. The focus of the debate in this Finance Bill should be a seriously hard-headed look at the consequences of no deal, and there should be a statement from Members on both sides of the House that that is not what we seek for the UK and that we do not believe that it is possible.
Jonathan Reynolds
I will take an intervention from the hon. Member for Dover (Charlie Elphicke), and I may come to the hon. Member for Shrewsbury and Atcham (Daniel Kawczynski) if the intervention is good enough.
Charlie Elphicke
The hon. Gentleman is making an interesting speech. My concern is with how he can support undermining the making of contingency preparations that are in the national interest, which is the effect of amendment 7. It is just the wrong thing to do, and the Labour party ought to be more responsible than that.
Jonathan Reynolds
I completely disagree with the hon. Gentleman, and a little humility from Conservative Members on the point about responsibility for the Brexit negotiations would be appreciated. For my entire lifetime, this country’s European policy has been dictated by the internal politics of the Conservative party. Every Conservative Prime Minister in my lifetime has been brought down by the issue of Europe. To suggest that any other political party or actor in this country needs to have more regard for the national interest, when it is the Conservative party that has never been able to do so, is not something I will take.
Daniel Kawczynski
Bearing in mind that 95% of the world’s growth over the coming decades will come from outside the European Union, what assessment has he made of the opportunities that will be afforded to the United Kingdom by our being able to tailor-make bilateral trading agreements?
Jonathan Reynolds
I am extremely glad that that issue has come up, because the opportunities created by growth outside the EU have no relationship to our membership of the EU, and could possibly be undermined by our leaving the EU. If we want to compete in competitive emerging markets around the world, what better way is there to do so than from within the single market? I would wager with the hon. Gentleman that a country like Germany will do far better from that growth around the world through its continued membership of the European Union than we will. I am afraid that it is because of such statistics, which have no bearing on serious Government policy or reality, that this debate has got to where it is, but I will move away from a wider debate on Brexit and return to the Finance Bill before you tell me to do so, Mr Deputy Speaker.
I will now come to clause 89 and the relationship between Great Britain and Northern Ireland. Under the draft withdrawal agreement it is widely accepted that, under the backstop arrangements, Northern Ireland will remain in regulatory alignment with the European Union, which would be particularly the case for EU customs law but it would also apply to compliance with elements of EU single market regulation in the technical regulation of goods, state aid and other areas of north-south co-operation between Northern Ireland and the Republic. Of course, Northern Ireland would be included in parts of the EU VAT and excise regimes and in the single electricity market.
With that in mind, it is clear that the powers handed to the Treasury by this Bill may not be applicable in Northern Ireland in the legal and regulatory areas under which EU authority would remain. We are therefore seeking a review that clearly sets out any difference in application of these powers in respect of Great Britain and Northern Ireland, and I urge Members on both sides of the House to support new clause 3.
New clause 7 relates to clause 90 on establishing an emissions reduction trading regime. It would require the Government to review the expected effect of the carbon emissions tax on the UK’s capacity to meet internationally agreed climate targets. There has never been a more critical time to take urgent action on climate change to avoid environmental catastrophe. The report from the UN Intergovernmental Panel on Climate Change, published in October 2018, shows that we have just 12 years left to make unprecedented changes to prevent global warming increases above 1.5° C. Our exit from the European Union must not be used as an excuse to step back from action on climate change. Worryingly, clause 90 contains one of the Bill’s very few passing references to environmental issues, and our review, proposed in new clause 7, would ensure that the Government are held accountable for making progress on reducing emissions without using Brexit as an excuse for stalling.
This is evidently a Government in chaos, seemingly without any plan or strategy at all. The new clauses and amendments in this group would improve both the Finance Bill and the process by which we leave the European Union. They are sensible, proportionate and timely, and I commend them to the House.
Nicky Morgan (Loughborough) (Con)
I realise that time is short and that many hon. and right hon. Members want to speak on this group, which shows the appetite of Members on both sides of the House to have their say on this critical issue. There is a deep frustration that debate was curtailed last month before we got to the meaningful vote on the Prime Minister’s draft withdrawal agreement.
I rise to support amendment 7, which was tabled by the right hon. Member for Normanton, Pontefract and Castleford (Yvette Cooper) and to which I have added my name, and amendment 8.
Nicky Morgan
I have great respect for my hon. Friend, but I think that it would have been better to have had this debate in 2016 rather in 2019, because the honest truth is that the Brexit that some Members on these Benches and some people out in the country say that they want was not outlined in any way, shape or form in the 2016 referendum. I refer to one Member, who said at the time, “Only a madman would leave the single market.” Yet now, that is exactly what he is proposing should happen.
I do not agree with my hon. Friend the Member for Basildon and Billericay (Mr Baron) about the advantages of WTO, and I will tell him why: if it was so good, Members who are backing the WTO option—a no-deal option—would not be so keen to get into negotiating free trade agreements so quickly with countries around the world. I do not know whether it was my hon. Friend, but one Member just now talked about trading with America and China, yet free trade agreements with America and China are touted all the time by those in favour of Brexit as agreements that need to be negotiated as quickly as possible.
The honest truth is that to make trade work around the world, all countries will seek to enter into agreements with countries they want to trade with in order to lift or to lower tariffs and non-tariff barriers. That is what we have done, very successfully, in our relationship with the European Union since we joined over 40 years ago.
Mr Baron
My right hon. Friend is being very gracious and I very much appreciate that.
Many of us in this place—I would like to think the majority of us—would prefer a good trade deal to WTO. That is not inconsistent, but I think what my right hon. Friend misses is that on a bad deal versus WTO we have got to get the balance right, because the EU has had such a bad track record on negotiating trade deals. We trade with the rest of the world on WTO terms very profitably and very successfully, even though many of us would prefer a good trade deal.
Nicky Morgan
Trade deals are immensely complicated. While Members know how I voted in 2016, I accept that this country will be leaving the European Union on 29 March—with regret, I have to say, but I do accept it—but one of the debates that we have not even started to have is how the House is going to approach the approval of trade deals. I can tell my hon. Friend that this is a real worry to those who are going to be negotiating those agreements. We saw with the Transatlantic Trade and Investment Partnership just how politically contentious that agreement was, even though it did not even reach the House as an agreement. We are going to spend the next few decades in the House negotiating and approving trade deals, which everybody, for various constituency reasons, will have problems with.
Sir Nicholas Soames (Mid Sussex) (Con)
My right hon. Friend is making an extremely powerful argument. Does she recall that the trade deal between America and Canada, which was a “willing buyer, willing seller” trade deal, took many, many years? The idea that this is some wonderfully easy, smooth, simple process is, frankly, rubbish.
Nicky Morgan
I have great respect for my right hon. Friend, and on this issue he speaks much good sense, as always. I hope that right hon. and hon. Members will listen to what he has to say. I am conscious of the time, so shall move on.
Over the past two years, we have heard it said in the House that no deal is better than a bad deal. I have to say that no deal is a terrible deal and it would be a gross dereliction of the responsibility of Members of this House to inflict no-deal on our constituents.
Nicky Morgan
I am afraid I am going to make some progress. My hon. Friend will be able to intervene on other Members.
Those who wanted Brexit talked often about the taking back of control. I have not had time to watch the film broadcast on Channel 4 last night, but I understand that that was a key part of it. As I have said before, it is right that control should come back to this Parliament, and it is right and it is time for Members of Parliament on all sides to make it clear to the Government that a no-deal Brexit outcome is absolutely unacceptable.
It will have been noticed that many of those who have put their names to amendment 7 are Chairs of Select Committees. The Treasury Committee took evidence in December—I am grateful to all Committee members, who have varying views on Brexit—and we produced a unanimous report. One thing that was made very clear is that, compared with today’s trading arrangements, and assuming no change to migration arrangements, our GDP would take a 7.7% hit on a modelled no-deal scenario. That is greater than the impact of the 2008 financial crisis. Members who have been in the House since 2010, and perhaps just before, will know the impact of the financial crisis on our constituents.
Finally, as a wise general said to me a few weeks ago, Britain is renowned for its confidence and competence. Currently, we are demonstrating neither. A no-deal Brexit will completely destroy any reputation we have for confidence and competence. The Government decided to put off the meaningful vote, although hopefully we will get it either this week or next. It is time for Members of Parliament on all sides to start ruling out options that would be deeply damaging to our country. That is what amendment 7 and 8 are about, and I will be delighted to support them both, should they be voted on.
Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)
It is a pleasure to follow the right hon. Member for Loughborough (Nicky Morgan), because although we represent different parties and disagree on many issues, and although we will take different positions on the Prime Minister’s deal when it comes to a vote, on this issue we agree. I rise to speak to amendment 7 and to support amendment 8.
We agree on the dangers of no deal to the country. I tabled amendment 7 because I am really worried that delays, drift or brinkmanship mean that there is now a serious risk that we will end up crashing out of the EU with no deal in just 80 days’ time. I am worried that we could come to the crunch and Parliament would not have the powers to stop it happening. We have a responsibility not just to stand by. I believe that the Government should rule out no deal but, if they will not, Parliament must make sure that it has the powers to do so if it comes to the crunch.
Amendment 7 has support from across the House. It has been signed by Chairs of cross-party Committees—it has the support of the Chairs of the Treasury Committee, the Exiting the European Union Committee, the Liaison Committee and the Business, Energy and Industrial Strategy Committee and others, too—and it is supported by those with a wide range of views on the best way forward. It is supported by those who support the Prime Minister’s deal and those, like me, who do not, and it shows that those who take a wide range of views on the best way forward have come together to say that we should rule out the worst way forward.
Charlie Elphicke
Just to clarify, does the right hon. Lady herself intend to support or oppose the Prime Minister’s deal?
Yvette Cooper
As I just said, and as I said when I spoke in the debate before Christmas, I am opposed to the Prime Minister’s deal. It is a blindfold deal that does not address some of the policing and security challenges, as well as customs union issues for manufacturing. I accept, though, that we take different views on that throughout the House. There are very different perspectives and views, which is why the opportunity to come together and rule out no deal is such an important one.
Yvette Cooper
I will give way in a second. I am conscious of the time, so let me set out what the amendment would do and I will then of course give way to the hon. Gentleman.
The amendment applies to clause 89 of the Bill, which the Government say they need for minor amendments to tax-raising powers in the event of no deal. In practice, clause 89 is drafted much more widely than that, but that is the point that the Government have made. The amendment says that, if the Government want to use clause 89 powers to implement no deal, they first need to give Parliament a vote on no deal and to have Parliament’s support for no deal. The amendment provides a safeguard to make it harder for the Government to go ahead with no deal without even going back to Parliament.
Yvette Cooper
The amendment provides a parliamentary safeguard. It does not, in itself, solve any of the many Brexit issues that we have, but it does provide an additional parliamentary safeguard that says that the Government cannot use the powers in clause 89 to implement no deal without first coming back to Parliament to ask for permission and support for a no deal. The hon. Gentleman is right that there may be other powers that the Government may choose to use. There may be other issues that they may choose to pursue, but this is our opportunity within this Bill to address these powers. That is why it is an important one to come around.
I have heard four sets of objections to the amendment. Some say that it is irresponsible; that it is somehow holding the Government to ransom on powers that they need. Some say that it is undesirable and perhaps even unpatriotic because they think that no deal is a good outcome and should not be ruled out. Some say that it is unnecessary because the Prime Minister’s deal is the best way forward. Some suggest that it is unstrategic because we need the threat of no deal to force a decision one way or another. I want to take each of those objections in turn because each of them is wrong.
First, on the charge that this is an irresponsible amendment, the amendment does not affect the normal Treasury and Government operations; those carry on as normal. It simply requires the Government to get Parliament’s permission if they want to use these powers to pursue no deal. Even if there is deadlock, the amendment provides a way forward. Let us suppose that Parliament votes against any deal that is put and also votes against no deal, and the Government still desperately want to use the clause 89 powers. In that event, they could follow paragraph (b) of the amendment if they still want to use the powers they need to apply to extend article 50. So in fact, this is an extremely responsible amendment. The irresponsible thing to do would be just to stand back and hope for the best, or to stand back and allow the Government to drift towards no deal without any attempt to put the safeguards in place to prevent that from happening.
The second objection is from those who think that no deal is a good option, or at least a good enough option not to rule it out. That is reckless. The damage to manufacturing industry, on which many of our constituencies rely, would be too serious. One local factory has said to me that the cost of its imports will double in price if we go to WTO tariffs. Another has told me that its European parent company would be under pressure to switch production to continental factories to avoid delays. Burberry has hundreds of jobs in my constituency, making clothing that is sold all over the world. It has written to me about the risks and concerns about delays to its supply chain. Its letter says:
“My hope in writing to you is that you will work with your colleagues across Parliament to ensure that there is no scenario possible where a No-Deal Brexit is a possibility.”
That is what I am doing.
Rachel Reeves (Leeds West) (Lab)
I thank my right hon. Friend for for tabling this amendment, which is so important. The Business, Energy and Industrial Strategy Committee has taken evidence from a number of businesses in the past few weeks, including Nestlé, Toyota and Airbus. Each one of them, and many others too, have said that the most dangerous thing would be to leave the European Union without a deal, which would have catastrophic impacts on their businesses and on the people who work for them. For that reason alone, anything that we can do to avoid a hard Brexit and going on to WTO rules, as some Members suggest, is the most important thing. This amendment at least helps to provide some safeguards to stop that from happening.
Yvette Cooper
My hon. Friend is exactly right. This is about dealing with risk, delays and increased costs. There is the risk that border delays will hit tight cross-border supply chains, but the CBI also estimates that the impact of WTO tariffs will mean a £4 billion to £6 billion increase in costs on our exports. The Environment Secretary—the leave campaigner himself—has said that WTO tariffs on beef and sheepmeat will increase by over 40%.
