Customs Safety, Security and Economic Operators Registration and Identification (Amendment etc.) (EU Exit) Regulations 2020

Lord Tunnicliffe Excerpts

Thursday 19th November 2020 Lords Chamber

[Lord Tunnicliffe (Lab) [V]]

My Lords, I am grateful to the Minister for introducing this statutory instrument and to other noble Lords for their contributions to this debate. I also express my thanks to the Secondary Legislation Scrutiny Committee for its important comments on this instrument.

The importance of getting customs processes right cannot be overstated. As we all know, we have left the EU and will soon leave the 12-month transition period. It is still possible that there will be a deal that facilitates trade in goods, but we cannot know whether the noble Lord, Lord Frost, and his team will succeed. Had the Government chosen to pursue a different course during the Brexit process, it is possible that we could have avoided the need for a new customs regime to be designed and implemented in record time. However, we are where we are, and it is in everyone’s interests—those of businesses and consumers alike—that Ministers get this right.

This instrument introduces a temporary waiver on the entry summary declarations. It also amends requirements in relation to the registration of businesses to ensure there is no major change to the UK’s powers at the end of the transition period. On this matter, the measures before us supersede a previous set of regulations. In relation to the first change, the Government present this policy as a favour to businesses, allowing them more time to prepare for our movement to new procedures, particularly in the light of the Covid-19 pandemic. While businesses will undoubtedly welcome the degree of flexibility, I hope the Minister will forgive me for being sceptical about his justification.

The Government set out the bulk of their customs policy proposals earlier this year, promising an array of new IT systems and the recruitment of 50,000 new officials by the end of the year. In recent months, we have seen a number of media reports, supplemented by National Audit Office analysis, suggesting that things were not progressing as hoped. On the IT side, could the Minister give us an estimate, in percentage terms, of our readiness? Is there any link between the ENS postponement and the Government’s ability to process the data? On recruitment, the Government have repeatedly refused Labour’s requests for information on numbers. Can the Minister confirm today how many of the 50,000 have now been recruited? Of this number, how many have received the necessary training to operate on the ground from January? I am happy for the noble Lord to write if he does not have the information to hand.

The changes to the timing of entry and exit declarations appear, at face value, a sensible step. Over the past four years, the road haulage industry has voiced concerns that the Government have not fully got to grips with the challenge hauliers will face beyond the transition period. I appreciate that Ministers have engaged with industry, but there have sometimes been concerns that such engagement has been half-hearted. With many ports already facing capacity issues, coupled with the well-documented steps being taken in Kent, we need to take any and all steps that will keep vehicles moving and ferries departing on time. I understand the justification for the two-hour deadline but would like to ask the Minister whether this will be kept under review and, if any changes are required, how they will be delivered.

I turn now to the Secondary Legislation Scrutiny Committee’s exchange with the department on the lack of impact assessment alongside these regulations. HMRC may be correct that this measure does not require an impact assessment due to its short-term nature. However, the Minister and I have had several exchanges on the quality of Explanatory Memoranda in recent months. Does he accept that, even if a formal assessment was not deemed necessary, the inclusion of relevant facts and figures, including the likely costs to businesses within and after the ENS waiver, was desirable? If he does, will he feed that back to his officials?

Finally, I will make a brief point that goes slightly beyond this instrument. The SI does what it can on the matter of imports but excludes exports for obvious reasons. While I appreciate that the Minister cannot control the protocols put in place by others, I hope he can provide some reassurance that this other, rather large piece of the trade jig-saw is being dealt with through the relevant channels.

Future of Financial Services

Lord Tunnicliffe Excerpts

Wednesday 11th November 2020 Lords Chamber

[Lord Tunnicliffe (Lab) [V]]

My Lords, I am grateful to the Minister for dealing with the second Treasury Statement in as many days. This Statement is billed as a prelude to the Financial Services Bill, which we will be able to scrutinise following its Commons stages. The process promises to be an interesting one, and I hope the Minister will avail himself of the expertise that exists across your Lordships’ House.

The Chancellor was correct to outline the importance to our economy of the financial services sector. It is a huge employer, generates a significant amount of economic activity and makes a large contribution to the Exchequer. It is vital that we harness the potential of financial services to grow our economy, particularly in terms of green growth.

