Deregulation Bill

Debate between John McDonnell and Kelvin Hopkins

Wednesday 14th May 2014 Commons Chamber

[Kelvin Hopkins]

Yes, indeed. One of my former colleagues at the TUC, Sir Bill Callaghan, who used to be the chair of the Health and Safety Commission, was alarmed at the threats to the funding and the future of the Health and Safety Executive. Interestingly, when the HSE did a consultation exercise on this issue, a majority of respondents were against what the Government are proposing. The HSE is obviously under-resourced. I want it to be strengthened and to have more resources so that it can save more lives and prevent more injuries.

I will give another anecdote about a recent experience. There were two men working on the pavement outside my house with a diamond-edged cutting disc—the sort of machine that is used to cut stone, brick or concrete. They had no goggles, no hard hats and no ear defenders. I went up to ask what they were doing. I was not going to comment on health and safety. They were clearly eastern European and did not understand English very well. The TUC has said:

“Migrant workers are also more likely to be self-employed and are more likely to have a poor command of English, which means that they need support and guidance from the HSE. Sex out of ten Rumanian and Bulgarian immigrants living in Britain last year were working as self-employed.”

We are talking about a whole sector. Hundreds of thousands of people will be less likely to be protected by health and safety regulations and laws. I think we ought to strengthen the Health and Safety Executive and the 1974 Act. We ought to provide the resources that are needed to ensure that it is enforced properly. There are a number of points that I was going to make, but they have been made strongly by my hon. Friends.

[John McDonnell]

I am not sure whether my hon. Friend has seen the list. In the past, we have raised the risks on the docks, where self-employment is increasingly becoming the norm. My dad used to be a Liverpool docker and he lost a finger as a result of an industrial accident. Although offshore activities are listed, there is nothing about the docks. That whole sector is excluded from the list, yet it is an extremely dangerous area of activity.

[Kelvin Hopkins]

I am sure we could find many areas where health and safety risks are not being addressed, even under existing legislation. We want such legislation to be strengthened, not weakened, but because of the logic of the situation the list of exemptions will inevitably mean that more people die or suffer injuries as a result of the clause. I strongly support my hon. Friends on the Front Bench, and other hon. Friends, in calling on the Government to abandon clause 1, accept the amendment, and return to common sense.

Financial Services (Banking Reform) Bill

Debate between John McDonnell and Kelvin Hopkins

Monday 11th March 2013 Commons Chamber

[John McDonnell]

I most probably will not even take 10 minutes.

I am very pleased that the plane of the hon. Member for Caithness, Sutherland and Easter Ross (John Thurso) did come in, because he always makes complex issues simple and entertaining. There is a consensus in the House around regulation as the approach to take towards resolving the banking crisis and ensuring that, if we do not prevent a future crisis, we at least stave it off for, as the hon. Gentleman suggested, possibly another 70 years. The degree of positioning is around Glass-Steagall-type full separation, a ring fence, and then, as he said, the novelty of an electrified ring fence. There must be different power levels of electricity on this ring fence, as well.

I stand outside that debate, because I do not think that regulation will work. I was the first Member to raise the issue of Northern Rock in this House. At that time, I completely underestimated what Northern Rock was up to. I thought that it was all about an offshore tax scam that was part of its link with the organisation that it called Granite; I had no idea of the scale of the problem that would be unravelled. I can remember the then Chief Secretary to the Treasury, I think, leaving the Chamber after I had talked about Northern Rock, to obtain a briefing about what I was talking about. I realised that what I was talking about was a crisis that was being created in the City by greed, primarily, and by speculation and casino banking. I remember being at the Labour party conference in the 1980s, around the time of big bang, and organising the launch of a book called “Big bang: the launch of a casino economy”, authored by the then Member for Hackney and my hon. Friend the Member for Bolsover (Mr Skinner), which predicted some of the outrageous potential that there was for speculation as a result of big bang.