Mr Baron
The right hon. Lady is being very generous in giving way, but may I encourage her to temper her dire warnings about WTO terms? There were many forecasts and predictions from business organisations, the Bank of England and the International Monetary Fund about the disastrous consequences if we voted to leave the EU in 2016, including predictions of 500,000 extra unemployed by Christmas 2016. Those predictions did not materialise because investment is about comparative advantage such as low taxes and more flexible labour market practices. That is what determines investment at the end of the day.
Yvette Cooper
I am not drawing on macroeconomic predictions about the overall impact on the economy, although I note that there are predictions of a 9% reduction compared with the level at which we might otherwise be. I am actually focusing on the microeconomic impact on individual businesses across the country of simply seeing those costs go up. That is a real impact of the tariffs. It is not about confidence, levels of investment and so on; it is about the real impact of those costs on consumers, manufacturers, exporters and importers that is the real consequence of WTO tariffs.
Ms Angela Eagle (Wallasey) (Lab)
I am sure my right hon. Friend has noticed that the Office for Budget Responsibility said in its report on the recent Budget that there has been a loss of 1.5% of GDP since the referendum, and that the uncertainty was likely to make that worse, at least in the medium term. This Parliament has a duty to ensure that we mitigate that as much as possible, which is why I will be supporting her amendment.
Yvette Cooper
My hon. Friend is right that we have a responsibility not to make life harder for our manufacturers, which face huge pressure and huge international competition. We also have a responsibility not to make life harder for our consumers, who could see significant increases in prices. The British Food Importers & Distributors Association warns that WTO rules could mean that food prices go up by over 20%.
Crispin Blunt
The hon. Member for Leeds West (Rachel Reeves) has just cited Nestlé, which is a Swiss company. The right hon. Lady will be aware that Britain and Switzerland, which is able to make arrangements for the future, negotiated an agreement on 14 December 2018 to be able to continue trade, even if there is no agreement between the UK and the EU. Once this House has rejected the withdrawal agreement, that is exactly where the European Union and the United Kingdom will be. We will need to make the best of the situation in which we find ourselves. That is precisely why both sides will, under article 24 of the general agreement on tariffs and trade, move towards a free trade agreement to ensure that we do not put tariffs in place at all after 29 March. That is where we should be and those are the realities that are going to descend once we are through the “Project Fear” phase.
Yvette Cooper
The same cheery optimism that the hon. Gentleman and others have expressed that everybody will suddenly magically come to an agreement once we are through this phase and if we are on WTO terms is exactly the same cheery optimism they had that we were going to end up with a deal by now—and we have not, because it is actually a lot tougher than hon. Members suggest. The reality is that we are going to have a big hike in prices in April if we have no deal, and that has consequences for our manufacturers, businesses and consumers right across the country.
Anna Soubry (Broxtowe) (Con)
I shall be supporting the right hon. Lady’s amendment. She talks about the manufacturing sector and I believe that there are a number of manufacturing jobs in her constituency. Has she heard any argument that falling back on WTO rules would ensure that those critical, just-in-time supply chains are able to continue, and does she agree that this issue is very important to the many millions of people across the country who rely on those just-in-time supply chains, because if we fall back on WTO rules, it is they who will be losing their jobs, not hon. Members?
Yvette Cooper
I completely agree with the right hon. Lady. What I am saying just comes from listening to employers in my constituency who have told me that they have bought all the storage capacity they can find in order to stockpile, but they cannot stockpile more than 10 days’ worth of some of their products, and they are really concerned about the impact of the delays on just-in-time technology.
John Redwood
Does the right hon. Lady agree, in wanting to promote stronger and better industry once we have left, that the Government should set zero tariffs on all imported components, which we would be free to do, which would make them cheaper from non-EU countries and preserve zero tariffs for EU components?
Yvette Cooper
It is not clear to me how that strengthens our negotiating position with countries all over the world that might then keep their tariffs extremely high on our goods. The whole point is that, if we crash out on WTO terms, it undermines our negotiating power. Whether one thinks that is about negotiating with the EU or negotiating with other countries, we are weakening our position abroad.
We also have the impact on the NHS, which is spending £10 million on fridges: it will have to put more money into this which could be put into patient care. The police have warned that we will be less safe. They and the Border Force would immediately lose access to crucial information that they check 500 million times a year to find wanted criminals, dangerous weapons, sex offenders and terror suspects. We will not be able to use European arrest warrants to catch wanted criminals who fled here having committed serious crimes abroad. We use those warrants 1,000 times a year to send people back to face justice in the countries where those crimes have been committed. If those 1,000 suspects commit more crimes here, MPs will need to explain to the victims why we took away the power from the police to arrest and extradite them by tumbling into no deal.
Mr Speaker
Order. I am listening to the right hon. Lady, as always, with great interest and enormous respect, but may I just very gently point out that we need to hear from other Members with amendments in the group and from the Minister? I am not certain how many more Members we need to hear, but my guesstimate is at least four, and we have 31 and a half minutes.
Yvette Cooper
Thank you, Mr Speaker. I apologise to anybody else who wants to intervene, but I will not take any further interventions and try to conclude my remarks.
Some of those who say they support no deal have said that it is unpatriotic to rule it out. I understand that there are strong emotions, but I hope we could be more respectful of each other than that, because I believe that it is patriotic to stand up for manufacturing, for families who may be on the breadline and face increases in food prices, for our NHS, and for British citizens abroad who could lose their rights.
The other objection that people have raised is that this is unnecessary because the Prime Minister’s deal is the one they want as the way forward. I simply disagree, but I think the reality is not about my view but the view in the House: there is not, at this stage, support for the Prime Minister’s deal, and I do not think there could be. We have to be able to respond to what happens next.
Finally, I have heard some say that they want the imminent threat of no deal to persuade people to back the Prime Minister’s deal, if not now, then later. But brinkmanship in Parliament is not the way to resolve this and get the best deal for the country. This is too serious for us to play a massive Brexit game of chicken. The country cannot afford to wait to see who blinks first.
I hope that Ministers, as may have been rumoured, will accept this amendment and accept the principle behind it. The Government should get agreement on a deal before 29 March, get explicit agreement on no deal before 29 March, or, if that fails, commit to seeking an extension of article 50, so that there is time to sort this out. The amendment does not solve the Brexit challenges that we have ahead and the many intense debates that we will no doubt have about the best way forward, but it gives us an opportunity to rule out the worst way forward and to do so in a way that is calm, measured and sensible. That is why I hope that amendment 7 will have support from across this House.
Several hon. Members rose—
Sir Oliver Letwin (West Dorset) (Con)
Thank you, Mr Speaker. I rise to support amendment 7, to which I am a signatory.
My right hon. Friend the Member for Mid Sussex (Sir Nicholas Soames), who is sitting next to me, and I have calculated that we have been in the House, collectively, for 56 years, and we have only ever, either of us, voted once against the Conservative Whip. This will be the second time that we will both be voting against the Conservative Whip, and I want to explain why. First, I want to say one thing about what this amendment is not. The right hon. Member for Normanton, Pontefract and Castleford (Yvette Cooper) and my right hon. Friend the Member for Loughborough (Nicky Morgan) gave eloquent expositions, but what they did not mention is that, in contrast to some things that have been suggested, it has no impact whatsoever on the Government’s ability to prepare for Brexit—it is about what the Government do after Brexit.
Secondly, clause 89 is an item that those of us who have been Ministers for a number of years will recognise as an “abundance of caution” clause. Some group of lawyers somewhere stuck in the bureaucracy clearly alerted Ministers to the possibility that they did not have certain unspecified powers and said it would be a good idea to have some unspecified powers in case the lack of unspecified powers turned out to be important. I do not think therefore that this amendment, in itself, will be likely to have a huge impact, if any, on the Government of this country.
That brings me to the question of why I am supporting this amendment. The answer is that it is most extraordinarily important to make it clear to the Government that it is not just this amendment. It is the precedent that this amendment sets, which is that on any power taken in any Bill in relation to the exit of the UK from the EU, if there is a majority in the House today and there continues to be a majority against no deal, it will be possible to bring forward similar amendments. It is my proposal that we should indeed do that. I want to make it abundantly clear to those of my hon. Friends who are thinking of voting against the Prime Minister’s deal, which I shall be supporting, that the majority in this House, if it is expressed tonight, will sustain itself, and we will not allow a no-deal exit to occur at the end of March.
My last point is on why I am so passionate about not allowing such an exit. Many Members, including the Father of the House, have spoken eloquently about the long-term dangers to our economy of WTO trading and so on. My right hon. Friend the Member for Wokingham (John Redwood), for example, very much disagrees with that. I do not take a particular view about that. My preference is for a continued free trade deal with the EU, which is by far our largest trading partner, but in contrast to some, I do not want to argue that there would be a disaster in principle if we were on WTO terms. I do not believe it would be disastrous. I think it is suboptimal but not disastrous.
For five long years, I was in charge of the resilience of this country. During that period, I saw many examples of our civil service, military and security apparatus being prepared or not being prepared for certain issues that closely affected the wellbeing of our country. That is one reason why two years ago I passionately argued—my right hon. Friend the Member for Wokingham will recall an occasion a year ago when I made that argument even more forcefully—that the Government should undertake serious preparation for a no-deal exit. That would have had the effect that some of my hon. Friends mentioned. It would have altered our negotiating position. It was not done.
I have been in awesome detail through the papers produced. I have listened to the briefing for Privy Counsellors. I have consulted senior officials across Whitehall. I know what the RAG ratings of red, yellow and green mean—nothing. I know what it is actually to have prepared for dealing with the gas interconnectors, the electricity interconnectors and the many other details concerned.
Some of my hon. Friends and others in the country believe they can assure that under circumstances where we wreck the deal, refuse to make all the payments that the EU is expecting and falsify its expectations of a reasonable departure, the EU will then reasonably set out to work with us in a calm and grown-up way to ensure a smooth departure. It may be so. I am in no position to deny that it will be. I do not make lurid projections. Anybody who believes that they know it will be so is deluded.
I do not believe that we in this House can responsibly impose on our country a risk that may be severe or serious short-term disruption, for the sole purpose of gratifying the possibility that we avoid certain eventualities that certain Members of Parliament would prefer to see avoided and on which nobody in this country ever voted because they were never asked to vote on it. Under those circumstances, I will be voting with the right hon. Member for Normanton, Pontefract and Castleford against my own Government and very much against my own will, and I will continue to do so right up to the end of March, in the hope that we can put paid to this disastrous proposal.
Mr Speaker
The right hon. Gentleman’s succinctness is a textbook of how to help the House, and I hope it will now be closely studied.
Kirsty Blackman
In the interests of time, I will be very brief. I want to make it clear to the House that the SNP intends to push new clause 18 to a vote. I will briefly speak to some of the other new clauses and amendments that we have put forward. A couple of them relate to the expenditure implications of the UK now having to take charge of carbon and greenhouse gas taxes. They are about making sure that the Government are clear with the House about why they are spending this money and about the money they intend to spend before they do so. This is an additional cost that would be associated with the UK leaving the EU, which is a concern of ours. Obviously, we would not have to spend this money if we remained in the EU.
Nick Boles (Grantham and Stamford) (Con)
I will be very brief, not least because my right hon. Friends the Members for Loughborough (Nicky Morgan) and for West Dorset (Sir Oliver Letwin) have described much better than I ever could why I am going to support amendment 7, which I signed almost while it was hot off the presses before Christmas. The one point I want to address is the question that has been raised, and indeed the accusation that has been made, that in doing so I and other Conservative Members are breaking faith with our constituents and somehow breaking a manifesto commitment. I believe this to be utterly wrong, and also a rather disgraceful suggestion to make.
In the referendum campaign on our membership of the European Union, I supported and indeed voted remain. However, the argument of my colleagues who voted and campaigned for leave that I found most powerful and most emotionally impactful was that Parliament is sovereign and should take control of all the decisions that affect the lives of my constituents. That was the argument that the leave campaign made that I found the most difficult to resist and the most difficult to say was worth compromising for the sake of our membership of the European Union. It is therefore somewhat extraordinary that the very same people who made that argument so eloquently and effectively during the referendum campaign should somehow have the temerity to criticise me or other hon. and right hon. Members for doing what we believe is right in the interests of our constituents and in the national interest.
Mr Kenneth Clarke
I cannot think of a single leading Conservative Brexiteer who would have changed his opinions on membership of the EU in the slightest had the remain side won the referendum. They made it quite clear that they had no intention whatever of abandoning their long-held, quite sincere views, which they would have carried on arguing in this House and voting for. Does my hon. Friend share my view?
Nick Boles
The Father of the House is completely right. I have to say—I am sure the same is true of him—that I rather admire them for it. I admire my hon. Friend the Member for Stone (Sir William Cash) for making the same arguments passionately and with principle for 40 years—longer, practically, than many Members have been alive.
I want briefly to address the question of the Conservative manifesto commitment. I should point out that quite large chunks of the Conservative manifesto were junked by the Prime Minister during her own election campaign, so I do not know quite why we have elevated it to be a sort of Moses-style tablet. Nevertheless, it contained a sentence saying that we maintain that no deal is better than a bad deal. I agree, and I agreed then, in my hospital bed, when I agreed to stand as a candidate in the election, that that was the right position for the Government to take. As my right hon. Friend the Member for South Dorset (Sir Oliver Letwin)—West Dorset; apologies to the people of Dorset—explained, it was entirely right for the Government to want to prepare for no deal. Unfortunately, as he pointed out, they failed to do so.
However, what we did not say in that manifesto is that no deal is better than any deal; we said no deal is better than a bad deal. I remind my hon. Friends that we have a deal; it is a deal that the 27 nations of the European Union have agreed, that the Prime Minister, who recently won a confidence motion in the Conservative party, and her Cabinet have endorsed and advocate, and that, at the last count, about 200 Conservative Members, including myself, intend to support when the vote is finally put. It is simply not possible to suggest that by saying that I will not countenance no deal, I am breaking that manifesto commitment. We do not have a bad deal; we may have a deal that you, individually, do not like —not you, Mr Speaker, but individual hon. and right hon. Members—but nobody can claim that we do not have a deal that it is reasonable for Conservative Members to support. It is therefore reasonable for us to say that, at this late stage, with the Government having prepared as woefully as they have for no deal, we will on no account countenance a no-deal Brexit.
