Loan Charge 2019: Sir Amyas Morse Review

Lord Spellar Excerpts

Thursday 19th March 2020 Commons Chamber

[Jesse Norman]

I have in my hand a detailed document designed to address this very issue. It goes through a whole range of different approaches and integrates them into a strategy. I would be delighted to have any input that she would like to make about other ways in which that can be improved and developed. We work on the basis of the law as it presently stands, and which we have inherited. It is itself the result of previous Parliaments, including of course the parliamentary consideration of the loan charge. We have to work with the hand we have got, and improve it as fast and as comprehensively as we can.

I will now address the motion directly and then, in the limited time I have, turn to the comments that have been made. Is the loan charge retrospective? Again, I think it is clear that it is not. It was introduced as a new measure in 2017. It taxes a loan outstanding at a future date. It does not change any law previously on the statute book.

It has been asked why the loan charge was introduced. In the words of Sir Amyas Morse, it

“offers an expedited means of collecting tax that is due”.

Is the loan charge unjust? Again, I would suggest not. If one asks the average man or woman in this country, I think they would say, “Everyone should pay their fair share of taxes. People are responsible for their own tax affairs. Real loans get repaid; if someone offered you a loan for which no repayment, no tax and no interest was due, it would probably be too good to be true.” And so it is.

The numbers seem to bear that out. More than 99.8% of the tax-paying population have never used a scheme. Even among the freelance population, the take-up has been only 2.5%. It is notable that Sir Amyas Morse was clear that he supported the essential purpose of the loan charge and that it should remain in force.

We have heard a lot about how the law was not settled in 2017. Again, as I said, I can do no better than refer colleagues to section A of the Morse review, which carefully reconstructs the history of the past 20 years of disguised remuneration.

Let me quickly turn to the many excellent contributions that have been made. I will start with the excellent contribution made as a point of order by my right hon. Friend the Member for New Forest West (Sir Desmond Swayne), who pointed out the excellence of my book on Adam Smith—I thank him for that, although I defer to the hon. Member for Kirkcaldy and Cowdenbeath (Neale Hanvey), as Kirkcaldy was, of course, Smith’s home town. My right hon. Friend the Member for New Forest West will recall—he taught economics so he must know about these things—that Smith not only set out the ideals of a well-functioning tax system, which we all aspire to achieve, but was, for the last 12 years of his life, a practising commissioner of customs, attempting to wrestle with an ever-evolving customs market and seeking to extract duty and tax due, and rightly so.

I would like to touch on the statesmanlike comments of the hon. Member for Bootle, the shadow Chief Secretary, which perhaps reflected his imminent expectation of taking my seat on this side of the aisle. He recognised that what people do not pay in tax due, someone else must. He is right about that. He noticed that if it looks too good to be true, it probably is. He is right to focus, as others have, on the enablers and promoters.

[John Spellar (Warley) (Lab)]

Will the Minister give way?

[Jesse Norman]

I have half a minute left. The right hon. Gentleman has only just arrived, so it is a little impertinent to raise a question at this point.

It is important that we focus on the centrality of the claim. Sir Amyas Morse has looked at it, and he has attempted to find a Jupiterian way through complicated tax issues and to deal, with equity, with the different interests and parties involved. I think he has succeeded, which is why the Government, comprehensively, with one exception, have accepted his conclusions.

Public Sector Exit Payments (Limitation) Bill

Lord Spellar Excerpts

Friday 13th March 2020 Commons Chamber

[Sir Christopher Chope]

I am sure that the issue does happen in Scotland, and I hope the measures will apply across the whole country, although the latest consultation document that the Government issued indicated that there might be different treatment in different parts of the United Kingdom.

The matter has reached the stage of being a public scandal, because money is tight and the Bill is a means of recovering £200 million a year for the taxpayer, both locally and nationally. It is unfortunate that, as a result of answering questions from me, successive Ministers have had words put into their mouths or put on the record that have now proven to be completely untrue, I am afraid. What more can one say? The current Chief Secretary has assured me that he will not fall in the same trap as his predecessors.

The regulations could be issued pronto. Why have they not been? We were told that there needed to be a consultation. After a lot of pressure, the consultation was issued in April 2019, and the responses had to be in very quickly by July 2019. Have the Government yet issued their response to those responses? No, they have not, because it is all so complex.

[John Spellar (Warley) (Lab)]

The hon. Gentleman is rightly drawing attention to a significant problem. Is there not another aspect to it, which is that many of these individuals, quite frankly, should not be being given any payments, because they should actually be being sacked for failure to perform their jobs? They are taking sums of money and then transferring to other parts of the public sector, where they will have a repeated pattern of failure. Is there not a need for a real change in culture inside the public sector, particularly, I regret to say, inside management levels of the national health service?

[Sir Christopher Chope]

The right hon. Gentleman is absolutely right about that. That is why organisations such as the TaxPayers Alliance are trying to work with the general public to raise the profile of these subjects. What is happening is a concerted fraud upon the taxpayer by these officials, who are cosying up to each other and ensuring that they are the only people who do not suffer as a result of their own incompetence.

--- Later in debate ---

[Sir Christopher Chope]

I am not sure that that is an adequate excuse. It could be a justification for everything, but in the Treasury it is an issue of priorities. There is no reason why, if hon. Members are given a promise that something is going to be done on a particular date, that promise should not be honoured.

[John Spellar]

The hon. Gentleman should come down a bit harder on that explanation from his hon. Friend, who is fundamentally saying that the Government are incapable of chewing gum and walking at the same time.

[Sir Christopher Chope]

I am not sure that my hon. Friend would have put it quite that way. The House needs to have a mood of intolerance of serial incompetence, if not a conspiracy of silence and inaction among people in the civil service.

The Value Added Tax (Reduced Rate) (Energy-Saving Materials) Order 2019

Lord Spellar Excerpts

Monday 24th June 2019 General Committees

[The Financial Secretary to the Treasury (Jesse Norman)]

I beg to move,

That the Committee has considered the Value Added Tax (Reduced Rate) (Energy-Saving Materials) Order 2019.

It is a great pleasure to serve under your chairmanship, Mr Robertson. The instrument amends the Value Added Tax Act 1994 to alter the scope of the reduced rate of VAT for the installation of energy-saving materials. That ensures consistency with the 2015 judgment of the Court of Justice of the European Union.

As the Committee will know, this Government are deeply committed to greening our economy and our society and bid fair to be the greenest Government ever. It is of huge regret to us that we have felt compelled to make this change because of EU regulation.

Under current UK VAT rules, a reduced rate of 5% applies to the installation of energy-saving materials such as insulation, solar panels and other technologies in residential properties. Under EU law, it is not possible to remove VAT from those materials, so the reduced rate of 5% applies. The VAT relief aims to lower the cost for consumers and families to install those energy-efficient products in their homes.

In 2011, the European Commission launched an infraction proceeding against the UK, arguing that the scope of the UK’s reduced rate for the installation of energy-saving materials was too wide and needed to be changed. The Government did not agree with the European Commission’s infraction proceeding, so the matter was heard by the Court of Justice of the European Union. In 2015, the Court agreed with the Commission and found that the scope of the UK’s reduced rate for energy-saving materials was indeed too wide.

Under EU rules, the UK is obliged to comply with the decision of the EU Court of Justice. If it does not, the European Commission will be required to issue infraction fines against the UK.

[John Spellar (Warley) (Lab)]

Given that the Prime Minister and others, including the Conservative leadership candidates, say that we are going to leave the EU on 31 October, why is the Minister rushing to comply rather than ignoring this and waiting until then?

[Jesse Norman]

As the right hon. Gentleman will know, it is hardly rushing to respond to an infraction proceeding that began in 2011 and involved a European Union Court of Justice appeal in 2015. While we remain a member of the EU, we are required to obey its laws. When we leave the EU, we will of course be in a position to revisit the issue.

[John Spellar]

I understand the build-up—it always takes this long—but given that Britain may leave the EU in only a few months, why does the Minister feel it necessary to do this now?