When I raised Northern Rock, I completely underestimated the levels of casino banking and the corruption that was taking place. In the previous debate a few weeks ago, I described the City as a “cesspool of corruption”, which it was. However, what was also revealed was the absolute incompetence. It was like “The Wizard of Oz”—when the curtain was pulled back, there was not a wizard but someone scrambling with various levers. We discovered then that the hierarchy of British banking did not even understand the instruments with which they were working because they were so complex. Then it all started to unravel, and we discovered scales of greed, incompetence and corruption that none of us expected.

At that time, we were assured that the regulatory system was not at fault, but we soon discovered how inoperable it was. The result, as we all know, is that the then Government intervened to borrow and they used taxpayers’ money to bail out the system. At its peak, taxpayers’ exposure to the bank collapse was on the scale of £1.2 trillion. I understand that so far we have retrieved only £14 billion of that taxpayers’ money. The second wave was the austerity programme introduced to pay for the Government intervention to save the banking system. Mervyn King estimated the cost of that to be £1 trillion. Anthony Haldane, who is probably more accurate in his assessment, estimates that we have lost the equivalent of between one and five years’ GDP. Those absolutely staggering sums are the result of a crisis brought about by incompetence and greed. The majority of people are 7% poorer than in 2007, and their living standards have fallen, according to the latest estimate, by 13.2% since 2008. The median household income in 2015-16 will be the equivalent of that in 2002-03. These are the implications of what this wealth of greed brought about: mass unemployment, welfare benefit cuts, food banks, and parents missing meals so that children can eat. It is absolutely staggering.

I find it extremely difficult to come to terms with an issue that was raised by my right hon. Friend the Member for Holborn and St Pancras (Frank Dobson). Since the crisis occurred—since I first stood up in this House and mentioned Northern Rock—and we went on to the nationalisation of banks, and then to quantitative easing on a scale that we had never seen before or could even comprehend, the scandalous practices have not gone away: they have continued. As my right hon. Friend said, the bonuses have continued, fraud has continued, LIBOR interest rate fixing has been investigated, and we have seen tax evasion and money laundering. This is happening even when the bankers are in full public sight. At a time when the eyes of the country are on them, they are still manipulating the system.

I find it astounding—I have raised this in the House three times, and 10 days ago I received a letter from the Minister about it—that when quantitative easing was introduced, we discovered through press reports that bankers even then sought to profiteer from it. The letter from the Minister confirmed that at one point the Bank of England had to intervene and withdraw from the market because there were suspicions of price fixing and manipulation of the market during quantitative easing.

[Kelvin Hopkins]

I am very interested in and admire what my hon. Friend is saying. There is a suggestion that the recent surge in share prices is simply the effect of quantitative easing and that it bears no relation to what is happening in the real economy.

[John McDonnell]

Exactly. I accept that point, but the relatively simple point that I am trying to make is that a group of people who have, in effect, been caught with their hands in the till are trying to use the money that has been used to bail them out to profiteer at the taxpayers’ expense. That is staggering and it says to me that regulation will not work with these institutions. Even when they are absolutely shamed, subject to public opprobrium and under the acute gaze of the public eye, they still try to profiteer.

Network Rail

Debate between John McDonnell and Kelvin Hopkins

Thursday 2nd February 2012 Westminster Hall

[John McDonnell (Hayes and Harlington) (Lab)]

Apart from the Catalyst study, most recently Christian Wolmar demonstrated that rail now has three times the subsidy that British Rail had, so there has been a tripling of subsidy and an increase in inefficiency, with higher fares.

[Kelvin Hopkins]

My hon. Friend is absolutely right, and of course that includes paying for the bloated, self-interested mass of people at the heart of Network Rail.

I like to think that David Higgins is possibly the right man for the job in the appalling organisation we have, but he has a difficult job at the moment. During the time in question there have been the accidents at Grayrigg, Potters Bar and Hatfield. There has been pressure for prosecutions, but Network Rail has constantly said “Not our fault.” It has tried to escape and avoid blame. As to the recent accidents on level crossings, it is interesting that just in the past couple of weeks David Higgins personally apologised to the parents of the two girls who were killed. That is a different attitude from that of previous Network Rail management.