Finally, I join my right hon. Friend the Member for West Dorset in very clearly saying this: I will vote on any motion, on any amendment, on any piece of legislation, proposed by whomsoever in this House to ensure that we leave the European Union on 29 March with a deal or not at all.
Several hon. Members rose—
Mr Speaker
Order. Just before I call the next Member, we must hear from the Minister, and the Opposition Front Bench should really have the chance, very briefly, to comment on its own lead new clause before we come to the vote.
Mr Chris Leslie (Nottingham East) (Lab/Co-op)
I will be brief, Mr Speaker. I will want to move amendment 8, which stands in my name and in those of many hon. Members on both sides of the House. In many ways, it complements amendment 7, which was tabled by my right hon. Friend the Member for Normanton, Pontefract and Castleford (Yvette Cooper).
Amendment 8 would institute a commencement motion for the powers that the Treasury is seeking. Clause 89 might have been wrapped up as fairly minor and inconsequential, but essentially the Government are asking for pretty whopping permission to start legislating for no-deal arrangements. At this stage in the game, I really do not think that right hon. and hon. Members should be delegating our powers entirely to Ministers in this way without question. I know it is difficult for the right hon. Member for West Dorset (Sir Oliver Letwin) to rebel for a second time, on amendment 7, but I would like to persuade him to do so for a third time on amendment 8. A commencement motion is an important adjunct so that we can give the House and hon. Members the chance to express how they wish Brexit to go forward—so that we have the opportunity to express our view. A commencement motion would allow hon. Members the chance to do just that.
As things stand—certainly if the Government’s Brexit proposal is negatived next week—there could be 21 days or perhaps another seven days before anything is voteable on in this place. My own view is that before we start delegating powers to Ministers on these issues, or indeed on others, we need to start saying that enough is enough. Hon. Members need a chance to help to guide the way forward. There are many different views on these particular issues—the hon. Member for Grantham and Stamford (Nick Boles) has his particular preference and I have mine—but we need to provide for ourselves the time and the space to express them. Amendment 8 would simply provide for a commencement motion.
I hope that the Minister will recognise there is a strong cross-party opinion that we need now to give voice to Parliament. We cannot just drift into a no-deal situation. Parliament does want to take back control. He should concede and accept the amendment now.
The Exchequer Secretary to the Treasury (Robert Jenrick)
I am grateful to all right hon. and hon. Members for the debate.
Delivering the deal negotiated with the EU remains the Government’s central priority. It is neither our preference nor our expectation that we will leave the EU without a deal. However, as a responsible Government, we must prepare for all scenarios. In the Budget, we furthered that commitment by confirming an additional £500 million of funding in 2019-20, taking the total Government investment on preparing for EU exit to over £4 billion. At the Budget, to help to ensure that the tax system can continue to function under any EU exit outcome, we announced a series of modest, sensible provisions, which included a power to make necessary minor technical amendments to UK tax legislation. It also allowed, as we have heard, for the Government to introduce a carbon emissions tax to replace the EU emissions trading system in the event of no deal. By including those measures in the Finance Bill, our foremost motivation is to provide certainty to taxpayers—the kind of certainty that one would expect from any responsible Government.
Let me turn to amendment 7, which was tabled by the right hon. Member for Normanton, Pontefract and Castleford (Yvette Cooper). Prior to proceedings in the Committee of the whole House, which considered clause 89, I placed a list of changes envisioned under the clause in the House of Commons Library. Right hon. and hon. Members who have taken the trouble to review the list will see that they are indeed minor technical changes, and out of minor and technical changes, these are the most minor and technical. Since then, we have received no indication from any Member to the contrary. Clause 89 is simply prudent preparation to provide our taxpayers with the certainty they deserve.
As I made clear, the Government do not want or expect a no-deal scenario. That was why we negotiated the withdrawal agreement, which will see us leave the EU in a smooth and orderly way on 29 March and sets the framework of our future relationship. As we heard from my right hon. Friend the Member for West Dorset (Sir Oliver Letwin) and my hon. Friend the Member for Grantham and Stamford (Nick Boles), the best way of avoiding a no-deal scenario, if that is of grave concern to Members, is to support the withdrawal agreement next week.
Dr Sarah Wollaston (Totnes) (Con)
Will the Minister clarify his last sentence? Is he saying that if the deal is voted down next week, it will become the Government’s stated objective to deliver no deal?
Robert Jenrick
The point I have just made is that the law of the land is that the UK will leave the European Union on 29 March, and nothing contained in amendment 7 will change that. As I will come on to say, the only difference that the amendment will implement is to make the UK somewhat less prepared for that eventuality. The purpose of clause 89 is to provide taxpayers and—
Sir Oliver Letwin
I am grateful to my hon. Friend, who is doing a valiant job—I do not envy him. Does he accept that although, as he says, the law at present is that we will leave on 29 March, the House of Commons, with the House of Lords and Her Majesty, has the ability to change that provision?
Robert Jenrick
The House of Commons has the right to make the law, but the law as it is today is that we will leave on 29 March. The point I am making is that, whatever the intentions of the right hon. Member for Normanton, Pontefract and Castleford and those who may wish to support amendment 7, all that will be achieved by supporting it is denying our citizens and taxpayers the degree of certainty that we wish to give them.
Robert Jenrick
I will give way one last time, but I have only a couple of minutes.
Mr Clarke
I, too, extend my sympathies to my hon. Friend, who drew the short straw of responding to the debate. He is trying very eloquently to minimise the significance of the whole thing, but of course he realises there are big issues behind this. Can he tell us what contingency arrangements the Treasury has made for the fiscal impact of leaving with no deal, and its likely impact on our trade, our manufacturing industry and so on? He must concede that the published figures for future deficits, debts and so on will be made utterly meaningless if we leave with no deal, and a fiscal crisis will occur. Is the Chancellor planning the emergency Budget he will probably require?
Robert Jenrick
My right hon. and learned Friend and constituency neighbour tempts me to go into areas that I should not, but the Chancellor has said that we will be prepared and that we have fiscal room available—that was what he stated in the Budget, as certified by the Office for Budget Responsibility. My right hon. and learned Friend appears to be making the case for prudent preparations in case of a no-deal scenario, which is all that clause 89 seeks to achieve.
Robert Jenrick
I will give way one last time to my hon. Friend—I apologise to the right hon. Lady, but I only have a couple of minutes.
David T. C. Davies
With all due respect to my hon. Friend’s Department, is it not the case that it published a series of figures about the economic disaster that was allegedly going to occur if we voted to leave the European Union, although none of that has happened, and that what we have here is an attempt to blackmail the Government into not going ahead with a decision that was taken after a majority of the population voted to leave the European Union?
Robert Jenrick
We are leaving the European Union. We wish to do so with a deal. The House will vote on the deal next week, but we must and will prepare for all scenarios.
Robert Jenrick
I give way to the right hon. Lady because, of course, amendment 7 is hers.
Yvette Cooper
Will the Minister confirm that he will still be able to use clause 89 powers if he either gives the House a chance to vote on no deal or, alternatively, takes the opportunity to apply for an extension of article 50?
Robert Jenrick
Clause 89 would give the Government the ability to provide certainty to taxpayers now. That is what we want to ensure. We do not want to inhibit the ability of HMRC and the Government to provide that critical certainty. Who would want to do that? Who would want to diminish certainty for taxpayers at this time? The right hon. Lady listed a number of businesses. Those businesses want certainty, and by supporting her amendment, we would diminish that certainty and our preparedness—admittedly only modestly—for a no-deal scenario.
We will not be deterred from making sensible preparations—the public expect us to do so—and using the Finance Bill to prevent or frustrate preparation for any eventuality is unwise and irresponsible. I therefore urge the House to reject all the amendments and new clauses tabled against clauses 89 and 90 so that we give our constituents and taxpayers across the country the degree of certainty they deserve.
Mr Speaker
Order. If the right hon. Gentleman feels able and willing to express his views in a minute, I will be delighted to hear him—I hope he will not be offended—but otherwise I will call the Opposition Front-Bench spokesperson.
Sir Vince Cable
Thank you for your indulgence, Mr Speaker. I just want to say a few words in support of amendments 7 and 8. They are Brexit-neutral, in the sense that they require the House to approve any change, but of course they relate primarily to no deal. The fiscal issues, as the right hon. Member for West Dorset (Sir Oliver Letwin) explained them, were arcane and rather gentle. I tabled a more brutal amendment that was not called.
In the 30 seconds left, I want to relate an incident from this morning, when I went to the ferry port at Portsmouth. It is very clear that the Government are totally and utterly unprepared for the chaotic impact that there will be on the road system, including access to the naval base, if a no-deal Brexit occurs. Despite repeated requests from the council and others, the Department for Transport and the Ministry of Defence are refusing to co-operate, and the police now say that the M3 motorway will have to be closed from Winchester to Basingstoke in order to provide a lorry park. Repeated efforts to get Ministers to respond have not been heeded. A meeting was held for 19 regional MPs last week, but only one attended, so I am taking on the job of representing a no-deal Brexit. It is a task I undertake with all the enthusiasm of an arsonist trying to put out a bushfire, but I will do it.
Jonathan Reynolds
This has been a significant and important debate. In fact, it is clear that the House desires a longer and broader debate—that point was well made by the Chair of the Treasury Committee. No deal is some people’s preferred outcome, and they are the same people who told us that doing a deal would be the easiest thing in history. They were wrong then and they are wrong now. I feel that the case against the unilateral use of these no-deal powers has been comprehensively made, and I urge all Members to vote for our amendments, because that is best for jobs, prosperity and the national interest.
The Minister of State, Department for Transport (Jesse Norman)
On a point of order, Mr Speaker. I understand that in the previous debate there was some unhappy and unfortunate talk about the potential for the M3 to be closed in connection with a lorry park. I want to put it on the record, from the Government’s perspective, that the Government have absolutely no intention whatever of closing the M3 in connection with a lorry park. Therefore, the record should stand corrected as from now.
Mr Speaker
I am very grateful to the hon. Gentleman for what he has said, which is on the record and will be widely observed.
Mr Marcus Jones (Nuneaton) (Con)
On a point of order, Mr Speaker. Several media outlets are quoting that I have signed a letter to the Prime Minister saying that I will vote against a no-deal Brexit. I would like to put it on the record that this is not correct. Can you advise me whether it is in order for a Member of this House to put another Member’s name to a letter when they have not given their consent to doing so? Given the febrile environment at the moment, can you make the point to the media that they should check their facts before they publish such information?
Mr Speaker
The hon. Gentleman arrogates to me almost superhuman powers if he thinks that I can advise the media upon the imperative of first checking facts before printing a story. I appreciate his confidence in me, but I fear that he has an assessment of my capabilities that is sadly unmatched by the reality. Nevertheless, he has put his point on the record, and doubtless he will circulate it more widely amongst the people of Nuneaton.
New Clause 2
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.”—(Anneliese Dodds.)
This new clause would require the Chancellor of the Exchequer to review the effectiveness of the changes made to entrepreneurs’ relief by Schedule 15.
Brought up, and read the First time.
Anneliese Dodds (Oxford East) (Lab/Co-op)
I beg to move, That the clause be read a Second time.
Mr Speaker
With this it will be convenient to discuss the following:
New clause 9—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 10—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 16—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 increasing the personal allowance to £12,750.
New clause 17—Review of changes to capital allowances—
“(1) The Chancellor of the Exchequer must review the effect of the changes to capital allowances in sections 29 to 34 and Schedule 12 in each part of the United Kingdom and each region of England 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 effects of the changes on—
(a) business investment,
(b) employment, and
(c) productivity.
(3) The review must also estimate the effects on the changes if—
(a) the UK leaves the European Union without a negotiated withdrawal agreement
(b) the UK leaves the European Union following a negotiated withdrawal agreement, and remains in the single market and customs union, or
(c) the UK leaves the European Union following a negotiated withdrawal agreement, and does not remain in the single market and customs union.
(4) 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, employment and productivity of the changes to capital allowance in the event of: Brexit with no deal; Brexit with single market and customs union membership; Brexit without single market and customs union membership.
New clause 24—Review of changes to capital allowances (No. 2)—
“(1) The Chancellor of the Exchequer must review the effects of the changes made by sections 29 and 30 of this Act within six months of the passing of this Act.
(2) A review under this section must include an assessment of—
(a) the cost to the Exchequer of these changes,
(b) changes to business behaviour that are likely to arise as result from these changes, including (but not limited to) levels of business investment in buildings, plant and machinery, and
(c) the impact of these changes on businesses in regions of England.
(3) A review under this section must compare these assessments, so far as practicable, with an assessment of the impact of replacing non-domestic rates in England with a tax on the value of commercial land.
(4) In this section, “regions of England” has the same meaning as that used by the Office of National Statistics.”
This new clause would require the Government to assess the effects on businesses and the public finances of new capital reliefs introduced by this Act and require the Government to compare these reliefs with replacing business rates with a tax on commercial land values.
Amendment 12, in clause 5, page 2, line 24, leave out subsection (4)
This amendment would delete provisions removing the legal link between the personal allowance and the national minimum wage.
Government amendment 2.
Amendment 34, in schedule 15, page 297, line 42, leave out “29 October 2018” and insert “6 April 2019”.
Amendment 34, along with Amendment 35, would remove the retrospective effect of the new qualifying conditions for entrepreneurs relief.
Government amendment 3.
Amendment 35, in schedule 15, page 298, line 10, at end insert—
“(6) In relation to disposals on or after 29 October 2018, the amendments made by this Schedule to the definition of “personal company” do not apply in relation to any day before 29 October 2018.”
See Amendment 34.
New clause 4—Review of late payment interest rates in respect of promoters of tax avoidance schemes—
“(1) The Chancellor of the Exchequer must review the viability of increasing any relevant interest rate charged by virtue of the specified provisions on the late payment of penalties for the promoters of tax avoidance schemes to 6.1% per annum and lay a report of that review before the House of Commons within six months of the passing of this Act.