--- Later in debate ---

[Richard Benyon (Newbury) (Con)]

I have some sympathy with the Minister. As a Minister in 2010, I inherited a situation where the Government were being taken to the European Court and were going to be subject to substantial multimillion pound fines on an occasion when the British Government intended to have a stronger environmental ambition than the rest of the European Union. That continued to happen relentlessly throughout my three and a half years as a Minister, attending international forums where we were promoting ideas and ambitions that were greener and more environmentally friendly than those of the rest of our European partners.

I remember a conversation during the EU co-ordination meeting at a congress of the parties in Hyderabad, in which an appalling person from the European Union—a Brit, actually—threatened the British Government that if we continued to hold out for our high ambitions, which I think were on biodiversity targets, we would go against the principles of the Lisbon treaty and we would be subject to a fine. I have never had my pro-European tendencies tested more than when I was representing Britain in international forums and had to spend hours sitting in European co-ordination meetings, only to hear such a thing.

The Opposition spokesman, the hon. Member for Bootle, can have a bit of fun on these occasions, but because he is a sensible person he knows that if he were in Government he would not want to put the Government in the position of having to pay a huge infraction fine. My friend, the right hon. Member for Warley, knows too that the timetable of such things is not in the Government’s gift. Very quickly we could find ourselves in a position, regardless of where we are in terms of our exit from the European Union, where we are at risk.

It is not something that any of us feels comfortable with. I and other Members are working hard on a proposal to the Government that may be of some assistance in trying to find a way forward, both while we are members of the European Union and soon after we have left.

[John Spellar]

May I help the right hon. Gentleman with his difficulty? The reason the European Commission behaves like that towards the British is because the British civil service rolls over to it. Were our civil service prepared to be as robust as the French are in response, there could be a much more realistic relationship. One could not imagine French Ministers in a similar position introducing a measure in this way, with this timescale.

[Richard Benyon]

I respect the way in which the right hon. Gentleman presents that argument, but I think he knows that that is a fallacy. Such things are frequently said, but I assure him that my civil servants were as robust as they could be, and I and my fellow Ministers were as robust as we could be. However, we came up against the legal bulwark of the Lisbon treaty, and there was nothing that we could do.

I wish to probe a couple of points. Some years ago, a similar situation arose regarding VAT on repairs to churches. The Government produced something called the listed places of worship grant scheme to offset that. Could the Minister suggest a grant scheme to offset the cost as part of a future Budget? If we leave the European Union at the end of October, it would be good to have some idea of the Government’s ambitions post exit.

Secondly, under current HMRC guidelines, battery installs can attract the reduced 5% rate only if they are installed at the same time as new solar, unlike all the other technologies defined as energy saving by HMRC, which can be installed separately. However, the proposed HMRC change means that any combined solar and storage system is likely to be over the 60% material/install threshold and, therefore, will attract the full 20% VAT rate. I would like to ask the Minister about the option for HMRC to allow stand-alone battery installs to attract the 5% rate, opening up the battery retrofit market to around 1 million homes that already have solar.

The justification for defining batteries as energy-saving materials is that domestic PV customers in the UK typically self-consume just a quarter of energy generated, because solar generation tends to be in the daytime, whereas UK home power demands tend to be at night. The rest will be spilled on to the grid. If a customer buys a battery, their self-consumption proportion typically would increase to around 70%—a huge efficiency improvement to the overall system for the customer, with the added benefit of reduced energy bills. Would the Minister consider that as a way forward?

Wild Animals in Circuses (No. 2) Bill

Lord Spellar Excerpts

2nd reading: House of Commons & Programme motion: House of Commons
Tuesday 7th May 2019 Commons Chamber

[David Rutley]

We will do everything we can. We are completely committed to making sure that the legislation gets into place. The hon. Lady has been keen to see it through, and we will do that. We are absolutely committed to delivering on this legislation.

[John Spellar (Warley) (Lab)]

This has been a pretty sorry story of delay, but I welcome the fact that the Bill is now here, given the lack of legislative business. Will the Minister say when the Government will bring forward legislation on increasing the penalties available to the courts for those guilty of animal cruelty? That is another issue that has been waiting a long time. It urgently needs to be resolved.

Puppy Smuggling

Lord Spellar Excerpts

Tuesday 2nd April 2019 Westminster Hall

[Nigel Huddleston]

I thank my hon. Friend for making that point; indeed, I am just about to come on to it. I think we are suffering from the unintended consequences of some changes in schemes and programmes.

Of course, puppy smuggling at heart is an industry perpetrated by people who are motivated purely by money. They can make up to an incredible £35,000 per week by illegally transporting puppies through our borders, to be sold to unsuspecting dog lovers in the UK. The root cause of puppy smuggling seems, indeed, to be the ease with which gangs can abuse the pet travel scheme that operates across Europe, which is otherwise known as PETS.

[John Spellar (Warley) (Lab)]

I thank the hon. Gentleman for giving way; he rightly identifies the large sums of money that can be made either by individuals or by organised crime gangs. These criminals appear to make a very fine cost-benefit calculation, which reinforces the need, expressed by a number of animal charities, to increase the penalties for maltreating animals. There should also be confiscation of vehicles, so that this business is no longer a paying business.

[Nigel Huddleston]

I thank the right hon. Gentleman for making that point. Indeed, many and various recommendations have come out of this debate, and of course disincentivising this really despicable trade in every way we can is very important. Penalties, fixed fines and indeed criminal sanctions are, of course, the things that we all need to consider.

Draft Food and Farming (Amendment) (EU Exit) Regulations 2019

Lord Spellar Excerpts

Tuesday 26th March 2019 General Committees

[The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (David Rutley)]

I beg to move,

That the Committee has considered the draft Food and Farming (Amendment) (EU Exit) Regulations 2019.

It is an honour to serve with you in the Chair again, Mr Gray. These regulations group elements of four policy regimes: spirit drinks, wines, genetically modified organisms and agricultural direct payments. The purpose of this statutory instrument is to make purely technical or operability corrections, ensuring that these regimes continue to function as intended. The corrections deal with removing or amending references, converting EU procedures to UK procedures, and transferring EU functions to the UK.

For genetically modified organisms, the SI makes purely technical changes, to keep the retained EU legislation operable on exit from the EU. The operability changes will allow us to continue to regulate and enforce the applications process for consent to market genetically modified organisms in the UK. It will also allow us to continue to regulate the export of genetically modified organisms—both those that originate in the UK and those merely passing through the UK. The SI also seeks to correct minor errors in EU exit statutory instruments that have already been made.

[John Spellar (Warley) (Lab)]

I seek a bit of clarity from the Minister; I was just looking through the documentation. Will we just carry on with the EU-directed regime, which is based not on science, but on hysteria against genetically modified organisms—particularly genetically modified crops? Alternatively, will we be able to use Brexit to get a policy based on science and agriculture, which would embrace that technology where appropriate?

[David Rutley]

The right hon. Gentleman makes an important point. Obviously, science will underpin our approach to genetically modified organisms, but it is worth noting that there are no genetically modified products in the approval pipeline, at least in the UK, and none is anticipated.

[David Rutley]

The hon. Gentleman also makes an important point, one that the Opposition Front Benchers—perhaps I should call them the three musketeers—have consistently been making, with support from the Scottish National party spokespeople, too. I stress—as I have on numerous occasions, but it is worth doing it again for the record—that there is no intention whatever to water down our standards. I wanted to make that point, because it is easy to get concerned about these issues. As the hon. Member for Stroud will recognise in his remarks, these regulations are about operability changes; they are not about changing policy.

[John Spellar]

There is a world of difference between watering down regulations that are clearly of proven scientific benefit to consumers, animals and the environment, and policies that are based purely on campaigns with a heavy degree of hysteria—particularly those against genetically modified crops, which have no proven negative impact on the health of the individuals consuming them. Is the Minister suggesting that we are not going to take the opportunity? There may not be an application, and that may be because the current policy is dictated by one or two European countries. Will we not become a bit more progressive and take a science-based approach?

[The Chair]

Order. If the Minister wishes to answer that question, he must do so strictly in the context of the statutory instrument before us.

