Oral Answers to Questions
Gareth Snell Excerpts(4 years, 10 months ago)
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Robert Jenrick
The United Kingdom is not the most unequal society in Europe; it is not anything like that. The Government’s policies, such as our policies of investing in infrastructure and in boosting productivity, have been designed to level up the parts of the UK that need it the most. When it comes to poverty and living standards, things are improving. Real wages have been rising for 10 consecutive months, and more people are in work. In the hon. Gentleman’s constituency, unemployment has fallen by 60% since 2010.
Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)
Robert Jenrick
Our priority has been getting young people into work. In 2010 we inherited a youth unemployment rate of 20%; we have almost halved that. The priority for this Government will be ensuring young people get a great education; more young people are in good or outstanding schools than when we came into power in 2010, and we want them to get apprenticeships and get into work and get on in life.
Co-operative and Mutual Businesses
Gareth Snell Excerpts(4 years, 10 months ago)
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Gareth Thomas
My hon. Friend is absolutely right. I pay tribute to the work of programmes such as Co-op UK’s Hive programme, the resources that are available from Stir to Action, some of the local measures that we have seen in Manchester and Preston, and Social Investment Business’s mutual Reach Fund, but these are all relatively small-scale and need to be scaled up.
The Minister will not be surprised to hear me—and, I suspect, other hon. Members—urge the introduction of further legislative reform to help credit unions offer more services to their members and enable them to invest their members’ money in an expanded range of ways to generate a return for savers. Credit unions are the most active, responsible lenders to the poorest and most financially vulnerable and excluded people in the UK, but they are held back from doing more by outdated legislation and a digital approach to regulation by the Financial Conduct Authority.
Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)
I declare my interest as a former director of the Staffordshire credit union, which sadly went bump because the FCA’s misunderstanding of the difference between the capital reserves we had to hold and the sustainability of our loan book meant that we could never meet its ever increasing targets and thresholds. That has left a number of former consumers unable to access even the basic banking arrangements that we offered, and I wholeheartedly agree with my hon. Friend’s comments about the way in which the FCA regulates. It needs to better understand what credit unions are, and how they differ from commercial high street banks.
Gareth Thomas
My hon. Friend makes a powerful point. There needs to be a significant culture change in the FCA’s approach to credit unions and other financial mutuals. I recognise that there has been some Government support—indeed, the Minister has been helpful in ensuring more support for credit unions—but wholesale reform of the objects and powers of credit unions through primary legislation, providing a clear basis for innovation and development in the sector, is overdue.
Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)
Like many people, my first interaction with the co-operative movement was going to the local Co-op store with my gran when she was doing her weekly shopping. At the end of the walk around the supermarket, the shop assistant would put the things through the till and say, “What’s your divvy number?” and she would say, “207619”. That was her getting her slice of the dividend back. I did not really understand what that was about until I was a bit older, when she explained to me that every Christmas, she got back her dividend from how much she shopped in the Co-op.
I did not think about it much until I reached my teenage years and went to university, where I remember other people talking about it. That number has always stuck with me. I grew up in a relatively poor household, and the Co-op basically funded our Christmas, because my grandmother used the dividend she accrued throughout the year to buy the nice things we had at Christmas that we did not have for the rest of the year. I am sure I am not the only person who has memories of enjoyable Christmases because of the dividend points that their families received through Co-op shopping. That is not something we should dismiss.
There have been a lot of excellent contributions—including from my fellow west midlands Co-op MP, my hon. Friend the Member for West Bromwich West (Mr Bailey)—about the huge opportunities in the co-operative movement to contribute to our economy and the greater good of the United Kingdom. We should also focus on the small co-ops and the little interactions of co-operative goodness that improve the everyday lives of individuals in our communities.
Labour has made a commitment to “at least” double the size of the co-operative sector—my hon. Friend the Member for Stalybridge and Hyde (Jonathan Reynolds) on the shadow Front Bench will realise that doubling it is not the end point in itself. Our aspiration in government is to at least double it and then go even further with growth of the co-operative and mutual sector in our economy, and I am sure that, having heard the many great contributions today, the Economic Secretary to the Treasury will seek to replicate that.
There are so many great examples. Much like the one described by the hon. Member for Stafford (Jeremy Lefroy), there is a wonderful building society in Stoke-on-Trent called Hanley Economic, which was formed in 1854 and originally called the Staffordshire Potteries Economic Permanent Benefit building society. Its purpose was to enable people who worked in the pottery industry to own a home, get on the housing ladder, have savings and manage their money better. It still exists today. Much like the Stafford Railway building society, it provides affordable, low-cost, sustainable and secure financial products for a number of people in north Staffordshire who ordinarily may be viewed by high street banks as being a bit too much of a risk. Because they can access suitable finance, they are able to make a better life for themselves. By building societies’ own admission, they are not going to change the world or overturn the economic hegemony of our current banking system, but they are making a difference to my constituents every day through the way that they operate and their business model, which is sustainable, ethical and fundamentally about trying to improve individuals’ lives.
That is where I want to add my contribution. I agree with pretty much everything that has been said by Members on both sides of the House about the opportunities if we were to properly unleash the co-operative movement and harness its economic potential. There are other things that we can do with the co-operative model. Someone—I think it was my hon. Friend the Member for Oldham West and Royton (Jim McMahon), but I do not want to attribute it to him, in case it was not—once talked about drainpipe devolution and the idea that if a decision is made in Westminster and Whitehall by half a dozen people, and then that decision is devolved to half a dozen people in Greater Manchester, the west midlands or north Staffordshire and called devolution for the purpose of devolution, we have not really devolved anything; we have just moved the decision makers to another office. We can harness the co-operative and mutual benefit by expanding the number of people who make the decisions in the first place.
Jim McMahon
My hon. Friend is right. During the EU referendum, people were talking about feeling powerless and wanting to take back control and have more say over their lives. We need to look at public services, and the Co-operative Councils’ Innovation Network is leading on that.
