Landfill Tax Fraud

Lord Beamish Excerpts

Thursday 12th January 2023 Commons Chamber

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

I beg to move,

That this House has considered the matter of landfill tax fraud.

I want to say how pleased I am that the Backbench Business Committee agreed to this debate and thank hon. Members from across the House for their support in securing it.

After I secured the debate, a journalist asked me, “What’s landfill tax fraud?” I said, “Yes, I do accept it’s quite a niche subject.” It might be seen as an anorak subject, but it is something that I have been involved with, along with the right hon. Member for Haltemprice and Howden (Mr Davis), for nearly 10 years now. I think he would agree that we are both proud anorak wearers when it comes to this matter, because it is a serious issue for the UK.

I have dug into the issue. There are solutions to it, but blind eyes have been turned by various Government agencies. There is no political will to really grasp the issue and the devastating effect it is having on our revenue collection, but also in various communities.

Have we made progress? Slightly, but there have been missed opportunities over the years. The right hon. Gentleman, who has been involved in this for as long as I have, and I cannot understand why the problem has not been grasped when there are clear solutions, some provided by the industry and some by me, the right hon. Gentleman and other Members.

Landfill tax was introduced in 1996, with the quite honourable aim of reducing the amount of domestic and other waste going into landfill and of pushing recycling—no one could disagree with that. It could be argued that it has worked in reducing the amount of waste going to landfill, but its effectiveness is questionable, because we do not know what is going into landfill.

The industry is worth some £9 billion a year—not a small part of our economy. Like anything generating large amounts of revenue, it attracts criminals and others who want to exploit the system. I suggest that the way in which the Government have dealt with this area, with a lack of regulation and oversight, has allowed criminals and others to benefit. As the Public Accounts Committee report recently said, waste crime in this country has basically been decriminalised because of the lack of action.

People may ask, “Why is this important?” Well, there is a cost to the public purse through uncollected tax revenue that could support all the things that our constituents want. However, it also funds serious and organised crime gangs, which undercut the legitimate businesses that pay their taxes and follow the regulations. The other factor is the future environmental cost. We do not know what is being disposed of at some sites, so there will be a cost relating to their future degradation, with some requiring remediation. Who will pick up that cost? It will be the taxpayer.

[Jim Shannon (Strangford) (DUP)]

I commend the right hon. Gentleman for securing this debate, because such problems also affect Northern Ireland. I am ever mindful of what he is saying, and I think others will reinforce his points, so is it his intention to ask the Minister to look at legislative change to ensure that the criminal gangs who break the law face punitive fines and imprisonment at a level commensurate with the activity? In other words, do the punishments need to be increased?

[Mr Jones]

I am grateful to the hon. Gentleman for this intervention. The frustration is that we do not need new legislation; we just need Government action to fund and implement the existing powers.

My next point, which will also affect the hon. Gentleman’s part of the United Kingdom, is about the effect on local communities. I know that my hon. Friend the Member for Blaydon (Liz Twist), the hon. Member for Newcastle-under-Lyme (Aaron Bell) and the right hon. Member for Haltemprice and Howden will mention specific examples from their constituencies of where local communities feel powerless to stop the huge environmental damage being done to the area. However, this is not down to any lack of trying by those right hon. and hon. Members, who have campaigned for change for many years.

The PAC report estimates that the cost of landfill tax fraud and waste crime is about £1 billion a year. However, that figure is just like me sticking my finger in the air, because basically no one knows. That is a conservative estimate, and the reason for that, as the report says, is that we have basically given up trying to monitor what is happening.

How does landfill tax fraud work in practice? There are strands to it. The first is the way in which the tax was implemented. There are two rates, and those rates went up between 2008 and 2014. The rate for inert or inactive waste is currently £3.15 a tonne, and the standard for ordinary waste is £98.60 a tonne. The first element of criminality involves saying that waste is inert when it is not. There is no monitoring at all, so people are instantly making a fortune by avoiding taxation. The incentive for misdescription of waste is the huge gap between the two rates. The Environment Agency does not really enforce this, and I am sure that boreholes would reveal that inert-waste only sites will contain other waste. The problem is that we do not know what is in such sites, which is a future environmental problem.

The second strand is illegal sites without a licence, for which there are no real sanctions. People can buy a field or an old quarry and keep filling it, and they do not pay any landfill tax.

The next method is far more sophisticated, whereby criminal elements buy or set themselves up as legitimate waste operators. Is that easy? It is, because there are no restrictions on who can become a waste operator. If someone buys an existing business or a quarry, they can label it and say they are going to collect waste, but who is checking? People can run two scams. They can declare active waste as inert, and they can just declare half of what they are putting in.

[Aaron Bell (Newcastle-under-Lyme) (Con)]

I thank the right hon. Gentleman for securing this debate. He is absolutely right that someone with no qualifications can set up or, indeed, take over a site, and there will be no checks as to whether they are fit and proper. They could have a criminal record within the waste sector itself, as was the case at Walleys Quarry in my constituency. The Environment Agency appears powerless to do anything to stop such people operating landfills.

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[Mr Jones]

Yes, and I will come on to such an example in a minute. We only have to look at a company’s directors to question the situation, and I know that the right hon. Member for Haltemprice and Howden is aware of such individuals. It would not take a great Google search, or an officer could have a look on the police computer to discover that these people have no interest in waste crime until they understand how lucrative it is.

Waste crime has become a very profitable business. The PAC report of last April, which came off the back of pressure from me, the right hon. Member for Haltemprice and Howden and others, outlines that of the 60 main organised crime groups in landfill tax fraud, 70% are involved in money laundering and 63% in other illegal activities. Waste crime is a way of washing or hiding drugs money, for example, and generating huge sums of cash—it is a licence to print money if people are not declaring what is going into a site.

People may ask, “Surely someone has noticed this?” People have been screaming about it for years. Are the police on it? Is His Majesty’s Revenue and Customs on it? Is the Environment Agency on it? They are not. I offer the House one simple fact: how many successful prosecutions for landfill tax fraud have there been since 1996? Not one.

The example I now come on to is the interestingly named Operation Nosedive—I would love to know why they named it that. Operation Nosedive was focused on the activities of a company called Niramax in Hartlepool in the north-east of England. At least, it operated in the north-east, but also elsewhere, as I am sure the right hon. Gentleman will allude to later on.

His Majesty’s Revenue and Customs instigated Operation Nosedive to look into illegal tax fraud. I have been told by individuals in the north-east about this company and what it did. It was set up, bought into the waste management business, had various sites around the north-east and other parts of the country, and I think it was running both scams: not only was it running the inert and active waste scam, but there is a question as to how much landfill tax was actually being paid on stuff it was dumping.

Someone explained it to me this way: looking at what Niramax was charging companies for taking away their waste. There is no way it could have charged that rate if it was paying the full landfill tax charge. Likewise, how could it be economically viable to transport waste from a council in south Wales to the north-east? It was quite a big operation, and certain local companies went out of business because they were being undercut by Niramax.

Three regional police forces, Durham, Cleveland and Northumbria, had contracts with Niramax, which shows how big the business got. If anyone had looked at the directors of the company and seen their backgrounds, I would have thought it would have rung a few alarm bells with those three police authorities and made them ask why on earth they were giving a contract to that company.

After a few years of badgering, HMRC took action and Nosedive was launched, with a great deal of publicity, in 2014 with a raid of Niramax’s headquarters in Hartlepool. £250,000 in cash was found under somebody’s desk and a lot of documents were taken. To quote the Teesside Live newspaper at the time:

“Simon York, Fraud Investigation Service director at HMRC, said: ‘This is the culmination of 18 months’ painstaking investigation into the suspected systematic abuse of the landfill tax system. We believe that over £78m revenue may be involved, money which could be used to fund some of the UK’s most vital public services.’”

That is £78 million for one operator. I thought, “Great!” when that happened, and so did people I know in the industry, but six years down the line a journalist rang me and said, “Do you know they’ve actually dropped the Operation Nosedive prosecution?”. Nothing happened, but HMRC spent £3.5 million of public money on the investigation.

I tried to find out how much that investigation cost; I know my hon. Friend the Member for Blaydon tried too, but HMRC would not tell us. We only found out because the right hon. Member for Haltemprice and Howden and I got the National Audit Office to do an investigation into it. There is a fundamental question of accountability here. Before the Minister tells me that we cannot have control over HMRC, I agree with him, but there is a lack of accountability in this situation if I or Parliament cannot ask why public money is being spent in that way.

Operation Nosedive was a complete failure and Niramax got away with the fraud—and that £78 million is just one organisation. The other point is that Niramax was not the only operator using that landfill site or the other sites it owned. Other operators were using them too, which raises the question who else was in on the scam and who else was not paying full landfill tax, because I suspect others were at it as well.

The strange thing is that one of the main directors of Niramax is currently in prison—it has nothing to do with this situation, but rather with a very nasty murder case in Hartlepool. Were people surprised when he was found to have been involved in that situation or found guilty? No, they were not, but why are people with criminal records allowed to run those industries? Because they are making money. That is just one case.

[Kerry McCarthy (Bristol East) (Lab)]

I am finding my right hon. Friend’s speech very educational. Does he share my concern about the prevalence of modern slavery and trafficking in this sector? I think in 2018 it was found that two thirds of modern slavery victims ended up in the waste sector at some point during their period of exploitation. That is part of the model he is talking about, whereby cowboy or even criminal elements are running the business, cutting costs at every corner and not caring about the cost of human life while they do so.

[Mr Jones]

I am not suggesting that happened in the Niramax case, but my hon. Friend is right that the individuals involved in these businesses are involved in everything from drugs to prostitution and, no doubt, modern slavery practices. That is why I cannot get my head around the fact that the Government, whether individual Departments or as a whole, just turn a blind eye to this problem, when it is causing so much damage.

There are now promises that the new joint unit for waste crime that has been set up will look at those things, but I ask the question again: it has been up and running for three years now, and has it prosecuted anybody yet? No, it has not. There is a sense of frustration at Nosedive and at the fact that HMRC does not seem to think these crimes are important. I hate to think how many billions—and it is billions—of taxpayers’ money has been lost over the years because of this process.

HMRC does not seem to be bothered. I remember when I first contacted HMRC about this situation, and they said, “If it’s not worth more than £20 million a year, we’re not really bothered.” Well, it reckons Nosedive was worth £78 million, and when I asked in a parliamentary question whether the individual quoted was giving his private estimate or HMRC’s, I got no answer, because HMRC hides behind a wall of secrecy. There is a serious issue with holding these organisations to account.

The other side to this issue is the environmental cost. We have lost revenue, we have funded organised crime and modern slavery and other things, but there will also be a cost to the environmental clean-up, and I am sure the three other Members who want to speak in this debate will highlight cases in their constituency. Not only will this activity be harmful for those various sites, but the cost will fall on the taxpayer.

My other point is about what communities can do when they have an illegal landfill site or someone who is operating a so-called legal site but is completely ignoring the regulations. It is very frustrating; people feel powerless, and I am sure we will have some good examples of that later in the debate. I know the hon. Member for Newcastle-under-Lyme has some good examples of where, even as a parliamentarian, he feels powerless when raising these issues. If he feels powerless, certainly his constituents do too, living next door to piles of rotting waste and quite rightly worrying about the environmental effect that will have on their community. I think that the PAC has done fantastic work to highlight the lack of regulation. The main thing is whether that has got any better since I have been involved, and I would argue that it has got worse. There are a lot of good and sound words, but there is not a great deal of action.