Animal Welfare (Service Animals) Bill (First sitting)

Lord Spellar Excerpts

Wednesday 16th January 2019 Public Bill Committees

[Sir Oliver Heald (North East Hertfordshire) (Con)]

It is a great pleasure to serve under your chairmanship again, Ms Buck. I know that you will keep us in good order. Thank you very much indeed for allowing Finn, the most decorated police dog in the land, to be here in Committee today.

I thank the hon. Members who have been selected for the Committee. They have all been great supporters of this small but important change in the law. I also thank all those who have campaigned for it, including PC Dave Wardell, Sarah Dixon of the Finn’s law campaign, the many animal charities that have given support, including the International Fund for Animal Welfare, which is represented here today, the media—support for Finn’s law has united The Sun and the Daily Mirror—and every police and crime commissioner in the country. I am grateful, to you, Ms Buck, for agreeing that Finn can sit in, accompanied by PC Wardell.

The Bill, which received its Second Reading on 6 July last year, arises from events that I explained to the House in a ten-minute rule Bill application on 5 December 2017. My constituent, PC Dave Wardell, is a police dog handler from Buntingford, where he lives with his family, Finn, and other dogs. Finn has of course now retired, but on Wednesday 5 October 2016 PC Wardell and Finn were on duty in Stevenage. I am pleased that my hon. Friend the Member for Stevenage, who has been so supportive, is here today.

PC Wardell and Finn were called to a suspected robbery. They followed the suspect, who ran off. He was found hiding in a garden. A light suddenly came on, revealing him. PC Wardell called on him to stop, but the suspect jumped to try to get over a fence, and Finn took hold of his lower leg. The man lunged at Finn with a hunting knife with a 10-inch blade and stabbed Finn right through the chest. He then turned his attention to PC Wardell, and Finn intervened to save the police constable as the blade was aimed towards his face. Finn put himself in the way to save the officer and PC Wardell received a hand wound, but the dog received further serious injuries. PC Wardell believes that Finn saved his life.

As other officers arrived the suspect was apprehended, but Finn was badly injured and bleeding. He was taken to the vet, and then to a specialist vet. He was in terrible shape, with his lungs punctured in four places, yet he was still licking his handler’s hand wound. Finn had a four-hour operation to save his life. The vet commented on the strength and bravery of this dog. PC Wardell slept downstairs with Finn for the next four weeks. I think we are all pleased that Finn made a remarkable recovery. After 11 weeks Finn was ready to go back to work and with PC Wardell he went on their first shift on 22 December 2016. On that occasion—their first outing after the incident—they arrested a fleeing suspect.

Finn is one of the most successful police dogs in the country and is renowned in Hertfordshire. He has won national awards for his bravery, including animal of the year in the IFAW Animal Action awards, hero animal of the year in the Animal Hero awards and the People’s Dispensary for Sick Animals gold medal, which is known as the animals’ George Cross. However, when it came to charging the offender it became clear that there is a problem with the law. For the assault on the officer there was the obvious offence of assault occasioning actual bodily harm, but there were only two potential charges for the injuries to Finn himself: causing unnecessary suffering to an animal, under the Animal Welfare Act 2006, or section 1 of the Criminal Damage Act 1971. Neither offence properly provides for the criminality involved in the attack on Finn.

In the event, the charge was criminal damage, but that treated Finn as though he was simply a piece of damaged police property, like a police radio or something of the sort. The Minister for Policing and the Fire Service, my right hon. Friend the Member for Ruislip, Northwood and Pinner (Mr Hurd), told me in a letter that it is unpalatable to think of police animals simply as equipment. Criminal damage is an offence for which the penalty is largely determined by the value of the damaged property—a seven-year-old police dog close to retirement is not worth much money—and so it proved at court, where no separate penalty was imposed on Finn’s attacker for the attack on the dog.

The offence under section 4 of the Animal Welfare Act 2006 is potentially a better route, but it has two problems at the moment. The first is that the maximum penalty is only six months’ imprisonment. After a consultation, which I think was partly based on what happened to Finn, the Government have committed to increase the maximum penalty to five years’ imprisonment. That still leaves the other issue, which is that there is a difficulty with the application of section 4(3)(c)(ii) of the Animal Welfare Act. Various factors must be taken into account in deciding whether the infliction of suffering to an animal can be considered unnecessary, including protection of a person or property. There is currently no reference at all in the Act to the particular role of service animals.

Clearly, the mission of a service animal is to restrain a suspect or use its physical presence to support the actions of an officer in accordance with his or her duty, but there is no reference to that role in the Act. We have heard from police dog handlers, prosecutors and all the police and crime commissioners in the country that there is concern that that provision allows defendants to argue that they are justified in applying force against a service animal in self-defence, rendering the force necessary. That has been an issue in deciding not to prosecute for the offence under the Animal Welfare Act.

I want to thank Department for Environment, Food and Rural Affairs Ministers, particularly Lord Gardiner, my right hon. Friend the Member for Surrey Heath (Michael Gove), and the Minister—he and I have a long history of considering animal welfare issues, going back to the 1990s—for discussing this issue with me at length and for supporting the Bill, which is the outcome of those discussions. This Bill follows the example of the Australian Animal Welfare Act, which makes specific provision for service animals. I could add that this approach is becoming the norm in advanced countries, and that is a good thing.

Clause 1 provides that the consideration in section 4(3)(c)(ii) of the Animal Welfare Act should be disregarded if the animal was under the control of a relevant officer at the time of the conduct, and was being used by the officer in the course of their duties in a way that was reasonable in all the circumstances. A relevant officer is defined as a police constable or person such as a prison officer, who has the powers of a constable, or persons in analogous positions. It also provides that Ministers can add to that list.

Clause 2 makes provision for commencement and formalities. It applies to England and Wales. This change to the law, when taken together with the Government’s increase in the animal welfare penalty, will mean that there is, for the first time, suitable protection for service animals and a proper sentence for offenders.

Service animals such as Finn do a great job. There are 1,200 police dogs in service at any one time, and there should be proper recognition in the law of their vital role.

[John Spellar (Warley) (Lab)]

Before the right hon. and learned Gentleman finishes, may I, on behalf of many colleagues—not just those on the Committee—commend him not only for introducing this Bill but for the tenacity with which he has finally brought it to Committee? I hope, now that we have reached this stage, that it will speedily move through our House and the House of Lords.

[Sir Oliver Heald]

I thank the right hon. Gentleman for that. Sometimes the House can come together and do good things, and this is an example of that. Perhaps we will see other examples before too long. I thank him and I commend the Bill and clauses 1 and 2 to the Committee.

--- Later in debate ---

[David Rutley]

I pay sincere tribute to the right hon. Gentleman for all his hard work—I hope he is pleased that we will not only back the important Finn’s law but take further strides towards making the legislation more impactful—and congratulate everyone involved.

Finn’s name is rightly associated with the Bill; it exemplifies the bravery of service dogs. The Government recognise that service animals do a fantastic job, an invaluable service that might take them into extremely dangerous situations. The best protection for them needs to be made clear in law, which is why we support Finn’s law and the campaign today.

As we have heard, in 2016 Finn was stabbed by an assailant when he assisted his handler, PC Dave Wardell, in the apprehension of a suspected offender. Finn received serious injuries but survived and even returned to duty before later retiring. He received all sorts of plaudits for his amazing and courageous work. In August 2018 the Secretary of State had the pleasure of meeting Finn and PC Wardell on a visit to Marsham Street. All the officials there were in awe and I have been told stories about how impressed they were to meet Finn. We can all agree with what the Secretary of State said at the time:

“Every day service animals dedicate their lives to keeping us safe, and they deserve strong protections in law. We will continue working with Sir Oliver Heald MP and the Finn’s Law campaign to achieve this.”

That is exactly what we do today.

When the Bill becomes law, animals such as Finn will have more protection from callous individuals, because it amends the Animal Welfare Act 2006—the architect of which is in the Committee—to make it clear that the ability for someone to claim that they were acting in self-defence when they attack a service animal should be disregarded in such circumstances. No longer will someone be able to inflict pain and suffering on much loved and heroic service animals, such as police dogs like Finn, police horses or animals supporting the prison service, and to say that they were simply protecting themselves.