(2) In this section, “the specified provisions” means—
(a) section 178 of FA 1989, and
(b) sections 101 to 103 of FA 2009.”
This new clause would require the Chancellor of the Exchequer to review the viability of increasing interest rates on the late payment of penalties for the promoters of tax avoidance schemes to 6.1%.
New clause 15—Report on consultation on certain provisions of this Act (No. 4)—
“(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 15 and Schedule 3,
(b) section 16 and Schedule 4,
(c) sections 19 and 20,
(d) section 22 and Schedule 7,
(e) section 23 and Schedule 8,
(f) sections 46 and 47,
(g) section 83.
(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 the Bill – alongside New Clause 11, New Clause 13 and New Clause 14.
Government new clause 6—Intangible fixed assets: restrictions on goodwill and certain other assets.
New clause 8—Review of changes to Oil activities and petroleum revenue tax—
“(1) The Chancellor of the Exchequer must review the effect of the changes to Oil activities and petroleum revenue tax in sections 36 and 37 and Schedule 14 in Scotland and the United Kingdom as a whole 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 effects of the changes on—
(a) business investment,
(b) employment, and
(c) productivity.”
This new clause would require the Government to review and publish a report on the investment, employment and productivity impact of the Bill’s fiscal measures on the North Sea sector.
New clause 11—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 the Bill – alongside New Clause 13, New Clause 14 and New Clause 15.
New clause 14—Report on consultation on certain provisions of this Act (No. 3)—
“(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 61, and
(b) Schedule 18.
(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 the Bill – alongside New Clause 11, New Clause 13 and New Clause 15.
New clause 23—Review of income tax revenue—
“(1) The Office for Budget Responsibility must review the revenue raised by income tax within six months of the passing of this Act.
(2) A review under this section must consider revenue raised by—
(a) the rates of income tax specified in sections 3 and 4, combined with
(b) the basic rate limit and personal allowance specified in section 5.
(3) A review under this section must also consider the effect on revenue of—
(a) raising each of the rates of income tax specified in sections 3 and 4 by one percentage point, and
(b) setting the basic rate limit for the tax years 2019-20 and 2020-21 at £33,850.
(4) A review under this section must also include a distributional analysis of the effect of introducing the policies specified in paragraphs (3)(a) and (3)(b).
(5) The Chancellor of the Exchequer must lay before the House of Commons the report of the review under this section as soon as practicable after its completion.”
This new clause would require the OBR to estimate how much money would be raised by increasing all rates of income tax by 1p and freezing the higher rate threshold.
New clause 26—Review of changes made by sections 79 and 80—
“(1) The Chancellor of the Exchequer must review the effects of the changes made by sections 79 and 80 to TMA 1970, and lay a report on that review before the House of Commons not later than 30 March 2019.
(2) The review under this section must include a comparison of the time limit on proceedings for the recovery of lost tax that involves an offshore matter with other time limits on proceedings for the recovery of lost tax, including, but not limited to, those provided for by Schedules 11 and 12 to the Finance (No. 2) Act 2017.
(3) The review under this section must also consider the extent to which provisions equivalent to section 36A(7)(b) of TMA 1970 (relating to reasonable expectations) apply to the application of other time limits.”
This new clause would require the Treasury to review the effect of the changes made by sections 79 and 80 and compare them with other legislation relating to the recovery of lost tax including specifically the loan charge provisions of Schedules 11 and 12 to the Finance (No. 2) Act 2017.
Government new schedule 1—Intangible fixed assets: restrictions on goodwill and certain other assets.
Government amendments 4 to 6.
Amendment 22, in clause 53, page 34, line 14, at end insert—
“(5) The Chancellor of the Exchequer must review the expected effects on public health of the changes made to the Alcoholic Liquor Duties Act 1979 by this section and lay a report of that review before the House of Commons within one year of the passing of this Act.”
This amendment would require the Chancellor of the Exchequer to review the impact of the revised rates on cider and wine on public health.
Amendment 23, in clause 60, page 44, line 17, at end insert—
“(3) The Chancellor of the Exchequer must review the effects of a reduction in air passenger duty rates from 1 April 2020 and lay a report of that review before the House of Commons within six months of the passing of this Act.
(4) A review under subsection (3) must in consider the effects of a reduction on—
(a) airlines,
(b) airport operators,
(c) other businesses, and
(d) passengers.”
This amendment would require the Chancellor of the Exchequer to review the effects of a reduction in air passenger duty.
Amendment 36, in clause 79, page 52, line 24, leave out “12 years” and insert “8 years”.
Amendments 36 to 45 would reduce the time limits HMRC have to make an assessment of income tax or capital gains tax (Clause 79) and inheritance tax (Clause 80) to eight years, rather than 12 years, where there is non-deliberate offshore tax non-compliance.
Amendment 37, page 52, line 27, at end insert—
“(2A) Where the loss of tax is brought about carelessly by the taxpayer, an assessment may be made at any time not more than 12 years after the end of the year of assessment to which the lost tax relates. This is subject to section 36(1A) above and any other provision of the Taxes Acts allowing a longer period.”
See Amendment 36.
Amendment 38, page 53, line 22, after “(2)” insert “or (2A)”.
See Amendment 36.
Amendment 39, page 53, line 28, at end insert—
“(7A) An assessment may also not be made under subsection (2) or (2A) if—
(a) before the time limit that would otherwise apply for making the assessment, information is made available to HMRC by the taxpayer on the basis of which HMRC could reasonably have been expected to become aware of the lost tax, and
(b) it was reasonable to expect the assessment to be made before that time limit.”
See Amendment 36.
Amendment 40, page 53, line 34, at end insert—
“(8A) Subsection (7A) will not apply in cases where the taxpayer is subsequently found to have failed to provide all relevant information available to HMRC, or to have provided misleading information.
(8B) For the purposes of subsection (7A), whether information has been made available to HMRC is to be determined in line with section 29(6) above.”
See Amendment 36.
Amendment 41, page 53, line 35, after “(2)” insert “or (2A)”.
See Amendment 36.
Amendment 25, page 54, line 1, leave out “2013-14” and insert “2019-20”.
This amendment, alongside Amendment 26, would mean that new section 36A of the Taxes Management Act 1970 did not apply retrospectively.
Amendment 26, page 54, line 5, leave out “2015-16” and insert “2019-20”.
This amendment, alongside Amendment 25, would mean that new section 36A of the Taxes Management Act 1970 did not apply retrospectively.
Amendment 42, in clause 80, page 54, line 19, leave out “12 years” and insert “8 years”.
See Amendment 36.
Amendment 43, page 54, line 20, at end insert—
“(2A) Where the loss of tax is brought about carelessly by a person liable for the tax (or a person acting on behalf of such a person), proceedings for the recovery of the lost tax may be brought at any time not more than 12 years after the later of the dates in section 240(2)(a) and (b).”
See Amendment 36.
Amendment 44, page 55, line 2, at end insert—
“(7A) Proceedings may also not be brought under this section if—
(a) before the last date on which the proceedings could otherwise be brought, information is made available to HMRC by a person liable for the tax (or a person acting on behalf of such a person) on the basis of which HMRC could reasonably have been expected to become aware of the lost tax, and
(b) it was reasonable to expect the proceedings to be brought before that date.”
See Amendment 36.
Amendment 45, page 55, line 8, at end insert—
“(8A) Subsection (7A) will not apply in cases where a person liable for the tax (or a person acting on behalf of such a person) is subsequently found to have failed to provide all relevant information available to HMRC, or to have provided misleading information.
(8B) For the purposes of subsection (7A), whether information has been made available to HMRC is to be determined in line with section 29(6) TMA 1970.”
See Amendment 36.
Amendment 27, in clause 82, page 58, line 9, leave out from “section” to “may” in line 10.
This amendment would provide for all regulations under the new power (EU double taxation directive) to be subject to the affirmative procedure.
Amendment 28, page 58, leave out lines 13 to 17.
See Amendment 27.
Amendment 18, in schedule 1, page 148, line 34, at end insert—
“21A The Chancellor of the Exchequer must review the expected revenue effects of the changes made to TCGA 1992 in this Schedule, along with an estimate of the difference between the amount of tax required to be paid to the Commissioners under those provisions and the amount paid, and lay a report of that review before the House of Commons within six months of the passing of this Act.”
This amendment would require the Chancellor of the Exchequer to review the effect on public finances, and on reducing the tax gap, of the changes made to capital gains tax in Schedule 1.
Amendment 17, in schedule 2, page 177, line 21, at end insert—
“Part 1A
Review of effects on public finances
17A The Chancellor of the Exchequer must review the expected revenue effects of the changes made to capital gains tax returns and payments on account in this in this Schedule, along with an estimate of the difference between the amount of tax required to be paid to the Commissioners under those provisions and the amount paid, and lay a report of that review before the House of Commons within six months of the passing of this Act.”
This amendment would require the Chancellor of the Exchequer to review the effect on public finances, and on reducing the tax gap, of the changes made to capital gains tax in Schedule 2.
Amendment 29, page 177, line 42, at end insert
“unless the amendment relates to a disposal of an asset or assets resulting in a capital loss between the completion date of the disposal in respect of which the return is made and the end of the tax year in which the disposal is made.
(2A) In that case, an amendment may be made to take into account any capital losses which have arisen after the completion date and within the same tax year.”
This amendment would allow UK residents to submit an amended residential property return where a capital loss on non-residential assets is incurred after the completion of the residential disposal and within the same tax year.
Amendment 19, in schedule 5, page 211, line 45, at end insert—
“Part 2A
Review of effects on public finances
34A (1) The Chancellor of the Exchequer must review the revenue effects of this Schedule and lay a report of that review before the House of Commons within six months of the passing of this Act.
(2) The review under sub-paragraph (1) must consider—
(a) the expected change in corporation tax paid attributable to the provisions in this Schedule, and
(b) an estimate of any change, attributable to the provisions in this Schedule, in the difference between the amount of tax required to be paid to the Commissioners and the amount paid.”
This amendment would require the Chancellor of the Exchequer to review the effect on public finances, and on reducing the tax gap, of Schedule 5.
Amendment 21, in schedule 6, page 221, line 26, at end insert—
“13 The Chancellor of the Exchequer must review the expected change to payments of Diverted Profits Tax and any associated changes to overall payments made to the Commissioners arising from the provisions of this Schedule, and lay a report of that review before the House of Commons within 6 months of the passing of this Act.’
This amendment would require the Chancellor of the Exchequer to review the effect on public finances of the diverted profits tax provisions in the Bill.
Anneliese Dodds
As my hon. Friends have set out a number of times already today, this is a Finance Bill that continues the Government’s previous programme of austerity for the many while the very best-off people are protected. This Conservative Government chose to tie the hands of this House with regard to amending the Bill, so there are very few means we can adopt to have an impact on any of these measures. None the less, new clauses 2 and 4 would require the Government to at least review their regressive policy approach. I realise that I need to compress my remarks, so I will speak briefly to each of those new clauses and then to new clause 26, which pushes in the same direction, and new schedule 1, which in many respects exemplifies this Government’s slipshod approach, particularly to tax policy making.
Anneliese Dodds
I do not believe I can, as I have been told that I have to proceed quickly.
For many years, the Government failed to take action, before clamping down purely on taxpayers and doing little to nothing to the enablers of this form of tax avoidance. I hope the Minister will be clear about this. He has talked about the promotion of defective schemes. When taxpayers are described as having done something illegal, which is what HMRC has said about the behaviour of those subject to the loan charge, why will the Government not say that those who promoted those schemes also promoted something illegal? They use this language about defective systems. I am sorry, but that is pusillanimous. Those who were unwittingly led into schemes that are now described as illegal must themselves be able to take action against those who wrongly advised them.
I hope that the Minister will look at that very carefully and accept the new clause. If he does not, I hope that he will accept my backstop, to coin a phrase, and have a meeting with me. I am glad he has intimated that he may be willing to do so to talk about how we can better help people who have ended up in a very difficult situation—some of them with their eyes wide open, but many of them not realising the impact of these schemes.
Nicky Morgan
I rise to speak briefly—I know time is short in this debate—about new clause 26. For the avoidance of doubt among those on the Treasury Bench, I will not be supporting the new clause, but, as Chair of the Treasury Committee, I want to put on the record some concerns about the loan charge on behalf of the many individuals who have contacted the Committee and of the Committee members who have expressed concerns about it. I hope that Ministers will listen and engage with MPs across the House on this issue.
The Committee has raised concerns about the loan charge in evidence sessions with my right hon. Friend the Chancellor, and with HMRC and the Chartered Institute of Taxation. As the hon. Member for Oxford East (Anneliese Dodds) said, it is right that people should pay their fair share of tax on their earnings, and we do not support anything that seeks to get around that. It is right that HMRC should act swiftly and firmly to close down such avoidance schemes.
However, tax law sets out time limits within which HMRC can open inquiries and make tax assessments. Normally, those time limits take account of whether a taxpayer has taken reasonable care to comply with their tax obligations, has been careless or has deliberately decided not to comply. They are seen as valuable taxpayer protections, giving a degree of certainty that takes appropriate account of taxpayer behaviour.
It is certainly concerning to me—I am not sure I can speak on behalf of the whole Committee, but I think it is fair to say that I speak on behalf of many of its members—that HMRC’s contractor loan settlement opportunity requires people who want to put their affairs straight to waive those protections, with the threat of the loan charge looming over them. It is not clear why it is necessary for that settlement opportunity to pressure people into paying tax for years that HMRC calls “not protected”—years where HMRC is out of time—even though it may have had the information it needed to open inquiries or raise assessments at the proper time.
Dame Cheryl Gillan (Chesham and Amersham) (Con)
I support the way in which my right hon. Friend is addressing new clause 26, on which I find myself in a similar position to her. Although we want people to pay the correct taxes, I have constituents who may face losing their homes over this, after entering into what they thought were perfectly legal and allowable arrangements. Does she agree that the Treasury must address that?