One issue is enforcement. The Environment Agency—another arm’s length quango—does not have the enforcement culture that it needs. It mainly issues guidance notes or warning letters. Frankly, giving guidance notes and sending warning letters to the types of people we are dealing with is a complete waste of time. I mentioned the joint unit for waste crime, which I have met. To their credit, the individuals in that unit are well meaning—they certainly come from an enforcement scope—but unless we see prosecutions taking down some of the big operators soon, this will just carry on. I am quite sceptical, frankly, about whether there is a will, certainly in HMRC, to grasp this. The Environment Agency has had its budget cut, and I accept that it does not have an enforcement culture—one of my hon. Friends refers to that agency as “newt lovers”, which they possibly are—but we need a certain culture to tackle what is a bigger problem.

I come back to a point that I cannot get my head around. We need a political lead from the Government to grasp the matter and ensure that the regulations are enforced and targets operated on. I, the hon. Member for Newcastle-under-Lyme and the right hon. Member for Haltemprice and Howden met the National Crime Agency a few months ago to talk about that, because, as my hon. Friend the Member for Bristol East (Kerry McCarthy) said, the money generated from such activity goes into a host of things that cost our society dearly.

The new joint unit for waste crime is a step in the right direction, but unless it starts delivering, a lot of us will be sceptical. The Minister needs to grasp this through HMRC, and there needs to be a politically led focus in Government, with someone who can say, “Right, where are you up to with this? What are you doing? What is needed?” Personally—others may think differently —I do not think we need more legislation. What we need is enforcement of the existing legislation, not just to ensure proper waste management to prevent environmental devastation, but to support the existing waste management industry, which is playing by the rules. That is an important point.

I raise this in the debate, as I am sure other hon. Members will, in the hope that someone will grasp the matter and take it forward. If they do not, we hon. Members present will not go away.

[Mr David Davis (Haltemprice and Howden) (Con)]

As we have come to expect, the right hon. Member for North Durham (Mr Jones) made a wise, insightful and pretty comprehensive speech. He is right to say that we have both struggled, over more than a decade, to get the Government and their agencies to take this issue seriously. He has covered ground thoroughly, but let me see if I can reinforce his points without too much repetition.

The right hon. Gentleman spoke of the Public Accounts Committee’s estimate of the near billion-pound cost to the Exchequer each year—he quite rightly referred to it as a finger-in-the-ear exercise. I have been a PAC Chairman, and I know how that sometimes happens. That is an under-estimate. We have signals all over the place of how big this really is. Last weekend’s Sunday Express said that £200 million in landfill tax had gone uncollected in 2019-20 alone—that is, again, an under-estimate, even in HMRC’s own figures.

The right hon. Gentleman said pretty plainly—and I agree—that HMRC does not want to big up this issue and make a big thing out of it, but it admits that at least £850 million has not been collected in five years. It has gone straight into the pockets of some of our most dangerous criminals. If £1 billion was not collected from, let us say, the bankers, legal people or some other such group, there would be uproar. But here, it is not being collected from criminals, and the matter just goes by.

The right hon. Gentleman made the point about the money being funnelled into criminal enterprises, and he was quite measured in his language. He referred to the type of criminals we are talking about—the Niramax directors and associate directors, one of whom, as he said, was jailed for 15 years for manslaughter. Frankly, I was quite surprised that the charge was not murder, because it was a man behaving in a random way over a personal argument and deciding to kill the other person who was involved. That is the sort of character we are talking about. An associate director went to prison first for a machete attack and then later on for drugs. That reinforces the point that the right hon. Gentleman made about drugs, prostitution and all the nasty underbelly of society—all the nasty criminal activity—being funded and supported by the problem we are talking about. We need to bear in mind more generally when we discuss waste crime that these are not just small-time wheelers and dealers. They are not the Harold Steptoes of today; they are very big wheels, in criminal terms, and very nasty people indeed.

Waste crime has blighted many of our constituencies—it has certainly blighted Haltemprice and Howden—for many years. That is where the concern first came from in my case, as I think it did in most others. Some time ago, in the middle of battles over the Gilberdyke site in my constituency, one of the sites that Niramax has an interest in, someone from south-west England involved in legitimate waste disposal asked to see me. Since it was such a big and recurrent issue, I said, “Yes, okay, come to see me.” He came to my home and, in essence, told me that the north-east of England was rife with waste crime and was known for it. That was what he argued to me. He did not know whether it was an accident of history or whether it was because the Environment Agency was somehow corrupt or involved, or for whatever reason not doing its job.

That was five years or more ago. To be frank, the story was so extraordinary that I thought it was an exaggeration. I am sorry to say that I was wrong. That person was describing pretty accurately what we have discovered in our joint endeavours over time. For too long, the Environment Agency has not been meeting its legal and community obligations, and HMRC has not been enforcing its. I must be clear that not all operators in the waste industry are criminal enterprises—that is anything but the case—but the clear inaction of our agencies has emboldened the dangerous individuals that do run such criminal enterprises.

[Mr Kevan Jones]

I agree with the right hon. Gentleman that not all operators involved in the sector are criminals, but there is evidence that in some cases—that of Niramax and others—contracts were procured by using threats and intimidation after people had signed up to contracts to freeze out legitimate operators and lock in people who were perpetrating waste crime.

[Mr David Davis]

The right hon. Gentleman is right, and I will come back to the incentives—both criminal and legal—that are built in against legal operators.

The right hon. Gentleman also spoke about the powerlessness of communities. Again, I can exemplify that point. We thought we had scored a victory by taking the Niramax associate Transwaste to court over the Gilberdyke site and winning our case that it had breached a whole load of conditions. We won the case, but did my constituents see any improvements? No. Were the problems addressed in court fixed or enforced by the agencies? No. Did the behaviour of the operators improve? No. The courts proved powerless and so the community certainly felt powerless, again because there was no proper enforcement. That goes back to the point that the right hon. Gentleman made in response to the hon. Member for Bristol East (Kerry McCarthy) that this is not primarily about changing the regulations or the law, but about changing the mode of operation of the agencies involved.

Precisely because they cheat and evade payment of landfill tax, criminal companies can undercut other businesses, picking up waste and charging a pittance for it, knowing they will make up for it in illegal returns. In the case of Gilberdyke, locals reported that lorries were flooding the area from Wembley, south Wales, south-west Scotland and Manchester. It is expensive to transport this stuff. Why would it be transported that far unless there were some enormous unfair—not to mention illegal—advantage for the operators? That is what is going on there.

Some of my constituents who are very qualified people monitored that site and estimated that between £50 million and £60 million in landfill tax was being evaded while those lorries were flooding the area. That is at one site alone. This activity involves the destruction of my constituents’ quality of life and the destruction of the local environment, all in pursuit of illegal profits, yet so little action is being taken.

The right hon. Member for North Durham quoted the Public Accounts Committee saying about the Department for Environment, Food and Rural Affairs in October last year that

“the approach to large parts of waste crime is closer to decriminalisation.”

I make the point, as a past Chairman of the PAC, that the PAC is careful about what it says about Government operations. It is careful that it is factually based, and it bases everything on the National Audit Office reports and so on. For the PAC to accuse an agency or Department of effectively decriminalising something as serious as this is in itself an enormously powerful and worrying statement. That quote will strike a chord with those of us who have had to observe the appalling weak record of enforcement of the Environment Agency, even with legal operators, frankly. We are not talking about legal operators today, but even with legal operators, the Environment Agency is weak, let alone those who need to be cracked down on. That fact, again, is reinforced by the data. The number of prosecutions for waste crime generally—not tax evasion, but waste crime generally—have fallen by more than 90% since 2007-08. As the right hon. Gentleman said, there have been no prosecutions whatever for landfill tax fraud.

With Operation Nosedive—like the right hon. Gentleman, I wondered about the name, where it came from, and whether it was making a prediction about its own success—I have to say that its failure was written in from the beginning. It was a failure from the start. HMRC, the Environment Agency and the Crown Prosecution Service were simply not working together properly to investigate and prosecute the gangsters. They simply were not doing the job as a coherent group of people. The NAO told me that HMRC and the CPS admitted as much, and that is why no prosecutions were taken forward. The problem is that this failure and the ongoing increases in the rate of landfill tax mean that illegal profits are only increasing. Given how landfill tax is structured, if evasion is not stopped, then every time landfill tax goes up to improve the environment, the criminal is actually incentivised more by a bigger comparative advantage against the legitimate operators.

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[Mr Davis]

I agree with the aims the hon. Lady describes, but I am not sure whether this is a resource issue for the Environment Agency—I think there is a resource issue in other areas. If the Environment Agency does its job right first time, that is it dealt with. To bring it down to the microcosm of a single waste tip, if it does not enforce the first, second or third complaint, it will have hundreds and thousands of complaints, and its time will be sucked into dealing with them. To some extent there may be a resource issue, but a bigger issue is, straightforwardly, to do with management and the determination to make the industry obey the rules and to spot such things as tax evasion. If tax evasion takes place, the whole structure she describes disappears. The cheap operator who is not paying taxes gets all the business, and therefore nothing is pushed to a better waste outcome. I take her point, but in many ways management is more important.

[Mr Kevan Jones]

On that point, does the right hon. Gentleman agree that the big disconnect is between the policy that everyone wants to support—more recycling—and not only how it is enforced but how it is monitored? The best example is Scotland’s zero waste strategy. It sounds great, but waste is being shipped across the border to the north-east of England and other sites in the UK, and there is no monitoring of that. Exporting waste from Scotland to landfill sites in the rest of the UK will not meet the environmental standards that the policy aims to achieve.

[Mr Davis]

I agree. Exporting from Scotland to England will not help at all, so the right hon. Gentleman is exactly right.

We have a ridiculous co-ordination problem in the midst of all this. The NAO told me that Operation Nosedive failed for a variety of reasons, but ultimately it was felt that defence lawyers for the criminals would be able to exploit all the weaknesses of co-ordination and data in the system. Frankly, it is galling that criminal charges could have been held back by the bureaucracy and box-ticking approach of Government Departments effectively, which were stepping on each other’s toes rather than working together.

Waste crime and landfill tax fraud are cheating the taxpayer out of hundreds of millions of pounds a year, and it is time we got serious about that. Thanks to the NAO, we know that every single year, waste crime in general costs £900 million—the PAC said £1 billion—which is a very, very large number. We should not lose track of the fact that that is an annual cost. And that is without, as it turns out, the costs in Scotland, Wales and Northern Ireland. We do not have the hon. Member for Strangford (Jim Shannon) in his place to raise a point about Northern Ireland, but there are costs there, too. In the current climate, I can only imagine the uproar if that occurred in any other situation.

The right hon. Member for North Durham touched on the importance of HMRC’s joint unit for waste crime. The Government would like to claim it has been a success—indeed, after the first year they said it was a success—but I have to tell Members that I cannot see a single sign of success. It is shameful, frankly. This is where I agree with the hon. Member for Bristol East (Kerry McCarthy) that this is a resource issue. We absolutely need to ensure that, unlike at HMRC before, there is the right legal advice at every stage, the right data at every stage and the right investigative capability at every stage, so that, rather than saving £10,000 here and £10,000 there only to lose £3.5 million on a failed case or £1 billion a year on the system as it is, we actually deal with the issue. The current strategy is penny wise and pound foolish, and in that respect she and I agree.