In supporting the Bill, we agree with my right hon. and learned Friend the Member for North East Hertfordshire that prosecuting attacks on police and other support animals, which cause unnecessary suffering, under section 4 of the Animal Welfare Act 2006, could be made more difficult by the court having to consider whether the defendant acted in fear of harm. Relevant here is the list of considerations in section 4(3) for the court to consider whether the suffering was caused for a legitimate purpose, such as to protect a person, property or another animal. In other words, the perpetrator of the attack on a service animal could use the provision to claim they were acting to protect themselves. As noted, the Bill amends section 4 of the 2006 Act so that this consideration will be disregarded with respect to incidents involving unnecessary suffering inflicted on a service animal that is supporting an officer in the course of their duties. That will make it easier to successfully prosecute people who cause animal cruelty by attacking a service animal.

We are taking further steps to protect our heroic service animals, and indeed all animals under our care, by increasing the maximum penalty for animal cruelty from six months’ imprisonment to five years’ imprisonment. Specifically, we will amend the maximum penalties set out in section 32(1) of the 2006 Act. That will include cruelty caused by attacks on service animals, which is the second part of the Finn’s law campaign. We said we will do it and we are doing it. We will bring forward the necessary legislative vehicle as soon as possible.

[John Spellar]

Given the delay in reaching this stage of the process, could the Minister and his Department get in touch with the Government business managers to expedite the Bill’s further passage through Parliament to become legislation?

[David Rutley]

We are doing everything we can to facilitate that pace—we are looking at various vehicles. On the question asked by the right hon. Member for Delyn about the situation in Wales, a legislative consent motion will be brought forward. We will do everything we can to work with the Welsh Government to facilitate that.

We are increasing the maximum penalties for good reason: as a deterrent to those who would choose to inflict the most abhorrent cruelty on animals, and to help to address comments from sentencing judges who have said that they would have handed down tougher sentences in the worst cases of cruelty, had a higher penalty than six months’ imprisonment been available.

In summary, a two-step approach has been taken, in large part in response to the Finn’s law campaign. First, this Bill has been introduced by my right hon. and learned Friend the Member for North East Hertfordshire, which removes the consideration in section 4 of the 2006 Act that the person was acting in self-defence in attacking a service animal. Secondly, the Government will bring forward tougher sentences for animal cruelty in separate primary legislation as soon as possible.

Racehorse Protection

Lord Spellar Excerpts

Monday 15th October 2018 Westminster Hall

[Mike Hill]

Yes. The petitioners’ point is that there is a conflict of interest.

[John Spellar (Warley) (Lab)]

A whole number of realms of life are subject to scrutinised self-regulation by people who actually know the profession, industry or walk of life in question. We may look for improvements, but why would we want to take regulation away from the people who have a long-term interest in sustaining the industry and who have the support of the millions who follow racing, either by going to races or by watching them on television?

[Mike Hill]

That is, of course, a perfectly appropriate point to make, and the BHA in particular would agree. As I said, I have sat down with the BHA and it has made improvements in areas where it recognises that they are required.

I will cite examples to make the case that racehorses have been failed by the BHA, and set out why the BHA should lose its horse welfare remit and be replaced by an independent body that has horse welfare as its only concern.

The problem is nothing new; it is historical. The rich and politically influential people in racing have always had their hands on the reins. They have controlled all aspects since they chose to self-regulate the sport back in 1750, just a few streets away from here, in a Pall Mall gentlemen’s club called the Jockey Club. Their stranglehold on power, and for a short period that of jump racing’s National Hunt Committee, existed until this century, when it married for a few years with a fledgling authority, the Horseracing Regulatory Authority. In 2007, those authorities gave birth to the current incumbent, the BHA.

This is a blue-blooded family who maintain power. Their relatives maintain control too. Weatherby’s, racing’s private administrator and registrar of thoroughbred births and deaths, has since 1770 and for seven family generations enjoyed direct involvement in the fully integrated sport of breeding, racing and disposing of thoroughbreds. Much of the information that it gathers on racehorses is kept private, but in some circumstances it can be bought.

According to the petitioners, this is an exclusive old boys’ club run like a masonic lodge with friends in Government. Through the ages, the Government have left this racing club in full control, rarely intervening in horse welfare matters. Parliament has seen few discussions on the subject. The last time any serious debate took place here was in 1954, when Lord Ammon rose to ask

“whether the attention of Her Majesty’s Government has been directed to the disaster on the Aintree racecourse during the Grand National Steeplechase on Saturday, 27th March when 29 horses started, of which 20, including four killed, failed to finish the course; whether the law concerning cruelty to animals applies in such cases, and to move for Papers.”

He went on to say:

“Nor is that all the story; hundreds of the horses who fail are not heard of again. It is difficult to get news about them”.

He was talked down by Earl Winterton, who—with the support of the Under-Secretary of State for the Home Department, Lord Lloyd—rejected Government intervention, stating that

“it would be a pity if it went out from your Lordships’ House that there was undue criticism here. Surely we should leave the appropriate authorities”

—by which he meant racing’s self-regulating National Hunt Committee—

“to consider what has been said…and decide what course they should take”.—[Official Report, House of Lords, 6 April 1954; Vol. 186, c. 1041-1049.]

Perhaps not unsurprisingly, the self-regulators did not take any course of action.

I mention that historical debate because, importantly, the same scenario is being played out today. Like Lord Ammon, I ask whether Her Majesty’s Government are aware that three horses died just weeks ago in a single afternoon’s racing at Perth racecourse. Is the horse welfare regulator—the BHA—going to make any changes to the racecourse or to the conditions of the races at Perth, to prevent this from happening again? Were the Government or anyone else aware that, more alarmingly, this is the second time that three horses have died in a day’s racing at Perth? After their deaths in August 2016, the BHA failed to act, making no changes and learning no lessons. As a consequence, horses have had to be killed yet again. Just as its predecessor for jump racing, the National Hunt Committee, walked away from horse deaths back in 1954, the BHA is doing the same—and this, of course, when the deaths do not make the headlines.

One might think that horses are racing’s most valuable assets. That is perhaps so for horses such as Frankel, Galileo or Kew Gardens, who are making millions of pounds for their owners, but maybe not for elderly brood mares and former racehorses such as Maidment or Marilouise. These are just two of 23 thoroughbreds, some pregnant and one with a foal at foot, who were taken at the eleventh hour from a bankrupt stud in Newmarket—the beating heart of British racing. Those horses were not saved with the support of the racing industry or the BHA but by Hillside animal sanctuary, a rescue centre that relies on public donations to feed and care for unwanted animals. Had Hillside not taken them into its care just a few weeks ago, on 17 September, those horses, including the foal, would have been destroyed—they were pre-booked for 18 September at 11 am. Fortunately for the BHA’s high-profile public image campaign, The Horse Comes First, and its flagship Retraining of Racehorses scheme, ROR, that desperate rescue of 23 vulnerable racehorses and broodmares, who were down on their luck, did not hit the national headlines.

That highlights the major welfare issue of overbreeding, and likewise what to do with the thousands of horses who face ejection by the industry each year, which in effect is the very same problem. In 2008, the Irish Republic, which is the supply centre of half the horses who are trained and raced in Britain, was hit by the global economic recession. British Racing, led by the BHA, stood by and watched an exponential rise in slaughter figures, from just over 2,000 in 2008 to 24,000 in 2012.

[John Spellar]

My recollection is that the global financial crisis also led to a crisis in horse-owning more generally, quite apart from horse-racing. I am not clear whether the perfectly legitimate line that my hon. Friend is taking is, actually, to oppose horse-racing.

[Mike Hill]

I remind my right hon. Friend that I am a member of the Petitions Committee and I am quoting the facts and figures of the petitioners on this occasion.

Abattoirs sprung up almost overnight to cater for the demand for the disposal of unwanted horses. In the crudest terms, Irish and British horse-racing had gone from a sport to a food producer. Young foals and those at the end of the careers, the injured or slow, poor-performing stallions and mediocre brood mares similar to Maidment and Marilouise, who Hillside took in just weeks ago, were turned into meat for human consumption or fed to hunting hounds, while others were rendered down to be mixed into everyday products. That massacre of the sport’s equine competitors was the result of a lack of foresight and strategic planning for the future, the ignorance of potential outcomes and the sheer apathy of a self-regulated industry. The average punter and Royal Ascot celebrity would never know this secret, because of a lack of transparency and a closed door to freedom of information.