It is a shame that this Statement has come only now. As it stands, we are weeks away from leaving the transition period without an agreement giving UK firms preferential access to the EU markets that are so important to their day-to-day operations. The Government have unilaterally published equivalence decisions for EU and European Economic Area member states, but the Minister will concede that that gets us only so far.

In his Statement, the Chancellor reiterated the Government’s position that an equivalence determination for UK firms should be simple and swift as we start from a point of regulatory alignment. If that were true, why were the Government not able to secure equivalence determinations by the deadline set out in the political declaration? The Chancellor has sought to blame the EU, but when the Government were asked to complete various questionnaires to aid that process they managed just four out of 28 by the June deadline.

While we may start at a point of alignment, decision-makers in the European Commission will no doubt be studying the Financial Services Bill in detail. Equivalence may not require total alignment, but it seems odd for the Government to amend UK regulations at the same time as demanding that our EU colleagues take a snapshot of them. Does the Minister believe that the contents of the Financial Services Bill are likely to have any bearing on the ongoing discussions? Is it possible that the EU will delay a ruling until that Bill is on the statute book? We will scrutinise the Bill closely, not only in the context of equivalence but to ensure that the reforms do not lead to a deregulatory race to the bottom that puts investors and financial stability at risk.

I turn to the green components of the Statement. The Government would have us believe that their commitment to tackling climate change is second to none, but those of us who share an interest in recent legislation will be sceptical, to say the least. We are told that everything done by Ministers is with a net-zero future in mind, but time after time they oppose sensible climate amendments, most recently on the Agriculture Bill. While the various green finance initiatives announced in recent days represent a degree of progress, the Treasury has not gone as far as many would like. It is certainly not the comprehensive green agenda that is needed to make swift and decisive progress towards the 2050 net-zero target and our wider international obligations. As the shadow Chancellor observed in her response in the Commons,

“Over the last decade, the UK has pumped £6 billion into overseas fossil fuel projects via UK Export Finance”.—[Official Report, Commons, 9/11/20; col. 621.]


There is no indication that this behaviour will be banned, undermining any meaningful action taken in the UK.

The Financial Conduct Authority has signalled a change in approach to firms’ disclosure of climate-related information, which we support. However, mandatory reporting will not be implemented until 2025. Why are the Government not being more ambitious? Green gilts are another case in point. How can we be sure that the money will represent genuinely new investment? Why have the Government waited until 16 other countries have introduced their own schemes, rather than taking the lead on the issue of green financing?

I wish I could be more optimistic, but, sadly, I remember the story of the Green Investment Bank. The institution, proposed in the last Labour Government’s final Budget, should have been key to improving the UK’s environmental record. Instead, just years into its existence, it was sold off by the former Business Secretary Sajid Javid. Earlier this year, a government Minister suggested at a roundtable event that the “Green Investment Bank 2.0” could materialise in the future. Can the Minister confirm whether this is being looked at and, if so, when we can expect news?

[Baroness Kramer (LD) [V]]

My Lords, I declare my interests as listed in the register. I agree with the Chancellor that financial services are fundamental to Britain’s economic strength. However, I recommend that anyone looking to assess their future ignore the hype in the Chancellor’s statement—he seems to have drunk the moonshot Kool-Aid—and look at reality. Our failure to negotiate mutual recognition, or at least equivalence-plus, with the EU is a serious problem. If only the Government had taken as much interest in this area as they do in fishing or, as Catherine McGuinness of the City of London Corporation is quoted as saying in today’s Times, finance risks being

“the neglected child of an acrimonious divorce”.

Over £1 trillion in assets have already transferred from the UK to the EU. Last year, Ministers seemed to think that half the financial services business with EU clients, which is about 15% of total UK financial services, had left or was in the process of leaving, including swathes of insurance and asset management. Is 15% still the number, I ask the Minister? The size of these asset transfers suggests that the actuality is well above those expectations. Job transfers are unclear because of Covid, but we do know that, even in 2019, the recruitment of graduates who do not have EU passports had pretty much collapsed for anything except retail banking.