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[Mr Kevan Jones]

I am grateful to my hon. Friend, who has been pursuing this for many years and we have had lots of discussion as parliamentary neighbours. Would she say that her communities are worried about the future? Although the site she refers to—I know it well—is now closed and possibly the initial blowing of rubbish and so on has stopped, because we do not actually know what is in that site, there could be a ticking timebomb of environmental damage. Ultimately, if it has to get cleaned up, it will come back to the taxpayer to do it.

[Liz Twist]

I most certainly agree with my right hon. Friend. Of course, we have had a history of such sites in previous years; we have no idea what is in them. It is vital that we do know what is in those sites, and it is vital that efforts are made and action is taken to ensure that landfill operators behave responsibly. I hesitated before saying “responsibly”: they need to behave in accordance with the law, treat waste properly and respect the local communities and our environment.

As I was saying, I am pleased that the Public Accounts Committee published its report on waste crime in October 2022. In their response, the Government acknowledged the slow progress on the wider issues of waste crime. I believe we are now awaiting the outcome of the landfill tax call for evidence, which we have not yet seen.

Of particular concern are reports of serious and organised crime in the waste sector. The establishment of the Joint Unit for Waste Crime in 2020 suggests progress on that issue, and we have heard reassurances that the unit will promote co-ordination between HMRC, the Environment Agency and other bodies. I am glad that Members have been able to speak to and meet that body. I will certainly be keeping an eye on its progress. That is a positive move. That co-ordination would go some way to remedy the difficulties in discharging responsibilities between different bodies that have been held responsible for the failure of Operation Nosedive.

However, the National Audit Office reported in April 2022 that the unit does not receive any dedicated funding from Government, and that the Environment Agency’s previously ring-fenced funding for waste crime will be incorporated into its core funding from 2022-23. Furthermore, the report highlights the need for improved data on waste crime, as we have heard, so that resources can be targeted more effectively and progress more accurately assessed. It is vital that resources are available to make that co-ordinating work effective and to protect communities.

If we are to learn lessons from the failure of Operation Nosedive—I cannot imagine who thought up that name, which in itself has caused a lot of issues—and make a difference, the Government must establish a more stable footing for the investigations. Our environment is precious to local communities and waste management is a vital part of its preservation. It must not be placed in the hands of criminals or fraudsters. It must be managed to the highest standards.

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[Aaron Bell]

I thank the hon. Gentleman for his intervention. That has been a significant problem in Newcastle. There have been accidents on the road outside the landfill caused by lorries backing up along the road. Firms opposite have complained that people have had problems accessing their businesses. An arrangement has been recently made through a variation to the planning permission to allow vehicles on to the site before the 7 am opening time so that they can at least queue on the site rather than on the road. There is also state of the road and the mud that some vehicles have left on it. There is a wheel wash that vehicles are supposed to go through when they leave. It is clear that it has not always been working. The county council has had to write on more than one occasion to the operator demanding that it cleans up the local roads as well. Traffic and the state of the roads are significant issues, and I wish the hon. Gentleman well with his efforts to represent the people of Reading in the situation with the incinerator to which he refers. The impact is not just about odour; it is about the whole operation and its interference with people’s quality of life in the surrounding villages.

As I was saying, there have been far too many breaches and they are still ongoing. Even under intense scrutiny, with four monitoring stations and regular Environment Agency visits—including unannounced visits, which I welcome—the operator is still being found responsible for more and more breaches. I pay particular tribute to Stop the Stink campaigner Dr Mick Salt, who has brought several such breaches to the public’s attention via freedom of information requests.

The operator’s continual failure to comply with the conditions of its permit, even under such intense scrutiny, is staggering. It surely only strengthens the case for stripping it of the permit altogether when the investigation concludes. I will continue to fight for my constituents and fight to ensure that the operator and the EA are both fully held to account and that we get some appropriate action in response to the misery that the landfill has visited on Newcastle-under-Lyme residents, particularly those who live closest.

Let me turn more specifically to the subject of today’s debate: landfill tax fraud, to which I referred in the Westminster Hall last February. The problem, as I said in my intervention on my right hon. Friend the Member for Haltemprice and Howden, is that bad firms are driving good ones out of the industry. I have spoken to legitimate operators in Stoke-on-Trent who are upset that they are trying to do an honest job but cannot compete with the firms undercutting them.

Fundamentally, most people will take assurances from firms that say, “Of course we’ll handle your waste legitimately, don’t worry about that—and here’s a nice price for you.” A lot of people will be guided by that, so the regulator needs to step in. People need confidence that a regulated firm will be regulated. They should not need incentives to go to one firm or another because of ethical considerations; they should be able to trust that any firm in a regulated space is operating honestly and ethically.

As we heard from the right hon. Member for North Durham, the landfill tax differential has gone up to more than £95 per tonne. When the charge was first introduced in 1996, there was only a £5 differential; the rates were £2 and £7. I welcome the fact that landfill tax has reduced the overall amount of waste going to landfill, but it has obviously created strong incentives for misdescription.

Not only is standard waste being misdescribed as inert, but waste is going to landfill that should not be there at all. In the debate last February, we heard examples from a journalist’s research that included cavity wax, arsenic, zinc and even rat poison going into Walleys Quarry. I know that those allegations have been put to the Environment Agency and I am sure that they will be part of the criminal investigation, so I do not want to comment further on them today, but the problem is that charging £100 a tonne for waste is increasingly incentivising misdescription.

[Mr Kevan Jones]

It never ceases to amaze me that these things happen even when the Environment Agency understands the problem. I referred earlier—I was racking my brains for the figures—to fires at waste transfer stations and landfill sites, which are another way in which operators get round the regulations. Burning waste to get rid of it is a common practice, but the Environment Agency just seems to turn a blind eye. Not only is there an effect on the environment when operators burn what they should not be burning, but they avoid landfill tax.

[Aaron Bell]

The right hon. Gentleman is absolutely right. With illegal landfill sites in particular, we can almost rely on there being a suspicious arson attack. Getting the fire services involved is often the quickest way to get these problems resolved, because operators know that they and not the Environment Agency will ultimately be the ones involved in cleaning up. My constituency also has a notorious illegal waste dump at Doddlespool farm; I do not want to detain the House for too long, but we have seen all these things going on, with all sorts of impacts on the environment from vermin and all the rest of it.

Fly-tipping is forecast to have probably the greatest overall financial impact, although it is very difficult to get the numbers. The national tax gap for HMRC overall is estimated at 5.1%, but the landfill tax gap was 17.1% in 2020-21 and in previous years it has been more than 20%. That is equivalent to £125 million, which is only a part of the overall billion-pound estimate of the cost of waste crime. That does not even really take into account the cost of fly-tipping; it is about tax that should have been collected but has not. Things that are completely illegal fall somewhat outside the tax gap calculations, as I understand it.

[Aaron Bell]

I could not agree more. I cannot remember who it was who mentioned the Environment Agency earlier, but there has been a cultural problem with enforcement, and I should like to see HMRC step up and assist. There is a long tradition of the taxman being the man who catches perpetrators of organised and serious crime in the end, but it is not happening with waste crime. I shall say more about that later.

In a statement to the House on the 18th report of the Public Accounts Committee, my hon. Friend the Member for The Cotswolds (Sir Geoffrey Clifton-Brown) said that Jim Harra had assured the Committee that the tax gap was so large because the scope of landfill tax had been widened to include illegal waste sites. However, if fly-tipping were taken into account, it might be even larger. The summary of the report stated:

“Waste crime is known to be greatly under-reported, so the true scale and impact of the problem are even larger than official data suggest.”

As my right hon. Friend the Member for Haltemprice and Howden just pointed out, that is just the financial cost; we are not remotely taking into account the cost in terms of the impact on people’s quality of life. Perhaps if we do get a class action lawsuit, some financial numbers will be attributed to that in Newcastle-under-Lyme.

[Mr Kevan Jones]

Another area in which some action is belatedly being taken is the export of waste, which not only avoids tax but causes environmental disasters in some developing countries.

[Aaron Bell]

The right hon. Gentleman is entirely correct. Indeed, as I mentioned last February in connection with Walleys Quarry, there was a suggestion that waste that should have been exported for treatment in, I believe, the Netherlands was actually going straight into landfill. Export adds an extra layer of complexity for the Environment Agency and HMRC to get on top of, but get on top of it they must, because these operators are using all the tricks in the book to get their waste dealt with as cheaply as possible and maximise their profits.

When it comes to social cost, misclassified waste is, according to the EA, the most likely result of the smell at Walleys Quarry landfill, driven primarily by hydrogen sulphide created by the biodegradation of gypsum. The awful impact of that has been experienced by my constituents time and again. It was exacerbated during lockdown, when the smell was at its worst, but when we opened up again, people did not want to come into the town centre and use our pubs, bars and cafes, or even just do their shopping, because of the awful odour.

I have mentioned the health impacts, but there is also the long-term environmental unknown risk of waste going into landfill. We do not know exactly what is in Walleys Quarry; if the reports from journalists are to be believed, there could be all sorts of things in there. I have been given assurances that it is unlikely to cause any risk, given that it is all capped off, but not knowing what is in the ground is not a great state of affairs. The site should have been properly regulated ever since the permission was granted by John Prescott back in 1998.

I am conscious that I have been speaking for a while, so I will end my speech shortly. We need to look at what is being done, but also at what more needs to be done. The Public Accounts Committee report stated that action was being taken, but I believe it is taking place too slowly. We have seen the establishment of the joint waste crime unit, but we have not seen enough activity on the back of it. We have also seen helpful reports from the National Audit Office highlighting the severity of the problem. I understand that the Government accepted all the recommendations of the PAC report and will implement them, but we need to see a response to the HMRC landfill tax call for evidence. We do not know yet what will happen with that, but it needs to be structured in such a way that it achieves its legitimate aim of reducing the amount of waste going to landfill without incentivising people to take shortcuts.

The Department for Environment, Food and Rural Affairs, the EA and HMRC clearly need to work with relevant bodies within the criminal justice system to develop a plan for making enforcement more effective across the full spectrum of waste crime. That must include speeding the process up and—this is very important—consideration of whether the sentencing guidance needs to be strengthened. The inadequacy of the fines issued to companies and individuals is all too apparent. People who are doing tens or hundreds of pounds’ worth of damage—and that does not even allow for the social cost—are being hit with only hundreds of thousands of pounds-worth of fines, and there are very few cases in which people go to prison.

On top of that, we need to consider whether the bonds put up by operators are sufficient. The Environment Agency is worried about operators walking away precisely because it knows that the money put up in bonds is not sufficient for a local authority to ameliorate a site. We have had that exact discussion in Staffordshire about what would happen if the operator walked away from Walleys Quarry. Who would be on the hook for it, and how would we manage it? I pay tribute to the work done by councils to prepare for that potential eventuality, but it should not have to be like that. There should be enough money in the bond to fund the amelioration, if necessary.

It is clear from my many discussions with the Environment Agency that many of its officers agree there is a fundamental lack of deterrence. I am critical of the Environmental Agency’s culture, and I think it was far too slow to react when the problem got worse, but there is a feeling that people are getting away with it because they do not feel deterred by the sanctions. We need to look at that, too.