Since that animal welfare disaster, the BHA has failed to put limits on breeding numbers. One hundred years ago, a top stallion would cover—a polite way of saying mate—with 15 mares. Around 35 years ago, stallions such as the ill-fated Shergar would cover 40 at best. This year, we are seeing single stallions cover 100, 200 or even 300 mares. It is irresponsible, and the BHA stands by and lets it happen. It is as bad as any unscrupulous dog breeder who has hit the news in recent years—behaviour that eventually brought about a change to the law.

The burgeoning racing fixtures list, drawn up to accommodate the swell of horses being bred, will be the biggest ever in 2019, with over 1,500 meetings. It will not meet the needs of a huge number of horses who will not win a race and will earn little or no prize money, and who will then be quickly cast out and replaced by another on the conveyor belt of horses that pass through the industry, which brings me on to racing itself.

When a horse steps on to a British racecourse, its welfare and protection from potential suffering should be paramount. Yet each horse has about a one in 50 chance of not surviving a year in racing. The BHA likes to minimise that alarming figure by stating that just 0.2% of runners die in racing, although if a horse runs 10 times and dies, that is classed as one in 10 runners. It is confusing and deliberately misleading. The disrespect shown by classing horses’ deaths as a percentage of runners, and the BHA’s unwillingness to name individual horses who are killed in an understandable and comprehensive list, as is done in Ireland, led the campaign group Animal Aid to launch its own online website, Race Horse Death Watch, where one can see the names of ill-fated horses and the racecourses where they died. It has become an endless list and makes for disturbing viewing.

Why do horses die racing? Is it by accident, as the BHA cited in the death of a two-year-old colt last month at Doncaster, or are horse deaths to some extent preventable? In the case of the two-year-old, the BHA shamefully absolved itself and the racecourse of any responsibility for the young horse’s death. I will go through the account of an eyewitness who saw this tragedy unfold. An inexperienced two-year-old colt known as Commanding Officer entered an enclosed starting stall from which to race. The horse became frightened and reared in an attempt to free himself from the all-enveloping stall. Instead of removing this panic-stricken, novice horse from the race, it was decided to blindfold him in the hope of eventually getting him to run. Without his vision, and with natural equine fear, he reared again in the starting stall. The poor design of stalls enabled Commanding Officer to trap a foreleg between the front gates. As he pulled back, blind, to free himself, his foreleg snapped into two as the gates held firmly shut. By design, there is, surprisingly, no quick-release mechanism on the gates to free individual horses from stalls. As a consequence, the colt’s hoof and five inches of bare cannon bone—his shin—were hanging off the end of his leg, held by just a tenuous flap of skin.

The horse was eventually destroyed, but not without immense suffering. The eyewitness described the horse’s destruction as “unbelievable”, and a load of empty syringes were thrown over the screens—those would have contained a deadly cocktail of drugs in a vain attempt to inject the scared and injured animal. The race was held up but still went ahead. As the other horses set off running, Commander Officer’s dead body lay in a white horsebox parked next to the stalls. He was two years old—just a baby.

Shockingly, the BHA stewards’ report of events stated that

“the BHA’s Equine Health and Welfare department…found that the starting and loading procedures were followed correctly, and that the injury sustained by Commanding Officer was an accident.”

There was no mention of the inability to quickly open the stall gates to free the horse. That might have been the end of the story, but it is not. At a previous meeting at the very same racecourse, Doncaster, an identical fatal injury happened that was similarly caused by the poor design of the stalls. An experienced horse known as Mukaynis caught his left foreleg in the starting stall gates when, yet again, the horse’s vision was compromised by a hood. Mukaynis, with restricted vision, was startled by a stalls handler. The gelding reared, the gates trapping a leg. Perhaps the BHA thinks that lightning cannot strike twice and crosses it fingers—it did not act after Mukaynis lost his life, and the young Commanding Officer has now lost his life, too. Both horses were failed by poor practice that could have been resolved with basic insight and cost-effective physical changes to starting stall gates.

That is not the only problem. The BHA’s crude reporting of events should also be scrutinised. The race-day stewards, who are mostly amateurs, are commissioned by and under guidance from the BHA, and are meant to monitor the races, take action, note any concerning matters and report them in the official BHA documents. The stewards reported that both horse victims were “unruly in the stalls”. Their report did not even acknowledge that Mukaynis was dead. The BHA allows anthropomorphic terms to be used to describe fear in an equine that is confined in an unnatural manner and unable to escape when panicked.

I could talk into the night about other heart-wrenching cases in which stewards failed to monitor or report welfare issues. Many racehorse deaths could easily have been avoided if the tired horses that had no chance of winning were simply pulled up. Horses are literally run into the ground: they are forced to race without having time to recover from the previous races.

I have spoken to the BHA, and it has talked about making improvements in the areas that I have condemned. It says that it reviews deaths, but its Cheltenham review came about only because of the public and media outcry over the death of six horses at this year’s festival meeting. It published no review of the 2017 festival and did not even mention the five horses that died during it, or the seven that were killed in 2016. The media failed to pick up on those deaths, so the BHA remained silent. It takes the wrath of public opinion to make it look into deaths, let alone take responsibility for them.

The BHA states that it has spent £33 million since 2017 on veterinary research and education. That sum may sound reasonable, but the BHA grossed more than £1.8 billion during that time, and it equates to less than 2% of expenditure. It is about £150 per horse—less money than a jockey’s riding fee for one race. Racing is a rich industry and can afford to increase its welfare budget. If it does not, horses will continue to pay the price of the underspend with their lives.

The petitioners call on the Government to act by removing the British Horseracing Authority from its role as welfare regulator for racehorses, while allowing it to retain its other roles in racing, and to replace the BHA with an independent body that is responsible only for horse welfare.

Concessionary Bus Passes

Lord Spellar Excerpts

Tuesday 8th May 2018 Westminster Hall

[Daniel Zeichner]

I thank my hon. Friend for that intervention. She is very prescient, because the TUC campaign was in the next paragraph of my speech; she has pre-empted it. She is right. Those of us who have done market square campaigning will know that we are not always a magnet for people to come and join us and enthuse, but I find that whenever we speak to older people, they are enthusiastic. I echo my hon. Friend’s congratulations to not only the east midlands TUC but Richard Worrall, who, when the scheme was initiated, set off on a tour of the country and was able to demonstrate that, using his bus pass, he could get round the whole country, which was very exciting. I am told that he is going to do that again, and certainly if he comes through Cambridgeshire I shall be very pleased to join him, although I shall be paying the extortionate fares that we suffer in rural Cambridgeshire—should we be lucky enough to find a bus. I say that because the enthusiasm to which I have referred is tempered by the fact that, in far too many areas, the Government seem to be managing decline rather than celebrating new routes. I will say a little about how that might be addressed, but first I would like to go back to the history of this scheme.

As I look around the Chamber, I see that some of us are old enough to remember that in the ’80s and ’90s pensioner campaigning was central to everything we did. I remember that, as a parliamentary candidate, I was summoned to many vibrant meetings—the pensioners’ organisations had a long list of demands at the time. That was because they compared, strangely enough, our situation in the UK with that in many other European countries and found that our European neighbours often enjoyed a whole series of things that pensioners in our country did not. One success of the post-1997 Labour Government was that they addressed pensioner poverty. I am thinking of measures such as free eye tests, the winter fuel payment and so on, and the bus pass was of course a key part of that.

However, there was not a particularly smooth path to that. We started with quite a panoply of schemes. Some places, such as London, had long had better schemes. Some of the urban areas—I have to say that they were almost always Labour-run areas—had been much more generous in the past. However, in the shires, it was much more of a battle. A kind of halfway house was introduced back in the Transport Act 2000, which gave pensioners half-price fares. That led to quite a lot of even more vexed campaigning.