The EU, which I once thought had a 10-year strategy to remove, slice by slice, most EU and euro-related financial services back to the 27, seems to have accelerated that programme. For example, Mr Dombrovskis has cautioned EU businesses to shift a significant portion of their clearing activity out of the UK in the next 18 months. Without dominance in clearing euro-denominated derivatives, the UK’s global role is seriously at risk. Does the Minister agree?

On fintech, many firms have made it clear that they will have to move EU business if we cannot agree on the rules that govern data. Where are negotiations on this, because at the last look they were pretty dire, with the UK determined to please the United States by watering down data protection?

I am delighted that we are finally going to issue a green sovereign. We may be a leader in green finance now, but every single significant financial centre is committed to the green agenda. I note that the EU is expected to issue €200 billion in green bonds as part of its Covid recovery fund, none of which will be issued through London. But will the Government replace the Green Investment Bank? The noble Lord, Lord Tunnicliffe, mentioned it; it was sold off in part because, along with the British Business Bank, it was associated with Vince Cable, but that was also a deliberate act of environmental vandalism. Will it be replaced?

We are entering a period of regional economic blocs. The United States has actively repatriated a great deal of dollar financial services. China and Asia generally, contrary to the expectations of George Osborne, are using Hong Kong and Singapore rather than London, even with all the disruption in Hong Kong. India is developing Mumbai, so I caution the Government not to misread the potential of dialogue with India. We are now outside all the regional blocs. We have capacity and skills in financial services, but everyone else has the clients and issues the major currencies. You can move capacity and skills, but you cannot move the clients. London will remain a global centre but, I fear, one of gradually less significance. Will the Government give us a reality check on the future of this crucial industry and a proper assessment of the damage that their hard-line Brexit is delivering?

Economy Update

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Tuesday 10th November 2020 Lords Chamber

[Lord Tunnicliffe (Lab) [V]]

My Lords, I am grateful to the Minister for presenting this Statement. It is the latest in a series of announcements and, while there are aspects that we very much welcome, it is a tremendous shame that it has taken so long and required so much frustration and anxiety among businesses and working people. The Labour Party has called for clarity on job support for months. In that time, rather than providing certainty, the Chancellor proceeded with winding down the furlough scheme. That decision was taken despite its apparent success at keeping people employed and warnings of the impact of a perceived cliff edge in support.

Instead of protecting as many jobs as possible, Mr Sunak was honest about the fact that he had decided to focus on so-called viable jobs instead. The replacement scheme was announced with little accompanying detail and, when the information finally emerged, it became apparent that the Job Support Scheme—JSS—would not do, even in the revised form announced mere days before its planned commencement. We now find ourselves with the Coronavirus Job Retention Scheme—the CJRS —extended to March, with a review of the proportions paid by the Treasury and businesses themselves to be carried out in January. This finally provides a degree of certainty to businesses, and we are pleased that they can now plan accordingly. However, not for the first time, the decision came much too late.

This entire process raises several important questions, which I hope the Minister will address. I appreciate that our time is restricted, so I would welcome a letter with any detail he is unable to set out today. What evidence base did the Chancellor draw on when announcing the planned shift from the CJRS to the JSS? Did that modelling predict that jobs may be lost in the short and medium term as a result? If so, how many? How does this match up to the reality reflected in recent figures? Does the Treasury anticipate any of these job losses being reversed and, if so, how many?

I now turn to the continued issues with the Self-employment Income Support Scheme. In last week’s response to an Urgent Question, the Minister cited the number of claims made under the SEISS and assured noble Lords:

“We keep under review the whole issue of trying to protect those who have fallen through the cracks.”—[Official Report, 4/11/20; col. 708.]


I accept the point he made in relation to certain changes to universal credit, which marginally improve the situation for some of those excluded from the SEISS. However, this ignores the key issue, which is that so many people remain beyond the scope of the Government’s core coronavirus economic support and are, instead, forced to rely on an inadequate social security system.

How can Ministers and their officials not have found a solution to this in the past six months? Is the problem that the Minister and the department do not believe there is one, or is there a lack of political will to bring one forward? What would he say to those who, by the end of the current package, will have been outside the scope of government support for a full calendar year?

