Council Tax: Government’s Proposed Increase

Lord Beamish Excerpts

Monday 25th January 2021 Commons Chamber

[Mr Kevan Jones (North Durham) (Lab)]

Most council tax payers think that their council tax pays for all council services, but that is not the case; it is made up of council tax, central Government grant and business rates. The central Government grant has been cut by 56% in the last 10 years, in a deliberate policy of this Government to move funding away from central Government grant and on to local council tax payers. In County Durham, for example, the council’s budget has been cut by 40%, which is £232 million in central grant. That has hit northern councils harder, because they relied heavily on the central Government grant for a proportion of their income.

It is a double whammy, because the Government are now pushing this on to council tax. In County Durham, 50% of properties are in band A. Surrey, for example, has larger numbers of council tax payers in band H. A 1% increase in Durham raises very little compared with what it raises in Surrey, so northern councils are being penalised through this.

We have heard all the nonsense this afternoon about local government needing to be more efficient. Councils are making efficiencies, but it is not possible to cut 40% of a council’s budget without services being affected. Some 60% of Durham County Council’s budget is spent on social care and looked-after children. The idea portrayed that every council is the same is nonsense, in terms of the demand for social care and care for looked-after children.

The Conservative Government and Government Members then blame councils for putting up parking charges and everything else. The councils have to, because frankly, that is the only way they are going to get their income. They criticise councils for speculative property developments. I would criticise them as well, because the majority of them are by Conservative councils in the south-east of England, and that cannot be right.

The Government’s campaign slogan is about levelling up the north. Well, I am sorry, but this Government and their predecessor have done exactly the opposite for the last 10 years. Pushing the increase in local government funding on to local council tax payers is not about levelling up. It will mean that people pay more in the north than they do in the south. If that is this Government’s idea of levelling up, it is not what is being portrayed by many Government Members. This is a regressive tax that will hit hard-working families in areas such as mine in North Durham.

--- Later in debate ---

[Luke Hall]

My hon. Friend is absolutely right that councils should be delivering efficient services with the settlement that they have received from this Government.

If we look at the provisional settlement that the Secretary of State published on 17 December, we see a 4.5% cash-terms increase in core spending power—a real-terms increase for the next financial year. We have also committed at least £3 billion of additional help to councils for next year. That includes the extension of the sales, fees and charges guarantee scheme, which we know has been a lifeline to so many councils during this pandemic. Our commitment to support councils is stronger than ever, and we will ensure that they have the resources they need to deliver first-class public services.

May I thank Members from both sides of the House for their contributions to this debate? I appreciate that it has been hotly contested and contentions, but some important points have been raised. I was surprised, however, to see numerous Opposition Members stand up and say how much they disagreed with the Government’s proposal, given that so many of their councils have not even bothered to respond to our consultation. The hon. Member for West Ham (Ms Brown) said how much she and her council disagreed with it, but Labour-run Newham Council has not responded to our consultation on council tax. The hon. Member for Slough (Mr Dhesi) told us how strongly he and his council feel about this issue, but it has not responded to our consultation, either. Perhaps that is because it welcomes fully the 3.9% increase in core spending power that it will receive next year. The hon. Member for Westmorland and Lonsdale (Tim Farron) told us how much he and his local Lib Dem council did not support it, but it has also not bothered to respond to the consultation. It is typical of a Lib Dem administration that it stands up, shouts from the sidelines and fails to do the necessary work.

[Mr Kevan Jones]

It might be because the Government completely ignore them. Durham County Council has lost 40% of its budget—£232 million—in the past 10 years. Under the proposed council tax rises, its limited council tax base will limit what it can raise compared with southern councils. How can that be right, in terms of moving money from the north to the south?

[Luke Hall]

I do not see how it is right for the right hon. Gentleman’s local council to spend millions of pounds on doing up an office building and installing a roof terrace during the middle of the covid pandemic. I shall come to his point about council tax redistribution in a moment.

The hon. Member for Garston and Halewood (Maria Eagle) talked about Liverpool City Council being forced to raise council tax. That is not the case; councils have a choice. Liverpool has been campaigning to have a higher council tax—

[Mr Jones]

On a point of order, Madam Deputy Speaker.

[Madam Deputy Speaker (Dame Eleanor Laing)]

We are not taking bogus points of order right now, because it is not fair for people who are not here in the Chamber. If the hon. Gentleman has a real point of order, I will listen to him.

[Mr Jones]

The right hon. Member does have a point, because what the Minister has just done is inadvertently misled the House—

[Madam Deputy Speaker]

Order. No, no—

[Mr Jones]

Durham County Council is not doing—

[Madam Deputy Speaker]

Order. This is a debate; there are, therefore, differing points of view on either side of the House—[Interruption.] Do not shout at me in the Chair.

Provisional Local Government Finance Settlement

Lord Beamish Excerpts

Thursday 17th December 2020 Commons Chamber

[Robert Jenrick]

My right hon. Friend the Secretary of State for Health and Social Care will bring forward proposals in due course. We will meet our manifesto commitment to introduce the long-term reforms that this country urgently needs on social care. I think today’s settlement provides local government with the sustainable finances it needs for social care. It has been widely praised by the sector as meeting the demographic changes that my right hon. Friend mentioned. We are also ensuring that councils such as his have the funding that they need. Bromley will have a 5.5% increase in core spending power from the previous year, in which there was a 4.7% increase. That is two successive years of increases in council funding for his local authority area.

Briefly, in other news for my right hon. Friend, today we have announced funding for waking watches, partly inspired by brilliant campaigners in his constituency.

[Mr Kevan Jones (North Durham) (Lab)]

I add my thanks to council staff and councillors for their work during this last year, particularly those at Durham County Council. I particularly thank the chief executive, Terry Collins, who is retiring at the end of the year after 43 years in local government.

The Secretary of State’s announcement is mainly made up of local council tax increases in core spending. Durham County Council has 50% of its council tax properties in band A, which limits its ability to raise large amounts of council tax compared with councils in the south, which have larger numbers of higher band council tax properties. That will mean that Durham County Council has no option but to increase its council tax to the maximum. The Secretary of State and the Government talk about levelling up, but today he is clearly punishing northern council tax payers while rewarding southern council tax payers.

CCRC Decision on 44 Post Office Prosecutions

Lord Beamish Excerpts

Monday 5th October 2020 Commons Chamber

[Mr Kevan Jones (North Durham) (Lab)]

(Urgent Question): To ask the Secretary of State for Business, Energy and Industrial Strategy if he will make a statement on the 44 Post Office prosecutions overturned by the CCRC.

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)]

I appreciate the urgent question. The Government recognise that the Horizon dispute has had a hugely damaging effect on the lives of affected postmasters and their families, and its repercussions are still being felt today. I have spoken to a number of postmasters who have been affected by this ordeal.

On 2 October, the Post Office formally responded to the Court of Appeal and Southwark Crown court regarding convicted postmasters whose cases were referred by the Criminal Cases Review Commission. The Post Office has stated that it will not oppose 44 out of the 47 cases. The Post Office also sincerely apologised to postmasters for historical failings and underlined its commitment to delivering a fundamental review of the businesses and to resetting its relationship with postmasters, to ensure that this never happens again.

This decision by the Post Office is an important milestone for postmasters whose convictions are part of this appeals process. Friday’s announcement was not, however, the end of that process. It is now for the courts to decide whether the convictions should be overturned. It would not therefore be appropriate for the Government to comment on these cases until that process is complete.

The Post Office continues to co-operate fully with the CCRC and is in the process of reviewing about 900 historical prosecutions. Should it find any new information that may cast doubt on the safety of a conviction, it has confirmed that it will disclose that information to the person who is convicted. We will continue to monitor the work of the Post Office closely. In addition, I am pleased that the Government last week launched an inquiry, chaired by retired High Court judge Sir Wyn Williams, which will gather relevant available evidence to provide a public summary of the failings that occurred in relation to Horizon and assess whether lessons have been learned and concrete changes have taken place, or at least are under way, at the Post Office.

[Mr Kevan Jones]

I had high hopes for the Minister when he was appointed, but unfortunately he is reverting to type, like all his predecessors I have had to deal with over the last eight years. The hon. Member for North West Leicestershire (Andrew Bridgen), Lord Arbuthnot and I have been campaigning on this issue for nearly nine years, and I know that many other Members across the House have individual cases and have been involved in this. It is six years since the three of us met the CCRC, and I am pleased that Friday’s announcement made it clear that the Post Office would not pursue 44 of the cases. But those are simple words, and they belie the agony and torment of these individuals and of hundreds of other individuals who have lost their livelihoods, their good names and, in some cases, their freedom. In other cases, people have lost their lives.

I am sorry, Minister, but what you have said today is not good enough. I cannot get over the fact that this scandal—that is what it is—is still being treated as somehow an issue of the Post Office. The Government are the single shareholder in the Post Office; they are the ones who can actually make some changes, so I would like to ask them some direct questions.

First, as the single shareholder, were the Government involved in the decision not to take forward these prosecutions, in the same way they were involved with the £100 million they spent in defending the civil case last year? Secondly, in terms of the convictions that have been overturned, the Minister said in June that there would be a process in place for compensation. Will he announce a compensation process, or will these people have to pursue cases through the court for compensation? Can I also ask where we are at with the historic compensation process? I understand that 2,000 claims have been made, but not a penny has yet been paid out.

Finally, can I put this issue to the Minister? I am sorry, but the review he has announced is not good enough. It may have a retired judge at its head, but he does not have the powers to summon witnesses and cross-examine them. A full public inquiry is needed. Without that, we will not get to the truth of what is, as I have already said, a national scandal.

[Paul Scully]

I thank the right hon. Gentleman for those points, and I will try to deal with them directly. The decision to prosecute postmasters was an operational matter for the Post Office, and the Government are not involved in operational decisions. However, in hindsight, knowing what we know now, it is clear that different conclusions could and should have been reached by the Post Office, and that is why the inquiry is there to look at the lessons.

The right hon. Gentleman asked about a route for compensation, should postmasters who have been convicted have their convictions overturned. There are processes in place for them to receive compensation if appropriate, and that includes a statutory scheme under section 133 of the Criminal Justice Act 1988.

In terms of the latest update on the historical shortfall scheme, the Post Office launched the scheme on 1 May to allow postmasters who were not part of the group litigation to have issues with shortfalls recorded in Horizon investigated and addressed. The window for applications formally closed on 14 August, but late applications are being considered by the Post Office on a case-by-case basis. There have been over 2,200 claims, and the independent panel advising the Post Office on the scheme is now assessing those.