We need much tougher fines and the prospect of lengthy prison terms, and there needs to be a fit and proper person test for people seeking to operate landfills, whether they are setting one up or taking over a licence. All the agencies need to work together to deter waste crime and landfill tax fraud. I have often spoken to DEFRA Ministers about this, and I appreciate that a Treasury Minister is here because this debate is an HMRC issue, but I look forward to what he has to say about tackling landfill tax fraud, and waste crime more generally.

Given HMRC’s case load, it might look like there is more to be gained by working elsewhere, but we are losing out on hundreds of millions of pounds of tax, and on millions or billions of pounds of additional social cost. It is an incalculable loss that ordinary people who want to dispose of their waste cannot trust the sector, because they do not know whether their waste will be disposed of legally or illegally.

Some blue chip names deposed of their waste at Walleys Quarry. They were appalled to be identified as having done so by the reporting of journalists, and they stopped sending their waste there. No blame necessarily attaches to them, but it shows that, overall, the sector cannot be trusted.

There is a tradition, going back to Al Capone, of the taxman being the one who finally holds serious organised criminals to account. HMRC must step up and give the Environment Agency a helping hand, because the crimes with which HMRC can charge people carry much more serious financial consequences and, potentially, jail time. If HMRC learned the lessons of Operation Nosedive and looked to prosecute people for waste crime, it would be greatly appreciated by me, by my constituents and, I am sure, by the constituents of all hon. Members here today.

--- Later in debate ---

[James Cartlidge]

It is fair to say that the hon. Gentleman has got that on the record, but he will appreciate that I am not going to comment—it is devolved, but beyond that it is a planning matter and not a matter for the Exchequer. He has got it on the record, though.

It is true that landfill tax has inevitably been relatively difficult to enforce, and non-compliance is high. The right hon. Member for North Durham is absolutely right that this is partly due to increases in the standard rate but, obviously, as the tax has increased, it has become more effective at incentivising disposal other than landfill. In parallel, there has inevitably been an increase in abuse and non-compliance.

[Mr Jones]

Listen, as I said in my contribution, I have no problem with the actual policy. It has been effective. I question the figures because, frankly, nobody knows what they are. The Environment Agency does not know what they are. What I cannot get my head around is this: the Minister says the tax has been difficult to enforce. Talk to people in the industry—they have known that for years. They have known every scam that has been going on for the past 27 years, and nothing has been done. That is what I just do not understand.

[James Cartlidge]

I was just being frank with the right hon. Gentleman. It is a relatively difficult tax to enforce, compared with others, but that does not mean we are not determined to do everything possible to deal with non-compliance. Let me turn to some of the specific points that he and other colleagues raised.

[Mr Jones]

Will the Minister give way?

[James Cartlidge]

I will make a bit of progress first and turn to Operation Nosedive, which I think every single colleague raised. First of all, I have no information whatsoever on the etymology—it is fair to say it is striking. As right hon. and hon. Members know, the legal obligations in relation to taxpayer confidentiality mean that it would be inappropriate for me to discuss the specific details of Operation Nosedive. However, the Public Accounts Committee acknowledged in its report that HMRC had been frank about the challenges associated with investigating these types of cases and that a high standard must be met for any criminal investigation to reach the prosecution stage.

The right hon. Gentleman for North Durham mentioned the operational independence of HMRC, to which I would just add—perhaps referring back to my previous role as Justice Minister—that perhaps the most fundamentally independent institutions under our constitution are the judiciary and, of course, the Crown Prosecution Service as independent prosecutors. It is ultimately its decision whether to prosecute, based on the evidential threshold.

--- Later in debate ---

[James Cartlidge]

The hon. Gentleman is right that it is not within my bailiwick, but I am happy for my officials to get in touch with him and let him know who is the appropriate Minister.

On waste incinerators, we should acknowledge that energy-from-waste plants have made an enormous contribution: the biggest factor in the reduction in landfill is the use of energy-from-waste plants. In my county of Suffolk, we have a very successful operation. When what would have been landfill is burned, it is used to create energy for homes. That is a joined-up operation and it has made a massive difference.

On joint working, I think it was my right hon. Friend the Member for Haltemprice and Howden who made the point that there was a failure of co-ordination. As he knows, in 2020 we established the joint unit for waste crime in the Environment Agency, in partnership with HMRC, the National Crime Agency and others, to tackle organised waste crime. Through shared intelligence and enforcement, the joint unit is identifying, disrupting and deterring criminals, and I can confirm that between April 2020 and November 2022, the joint unit worked with more than 100 partner agencies and engaged in 175 multi-agency days of action, resulting in 51 arrests by other agencies.

I turn to the report by the Public Accounts Committee, which all colleagues have mentioned. As right hon. and hon. Members know, the National Audit Office and the Public Accounts Committee last year published reports on Government efforts to combat waste crime. Despite the work done to date, the Government are not complacent and recognise that more needs to be done. That is why we accepted and are implementing all the recommendations in the Public Accounts Committee report, “Government actions to combat waste crime”. Importantly, we are not going from a standing start; there are, as I have just demonstrated, a host of multi-agency efforts already under way.

The hon. Member for Blaydon mentioned the landfill tax review. I can confirm that we launched the landfill tax review in 2021 to explore how the tax’s design can continue to support environmental goals. The Government are considering responses to the review’s call for evidence, which closed in February 2022, and we hope to issue a response in due course. The Public Accounts Committee has recommended that DEFRA should work with HMT and HMRC to ensure that the review of landfill tax takes into account the incentives that the tax, as currently designated, creates to commit waste crime. We agree with that specific recommendation and we will look at that factor.

[Mr Kevan Jones]

This question is within the Minister’s bailiwick: as colleagues have said, the higher rates have incentivised waste crime, so will he engage with the Environment Agency to look at the test for labelling waste as inert and the way it is enforced? Frankly, it is frankly a farce. Operators are allowed to do the test themselves and put it forward as a bulk of waste. There might be some inert waste on the top, but under it there will be active waste. This is about enforcement, but it is also about whether we should just abolish it altogether.

[James Cartlidge]

The right hon. Gentleman makes an important point. He will appreciate that I am not going to predetermine our review, but it is important that we look at those precise points. That is why we have established the review. As I say, we will respond in due course to the responses we have received to the call for evidence.

I turn finally to HMRC, which lots of colleagues have mentioned. A further recommendation from the PAC was for HMRC to respond on how it has improved its approach to landfill tax prosecutions. It did that in December. Briefly, HMRC’s approach to landfill tax compliance aims to collect the right amount of tax and support the Government’s aim to create a better environment. Most of its work to tackle tax fraud makes use of civil powers, as I said earlier, but it also uses criminal powers selectively.

HMRC has learned lessons from previous operational activity and is developing a number of criminal investigations into those involved in waste crime—[Interruption.] Yes, there are ongoing investigations to confirm that for the right hon. Member for North Durham, who is chuntering away in his invisible anorak on the Labour Back Bench. The investigations are at an early stage of development, and the House will understand that it is not appropriate to provide further detail at this point.

Lastly, colleagues on both sides of the House have raised the point about resourcing, including the hon. Member for Cambridge (Daniel Zeichner). HMRC has deployed more resources to increase the number of civil investigations of landfill tax non-compliance. Actions between 2018 and 2021 have already secured £110 million of additional tax revenue, and in future we expect at least £50 million of extra tax to be paid annually. HMRC increased the operational compliance resource dedicated to landfill tax in 2017 and 2018, doubling capacity to 50 people. It is deploying a further 10% more resource specifically to increase the number of civil investigations of landfill tax non-compliance. That was funded in the spring Budget of 2022.

To conclude, I thank the “Landfill Four” for their excellent contributions, and my right hon. Friend the Member for Haltemprice and Howden and the right hon. Member for North Durham for securing the debate. Landfill tax has helped to transform the approach to waste and resource management, with reductions in waste to landfill and increases in recycling rates. However, there is and will always be more work to tackle criminals looking to take advantage of the system. Finding that balance and achieving both those things is crucial, and I am determined that we will.

[Mr Kevan Jones]

I thank my parliamentary neighbour, my hon. Friend the Member for Blaydon (Liz Twist); the right hon. Member for Haltemprice and Howden (Mr Davis; and the hon. Member for Newcastle-under-Lyme (Aaron Bell) for their contributions.

What outcome do we want from the debate? I have to say that the statement from HMRC that the Minister just read out did not fill me with a great deal of confidence. It was great, flowery civil service language, but there are some asks for the Minister to take away. The first is dedicated funding for the joint unit for waste crime, which I think we all agree is the way forward. The other is the use of existing powers, and not just for criminal enforcement of landfill tax fraud. With or without the National Crime Agency and others, the bodies involved could use legislation in the Proceeds of Crime Act 2002. Some people have become very wealthy from all this, and that raises questions about where the money has come from. That is possibly because, as the Minister said, this policy area has perhaps been successful, but it has also created a problem, not just in terms of lost revenue, but by funding criminality in this country. That is partly because it has fallen between two Departments in the Treasury and DEFRA, and two arm’s length organisations in HMRC and the Environment Agency.

I ask the Minister to take a personal interest in the matter and to have a meeting with his opposite number at DEFRA to co-ordinate and drive this agenda forward. My fear is that, despite all the good words we have heard today from officials about the joint crime unit and everything else, without political muscle behind it and somebody watching over it, things will not move forward. I warn the Minister that I and the right hon. Member for Haltemprice and Howden will not be looking the other way and we will be back on to this. That is one way to drive forward the agenda, which definitely needs a political lead. I accept that that would involve two Ministers, but if those two individual Ministers came together, it could make a difference.

Question put and agreed to.

Resolved,

That this House has considered the matter of landfill tax fraud.

Economic Situation

Lord Beamish Excerpts

Wednesday 12th October 2022 Commons Chamber

[Chris Philp]

I think having the lowest unemployment in my lifetime and having lower unemployment than comparable countries such as France and Italy is something that we can be proud of as a country. Of course, we are committed to working with people who have long-term sickness, working through the NHS and with work coaches at the Department for Work and Pensions to find ways to enable them to return to the workforce. Of course we are going to work with them, but ultimately having the lowest unemployment rate in my lifetime is something we should be proud of.

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

Listening to the Minister, I wonder what colour the sky is in his world. He talks about the energy price guarantee protecting families from energy bills of up to £6,000 a year, but as a direct result of the Government’s mini-Budget families in my North Durham constituency now face a mortgage increase of £6,000 a year not just this year but in future years as well. He can blame international markets when it comes to energy, but is he actually going to admit that the mini-Budget has led to those families paying £6,000 a year extra, if not more in some cases, and what is his advice to them?

[Chris Philp]

I have explained already that there is a global upswing in interest rates—

[Mr Jones]

No!

[Chris Philp]

The right hon. Gentleman can say no and not want to hear it, but I will just tell him again. In the United States, in the last nine months, there has been a 3% increase in the federal reserve base rate. In that same period, the Bank of England base rate increase has been only 2%. It has gone up by one and half times more in the United States compared with the United Kingdom. We do understand that there are cost of living pressures and that is why we have stepped in with the energy price guarantee to protect families in his constituency and mine from the £5,000 or £6,000 bills that they would otherwise have faced. That is why we are alleviating the tax burden on their shoulders and why we will ensure that the economy grows.

Funeral Plan Industry

Lord Beamish Excerpts

Thursday 26th May 2022 Westminster Hall

[Lucy Allan (Telford) (Con)]

I beg to move,

That this House has considered the funeral plan industry.