Finally, I was grateful for the promise of correspondence on self-isolation payments and the technicalities of that system. I have some further points on this. A study by Independent SAGE suggested that only approximately 20% of people in England who experience Covid-19 symptoms go on to follow fully the Government’s self-isolation guidance. Now that we find ourselves subject to a new lockdown, what steps are the Government taking to address this worrying trend, so that there is higher compliance when the current restrictions are eased?

I touched last week on people being ineligible for self-isolation payments if they receive notification via the mobile app rather than an NHS contact tracer. There are many other issues with eligibility, meaning that only one in eight workers is covered by it. In the gig economy, the situation is potentially even worse. Those workers do not enjoy statutory protections and often cannot afford to miss even a day’s work. While some digital platforms have put in place their own measures, this relies on good will and discretion rather than providing guarantees to those in need. What, if anything, do the Government have planned in this area? How soon are we likely to see the details?

[Baroness Kramer (LD) [V]]

My Lords, last week the Minister was not a bit keen on my call for an extension of the 80% furlough scheme to June. Now it looks as though I will get that until at least April, unless there is a poison pill in the January review—though I suspect, quite frankly, that the Government would not dare. I also called on the Government to feed the kids. What a difference a week makes. I am glad they have finally faced up to the realities and have U-turned on quite a range of issues.

They should still do more for the self-employed, whose income support grant ends at the close of December. They cannot be left out in the cold at the turn of the new year. Again, not a thing has been done for the 3 million excluded. The clue is in the name: excluded. There is no point in the Minister quoting programmes that these people cannot access and use. Letting them down is unacceptable.

On the same day the Chancellor made the furlough announcement, the Bank of England announced another £150 billion of QE, which will bring its holding of government debt to over £900 billion. There is a widespread market sentiment that this policy has come to the end of the road. Will the Government comment on that and the implications of negative interest rates, which are now being explored by the Bank? Are we really saying that savings are worth nothing, and that ordinary people need to take increased financial risk in a time of such uncertainty, created by not just Covid but an imminent economic Brexit?

Covid-19 Lockdown: Economic Support

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Wednesday 4th November 2020 Lords Chamber

[Lord Tunnicliffe (Lab) [V]]

My Lords, the announcement that the Self-employment Income Support Scheme grant will increase to 80% for November is welcome. However, the Chancellor still has not moved on the issue of the thousands who are not eligible for payments. When will the Government act to ensure that the scheme provides wider and fairer coverage, rather than awarding a 55% grant to some and nothing to others? In addition, can the Minister confirm whether the test and trace support payment will be extended to those who receive a notification via the NHS app? Will the size of the payment remain the same even if the Government reduce the self-isolation period to seven days, as has been reported in recent days?

Covid-19: Economy Update

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Tuesday 27th October 2020 Lords Chamber

[Lord Tunnicliffe (Lab) [V]]

My Lords, as ever, I am grateful to the Minister for presenting this Statement. When we last discussed the economic update from the Chancellor on 28 September, he was rather unhappy with my characterisation of it as

“another example of Ministers reacting to events, rather than attempting to shape them—of allowing problems to grow, rather than acting quickly and decisively to prevent them in the first place.”—[Official Report, 28/9/20; col. 18.]

The fact that we find ourselves discussing major revisions to the package of measures outlined just a month ago suggests, sadly, a lack of strategic thought in both No. 10 and No. 11 Downing Street. While some of the changes outlined by the noble Lord are to be welcomed, there is too little detail on how others will operate in practice. We know with financial Statements that the devil is in the detail, but on too many fronts we are still waiting for that detail to be finalised.

I have no doubt that the noble Lord will tell us not to worry and that everything is under control. However, in an ideal world, the Treasury would not be redesigning the Job Support Scheme a matter of days before it went live. That it is having to revisit its plans will have done nothing to address the anxiety of businesses and workers, which I referred to during our previous discussion. The revisions to the JSS and the announcement of an increase to the third grant for the self-employed are small steps in the right direction. Additional support for businesses operating in tier 2 and tier 3 areas is also welcome, although the announcement of new funding for such businesses makes it puzzling that some of that support was withheld when requested by the Mayor of Greater Manchester earlier last week.