The right hon. Gentleman talked about the inquiry. A judge-led inquiry is very much what was asked for. We have Sir Wyn Williams, a former judge, at the head of that. He will be an independent chair; he will be able to ask the questions, push back at the Government and the Post Office, and get evidence. The reason it is an inquiry rather than a review is that, reflecting on the way its remit was worded, I have always wanted it to be a backward-looking review that enabled evidence to be sought, rather than to be done on just a desktop basis. We have clarified that in the written statement, and I believe this is the inquiry—albeit on a non-statutory basis—that will actually get the answers, and do it in a quick way that hopefully satisfies the sub-postmasters and gets the answers they want.

Draft Enterprise Act 2002 (EU Foreign Direct Investment) (Modifications) Regulations 2020

Lord Beamish Excerpts

Wednesday 8th July 2020 General Committees

[Paul Scully]

I thank my right hon. Friend for his intervention. The regulations will be repealed as part of the wider European Union (Withdrawal Agreement) Act 2020. They do not interact with the Bill that we are introducing, but add further powers that can be used.

The UK and the EU have both stated that we intend to support ambitious, close and lasting co-operation on external threats. That co-operation should respect both sides’ strategic and security interests and respective legal orders. We are open to participation in security-facing EU programmes and instruments on a case-by-case basis.

[Mr Kevan Jones (North Durham) (Lab)]

The right hon. Member for Forest of Dean makes an interesting point. Is there not going to be a gap between the lapsing of this legislation and the new Bill to which the Minister refers? This week, we announced sanctions against a number of individuals—independently of any other country, including the EU. Does that not leave us at a disadvantage if we are not able to get information, perhaps about people we think are a threat but the EU does not?

[Paul Scully]

I thank the right hon. Gentleman for his intervention. Both the UK and the EU have expressed our intention to co-operate as best we can. How that is structured will be part of the negotiations. Although this measure does not directly interact with the new Bill, we intend to introduce the Bill very soon.

[Mr Jones]

This is like a lot of things to do with the withdrawal agreement Act—it is wishful thinking, and there will be a gap that will put the UK at a disadvantage. Great fanfare was made this week about the fact that we can now sanction individuals who use investment as a way of hiding money. It was said that that is a great step forward for our freedoms from the EU. If we do not have a seamless connection, this measure will leave us at a huge disadvantage, because there will be no onus on the EU to share any information with us.

[Paul Scully]

As I say, although we are obviously obliged to abide by EU law during the transition period, we do not believe it would be appropriate to remain part of the reciprocal information-sharing channel after the transition period has come to an end. As I say, when the National Security and Investment Bill is introduced, we will be able to debate that fully.

[Paul Scully]

I thank my right hon. Friend for that clarification. We already share a lot of this information on gov.uk, and it is not particularly burdensome on businesses to release the information we are looking for. Much of this work is in effect tidying up, because we have gone that little bit further in the Enterprise Act.

[Mr Jones]

I say in response to the right hon. Member for Forest of Dean that there will be no obligation on Ministers to share information. There might be good will, and it might be in our interest to share the information, but there will be no legal obligation as there is now.

[Paul Scully]

As I said, we already go far enough with the Enterprise Act. The information is released and on gov.uk. This is very much a tidying-up exercise to ensure that the legislation works.

--- Later in debate ---

[Paul Scully]

I thank my hon. Friend. The UK and the EU will have separate jurisdictions to scrutinise mergers. The EU might look at a merger if it is relevant, but that would not stop the CMA from conducting its own investigation.

[Mr Jones]

The hon. Member for Ruislip, Northwood and Pinner tried to help the Minister out, but I do not think he did: the regulations, which I have no problem with, lapse when the transition period ends. Obviously, the new Bill will try to cover some of these areas. If we believe the Prime Minister, this is all going to be done and dusted by January next year, so that Bill will have to come in before January 2021 if we are to have the seamless transition the Minister has referred to.

[Paul Scully]

That is a topic we will come to when we introduce the Bill. Hopefully, with the co-operation of Her Majesty’s Opposition, we can get that through swiftly and at the appropriate time to allow for that seamless approach.

To conclude, this instrument is not going to make fundamental changes to the UK’s investment screening regime. The UK is going to retain the levers in the Enterprise Act that allow the Secretary of State to intervene in a merger. The instrument will also not affect plans for the forthcoming National Security and Investment Bill, nor will it interact with the two instruments laid before the House on 22 June, which amend the Enterprise Act 2002. However, it is necessary to agree this instrument to ensure that the UK complies with EU law, as is our duty under the withdrawal agreement.

--- Later in debate ---

[Mr Kevan Jones]

It is a pleasure to serve under your chairmanship, Mrs Miller. It is also a pleasure to see the Government squirming when it comes to how shambolic the exit from the EU is becoming. The regulation that we are considering will be in place until the end of the transition period. The Minister cannot say when the new National Security and Investment Bill will come forward, but given the snail’s pace at which the Government are bringing forward legislation at the moment, I doubt it will be in before Christmas, so there will be a gap.

It also concerns me that after the transition period we will be left with what I think the Minister referred to as the “good will of Ministers”. That is not a legislative term that I am aware of—that we are to let the Executive exercise their good will. Interestingly, the explanatory memorandum states that

“An Impact Assessment has not been prepared for this instrument”

because

“no, or no significant, impact”

on the private sector, “voluntary bodies” or “the public sector” is foreseen. I am sorry, but I do not accept that. If there is a gap during which we are relying on Ministers to take case-by-case decisions on whether they share information with the EU, that is quite a significant impact.



As I said to the Minister in my earlier intervention, the Government this week congratulated themselves on having new powers, free from the awful EU, to sanction individuals. Without co-operation with the EU or other nations on information sharing in this and other security sectors, however, we can have all the powers we like but, frankly, if we do not have the information to implement them or to co-operate with other nations, they are pretty meaningless. That gap will be there, which concerns me.

The other thing that concerns me is what the Minister just said. He said that, under the new Bill, we will not have a system of automatic transfer of information with the EU. That is absolutely silly from our point of view, because we do not live in a hermetically sealed bubble in this country where everything that goes on outside our borders can be forgotten and cannot affect us. We are interrelated, whether with the EU or other nations. Some Government Members want to portray the vision that Britain can somehow pull a duvet over its head and ignore the rest of the world but, I am sorry, it cannot. That is quite serious.

Increasingly, as shown this week by the sanctions, people want to hide money. States, individuals and criminals, for whatever purposes, use investment as a way to cleanse that money through the system. When we leave the transition period, it will be vital to share that information with the EU and other countries. If we do not, we will not have the ability to test whether the money is clean or linked to individuals who we do not want to be associated with, or whether for some other reason the money has come from sources that we do not approve of.

It is important for that information to be there. If it is not, and it is left to a Minister after the transition period, we will be at a huge disadvantage without the National Security and Investment Bill. When will that come forward? If the direction of travel in that Bill is that—I know it is like red meat to Tory Back Benchers—we will not share anything with the EU because that nasty old institution will dilute our great freedoms, I come back to the point that, without co-operation with other nations on that area and a whole host of others related to national security co-operation, we will be at a huge disadvantage.

[Jane Hunt (Loughborough) (Con)]

Does the right hon. Gentleman agree that we should stick to our knitting? The regulations are a short-term device to get us from A to B. We do not have to consider all the legislation and the whole purpose of leaving the EU with regard to this short piece of legislation.

[Mr Jones]

I say to the hon. Lady that the devil is in the detail. I have sat on a number of these SI Committees and I always like to contribute, because we need to scrutinise them, as their implications are important. They may well be small in terms of their overall impact, but cumulatively, they have an impact. I have sat on many such Committees because of the withdrawal from the EU, and the impact of this SI, without the cover legislation, will be that we are disadvantaged. My plea to the Government is to bring that Bill forward before Christmas—before we leave—because we are going to leave and it will leave us at a disadvantage.

I reiterate the main point, which is, whether the hon. Lady likes it or not, we need to co-operate with everyone in the world to make sure that it is to our advantage and that we are not at a disadvantage in cross-border trade and investment, which is a fact of life. She might not like co-operating with those nasty Europeans, but unfortunately, she will find that, come 31 December, we will have to.

[Jane Hunt]

I thank the right hon. Gentleman for giving way again. This is a device for getting from A to B, and nothing else. I do not agree with his comment about “nasty Europeans” either—most decidedly. I am one of those Back Benchers that he is talking about, but I do not agree with that phrase.

[Mr Jones]

It gets from A to B; I do not disagree with the hon. Lady on that, but where is C? Where is the ultimate destination? That is the point, which the Minister has not answered. If we do not have that Bill before us before we end the transition period, we will be at a disadvantage.

This process of withdrawal will not be easy, because there will be huge complications in terms of numerous things that will come up in a number of years, which will hit us in the face. In terms of the security of our country, the idea that we can get investment from individuals—some parts of the Conservative party might welcome that, but my party will not—who we should not [Interruption.]. The hon. Member for Bolsover laughs, but, I am sorry, he should just look at some of the donations taken by his own party from individuals whom I would not want to be associated with, but that is another matter.

If the Minister can assure us that the Bill will be in before Christmas, that will be fine. It makes practical sense to agree this today, but it is important that we have that Bill before we end the transition period.

[Mr Harper]

I have one question and one point. I am conscious of your injunction, Mrs Miller, to stick to the subject. This is directly related to points that are made in the explanatory statement.

I disagree with the hon. Gentleman about the future framework—

[Mr Jones]

Right hon.

[Mr Harper]

The right hon. Gentleman. I disagree with him on the compulsory nature of the information sharing. I am perfectly happy with a co-operative framework. The point I was driving at—I think this is the substance of the regulations—is that in order for the CMA to share information, it has to have the power to share the information. If it shared the information, even if it wants to, that would be unlawful; it does not have the power to do that sharing.

My point, which I think is different from that of the right hon. Gentleman, is that I am perfectly relaxed that we are not able to compel European Union member states, post the transition period, to share information with us, because I am content that they should not be able to compel us to share information with them. I do, however, want to see a structure where we co-operate with them, so that where we choose to share information with them, we are empowered to do so. The regulations specifically address allowing us to share information.

My question to the Minister is about what is intended to come afterwards. Do we intend to replicate the ability for us to share information where we choose to do so? That is a different point from that made by the right hon. Gentleman, which, I think, is about some element of compulsion.

My second point is that the explanatory notes explicitly say that the intention is to revoke not just the instrument we are debating today but the retained version of the foreign direct investment regulations in their entirety at the end of the transition period. Paragraph 7.1 of the explanatory memorandum states that the FDI regulations do not

“affect the UK’s ability to screen investments into the UK”

because we will retain our own responsibility for national security. Once we have removed those FDI regulations, do we currently have domestic powers to do that screening, or is that what the new Bill is for?