Nicky Morgan
I very much agree with my right hon. Friend. It will probably turn out that most of us have constituents who are affected in that way. There are some who perhaps did know what they were doing when they entered into these tax arrangements, and some who clearly did not. It is absolutely right that the correct tax is applied, but, equally, it cannot be right that people are facing serious situations that will undermine their financial security and also their mental health.
John Redwood
Is my right hon. Friend aware that not only did quite a few people take advice, but they notified the Revenue of what they were doing and no objections were made at the time?
Nicky Morgan
Yes, I absolutely agree with my right hon. Friend. That was raised in the Westminster Hall debate led by my fellow Committee member, my hon. Friend the Member for Wycombe (Mr Baker).
I say to the Minister that it is troubling to hear that tens of thousands of people who want to settle with HMRC before the 5 April deadline have yet to receive calculations from HMRC. It is impossible for them— I think it would be for most of us—to settle large bills within a matter of months if they do not know what they will be asked to pay, let alone if they cannot start to make arrangements for how to pay them. These individuals need to know how much they have to pay, and I ask Treasury Ministers to step in and make clear what will happen to those people if they do not hear from HMRC by 5 April.
I will leave that with Ministers. I hope they can tell that there are MPs on both sides of the House who are concerned about this. By working together, we can make sure that the right tax is paid, but also that people are treated fairly.
Kirsty Blackman
I am aware that we are fairly short of time, so I will not rerun many of the things I said in Committee—I am sure the Minister and those on the Opposition Front Bench will be delighted to hear that.
I want to highlight a few of the SNP amendments and new clauses in this group. We have a couple of new clauses asking once again whether the Government’s provisions will do what they intend. For example, we want them to review the changes to entrepreneurs’ relief. We also want them to look at the changes in relation to emergency vehicles, because we are particularly concerned about the potential rural impact. Those who have emergency vehicles in rural areas may have more cause to use them outside work time than people who use them in cities. We felt that that issue was not drawn out enough in Committee or in the information the Government provided previously.
New clause 17 is about Brexit analysis. It is important to note that, since the Brexit vote in June 2016, over $1 trillion has been pulled from UK equity funds, which is obviously a really large number. In any changes or preparations the Government carry out in relation to Brexit, therefore, they should note the impact on the economy, which, according to the Bank of England, has cost individual families £900 each so far, and there is also the impact on financial services, for example, which have historically been very strong in the UK.
New clauses 15, 11 and 14 again ask the Government to provide information through consultation reports. It is important that the Government tell us the consultation they did on the draft clauses they brought forward. On the ones they did not bring forward, why did they not do so?
On that point, I should mention that the Government have included a new schedule in this group. That is a relatively unusual thing for the Government to do at this stage, given that they could have included the schedule in the original Bill or brought it forward in Committee. Because the new schedule was not brought forward in the initial stages, the explanatory memorandum provided by the Government does not include details about it. It would have been helpful if it had been considered at an earlier stage or if the Members who sat through the Bill Committee had been notified that it was likely to come forward. Presumably, the Government knew about it before the Christmas recess, and it did not just appear out of the ether. That process could be improved.
The main thrust of my contribution in the short time I have remaining is about the removal of the link between the personal allowance and the minimum wage. I understand that the Government have removed it on the basis that the personal allowance has now reached £12,500 and that they therefore believe they do not need to keep the link. I understand why they are making that case, but if that link had been kept, with the Government required to do a review if the personal allowance threshold was set at less than £12,500, future Governments would have continued to be bound by it. That would have meant that the protection the Government felt was necessary for people on the lowest incomes would still be there in the future. I understand that the Government do not intend to reduce the personal allowance, but that protection could have been left in place without the law causing any problems. That is something I am concerned about.
It is particularly concerning when the living wage the Government have put in place is not a real living wage, but a pretend living wage. It also does not apply to anyone under 25, which is an issue the SNP has raised over and over again. Just because someone is 24 does not mean that their living costs are less than they would be if they were 26—they could have the same number of children and live in exactly the same accommodation. However, the Government believe that it is okay to pay them less just because they are under that age threshold. That is exacerbated by the fact that the minimum wage increases the Government have introduced this year increase by a higher percentage—not just a higher monetary value—the minimum wage received by those who are over 25. The gap is widening: those who are over 25 are getting a bigger increase in the minimum wage, while there is a smaller increase for the younger age groups. The Government need to take seriously the fact that they are saying apprentices are worth pennies, frankly, and that 16 and 17-year-olds are worth far less than people under the age of 25. We raised our concerns in Committee in relation to the removal of the number. I do not think it would have cost the Government anything to leave in the link to protect future generations.
Mrs Main
I wanted to have more time to be able to say what a great job the Government have been doing: a 43-year low for unemployment rates, 1,000 jobs a day created and bringing in the personal allowance upgrade even earlier. We do not have time to go through all that, but I believe that getting people into work and out of poverty is the way forward for many families.
The Government were absolutely right to target business rates as a way of helping the high street and small businesses, with a cut of 33% in rates for businesses with a rateable value of under £51,000. In areas like mine with high property values, however, it is not having the impact the Chancellor might have hoped. The new rate simply provides a cliff edge that penalises successful businesses in areas that are plagued by high property values. We must devise a system that helps small businesses and pubs to thrive, not just those with a low retail value. I recently met pub owners in my constituency who have been hit extremely hard by business rates. I have cut out an awful lot of my speech, but I am pleased to say that I have secured a Westminster Hall debate on this matter next Tuesday. I look forward to exploring the matter further with a Minister. Pubs in areas such as St Albans are seeing massive hikes in business rates, not the help that was intended.
Time is pressing, but I want to touch on new clause 26 tabled by the right hon. Member for Kingston and Surbiton (Sir Edward Davey). I have serious concerns about the retrospective nature of the tax being collected. Several of my constituents have raised cases with me and I am extremely concerned about how the process has been handled. Many make the case that this was not illegal tax evasion; they were advised to use the scheme as a way of keeping more of their own money. It is worth remembering that these people are not employees. They take on more risk, with no sick pay, maternity pay or other forms of support offered to an employee. I want to give a couple of personal examples, because I think that is key and we have so little time.
One of my constituents, who worked as an IT professional in the FinTech industries, is being pursued for £900,000 by HMRC for the loan charge. He is extremely worried—many are on the brink emotionally—and this has put him and his family under considerable stress. He had been advised that what he had done was lawful and he considered it to be so. He told me, worryingly, that he tried to settle the case with HMRC for about £700,000, but that that had been rejected. Many people who find themselves in tax difficulties manage to make negotiated settlements with HMRC. It appears that this particular group of people are being treated very unfairly and are being left in the very difficult situation of not knowing exactly how much they owe or how quickly they have to pay.
Colin Clark
Other colleagues will be aware that the oil industry had a lot of contractors who were using what effectively turned out to be disguised schemes. Does my hon. Friend agree that there is a duty on HMRC? We have heard today from another hon. Member that customers should not be unduly disadvantaged if they have not managed to settle their claim to date, because after 5 April it will be significantly more.
Mrs Main
Exactly. I have also been advised by a former constituent, who, despite no longer living in the UK, is being pursued by HMRC for thousands of pounds of unpaid tax. Another person was advised that this mechanism truly was lawful and it has come as a huge shock to his financial planning that he is left in this position.
There are reportedly over 1,000 people being pursued for unpaid tax. No one is disputing that people should pay tax that is due. The issue is the way it is being requested. People have been badly advised. They have never been able to check whether anything they were doing was illegal, because they were being advised that it was not illegal at the time. It is a loophole that has now been closed.
Luke Graham
My hon. Friend is making a very valid point. One of my constituents, an IT contractor, was advised by his own accountant. A review would be very helpful in ensuring that people receive proper advice, so that laws can be followed and taxes collected.
Mrs Main
My hon. Friend is exactly right. There are many versions of that story. I have constituents who say that HMRC was made aware of these arrangements but no objection was raised until many years later. That has to be fundamentally wrong. What more due diligence can anyone do?
I will conclude, because I know the right hon. Member for Kingston and Surbiton wishes to speak. The huge pressure and distress—even suicidal thoughts—that this measure has put in people’s minds is totally unacceptable. I say to the Minister: if we do nothing else tonight, can we accept new clause 26? There is a clear ambiguity in the law that applied at the time—perhaps clarity has been provided now. The fact that people cannot negotiate a reasonable settlement even though they acted in good faith at the time, and are being pursued to the point of the destruction of their careers, homes, family lives and marriages, is completely unacceptable. We clearly need a review, and I hope the Minister takes that on board and accepts new clause 26. If it is pressed to a vote, I shall vote for it.
Sir Edward Davey (Kingston and Surbiton) (LD)
I thank the hon. Member for St Albans (Mrs Main) for her passionate speech. I also thank the right hon. Member for Loughborough (Nicky Morgan), who chairs the Treasury Committee, and right hon. and hon. Members from across the House, who have campaigned as a Parliament against this measure and supported new clause 26. It is my wish to divide the House on the new clause if the Minister does not accept it.
Let me make it crystal clear from the start that I support the Treasury’s aim of closing tax loopholes and stopping tax avoidance. The introduction of loan charges in the Finance Act 2017 to stop future abuse was correct, and the review my new clause proposes would not seek to prevent the Treasury from stopping that abuse from the 2016 Budget announcement. Instead—somewhat inelegantly, due to the rules of Finance Bill debate—new clause 26 aims to focus the minds of Treasury Ministers on the gross unfairness of the way the 2017 Act went about closing an unacceptable tax loophole.
I believe that the review envisaged in the new clause would reveal the unfairness of the retrospective nature of the current loan charge legislation in two ways. First, it would show how that retrospective nature is even more severe than non-retrospective but backward-looking proceedings for the recovery of lost tax elsewhere in our tax legislation. Secondly, it would show that the test of reasonableness included in proposed new section 36A, if applied to the loan charge, would in fact prevent any retrospective tax collection from the loan charge.
Let me remind the House why the Treasury should, after the review, ditch the retrospective nature of this measure, delay April’s implementation and amend the charge so it focuses only on payments made after 2016. It is because the loan charge, as introduced, offends against the rule of law. It is the sort of taxation that led the barons to rebel against King John and gave birth to Magna Carta. It is simply not acceptable for a Government to introduce a law that makes illegal something someone did years ago, when that action was considered legal. That is a clear principle.
Ruth Cadbury (Brentford and Isleworth) (Lab)
I thank the right hon. Gentleman for giving way— I realise time is short—and for tabling new clause 26, which I, too, support. Does he agree that it is unreasonable for people to be expected to have kept records going back 20 years when they were reassured at the time that the scheme was legitimate?
Sir Edward Davey
The hon. Lady is absolutely right, and I thank her for her support. Let us remember that these people—our constituents—were given professional tax advice and behaved in a way they thought was right and lawful at the time.
Tommy Sheppard (Edinburgh East) (SNP)
I fully support the right hon. Gentleman’s comments and will vote for new clause 26 if it is pressed to a Division. I wonder whether he will reflect briefly on my concern that some people who support the Government’s position have implied that, in seeking justice and fairness for our constituents, we in some way condone tax avoidance. In fact, the opposite is the case—we say that there should not be tax avoidance or evasion. The real culprits in this are not the individuals who were conned and duped by professionals into taking out these schemes and now face bankruptcy, but the firms that designed and sold them the schemes in the first place, some of which are still operating.
Sir Edward Davey
The hon. Gentleman is right on all the points he makes. When my hon. Friend the Member for Eastbourne (Stephen Lloyd) tabled the early-day motion that got cross-party support when this campaign was getting going, those were exactly the points he made. We all condemn tax avoidance and support the Treasury, but this retrospective approach to taxation is simply unacceptable.
Crispin Blunt
I congratulate hon. Members and hon. Friends on their speeches and wholly agree with them. It is grossly unfair that one of my constituents, a contractor between 2004 and 2006, is expected to repay tax from this period. It goes against the whole principle of fairness and surely would not survive any challenge in the European Court of Human Rights.
Sir Edward Davey
Indeed. HMRC knew about these tax schemes for years and took no action. They were widely used—as we have heard, right hon. and hon. Members from around the House have constituents affected—and widely advertised and yet were ignored by the tax authorities. People could only take some public sector positions if they agreed to be paid via these schemes, and it emerged ahead of the Westminster Hall debate that even some HMRC contractors were paid through such a scheme.
Wes Streeting (Ilford North) (Lab)
I am grateful to the right hon. Gentleman for tabling the new clause. I found HMRC’s answers to the Treasury Committee wholly unsatisfactory. There remain serious questions to be asked of the promoters of these schemes, of the employers, including public sector employers, who promoted them to contractors, and also of HMRC. If people were given tax advice and followed it, and if HMRC was aware of these schemes but did not take action in any previous tax year, how on earth could any reasonable person have concluded that they were doing anything wrong?
Sir Edward Davey
I totally agree, and I am grateful for the hon. Gentleman’s intervention.
Sir William Cash
It is not often that I agree with the right hon. Gentleman, as he knows, but I strongly agree with him on this issue. Retrospective legislation is bad in principle. This is an unjust provision, unreasonable and unfair, and I urge the Government to take note of the arguments put forward.
Sir Edward Davey
Having taken that wonderful intervention, I bring it to the House’s attention that the hon. Member for Wellingborough (Mr Bone) has signed my new clause. It is bringing the House together at a time when elsewhere it is divided.
I end on what this loan charge and its retrospective nature have meant for our constituents. It has caused misery. It has affected people’s lives, their health, their families. It has caused gross misery. Some people believe they will have to go bankrupt if they are forced to pay, or that they might lose their homes, and that is why the House is united against this retrospective action. I really hope that the Minister will get to his feet, accept the new clause, go ahead with the review and bring it back before the end of the tax year, so that the House can see it and vote on it.