We hope that changes to the formula for the JSS will encourage businesses to keep on more workers. However, as a range of commentators have noted, the late arrival of the announcement means that many thousands of jobs that may otherwise have been safeguarded have already been lost. As I said last time, each job loss is a personal tragedy. More needs to be done to protect people’s jobs and that requires a concerted government effort. Despite the changes announced last week, many workers still face noticeable reductions to their pay.

Despite taking home less, people will still have bills to pay, including mortgages and rent. The Government previously chose not to extend the statutory protections from eviction in place during the first wave of the pandemic. For homeowners, the ban on repossessions comes to an end on Saturday. Will the Minister confirm whether either policy is being revisited in light of the second wave’s arrival and the very real likelihood of unemployment continuing to rise?

The noble Lord will no doubt have seen the headline in the Resolution Foundation’s latest research on the Government’s Self-employment Income Support Scheme. The organisation echoes what we have said for some time: the programme has been poorly targeted and often missed those who are most in need. Its analysis suggests that a substantial number of beneficiaries have lost either no or minimal income as a result of the pandemic, whereas half a million people have received nothing, despite being left without work. The Treasury has had time to look again at the furlough, so why has it not properly revisited the self-employment equivalent? Will the Minister commit to doing that and, if so, can he provide a timescale? Will he also outline the rationale for the third grant being equivalent to just 40% of pre-crisis profits, rather than the higher levels of previous rounds? Why is the work of the self-employed suddenly less valuable than it was previously?

We appreciate the unprecedented nature of this public health crisis and the scale of interventions required. However, I hope that the Minister recognises that this is an equally challenging time for businesses and working people across the UK. They need meaningful support and early sight of the details so that they can make the right decisions for the future. The Government’s habit of last-minute announcements, often without accompanying detail, is severely undermining public confidence. This has been the case for not only economic measures but public health measures. I hope that the Minister can provide assurances that future announcements will come earlier and with more clarity. People’s jobs and our wider economic recovery depend on it.

[Baroness Kramer (LD)]

My Lords, this feels like déjà vu. Once again, the Government are forced to revise and increase their support for businesses. We need them to give up their bravado and recognise the depth of the economic crisis coming both from Covid and from the harmful economic realities of Brexit, undercutting investment and jobs, even with a deal. Frankly, we desperately need a new OBR forecast, even if without a Budget. While I understand the Government choosing just a one-year spending review, we should be getting open kimono on the long-term issues and choices for discussion in this House and elsewhere. This is not the time for secret spells cooked up in No.10. The situation that we face is far more dire and needs the resources of everybody’s minds and energy.

I want to make two pleas to the Government. First, feed the kids. I know that we have just taken a PNQ on that subject but the money provided to local government under the local authority welfare assistance fund and others was never intended to cope with the present scale of demand, when much of the country is necessarily closed down again, many people are facing redundancy at the end of the month in just a few days’ time, homelessness is rising, and mental health and other demands on local services are increasing exponentially. Many Liberal Democrat, Labour and Conservative councils have stepped in to provide food vouchers to children on free school meals, but that is at the price of financing other needs. Families who qualify for free school meals have by now exhausted any savings, borrowed anything that a respectable lender will let them have and tapped out family and friends. Please will the Government put in place a voucher system to at least carry us over to next Easter?

Secondly, will the Government finally step in to help the 3 million excluded people? They consist primarily of self-employed contractors with personal service companies but also include a range of other people in the self-employed arena. There has, by now, been plenty of time to set up appropriate schemes. The Government argued from the beginning that the issue was complicated, but there has been time to sort it out. As the Resolution Foundation pointed out, and as the noble Lord, Lord Tunnicliffe, described, the SEISS has been badly targeted. The self-employed have suffered an even bigger market shock than employees, and with so many people facing redundancy and needing to look to self-employment for any future income, it is absolutely crucial that proper support is put in place for the self-employed, under whatever arrangements they have established.

Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020

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Tuesday 6th October 2020 Lords Chamber

[Lord Tunnicliffe (Lab) [V]]

My Lords, as ever, I am grateful to the Minister for introducing these important regulations and to all noble Lords who have taken part in the debate. It is a good illustration of the breadth knowledge of the specialist areas that we find in our House, and the extent to which there has been consensus on this matter is gratifying.