That is an important question, because if we currently have powers and the new piece of legislation the Minister refers to is about strengthening or extending them, I am fairly relaxed about whether there is a gap before the Bill comes into force, because if we already have substantial powers and we are talking about beefing them up, I can live with there being a gap. If we revoke the FDI regulations on 31 December, however—and with them, our current ability to do screening for our own national security—the right hon. Member for North Durham is right to say that we would need the new legislation to come into force immediately upon their revocation or there would be a gap, not just in the sharing of information, but in our own national security. That is a point on which I differ from the right hon. Gentleman, but also one very specific question that pertains to points in the explanatory note.

[Paul Scully]

I thank the Committee for its consideration and for the points that have been raised during the debate, which I will try to address. The hon. Member for Manchester Central talked about the CMA and small businesses. Clearly, it is important that we give due consideration to the pressures on small businesses, especially at this particular time. The CMA understands that this is a challenging time for small businesses and encourages them to approach it as soon as possible if they foresee difficulties in meeting the deadline, so that the information request or stipulated response dates can be varied where appropriate. It is important that the CMA works with small businesses in that regard.

The right hon. Member for North Durham raised a few points. On the question of co-operation with the EU, as I have stated, the EU and the UK have said that they both want to co-operate where appropriate. On information sharing, we must not forget that the EU does not equal the rest of the world. It is an important partner for trade, for security and for any number of issues on which we must continue to co-operate, but as we do so, we need to retain our sovereignty at the end of the transition phase, having left the EU in January. The Opposition effectively did not want to bring Parliament back as a result of covid; we wanted to come back so that we could progress the legislation at pace, and we have done a lot since then. The right hon. Gentleman asked whether the legislation places us at a disadvantage. The Enterprise Act already has information-gathering powers when there has been a public interest intervention notice, so we will have the power to share information, as we do now, after the implementation phase.

As I have said, the UK and the EU have stated their intention to support ambitious, close and lasting co-operation. My right hon. Friend the Member for Forest of Dean asked whether Ministers will be able to share information about mergers after December. Yes; that is planned in the National Security and Investment Bill, so we will be able to share information about mergers after that point.

[Mr Jones]

What happens during the gap between these regulations falling and the Bill coming in?

[Paul Scully]

The right hon. Gentleman is talking about a future Bill. If he is happy to work with us, we can make sure that the Bill progresses at pace. We have been introducing a lot of new legislation at pace to respond to covid, and we can do the same with the Bill. We have all learned from the pandemic how to work more closely together when it is in the national interest, instead of playing politics with some of this stuff, and we have moved at pace. The right hon. Gentleman suggests that there will be a gap, but that is not necessarily within the scope of the debate or our intention.

[Mr Jones]

That is a bit rich. I do not control the legislative programme of the House or the Government. The Minister has only to look at the programme for the last few weeks: Opposition days, general debates and the debates on estimates that we have had for the last two days. The idea that there is not enough time—and blaming the Opposition for it—is frankly a bit rich. It is down to the Government to bring the legislation forward.

[The Chair]

Order. Can we keep interventions to the subject of the debate?

[Mr Jones]

He raised it!

[Paul Scully]

To be fair, I was responding. The UK’s investment screening process will continue to operate as it does now, with a few additional steps to ensure that we comply with the regulations. Our sovereign capabilities to intervene in a merger will not be affected. I commend the regulations to the Committee.

Question put and agreed to.

Resolved,

That the Committee has considered the draft Enterprise Act 2002 (EU Foreign Direct Investment) (Modifications) Regulations 2020.

Horizon: Sub-Postmaster Convictions

Lord Beamish Excerpts

Wednesday 10th June 2020 Commons Chamber

[Paul Scully]

The Post Office has acknowledged mistakes in the settlement and the case that we have had. I am glad that both parties to the group litigation were able to reach a settlement. Other sub-postmasters who suffered a shortfall will be able to take advantage of the historical shortfall scheme that the Post Office has launched. They will be able to come forward and have their case investigated, and hopefully those wrongs will be righted.

[Mr Kevan Jones (North Durham) (Lab)]

I, the hon. Member for North West Leicestershire (Andrew Bridgen) and Lord Arbuthnot have been campaigning on this for over seven years. People have been imprisoned; they have been ruined, both financially and mentally. As I have said on the record previously, they have been treated in a way a totalitarian state would treat people. The fact is that only a judge-led inquiry will get to the bottom of what is needed. Over the past seven years, I have cross-examined many of the Minister’s predecessors; today, I urge him to insist on that, because without it we will not get to the truth.

The Post Office is not the only one to blame; the Government are to blame as well, because Government Ministers have shareholder representation on the Post Office board and they have sat back and done absolutely nothing. Last year, they allowed the Post Office to spend nearly £100 million of public money on trying to bankrupt the Justice For Subpostmasters Alliance. That disgrace also needs to be exposed.

[Paul Scully]

I acknowledge the right hon. Gentleman’s long campaign on behalf of the Horizon postmasters, which is to be welcomed. I have been shocked and surprised by the revelations I saw when I took over and continue to see. The terms of reference of the review are the same as those for a public inquiry. It is to work out: who is to blame, can it happen again, how can we prevent it from happening again, what wrongs were done, and how can we right them? The chairman will be independent of both the Post Office and Government.

On the Government’s role as a shareholder, clearly the Post Office has operational independence, but numerous attempts have been made over the years to resolve the dispute, including an independent investigation in 2013 and a mediation scheme in 2015, which was supported by Post Office Ltd and Ministers. All those attempts failed to resolve the issues, leaving the court as the only way to provide the independent review that all sides needed.

Financial and Social Emergency Support Package

Lord Beamish Excerpts

Wednesday 25th March 2020 Commons Chamber

[John McDonnell]

It demonstrates that naming and shaming works, and at some time in the future I might drink to that.

[Mr Kevan Jones]

Not in Wetherspoons.

[John McDonnell]

Not necessarily.

Lay-offs are happening at scale, as I said, and hon. Members have mentioned the statistics. The Secretary of State for Work and Pensions has said that nearly 500,000 people have now applied for universal credit. I welcome, as always, the work that my right hon. Friend the Member for East Ham (Stephen Timms) and his Work and Pensions Committee have done in demonstrating the nature of the reforms that are needed to universal credit. We need those reforms rapidly now to be able to assist people and keep them out of poverty.

--- Later in debate ---

[Mr Clarke]

To put it simply, none of those individuals ought to be going to work at this time; the Government would stand with anyone who refused to go to work because they need to be shielded, and we will stand up for them if any employer is so foolish as to try to press that point.

Those who are being shielded will benefit from a website and a telephone helpline, both of which are now fully operational. We are working with all partners—councils, the food industry, local resilience and emergency partners and voluntary groups—to ensure that essential items can be delivered as soon as possible to those who need them. Deliveries of food will start this week, medicines will be delivered by community pharmacies, and groceries and essential household items will be delivered by local councils and food distributors working with supermarkets to ensure that no one needs to worry about getting the food they need. Parcels will be left on the doorstep.

The Government, the food industry, community pharmacies, councils and emergency services are working around the clock to get this scheme off the ground. I pay tribute to the civil servants who have been working tirelessly throughout this period. I am enormously impressed by the dedication and resolve that they have shown. I can also confirm that, from today, we have deployed military planners to every area of the country to help to co-ordinate this work. We pay tribute also to our armed forces and the role that they will play in this effort.

As Members have highlighted, it is not only the incredibly hard-working medical professionals on the frontline against coronavirus who are under immense pressure. We in my Department know that local authorities, which are essential to the running of this country, are feeling the pressure too. We have already announced £3.4 billion to alleviate that pressure, comprising £1.6 billion of covid-19 pressures funding and the initial £1.8 billion grant for business rates relief measures. We know that immediate pressures require immediate cash, so we can now confirm that the funding will be with every local authority, in its bank account, by Friday. We have said that we will do everything we can to support the sector, and this is us doing it.

When it comes to grants for businesses, the Department for Business, Energy and Industrial Strategy has now issued guidance to all local authorities, and we will provide the full £13 billion of funding for the business grant support scheme at the beginning of April. We must acknowledge that the crisis will not just burden our social care system and affect our most vulnerable; it will also affect our local economies, so local authorities should be confident about contacting businesses in their patch and making arrangements for the grants to be paid as quickly as possible. Time really is a vital factor here.

Further to the targeted funding, we have set out detailed guidance for local authorities on the 100% business rates discount for the retail, hospitality and leisure sectors, which was published by my Department this week. Today, we have announced a further expansion to the discount to remove some of the previous exclusions from the relief, to ensure that businesses that are now required to close—including estate agents, letting agents and bingo halls—will pay no business rates this coming year. My Department will amend guidance as necessary this week. We will, of course, fully compensate local authorities for the costs of this measure.

More broadly, I acknowledge that asking businesses to close their doors is a huge ask—those businesses have often been built up over many years of hard work and sacrifice—but it is only through such measures that we will ensure public safety. By the action that the Government are taking, we will mitigate the effects of the crisis so that once it is over, businesses can bounce back and renew our economy.

The Government’s measures not only are targeted at our businesses and public sectors but will support citizens at an individual level, too. We are working to support those who, through no fault of their own, are facing a sudden drop in income. The Chancellor has announced unprecedented measures to support people by making funding available to cover up to 80% of wages. In response to a point raised by the shadow Chancellor in his speech, I can confirm that apprentices will qualify for that if they are on PAYE. I will write to him on that point, but it is certain that they are included.

[Mr Kevan Jones]

I accept what the Minister is saying, but during my contribution I referred to the email that I received from Scott Hawthorne, who runs a recycling business. He wants to do the right thing by his workers but he is still waiting and does not quite understand how to implement the scheme. I urge the Minister to get the information out to businesses as a matter of urgency, because those that want to do the right thing need to be able to implement it.

[Mr Clarke]

I take that point to heart. If the right hon. Gentleman sends me the details, I will write to him after this debate and ensure that that company is contacted personally so that we can provide the guidance needed for his constituents.

--- Later in debate ---

[Mr Speaker]

I will be quite honest. This is a time when people in the United Kingdom expect the parties to come together to work on behalf of this country, and I do not disagree. This is about ensuring that there is dialogue across the political parties to ensure that we do the right thing by the people in this country.

[Mr Kevan Jones (North Durham) (Lab)]

Further to that point of order, Mr Speaker. I echo the sentiments you just outlined—this is a time for coming together and putting political differences aside—but we have been played here. This issue was highlighted by hon. Members last week and into this week. The Government have had time to look at it. I accept that there are complexities in the process, but to have it announced that the statement is going to be made tomorrow in a press conference is totally unacceptable. May I ask your advice? If we were to vote down the motion on the Adjournment for the Easter recess, would that make it possible for us to sit tomorrow to accept this statement?

[Mr Speaker]

It would take us through probably to next Tuesday.