Bambos Charalambous (Enfield, Southgate) (Lab)
I rise to speak in support of new clause 2. I was staggered to learn that entrepreneurs’ relief costs the Treasury an estimated £2.7 billion, and this to allow people selling companies worth up to £10 million to keep half the money they would otherwise pay in capital gains tax.
I was even more surprised to learn that this tax relief was concentrated among a few very wealthy individuals, with 6,000 people making gains of over £1 million and averaging £450,000 in tax relief each. This relief is only benefiting the very wealthy and should be reviewed as to its effectiveness. If it is scrapped, the £2.7 billion could be used to fund schools buckling under the pressure of funding cuts and provide huge investment in special educational needs and children and adolescent mental health needs. It could also go some way to funding children’s services and social care in local authorities and policing.
This is not the only area where the Government are giving away money that could otherwise be put to better use. Under amendment 22, in the name of the hon. Member for Aberdeen North (Kirsty Blackman), the Government are being asked to review the expected effects on public health of the changes made to the Alcoholic Liquor Duties Act 1979. The Alcohol Health Alliance has stated that the Government’s own figures show that alcohol duty cuts from 2013-14 have cost the Treasury £4 billion, which is the equivalent yearly cost of employing over 100,000 teachers. The figure is expected to rise to £9.1 billion by 2024. Considering the pressures on budgets as a result of austerity, that is not an insignificant amount.
The freeze on duty on beer, spirits and cider for 12 months from February 2019 is in effect a cut, as it is not keeping in line with inflation. Indeed, it has not done so for six of the last seven years. Cheap alcohol has a tremendous effect in causing damage to people’s health, the economy and wider society. Alcohol is the leading risk factor in respect of the deaths of people aged 15 to 49. In England alone, there are more than 1 million hospital admissions and 24,000 deaths related to alcohol every year. That is a clearly an impact that the Government need to consider when they set duties on beer, spirits and cider. Cuts in alcohol duty have a double effect. They reduce revenue for the Treasury, which in turn reduces the amount of funding for the NHS, while simultaneously increasing demand and costs in the NHS by encouraging the consumption of cheap alcohol. I therefore ask the Government to review the impact of the alcohol duty freeze on public health.
Liz Twist (Blaydon) (Lab)
Does my hon. Friend agree that the stories we hear from our constituents suggest that some of them are not only afraid of losing their homes and livelihoods, but are actually having suicidal thoughts because of the pressure that is being put on them to pay the money?
Bambos Charalambous
That is an excellent point, which I was about to make myself. While the large accountancy firms have gone unpunished for creating tax avoidance schemes for big banks, those individual contractors are bearing the brunt of HMRC’s powers. I have been informed by the Loan Charge Action Group of suicides, bankruptcies and relationship breakdowns as a result of the stress involved in their dealings with HMRC. The group has said that many of the people being pursued by HMRC unwittingly signed up to loan-based schemes, but the promoters of the tax avoidance vehicles have not been targeted.
I ask the Minister to reconsider these measures and to ensure that people are not punished when they should not be.
Mel Stride
Given the limited time that is available to me to summarise a debate that has covered a large number of amendments and new clauses, I shall confine my remarks principally to the issue that has been raised most frequently, which relates to new clause 26. The new clause requires the Government to lay before the House a report reviewing the effects of changes made by clauses 79 and 80 no later than 30 March 2019. While I should note that such a report will come too soon for the measures to have had a real effect, the Government of course remain committed to setting out the rationale for their policies as well as their impact, and in that spirit we will not oppose the new clause.
I do, however, echo many of the comments made by Members about what these schemes are truly about, which is gross aggressive tax avoidance. The way in which disguised remuneration typically works is that, instead of an employer’s paying an employee by way of a salary in the normal way, which attracts PAYE income tax and employees’ and employers national insurance, the payment is made as a loan. Typically, those so-called loans, which are not really loans at all—there is no intention of ever repaying them—are routed out via an offshore trust in a low or no-tax jurisdiction, and then routed back to the United Kingdom to be received by the end recipient. That is extremely unfair. It is unfair to our public services, because we have a duty as a Government to collect the tax that is due to fund them, and it is unfair to the vast majority of taxpayers who do the right thing, which is not to get involved in aggressive tax avoidance schemes in the first place and to pay their fair share of tax.
One issue that has been raised on a number of occasions is the question of whether HMRC’s loan charge arrangements are themselves retrospective. They are not retrospective because, critically—this is where I take issue with the right hon. Member for Kingston and Surbiton (Sir Edward Davey)—at the time when they were entered into they were defective. No matter how far we go back, the scheme typically—I have described the way it works—was defective. It did not work then, it does not work now and the tax is due.
These schemes have been taken through the courts on many occasions. A scheme used to the benefit of Rangers Football Club was taken to the Supreme Court—the highest court in the land—and was found to be defective.
Mel Stride
I will not, simply because I have two minutes and 30 seconds left and I want to cover some of the other issues raised this evening.
However, as I have said, the Government will accept this new clause. It is absolutely right that, when HMRC deals with the public, it has a strict duty of care, a duty of proportionality and a duty to be as sympathetic as it can be relevant to the circumstances of those with whom it is dealing. In my dealings with HMRC, I have made those points forcefully clear. As the right hon. Gentleman will know, HMRC has recently come forward to say that those earning £50,000 or less—which is over twice the average national salary of somebody working in our country—will automatically be granted, without requirement for additional paperwork, a minimum of five years’ time to pay as an arrangement to settle their affairs. Of course for those who come forward before April there is effectively in most cases no penalty as such; they will simply be required to pay that tax which was due in the past—and it was always due in the past—plus the interest that is rightly applied.
I have less than a minute left and want to say a little about amendment 12, tabled by the hon. Member for Aberdeen North (Kirsty Blackman), on the national minimum wage lock. She will know that, because we have increased the personal allowance now to £12,500 for every year of the forecast period, there will be no necessity for that lock to be in place. She makes the point that there could be a projection beyond that point. That will be a matter for a future Government of course and it is not for this Parliament to bind its successors.
I conclude on the suggested entrepreneurs’ relief review and new clause 2, which the hon. Member for Oxford East (Anneliese Dodds) spoke to. We had a review that was published in December 2017, which reported on this particular matter, and it showed that a third of those using entrepreneurs’ relief went on to reinvest in new businesses and half of those who were aware of entrepreneurs’ relief said that it significantly influenced their decision to enter into an entrepreneurial activity. It is an important element of the business tax landscape and we will of course, as we do with all taxes, keep that relief under review.
In the six seconds I have left, I urge that the House accepts the Government new clauses and, with the exception of new clause 26, rejects the Opposition amendments.
Madam Deputy Speaker (Dame Rosie Winterton)
I will now suspend the House for no more than five minutes in order to make a decision about certification. The Division bells will be rung two minutes before the House resumes. Following my certification, the Government will table the appropriate consent motion, copies of which will be made available in the Vote Office and will be distributed by Doorkeepers.
Madam Deputy Speaker (Dame Rosie Winterton)
I can now inform the House that I have completed certification of the Bill, as required by the Standing Order. I have confirmed the view expressed in the Speaker’s provisional certificate issued on 7 January. Copies of my final certificate will be made available in the Vote Office and on the parliamentary website.
Under Standing Order No. 83M, a consent motion is therefore required for the Bill to proceed. Copies of the motion are available in the Vote Office and on the parliamentary website, and have been made available to Members in the Chamber. Does a Minister intend to move the consent motion?
The Lord Commissioner of Her Majesty’s Treasury (Craig Whittaker)
indicated assent.
The House forthwith resolved itself into the Legislative Grand Committee (England, Wales and Northern Ireland) (Standing Order No. 83M).
[Dame Rosie Winterton in the Chair]
The Second Deputy Chairman of Ways and Means (Dame Rosie Winterton)
I remind hon. Members that, if there is a Division, only Members representing constituencies in England, Wales and Northern Ireland may vote on the consent motion. As the knife has fallen, there can be no debate. I call the Minister to move the motion.
Motion made, and Question put forthwith (Standing Order No. 83M(5)),
That the Committee consents to the following certified clause of the Finance (No. 3) Bill:
Clause certified under Standing Order No. 83L(2) (as modified in its application by Standing Order No. 83S(4)) as relating exclusively to England, Wales and Northern Ireland and being within devolved legislative competence
Clause 3 of the Bill, as amended in Committee and the Public Bill Committee and on Report.—(Mel Stride.)
Question agreed to.
The occupant of the Chair left the Chair to report the decision of the Committee (Standing Order No. 83M(6)).
The Deputy Speaker resumed the Chair; decision reported.
Third Reading
Mel Stride
I beg to move, That the Bill be now read the Third time.
Eight years ago, our country’s finances were in peril. For far too long, Labour had spent and borrowed more than our country could afford. The deficit was at a peacetime high and debt was spiralling out of control. [Interruption.] I would not keep repeating it if Labour Members had learned their lesson, but they clearly have not, so they need to be told. This Government came into office knowing that we had to rise to the challenge of working with the British people to bring expenditure back under control and to once again live within our means, and we have done just that, with the deficit now four fifths lower than it was when we came into office and debt beginning its first sustained fall in a generation.
But bringing down the deficit alone was not the limit of our endeavour. The manner in which we did so was equally important: reducing the deficit, yes, but remaining committed to funding our vital public services, giving tax cuts to millions of strivers right up and down the country, and building a tax system that rewards and incentivises business and growth—prudent but pro-business, and deeply invested in the idea that those who work hard should be rewarded. The results are clear to see: 3.3 million more people in work since 2010, unemployment at its lowest level since the 1970s, wages growing, and the rate of absolute poverty at a record low. This Bill continues that work.
At the heart of the Conservative ideal is the firm belief that people know how to spend their money better than Government do, and that those who work hard deserve to be rewarded. The best way for Government to serve that ideal is to cut taxes, especially for those on low and middle incomes—to get out of the pockets of the British people and let them decide what they do with the money that they have worked so hard to earn. When this Government came into office, the personal allowance was at £6,475 and the higher rate threshold was at £43,875. We were elected to raise those thresholds to £12,500 and £50,000 respectively. In this Bill, we deliver on that commitment not just in line with our manifesto but a full year early—at the earliest affordable opportunity. Those changes mean that, compared with 2015, we have cut taxes for 32 million people, with an additional 1.7 million people paying no tax at all, and nearly a million fewer people having to pay the higher rate of income tax. We are also making sure that the extra money in people’s pockets goes further. It is for that reason that we are freezing fuel duty, freezing air passenger duty on short-haul flights in real terms, and freezing the duty on beer, cider and spirits.
Also central to the mission of this Government is our steadfast support for business—our instinctive and deep-rooted understanding that it is never Government who generate the wealth and taxes that fund our vital public services, but the innovation and hard work of millions of people right up and down our country. The achievements of our businesses have been very significant, yet despite that, productivity has been subdued since the financial crisis, and business investment in our country, while strong, is lower than we would like it to be to make the most of the opportunities that lie ahead.
That is why in this Bill we are taking substantial action to boost private sector investment. We have introduced, at the request of the CBI, a new capital allowance for qualifying non-residential structures and buildings that will support business investment and improve the international competitiveness of the UK tax system. From 1 January, we are increasing the annual investment allowance to £1 million for two years, providing additional support for firms to invest and grow. Not least because of the relentless lobbying of my Conservative colleagues who represent constituencies in Scotland, we are legislating for a groundbreaking transferable tax history mechanism for late-life oil and gas fields.
A core pillar of this Government’s approach to taxation is a belief in fairness—that everyone should pay what they owe when they owe it. This Government have an outstanding record in this area. We have protected more than £200 billion in revenue that would otherwise have gone unpaid since 2010, and we have introduced more than 100 avoidance and evasion measures since that time.
In this Bill, we continue that work, taking action against multinationals that keep their intangible property in low-tax jurisdictions in order to avoid UK tax; tackling profit fragmentation, whereby companies reduce their tax burden by artificially shifting their revenue; and cracking down on multinationals that attempt to erode the tax base—a tax system where enterprise is rewarded but everyone pays their fair share and our public services get the funding that they need.
I have been proud to take this Bill through the House. It provides a tax cut for 32 million people. It backs British businesses, introducing with measures to boost private sector investment and support jobs and growth, to ensure that our country is the country in which enterprise can thrive. I understand that the Labour party does not agree with every aspect of the Bill but will not divide the House on Third Reading, which is positive. Those on the Government Benches support tax cuts for millions of hard-working people. We support business growth and investment. We support job creation, and we are the side of the House to ensure that taxes are fair and paid. I commend the Bill to the House.
Anneliese Dodds
This has been a Finance Bill of highs and lows. One high was the Government finally listening, albeit only when they were pushed to do so by the prospect of losing a vote, as we have just seen in relation to the loan charge. Another high was the fact that we saw the House seize the initiative to act to protect our country from the negative consequences of a no-deal Brexit for our economy and for our safety and resilience, as set out by the right hon. Member for West Dorset (Sir Oliver Letwin) in what I thought was an extraordinary speech.
I understand that the vote a couple of hours ago on the amendment tabled by my right hon. Friend the Member for Normanton, Pontefract and Castleford (Yvette Cooper) was the first time that a Government have been defeated at this late stage of a Finance Bill since the summer of 1978. At that stage I was only four months old, so I cannot exactly say that this is the only time I have seen a Government defeat on a Finance Bill in my lifetime, but I suspect it was the first time for many other Members. It was an appropriate defeat, because it shows that this House has adopted responsibility when our Government have sadly been unwilling to do so.
All this has happened in a context where Government have systematically attempted to reduce the opportunities for this House to influence the Finance Bill. Conservative Ministers’ decisions over recent years to prevent the House from substantively amending Finance Bills have been unprecedented. They have become a new norm and reflect the lack of confidence that this Government have in arguing their convictions. Surely that, above all, is the case with the Government’s approach in this Finance Bill, which preserves austerity for the many while the very best-off people and profitable corporations continue to benefit, our productivity gap yawns, regional inequalities widen and we see the creation of unprecedented phenomena in this country, such as the fact that getting into work is no longer the ticket out of poverty that it once was.