--- Later in debate ---

[John McDonnell (Hayes and Harlington) (Lab)]

I also congratulate the hon. Member for St Albans (Mrs Main) on securing this debate. I know that offering such congratulations is usually done as an element of politesse in these debates, but I genuinely congratulate her. This debate has been really helpful, and having heard from both her and my hon. Friend the Member for Luton North (Kelvin Hopkins) there is not much more to be said really.

I am really pleased that the hon. Member for Reading East (Mr Wilson) had that wonderful experience with Network Rail, and I hope that that experience is transposed to other constituencies, because it is very rare that we receive such a report about Network Rail. I am also sure that he will want to pay tribute to former Members who have lobbied on behalf of Reading—for example, Martin Salter—to gain the project that he described and bring it to fruition.

I want to address a limited number of health and safety issues, as so much else has already been said about other matters. Before I do so, however, I want to talk about the issue of bonuses. Way back in 2009, I tabled an early-day motion on bonuses, which was a reflection of how unaccountable Network Rail was. On that occasion, I think 51 Members of the House signed that early-day motion, and it seemed to have cross-party support. It urged Network Rail not to go ahead with the payment of bonuses that year, because it was laying off 1,500 track maintenance workers at that time. My understanding is that the bonuses were paid, on some scale.

May I draw Members’ attention to another early-day motion—early-day motion 2681—that has been tabled on Network Rail annual bonuses? So far, 28 Members have signed it. It would be very helpful if that early-day motion was supported. It is worded on a cross-party basis and draws attention to the statement by the Secretary of State for Transport in The Daily Telegraph on 19 December 2011 that

“Passengers would be extremely surprised if Network Rail attempted to award bonuses next year in the light of this action by the ORR”.

I urge hon. Members on a cross-party basis to sign that early-day motion, as well as noting the expressions of concern that have been made today about the bonus situation at Network Rail.

I am interested in rail because in my constituency we have a railway estate at Hayes. It was constructed by the old Great Western Railway and then taken over by British Rail, and it was built to house railway workers. It still is a railway estate, although most of the properties have now been sold off. Nevertheless, it still houses railway workers and their families, so I have taken an interest in rail for the past 30 years, based on the practical experiences of my constituents as they report them to me.

I must say that, tragically, my interest in rail also results from what happened under Railtrack. One of my constituents was one of the drivers killed at Paddington as a result of the tragic accident there, and there was the accident at Southall, which is literally one mile down the track from my constituency, where people were also killed. That accident also involved some of my constituents. So, I have taken a particular interest in health and safety matters on the rail network as a result of those incidents and the dialogue that I have with my constituents who are represented by their unions, the RMT, TSSA and ASLEF.

With regard to health and safety, I want to raise the issue of crossings. A number of Members have waged a campaign over many years to ensure that we rid ourselves of the crossings that we have, which are so dangerous. We heard this week about the findings against Network Rail as a result of the tragic deaths at Elsenham in 2005. Network Rail made a statement—I think it was made in early January—that it is proceeding to eliminate the crossings that it has. It says:

“Network Rail has closed 500 level crossings across Britain since April 2009 and intends to close a further 250 by 31 March 2014.”

My view, and that of many Members, is clear, and it reflects the views of the industry’s workers: the programme for the elimination of crossings must continue, and all high-risk crossings that we have identified must be removed, particularly those on high-speed rails. Replacing them with underpasses and bridges is the only way to ensure people’s safety. All other level crossings should be reassessed, with the ultimate aim of removing them also from Britain’s rail network. Although Network Rail has made its statement about the pace of change up until 2014, I urge it to consider how to increase that pace, to eliminate the risk.

The health and safety risks that resulted from privatisation, particularly from contracting out, are well documented. With Railtrack, there was contracting out—subcontracting—and then there was subcontracting of subcontracts, which meant that there was a failure to manage and monitor the quality of work. That was combined with cuts, particularly in front-line staff, even though there seemed to be a flourishing of management levels of bureaucracy within the company, which resulted in a high risk to workers on the tracks and the trains, including the drivers, and also, importantly, to the passengers. Track maintenance was brought back in to Network Rail, which was a major breakthrough, but we seem to be going down the same path as before, with a combination of a drive for cuts—it is argued that they are efficiency savings, but I would like to evidence that they are direct cuts—and potentially more contracting out. We seem to be replicating Railtrack’s mistakes.