--- Later in debate ---

[Mr Kevan Jones]

Further to that point of order, Mr Speaker. The Leader of the House is an honourable man. There is a sense of anguish out there among our constituents who are self-employed. He will have had the same emails and phone calls as I have had. The way this is being handled is terrible. Reassurance is being given and I accept that it is not easy to bring these schemes into being, but as my right hon. Friend the Member for Warley (John Spellar) has suggested, the announcement could be made tonight instead of tomorrow. A Treasury Minister—the Economic Secretary—is present, or somebody else could be made available in the next few minutes. If the Leader of the House knew that the announcement was going to be made tomorrow, it would have been in order for him to amend the business motion so that we could sit tomorrow to look at it. He is supposed to be our voice in Government, and I suggest that he should have done that. It would have been a good way forward. The alternative is that we vote against the Adjournment tonight.

[Mr Speaker]

I will come back to the Leader of the House. I think it is quite clear that those channels should be opened by the leaders of the parties. Some good offers have been made and I hope that the Leader of the House can respond.

--- Later in debate ---

[Mr Speaker]

The only thing I would say in their defence is that I do not think there was much detail in Peston’s tweet. I call Kevan Jones.

[Mr Kevan Jones]

Further to that point of order, Mr Speaker. My right hon. Friend the Leader of the Opposition has made a very good suggestion. Could the Leader of the House indicate whether he would be able to take that forward? I think it would be a helpful way of moving this on.

[Mr Speaker]

I think the Leader of the House has a note that he might be able to share.

Horizon Settlement: Future Governance of Post Office Ltd

Lord Beamish Excerpts

Thursday 19th March 2020 Commons Chamber

[Mr Kevan Jones (North Durham) (Lab)]

I beg to move,

That this House has considered Horizon settlement and future governance of Post Office Ltd.

Innocent people jailed; individuals having their good name and livelihoods taken away from them; the full use of the state and its finances to persecute individuals. Those are all characteristics of a totalitarian or police state. But that is exactly what we have seen in the 21st century in the way the Government and the Post Office have dealt with sub-postmasters and their use of the Horizon system. The Horizon system was the biggest non-military IT project in Europe. It cost over £1 billion to install and affected 18,000 post offices throughout the UK.

Before I go on, I would like to pay tribute to some individuals who I have been working long and hard with on this campaign. The first is the hon. Member for North West Leicestershire (Andrew Bridgen), who cannot be here today because, unfortunately, a family member is ill and he has had to self-isolate. He has been with me from the start in trying to get justice for sub-postmasters, and I will refer to some of his work later. He would like to have been here and sends his apologies; that he is not here does not mean that he is not interested in the outcome. I also thank James Arbuthnot, the former Member for North East Hampshire, who, despite being moved to God’s waiting room further along the corridor, has still consistently pressed the case for justice for sub-postmasters. I pay tribute to the work that he has done in the past and is doing now.

I want to mention two other individuals. Alan Bates is the lead claimant in the class action. Alan has been a stalwart and stuck by his principles—knowing, as he said, that “I am right and I am going to make sure we get the truth out.” The other person is someone who has very helpfully shone a spotlight on the issue, and has spent many hours sitting through long court cases: Nick Wallis is a journalist who has kept this story in the public domain. Alan and Nick both deserve credit for their continued actions now and their work in the past.

I first came to be involved in the issue when a constituent came to see me in my surgery. That constituent was Tom Brown. Tom, like many other thousands of sub-postmasters, was a hard-working and well-respected individual. He had won awards from the Post Office for fighting off an armed robber in his post office, but because of the introduction of the Horizon system, he was accused of stealing £84,000 from the Post Office. Even though he said and demonstrated that that was not the case, the Post Office took him to court, and he went through the agony of being publicly shamed in his local community—we must remember that a lot of these individuals are the stalwarts of their local communities.

Tom went to Newcastle Crown court, and on the day of the trial the Post Office withdrew the case, but the damage had already been done. His good name had been ruined, and he had lost—because he had had to go bankrupt—in excess of nearly half a million pounds in the form of his business, the bungalow that he had bought for his retirement and some investment properties. He now lives with his son in social housing in South Stanley. The man who should have had a nice retirement, and who was well respected in his community, has been completely ruined and is destitute. Despite that—he came to see me last week—he is an individual who still has integrity, because he has always insisted that he is innocent of what he was accused of, and he has not been alone.  Despite that—he came to see me last week— he is an individual who still has integrity, because he has always insisted that he is innocent of what he was accused of, and he has not been alone. The estimate from the class action that has been taken is 555, and there are many others, some unfortunately who have died since the case was taken forward.

The scandal of this—what makes me so angry and why I have persistently hung on to the campaign—is that the Post Office knew all along that the Horizon system was flawed.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

I congratulate the right hon. Gentleman on securing this important debate. Is not the other scandal in this that the courts time and again failed the victims? In the prosecutions that were taken forward by the Post Office, the courts found in favour of the Post Office, despite it being unable to properly evidence its case. It is absolutely wrong. We must stand up for David versus Goliath in our courts.

[Mr Jones]

I will come back to that, which is something that I think my hon. Friend the Member for Kingston upon Hull East (Karl Turner) will refer to in his contribution.

The board minutes from 1999 show that the Post Office knew there were bugs in the system and software problems. It denied all the way through that, for example, the amounts that sub-postmasters inputted could be changed. That was just not true. It could be remotely done, and the hon. Member for North West Leicestershire and his constituent Mr Rudkin, who visited the headquarters where the data was being stored, proved that. In classic style, when he raised that the Post Office denied that he had ever visited the data centre in the first place, until he proved that he had. It was just one cover-up after another. The denial culture in the Post Office was described by Judge Fraser, in what I thought was a very good his judgment, as

“the 21st century equivalent of maintaining that the earth is flat”,

because the evidence was there all the way through. There is no way that anyone who took an objective look at the system, in terms of the Post Office or Fujitsu, the contractor, could argue that it was perfect.

[Duncan Baker (North Norfolk) (Con)]

It has also come to light that the people who were fixing the system from behind the scenes, as the right hon. Gentleman mentioned, and who could go in and balance the tills as it were, were incentivised and paid to be speedy and quickly fix the issues, which made a lot of these cases even worse, so that balances that were already poor got even worse.

[Mr Jones]

It was even worse than that: for many years the Post Office denied that that could ever be done. It was only in 2011, after campaigning by me and others, that the Post Office had the forensic accountants Second Sight take a look, and it discovered exactly what the hon. Gentleman has just outlined. But what does the Post Office do? It set up a mediation service, but still denied that there was any problem, even though the evidence was there.

As for the operator, Fujitsu, it knew that there were glitches. Indeed, I have to say that it is as guilty of the cover-up as the Post Office. I cannot comment on the judgment—I think the judge has possibly referred the case to the Crown Prosecution Service to get its involvement, so I do not really want to go into the detail—but Fujitsu has a lot to answer for.

[John Spellar (Warley) (Lab)]

My right hon. Friend is outlining a litany of maladministration at the very least. Have any individuals at management level in either at Post Office Ltd or Fujitsu ever been held accountable for this?

[Mr Jones]

I shall come to that, which is a very good point. The complete opposite: most have been promoted or, in one case, appointed as a Government adviser when she left the Post Office.

That denial then led the postmasters to get the group action together, with 555 taking the Post Office to court. The Post Office was still denying that there was a problem when it went into court; indeed, its consistent approach has been to deny any type of liability.

Let me turn to the role of the Post Office and that of Government. The Post Office is an arm’s length body from Government, but the sole shareholder is the Government. They have a shareholder representative on the board. Despite that, millions of pounds of public money are spent every year. In fact, it is a nationalised company, whether we like it or not.

But we are unable, as parliamentarians, to scrutinise the Post Office. For example, in spite of what it knew, it is estimated that the Post Office spent between £100 million and £120 million defending the indefensible in court. That was basically designed to whittle down the case, so that the other side ran out of money. Trying to scrutinise the Post Office and get it to account for that is virtually impossible. When I have asked parliamentary questions, they are referred to the Post Office. I will come on to the role of Ministers, but I am sorry that the right hon. Member for Kingston and Surbiton (Sir Edward Davey) is no longer in his place, because I would have liked him to answer for his role—or lack of role—when he was the Minister.

The Post Office falls somewhere between a private company and a public company, but then there are the individuals involved, as my right hon. Friend the Member for Warley (John Spellar) said. Paula Vennells was the chief executive of the Post Office. She left last year. Obviously, as a board member she knew what was going on, including the strategy in the court case and the bugs in the system. What happened? She got a CBE in the new year’s honours list for services to the Post Office. That is just rubbing salt into the wounds of these innocent people. There is a case for her having that honour removed, and I would like to know how she got it in the first place when the court case is ongoing. Added to that, she is now chair of Imperial College Healthcare NHS Trust. Again, I would like to know why and what due diligence was done on her as an individual.

[Lucy Allan (Telford) (Con)]

I congratulate the right hon. Gentleman on his excellent speech and his stoical determination in trying to get to the bottom of this. Is he also aware that the head of Fujitsu UK is now working in the Cabinet Office?

[Mr Jones]

I do not know whether the hon. Lady has read my speech, but I am just coming on to the Cabinet Office, because lo and behold, guess where Paula Vennells also ended up? She was a non-executive member of the Cabinet Office. I am told that she was removed from that post yesterday; I do not know whether it was because of this debate. I welcome that, but why is someone who has overseen this absolute scandal still allowed to hold public positions? Worse than that, she is a priest. I respect those who have religious faith, and she does, but the way that she has treated these people cannot be described as very Christian—she certainly would not pass the good Samaritan test, given the way she has ignored their pleas. I hope she thinks about people like Tom, who have lost their livelihoods and are now living in social housing because of her actions. It angers me that these individuals have gone scot-free, and they need to be answerable for their actions.

[John Spellar]

Maybe she fulfils the role of the Pharisee in that parable. Does this not also speak to a deeper problem in our society, where relentlessly, time after time, the great and the good look after each other and hand out these positions to each other, irrespective of whether they have been successful or a massive failure? We see that particularly in the health service, where people move from job to job, taking payments each time they go and leaving catastrophic failures. Is this not a deeper failure in the system?

[Mr Jones]

It is, but how could somebody be given a CBE when this scandal was out there? How could somebody be appointed to the non-executive board of the Cabinet Office and a healthcare trust, given what is coming out of this court case? I find that remarkable.

Then there is the role of Government. When the right hon. Member for Kingston and Surbiton was the Minister, he said that the Post Office

“continues to express full confidence in the integrity and robustness of the Horizon system and also categorically states that there is no remote access to the system or to individual branch terminals which would allow accounting records to be manipulated in any way.”

That is despite a board minute of 2009 which said that remote access was possible. What his role in it was I do not know, but he clearly did not ask many searching questions of the Post Office.