Gareth Snell
I thank my hon. Friend for his intervention, because he takes me neatly to my next point, which is about learning from good practice on a smaller scale that directly benefits our economy. The Co-operative Councils’ Innovation Network, of which he and I were both members when we were council leaders, demonstrates overwhelmingly what can be done if we put a small amount of investment into local projects. Tudor Evans, who leads the council in the constituency of my hon. Friend the Member for Plymouth, Sutton and Devonport (Luke Pollard), and Sharon Taylor in Stevenage are just a few examples of people who are pushing this agenda nationally.
If we put a small amount of investment into a group of people who want to change the way that their town works, we can get huge dividends back. If we move away from a simple contractual relationship for a new business towards profit share for rental purposes or an equity share in lieu of rent, we can suddenly start to sustain our high streets better. We can see empty units revitalised by businesses that can think about long-term business planning, rather than short-term business planning to meet next month’s rent and rates bill. We end up with a greater economic benefit to the local community.
If the Government thought about how they could help local authorities to do the sort of work that the Co-operative Councils’ Innovation Network is doing across the country, they would see an increase in potential tax take, because there would be more thriving small businesses. What do we know about thriving small businesses? We know that the people they employ spend their money in the neighbouring shops, and we have a circular economy, whereby one or two different thought processes about how we include more people in decision making in a community leads to economic benefits for not only the Treasury but local communities. That should surely be looked at by this Government or the next Government or as part of Labour’s commitment to at least double the co-operative sector.
The mutualisation argument extends to not only high streets but things such as public services for buses and trains. There is an argument for utilities to be mutualised, because these are things that we all use. If we mutualise and say that the people who use those services should have a stake in the control of them, those services can be driven to a higher quality and standard. There can be financial dividends for the users, but there can also be improvements in standards of delivery, because the people using the services are in control of how they are used. That is a fundamentally simple model that is not being exploited sufficiently by a number of Government bodies at the moment.
Jeremy Lefroy
The hon. Gentleman is making an extremely important point, and I agree with everything he is saying. One body that is, in effect, a mutual and is growing month by month almost under the radar is the National Employment Savings Trust—NEST. It is growing by several hundred million pounds. Last I saw, it had £5 billion, and by the end of the next decade, it will probably be one of the largest financial institutions in the country. It is doing a great job in many ways, yet almost all the top 10 investments of NEST are in overseas companies, not ones in the UK. It may have operations in the UK, but they are overseas investments. Does he agree that, given that it is a mutual, or at least owned with social purpose in the mutual interest, at least some of those investments could be put into precisely the things he is talking about?
Gareth Snell
I agree entirely. The hon. Gentleman, as always, has touched on a pragmatic and simple way of fixing something that should not be a problem to start with. He talked about the Staffordshire Credit Union. The reason the Staffordshire Credit Union ended up folding was that we were unable to meet the Prudential Regulation Authority’s 3% threshold rule between capital and assets. With a very small investment that a body like NEST could have provided, we would have been able to continue helping the thousands of people who were members, offering secure, low-return financial products to people who need it the most—people in communities such as Stoke-on-Trent, where payday lenders prey because they know that people want to borrow money quickly. While credit unions do not provide an immediate alternative to payday lending, they are part of the mix that is available. I can immediately think of a number of organisations that would benefit from the sort of investment the hon. Gentleman mentioned, and then the mutual role of NEST would get to grow and become even greater.
I want to go back briefly to my point about railways and buses. I may end up falling out with my Front-Bench colleagues on this issue, as on many others. State ownership is still a monopoly, and if we are talking about ways in which we could open up public services to be democratically controlled by the public, we need to mutualise them. We should allow and facilitate worker and management buy-outs of existing companies that are looking to be sold, and enable places to allow municipal bus companies to come back into the mix. This would help to sustain the market and—again, I go back to this point—make sure that people using those services have some semblance of taking control of those services and delivering them in a way they think is appropriate for their communities and sustainable in the long term.
This goes not just for public services. We have not touched on the potential economic benefits of things such as fan-owned football clubs and how we should do more to push fan-owned stadiums. In many other countries, it is not uncommon for sporting facilities and sports clubs to be owned, operated and managed by the users of those facilities. In this country, we have not particularly got into that model, as far as I can see, with the depth and the courage that others have.
Finally—I am conscious of the time—about 18 months ago, my hon. Friend the Member for Harrow West (Gareth Thomas) ran a very clever social media campaign pointing out that if the 5% profit of some of the largest companies in the country was shared among their employee base, each employee would receive a certain amount of money, emulating the French profit-sharing law. To turn full circle back to my first point, if we had such a law in this country—it is not necessarily a co-operative solution, but it is about profit sharing and sharing the values of co-operation—what would happen to that money? Most people who work in such companies and small-scale industries will spend that money locally: more money in their pockets means more money going into their local high streets, shops and facilities. I am sure the Government have already looked at the circular effect of an economic benefit coming from a co-operative solution, even if it is not a co-operative model, and if they have not already committed to looking at the French profit-sharing law, I would encourage the Minister to do so.
It would be wrong of me not to talk about the Co-operative Group as a whole. As has been mentioned by a number of my colleagues, it is not just about the financial products and services it offers, but the values and ethics it brings to them. The Co-operative Group is leading the way on dealing with modern slavery, food injustice and food hunger, and retail crime. It knows that, at the heart of everything it does, is its staff and its consumers, and those are the values that I am sure the Minister will have heard about in every contribution today and will want to make part of any Government strategy on co-operatives.
Dr David Drew (Stroud) (Lab/Co-op)
It is a great honour to follow the current chair of the Co-operative party, my hon. Friend the Member for Redcar (Anna Turley). I am glad that her predecessor, my hon. Friend the Member for Harrow West (Gareth Thomas), was able to secure the debate. I am grateful to him for all he did, including taking the party through some quite difficult periods. The movement has also suffered, because of some of the well-known controversies that we had to face down. I thank the hon. Member for Wycombe (Mr Baker), who is no longer in his place. It is good that there is at least some support from those on the Government Benches for something that some of us, as proud Labour and Co-operative party MPs, feel is very important. We feel that the co-operative message is not always heard as much as it should be, in this place or, more particularly, in wider society.