It is a great pleasure to serve under your chairmanship for the first time, Mrs Cummins. I am grateful to the Chairman of Ways and Means, for her wisdom in selecting this afternoon’s debate; amid the noise and chaos that is the normal week in Parliament, she has provided a space to consider the needs and concerns of decent and often vulnerable people who are trying to do the right thing.

People who buy funeral plans are elderly, and they may be ill—perhaps terminally so. They may have struggled with the cost of a funeral when their spouse died, and they do not want to burden their children with the same anxiety. They may fear the shame of a local authority funeral—a pauper’s burial. These are people who have worked hard and saved hard, and they want some piece of mind at the end of life. They are not people who grab the headlines and demand the limelight or who, when something goes wrong, take to Twitter, call their lawyer or send emails in capital letters to their MP twice a day. They may even be quite reluctant to contact their MP, and if they do, it will be politely understated. For that reason it is all the more important that we are here today to ensure that their voices are heard in this place, and I am very grateful to all Members for attending the debate.

The funeral plan industry sees these people, who I think we can all agree are vulnerable, as a lucrative target market. Until now, it has certainly been a huge growth industry. Today, 1.6 million people hold a funeral plan, with 218,000 people taking out a new plan only last year and with over £4 billion in funds under management held in plans. There is huge trust placed in funeral plan providers by vulnerable people, yet this lucrative industry is unregulated.

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

Does the hon. Lady share my concerns about some of the practices and sales techniques that are used to get people to sign up to these plans? She has already mentioned that people are vulnerable, but when we read the small print in the glossy brochures that are provided, it is clear that these plans do not actually deliver what has been promised to many people.

[Lucy Allan]

The right hon. Gentleman is absolutely correct, and I will come on to some of those high-pressure sales techniques, which I very much hope the new regulatory regime will remove.

The Funeral Planning Authority held itself out as providing some form of oversight, giving itself a veneer of respectability as a quasi-regulator, but it was not, and we have to remember that the industry is entirely unregulated, despite any appearances to the contrary. The Minister rightly took steps some years ago to rectify that omission, and I pay tribute to him for that. Of course, there are good providers, such as Dignity and Co-op Funeralcare, which care about good governance and are working to ensure that this unregulated industry is brought within the perimeter of the Financial Conduct Authority by 29 July. However, that creates challenges for the industry, because some providers have not applied to be regulated and some have not been accepted for regulation, for good reason. There are concerns about where that will leave people who hold plans with those providers. I have had useful meetings with Dignity and the FCA, and I am grateful to them for their work in this area.

Let us make no mistake: as the right hon. Gentleman just alluded to, this is an industry with a record of using high-pressure selling techniques, such as cold calling, telesales and having a sales rep sit in someone’s kitchen until they sign on the dotted line. People sign up for some extraordinary fee arrangements, whereby 25% of the plan could be taken as commission. Then there is the use of intermediaries, such as will writers, to sell a funeral plan as if it were an add-on, when all people really wanted was a will. They are told that their money is held in trust and overseen by independent trustees, and that it will be ringfenced and invested in blue-chip equities, yet there is a complete lack of transparency as to how their money is invested. Then there is the playing on people’s fears, and I am afraid that even the more reputable companies tell people that a funeral plan is an essential part of end-of-life planning.

That brings me to the ironically named Safe Hands Funeral Plans, now in administration. While we can all agree that only a small number of providers pay scant regard to good governance, the industry as a whole has long known about these providers and their practices. I am sad to say that it knew about Safe Hands Funeral Plans and its methods, which were an open secret in the industry. As we move towards regulation, it was only a matter of time before any rogue operators would fail. A number of investigative personal financial journalists have covered this story, and I particularly pay tribute to Jeff Prestbridge for his sterling work in this area. I encourage him and others to keep up the campaign.

When my constituents, Don and Toni Haines, from Ketley in Telford, contacted me about their Safe Hands plan, sold to them by Equity Wills in Market Drayton, Shropshire, it did not take me long to see what had happened to the money supposedly held in trust for the benefit of plan holders. Yes, I am a chartered accountant and I specialised in insolvency, including administrations and liquidations, but even a cursory glance at note 8 on page 6 of the Safe Hands accounts, freely available to anyone online, makes clear that the company is entitled to receive any surplus declared following an actuarial valuation of the Safe Hands Plans Trust—the moneys held in trust for savers could be distributed to a director shareholder.

The surplus declared on the Safe Hands Plans Trust as at May 2020 was £2.4 million. In 2019 the surplus was £10.9 million. It is clear that moneys supposedly ringfenced for plan holders were distributed to director shareholders as a dividend. Did Equity Wills of Market Drayton tell Mr and Mrs Haines that this would happen if they bought a Safe Hands plan? Did Equity Wills check the Safe Hands accounting policies themselves before pocketing their commission? They did not even tell Mr and Mrs Haines they were buying a Safe Hands plan, so my constituents could not even check for themselves.

Digging a bit deeper into the accounts, which of course make full use of the small company exemption to file only limited information, we see that a loan of £3.5 million appears to form part of the assets of the trust, which are ringfenced for plan holders. This loan was advanced to a director of Safe Hands—a Mr Malcolm David Milson, and his wife. By 2020, he was no longer a director shareholder and the advances made to him were not recovered. In anyone’s book, this is clearly financial misconduct. The administrators believe that, out of a portfolio valued at at least £60 million, they can realise between only £10 million and £16 million, leaving plan holders with a return of between 10p and 20p in the pound—and we should not forget that that is after they have paid their 25% commission.

Let us call this what it is: theft. Anyone associated with this company should be disqualified as a director, along with anyone who signed off the accounts or certified the surplus. There is a duty of care to the vulnerable. As much as I admire what Dignity is trying to do, in the material that it circulated to Members it has not fully recognised or accepted that these people are vulnerable. It is important that that is acknowledged, and I am sure the Minister will do that in his response.

I am not somebody who uses exaggerated language, because it often diminishes the power of an argument, but what has been happening here is clear: it is what any accountant will call teeming and lading—in other words a Ponzi scheme. As long as the provider keeps selling to new customers to pay the maturing plans of existing customers, there is no problem, but if the music stops—as it did in this case when the provider was prevented from selling any new plans by the FCA as it moved to regulate the industry—the house of cards collapses, leaving vulnerable savers in this instance with 10p to 20p in the pound.

My fear is that Safe Hands plan holders will not be the only casualties. In fairness to Dignity, it has so far underwritten the plans that are now maturing and is working with the FCA to see how it can take plan holders on as clients. However, there is a big concern that its long -term proposal would require plans that are fully paid—we should not forget that most plans are fully paid—to make further payments to Dignity on the basis that people would at least be better off doing that than just having the 10p to 20p in the pound that the administrator would pay. That is not good enough.

The industry knows that nobody needs a funeral plan. Let us not pretend otherwise. A person can tell their children what they want when they die and put their monthly contribution into an ISA or bank account. Why risk it with a funeral plan? Why pay exceptional commissions? If their estate is valued at less than a few thousand pounds, the cost of the funeral gets the first call on the deceased’s assets. If there are no assets at all, the local authority picks up the cost.

I am very concerned that some industry lobbyists are seeking to water down the FCA regulatory proposals and are lobbying MPs to that end, and I urge the Minister and the FCA to stand firm. These are vulnerable savers and they must have the gold standard of protection. Watering down the proposed new regulatory regime for the industry would make it easier to become regulated. I understand that we do not want to exclude providers from regulation altogether, but it would be counterproductive. We have been there with the FPA, which, as we have seen, has provided no regulation whatever, just the veneer of regulation or some form of respectability.

Funeral plans are savings and investment products targeted at vulnerable people, and those savers should have at least the same level of protection as anyone else buying a savings financial product. There is a duty of care to protect the vulnerable from exploitation and mistreatment—I am sure the FCA and the Minister will agree.

[Mr Kevan Jones]

Does the hon. Lady agree not only that it needs to be clear what people are purchasing, but that if the people selling the plans are receiving commission —in some of the examples I have come across, the third party selling them has been on commission—that should be clearly stated, too?

[Lucy Allan]

The right hon. Gentleman is absolutely right. The lack of transparency is a significant feature of where this industry has gone astray.

Protecting funeral plan holders from some of their loss, which is what is suggested, is not good enough, and nor should the industry expect taxpayers to bail it out. This is a problem of the industry’s making, and it needs to work together to find a solution. If the industry cuts plan holders adrift, it will have sullied its own reputation, creating longer-term consequences for itself.

This is also about accountability. The auditors, the actuaries, the trustees, the directors and the fund managers cannot just walk away from these vulnerable customers. Why should plan holders with fully paid plans have to pay more to save their funeral plan? It is no good saying that a Safe Hands customer’s loss would be less if they paid to switch to a Dignity plan than what would otherwise crystalise from a distribution from the administrator. That is no comfort to anyone. I welcome the steps that Dignity has taken to date, but it must consider whether it, with other reputable members of the industry, can go further.

I know that the Minister wants to do the right thing, and I know that the industry understands that if it wants to survive this financial shock—this battering to its reputation—it too will go the extra mile to do the right thing. The voices of people who work hard, save hard and trust others to do what they say they will do with their money are being heard today by the Minister loud and clear.

I hope the FCA will have no truck whatever with the view that these vulnerable saving plan holders should be treated less favourably than other plan holders. There must in all circumstances be a duty to protect vulnerable customers, a requirement to hold capital to be able to honour the guarantees that are given, and an industry compensation scheme for the plan holders who will be excluded from the financial services compensation scheme. This is an important point. Anyone who will lose out prior to 29 July will not be protected by the financial services compensation scheme. Those people must have a scheme that protects them from losses, and that must be a funeral plan industry scheme. I do not think it should be topped up by the Government. The industry got into this mess, and it needs to work together to get out of it.

I know that, sadly, this matter will not be at the top of the Treasury’s in-tray, at what is a challenging and difficult time for all Treasury officials. The Minister is one of my favourite Ministers, and I urge him to make sure that the little people do not end up at the bottom of the pile, and to consider that how we treat the vulnerable says much about our financial services industry as a whole—and, indeed, about our society.

We want to build a reputation for probity and integrity in the financial services sector. There are vulnerable people whose vulnerabilities have been exploited. We cannot just hope that they will not know that they lost the money; that, if they do know, they will not have the capacity to fight for themselves; or that they might die, leaving local authorities to step in. If we do that, we will damage not only the funeral plan industry, but the financial services industry. There are MPs across the House who will not let that happen—I am one of them. These individuals are the people we are all here to represent. I hope that the Minister will allow us all to be part of the solution.

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

It is a pleasure to serve under your chairmanship, Mrs Cummins. I thank the hon. Member for Telford (Lucy Allan) for securing this debate.

As the hon. Lady said, this debate concerns some of the most vulnerable people in our society. Do I agree with what she said about whether we need funeral plans? No, we do not need funeral plans. However, there is a reason for them. There are generations of people—certainly in the community I grew up in—who feel a certain shame about leaving nothing for their funeral. As people become ill or grow old, it preys on their mind. They want to avoid the stigma that there used to be of the parish, as it used to be, or the local authority having to pay, and they do not want to be a burden on the loved ones they leave behind.