I turn to how we scrutinise the Post Office. I have tabled numerous written parliamentary questions, but because the Post Office is an arm’s length body, the Department for Business, Energy and Industrial Strategy shift them over to the Post Office—it is at arm’s length, and therefore it is nothing to do with the Department. There is a question here about how we can scrutinise the Post Office. This week, I asked a question about what the complex case review team in the Post Office is. My able assistant rang BEIS and asked, “What is it?” BEIS did not even know about it. The parliamentary question has now been given to the Ministry of Justice, but it does not know what that team is. I know that last week two cases were settled out of court, each for £300,000. This is public money we are talking about here, and we need full scrutiny. I would love to see whether the Minister can shed some light on what this organisation actually is.

Then we come to the role of Ministers. I have already mentioned the right hon. Member for Kingston and Surbiton, but Jo Swinson, Claire Perry and the Minister’s immediate predecessor the hon. Member for Rochester and Strood (Kelly Tolhurst) were all involved. They all completely believed what they were being told by the Post Office, never asked any questions about how public money was being spent and allowed the Post Office to continue what it has been doing. The Government cannot say that they never knew about this, because when the new Government came to power in 2010, myself, James Arbuthnot and the hon. Member for North West Leicestershire went to see Oliver Letwin, then a Cabinet Office Minister, to put our case to him. He had sympathy for it, because he had a similar case in his constituency. What happened to that? Nothing happened at all. Clearly there is an issue that the Government cannot hide from it.

[Dame Diana Johnson (Kingston upon Hull North) (Lab)]

My right hon. Friend is making an excellent case. I want to raise with him this issue about MPs not being able to find out what happened. In the Hillsborough inquiry, the Bishop of Liverpool talked about

“The patronising disposition of unaccountable power”.

This is a classic case of exactly that.

I also want to put on the record how grateful my constituent Janet Skinner is that MPs such as my right hon. Friend and others have pursued this matter for many years to try to get justice for the people involved.

[Mr Jones]

I thank my hon. Friend for that. She uses a great description.

We then come on to the issue of compensation.

[Mr David Jones (Clwyd West) (Con)]

The right hon. Gentleman mentioned the issue of Ministers. Of course the Post Office has a non-executive director appointed by the Government. One must assume that that non-executive director is reporting to Ministers. Would that not be an interesting topic for the inquiry?

[Mr Jones]

Yes, and I was going come on to that, because I would love to know who those non-executive directors have been over the years and what they said to Ministers. If I had been the Minister, I would have had that person in and scrutinised what was going on, as I am sure the right hon. Gentleman would. That would certainly have applied in the past few months, given the hundreds of millions of pounds that have been spent defending the indefensible.

In December, the Post Office agreed a settlement worth £57 million. Unfortunately, most of that has been swallowed up in the fees and the after-the-event insurance that the litigants had to afford. I do not criticise the lawyers—the people who funded this—because without them we would not have got justice, but that leaves about £15,000 for each of the successful people in the class action. We must recall that my constituent has lost more than half a million pounds, and the Post Office is settling cases outside this settlement for £300,000. What has to happen now is that a scheme has to be set up to compensate individuals properly. We must remember that £15 million of those costs were legal costs for pursuing the case, and £4 million of that is VAT, which will go straight back to the Government. Over the time that Paula Vennells was at the Post Office, she earned nearly £5 million, which just shows how the individuals who have been affected are not having happy retirements and peace of mind, but have been put through this system. The issue is clear to me: the figures that are being paid out now privately need a scheme.

I wish to make a couple of further points before I finish. The first is that the National Federation of SubPostmasters needs winding up now. It is not independent, nobody joins it—sub-postmasters are auto-enrolled. It is basically an arm of the Post Office and is paid for by the Post Office. Surely if it is going to be an independent voice for sub-postmasters, it should be that.

If anyone saw the Business, Energy and Industrial Strategy Committee hearing last week, they will have seen the chief executive, who could not answer on how many of his members had been affected by Horizon or what his organisation had done about it. I will tell the House exactly what it did: nothing. In Tom Brown’s case it just said that the Post Office must be right. The organisation is a sham and it needs to be wound up now. We need an independent organisation to represent sub-postmasters—including through the recognition of the Communication Workers Union, which some people are members of—that can actually be an independent voice for sub-postmasters.

The other thing that I, the hon. Member for North West Leicestershire and James Arbuthnot did was to take some cases to the Criminal Cases Review Commission, because there are people who have been found guilty and in some cases jailed unfairly. I pay tribute to that body, which took the issue seriously and took on a number of cases. It has stayed those cases—quite rightly, in my opinion—until the outcome of the civil litigation. It is important that those cases are now moved on and considered, because there are miscarriages of justice in some of those cases that need to be put right very quickly.

The right of the Post Office to take forward its own prosecutions needs to be removed. This issue goes back many centuries in the Post Office’s history. When Tom Brown asked whether he could get the police or the Crown Prosecution Service involved in looking at the evidence against him, he was told no. Likewise, it was the same for everyone else. Removing that right is something that the Government could do straight away, because there is no adequate oversight of how cases are being prosecuted. In Judge Fraser’s summing up, he described the contract and the way in which the Post Office acted as

“capricious or arbitrary ways which would not be unfamiliar to a mid-Victorian factory-owner”,

and said that the Post Office appears to

“conduct itself as though it is answerable only to itself.”

That is the case: it was answerable only to itself, with little or no insight in terms of oversight from Government.

Let me say what needs to be put right now. I have already mentioned that compensation needs to be put in place. We now need a full independent inquiry, and in a response in Prime Minister’s questions on 26 February, the Prime Minister indicated that that might be the case, calling the issue a “scandal”. In response to Lord Arbuthnot in the other place on 5 March, Lord Callanan said that the issue would be under consideration. We need as a matter of urgency an inquiry to cover not just what has gone on but how we can improve the situation for the future, and it has to be independent of Government. The Business, Energy and Industrial Strategy Committee is looking into the matter, and I give credit to it for doing that, but we need some recommendations about what went on in the past. I am sorry, but as my right hon. Friend the Member for Warley said, we need to expose who did what. I have to say, if in some cases what I would argue was criminal activity took place, people have to be prosecuted. Given their involvement, they certainly need to be removed from any public bodies on which they currently serve.

The Minister’s predecessors have not been good at looking into this issue. They have not asked the right questions—they have not asked questions of their officials or the Post Office. The Minister now has a chance to put this right. I know that he spoke to Alan Bates yesterday, and I know that he is hiding behind the court case in terms of compensation—his officials are saying that they cannot get any more. I have to say: please do not do that. It is now time for bold action. If we do not take action, this injustice will continue.

Let me finish with this: my constituent Tom Brown should be enjoying a happy, well-funded retirement, but he is not. He is still a proud man, as I said—he is a man who has not lost his dignity—but he is living in social housing with his son, and that is not his fault; it is down to people such as Paula Vennells and the board at the Post Office, and the failure and cover-ups that have been perpetrated by individuals. The Government, who should have stood up for him, have turned a blind eye.

[Several hon. Members rose—]

--- Later in debate ---

[Jerome Mayhew (Broadland) (Con)]

Scandals come and scandals go, and both as a former barrister and as a new Member of this House, it is all too easy when we see a raft of paperwork coming across our desks to scan through the details and forget that each of these scandals is made up of individual cases—individual human stories—so I beg the indulgence of the House and ask to reprise the story of Siobhan Sayer, a constituent of mine who 14 years ago was a sub-postmistress and had trouble balancing accounts. She did not hide this issue; she highlighted it and asked for help—indeed, she asked for help from the Post Office. Eventually, that help came, in the form of three auditors. They did not assist her in balancing the books. Instead, they suspended her, they accused her of theft, they searched her house, asking her where she had hidden the money, and then they interrogated her to such an extent that it stopped only when she physically collapsed. But it did not end there: they took the further step of prosecuting her, both for theft and for false accounting.

That young lady was pressurised to plead guilty to the lesser charge of false accounting in order to avoid a prison sentence for theft. As a former barrister, I can understand why, in the face of the seemingly impenetrable evidence of a robust system in the form of Horizon, that advice might have been given. Having pleaded guilty, she was sentenced to 10 months’ imprisonment, suspended for two years, and 200 hours of community service. That is terrible. That is a true scandal. But it is worse than that, because she was shamed in her community, she was ostracised by her friends, and her mental and emotional health was hit to such an extent that she was unable to leave her home for two years. That is the consequence of the actions and inactions of the Post Office and its servant, Fujitsu.

Why did that happen? Undoubtedly, it happened because the Post Office did not care to believe in the honesty of its own staff. It refused to believe that the system could be wrong, despite its own evidence mounting up to the contrary.

[Mr Kevan Jones]

Does the hon. Gentleman agree that it is remarkable that there is a minute showing that the Post Office board knew in 1999 that the system had its faults?

--- Later in debate ---

[Mr Kevan Jones]

I thank all hon. and right hon. Members who took part in the debate. Could I say one thing to the Minister? He should not just parrot what his civil servants say to him. The court case did not result in a comprehensive settlement. He has admitted that the Criminal Cases Review Commission is settling cases that did not come before the court. His Department did not even know what that was when we rang it this week. Two such cases were settled in the last month for £300,000 each. If we are to get justice, we have to look at giving the same amount of compensation to those who took the court case forward.

The Minister has an opportunity here. I have been a Minister, and it is a great privilege, but it is not about sitting on that Front Bench or carrying the red box; it is about making a difference. The Minister has an opportunity to make a real difference and put right a wrong. He cannot carry on as his predecessors have done and ignore the truth. I challenge him: be brave, Minister. Please, put this right; it is in your hands. No matter what obstruction he has from his officials, he should challenge them.

Motion lapsed (Standing Order No. 9(3)).

Draft Client Money Protection Schemes for Property Agents (Approval and Designation of Schemes) (Amendment) Regulations 2020

Lord Beamish Excerpts

Monday 2nd March 2020 General Committees

[Mr Kevan Jones (North Durham) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Davies. I do not object to the regulations, but are we setting up here a system for wholesale fraud and money laundering by unscrupulous individuals? I do not suggest for a minute that most letting agents are unscrupulous; most are legitimate businesses providing a service, and anything that protects clients’ money is important. However, I am concerned about these pooled accounts. As the Minister said, they are not like ordinary bank accounts, because they contain not the business’s money but someone else’s money. Some large letting agents could hold money from several hundred thousand people in one account. Who is going to ensure that these pooled accounts will not be used as a way of money laundering?

Surely an easy way around it would be to have fictitious tenancies. Say for example that I invented you as an individual, Mr Davies, and said that you had rented a property and given me £2,000, and I put it into an account, and several months later I say that the tenancy has finished and I have to pay you the money back. Are we not possibly creating a problem for the banks in how they monitor these accounts?

Likewise, if we have individuals who legitimately give a letting agent £100, but what is put into the account is another £900, or £1,000 altogether, there is no way of linking individuals. Will the bank have any oversight of how many individuals the money covers? Otherwise, it does not take a genius to work out how someone could quite clearly manipulate these accounts to launder quite large sums of money, especially if we are talking about large numbers of individuals.