I just want to touch on three quick points, but I will just mention what has already been said, which is that we need to see the growth of co-operation. It is an alternative to capitalism and state socialism, and it is important that we see it as an answer to the problems of the 21st century, rather than as purely a historical legacy. I hope the Minister will say some nice things and respond in kind to the suggestions I will make. I am not going to talk about credit unions, but it is important we recognise that they have a part to play in financial arrangements. I was one of those who set up the Stroud co-op union, which is still flourishing. It needs to grow and we need some help to make it grow, but it is an answer for those who find it difficult to access finance in other ways.
My first substantive point is on what I have always felt is a great problem with co-operation: where to get advice to set up a co-operative. State business support organisations, whether local enterprise partnerships or their previous incarnations, have all suffered from the same problem, which is that the people offering advice have either had no experience at all of co-operation, or their experience has been limited to what they have read about it. Co-operators need to be able to advise other potential co-operators. I hope the Government will consider this issue, because too often this is a huge lacuna. There is no one to go to who knows enough about the opportunities that the co-operative movement as a whole can bring. Since the loss of co-operative development agencies, which many of us have sadly witnessed over the past few decades, this issue has become much more acute.
Secondly, co-operative housing can be a solution, particularly in rural areas where community land trusts have now come into their own, but we need a number of things to happen to make them more available than they currently are. First, we need changes to the planning system. I am pleased that the Government have now looked at small sites and made them more accessible to this form of provision, but at the moment the planning system is such that too often communities and neighbourhood planning groups who want to have a small clutch of housing either give up because it is too bureaucratic, or they get turned over and it ends up as executive housing in villages, which is just what they did not want. They want affordable units. Dare I say it, they want social units.
The great benefit of community land trusts is that the land remains held mutually in perpetuity. That is very important, because losing the land means losing control. It would therefore be very helpful if the Government looked at the planning system in that regard and at what financial help they could provide to such groups. It is expensive to go through the rigours of trying to set up a community land trust, so I hope the Government will be generous and consider ways to help such communities solve these problems. They do not want masses of housing; they want 10 to 12 units and they want them to remain affordable in perpetuity. That is why community land trusts, as a form of co-operative housing, are so important.
My final point is on the role of co-operation in farming. The Agriculture Bill will one day come back to this House, but so much of it is predicated on public moneys for public goods and none of us quite knows how that will work. We are waiting to examine the environmental land management trusts in more detail so we can know how they will work in practice, but the simple fact is that farmers are already co-operators. More than half of all farmers belong to some form of co-operative. They may not always recognise that. They may think that NFU Mutual is a pure insurance company, but it is a mutual. It is a co-operative.
Gareth Snell
My hon. Friend describes a situation that applies to many people, not just farmers, who are members of a co-operative organisation. I think of the Asian community in Stoke-on-Trent, who have a savings scheme for funding family funerals. They would not think of it as a co-operative, but that is exactly the sort of mutual and co-operative model we are talking about.
Dr Drew
Exactly. That is partly the problem of the movement, because it is not overt enough. It does not broadcast the fact that they are mutuals and co-operatives. On farming, the changes that are going to come will, to some extent, demand upscaling. Some of us may worry about that, but the reality is that with the change in the funding mechanism there will be a drive towards larger units. The only alternative to that is some form of greater co-operation among those who practise farming at the moment. We want more people to come on to the land and particularly younger people, because the average age is 59. It will hardly be a burgeoning, growth-inspired movement without younger people coming in to do the exciting things that we all know could happen to provide more of our own food.
I hope we will look at how co-operatives are not only built into the Agriculture Bill, but given encouragement. All the pressure is on selling smaller units, whether that is what is happening to the county farms estate, where they are being gradually cut away one by one—some of us worry about that—or the fact that when land comes up for sale, the big guys come in and buy it.
Beer Taxation and Pubs
Gareth Snell Excerpts(5 years, 1 month ago)
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Ruth Smeeth (Stoke-on-Trent North) (Lab)
I congratulate my friend, the chairman of the APPG on beer, the hon. Member for Dudley South (Mike Wood). It is an honour to serve as his deputy and as the Labour lead in the House on the issue of beer.
I must declare an interest—not one in the register—in that I am the hon. Member for the Titanic brewery, the best small brewer in the United Kingdom.
Ruth Smeeth
I think I am going to be heckled throughout by my hon. Friend and neighbour.
Titanic has benefited hugely from small brewer’s relief, which I will touch on in a moment. First, I would like to put on record my thanks to Keith and Dave Bott not only for the support that I receive from them, but for the investment they have made in my community. They have ensured that small brewers have had a voice in this place, and others, for many years.
It is a pleasure to talk about a B-word that has nothing to do with Brexit. I think we can all agree that we have spent enough time on that for a little while. Instead, I would like to talk about the value of pubs to our society.
While the sector supports more than 1 million jobs in the country, and we heard various statistics from the hon. Member for Dudley South about it, we need to touch on the other things that the pub sector delivers, such as the impact on loneliness—especially providing somewhere for older gentlemen to go—and on our communities.
Transport for Towns
Gareth Snell Excerpts(5 years, 2 months ago)
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Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)
It is a genuine pleasure to serve under your chairmanship, Mr Austin. I congratulate my right hon. Friend the Member for Don Valley (Caroline Flint) on securing this debate, which has demonstrated the strength of feeling across the House on the issues that face our local transport networks, particularly in towns.
Stoke-on-Trent is one city, but it is in fact six towns linked together by an artery of roads that all too often neither get people to the place they want to be, nor get them there on time. We struggle in Stoke-on-Trent because of the non-traditional geographical nature of our city. Towns that are no more than 2 miles apart do not have a direct bus route. In one instance, people can stand in one town and almost see the other, yet they have to travel through a third town to get there by bus. It is telling that since 1991, bus usership is up by 8% across the country, but network coverage is down by 30%. That is disproportionately affecting the small towns we all represent.
In places like Stoke-on-Trent, bus companies make operating changes, and that has consequences. In my community, a morning bus service at school time was changed, meaning that young people could either get to school an hour early or 10 minutes late. I am not convinced that the consequential impact of such changes on the day-to-day lives of those we represent is being taken seriously by bus companies or the Government. The Government have given additional powers to the combined authority areas to do proper regulating and franchising of buses, but they have also extended that power to local authorities outside of those combined authority areas, if they can prove they meet the criteria and standards set by the Department for Transport. When the Minister sums up, will she tell me how many times the Department has granted to local authorities that cover small towns those powers to get directly involved and bring their bus routes back into public ownership?