What is sickening about this scandal—and it is a scandal—is that these individuals have been taken advantage of by a company that knew what it was doing. Like the hon. Member for Telford, I have been contacted by a number of people about Safe Hands Funeral Plans. Having looked at it in detail, it is clear to me that it knew what it was doing. Frankly, it was a scam. Why would someone invest unless they thought that their assets would grow over time and that their investment was guaranteed? But it took profits out, and the only way to plug that hole, as the hon. Lady said, was by recruiting more individuals.

Having spoken to people, I have learned of the scandalous hard sell used to very vulnerable people. It is no good criticising those people and saying that they should have asked questions. A lot of them do not have extensive experience of the financial sector. They might have a bank account; they might save for a pension or have a small pension. What they have not done is look at investments and other areas. They have been taken advantage of.

I agree with the hon. Lady that those individuals did what they thought was the right thing to do, and they should be commended for that. However, they have been left in a position where they are potentially receiving only 10% to 20% of the money they paid in. An Adjournment debate was granted on Safe Hands Funeral Plans on 12 May, but there have since been some updates. When the average funeral costs more than £4,000, and people paid in that money, that return will not go any way to covering the cost of a funeral. Are these people in a position to replace that loss by taking another plan out or saving in another way? No, they are not. The company should be called out, which is what the hon. Lady has done, for the way it has acted.

I heard from one of my constituents, who said:

“I am a 70-year-old pensioner, and a few years ago my wife persuaded me to take out a funeral plan in order that close family relatives were not burdened in any way upon end of life. My plan was fully paid up.”

Another said:

“We bought 2 funeral plans several years ago from Safe Hands Funeral Plans. We have just received a letter from the Administrator saying they have stopped trading and it seems our funeral arrangements are now at great risk. We were assured our money was safe and money was held in a trust so there was no risk. We are 75 years old and did the right thing we thought.”

They were lied to. I will come on to regulation in a moment, but could the Minister look at whether criminality has taken place in what Safe Hands has said and done? My constituents were assured that their money was safely put away. It clearly was not if directors were taking money out of the system.

Like the hon. Member for Telford, I think that the Minister tries very hard in a very difficult Department. I have had dealings with him on numerous Committees. He likes to do the right thing within the constraints of the system of that body we call the Treasury. I welcome the moves that have been taken in the Financial Conduct Authority’s new regulations, but there are outstanding issues that he needs to pin down.

Nobody should be able to sell a funeral plan without being regulated in any way—that should be a given. As the hon. Member for Telford has said, numerous companies clearly are not going to meet the test because they were never set up to do so, and she has referred to Ponzi schemes. We need a scoping exercise to see what level of scandal this is going to be. It is not going to be on the same level as the Horizon scandal involving postmasters and postmistresses—the hon. Lady and I also got involved in that. It could, however, be huge if companies go unregulated because they do not pass the test, with some ending up insolvent.

The FSCS is vetting funeral plan providers to see if they are fit and proper. Of the 75 funeral companies on its radar, only 32 have been authorised, while 20 indicated that they either do not intend to apply or have yet to seek authorisation, and 13 other providers, including Safe Hands, have withdrawn their applications. If we are not careful, those 13 cases could lead to more scandals similar to Safe Hands. There are also others. If companies are not in the scheme, they should cease trading or not be allowed to sell these plans; otherwise, vulnerable people will be taken advantage of.

We can do all the advertising and awareness raising we want, but the hon. Lady is right to say that this is not a generation of people who are on the internet. They are recommended these things through what they consider to be trusted third parties, and no matter what kind of information campaign we undertake, it is not going to get through to them. The way to stop the problem is to take the rogues out of this industry altogether through regulation.

Before I sit down, I would like the Minister to address the regulation information available on the FCA website. It states only that companies that do not sign up to new regulation

“might not be authorised by 29 July 2022 and will need to stop selling and carrying out funeral plans in the UK by that date.”

Can we have an assurance that any company that fails to sign up will not be able to provide funeral services after that date?

I would like to finish on the issue of Safe Hands. There needs to be a day of reckoning for the directors of that company. They knew exactly what they were doing. I think there is a case to look at whether criminality took place. As the hon. Member for Telford said, there is no way that the business model stacked up, even if looked at with a cursory glance.

I welcome what the Government have done so far, but will the Minister make sure that the regulation is watertight? His Department also needs to look at the extent to which other companies are going to fall over, because Safe Hands is potentially the first of quite a few. Also, what information can the FCA put out? I accept that this is a very difficult audience to get through to, but questions should be asked when people are signing up to these things. There are alternative ways of saving for their funerals. These types of plans might seem attractive to people when they are given a glossy brochure and sales patter, but sadly they will leave too many people who have worked hard and tried to do the right thing in a very precarious position. In addition to not having the comfort of having paid for their funeral, they may well now be out of pocket by several thousand pounds.

--- Later in debate ---

[John Glen]

Going forward, people either are regulated—those who are going on the journey into regulation by the end of July go under FCA regulation, and it will be keeping an eye on their selling practices—or become an appointed representative of a bigger, regulated firm, which keeps an eye on them, and then the FCA keeps an eye on it. Many firms, most firms—I think it is in the order of 67 firms—are going through the journey into regulation. There will be smaller firms that decide not to go on that regulatory journey, and either they will become authorised under the appointed representative regime or they will wind down, and return the funds to their customers.

Those are the two options. The FCA is working with the industry to smooth that journey. The House passed a statutory instrument to ease that process of transition. But those are the options available. Of course, we are midway through that journey, but what this afternoon’s debate has shown is the imperative of the industry working to sort out some of the issues that have been laid bare by the Safe Hands experience. I think Safe Hands is an exception, but it is a pretty awful experience for those customers. My belief is that this process of regulation will give clarity to the situation, going forward, in terms of who is regulated, how they are regulated and what being under regulation, either as an appointed representative or directly from the FCA, means. The FCA will be responsible for communicating that.

[Mr Kevan Jones]

I thank the Minister for his explanation. My fear and, I think, that of the hon. Member for Telford (Lucy Allan) is that there may well be other companies like Safe Hands out there that will not go down either of those routes, so I am interested to know what the timescale will be on that. In relation to Safe Hands, he talked about the administrators. What powers does the FCA have if it finds, in those smaller companies, clear scams? I would use the word “scams”, because that is what I think Safe Hands clearly was. What powers does the FCA have then to force the closure of those schemes?

[John Glen]

As I said, it is difficult to be precise in all circumstances because every situation is different. The purpose of giving the FCA that authority is that it has the powers to fine, regulate and insist on certain levels of transparency. Ultimately, if firms that go into regulation do not align with those expectations, the FCA has the power to wind down those firms—in extremis. At this point we are at the start of the journey. The conversations I have had with Dignity—

[Mr Jones]

Will the Minister give way?

[John Glen]

I will certainly give way to the right hon. Gentleman in a moment. Dignity has set up processes to ensure that they continue to comply with those regulations. Those firms that do not choose to be regulated, or do not choose to go under the appointed representative regime, will be obligated to wind down those plans and return those funds. Forgive me; I cannot give absolute clarity on the detail of that process, but I am happy to engage with the right hon. Member for North Durham beyond this Chamber to give him more clarity.

[Mr Jones]

I appreciate that the Minister has been very helpful with what he has described. However, my fear is that some of those small companies may keep trading and taking money off people when we know that they are not being regulated. Are we going to get to a date beyond which, to sell a funeral plan, a company has to either be covered by the FCA or go down the route just described? That will then give assurance to customers that at least there is some protection. I am not going to ask the Minister what that date is, but we do need some indication.

[John Glen]

My understanding is that the intention is for that process to commence at the end of July. In terms of the transition and the guidance to customers, I would need to refer to the FCA on that. I shall write to the FCA and make that letter available to the House of Commons, so that people can be clear about what the situation is.

Among the questions that the hon. Member for Erith and Thamesmead asked me was one about the Government’s actions to this point. We have taken action and we did legislate to bring providers and intermediaries within the regulatory remit of the FCA. That means that from 29 July, funeral plan providers will be subject to robust and enforceable standards on the sale of their plans. In future, consumers will have greater clarity and understanding of what is covered by their funeral plans, and will not be exposed to misleading or high-pressure sales tactics—an issue raised by the right hon. Member for North Durham. For the first time, funeral plan customers will also be able to take advantage of a redress scheme provided by the Financial Ombudsman Service, and benefit from the protection of the financial services compensation scheme. That reflects the point about this being a financial services product, raised by the hon. Member for Gordon. Indeed, we have seen a massive growth in that over the period between 2016 to 2019—a growth of, I think, 175%.

That is why we are doing it. We want to ensure that there is proper regulation that is meaningful and give consumers real assurance around what protections exist. It is also about proportionate regulation. Across my brief as Economic Secretary, I want to be able to boost competition and protect consumers. That is exactly as it should be. That is what drives me in the other areas of regulation that I am looking at, such as buy now, pay later. At the same time, the Government very much recognise the impact of the change that regulation represents for providers. That is why we introduced a transition period before the new rules came into effect—to give businesses the chance to prepare and adapt.

A key priority has been to minimise any disruption to customers resulting from the transition to regulation. The FCA has therefore said that providers who decide not to obtain authorisation, or cannot obtain it, should either wind down before the regulation comes into force or transfer their plans to a provider that will operate under the new rules. The Government recently laid a supplementary statutory instrument to make such transfers easier. That is in line with my responses to earlier interventions—I am glad my speech is in line with my head.

We are aware, of course, that when we bring a sector into regulation for the first time, some providers may be unable to meet the authorisation threshold. That point has been raised with me in representations from my right hon. Friend the Member for South Holland and The Deepings (Sir John Hayes) and representatives of the industry. The inability to meet those new standards due to issues with conduct, business models or trust arrangements does not mean that the regulation is at fault. Rather, the regulation is acting as a cleansing agent, weeding out unsustainable practices and preventing future consumer detriment.

Some Members have asked whether the Government are likely to compensate Safe Hands’s customers. I do not think it would be appropriate for us to set the precedent or expectation that the Government will use taxpayers’ money to compensate consumers for the misconduct of unregulated firms. The Government’s role is instead to ensure that appropriate regulation is in place to guard against such failures. However, the action of Dignity to take a lead as one of the biggest industry players, to make provision for an initial six months and develop a transition option for those who unfortunately are victims of the Safe Hands situation, is very welcome, and I call on others in the industry to follow Dignity’s example. We do not anticipate that there is something else on the scale of Safe Hands out there; we can never be sure—I do not have a crystal ball. Nevertheless, it is incumbent on the industry to continue to work with the regulator to find enduring solutions for as many people as possible.

There is no doubt in my mind that, by acting to protect consumers through a robust regulatory framework, we are doing the right thing. There was a consensus across the House: it was not just this Government, but Members from the Scottish National party and the official Opposition, who called for this action three or four years ago. A well-regulated market will also promote effective competition and do the right thing by consumers over the long term. As I have said, Safe Hands customers have been assured that they will be covered for at least another six months, and I implore others in the industry—other market participants—to take further action to protect consumers of firms that will not become authorised. Taking such action is good for consumers, but also for the reputation of the funeral plans sector. To that end, the Government and the FCA will continue to work closely with each other and the sector to ensure that the shift to regulation is as smooth as possible. That is what funeral customers deserve, and it is what they have a right to expect.

I will reflect on this debate, and if there are any matters that I feel I have not adequately dealt with, I will write to Members and publish a copy of that letter for the House to see.