I do not object to the regulation, but I wonder about the way it has been set up, who will be looking at these accounts and whether there will be a random audit, for example, of individual pooled accounts. Otherwise, it could be open to a lot of fraud. I am not suggesting for one minute that the majority of letting agents would do this, but it is interesting to note that whenever the Government or the state invent a new tax or a new system, there are always people looking for ways to exploit it. This would be an obvious one for them to be able to do so.

[Christopher Pincher]

I am grateful to the spokesman for the official Opposition for agreeing to support this statutory instrument, and to the right hon. Member for North Durham for his questions.

The hon. Member for Stockton North asked a number of questions. He began by asking how letting agents and their clients can have confidence that their money is not being in any way misappropriated or misused. I point him to the statistics, which show that since 1 April 2019, there have been only 37 valid client money protection schemes, totalling less than £14,000, against the scheme, which manages £3.4 billion of client money. Therefore, the confidence levels of those people, whether they be landlords or tenants, should be high. That also goes some way to addressing the questions asked by the right hon. Member for North Durham.

[Mr Kevan Jones]

I am talking about how bank accounts will be operated in practice and who will look at them. I should think that the majority are perfectly fine, but who will be looking at whether those pooled accounts are proper pooled accounts or are being used for fraudulent activity? Who will actually do it?

[Christopher Pincher]

The right hon. Gentleman is perfectly entitled and right to ask those questions. We have robust anti-money laundering legislation, as he knows—he has probably debated it in the Chamber of the House of Commons. We believe that the counter-terrorist financing supervisory regime is comprehensive. The banks have to look at the money passing through their accounts, and that is one reason we are here today, because they are taking care, as they properly should, to ensure that the money passing through the accounts they manage is clean. That is placing a burden on a small number of letting agents, who we do not believe are engaged in any money laundering and whose funds we do not believe are significant, but who none the less want to conclude their business.

[Christopher Pincher]

My hon. Friend makes the point even more eloquently than I can. Fundamentally, we have robust systems in place to protect against money laundering. I do not think that the extension of the statutory instrument will undermine them in any way.

[Mr Kevan Jones]

I am not suggesting that; all I am saying is that we are opening up a potential route for money laundering. There is clear evidence, in my constituency and others, where property prices are very low, that a good way of laundering illicit gains is to buy a property and, in some cases, to rent them out through individuals whom the hon. Member for East Worthing and Shoreham might want to say are legitimate. In some cases they are not. All I am trying to get to is the money laundering mechanism, and what we will do to ensure that banks, or anybody administering those pooled accounts, are scrutinised. I ask the question to put it on the record.

[Christopher Pincher]

The right hon. Gentleman makes his point. Pooled accounts exist already, and are managed by regulated organisations and groups. We are trying to ensure that the unregulated bodies—the smaller organisations that we do not believe present a significant risk—can do their business as well. That is why the joint committee is doing its work.

The hon. Member for Stockton North asked why the joint committee is doing that work, rather than some other body. It is because the joint committee combines the United Kingdom trade organisations and representatives of the financial services industry. We believe that it is best placed to ensure that the right level of regulation can be put in place—the right method of ensuring that banks can feel that the systems that they operate are sensible, compliant and deliver safeguards against money laundering.

Local Government Finance (England)

Lord Beamish Excerpts

Monday 24th February 2020 Commons Chamber

[Robert Jenrick]

If the hon. Lady is concerned about funding for local public services, she will join me and my colleagues in supporting the best local government settlement we have seen for a decade. She says that council tax is regressive, so what happened under the last Labour Government, when council tax doubled? Under this Government council tax has fallen by 6% in real terms, while we have continued to deliver important public services.

I was determined to champion local government in September’s spending review. I want to thank those who responded so constructively to the two consultations we ran at the end of last year. We can be proud of what we have achieved, and particularly of how the settlement delivers for the most vulnerable in society. It secures £1 billion of new Government funding for social care, alongside the extra £410 million that we invested last year. That is a major new injection of funding that will help local authorities to meet the undoubted rising pressures on the care system, which we all see in our communities and in our own lives.

We will also be maintaining all funding going into the improved better care fund, at the same time as the NHS contribution to the better care fund rises by 3.4% above inflation to over £4 billion, in line with the broader NHS settlement. Alongside this, I am allowing local authorities responsible for adult social care to raise council tax by an additional 2% above the core referendum principle. That is a necessary step that is specifically targeted to meet demand and ensure that vulnerable people are supported.

[Mr Kevan Jones (North Durham) (Lab)]

Councils such as Durham County Council are being disadvantaged, because even if they increase their council tax by 2% to cover that element, it will raise far less than could be raised by some councils in the south, which have larger council tax bases. The demands on Durham County Council are far greater than those on councils in Surrey, for example, because we have fewer self-funders, so how can that be fair?

[Robert Jenrick]

I will turn now to the specifics for the right hon. Gentleman’s constituency. This settlement will see a 7.1% increase in core spending power, and the additional social care grant for next year will be £12.8 million, which is a very significant increase. For the reasons he has just set out, we decided to apply an equalisation to the social care precept, which will ensure that those areas of the country with the lowest tax base will see more funding flow to them, in a redistribution of funding from those areas elsewhere in the country that, as he rightly says, have higher tax bases. We chose to do that at £150 million, which is more than has been done in previous settlements, precisely to answer the point he makes.

--- Later in debate ---

[Andrew Gwynne (Denton and Reddish) (Lab)]

First, I want to thank our dedicated council staff, officers and our local councillors of all political persuasions and none, who over the past decade have had to contend with year-on-year budget cuts and a Government who have failed to take any meaningful action on the largest issues they face—the crises in children’s services and in adult social care. Yet our councils have ploughed on, and they have continued to innovate. They continue to provide good services for many of our local communities, because councils are the linchpin of our communities. They ensure the delivery of proper, cohesive, joined-up services with other agencies—whether housing associations, the police, leisure services or youth services—but it is crucial that our councils and our councillors are given the resources that they need, and that we do not cost-shunt from one area of the public sector to another.

As the Secretary of State will know, the finance settlement is one of the most important events in the local government calendar, so it was disappointing that the settlement this year was subject to delay and a degree of uncertainty because of the general election. It was also disappointing that the Secretary of State did not deliver the provisional settlement by way of the usual oral statement before Christmas, especially considering the cancellation of Housing, Communities and Local Government questions for almost six months.

It is at least pleasing to see the Secretary of State in his place today, after he survived the reshuffle before the recess we have just returned from. Reshuffles can be a tough business—a sigh of relief from the two survivors on the Front Bench facing me, but brutal for those who are moved or dropped. Who knows what will happen after 4 April on this side of the House, so in the spirit of solidarity, I want to pay tribute to the right hon. Member for Tatton (Esther McVey), the former Housing Minister, for all that she did in pushing for greater investment in social housing, in particular. I would also like to thank the right hon. Member for Rossendale and Darwen (Jake Berry), the former Northern Powerhouse Minister. We certainly had a fair few run-ins over the years, but I never doubted his commitment to the job of representing a rejuvenated north of England in Government, and I would like to thank him for his work. I sincerely welcome the new team on the Government Front Bench, as I did earlier today before Housing, Communities and Local Government questions.

I am happy to recognise a local government finance settlement today that at last begins to move in the right direction and provides an overall uplift in spending power. This is an uplift, though, with some big provisos and assumptions. It must be considered in the overall context. Councils are at a low base after 10 years of reductions and cuts, and local authorities still face very significant pressures that this settlement does not address nearly enough.

Today the Secretary of State has offered what the Local Government Association has referred to as the “least worst” financial settlement since 2010. To be honest, after a decade of disappointment, it is easily done. In the past decade, funding for local government has fallen by 43%; since 2015 alone, it has fallen by 32%; and if we look at the Government’s preferred measurement, and include today’s settlement in full, we see that overall spending power is still 11% lower than it was in 2010. That is 11% less funding for our local public services, while residents continue to pay more every year for council tax and services are being cut. [Interruption.] The Secretary of State says it is a reduction; if council tax goes up every year, it is not a reduction for those people. Let me just say to him that the average band D council tax in England in 2010 was £1,439, in 2015 it was £1,484, in 2019-20 it was £1,750, and it is going up again this year too; those are increases in council tax however he tries to spin it.

We know that the cuts have not fallen equally across England. Labour-run authorities have seen their spending power fall on average by 14%, almost twice on average as much as the cuts forced on Tory-run authorities. I do not say that this is all political; it is a fact of geography, because areas like these are also often some of the more deprived areas that have the greatest needs in adult social care and children’s services, that have the greatest health inequalities, and that are more grant-dependent to fund services, because the property types in those areas mean that their council tax base is low, and that cannot be changed quickly or easily. But the difference between the figures for funding and spending power is also revealing, because it shows how much the Government have pushed the burden for funding local services away from the centre and on to local taxpayers.

In an ideal world of localism that is not a bad thing, but the playing field is not level and nor is the game currently fair. We are now in the bizarre situation where people are paying more for less, and that is unsustainable for the long-term viability of the local government sector, something I cherish, having been a councillor for 12 years before entering this House.

In order to achieve the Community Secretary’s stated 4.4% increase in spending power, residents will once again be forced to bear the burden of inflation-busting council tax increases. The Government’s plans are entirely predicated on this increase happening in every town and county hall—and that in itself is not a certainty—and so the “best settlement in a decade” boast from the Secretary of State depends on this happening, or the 4.4% that he quotes will not be reached.

[Mr Kevan Jones]

Not only do we have a system that has been deliberately skewed to benefit certain parts of the country, but there are added pressures on certain councils, such as Durham and other northern councils, in terms of social care and looked-after children. With social care, we have fewer self-funders, and there are over 900 looked-after children in Durham, which should be compared with the figures for some other areas. That means that 60% of the budget is now being spent in just those two areas, and in some places—such as Hartlepool, I think—it is about 65%.

[Andrew Gwynne]

My right hon. Friend is absolutely right, because the people-based services—children’s services and adult social care—are services that most of our constituents never have to use and where they do not see the money being spent, but the things that they care about and think these inflation-busting council tax increases are going towards, the neighbourhood services, are the things that over the past 10 years have been squeezed and squeezed, and in some cases have disappeared altogether.

Let us be clear: I do not expect churlishness or hypocrisy from Ministers or Members of the governing party in the upcoming local elections if councils increase their council tax and the social care levy by the maximum amount, because this finance settlement that we are agreeing tonight requires these increases to happen in full in every town and county hall in the country, to meet the 4.4% claim that is being made. What we know is that one third of this year’s growth would come directly from the general council tax increases of the maximum of 2.99%, with an additional one-fifth of the whole figure of growth coming from the social care levy being charged at the maximum of 2%. That is over 50% of the funding growth that has been lauded tonight coming from local taxation, not Government. As we know, its spread is very unequal, so we do not expect to see Ministers boasting about this settlement and then criticising councils for putting up council tax in the same breath. This settlement also fails to move beyond the sticking-plaster solutions that have been offered in recent years.