Municipal bus companies have not been mentioned. There are multiple examples around the country of small towns running their own bus services for public benefit at a profit to the taxpayer, meaning that services can be subsidised from a commercial interest. That is not being talked about and the Government appear to be opposed to the idea. When the Minister sums up, will she explain why she does not think small towns should be in control of their own bus services?
Ms Ghani
The hon. Lady shakes her head. If she wishes to get in touch with the Department, we can lay out how the plans can work for her local authority so it can take the relationship forward.
I believe the constituency of the hon. Member for Barnsley East (Stephanie Peacock) sits under the mayoral authority of the hon. Member for Barnsley Central (Dan Jarvis). Through the powers in the 2017 Act, the Mayor has the opportunity to franchise bus services. I had that conversation with him in person when he met me about HS2.
The hon. Lady was also keen to make sure that the right investment was made in the rail network in her region. About £48 billion of rail investment is projected between 2019 and 2024. There has also been a substantial amount of infrastructure funding—about £300 million—to help with HS2.
The hon. Member for Stoke-on-Trent Central (Gareth Snell) was keen to understand how the 2017 Act could help his local authority. Local authorities can have a voluntary or statutory partnership with their bus companies. They just need to get in touch with the Department. We would welcome any interaction, because we are always delighted to enable local authorities to take that forward.
Gareth Snell
Having read the 2017 Act, I am acutely aware of what possibilities exist in it, but my specific question to the Minister is how many local authorities have taken up those powers outside mayoral combined authority areas. Simply having something on paper does not mean that local authorities are doing it. Can she give me a figure today of how many local authorities have taken up the powers that she references?
Ms Ghani
The hon. Gentleman raises a valuable point. Previously, the argument was that the powers were not available. The Department made those powers available in 2017—they have been in place for only a few years—and we are in conversation with a number of local authorities and Mayors. We need local authorities to put business cases together, come forward and be bold and responsible for the bus services that they should be making available to their local communities. The hon. Gentleman might also have noted his area has been shortlisted for a slice of the £1.28 billion transforming cities fund. I know that is a city and we are talking about towns, but we can ensure that buses are central to how that fund is allocated.
European Union (Withdrawal) Act
Gareth Snell Excerpts(5 years, 4 months ago)
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Mr Hammond
I shall make a bit of progress, then give way again.
I was saying that the benefits flowing from new FTAs would not compensate us fully for the loss of EU trade from a no-deal exit. That is why we have fought so hard for a deal that delivers the closest possible trading relationship with the EU, while respecting the outcome of the referendum and giving ourselves the ability to form new trading arrangements with countries around the world. Today, the case for this deal is that, uniquely among the options open to us, it does deliver on our commitment to leave the EU and on our collective duty to protect the jobs and living standards of our constituents.
Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)
While the Chancellor is explaining the deal, will he explain to the House which trade unions he has sat down and briefed on the deal, and what their response was? The feedback that I have had from ordinary trade union members in my constituency is that, although this deal is preferable to no deal, it is still a long way away from the certainty that they would have hoped to have had in the proper arrangement that they were expecting.
Mr Hammond
The deal that is on the table provides the key elements that we will need to maintain our trading relationship with the European Union. It makes a commitment to maintaining our borders as openly and free-flowingly as possible. It eliminates tariffs, quotas, fees and charges. It will protect the vital supply-chain business that is at the heart of our trading relationship with the European Union.
Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)
I have been elected to this House twice since the referendum: first in a by-election, and then a short 12 weeks later in the general election. Both times, I was elected on a clear promise and a manifesto commitment that said that we would respect the outcome of the referendum. In my mind, that means that we leave the European Union, but do so in a way that causes the least economic damage. That does not mean a hard no-deal Brexit or a second referendum, which I do not support and think would do nothing but further entrench the divisions in our society.
The anomaly of this debate is that, frankly, everyone contributing today has made up their mind. Everyone who will contribute on Monday and Tuesday has made up their mind. In fact, we could probably have a good guess now as to the final numbers in the Division on Tuesday—that is, that the Prime Minister’s deal is dead; it is sunk; it is no more. The real debate we should be having is about what we do next. What does this country do next that avoids the current default option of no deal, but at the same time allows us to honour the spirit of the referendum and untie our political union with the European Union?
My leave-voting constituency was 70:30. In parts, it was 80:20. My constituents were quite clear. Contrary to the emails I have received, they were not racist, prejudiced or thick. And it was not the case that they “did not understand” or “did not know”. My particular favourite was the lady from London, who emailed me to say that I should get a subscription to The Guardian for every person who voted leave—then they would really understand what life is like in this country.
We should be looking at how we can heal the nation as a whole. I say to my constituents who say that we need to get out of Europe at all costs, Europe is not the cause of our problems, but nor is it the salvation. It was not until ’97 when a Labour Government came to power that we signed the social chapter, despite it being a piece of European policy from ’93. When workers’ rights were attacked by the Conservative Government by doubling the continuity of service before workers could access them, it was not Europe that stood up for them; it was the trade union movement. When the Trade Union Act 2016 was introduced to try to take away that power, it was the Labour party that stood up against it, not the European Union.
In my constituency, we have lower wages. We rank 13th in social deprivation tables. We have a hospital in financial special measures. Young people in my constituency struggle to get a house, get a job or go to college. That is while we are members of the European Union. The European Union offers no bulwark against the social inequalities we see today, which are predominantly driven by domestic issues perpetrated by the Government. We should spend our time and energy working out the radical domestic policy agenda that we want to enact as a Parliament and as a country to deal with those social ills.
So far the debate has focused almost entirely on process. We have talked about votes, amendments, the order of amendments, the membership of sifting committees, whether the House of Lords gets to have a vote that stops something, or whether an amendment is binding. My constituents frankly do not care about that. They want to know how they will feed their kids and heat their house, and how they will get to work if there is no bus. How will they make ends meet if they have to move from their current benefit on to universal credit? Those are the issues that motivate people in my constituency, and the sooner we move away from Brexit the better.