I remember going to a Labour policy forum in 2004 with colleagues from adjoining counties in the rural east of England—I particularly remember the then leader of Norfolk County Council, Celia Cameron, and Bryony Rudkin from Suffolk. We sat with the then Secretary of State for Transport, Alistair Darling—this was long before he realised he was to become Chancellor of the Exchequer—and explained to him why we thought that a concessionary fares scheme of this type would be not only equitable and fair but hugely popular. I remember the look on Alistair’s face: he said, “Do you know how much that would cost?” That was actually quite a good question because, as I shall explain in a minute, the question of costs has never been properly tied down. His point, of course, was that it would be quite a costly commitment. We went away, having established the idea in principle, but with no great hope that it would necessarily be adopted, so it was with huge joy that we greeted the development a year later. I am not suggesting that it was just we who achieved this; it was a wide range of campaigners, but in the 2005 Labour manifesto a full scheme was suggested, and it was finally implemented in 2006.

The issue of funding is important because, right from the beginning, it has proved to be complicated and difficult. When I was a parliamentary candidate, I spent many a happy hour trying to work out, with my local county councillors and district councillors, who was paying for what and how much it was really costing, and, frankly, coming to the conclusion that probably no one was entirely sure.

We are told that, overall, this scheme now costs £1.17 billion per annum. Not surprisingly, the cost has increased since the scheme was introduced. We are told that, in 2013-14, 9.73 million concessionary travel passes were issued across the country; that puts the average cost at £120 per person. When the scheme was first introduced, the Government provided an extra £350 million for 2006-07 through the formula grant system to fund the cost to local authorities as they then saw it. Between 2008 and 2011, the Department for Transport provided a special grant, totalling just over £650 million, to local authorities to pay for the statutory concession.

Since 2011, however, it is the formula grant that funds the bus pass; money is no longer ring-fenced. Of course, it is a familiar sleight of hand by central Government to apparently put money into the local government grant and tell local government that it has to do this. As the years go by, it becomes less and less clear what the money is for. There is a strong suspicion that it is a sleight of hand, and particularly when councils are being so heavily squeezed, it is asking a lot of them.

Therefore, my first question to the Minister is whether she would like to have a word with the Treasury about looking again at providing proper, ring-fenced funding for the scheme to local authorities. It is not entirely clear to me that the current system of local government finance, particularly with the move away from central Government funding and, supposedly, to business rates retention, actually provides a good, sustainable model for supporting a scheme such as this.

[John Spellar (Warley) (Lab)]

Surely a proper cost-benefit analysis ought to be part of that assessment. In many rural areas, the benefit is that people in smaller, local towns can access services. Most significantly, the benefit is to the health budget, by keeping so many of our pensioners active and engaged. There are lots of studies now on the impact of loneliness on older people. This scheme helps to get people out and about, and maintains their health for much longer.

[Daniel Zeichner]

My right hon. Friend is absolutely right. I will come on to the social and environmental benefits in a minute. This partly shows us how complicated it is to assess the long-term benefits.

Returning to the relationship between central Government and local government, local authorities were charged with coming up with a reimbursement system that left the operator no better or worse off, but they are in a difficult place, and I will come on to the reimbursement system in a minute. The Local Government Association estimates the cost to local authorities at around £760 million a year, with a funding shortfall of £200 million. I suspect that that pressure will only get worse.

The operators are not keen on the system at all. I frequently hear complaints. It is difficult to prove what it costs to carry passengers for free, in a way that observes that reimbursement rule. Putting some extra people on half-empty buses does not necessarily cost more. If there are too many extra people, however, extra services are required.

I understand that the prime task of the bus operators—the big five and many smaller operators—is to return a profit to their shareholders. That is right and proper; that is what they do. They will inevitably claim that this costs rather a lot. In the early days—this was my experience in Cambridgeshire—the bus operators did quite well, because the reimbursement cost they extracted from the county council was rather high. Over time that seems to have settled. As has been said in questions to Ministers, the number of appeals has settled down, which suggests that there is a kind of settlement in all this. I think there is a wider question, however, of how and whether the reimbursement system works.

There is a comparison to be made between London, which has a regulated system, and the rest of the country. Thanks to the Bus Services Act 2017, we hope that some of the new mayoral authorities will adopt franchising. I hope my own in Cambridgeshire does. In London, where you have gross cost franchising, it is much simpler for Transport for London to make decisions about the public good. It decides the fares and the frequency, and then it pays the operator to deliver the service. In a way, the operator has much less to worry about, provided it does not drive up usage and extra costs too far. For London, which groups pay and which do not, and how much is made up by the fare box and how much is raised in others ways, are political choices.

In the rest of the country, it is much less clear. It could be suggested that operators have a perverse incentive to put up fares, because if they know that many of their passengers will be concessionary fare holders, they will be reimbursed for that. We will see whether that gets any response from the operators. The choice over discounts and whether young people should qualify for similar fare schemes is essentially market driven; it is not a choice around social need or the social good. There is a huge opportunity, if we shift to franchising, to move to a much clearer and more efficient model. It may reduce operators’ profits, but if it provides lower fares and space for social choices for the social good, it is worth them paying that price.

I pay tribute to the work being done by the Transport for Quality of Life team, including Lynn Sloman and Ian Taylor, who have begun to look at European systems where, effectively, transport is provided for free across an urban area—it is predominately urban areas at the moment. That is not a novel or unprecedented idea, because many people take the view that public transport—like health, education, policing, parks and museums—is an essential public service that contributes to the fabric of local life. The organisation’s work—often commissioned by my trade union, Unite—shows that this is already happening in 100 towns and cities worldwide, including more than 30 in the United States and 20 in France. Dunkirk, with a population of 200,000, will apparently become fare-free in September. The largest city in the world to have made its public transport free is Tallinn, the capital of Estonia, with a population of 440,000. Free transport was introduced to residents in 2013. It has cost the city €12 million, but it believes that that has been offset by a €14 million increase in municipal revenues, as many more people have moved there, increasing the tax base.

That links to some of the work being done by my colleagues on the Transport Committee about mobility as a service. We are looking at a whole new range of ways of getting around cities. My vision is what I see when I visit an airport. Some airports are like small cities. There are travellators, lifts, shuttle metros and shuttle buses. The noticeable thing is that we do not pay to get on each of them, because it is in the interests of that community to get people where they want to go quickly and efficiently. I argue that is in the interest of all of us, in all our cities and smaller towns, to ensure that people can get around quickly and efficiently.

That is my vision for the future, but to return to the present, extending franchising beyond the mayoralty areas would allow local authorities much more control over services in their areas. It would put them in a much stronger position to maintain stability in funding the national concessionary travel bus scheme. The additional flexibility could also be extended to the community transport sector. That is sometimes a controversial issue, but it is being raised by people in the sector. If we are looking for a flexible mix of transport solutions, particularly in rural areas, I think it should be considered.

My right hon. Friend the Member for Warley (John Spellar) has already raised the social issues involved. Very good work has been done on that by Claire Haigh at Greener Journeys. She demonstrated, in research done a few years ago, that each pound spent on a bus pass generates at least £2.87 in benefits to bus pass users and the wider economy.

--- Later in debate ---

[Daniel Zeichner]

Once again, my hon. Friend is absolutely right. The environmental benefits are really important. I was pleased to see the Minister announce at the UK bus summit the retrofitting proposals, which I was happy to see in the Labour party manifesto last year. It is always good to see the Government adopt such things, and I will have some more suggestions for the Minister in a minute. Alongside that proposal are the very good hydrogen buses that are being developed. I suspect that other Members, like me, have been happy to go and see them. All those things add to my point that the bus is one of the important ways forward in improving the quality of life in our cities, towns and villages.

One extremely good way of promoting buses is by looking at the younger generation, who we are reading about this morning.

[John Spellar]

Just before my hon. Friend moves on, I want to make a point that may lead on to the next part of his speech. Does he share my concern about the Resolution Foundation’s report today that calls for increased taxes and charges on pensioners? It once again raises the concern that many pensioners have that their use of or access to bus passes will be rationed or restricted. I hope he would say that that certainly should not happen, and perhaps give the Minister an opportunity to make it clear on behalf of the Government that they will definitely not be taking any action to change the availability of bus passes for pensioners.