Solace’s local government finance spokesman, Martin Reeves, has criticised the Government’s approach, saying:

“the constraints placed on these pots usually means the money is spent on dealing with existing demand, demand that is itself often a symptom of structural (and often longstanding) funding shortfalls elsewhere in the system.”

Rather than this reactionary approach to funding, we need to be dealing with a system that is at breaking point, proactively investing in reforms to improve outcomes, particularly for the more vulnerable people in our communities. The National Audit Office has warned that a continuation could

“undermine strategic planning and create risks to value for money.”

I trust that the Secretary of State is working closely with the NAO on its review.

What I am speaking of today should not be any surprise to the Communities Secretary, because I am not the first person to raise concerns over the Government’s funding plans. Indeed, over one in 10 who responded to the Government’s consultation on the financial settlement objected to the way that the Government are increasingly using council tax to address the funding pressures the Government themselves have created, arguing that that would transfer the burden to local taxpayers. They argue, and they are right, that additional council tax flexibilities can have an uneven distributional effect, benefiting areas with larger tax bases while those with smaller tax bases continue to see gaps in their budgets grow.

Unfortunately, those same areas are often the ones that face the largest pressures on adult and children’s social care. For example, while Wigan has the potential to raise around £4.5 million from the council tax changes, Buckinghamshire can raise £12 million. For Wigan, that would barely let it break even on last year’s overspend as it managed increasing demand on care services, particularly caused by pressures in children’s services. Growth in demand is not slowing down, but the money to ensure that these essential services are in place is not coming from the Government and cannot be sufficiently raised in many parts of the country with the greatest call on these services.

A quarter of people who responded to the Government’s consultation were concerned, stating that the additional flexibility on council tax was not enough to meet the growing pressures on children’s services. One in five raised that concern in relation to adult social care. In 2018, the Local Government Association warned that the funding gap for adult social care alone will grow by £3.5 billion by 2025. Today it reported that over the past five years pressures on children’s services have pushed overspending to £3.2 billion. The number of children in care has grown by 28% in the past decade, and the number of children at risk of physical, emotional or sexual abuse or neglect has increased by 53%. I do not say that to make a political point. It should shame each and every one of us, on whichever side of the House we sit, that those most vulnerable children are being let down by a system that is broken.

The LGA has also warned that the funding promised in the finance settlement will not even be enough to cover the increase in costs from the rise in the national living wage from April. Even though demand continues to grow, councils will be forced to cut back on these services. This is not sustainable. I appreciate that there are no quick fixes. The Secretary of State knows my concern about the so-called fair funding review, but the figures that were used by the Local Government Association Labour Group were produced by the Tory-led LGA, whether he likes it or not. His Ministry was asked for clarification of whether or not those were in line with Government trends and thinking, and it gave its acknowledgement that they were.

I repeat my offer to the Secretary of State: we in the Opposition are willing to work with anyone who genuinely wants to fix our outdated and broken local government finance system, but it has to be genuinely fair and based on real needs. It needs to reflect the circumstances facing each local authority, including their ability to raise income, and it must properly take account of all kinds of need, including deprivation and health inequalities.

After a decade of decline and neglect, there is little surprise that the promise today of an uptick in spending power has largely been welcomed by the sector, and indeed, by us. We will not oppose the local government settlement. We will not oppose councils receiving any additional funding in today’s settlement, but let us be honest: this settlement, while welcome for a limited uplift, does not solve the financial crises faced by our town and county halls. It does not fix the two cost and demand-led services of adult and children’s social care, and it does not ease the squeeze on our hard-pressed neighbourhood services—all the things that our constituents think that their ever-increasing council tax bills go towards: the parks, the road repairs, the ground maintenance, community centres, street cleaning, libraries, street lighting and bins. There are also the contributions that are less tangible, such as the sense of place, community and local identity—the things that make us proud, or sometimes not proud, of where we live. All these things will continue to be cut or squeezed until or unless the funding crisis in children’s and adult social care is properly addressed and councils can start to rebuild our neighbourhood services again. Once we get to that place, that will be the time to welcome what is happening in local government. That will be the time to cheer. We will support the Secretary of State tonight, but let us get local government back to where it always should have been—at the heart of rebuilding our communities.

--- Later in debate ---

[Mr Richard Holden (North West Durham) (Con)]

With a 7.1% increase for County Durham today in the local government finance settlement and a 7.9% increase in police funding, both above the national average, I am delighted that the Opposition are not voting against these measures, especially given that the hon. Member for Denton and Reddish (Andrew Gwynne) wrote a letter to me just a few weeks ago saying that actually we were going to be facing cuts. It looks like quite the opposite is the case. I am looking forward to his letter outlining the increases we will be facing and welcoming the Government’s approach, especially given that Labour-controlled Durham County Council is still spending more than £50 million building a council headquarters on a floodplain, although this is a massively opposed by local people. I would quickly like to declare an interest in respect of the one point I would like to make in this debate.

[Mr Kevan Jones]

Will the hon. Gentleman give way?

[Mr Holden]

I am going to be very quick today. I wish to declare an interest, in that I am co-chair of the all-party group on local democracy. I pay tribute to my hon. Friend the Member for Cities of London and Westminster (Nickie Aiken), who said that she wants the most bottom-up approach possible when it comes to councils. As such, I urge my right hon. Friend the Secretary of State to reintroduce the Bill to exclude public lavatories from business rates. That is exactly what most local councils want. It would save Wolsingham parish council in my constituency £750 a year, and it would save local councils throughout the country more than £8 million a year.

In conclusion, I welcome what I hope is the start of levelling up, from both the Ministry of Housing, Communities and Local Government and from the Home Office in the form of the police settlement. I hope this is the start of things to come.

--- Later in debate ---

[Mr Kevan Jones (North Durham) (Lab)]

The Secretary of State opened the debate by announcing that this is the best local government funding settlement for a decade. That would not take much beating when we consider what has happened over the past 10 years. In the previous debate, on police funding, I referred to the year-zero approach, because it is as though anything that happened before December 2019 was someone else’s fault and had nothing at all to do with this Government; as though they are a new Administration who are coming in to put everything right. But most of the Ministers now on the Front Bench voted for the austerity of the past 10 years, so it is with some chutzpah that they are now trying to convince us that they had nothing to do with it.

We also now have a key in-word, which we will hear a lot more of. The hon. Member for North West Durham (Mr Holden) mentioned it when he talked about “levelling up”. Well, it will take a hell of a lot of levelling up. I will come on to answer his points about Durham County Council in a minute, because he is clearly going to try to play dog-whistle politics, which does not surprise me at all. He welcomes this statement as though it means extra money for the county council. Yes, this settlement is for this year—it is a one-year settlement. I hope that when the council and the police commissioner put up the local government tax, he does not blame Durham County Council. To do that would be to abnegate his responsibilities, as he would be welcoming it in this place, but saying another thing in County Durham. I look forward to him supporting whatever difficult decision the police commissioner and Durham County Council have to make on the local council tax precept. No doubt, he will try to say something different locally.

This is a one-year settlement. We now have the so-called new fairer funding formula coming in, but we need to remind ourselves about what has gone on previously. Durham County Council has lost 40% of its budget in the past 10 years. That is £232 million. In the early days, when we had Eric Pickles as Secretary of State, this could all be done by cutting back on pot plants and getting rid of chief officers. Well, I am sorry, but I defy anybody who says that we can get 40% efficiencies out of an organisation and still deliver the same services, because we clearly cannot.

What we have had today is the Secretary of State saying that we will have a fairer funding settlement that respects need. That is not what the Government have been doing over the past 10 years. On every indication, the funding formula is seeing money being moved from areas of deprivation to areas of affluence. The National Audit Office has identified that. While Durham County Council has taken huge cuts, places such as Surrey and Wokingham have had increases in their core spending budget. We get to a ridiculous situation now where, if we look at 2019-20, core spending per dwelling for Durham is £1,727, whereas for Surrey it is £2,004. People might ask what difference it makes. It comes back to what we have heard for the past 10 years, which is not only that austerity is needed, but that, somehow, everywhere in the country is the same in terms of delivering services—whether in Surrey, in an inner-city metropolitan area or in County Durham. The two main drivers that are swallowing up most of the budget of counties such as Durham are adult social care and looked-after children.

[Matt Western (Warwick and Leamington) (Lab)]

My right hon. Friend is being very generous. He is making a terrific speech as usual. Does he agree that this issue, as he is describing it, is actually compounded by the deceit that, as part of the devolution of power and fiscal responsibility, these authorities would be able to retain more business rates, but the reality is that the Government do not want increases in business rates, and neither do businesses, because they cannot afford them. The reality is that those authorities will not be given those moneys in any event.

[Mr Jones]

I will come on to business rates in a minute. I will give an explanation as to why, for example, Durham County Council is doing what it is doing with its headquarters. I would argue that it is a response to Government policy.

If we look at adult social care in Durham, we see that there are 3,295 people in home care, 3,151 in residential care, 736 in supported living schemes, and another 763 receiving direct payments. The difference between Durham and places such as Surrey is that we have a higher proportion of people requiring council support. As my hon. Friend the Member for Kingston upon Hull West and Hessle (Emma Hardy) identified, we do not have a large package of support. We actually self-finance, and that makes a big difference in terms of the pressures on local councils.

The same is true if we consider looked-after children not just in Durham, but across the north-east. In Durham, we have 900 children in local authority care. As was said earlier, the number of looked-after children has increased by 20% in the last decade, but in the north-east it increased by 72% in the same period. Two councils in the north-east, Hartlepool Borough Council and Middlesbrough Council, have more than twice the national average number, and five times more looked-after children than Wokingham Borough Council. The new funding formula has to take that need into account. The idea that everywhere is the same is complete and utter nonsense.

The bigger debate, which has not really been had, is about the Government’s direction of travel over the past 10 years, which has been to reduce the amount of central Government funding to local authorities and to push the burden on to the local council tax base. Again, County Durham is at a disadvantage. More than 50% of our properties are in band A, so an increase of 1% in Durham raises very little compared to such an increase in more affluent areas with large numbers of higher-band properties. That will have to be taken into consideration. For true levelling up, there will have to be a complete reversal of what has happened over the past 10 years. If we get to a situation in which what a local authority requires is raised locally, councils such as mine will be at a huge disadvantage, certainly given the increase in the number of looked-after children and individuals in care in the area.

[Preet Kaur Gill (Birmingham, Edgbaston) (Lab/Co-op)]

My right hon. Friend is making an excellent speech. Does he agree that the Government have to stop running councils into the ground with their cuts, and should instead invest properly to halt and reverse the real-world implications of their ideologically driven austerity policy?