In the current control period, 4, Network Rail is looking for the same level of efficiency savings as McNulty has called for, of about 30%, and they seem to be coming from direct cuts to staff. I shall read out some of the concerns that individual workers and groups of workers around the country have raised, via the RMT. I have met groups of staff as I have held meetings with union representatives. The signals and telecom teams in Scotland

“have been reduced from three to two workers, resulting in a large backlog in maintenance work, leading to the company offering 12-hour overtime shifts in an attempt to clear that backlog.”

That was a criticism we had of Railtrack. Front-line staff numbers were cut and teams reduced, and therefore to achieve cuts and savings long hours of overtime were worked, which had an impact on staff’s ability to maintain safety levels.

Another current concern is that maintenance gangs:

“in Scotland are faced with vacancies being left unfilled. Furthermore, cover is not being provided when gang members take annual leave, are on long-term sick or undertake extended periods of higher-grade duty.”

Again, we had those same problems under Railtrack, with gaps in front-line service provision. The workers also report that budgetary constraints have meant that signals and telecoms teams

“from Carlisle and Warrington are filling vacancies by working overtime. The effect is that gang members are working long and arduous hours with potentially serious consequences for both health and safety at work and the integrity of the infrastructure itself.”

In the north-west of England

“track inspections are now taking place every two weeks rather than the previous once a week inspection regime.”

Members might recall that under British Rail there were track inspections three times a week, so we have gone from that to once a week, and now to once every two weeks. In some of the recent reports, the accidents have been specifically connected to the track, and the lack of adequate inspection.

I can remember the debates in the House about another problem:

“RMT inquiries into the cause of the disastrous overruns over Christmas and New Year 2007/08 found that in the Overhead Line division vacancies were being left unfilled for long periods of time…the Doncaster OHL depot had a staff compliment of 40, however at that time there were 7 vacancies that had been unfilled for some considerable time. This represented a staff shortage of almost 18%.”

Yet another concern is that in

“the Anglia region S&T Teams have also been reduced to 2 workers. Where work is planned and risk assessed in advance this can on rare occasions be an acceptable practice”

because at least management can assess the work that the signals and telecoms team is going to undertake. However, in a rapid response fault team the workers do not know in advance what they are going to face, and when or where they will have work on the track, and that results almost certainly in risk but also in further delays in the work being done properly. Also in the Anglia region there are further reductions in the rate of track maintenance inspections.

What I am trying to point to is that sometimes we need to talk to the people on the very front line of the delivery of the service, which is what a number of us have done. Reports are coming back from around the country that because of the pressure under control period 4, which is looking for 30% cuts—and under the McNulty recommendations they will roll into control period 5—front-line staff are being cut and the number of inspections reduced, which will inevitably lead to the same problems we had with Railtrack, which resulted in one of my constituents dying.

[Kelvin Hopkins]

I support everything my hon. Friend has said about inspections and track. A little over 10 years ago, in the last days of Railtrack, I was asked by a friend from inside the industry to look at the track north of Hadley Wood tunnel, which is not far from where I live. It is a significant bit of track. My friend was seriously concerned, and wanted me to raise the matter with John Prescott, who was then responsible for railways. I did not manage to get down with my camera because I was too busy. Just north of that track are Potters Bar and Hatfield. I think that the two might be connected.