Covid-19: Government Support for Business

Lord Beamish Excerpts

Thursday 16th December 2021 Commons Chamber

[John Glen]

The advice is clear: one should get the booster as quickly as possible—I did so on Saturday—take lateral flow tests and act responsibly. On Monday, I shall take my Salisbury team out for lunch.

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

Public health messages need to be clear and consistent, but last night the Prime Minister’s press conference was confusing and sowed turmoil in the hospitality sector. Another sector that is already hurting is small coach and bus operators, such as Stanley Travel in my constituency, who rely on Christmas and the new year for income to tide them over the fallow period of January and February. When the Chancellor comes back from his winter sun trip to California, will the Minister ensure that he does not forget the sector as we look at support in the coming months?

[John Glen]

The right hon. Gentleman legitimately raises a point about the whole range of businesses affected. That is why the Government’s priority was to give local authorities maximum discretion in how to allocate funds. As the Chancellor has done yesterday, today and every day, he will continue to focus on the needs of the economy and businesses up and down the country.

Public Health Restrictions: Government Economic Support

Lord Beamish Excerpts

Tuesday 13th October 2020 Commons Chamber

[Steve Barclay]

I hear the concerns of my right hon. Friend, but there is a balance that needs to be struck between the comprehensive nature and the fiscal cost of the range of packages that we have put in place and the measures that we have taken to control the virus. The balance that we have struck, in line with the advice that we have received, is about balancing how we control the virus with the wider implications not only for the economy, but for non-covid health issues as well. That is the balance that we are striking. Of course it is attractive for him to say that we should keep spending more and more, but we have already committed more than £200 billion.

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

The Prime Minister has been clear that the Government’s response to the covid crisis will follow the science. Last night, on a conference call with Professor Stephen Powys, the medical director for England, the hon. Member for Windsor (Adam Afriyie) and my hon. Friend the Member for Gateshead (Ian Mearns) asked about the science behind the 10 pm curfew on pubs and restaurants. Professor Powys said that there was no specific advice and in his words it was a “policy decision”. Given that thousands of jobs and businesses are at risk in tier 2 areas such as the north-east, can the Minister tell us what the logic is behind this policy decision?

[Steve Barclay]

As the right hon. Gentleman will know, that same SAGE guidance also says that there are multiple anecdotal reports of outbreaks linked to bars, and the Public Health England case control study also identifies visits to entertainment venues as a risk factor. It comes back to the point about balance. Some in the House say that there is a risk of infection in these hospitality venues and we should close them entirely; others say that we should have no restrictions at all. We have taken our decision on the basis that compliance tends to decrease later in the evening and that there are links to outbreaks in these venues. That is the balance that we have been striking.

Economic Update

Lord Beamish Excerpts

Wednesday 8th July 2020 Commons Chamber

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

At the beginning of this crisis, the Chancellor said that the Government would do “whatever it takes”. Local government finance is in crisis, but it was not mentioned in his statement today. Durham County Council has spent £62 million on its covid response and it has had £33.2 million from the Government, leaving £28.8 million for the taxpayer locally to pick up. When will he bring forward a comprehensive settlement for local government, which is being called for by all political parties in local government? Without it services will be lost and jobs will also be cut.

[Rishi Sunak]

As a former Local Government Minister, I know at first hand what a great job our local authorities do, but I would say to the right hon. Gentleman that the last two years’ settlements for local government have involved record increases in core spending power—

[Mr Jones]

No, they haven’t!

[Rishi Sunak]

They absolutely have—the highest in over a decade, two years in a row. In this crisis, we have provided £3.7 billion for local authorities and an additional £600 million for infection control. Just last week, at the Local Government Association conference, my right hon. Friend the Local Government Secretary unveiled a new deal with local government to help provide some compensation for the losses through income that has gone, in a sharing arrangement, and it was warmly welcomed by the sector and at the LGA.

Financial and Social Emergency Support Package

Lord Beamish Excerpts

Wednesday 25th March 2020 Commons Chamber

[Jeremy Corbyn]

My hon. Friend makes a very strong point. Indeed, that has been raised by my right hon. Friend the shadow Home Secretary and others on many occasions. It is absurd that we have highly skilled people in our society who are awaiting a letter from the Home Office before they are able to contribute to our society. We are talking care workers, doctors, social workers—all sorts of highly skilled people. They want to contribute to help us out, so I absolutely agree with my hon. Friend and I strongly support the view that he is putting forward to the Home Secretary.

We should also take a moment to say thank you to civil servants in the Department of Health and Social Care and other Departments. They are putting in incredibly long hours. I talk to local government workers in my local authority who are working really hard to try to ensure that the community and society are safe.

We should thank teachers who are having to go into school to ensure that there are some facilities and teaching available for the children of essential care workers, as well as for children who have very special needs. Let us value them and the work they do, and thank the National Education Union and the other teaching unions for the work that they have put in to ensure that that takes place.

Let us also thank those who deliver stuff—delivery workers, delivery riders and delivery companies, and also our postal workers—for what they do. Our postal workers suspended their industrial action—their wholly justified industrial action, I might say—to ensure that essential deliveries can carry on throughout this crisis. We should say thank you to the Communication Workers Union and to those workers for all of that.

When we talk about key workers, it is not only those I have mentioned who keep society going. On Monday, the Minister for Crime and Policing, the hon. Member for North West Hampshire (Kit Malthouse), said that

“when we emerge from the crisis…there will be a general reassessment of who is important in this country and what a ‘key worker’ means.”—[Official Report, 23 March 2020; Vol. 674, c. 15.]

He is absolutely right. We can all now see that jobs that are never celebrated are absolutely essential to keep our society going. Think of the refuse workers, the supermarket shelf stackers, the delivery drivers, the cleaners—those grades of work are often dismissed as low skilled. I ask the House: who are we least able to do without in a crisis—the refuse collector or the billionaire hedge fund manager? Who is actually doing more for our society at this very moment? Let us value people for the contribution that they make and respect the skill of the cleaner, the refuse worker, the postal delivery worker and all those others. Let us have respect for those who are part of the glue of our society. Right now, they need our help, and I hope that, as we look beyond this crisis, they will continue to get our respect, because people we respect should not be treated in the way they have been treated throughout the past decade of austerity.

Right now, we must guarantee for our NHS staff the personal protective equipment that they are crying out for. There must be no excuses: get it there and deliver it for NHS staff, care staff and all the others. Doctors have said they have had to go along to Screwfix to buy face masks. They need visors, long gloves, surgical gowns and hand sanitisers—and they need them now. It is not as if this crisis happened yesterday; the coronavirus broke out in China some months ago and has spread rapidly across the whole world. One doctor was quoted as saying:

“I feel totally abandoned. We don’t have the protective equipment that we desperately need and our children are being treated like orphans and sent off to care camps.”

NHS staff are putting themselves on the line for the rest of us; we must not let them down for a moment longer. It is a matter of their safety and the safety of their patients. For the same reasons, let us test all our NHS staff for the virus as quickly as possible. It is an absolute requirement to accelerate testing throughout the population—“test, test, test”, as Dr Tedros Adhanom Ghebreyesus, the head of the World Health Organisation, instructed us all to do quite some time ago. I pay tribute to him and the World Health Organisation for their steadfast and calm leadership during this crisis, and for pointing out that a world pandemic is going on and some countries are better able to cope with it than others.

As we look beyond this crisis, our NHS staff should be treated with respect, which means ensuring that the health service in which they work is well funded; bringing down their levels of stress, which are enormous; and ending the threat of the privatisation of their jobs and the outsourcing of services in NHS hospitals. Right now, can we ensure that our social care workers have the very best protective equipment that they need, and can we also have full testing for them? They also need financial security, an issue I raised at Prime Minister’s Question Time four weeks ago. A quarter of social care workers are on zero-hours contracts. Their job is, as we know, to travel from house to house, making contact with those often at the highest risk of death from this virus. They sometimes see 12 or more clients a day, spending time in their homes and potentially passing on the virus from one home to another and another. A lack of testing increases that danger all the time, so it is not just urgent, it is super urgent—like today, it has to be done. They need to be given the security to know that they can afford to stay off work if they have symptoms, yet none of them are included in the Chancellor’s scheme to pay 80% of wages. That must be addressed immediately. I pointed out in Prime Minister’s Question Time the situation for construction workers, and exactly the same applies to care workers.

As we look beyond the crisis, we need to learn the lesson and end the scandal of paying so little to those entrusted with the care of our loved ones. Let us end the disgrace of 1.4 million people being denied the social care that they need. Right now, the Government can give peace of mind to all self-employed and insecure workers with an income protection scheme equivalent to the one devised for employees. The Prime Minister said he would work on this very quickly, and it has to be done very, very quickly indeed; otherwise, we are all put at greater risk and danger.

Freelancers, workers on zero-hours contracts and those with no recourse to public funds still have no support. From cabbies to childminders, actors to plumbers, people are being told to do something absolutely extraordinary: to stop earning a living. Having made that demand, the Government—yes, the Government—have an awesome responsibility to ensure that these people do not fall immediately into hardship and that they are able to do what is necessary for public health.

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

Does my right hon. Friend agree that there has to be a crackdown on some employers? Constituents have contacted me this morning to tell me that employers are insisting that people go to work and telling them that if they do not turn up, they will not get paid. Even businesses that are clearly not on the list of key industries have done this. Does he think the Government should crack down on employers that are putting their employees at risk?

[Jeremy Corbyn]

If employers are putting us all at risk by forcing people to work in a non-essential industry or company or non-essential work, they should be sanctioned, and those sanctions should include fines. They have to understand that they have a responsibility as well.

The Government should ensure the closure of any construction work that is not urgent or health and safety-related, just as Transport for London and the Scottish Government have already done—and remember, both have many major building projects going on at any one time.

--- Later in debate ---

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

I know that all right hon. and hon. Members will want to pass on their condolences to the family and friends of the 435 people who have died in this coronavirus epidemic. Each of those deaths is a personal tragedy for them and their families, and, sadly, we know that there will be more in the coming days and weeks. I also want to put on the record my thanks to those working in the NHS, our vital emergency services, including the police; the civil service; and to local government officers, some of whom are working round the clock; retail distribution workers; postal workers; and those in our armed forces. Mention was made earlier of cleaners, whom we should thank in particular, because they are going to be important in fighting this epidemic. We need to be honest and say that these are fraught times and tempers may get frayed in the coming weeks and months, but may I urge people not to take it out on the individuals who are there working on our behalf—shop workers and others—who will be vital in getting us through this crisis?

I am disappointed that the Government have not brought forward measures to support the self-employed. Last Thursday, I raised the case of Andrew Brown, a graphic designer in my constituency whose business folded overnight last week. Since then, I have been inundated with questions from individuals who are in real need—taxi drivers, self-employed individuals, and people who run businesses. Let me say to the Minister, as I said to the Chancellor last week, that these individuals do not have recourse to independent wealth and do not have masses of savings. In most cases, they are living and working week to week. Some, such as taxi drivers, have ongoing bills, for example for the rental of cars, that they have to meet. If they cannot work, they do not have recourse to funds that they can suddenly find somewhere else. It is important that a sense of urgency is brought into this, and I am not sure the Government recognise the deep upset, hurt and fear that these people are facing.

[Catherine West]

My right hon. Friend is making an excellent speech. Does he agree that it is deeply disappointing that the package is likely to come out tomorrow or Friday, when the House is not sitting, so Members will not be able to scrutinise it in the way in which we are accustomed to do?