We have seen this Government’s unwillingness even to gather the figures and evidence about how their measures will affect child poverty or public health, in a context where life expectancy is for the first time going down in some of our communities. We have seen them bowing to lobbying pressure and introducing loopholes to protect many overseas investors from measures intended to level the playing field between them and domestic investors. Finally, we have seen the extraordinary contortion of a new schedule being inserted into the Bill just before Christmas to introduce a new tax relief for profitable corporations, not only very late in the day but without any information whatsoever about the cost that it will pose to the public purse. Indeed, we will not get that information before the measure is implemented.
The Government are spendthrift when it comes to profitable companies and the very best off, but miserly when it comes to the worst off. I see those on the Government Front Bench adopting a rather pantomime-style response to that. I am sorry to say that the overall package in this Finance Bill supports that contention, as do the figures, if only we could have them in front of us now.
Despite the considerable problems with this Bill, given the fact that it now contains provisions that militate against a no-deal scenario—surely the most significant risk currently to our economy and indeed to our security—we cannot and will not oppose it. I want to end by thanking all the civil servants and indeed staff of this House who have worked so hard on this Bill, and who have helped us in the Opposition—[Interruption.] I see that the Minister wants to thank them, too. I also want to thank all my hon. Friends who have contributed to our debates on this Bill.
Kirsty Blackman
It is great to have the chance to speak on the Third Reading of my fifth Finance Bill. Given my relatively short time in the House, that shows just how many Finance Bills we have had.
There is much this Government do that I would criticise, but I will start with three things that I am pleased are in this Finance Bill. The first, which the Minister mentioned, is the transferrable tax history. To be clear, I was calling for that when there was only one Scottish Conservative Member of Parliament in this place. Actually, I think there has been cross-party work on the transferrable tax history. I think the Government have worked well with industry in bringing it forward, and I am pleased that they have done so. I am really pleased that it is in the Bill, and I think it will make a big difference to the North sea in particular, given the fact that we can extract oil and gas from the North sea for a longer period as a result of the changes made. The jobs associated with that will be secured, which is particularly important for my constituents and those in constituencies around the north-east of Scotland, so I am pleased it is in the Bill.
I am also pleased that clauses 92 and 93 are in the Bill. Clause 92 was accepted by the Government in relation to tax avoidance. It was tabled by the SNP, and it requires a review of the effects of the provisions in reducing tax avoidance and evasion. The Government will have to bring forward this review within six months of the passing of the Act, and we look forward to them doing so. The Government chose to accept two of our amendments, neither of which I was involved in the debates on, so I am a little bit disappointed about that. My hon. Friend the Member for Glasgow Central (Alison Thewliss) led on this part of the debate, and my congratulations go to her on getting this through.
Clause 93 was also accepted as an SNP amendment. It was the result of the excellent work of my hon. Friend the Member for Inverclyde (Ronnie Cowan) on fixed odds betting terminals and the general work he has been doing on the public health impacts of gambling. Earlier, I made the point that we sometimes put in tax measures to discourage behaviour that we do not want to happen—for example, a harmful behaviour. I am really pleased that the Government will, as a result of the SNP’s pressure, bring forward a review of the public health impacts of gambling and the changes made. When the Government are taking decisions about gambling and gaming duties, they should always be thinking about the public health impacts and have them front and centre of any explanatory memorandum for future Finance Bills.
I am not going to be overwhelmingly positive; I have some negatives as well. The process for this year’s Finance Bill has been particularly—[Interruption.] Shambolic, yes. It has been particularly shambolic and inadequate, because the Government have failed to consult on as many of the measures as they should have done. They did not put them forward in draft format, so companies and organisations were not able to make known their concerns or suggest ways in which the Bill could be changed to make it better. I fear that that is not good for scrutiny. Changes were introduced in this Finance Bill to correct errors made in previous Finance Bills or to strengthen provisions that were inadequate in previous Finance Bills. Again, I am concerned that, because of the process this year, we will see more of that in future years.
The other thing that is particularly poor in this Finance Bill—this is a real contrast with the decisions made in Scotland—are the tax changes. Tax changes that have been made on things that are devolved to Scotland, which I none the less feel able to criticise, are not the ones that I feel should have been made, because they are not made from the progressive point of view that we would like. The tax changes we are making in Scotland are on a much more progressive basis, and the Government would do well to look at what we are doing in Scotland. In England, about half of taxpayers pay more than they would if they were in Scotland, and those taxpayers are the ones at the lower end of the income spectrum. They are the people we think we should be supporting, rather than the people at the top end of the income spectrum.
I have just a last couple of points. Better scrutiny of the process is always required. I have called repeatedly for the Finance Bill to be subject to evidence sessions in Committee, and I will continue to make that call of the Government until they capitulate, because Finance Bill Committees should hear evidence. The other half of this—the spend process—has been improved very slightly, but it has not been improved nearly enough, and we need better and more adequate scrutiny of Government spend before it happens, rather than just doing it through the estimates process.
Lastly, I would like to take this opportunity to thank my hon. Friend the Member for Paisley and Renfrewshire South (Mhairi Black), who was with me in Committee, as well as two members of staff, Jonathan Kiehlmann, who was involved in this, and Scott Taylor, without whose help I could not have gone through the Finance Bill Committee or the stages we are at now. I would like to offer my specific thanks to them.
Question put and agreed to.
Bill accordingly read the Third time and passed.
Business without Debate
Delegated Legislation
Maximum sentences for child cruelty offences
Tom Tugendhat (Tonbridge and Malling) (Con)
What a huge pleasure it is to be here this evening. May I start by paying tribute to some people in the Gallery just above us? Up there we have Paula Hudgell and her family. On her lap, we can see Tony. Tony is four years old, and he is an incredibly courageous young man. He was, sadly, incredibly brutalised by his birth parents, before his real parents took care of him. He was so cruelly treated in their care, and the assault on him was so great, that he lost both his legs. That is an extraordinary situation for anybody in our society to find themselves in, but where it happens to a child, at the hands of their parents, it is a wrong that screams out for justice.
That is why I am here this evening with a petition of 12,000 names—if I may, Madam Deputy Speaker, I will show you just a few of them—that Paula and Tony have collected to ask for a change in the law. How can it be right that, had Tony been an adult, and his attackers been charged with grievous bodily harm, they could have received a life sentence, but because he is a child, and because they were his parents, the maximum sentence was 10 years?
That is clearly wrong, and this petition expresses the wishes of the people not just of Kent, and not just of Kings Hill and Tonbridge and Malling, but of the whole country, who are speaking out for justice, speaking out for Tony, speaking out for the whole Hudgell family and, most of all, speaking out clearly about the wrong that we see today in our country and asking why it is not more severely punished.
Madam Deputy Speaker, thank you for letting me lodge this petition this evening. This is the first of a long series of parliamentary steps that I shall take alongside the Hudgells to change the law and to see justice done for children.
Following is the full text of the petition:
[The petition of residents of Tonbridge and Malling,
Declares that the sentence given to the abusers of Tony Hudgell will not act as a serious deterrent considering the life changing injuries Tony suffered at their hands; the reasons for this petition is not to change the sentence already given, but for Parliament to raise the threshold of maximum sentences for future cases.
The petitioners therefore request that the House of Commons urges the Government to introduce tougher sentences for child cruelty offences.
And the petitioners remain, etc.]
[P002308]
A40 in West Oxfordshire: Congestion
(5 years, 3 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Robert Courts (Witney) (Con)
I am delighted to see the Minister in his place again as I bring the matter of West Oxfordshire’s roads before the House. I am delighted to have the opportunity to raise the issue of congestion on the A40, which is of enormous significance for those who travel on the road daily.
The A40 is one of the main trunk roads of this country and the main trunk road that travels through my constituency. Congestion is a particular concern between Witney and Oxford. There is a very good reason for my constituents’ concern over the congestion that they face, many on a daily basis. It is not just from the major market towns of Witney, Carterton and Eynsham, but from the surrounding villages. Between 23,000 and 32,000 vehicles currently use the section between Witney and Oxford each day, which is above the road’s capacity. During school term times, the average journey speed on the A40 between Cassington and Wolvercote in peak time is 17 mph, while on the worst days it can be as low as 10 mph.
The Oxfordshire strategic traffic model forecasts an increase in highway demand on the A40 between Witney and Oxford of between 70 and 140 movements per peak hour by 2031. Without improvements, that will lead to an even greater overcapacity on the road and increase the severity of the congestion that my constituents already suffer from. Peak journey times between Witney and Oxford could increase by about 15 minutes.
I have spoken of the major towns, but equally people living in towns and villages further afield, who may not even use the A40, are suffering the ill effects of the congestion on that road. For example, in Bladon, which is the village in which I live, we suffer from excessive traffic, particularly HGVs, which rat-run through our village on the A4095 to escape the congestion on the A40. Businesses across West Oxfordshire are shackled by the logjams on the A40 and I have lost count of the number of businesses that have said to me over the past two years that they could expand were it not for the barrier that the A40 presents because of the congestion on it.
The A40 is costing jobs and revenue. Because of the difficulties for people travelling in and out of West Oxfordshire, it is making recruitment for our NHS and our schools very difficult. The plain truth is that West Oxfordshire will never and can never reach its full potential until the congestion on the A40 is addressed.
Back in 2002, my predecessor remarked in this House that
“In west Oxfordshire, we have some of the best and brightest businesses in the country, but the gridlock on our main road is like a hand pressed against their windpipes. Business in west Oxfordshire must be allowed to breathe.”—[Official Report, 12 June 2002; Vol. 386, c.308WH.]
He was right and his words remain true today. I do not rise in this debate to complain. I rise to be a voice of optimism and not to speak of the past, but to champion the opportunities and to explain to the Minister—I am very grateful to him for listening—what it is we need for our area. There is, in truth, more optimism now than there has been for decades. Progress is being made. If we are ambitious and bold in the years ahead, we might just be able to get to grips with this issue.
Jim Shannon (Strangford) (DUP)
I had the opportunity to be in the hon. Gentleman’s constituency through the armed forces parliamentary scheme. I have witnessed some of the problems he has on the roads in his constituency and I am very aware of the gridlock to which he refers. I am also very aware of the impact on the economic life of farming and the rural community. Does he feel that the changes he is proposing, and hoping that the Minister will respond to, will enable the rural life in his constituency to grow and have the economic life and strength it really needs?
Robert Courts
I thank the hon. Gentleman for that excellent intervention. He refers to two points to which I would like to draw attention. The life of rural communities is absolutely essential. I referred to the village in which I live, Bladon. It is a small village. It is one example of many villages which find that they are clogged up in turn because the A40 is so difficult.
Alex Chalk (Cheltenham) (Con)
Not just villages, but towns such as Cheltenham beyond Witney are affected. The situation at the moment is that the A40 is like a furred up artery. If we could just unclog that artery, it would be good for jobs, businesses, social mobility and all the things we want to see in Gloucestershire as well as Oxfordshire. Does my hon. Friend agree?
Robert Courts
I could not agree more and I am very grateful to my hon. Friend for making that point. I tend to talk about the A40 in terms of Witney and West Oxfordshire, but we must not forget that the effects of the congestion on the road spill over into Gloucestershire and his constituency. [Interruption.] And of course I am reminded, from a sedentary position by my hon. Friend the Member for Banbury (Victoria Prentis), that it affects the whole of Oxfordshire, not just West Oxfordshire.
Victoria Prentis (Banbury) (Con)
My hon. Friend is making an excellent speech. Does he agree that in Oxfordshire we are really getting behind the Government’s housing programme and going for growth? His area and mine repeatedly top the leader board for the number of new houses built. Does he agree that our road arteries are holding us back?
Robert Courts
That is an excellent point. One point overrides all others—if there are to be new homes, the infrastructure must come with them. I will dwell on that a little more later, but my hon. Friend makes her point excellently.
The hon. Member for Strangford (Jim Shannon) referred obliquely to Brize Norton. That is terribly important. The people who work at that Royal Air Force base come not necessarily from Carterton but from further afield—sometimes 50 or 100 miles away—because of the nature of service life. This issue affects the Royal Air Force’s functioning and efficiency, too, and we must address that.
There is no silver bullet for A40 congestion. We will require a combination of schemes from a variety of funding streams to tackle it. I will briefly cover some of the options and funding avenues, and ask for the Minister’s help in securing the funding we need.
First, the park and ride scheme, for which a public consultation has just closed, is Oxfordshire County Council’s most immediate project for A40 improvement. The intended funding stream for that is the Department for Transport’s local growth fund. There are plans to build a park and ride at Eynsham, together with an eastbound bus lane between Eynsham and the Duke’s Cut canal bridge near Wolvercote. Those proposals probably represent the biggest step forward on A40 congestion in a generation. They would bring real change and progress on an issue that affects the day-to-day lives of us all. We would see essential widening of the road and long-needed upgrades to public transport along the route. It would be a significant step—although perhaps not a conclusive one—in the right direction, and I will ask for the Minister’s help in securing funding. However, it may be that those proposals on their own do not offer a final fix and that no aspect of this scheme can be seen in isolation. Work may need to continue—
Sir Geoffrey Clifton-Brown (The Cotswolds) (Con)
I am grateful to my hon. Friend for raising this issue. On that theme, does he agree that part of the solution to any road congestion is improving the railways? Some while ago, I got funding for the doubling of the Cotswold line from Moreton to Evesham. Is it not now imperative that we get full doubling right through from Moreton-in-Marsh to Oxford? That would take a significant burden off the A40.
Robert Courts
Absolutely—I could not agree more. I am grateful to my hon. Friend for making that point. There are two ways of addressing road congestion: increasing the flow of the road—the furred artery, as my hon. Friend the Member for Cheltenham (Alex Chalk) referred to it—and taking cars off the road wherever possible. My hon. Friend the Member for The Cotswolds (Sir Geoffrey Clifton-Brown) refers to redoubling the Cotswold line so we can have faster, more reliable and more frequent trains and take as many people off the A40 as possible. I feel particularly strongly about that—it is one of my pet projects—and I will refer to it again a little later.