That does not mean, however, that we should simply sign up to any deal that the Prime Minister puts forward. I do not know what the alternative is, but no one else in the Chamber appears to know either. Everyone says that no deal is not an option—fine, let us take that. We are unlikely to have a general election because the Conservative party does not voluntarily give up power. That is not what it does, although it might fall apart in front us, which is delightful. I do not support a second referendum, so I simply ask the House: what do we do next?
Dr Fox
I will not give way again.
The Government have made it clear that we want to take a balanced approach to the question of our future trading prospects. We acknowledge the need to maximise our access to the EU market, but without damaging our potential to benefit from the emerging trade opportunities in other parts of the world. I remind the House that the International Monetary Fund has said that 90% of global growth in the next five years, bringing its forecast forward, will occur outside continental Europe.
Ambitious arrangements have been made in the political declaration for services and investment—crucial to this country—arrangements that go well beyond WTO commitments and build on the most ambitious of the EU’s recent FTAs. But we have also been clear that our future relationship with the EU would recognise the development of an independent UK trade policy and not tie our hands when it comes to global opportunities. The 27 nations of the EU constitute some of our largest trading partners. As a whole, some 44% of this country’s exports of goods and services still go to the EU, although that proportion has diminished somewhat over the past decade or so. We have set out an approach that means the UK would be able to set its own trade policy with the rest of the world, including—let me be very clear—setting our own tariffs, implementing our own trade remedies and taking up our own independent seat at the World Trade Organisation. It is at the WTO and like bodies that proper global liberalisation is likely to take place. In an economy that is 80% services-orientated, the liberalisation globally of services will have a far greater impact on the future prosperity of the United Kingdom than anything that is likely to be done on a bilateral agreement in goods, which has largely been liberalised over the past 20 or so years.
Britain is well prepared for a global future. No other country has the same combination of fundamental strengths, which will allow us to thrive in an age where knowledge and expertise are the instigators of success. The inward investment into this country in recent months is testament to that. Not only have we maintained our place in global FDI—we have improved it. According to the UN, in the first six months of 2018, Britain was second only to China and ahead of the United States in terms of inward investment because of the strong economic fundamentals of this country that have been set down since 2010 by the Conservative Government. Our export and investment performance shows that the sceptics have been wrong and that Britain is flourishing. The divisions of the referendum now need to be consigned to the past. It is time to set aside our differences and lead our country to a future of freedom, success and prosperity.
Let us be clear about one thing. There are those who claim, and it has been claimed today, that Parliament can override the result of the referendum because Parliament is sovereign. I say this to them: on this particular issue Parliament subcontracted its sovereignty to the British people when it said, “We cannot or will not make a decision on this particular matter. We want the people to take this decision and issue an instruction to Parliament.” The people of this country made that decision and issued that instruction. If we want to retain the public’s faith in our democratic institutions, it is time for Parliament to live up to our side of the bargain. In politics, we cannot always have the luxury of doing what we want for ourselves, but we always have an abiding duty to do what is right for our country. I commend this motion to the House.
Ordered, That the debate be now adjourned.—(Gareth Johnson.)
Debate to be resumed on Monday 10 December (Order, 4 December).
Mr Speaker
I fully understand the purport of what the hon. Gentleman has had to say. I think that he has set the record straight. It is not for me to act as arbiter of the merit or demerit of what a particular hon. Member says. Each Member takes responsibility for his or her own observations. However, in the circumstances which the hon. Gentleman described to me briefly some little while ago at the Chair, I quite understand why he wanted to say what he has just said. I thank him for doing so, and I think it will be noted and appreciated by colleagues.
Gareth Snell
On a point of order, Mr Speaker. At the beginning of the debate we have just had, you made it very clear that it was expected that Members who participated in the debate would attend the Chamber for wind-up speeches. If I have misjudged this I will apologise, withdraw and sit down accordingly, but one Member spoke for well in advance of 20 minutes in this debate and subsequently never returned for the wind-up speeches. That was in excess of five times as long as some Back Benchers got. If there is a good reason, I will apologise and withdraw. If there is no good reason, how might this be placed on the record so that my dissatisfaction, which I think is shared by many on my side of the House, can be recorded?
Mr Speaker
I am grateful to the hon. Gentleman for his point of order. He is entirely correct in recalling what I said at the outset of the debate. That was a repeat of what I had said yesterday, which could brook no misunderstanding. Off the top of my head, and I do not think it is proper to air it here on the Floor of the House anyway, I am not sure to whom he is referring. Suffice it to say, unless there is a peculiarly compelling reason why somebody has to absent him or herself, and can therefore not be present for the wind-up speeches, Members who choose to speak in a debate should then be present for the wind-up speeches. The hon. Gentleman has registered his point with some force and obvious sincerity, and I respect what he has said.
2019 Loan Charge
Gareth Snell Excerpts(5 years, 5 months ago)
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Justin Madders (Ellesmere Port and Neston) (Lab)
It is a pleasure to serve under your chairmanship, Mr Walker. I congratulate the hon. Member for Wycombe (Mr Baker) on securing the debate. It is clear from what we have heard that the issue has caused much consternation and anguish for many people, so it is right that those concerns have been aired here.
As much as the next person, I believe that if tax is due, it should be collected. Without the ability to raise funds, our public services would grind to a halt. I am sure there is unanimous agreement about that. My concern, and that of many hon. Members, lies in the way the recovery of the 2019 loan charge has been handled. It raises questions about whether HMRC can say, hand on heart, that all those who are subject to it have had what I would call a fair hearing. I want to make it absolutely clear that if, following due process, the money is owed, it should be paid, but what I have heard from a constituent does not give me confidence that that will be the case.
My constituent, Mr Crook, was working as a geologist in the oil industry when the agreements that are being scrutinised were set up. His work has dried up and he is now unemployed. He tells me that he is not in a position to repay everything he owes—not that he has been told how much that is—and that because of the uncertainty and the failure of HMRC to engage with him, he is concerned about the risk of bankruptcy.
I have corresponded with Ministers and officials to ask someone to look into Mr Crook’s case but I have had nothing back but the standard response. With Mr Crook understandably anxious to resolve matters, he has contacted HMRC at the email address provided on 9 April, 8 May, 30 August, 31 August and 28 September, and by post on 2 July. His emails have had an automated response and he has had no response to his letter at all.
Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)
My hon. Friend is making a powerful argument on his constituent’s behalf. I have a constituent much like his who has been told that he may have to pay back more than £100,000 over the five years, which could cost him as much as £2,500 a month. Does my hon. Friend accept that even when people are still in work, if they are trying to provide for their families, those sorts of sums are simply unobtainable for most of our constituents and will lead to bankruptcy, whether that is what the Government intend or not?
Justin Madders
There is a lack of reality and a lack of genuine engagement with the individuals affected. As I said, my constituent has not had a discussion of the sort that my hon. Friend refers to, and until he does, he is in no position to know whether he will be able to repay anything at all. Will there be genuine discussions before the loan charges become due? Is the Minister confident that the Department has sufficient staff and resources to deal with all the inquiries that we have heard about?
My constituent tells me that although he submitted his tax returns each year when he was working they were never queried, and because of that HMRC has at the very least implicitly, if not explicitly, accepted that the moneys he received as a loan were indeed just that. He is concerned by the retrospective nature and long reach of the loan charge, and states:
“We really are normal people, who operated within the law at the time, itemising everything on our tax returns, paying benefits in kind tax on the loans and operating under a registered scheme with a reference number lodged with HMRC at the time.”
I contrast those words with what my hon. Friend the Member for Mitcham and Morden (Siobhain McDonagh) said earlier about the string of multinational companies that are clearly paying less tax than they ought. When individuals are being driven to despair by the sort of hectoring we have heard about, it is perhaps right if they conclude that there seems to be one rule for the big corporations and another rule for the man on the street. If individuals are made bankrupt we will all lose, but it looks as if we could end up in that situation by default because of a lack of resources and engagement by HMRC. Will the Minister look carefully at how the recovery operation is working, so that we avoid that? Finally, I ask that HMRC acts with competence and compassion.
John Glen
In the course of my speech, I will address that point. I am happy for the hon. Gentleman to come back to me later if he feels that I have not done so.
To be clear, I am the Economic Secretary; the Financial Secretary wanted to be here but he is in the main Chamber for the Finance Bill, so I am here in his place.
I acknowledge the early-day motion tabled by Members. It has attracted 103 signatures, and I also acknowledge the concern throughout the House on this matter. The concerns expressed are for people who have used a disguised remuneration scheme, who expect to have outstanding loans in April 2019, and who will be subject to the charge. I recognise that the Government need to be clear about why we legislated for this charge, which received Royal Assent following a full debate during the Finance Bill process in 2016-17. I will outline the steps that the Government have taken to help those individuals who may be affected.
The Government believe that it is not fair to ordinary taxpayers, who pay their tax on time and in full, to allow people who have used tax avoidance schemes to get away with it. Disguised remuneration tax avoidance schemes are contrived arrangements that use loans, often paid through offshore trusts, to avoid paying income tax and national insurance contributions. The schemes may have involved provision of a loan with no intention whatever to repay it. I spoke to the Financial Secretary this morning, while preparing for the debate, and he said, “Earnings are earnings, and a loan is a loan,” and that is what the issue boils down to.
Gareth Snell
I understand the Minister’s point, but before he progresses with his speech, will he clarify whether he accepts what many Members have asked this afternoon-that those who undertook the scheme did so in good faith, and therefore that the people ultimately in trouble for this system are those who perpetrated it, not those who signed up to it?
John Glen
I am happy to concede that for the 50,000 indivi-duals affected, there are obviously responsibilities for those who promoted this. It is absolutely the case that HMRC is pursuing those individuals. They often promoted the scheme to large numbers of individuals. Five cases are before the courts—that seems a small number, but each one covers a large number of individuals—and there has been a judgment in one, with the other four cases still moving through the courts. It is not right to say that HMRC is not engaged with those who promoted the scheme.
Finance (No. 3) Bill
Gareth Snell ExcerptsMonday 12th November 2018
(5 years, 5 months ago)
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Charlie Elphicke (Dover) (Ind)
It is always a pleasure to follow the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry), who always paints such an uplifting picture of the country for the House.
It seems to me that the people I represent in my constituency know that the best cure for deprivation is a job. There is no doubt that this Government have had massive success in creating so many jobs since they have been in office. That is in sharp contrast to the toxic inheritance left by the previous Government.
The ultimate test of any Finance Bill is: what path does it set for the future of the country and what vision does it set for the next steps? Yes, the people I represent in Dover and Deal know that we have done well in creating jobs and creating new prosperity, but it is also important that we are a compassionate party and that we care for and look after the least well-off. It goes beyond just getting a job; it is important that we reduce the burden of taxation on those who are the least well-off.
That is why it is so important that the personal allowance has been increased to £12,500. I have long argued—since 2010—that we should increase the personal allowance and take people out of taxation altogether. I am really glad that we have come to a time when it is at such a high level. That is good for the least well-paid and good for taking people out of tax altogether.
I welcome the measures on universal credit. It is welcome that the Chancellor has listened carefully to the representations made by me and many other Conservative Members that we should look after those who are the least well-off. In many ways, universal credit improvements and the better funding of universal credit is the best way to reduce the incidence of taxation on the least well-off. It is the most targeted way of helping people, and I welcome that.
Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)
I agree with the hon. Gentleman that properly funded universal credit and taking the lowest-paid out of tax are important, but does he agree with me that the billions of pounds we are going to spend giving the top 10% a tax cut would have been better spent on the low earners he mentions?
Charlie Elphicke
I am going to come on to that in one moment, but I will just finish this point.
When talking about the importance of compassionate Conservatism and the vision we as the Conservative party should have of looking after the least well-off, it can never be right to put jobs ahead of people’s lives. That has been well settled on the Conservative Benches. Let us not forget that it was on these Benches that important legislation such as the Ten Hours Act was pioneered well over a century and a half ago. It was on these Benches that so much of our health and safety legislation was pioneered and put through. It was on these Benches that we made the argument that jobs should never come ahead of people’s lives.
That is why I join my hon. Friend the Member for Stirling (Stephen Kerr), who spoke movingly some moments ago, in saying that we cannot delay the action that is needed on fixed odds betting terminals beyond next April. It cannot be right to delay this, and it certainly cannot be right to do so on the basis of a bogus report. It has been said explicitly that that was not what the report was intended to be for or to do.