[Mr Jones]

That has to be what we want local government to do. The Chairman of the Select Committee, my hon. Friend the Member for Sheffield South East (Mr Betts) said that, too. It is no good deluding people if, locally, more than 60% of the budget has been taken up by two areas. As my hon. Friend the Member for Denton and Reddish (Andrew Gwynne) said, most people do not have any visibility of that. When they pay their council tax, they see their bins emptied and environmental improvements, but if 60-odd per cent. of a council’s budget—I think the figure is higher for some councils—is going on two sectors, that will be difficult to explain to people.

A decision has to be taken about what proposals will be put forward on business rate retention. If it is not, the lack of the clarity that local government needs will create real problems for councils such as Durham County Council. There is an opportunity to grow the business rate. I will explain to the hon. Member for North West Durham (Mr Holden) why Durham County Council decided to downsize its headquarters and move to the centre of the city: to open up an area for investment and create up to 7,000 jobs in order to grow the council tax base. It is doing exactly what the Government want. In addition, it has moved jobs away from County Hall to places such as Crook in his constituency. I do not hear him arguing against moving county jobs to his constituency. Dog-whistle politics is fine, but he needs to look at the facts first.

[Mr Holden]

Will the right hon. Gentleman give way, as he is attacking me directly?

[Mr Jones]

In a minute. If he wants to say that he does not welcome county council jobs to Crook, that is fine; I will have them in Chester-le-Street.

[Mr Holden]

I would be very happy if the county council was just downsizing its current office; what I do not understand is why the Labour-controlled county council is spending £50 million building a brand new centre on a floodplain. Why not just make better use of the current site?

[Mr Jones]

If the hon. Gentleman has been in the current building, he will know that large sections of it are empty.

[Mr Holden]

Exactly!

[Mr Jones]

Wait a minute. It was built in the 1960s, it is full of asbestos and it is very energy-inefficient. If he wants to put capital—public money—into it, fine, but it will not happen, because the money is not there, and what he suggests would cost a lot more than what has been proposed. In addition to that, the council is going to save somewhere in the region of £300,000 a year in running costs. In terms of trying to grow our council tax base in County Durham, that is what the Government want us to do. That is a good, prudent way in which the council is operating. As I say, if the hon. Gentleman is against jobs going to his constituency, please redirect them to mine, because I will have them. [Interruption.] Well, I just ask him to learn his facts. If he wants dog-whistle politics, which he obviously does, then fine, but let us see what is to the benefit—[Interruption.]

[Mr Speaker]

Order. If the hon. Member wants to intervene, he should intervene. I am not having continuous noise across the Chamber.

[Mr Jones]

I am sorry, Mr Speaker—I never had this problem with the hon. Gentleman’s predecessor.

The Secretary of State referred to the grants on public health. Again, this issue needs to be addressed, because it is a driver of inequalities. In the police precept debate earlier, we talked about mental health and support for the most vulnerable in our community. The Advisory Committee on Resource Allocation came forward with a formula that meant that from April 2020 County Durham would have lost £19 million whereas Surrey would have gained £14 million. I say in a spirit of genuine co-operation with the hon. Member for North West Durham (Mr Holden) that I hope he is going to argue, and lobby his Government, to ensure that this inequality, which has been there for the past 10 years, will not continue.

Let me turn to the new homes bonus, which, again, disadvantages not only Durham but other councils. The top-slicing of the new homes bonus leads to a situation where, again, southern councils are gaining from this allocation and Durham and others are losing. That cannot be fair in any type of system. I therefore look forward to the new, radical approach that has been announced by the Secretary of State in arguing that we will level up these grants and the new formula will recognise need, because if it does genuinely recognise need, then the likes of County Durham will gain through this process. It is not acceptable to say that we can wash away the past 10 years as though they did not happen; they did happen. Without the fundamental question about what we want local government to do and how we want to fund it—

[Mr Holden]

If the right hon. Gentleman wants to talk about a year zero starting last year, I wonder whether he would like to talk about a year zero starting in 2010—as if nothing was a problem then, when this country was borrowing £1 in every £4 it was spending due to the policies he had voted for since 2001.

[Mr Jones]

I do not want to get off the subject, but the hon. Gentleman will have to try better than that, because I was a Member then, and I remember, for example, the investment in Sure Start in County Durham, in my constituency and his constituency. I remember the six new schools, two new hospitals and three new doctors surgeries that were built in my constituency—all that investment. With regard to this nonsense that Labour spent too much, he should look back to just before the crash. What were David Cameron and George Osborne, and their Front Benchers, doing then? They were not just matching our spending—they were calling for more expenditure. So if we were profligate, then they, frankly, were completely reckless. When I was a Defence Minister, if I had followed what they wanted to do then, we would have increased the defence budget by billions. What did they do when they first came in in 2010? They slashed it by 16%. So I shall take no lessons from anyone on the Conservative Benches about Labour spending too much, because the Conservative party at the time was calling for more. I was going to —[Interruption.] I will carry on if those on the Front Bench want me to.

The hon. Member for North West Durham cannot ignore the fact that his party, in coalition and in government, has been in power for 10 years. Decisions being taken now are affecting the lives of his and my constituents, and we must put those right. I am prepared to work with him to argue for more money for Durham County Council and others, but I will not get into the petty dog-whistle politics of his portrayal of Durham County Council.

I genuinely think that there is an opportunity here. If the Government get this right and follow through on a fairer funding formula, they will have my full support, but it must be fairer. There was a time when I was in local government that it was not only a proud achievement for many Labour politicians but it was something that the Conservative party was proud of too.

Ministry of Housing, Communities and Local Government

Lord Beamish Excerpts

1st reading: House of Commons
Tuesday 2nd July 2019 Commons Chamber

[Mr Kevan Jones (North Durham) (Lab)]

I would like to begin by addressing the remarks of the hon. Member for Oxford West and Abingdon (Layla Moran). I am sorry, but her party, the Liberal Democrats, were not innocent bystanders in austerity. They were active participants. She says she wants to look to the future—fine—but the effects of the decisions taken under the coalition Government are still biting today, not just in local government but across a whole host of Government policies. I am sorry, but people need to keep being reminded of that.

The National Audit Office and the Centre for Cities produced very robust reports on the effects of the cuts by the coalition Government and this Government to local government funding. Those cuts have been, as my hon. Friend the Member for Sheffield South East (Mr Betts) said, most severe in their effect. They have also not been very fair. For example, the most deprived areas in the north have borne the biggest share of the cuts, while areas such as Surrey and Wokingham have had few cuts that have had very little effect.

Durham County Council has faced massive cuts. Since 2010-11, its budget has been cut by £242 million. It has also been put at a disadvantage. As my hon. Friend the Member for Sheffield South East alluded to earlier, the Government have been moving funding from central Government to locally raised taxation. That puts authorities such as Durham at a huge disadvantage, because we have a low council tax base and a low business tax rate base. Some 50% of properties in County Durham are in council tax band A, so its ability to raise local taxation, even if it wanted to, is limited compared to others that have a larger and more diverse council tax base. If that was not bad enough, in addition to what is coming down the road with the fairer funding formula, County Durham will have to find another £39 million of cuts over the next four years. Under that strangely named fairer funding formula, County Durham loses an additional £10 million. Even though it is a deprived area, since 2011 it has already faced a higher than average core spending cut. Yet if we look at the average across the country, Durham is below average, so I do not know how that can be fair.

There is an idea, not just in local government funding but in education funding and everything else, that somehow every single part of the country is the same. We heard it from the hon. Member for The Cotswolds (Sir Geoffrey Clifton-Brown), who argued that the Cotswolds could somehow be compared to an inner-city borough such as Hackney. It is quite clear that deprived areas such as County Durham have a huge call on their resources from the two great drivers, adult social care and children’s care.

In 2018, there were 1,157 looked-after children in County Durham. Wokingham, which has not had the savage cuts that County Durham has had to face, looks after 141 children. We not comparing like with like. These are not services that councils can pick and choose from either; they fall under statutory provision. I have to say that Durham does them very well, but they create huge demands on the council budget that are not reflected in the support received from central Government. The cut in core spending has been dramatic in County Durham. Government figures show that the average core spending per dwelling is £1,908. In Durham, it is £1,727. In Surrey, which I would argue is a little bit more affluent than County Durham, it is £2,004. If we were brought up to even the England average, County Durham would get an additional £44 million.

This is about not only the savage effects of austerity on local government, but the pork barrel way in which the Government have distributed the money, clearly favouring areas that have supported the Conservative party and its coalition partners in the past, and punishing northern councils. In addition to the cuts that have taken place already, we have the public health funding formula, on which I led a Westminster Hall debate a few weeks ago. How can it be right that County Durham will lose £19 million a year—35% of its budget—while Surrey County Council increases its public health budget by £14 million a year?

Those funding decisions are clearly designed to support certain areas. [Interruption.] The right hon. Member for Gainsborough (Sir Edward Leigh) chunters from a sedentary position, but the facts are there in black and white. It has been a deliberate policy of this Government since—[Interruption.] Oh, he has got tired and gone off for a sleep. Clearly, as my hon. Friend the Member for Sheffield South East said, we need not only to look at fairer funding for local government but to ask what we need it to do. Like him, I feel that we will end up in a situation where some councils go bankrupt—some already have—and others struggle on delivering services, while being blamed by the Government for not doing so, when they have limited ability even to raise council tax locally.

In the 1980s, when I was first elected to local government, the Conservative party was a proud party of local government. It actively supported local government, cared about it and, as my hon. Friend said, thought it was an important part of the glue of democracy and of how we provided for communities. Alas, that seems a distant past: as I said, local government clearly will not be a priority for whoever wins the Conservative party leadership contest. This cannot go on, or we will end up in a situation where the people we were elected to serve suffer and councils throughout the country become unsustainable.

--- Later in debate ---

[Mr Kevan Jones]

My hon. Friend is making some good points, but does he also agree that one of the Government’s mistakes in terms of devolution is holding to the idea that that can be done only if there is a mayor? That has led to some very strange situations. For example, in the north-east we have a hotch-potch of different responsibilities in different areas.

[Gareth Snell]

I entirely agree, and the same goes for LEP boundaries. If we are going to do this, there has to be a way forward that fits local area needs.

According to the NAO, £6 billion is currently tied up between section 106 agreements and the community infrastructure levy. That is a huge amount of money, but the CIL aspect of that cannot be spent on building new affordable housing because it is for low-level infrastructure. I urge the Minister to review that. It is a pot of money that exists in local authorities that could be unlocked to readily transform the way in which our local authorities work.

At its best local government is flexible, lean and hungry to do things, but that agility is fast becoming fragility, and I fear that if there is one more knock to the system everything will shatter.