[Andrew Rosindell in the Chair]

[John McDonnell]

I can only state as baldy and starkly as I can that what my hon. Friend has just said is that we have been here before, under Railtrack, and that we seem to be replicating the experience under Network Rail. Everyone wants to look at the drive for efficiency and the reduction of costs, but all the reports we have seen so far are not about the lack of efficiency of front-line staff. The increasing costs are a result of the fragmentation of the industry, the division between rail and operations, and the lack of co-ordinated management across the network. My hon. Friend spelt out very clearly in his speech that that is where we fail in comparisons with the rest of Europe, where there is an integrated railway system that enables those efficiencies and economies of scale to be made. Network Rail is looking for savings and efficiencies in the worst possible way, by reducing front-line staff and increasing the pressure on specialists working on the ground, which results, I think, in increased risks to the health and safety of workers and passengers.

Will the Minister clarify when the Government’s White Paper is to emerge? I hope that we can have a genuine debate on the document and that we can go at it with a blank sheet of paper, a tabula rasa for putting our ideas back in. I hope that we do not have prejudices against public ownership, but that we look at what will work. The lessons from Railtrack, and now from Network Rail, are about investment in front-line services and about ensuring that if we are looking for savings we do so by overcoming the fragmentation. We must support those people working at the front line under the tiers of bureaucratic management we have had for decades, under both Railtrack and Network Rail.

Those are just reports collected from across the country. One exercise we could do during the discussions on the White Paper—I know we have done this before—is an extensive consultation across the country with the trade unions that represent front-line workers to get a feel for what is happening on the ground. Ultimately, it was the workers on the ground who exposed what was happening within Railtrack and eventually forced the change. Tragically, that change came too late for a number of my constituents, one of whom was killed in the accident at Paddington while others were seriously injured at Southall. I hope we have learnt the lesson from that and that in the White Paper discussions, we will look to the longer-term future of investing in an integrated system in which workers and passengers have much more democratic control and say.

Legal Aid, Sentencing and Punishment of Offenders Bill

Debate between John McDonnell and Kelvin Hopkins

Tuesday 1st November 2011 Commons Chamber

[John McDonnell]

I will come to that, because we need to learn lessons across the House about the appropriateness of how we have legislated in recent years. I have sat in this place and seen bad law produced as a result of rushing things—it happened under the last Government and it is happening under this one—and a lack of judgment about how much consideration each piece of legislation needs.

[Kelvin Hopkins (Luton North) (Lab)]

Will my hon. Friend give way?

[John McDonnell]

I will, but I would like to press on, because others want to speak.

[Kelvin Hopkins]

Is there not a hint of short-term populism in what the Government are doing? Does my hon. Friend think that even the Government might come to regret it if they press their case?

[John McDonnell]

I went through 13 years of new Labour, so commenting on short-term populism might not be the most appropriate thing. I would not say: “A plague on all your houses!”, but let us all learn a few lessons.

HM Revenue and Customs

Debate between John McDonnell and Kelvin Hopkins

Wednesday 2nd March 2011 Commons Chamber

[John McDonnell]

Yes. In recent years and from the time of the initial legislation, there has been almost a Dutch auction between Front Benchers competing to see who could cut more jobs from HMRC. We tried to point that out. My hon. Friend the Member for Leeds East gave a good example of how not to do a tax return. Some people need a face-to-face discussion about their tax affairs and that cannot be done through a call-centre mentality.

Some Members have pointed out that the evidence on call centres is fairly appalling. The pressure on call centres has mounted. Let me give some statistics for the record. Calls were up 20% from 2009-10 to 2010-11. Call attempts were up 100% from 2009-2010 to 2010-11. Engaged and busy tones played were up from seven to 35 minutes. One can see why that tune—“Greensleeves” or whatever it is—pushes some people right over the edge if they have to listen to it for 35 minutes. The current contact directorate performance prediction for 2010-11 is that only 40% to 50% of call attempts will be answered.

[Kelvin Hopkins]

I agree strongly with my hon. Friend. Together with the cuts in staffing, which have put extra pressure on staff, and de-professionalisation, will my hon. Friend mention the relatively low pay with which many tax office staff have to cope?

[John McDonnell]

We once prided ourselves on an effective and efficient tax delivery service through tax collection, and the job of tax inspector was one to which people aspired. We have undermined that through the de-professionalisation of the service, the way in which staff are treated and pay.