[Daniel Zeichner]

My right hon. Friend is an experienced and skilled operator, and I am sure the Minister will have heard his challenge, which echoed the challenge I laid down at Transport questions the other day. Older generations may have done better—as I indicated, only 20 years ago pensioner poverty was a very real and terrible thing, and because of policy changes it is only recently that people have been less likely to be poor when they are older—but we have to get the balance between generations right. We do not do that by punishing another generation; we do that by finding the resources from other places.

Turning to younger people, who now need to benefit, I want to reiterate something about the scheme in general. Claire Walters, the chief executive of Bus Users UK, recently said:

“Far more people rely on bus services than trains in this country. They are as vital to many people’s lives as gas, electricity and water”.

For many young people, particularly those in rural counties such as mine, getting to college or work is a real challenge. We are not talking about home-school transport today, but the Government would do well to consider that at some point, because there are rumblings in the shires, as they may have noticed last Thursday. Part of the challenge for young people is the cost of travel, including home-school transport.

As my right hon. Friend has just mentioned, the Resolution Foundation report showed the immense squeeze on the younger generation. They have experienced the tightest squeeze on household spending we have known since 2000, and they now consume 15% less than older working-age people on items other than housing. As we know all too well, home ownership is now out of sight for many people who are working, particularly in cities like mine. At the other end of the spectrum, those under 25 face significant restrictions on the amount of benefits they can claim.

I was absolutely delighted by the announcement by Front-Bench hon. Friends a few weeks ago that in future Labour would provide free bus travel in some parts of the country to those under 25. That would reduce the barriers to accessing work and education that so many young people face. The proposal could benefit up to 13 million young people, helping them save up to £1,000 a year. My hon. Friends have suggested that money ring-fenced from vehicle excise duty could be used. In addition to my earlier argument about franchising, with much greater control from local authorities there could well be extra headroom within local funds to help fund such an extension of the scheme.

I can anticipate the reaction from the bus operators. My local Stagecoach bus manager, with whom I have had many detailed conversations about bus franchising over the years, is not shy in coming forward to warn me of the perils of such an approach. I say gently to the operators that while their books remain closed and their finances opaque, it is not unreasonable for those of us interested in the wider public good to wonder whether more savings could not be made. We are told it is an unregulated market, but it is a funny kind of free market when public money accounts for more than 40% of bus operator revenues through local authority contracts, the bus service operators grant, reimbursement for trips made under the concessionary passholders scheme and grants. We therefore have a responsibility to ask whether we are making best use of that public money.

There is a lot of public money going into the bus system. Can we make it work better? I welcome the announcement that the concessionary fare scheme is no longer under review, but as I intimated earlier, I would like a slightly warmer endorsement of the underlying principles and a true enthusiasm for universally available mass public transport systems. Let’s hear it for the bus! Where older people have led the way, let us open the door for young people too. As we do not know when the next general election is coming—it could be a little while yet—will the Minister consider meeting me and the shadow Minister responsible for buses to discuss adopting yet another of Labour’s excellent bus policies? Young people would be as happy with their new bus pass as millions of older citizens have been with theirs over the last decade.

Finance (No. 2) Bill

Lord Spellar Excerpts

Committee: 1st sitting: House of Commons
Monday 18th December 2017 Commons Chamber

[Mel Stride]

There is not an area or region of the country that will not see benefits for first-time buyers. [Hon. Members: “Yes, there is.”] No, I am afraid that that is simply not the case. This measure will benefit first-time buyers in every single region of the country. It is the case that property is a lot more expensive in some parts of the country than in others. Arguably, that is where the particular need is. As I have said, the average house price in London is 12 times average earnings, and it is 10 times average earnings in the south-east.

[John Spellar (Warley) (Lab)]

Can the Minister give us any indication of his Department’s estimate of the cost of this measure and of the incidence—how it falls— in different regions of the country? In other words, how much is it going to cost globally and what other housing could the Government have built with that money? Equally importantly, how much of this will be in the south-east and how much in other regions?

[Mel Stride]

In addition to what I just said about every region seeing benefits, I can tell the right hon. Gentleman that the average benefit for the average first-time buyer will be around £1,700, which is a significant amount. For people purchasing a property at the £300,000 to £500,000 level, the benefit is no less than £5,000, which is a considerable sum.

--- Later in debate ---

[Mel Stride]

As I say, the average across the piece will be £1,700 per average first-time buyer. I also stated quite clearly that, in every region of the country, there will be those who benefit from this measure.

[John Spellar]

I thank the Minister for giving way, but surely his Department must have done an analysis, first, to convince the Treasury of how much this would cost and, secondly, to work out how much this would affect each region—in other words, how much benefit was going to the south-east, how much to London, how much to Yorkshire and how much to the west midlands. Why is he so reluctant to open up about those figures?

[Mel Stride]

What I am able to tell the right hon. Gentleman is that, as I have said, the average benefit will be £1,700 for the average first-time buyer. Every region in the United Kingdom will see benefit from this measure, and those regions—particularly in the south and south-east—where the ratio of salaries required to mortgage levels is particularly high will especially benefit.

However, the other thing we need to do as a Government, as I have already stated, is to make sure we get the supply of housing right. That is why we will be moving from the current level of 200,000 new builds a year up to 300,000 in the middle of the 2020s.

--- Later in debate ---

[Jonathan Reynolds]

We will get on to whether those measures will be effective, based on the assessments that have been made. I am old enough to remember when a tax on land banking was described as Venezuelan-style socialism, so it is good to see some permutation of that idea among Government Members.

The analysis by the OBR on the likely outcome of the policy shows that it will push up prices by 0.3% in 2018.

[John Spellar]

My hon. Friend is talking about land banking by the big house builders. Is not the evidence of that the utterly obscene bonus being paid to the chief executive of Persimmon, which is so outrageous that the chairman of the company has seen fit to resign in disgust?

[Jonathan Reynolds]

My right hon. Friend identifies another feature of a dysfunctional market. That will be corrected only by a change in Government policy, but we have not seen one in the Bill.

Conservative Ministers’ review of a previous stamp duty cut concluded that the tax relief, in itself, had

“not had a significant impact on improving affordability for first time buyers”.

That is why Labour has tabled an amendment calling for the publication of a review prior to the 2018 Budget on the impact of the relief on first-time buyers, including its effect on house prices and the supply of houses.

The Minister, as usual, talked an extremely good game on funding for new housing, which he said would help to ameliorate the supply issue. On further scrutiny, however, we find that no measures in the 2017 Budget will directly increase house building. Only one third of the £44 billion announced in the Budget is genuinely new, and there is no extra Government investment in new affordable homes. That builds on a legacy of failure. Let us remind ourselves that not one of the 200,000 starter homes promised by the Tories three years ago has yet been built. That lack of action is having a serious impact across every part of our society. During the Government’s seven years in power, homelessness has doubled. Shockingly, recent statistics from the Department for Communities and Local Government show that nearly 80,000 households were homeless in September; that includes 120,000 children. The situation is extraordinarily urgent.

--- Later in debate ---

[Mr Kevan Jones]

I agree with the hon. Member for Witney (Robert Courts) and the right hon. Member for Hemel Hempstead (Sir Mike Penning) about the armed forces allowance. In my experience, as in theirs, the modern member of the armed forces, whether male or female, wants choice. I have nothing against that, but I think that this is the wrong way of providing it. As we heard from my hon. Friend the Member for Stalybridge and Hyde (Jonathan Reynolds), the problem now is that much of our military housing stock was locked into what was a terrible deal for the taxpayer during the last year of the Major Government, who sold most of the housing stock in England.

[John Spellar]

May I correct my hon. Friend? In the last few months of the Major Government, Michael Portillo, in a hugely criticised deal at the time, basically gave Nomura the deal of the century.

--- Later in debate ---

[Mr Jones]

I do agree with the hon. Gentleman. Anyone with a close involvement with the armed forces, as he has, will know that we rely on those men and women to go on operations and that a key issue for morale is to ensure that their families are supported during those times.