For that reason, we need to come together as a House and collectively persuade the Government to think again and accept that we should bring this in from April 2019, as has long been planned. In my constituency of Dover and Deal, addiction is a big problem for many people. Whether it is to alcohol, drugs or gambling, addiction is a big problem. It is the responsibility of this House—and, in my view, this has long been settled as a responsibility of compassionate Conservatism—to look after and care for those who suffer from addiction, so I think it is the right thing to do.
It is important that this is not simply about protecting the least well-off, helping them to have more money and protecting them from exploitation, but about making sure that we can power ahead as a country. It is important that powering ahead as a country is at the heart of this Bill. We need to get big business investing, because it has not been investing; it is sitting on about £750 billion of cash balances. We need to get big business investing in the future of this country. It should not be relying on low-skilled labour from overseas; it should be investing in kit, investing in people and investing in skills. That will ensure that our nation has much greater productivity and a more highly skilled home-grown workforce so that our countrymen will be able to do better and earn more in the years to come. That is important for investment.
It is also important that we back the entrepreneurs—the job creators. Who are they? The figures are clear. Since 2000, 4 million jobs have been created by small and medium-sized enterprises, whereas big business has created only 800,000. The obvious thing to do is to back small businesses—the entrepreneurs—with tax cuts and deregulation and by making it easier for them to get on and do well. That is why it would never be right to increase taxes on small businesses, because that would hold people back. It would never be right to increase the regulatory burden on small businesses, because that would make it harder for them to succeed. Nor would it ever be right to allow big banks to prey on small businesses and to litigate them into bankruptcy, as my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) movingly said in his speech. That is why we need to ensure that there is a financial tribunal system to protect small businesses from being exploited by the oligopoly of big banks.
While we are about it, we ought to think about putting the consumer back in charge and back in the driving seat, by taking action to break up the big energy companies and the big banking oligopoly. We should make sure that we have more competition in this country. We should unbundle Openreach to ensure that we have much better, faster internet access. It is a disgrace the way Openreach carries on, cutting off villages. However, it does not just do that; when people change connection, half the time they have to wait half a month for the connection to be made, because of Openreach’s galactic incompetence. The company is more interested in investing in sports rights than in infrastructure; indeed, it does invest more in sports rights than in its infrastructure, and that has to change as well. If it were a stand-alone company, I am absolutely certain that that would be the case.
So, yes, the Conservative party should be the party of enterprise and of the small businesses that drive the economy, that create the jobs and that have created the jobs over the last 15 years. Yes, we should be the party of compassion for the least well-off. Then, however, I am challenged by the hon. Member for Stoke-on-Trent Central (Gareth Snell), who says, “Should you not be in favour of increasing taxes on the richest, on businesses and all the rest of it?”
Gareth Snell
I fear that the hon. Gentleman is misrepresenting what I said. I did not say that the Government should be raising taxes; they should simply not be cutting taxes, which is a very different thing.
Charlie Elphicke
The hon. Gentleman seems to be muddled: is he a tax raiser or a tax cutter? It seems to me that the evidence of history is really clear. Back in 2006, I wrote a paper for the Centre for Policy Studies saying that we should halve the rate of corporation tax, which then stood at over 30%. I basically said that that would pay for itself, because if we cut the rate, we up the take. I made the case that we would have more revenues than were coming in at the time if we halved the rate to less than 20%. Since then, that policy has been put into action, and that has turned out to be the case: if we cut the rate, we up the take. In the 1980s, they cut the higher rate of tax from 80% to 60% and then to 40%. Each time the rate was cut, what happened? The tax take rose. That is why we ought to be looking at how we can reduce the burden of taxation in areas where we can raise more taxes.
There are some cases where we increase the burden of taxation and see revenues falling. We can see that in what has happened with stamp duty land tax on very high-value properties: we freeze the market, and we see lower revenues as a result.
Oral Answers to Questions
Gareth Snell Excerpts(5 years, 5 months ago)
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Elizabeth Truss
My hon. Friend is right. We know that people with STEM skills have higher earnings. That is why we put more money into the maths premium last year to encourage more students to study that subject from 16 to 18. This year, we have launched a new programme to enable the better retention of maths and physics teachers in our schools.
Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)
If, as the Chief Secretary says, there is now more money for skills funding, why did not the Chancellor announce in his Budget speech an uplifting of the cap on sixth-form and college funding from £4,000, which is causing real problems?
Elizabeth Truss
What the Chancellor announced in his Budget speech is the fact that we are giving employers more flexibility over apprenticeships, which they have asked for, and we are seeing more and more people going into high-level apprenticeships under this Government.
Financial Guidance and Claims Bill [Lords]
Gareth Snell ExcerptsTuesday 24th April 2018
(6 years ago)
Commons ChamberRead Full debate Financial Guidance and Claims Act 2018 View all Financial Guidance and Claims Act 2018 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Consideration of Bill Amendments as at 24 April 2018 - (24 Apr 2018)
Gareth Thomas (Harrow West) (Lab/Co-op)
I rise to speak to the three amendments in my name. According to a recent Bank of England survey, the average level of household debt, excluding mortgages, is £8,000. While everybody should be able to access basic debt advice, people on low incomes with much higher levels of debt, at higher rates of interest, clearly need significant support. Unlike in the United States, it is difficult to work out with any certainty where such people are living in the UK, beyond relying on an individual to approach their local citizens advice bureau or another advice service.
At present, the new financial guidance body will not have access to data to allow for a detailed mapping of debt at a local level. Indeed, it will not have access to a full picture of the activity of banks and other lenders in our communities. There is no requirement on banks, payday lenders and other financial services providers to be fully transparent about the services in each of our constituencies—specifically where they lend, what rate they lend at, and the types of loan that they offer. Were that data available to public bodies, it would allow for the accurate mapping of who is lending and what is being loaned. Banks and other lenders do hold such data down to postcode level, and such data are released in the United States. Many British lenders that are active in the US are used to releasing that information, which allows public bodies to map the activities of banks and other lenders.