The second aspect I would like to talk about is the Government’s housing infrastructure fund. One of the biggest causes for optimism at the moment is Oxfordshire County Council’s plan for road upgrades and the strong case it is making for a part of that £5 billion fund. I am delighted that it is making the most of that opportunity with a very strong bid for A40 upgrades, which it will submit later this year and no doubt will be highly competitive. I look forward to continuing to work with Oxfordshire County Council and neighbouring councils, and with the Government, to progress that bid.
The bid will seek to achieve upgrades for four strategic and interdependent road sections, including general roadway widening along critical sections of the A40 to complete the dualling from Witney to Eynsham, new bus lanes, additional cycle path links and—this is another thing I have campaigned for since being elected—a walking path to promote active travel between Eynsham and Oxford. The B4044 community path in particular is something I have campaigned for consistently since being elected. I want to take this opportunity to praise the hard work of campaigners and put on the record my full support for enabling people to cycle as much as possible—to get out of cars and to cycle from Eynsham into the centre of Oxford, as I was lucky enough to be able to do along the excellent A44 path from Bladon to Oxford when I worked in the centre of Oxford, and I am delighted that the B4044 community path is included in Oxfordshire County Council’s plan.
The bid is connected to delivery of the Oxfordshire-Cotswolds garden village, which will see 2,200 new homes built on the A40 corridor. This, along with further developments west of Eynsham and Witney, will put increased demand on the A40, and so the road’s capacity must be enhanced if we are to cope. I look to the Minister for his help in achieving this funding. I have always been clear that transport upgrades—improvements to bus, road and rail—need to happen before, not after, new homes are occupied to ensure that new development does not place an unacceptable burden on existing residents.
These schemes will also assist our area in delivering improved housing choice, affordability for residents and reasonable commuting time to their place of employment. They will attract high-value knowledge businesses to go alongside the leading businesses in West Oxfordshire I have already referred to, further enhancing the dynamism of our area. West Oxfordshire is an economically successful region, but this comes at a price, and that price is increased pressure on our existing infrastructure, less reliable connections and less resilience. The deficiencies in our current transport network must be addressed before we start to think about additional growth.
I fully support Oxford County Council’s efforts. I have no doubt it will submit a compelling bid that I sincerely and passionately hope will be successful, and I urge the Government to accept and support the bid. I am sure the Minister will offer his advice and advocacy to that very end.
In my last two or three points, I will refer to the major road network scheme, which, looking further into the future, I believe offers more promise of further A40 funding. I have campaigned for such a programme to ensure central Government funding for local major roads that fall outside the strategic road network, and I welcome the broad outline of the scheme. Considering the existing strategic road network together with major local authority roads is a welcome step, and providing a dedicated funding stream for the major road network will enable growth and development to be more effectively planned.
I well remember discussing this matter with the Transport Secretary—I am grateful to him for visiting—as we stood near Eynsham. He saw the congestion on the A40 for himself, and this scheme grew out of that visit. I explained how the A40 had been de-trunked in 2002 by the Labour Government and how that resulted in the road falling between the cracks, not receiving the significant central Government investment required to tackle the severe congestion on the road. The major road network proposals offer the potential of local authority-controlled roads being able to access central Government funding while not losing the important local democratic control provided by locally elected councillors.
I have submitted a consultation response on the MRN and was pleased to read the Government’s response published just before Christmas. I am greatly encouraged by it, and the MRN shows great promise, but we now need to see the rhetoric transformed into decisive action, such that we begin to tackle the congestion issues on roads such as the A40.
I ought briefly to mention the Oxford to Cambridge expressway project. I appreciate that it will be some time yet before construction starts, but it demonstrates how much the Government value Oxfordshire and its growth. It is a key area for business growth, and housing growth is expected as well, but if we are to accept, as the Government have done, that Oxfordshire is a key growth area for the UK, of paramount strategic and economic significance, there is no excuse for neglecting our infrastructure needs. It is all well and good building a new expressway but, if we are to deliver the economic growth envisaged, we must address our current infrastructure deficiencies, such as on the A40, which affects Oxfordshire and Gloucestershire, with urgency.
Either the Oxford-Cambridgeshire corridor is a national priority for economic growth, or it is not, and if it is, this must be reflected in the Government’s investment decisions, and those must help and benefit communities throughout the whole of Oxfordshire and Gloucestershire and beyond.
Sir Geoffrey Clifton-Brown
Considerable growth is due to take place in Cheltenham, Gloucester, the Cotswolds and Oxfordshire. Does my hon. Friend agree that if we do not relieve congestion in what is a narrow throat, growth will be inhibited not only in Oxfordshire but in Gloucestershire, and further afield in Wales as well?
Robert Courts
That is absolutely true. The focus tends to be on the Witney area, because that is where the A40 approaches the A44 and then joins the strategic network, but let us not forget the serious impact on communities further afield, such as the rural areas mentioned by the hon. Member for Strangford. I am thinking of the rest of Oxfordshire, of Cheltenham, and of rural communities elsewhere in Gloucestershire. This is a narrowing road that happens to reach a pinch point in my constituency, but affects the far wider areas represented by Members who have come to contribute to tonight’s debate.
Alex Chalk
I have spoken to representatives of businesses in Eagle Tower, in the centre of Cheltenham, which are struggling to recruit people because they cannot persuade them to travel from London. Whether the company is GE Aviation, Spirax-Sarco or GCHQ, better communications mean better recruitment and are better for the local economy.
Robert Courts
My hon. Friend is absolutely right, and that problem affects not just Cheltenham but my constituency. It affects Witney, Eynsham, Carterton and the Royal Air Force, which is also struggling to recruit people. Business is suffering, but so are our essential public services. I mentioned that only briefly at the beginning of my speech, but it is a major issue. Recruitment difficulties in the NHS and teaching are also affected by people’s inability to travel quickly in and out of the area where they need to be.
Victoria Prentis
I am grateful to my hon. Friend for mentioning public services. As he knows, because of what is, we hope, the temporary downgrade of Horton General hospital, people from both our constituencies need to gain access to essential public services in Oxford, which is very difficult to reach at times of peak traffic demand.
Robert Courts
My hon. Friend is right, and I entirely support her campaign to ensure that our important services are outside the centre of Oxford whenever possible so that that journey is not necessary. However, sometimes it is, and the A40, like other major roads, is sometimes impassable owing to congestion that poses not just an obstacle to business and public services but, in some instances, a safety threat to residents. That is clearly unacceptable.
I want to make a couple of points before, very gratefully, I allow the Minister to respond. I have spent much of the debate discussing the investment that I want to see in direct upgrades on the A40, but we must not forget—I am grateful to my hon. Friend the Member for The Cotswolds for his foreshadowing of the points that I now wish to make—the contribution to be made by West Oxfordshire’s railways in tackling A40 congestion. It is in everyone’s interests for fewer cars to use the A40 whenever possible, but we can see the modal shift that we need only if our railways can offer a feasible, practicable and reliable service as an alternative. If that is to happen, there is an urgent need for the remaining sections of the Cotswold line to be doubled, which would enable more frequent and more reliable trains to travel from Hanborough to Oxford.
I will continue to campaign for the reopening of the Cowley branch line for passengers, with a regular shuttle service to Hanborough, but if we improved bus and cycle links to and from Hanborough, we could create a public transport hub in West Oxfordshire, taking cars off the A40 and reducing congestion throughout our area. I want people to be able to leave their cars behind, and to use buses, trains and bikes whenever possible so that there is more room on the roads for those who must use cars. We need to build a truly integrated transport network in West Oxfordshire that will meet the needs of our area and enable residents and businesses to thrive in the years ahead.
For decades, congestion on the A40 has been one of the biggest issues facing West Oxfordshire, and I am determined to tackle it. We are moving in the right direction, with opportunities for investment from a number of central Government funds, so there is more cause for optimism than there has been for decades, but there is still much work to do if we are to deliver the improvements that are needed. Let me stress to the Minister that, as we have heard from everyone who has spoken in the debate, this is not just a matter of minor inconvenience for us; it is a blight on the lives of commuters, and a millstone around the necks of our businesses. It is vital that we work towards, and ultimately achieve, a final fix for the A40, because only then can West Oxfordshire, and the surrounding areas, achieve their full potential.
The Minister of State, Department for Transport (Jesse Norman)
I congratulate my hon. Friend the Member for Witney (Robert Courts) on securing the debate and welcome the opportunity to speak about the A40 west of Oxford, although, unfortunately, such has been the Periclean—indeed Demosthenic—quality of his oratory that he has left me nine minutes of a 30-minute debate in which to respond. He and other colleagues raised many issues that it would be nice to touch on, so in a way it is a pity that there is not more time for the Government to give the account he seeks.
I understand the great importance of this road in the area and to the local people who regularly use it. It will be no secret to hon. Members that the A40 can experience congestion—at times severe congestion. It should be said that the chief glory of the road is that it leads to Herefordshire. I was astounded that my hon. Friend the Member for The Cotswolds (Sir Geoffrey Clifton-Brown) neglected to make that point when sketching the gap between Gloucestershire and Wales, thereby ignoring much—almost all—of what is of value in this.
There are considerable growth ambitions for the west of Oxford along this corridor and the debate is therefore timely. The county has a fast-growing and successful economy that contributes some £21 billion per year to national output. It competes well on a global stage as a centre of science and innovation, but infrastructure constraints there, as elsewhere across the country, are a barrier to housing development and job creation. That was why in November 2017 the Government announced that Oxfordshire would receive up to £215 million of new funding to support its ambition to plan for, and to support the delivery of, 100,000 homes by 2031. That is alongside a commitment to adopt an Oxfordshire-wide statutory joint plan by that year. This ambitious and comprehensive investment programme is designed to deliver sustainable development and growth, with a focus on the amenity, quality and liveability of the area and on affordable housing.
On 12 September 2018, the first of the planning flexibilities agreed as part of the deal was enacted by written ministerial statement. This has amended land supply policies for Oxfordshire, and the Government look forward to the county developing its joint statutory spatial plan, making use of these new flexibilities.
As my hon. Friend the Member for Witney acknowledged, the majority of local transport improvement schemes are funded through the local growth fund—it is not entirely a Department for Transport scheme. We are providing some £6.7 billion to that fund over the six years from 2015-16 to 2020-21. Funding also comes through local enterprise partnerships, with some 600 transport schemes being funded across England.
There is also considerable planned investment on the A40 through the local growth fund. The Oxford science transit scheme has been allocated £35 million of the fund to support the expansion of the integrated public transport system west of Oxford, including the provision of bus priority and of a 1,000-space park and ride at Eynsham, to which my hon. Friend referred. We hope that this will deliver major enhancements to the strategic route, connecting centres of innovation and economic growth. I understand that the county council aims to have the park and ride and bus lane open for use by April 2021. Improvements to public transport should provide a viable alternative to private car use and, as my hon. Friend rightly said, a substantial modal shift would help to address congestion and would also be of enormous public value in others ways. This scheme and other current and planned projects will provide congestion relief in the short to medium term along the A40. Of course, there is also a £5.9 million local growth fund commitment to the Oxford North project, a package of measures to improve transport in the north of the city and to provide a new research space and new homes.
There are also wider aspirations to tackle congestion in the longer term. As my hon. Friend pointed out, a consultation has recently closed on plans for the first phase of these improvements, and my officials continue to work closely with Oxfordshire County Council to take the project forward.
The North Cotswold line is not strictly within the terms of this debate, but it has been raised and I am pleased to discuss it quickly. As with the road, its chief glory is that it leads to Herefordshire, so I have a certain stake in this issue, and of course colleagues representing constituencies along the line would like to see faster and more frequent services. Any proposals must be supported by a robust business case in accordance with the rail network enhancements pipeline. The Department will continue to provide advice to Lord Faulkner’s taskforce, which has been established to develop a vision for the route between Worcester and Oxford—and, ultimately, of course to Herefordshire—and to develop proposals.
On the housing side, the autumn Budget provided an extra £500 million for the housing infrastructure fund, bringing the total funding available to £5.5 billion. In March 2018, the Government announced the areas that are being taken forward through co-development, where the Government work with local authorities to further develop their proposals. Oxfordshire is one of the designated areas for co-development. The Department works closely with other Departments and local partners to take forward these proposals. Final funding awards for the proposals will be determined by the Ministry of Housing, Communities and Local Government following the assessment of detailed business plans. I understand that Oxfordshire County Council intends to submit its own proposals early this year.
My hon. Friend has raised the issue of maintenance and potholes on many occasions, and indeed he secured a debate on the subject in July last year. As he will know, the Government have since allocated a further £420 million of new money for local highways maintenance —not necessarily entirely as a result of that debate. That means an additional £7.4 million of funding for local roads in Oxfordshire, which adds to existing committed funding sources totalling some £28.2 million for the county.
My hon. Friend rightly mentioned the major road network. Oxford does have a section of the A40 that is eligible for the local roads network, in that it fits the criteria that we have set for that. It is now for local partners to gather evidence that demonstrates which improvements are priorities for their respective areas, and to bid for support. This is a major new Government initiative to create a package of support for schemes that are eligible along the future major road network. It therefore provides an opportunity across the country, not just in Oxfordshire. The Oxford to Cambridge expressway has also been raised, and my hon. Friend will know that considerable investment is being made in that area to improve transport connectivity and growth not just across Oxfordshire and the region, but for the benefit of the UK as a whole.
I think that my hon. Friend will recognise from this quick canter through the various pots of money and opportunities available that his county has done well and that if the bids can pass muster in this very competitive process, they will stand every chance of an attractive outcome. He knows that a series of bids have been placed, or are due to be placed, in front of the Government for those different pots, and I urge him, his county council and local partners to continue to build robust and compelling cases that can demonstrate to the Government that investment in key infrastructure is well worth while and will deliver the key targets that they have specified, along with benefits for current users and future growth and success.
Question put and agreed to.