My hon. Friend the Member for Cumbernauld, Kilsyth and Kirkintilloch East (Gregg McClymont) has direct experience, having met large numbers of his constituents who work in that tax office. The problem is not just the numbers of staff or how some of the services have been downgraded; it is the fact that the redundancy payments of people who are being laid off as a result of the recent cuts are being cut by up to two thirds. In addition, their pensions are now threatened by the change from the retail prices index to the consumer prices index.

Of course, that spells disaster for many people in planning their careers and their futures, so it is no wonder that the statistics on morale are so appalling—and morale is getting worse, not better. Staff were asked whether the changes were usually for the better, but fewer than one in 10 answered yes, meaning that they hold out no hope for the future.

Staff have been treated appallingly by management over a period too. Some Members were in the House when we debated the introduction of the lean system to HMRC, which was lifted straight from the Toyota car factories. That system produced the first strike in the history of HMRC in Scotland, because of how staff felt they were being treated. Hon. Members have learned that members of staff describe the imposition of the new attendance management system as draconian. One said that HMRC management seems to be

“more interested in finding ways to justify dismissing staff to get the numbers down as this is cheaper than redundancy rather than staff welfare and delivery of good customer service.”

The fact that professional staff have those sorts of opinions is an indication that something is wrong.

Staff are also concerned about elements of privatisation, such as the increasing role of private debt collection agencies in pursuing tax debts of under £10,000, and the conduct of private companies that do not have the expertise that HMRC has developed over the years in door-to-door collection. There are real concerns about not only office closures but the disbanding of whole HMRC business streams, which is reducing expertise and damaging service delivery.

[Kelvin Hopkins]

One feature of privatisation and the call centre culture is that it destroys the public service ethos. As my hon. Friend the Member for Cumbernauld, Kilsyth and Kirkintilloch East (Gregg McClymont) said earlier, the public service ethos is vital in an important job such as tax collection.

[John McDonnell]

I fully agree, and we have painted a picture this afternoon of the impact of a combination of job reductions, cuts in redundancy pay and the threats of cuts to pensions, which my hon. Friend the Member for Cumbernauld, Kilsyth and Kirkintilloch East described as a perfect storm. The message from those on the front line of tax collection is that HMRC is in a perilous situation. I hope from here on in that those voices will be heard and that we will consider a more systematic approach to HMRC reform.

Hon. Members have been told that access to face-to-face inquiry services has been significantly reduced, which is extremely worrying. Let me put on record what a number of tax inspectors have said about that. They say:

“Those offices that remain open”

after the 200 closures

“are having their enquiry centre opening hours significantly reduced. In some case these offices are due to be opened for only two or three days”—

maximum—

“rather than the five days a week they currently open for.”

There is also concern about the disbanding of the complex personal return team in March 2009. Many thousands of the top UK taxpayers no longer have the services of a dedicated case owner and customer relationship manager. Thirty-five thousand taxpayers whose tax affairs were handled by that dedicated team—a highly trained, professional team—are now dealt with in the wider HMRC network. There is a view that the skills are therefore not available or not dedicated in the most effective way to increase tax revenues.

In conclusion, I have heard figures bandied about for how much tax is avoided or evaded, and therefore should be collected. They range from the internal estimate of £46 billion up to £120 billion. A number of us have worked with Richard Murphy and John Christensen of the Tax Justice Network over the past five to eight years to try to highlight the issue. Until recently it was not taken up or reported particularly effectively by the media, so I pay tribute to UK Uncut—a group of individuals who have come together spontaneously, taken information from the tax justice campaign and mobilised direct action, which, whatever Members think of it, has been incredibly effective in raising the issue up the political agenda. As a result of campaigning by the Tax Justice Network, UK Uncut and others, and as people are experiencing the cuts and moving from abstraction to reality in their communities, as my hon. Friend the Member for Leeds East said, they are now asking the question: why are we not collecting this tax? It is due not just to a lack of political will—although there is a tax reform issue that needs to be addressed—but to the way in which we have treated HMRC over the years, undermining its ability to collect those taxes.