My amendments 1 and 2 would allow the single financial guidance body to facilitate the release of that information by lenders in an anonymised form so that we could know where debt is concentrated and what types of credit are used in different areas. That would allow for better, more strategic responses to the household debt crisis with which the House is familiar. The data would help to inform where to target the debt advice funding that the SFGB will dispense, encourage more engagement between mainstream lenders, and allow the community finance sector to scale up the provision of affordable credit in areas where there are specific problems. Indeed, such data would reveal market gaps and the communities excluded from mainstream credit.
Fair access to financial goods and services is a basic requirement for full engagement in modern society, but Thamesmead, an estate of 55,000 people in south-east London, has not been home to a mainstream bank branch for a long while. Charities report anecdotally that high-cost credit lenders such as doorstep or payday lenders are very active. More and more bank branches are being closed by the big banks, which is leaving whole communities, some in the poorest areas of our country, without a single mainstream bank branch. Thamesmead is not an isolated example.
At the same time, rumours persist that the big banks want to pull the plug on free cash machines. Which? has reported that over 200 communities in Britain already have poor ATM provision or no cash machines at all. The combination of a lack of access to cash machines and to mainstream bank branches could create the space for a much bigger increase in the activities of high-cost credit companies, doorstep or payday lenders or, worst of all, illegal loan sharks, as a response to the needs of people in such communities for short-term loans. We need to know where the other Thamesmeads are across the country so that charities, community banks and credit unions can be supported by the financial guidance body and other statutory bodies to target financial exclusion in such areas by signposting people to responsible financial providers.
In 2015, when considering this specific problem, the Financial Inclusion Commission, which was set up by the Government, argued for a much wider level of data disclosure to develop a greater understanding of the problem. It said specifically:
“If lenders were required to disclose data by postcode on credit applications and rejections, policymakers would be better able to understand the scale and shape of the low income credit gap.”
Since the financial crisis, banks and other lenders have withdrawn from higher-risk lending and raised the threshold for accessing mainstream credit. In turn, this has restricted the credit available to those with low credit scores, leaving them at the mercy of higher-cost lenders to bridge their income gap. Surely part of the long-term solution to the household debt crisis is to make it easier for low-cost credit providers and other alternatives.
It is true, as Ministers have previously suggested in Committee and in a letter to me, that there are other sources of data on debt. The Office for National Statistics and the Bank of England publish data on lending, but only at UK level—the data is not broken down by constituency or by area. StepChange, too, publishes some data on lending, as does the Money Advice Service, but the Minister might not be aware that it publishes only estimates of the number of people who are over-indebted.
I would not dream of criticising the Money Advice Service, but its data on lending does not go anywhere like far enough to meet the recommendations of the Financial Inclusion Commission. The Money Advice Service does not routinely collect information about the extent of debt problems at the most local level. Its last significant report was back in March 2016, and it set out estimates of the number of over-indebted households down to local authority level, not postcode level, which is what we need. The Money Advice Service data are estimates based on survey work, not actual individuals who take out loans.
I should be clear that some lending data is already released. The coalition Government, to their credit, required the British Bankers Association, which is now UK Finance, and the Council of Mortgage Lenders voluntarily to publish some data by postcode, primarily to try to tackle the challenges that small businesses were facing when accessing credit.
There are problems with the data. For example, it does not include high-cost, short-term credit—payday lenders. Additionally, it does not disclose lending levels or rates at postcode level. Some details of loan applications and credit providers’ registers are not released either, so a full picture of the level of lending at a postcode level has not yet been able to emerge.
At the moment, the data is released voluntarily. Legal underpinning is needed so that more statutory bodies working in this field can more easily negotiate improvements in data. Specifically in this context, for example, the single financial guidance body should be able better to negotiate the release of the data that it needs.
I say this gently to the Economic Secretary, who will be very helpful to me tomorrow, but efforts to re-engage the Treasury in getting UK Finance to improve the usefulness of the data its members release have not had much success recently. At the very least, I hope he will be willing to join me in meeting national groups operating in this field to hear their concerns about the data, and perhaps he might be willing to use his leverage to get at least small improvements in that area.
In the United States, the Community Reinvestment Act means that banks and other lenders have to report what they are lending, where to and at what rate. The disclosure requirements are critical as they enable independent, informed assessments of what the banks are doing. Crucially, they keep the banks honest. Before the CRA, access to credit was scarce in deprived areas, and that lack of access contributed to and prolonged the decline and deprivation in such communities.
Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)
My hon. Friend makes an excellent point, but does he agree that the disclosure of such data would highlight the hotspots in communities such as the ones that we represent, and would therefore allow the Department for Work and Pensions to put in the necessary resources so that jobcentres and other advice bureaux can act as a preventive measure so that we do not see more of our constituents with little chance of getting out of the vicious circle of high-cost borrowing?
Gareth Snell
I apologise for intervening again, Madam Deputy Speaker. I was a director of a credit union in Staffordshire, but unfortunately it went under because the regulation from the FCA simply meant that it became unviable, because the authority did not understand the operating model. I therefore very much agree that the FCA has a big role to play, along with the Government, in making sure that credit unions are sustainable, because they offer a hope for constituents who would otherwise use high-cost lending.
Gareth Thomas
My hon. Friend amplifies the point I was making. One last point to make is that there is a need for legislative change to allow credit unions, in particular, to offer loans for cars and—
Oral Answers to Questions
Gareth Snell Excerpts(6 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Elizabeth Truss
My hon. Friend is absolutely right: we need to increase productivity, which will help drive up wages. That is why we are working with employers on the national training scheme, and why we are increasing our investment in areas such as maths and computer science to make sure that our young people have the skills for the future that will enable them to earn high wages and compete with the rest of the world.
Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)
The national living wage applies only to people over the age of 25, yet the cost of living in places such as Stoke-on-Trent is the same for people under the age of 25: there is no discount on their rates, mortgage or utility bills. Do the Chancellor and his Ministers think it is fair that these people are expected to earn less when their living costs are not affected?
Elizabeth Truss
What is unfair is the fact that, under the last Labour Government, youth unemployment went up to 20% and those young people were left on the scrapheap, whereas we have reduced youth unemployment by 40%. We have more young people in work earning the vital skills for their future.