--- Later in debate ---

[Mr Jones]

I totally agree with my hon. Friend. I have been raising this issue for the past week, as I know other colleagues have. The Federation of Small Businesses, for example, has been lobbying not only us but the Government, asking them to do something urgently about this.

Another key point is that some individuals, if they are not supported now, will not be in business after the crisis is over. All our communities need the services that those businesses supply. It is about not only supporting individuals, but supporting those businesses in our local communities. I urge the Government, as I have been doing for the last week, to do something about that urgently. I hope that that comes in.

When the Financial Secretary to the Treasury opened the debate, he talked about communications, which the Government have not got right. The hon. Member for Glasgow South West (Chris Stephens) mentioned companies that are still asking people to go to work. It is okay for the Prime Minister to go on television and say, “This is what you can do,” but this morning I received telephone calls from individuals who have been told by their employer that they must go to work in their local engineering company or they will not be paid.

That is fine for people who have great savings or access to a trust fund, or for those who are independently wealthy, but some people need that money to survive. The messaging is okay when it is said, but turning that into action is another thing altogether. As the hon. Member for Gordon (Richard Thomson) said, some companies know that their workers are not needed with regard to the criteria that have been laid out. They are putting not just those individuals at risk, but the rest of us as well.

The other issue is the support that has already been given to business. I welcomed the comprehensive package that was introduced last week for business but, again, communication is an issue, and the Government need to look at that. As the debate started, I received an email from Scott Hawthorne, who runs a waste disposal company in my constituency. He asked whether it would be possible to get clarification on the announcement on furlough funding, because he wants to keep people on. However, he cannot do so, since he cannot explain the basic, simple messages to people because he does not have the information about what the deal is. His finance director cannot make an assessment regarding cash flow, who they can keep on, and whether they will get the money in time.

Earlier in the week, that waste disposal company offered its services to the local county council. The company wants to do good, but the messaging has to get out. I know the people at this company; if they are having difficulty interpreting the Government’s scheme, I am sure that others will be in a similar situation. That is leading to a lot of uncertainty on behalf not only of companies, but the individuals they employ. There are companies that want to do the right thing by their employees, and we should support them. I urge the Minister to ensure that that advice is put up on Government websites and reaches such companies as a matter of urgency.

In Durham, we have a number of prisons and a lot of prison officers live in my constituency. There is an issue for prison officers regarding exposure to the virus in prisons. The Government need to take some steps as a matter of urgency to ensure that those prison officers and other people working in prisons have protective equipment. I think the Government will also have to make the decision to release individuals to take pressure off those hard-working staff.

On communication, the hon. Member for Southend West (Sir David Amess) mentioned MPs having hotlines. If those hotlines are anything like the one that the Foreign Office set up, do not bother, because it did not work. We have people abroad. The message has been put out: “Please return home from overseas.” However, if people do not have the means of doing so, that needs to be put right straightaway. In Prime Minister’s questions, my right hon. Friend the Member for Warley (John Spellar) raised the issue of leasing aircraft. That needs to be done as a matter of urgency, to get those people home.

I will finish on the issue of community support. These are dark times but there is a lot of good will out there. I have been humbled by the great work being done in my constituency. People have been coming forward to help Pact House, a community charity in Stanley in my constituency that is delivering meals and support to local people. Local people want to do the right thing, but they need to know how to do it. I congratulate Stanley Town Council, which yesterday provided £63,000 to a number of community groups, to support their efforts in these difficult times.

The Government need to address the point made by my hon. Friend the Member for Mitcham and Morden (Siobhain McDonagh). We supported charities in 2008—I can remember doing it. Without direct financial support, some of these charities—we need them now and we will also need them in the future—will go under. It is important that that is also done as a matter of urgency. There are demands on their services now and we are going to need them in the future. Without them, we will find it very difficult.

Finally, I wish you and your family all the best, Madam Deputy Speaker, in staying safe in the coming weeks and months. I also extend those wishes not only to all right hon. and hon. Members of this House, but to the hard-working staff who have worked really hard over the past few weeks to keep us going. Let us think about them in the coming weeks and months.

Self-employed Persons: Financial Support

Lord Beamish Excerpts

Tuesday 24th March 2020 Commons Chamber

[Steve Barclay]

As I have said, the Chancellor held meetings with small business leaders this morning. He is having further meetings on this issue today. He is very aware of the concerns raised by my right hon Friend and other Members, and we continue to work at pace on this issue.

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

I am sorry that the Chancellor is not here, but may I ask the Minister to pass on to him that the self-employed people contacting me are not wealthy individuals? They are individuals such as Andrew Brown, who I raised last week—a self-employed graphic designer whose income has disappeared. They are taxi drivers. They are small catering companies. Unless action is taken now for these individuals, not just to relieve the hardship they are facing, their businesses will no longer be in existence. My fear is that we will generate unemployment among these people for a long time to come.

[Steve Barclay]

I agree with the first part of that. The right hon. Gentleman is absolutely right about the vast majority of these people. I have made that point repeatedly. I referred earlier to the fact that the target population has different elements, but the vast majority of those who are self-employed face enormous challenges. We absolutely hear that, and I accept that. On his second point, we have taken a number of measures, but we recognise that more is needed. That is why my right hon. Friend the Chancellor is meeting leaders on this issue today to look at what further measures we can bring forward.

Oral Answers to Questions

Lord Beamish Excerpts

Tuesday 24th March 2020 Commons Chamber

[Rishi Sunak]

I thank my hon. Friend for his comments and pay tribute to the work that he is doing to represent his constituents and make sure that his local businesses get the support that they need. I hope that his businesses welcome the various interventions that we have provided in terms of cash flow support, tax relief deferrals, and subsidised loans to help them get through this difficult period. If he has further ideas that he thinks we should consider, I would be very happy to talk to him further.

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

Supply teachers play a vital role in our schools. Many thousands, including my constituent Ellie Atkinson, have found themselves out of work, so may I urge the Treasury to look at a way of supporting these vital workers, either with direct financial support or by ensuring that they can actually work in the schools that are being kept open?

[The Chief Secretary to the Treasury (Steve Barclay)]

The right hon. Gentleman will know that school budgets have been allocated, so the schools already have that money to spend; that will not change. The announcement that the Chancellor has made about the PAYE system is about supporting people through that mechanism. If the right hon. Gentleman has other proposals, I am happy to engage with him to discuss them further.

Coronavirus Bill

Lord Beamish Excerpts

Committee stage & 3rd reading & 3rd reading: House of Commons & Committee: 1st sitting & Committee: 1st sitting: House of Commons
Monday 23rd March 2020 Commons Chamber

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

I accept that there is going to be a lot of pressure on doctors. I understand why the provision has been introduced, so that one doctor can sign documents to commit someone under the Mental Health Act 1983. Would not a better way of doing it be to get one doctor to sign the documents then, within a period of days, have someone else review the case while countersigning the documents?

[Nick Thomas-Symonds]

My right hon. Friend makes a useful and constructive suggestion. I am in favour of doing all that is reasonably practicable to comply with the existing duty—that is the simple position that the Government should adopt. I do not disagree with my right hon. Friend. He makes a useful suggestion, which is why I also suggest that a single doctor should sign only when absolutely necessary. Even in that case, the point that my right hon. Friend makes is useful. I am sure that the Government understand concern about the proposals, and I hope that the Minister will be able to provide us with reassurance.

Turning to the issue of law and order, I would be grateful if the Minister passed on my gratitude to the Security Minister, who has spoken to me mostly from home, where he is self-isolating, on a number of provisions in clauses 21 and 22 on the appointment of temporary judicial commissioners, changes to urgent warrants under investigative powers, and an additional measure on data retention. I understand that the biometrics commissioner supports that measure, but I hope that he can comment on and deal with those provisions in the next few days.

I also understand that action will be taken to ensure that the temporary judicial commissioners receive the appropriate training, but clearly that will have to be done on a remote basis. It is important that we maintain existing standards as far as possible.

I know that the measure on data retention is an emergency power—of course, we do not want data on people who may wish to do us harm simply to disappear because somebody was not available to carry out the national security determination—but we must say, as the right hon. Member for Sutton Coldfield (Mr Mitchell) did in relation to the last point, that this can only be a temporary measure. We must return to the existing deadlines as soon as we can.

Courts and tribunals are covered in clauses 51 to 55. Clearly we must look to live links and audio technology, but we must try to secure justice in each and every case. We cannot allow any court user to be in danger of being transmitted the coronavirus. The Lord Chief Justice has said today that there will be no new jury trials, but clearly some jury trials—including some very long-term ones—are still ongoing. Every step must be taken to ensure that social distancing is imposed by the judges in those courts.

Although all Members agree on following advice about self-isolation, in cases of domestic violence self-isolation can create a situation that is favourable to abusers. Therefore, where our courts are functioning, dealing with domestic violence must remain a priority.

--- Later in debate ---

[Helen Hayes]

Time is very limited this evening, but I want briefly to return to an issue that I did not have time properly to probe on Second Reading: the question of people with learning disabilities and autistic people whose rights are at risk as a consequence of the Bill. As someone who has campaigned on the “Transforming Care” agenda and the Government’s failure to implement it over many years, I know that there are people the autism community and among those who support people with learning disabilities who are very worried that the Bill could result in further unnecessary admissions to hospital. This could happen both indirectly, through the withdrawal of support for autistic people and people with learning disabilities, resulting in a higher incidence of crisis, and directly, through provisions in the Bill that make it easier for people to be detained.

Any institutional setting where large numbers of people live together has increased risk of covid-19 spreading. Families who have battled for years to get their loved ones out of hospital are very frightened that the Bill could mean that their loved ones end up being detained once again, and that if this happens they might also fall victim to covid-19. Once again, I want to seek assurance from the Secretary of State for those families that their loved ones will not end up once again in settings that have been traumatising in the past and where abuse has taken place, as a consequence of the Bill.

[Mr Kevan Jones]

I ask the Minister to look again at the provisions in the Bill around the Mental Health Act 1983. I accept the reasons why having one doctor to free up capacity might be relevant, but could the Minister consider provisions under which one doctor signs and that is reviewed by a second doctor within a day or a very short period? Without that, some very vulnerable people could be left unprotected.

I accept the reason why elections have been postponed. However, in County Durham, we have a police and crime commissioner by-election due in May because of the death of the PCC. The acting commissioner is only in there for six months, so is there provision to extend his period by up to another 12 months? That will be needed, because the elections will not take place next year.

Lastly, I urge the Minister and the Treasury to do something for self-employed people.

[Yasmin Qureshi]

Earlier, I asked the Minister about cremation and I know that she gave me the assurance that no one would be cremated or buried against their religious wishes. However, with all due respect, assurances from the Minister are not the same as provisions in the Bill. The Bill still says that it is “desirable” to ask for views and to do something, but unless the body of the Bill actually states that nobody can be buried or cremated against their religious wishes, the law as it stands is that that is not compulsory—the idea is only advisable or only something to do with consultation. I say that because currently the legislation is that someone cannot be cremated without the consent of the person.

The precise reason why the Government introduced the legislation was so that they could circumvent that by putting in the provision saying it is “desirable”. In a court of law, “desirable” is not the same as saying “you must” or “you cannot cremate or bury somebody unless they wish that to be so”. That is the kind of guarantee that is required in the body of the Bill.