I am a bit wary about this proposal for another reason. When the Australians introduced this type of rent allowance, they did it gradually, over a 10-year period. There was therefore a transition period with new starts and other people coming in. The proposals in the Bill seem a bit piecemeal, and if they are not done in a thought-out way, we could end up in a situation in which Annington Homes retracts the existing accommodation and people’s options become limited. Again, I think this is the right move forward but it is not being done in the right way. Anything that the Treasury can do to extract the Ministry of Defence from the Annington Homes contract would be universally welcomed—[Interruption.] The right hon. Member for Hemel Hempstead is shaking his head. He has obviously looked the same thing as me. Let us wait and see what the new housing model delivers, but let us hope that it adopts a joined-up approach that will be of benefit to members of our armed forces.

I want to turn now to stamp duty. My right hon. Friend the Member for Warley (John Spellar) asked the Minister which regions would benefit the most from this proposal. The Minister, as usual, sidestepped the answer, but it is in fact quite clear. The average house price in County Durham is £138,000. In London, it is £488,000, so it is quite clear where the money will go. As my hon. Friend the Member for Wirral South (Alison McGovern) said, the Government are completely ignoring the idea of trying to eradicate inequalities throughout the regions. Indeed, they will actually increase them through these moves.

There is a broader point, however. I passionately believe that people who aspire to own their own home should be able to do that, and we should be able to help them to do it. The problem with this Government, however, is that they have one trick in their armoury, which is the idea that the private sector should deliver all this. They believe that the only way to achieve the mythical 300,000 new homes is to allow the private sector to deliver them. Well, I am sorry, but if they are going to rely on the private sector to do that by supplying 300,000 new homes for purchase, that will not deliver the homes that we need in most areas—not just in London but throughout the regions.

[John Spellar]

Does my hon. Friend agree that the underlying problem is that the private sector supply side is becoming increasingly dysfunctional? Indeed, it is becoming an oligopoly, and many of the companies involved are no longer construction companies but just land banks.

[Mr Jones]

They are indeed. My hon. Friend the Member for Ipswich (Sandy Martin) mentioned the example of Persimmon earlier. Many of those companies are no longer housebuilders in the traditional sense. They are employment agents who employ contractors to do things. In my constituency, some of the complaints about new builds are pretty horrendous, and I think that that experience is shared across the House.

--- Later in debate ---

I am not suggesting for one minute that we take houses off people in a draconian way but, where houses are sitting empty on somebody’s books after having been bought in a basket of property—where the houses are not a top priority—we need to give local councils the ability to try to bring them back into use. If it were done in a targeted and effective way, it could increase the housing supply in most areas without building a single extra new house.

[John Spellar]

I start by welcoming the service accommodation proposals. I echo the comments of my hon. Friend the Member for North Durham (Mr Jones) on the short-term gain taken by the Ministry of Defence and the Treasury in a bid to shore up the finances of the Major Government, which did them absolutely no good in the 1997 election. Service personnel and their families have been suffering from the impact of that ever since.

On the basic question of the stamp duty measure, I suppose that it could be welcomed, superficially, as a reversal of the intergenerational transfer of wealth, but in fact, as my hon. Friend the Member for Wirral South (Alison McGovern) said, the reverse is the case, as the main beneficiaries will be the existing owners of housing. In a tight housing market with a large amount of stock and limited flow, the net effect of adding extra liquidity into the system is most likely to be an increase in the price of housing.

The other beneficiaries will be not just individual householders who seek to trade down, or even up, but private sector landlords who have been buying up property and forcing up prices. Many youngsters are not able to get together the sort of deposit that is now required unless they can go to the bank of mum and dad. With the average house price in London at nearly £500,000, they are having to find a deposit of some £50,000. We are targeting a considerable public subsidy towards one small group without actually dealing with the problem.

It was very instructive that the Minister was unable—or probably unwilling—to give the figures I asked for about how much the measure will cost in aggregate and how the costs will break down by region. It is inconceivable that such analysis was not carried out as the policy was drawn up and ground through the mills of the Treasury. To save me from tabling a parliamentary question, I urge the Minister to come up with those figures in his winding-up speech. I think that the figures will show a considerable disparity between regions, which is not uncommon under this Government, much as they seek to hide it. Just recently, a letter from the Secretary of State for Transport told us that we had it all wrong and the average spend on transport was roughly equal between the north and the midlands, and London and the south. The only issue was, as my hon. Friend the Member for North Durham found out, that the Government had omitted to include the £32 billion—I believe that is the figure—for Crossrail from the London figures, because that had somehow been designated as a national scheme.

[Mr Kevan Jones]

I can inform my right hon. Friend that it was actually worse than that, because the Government had also deemed the north as being the north-west, the north-east and Yorkshire.

[John Spellar]

I do not get involved in those arguments.

In essence, we are seeing major transfers of wealth to areas that the Government see as their political homeland. However, let us also look at the big house builders, as they are euphemistically called—really they are land bankers and, as my hon. Friend said, employment agencies. They also indulge in a number of other unsavoury practices. Several of them have now been exposed for their involvement in the racket of escalating leaseholds, which they have now been forced to back down from. They have had to pay considerable sums to buy back those leases from individuals—speculators—who bought them and were then exploiting residents on that basis. Is that not a symptom and a symbol of the dysfunctional nature of our housing market? The Government are not tackling that in any particular way.

Nor are the Government tackling the increasingly oligopolistic nature of the house building industry. There has been a significant decline in medium and small builders, who used to be the backbone of the building industry and of many towns. Building, by its nature, is subject to cycles, and banks have been incredibly reluctant to lend money to small builders, who have steadily either gone out of business, or been absorbed into the big builders. That has flowed into the lack of training that has taken place, because so many of the big house builders are mainly just the name outside a project and are not particularly interested in the small sites—brownfield sites—around our towns. With the breakdown in training, we then have the cry from those same builders that need to bring in more and more builders from abroad because of insufficient supply in this country. That is because over several years, if not decades, they have not been training people.

Nor do the Government have any programme, as far as I can see, that is equivalent to the better homes programme which, as a number of colleagues have said, contributed enormously, not only to bringing many properties back into effective use, but to improving the lives of many of our constituents. Finally, what we see here is figures being plucked out of the air. This is reminiscent not of an efficient market, but very much of Soviet planning, with declarations of 300,000 houses but no visible means by which that will actually be achieved.

[Lloyd Russell-Moyle]

I will try to be brief, because we all want to get to the vote and then move on, but I will say that the measures we are considering are far too little and far too late. Homelessness has doubled in Britain, and in Brighton it has tripled, with 10% of adults now on the housing register. How do these proposals help them? The measures will increase house prices for first-time buyers. I know the Minister says that he has better data than the OBR, but I tend to believe the OBR, which was set up by the Conservative Government to provide independent analysis, over the books that are cooked in the Treasury—[Interruption.] Yes, the books that are cooked in the Treasury. What we need are clear supply-side measures—[Interruption.] The evidence for cooked books is that the OBR does not believe the Government’s figures. The evidence comes from the independent regulator. Let me get back to what I want to say, otherwise I will be distracted and we will be here for longer.

We clearly have a problem with young people and first-time buyers getting into the property market. In my constituency today, only five studio flats are on the market for less than £200,000. With average earnings in Brighton lower than the average for the rest of Britain, the introduction of a stamp duty waiver will make not one jot of difference, because people cannot afford to raise money for a deposit and to go to banks to ask them to lend. What we really need is decent social and council housing so that people can move into secure tenancies. I asked the Prime Minister whether she would lift the housing revenue account cap. We see in the Bill that there will be a lift to the value of £1 billion, if councils apply, but of course £22 billion would be made available, at no direct cost to the Government, if they just lifted the cap completely. Why will they not? Because they are scared—they are chicken—to allow working people to have decent homes. Clearly they want to keep people subjugated and in poor-quality rented private property. That is the only conclusion I can draw from their miserable set of proposals.

Another thing we need is planning regulation that is stronger, not weaker. Until very recently, I sat on my local council’s planning committee. Time and again we were toothless in enforcing the social and affordable housing requirements. We do not need to give councils less power to enforce those requirements; we need to give them more powers to enforce them. The measures in the Bill to try to deregulate the planning sector go in completely the opposite direction.

I could make other points, but I am not going to talk anymore—let us go home. It is quite clear that I will be voting against the Government’s measures, because they are absolutely useless for dealing with homelessness and house building. In fact, they will make matters worse.