I also express my gratitude to the Secondary Legislation Scrutiny Committee, which brought a previous iteration of this instrument to the attention of the House. It has since engaged in correspondence with the Treasury regarding its plans for effective signposting to the new measures, as acknowledged in the committee’s 27th report and paragraph 11 of the Explanatory Memorandum.

These regulations are an example of the value that your Lordships’ House brings to the scrutiny of legislation. My noble friends Lord Stevenson of Balmacara and Lord Mackenzie of Luton, and several others, took up this cause during the passage of the parent Act. It is to the Government’s credit that they heard and accepted the arguments, bringing forward their own amendments on Report. Given the volume of legislation that we are currently dealing with, perhaps the Minister could remind his colleagues that good things can come from having an open mind and working together.

The breathing space scheme introduced by this instrument has been long championed by organisations such as StepChange. It is based on a successful scheme that has been working in Scotland for a number of years and is designed to offer people with unmanageable problem debt greater access to the financial advice they need—and at an earlier stage, too. We are delighted to note that the Government accepted the views expressed by virtually everyone they consulted on the draft regulations and agreed to include in the scheme all unsecured debts, including those owed to the Crown. There is also a welcome focus on special support for those who suffer from mental stress as a result of their debts. This will make a huge difference, particularly as the pandemic continues.

Implementing a 60-day freeze on charges, fees and certain forms of interest, as well as a pause in enforcement action, will provide valuable time for advice to be sought, provided, considered and ultimately acted upon. It seems obvious to say it, but complex debt cases take time to resolve. Recognition of that will, I hope, lessen the stress and anxiety faced by those who feel that their situation is spiralling out of control. Dedicated provisions for those experiencing a mental health crisis are particularly important. The taking into account of treatment lengths and recognition that mental health problems often recur undoubtedly strengthen the scheme. I hope that we will see such issues considered in future policy-making.

The impact assessment published alongside the instrument makes clear the scale of the problem. Out of 9 million overindebted people in the UK, just over 1 million seek and receive advice each year. Estimates suggest that between 650,000 and 2.9 million people would benefit from debt advice but do not actively seek it, often due to the stigma of problem debt. The impact assessment suggests a clear net benefit to society, and the regulations include five-yearly reviews. Although it will clearly take some time to assess the full impact, can the Minister indicate whether the department plans to publish any interim analysis before 2026? This new scheme will undoubtedly help to encourage more people to seek help, but the problem of stigma requires further work. Is the Minister able to comment on the steps being taken?

Ministers have met their target to launch the new scheme in May 2021, which is to be welcomed. We could perhaps have arrived at this destination at an earlier date—the parent Act received Royal Assent back in May 2018. Earlier publication and consideration of the detail would also have afforded financial institutions additional time to prepare.

We all agree that the new scheme will be of significant value, but we must also be mindful of the fact that it is only one part of a very complex puzzle. As noted in the Explanatory Memorandum, plans to introduce the option of a statutory debt repayment plan are ongoing. I wonder whether the Minister will feel able to go beyond the contents of paragraph 2.1 of the EM by naming a target date for the SDRP to be introduced.

I will end with a brief comment on the timing of this instrument, which is hugely symbolic, if coincidental. Covid-19 and the economic challenges that it has presented have forced millions of people to deplete what little savings they had, and in many cases to take on personal debt. I raised this point in the recent Private Notice Question on personal savings.

Although it is good that we have reached this important milestone, we must also acknowledge the challenges that lie ahead. Unemployment is likely to rise in the coming months and this could have a profound impact on levels of personal debt. I hope the Minister can reassure the House that the Treasury is not only aware of this risk but proactively considering how to mitigate it.

Economy

Lord Tunnicliffe Excerpts

Monday 28th September 2020 Lords Chamber

[Lord Tunnicliffe (Lab) [V]]

My Lords, I am grateful for the chance to respond to this Statement. The timing, just over a month before the winding up of the furlough scheme—which has caused anxiety for millions across the UK—is regrettable. Other countries have been quicker to provide businesses and workers with certainty, and bolder in the steps they have taken.

The Statement fits the now-familiar pattern of the Government’s handling of coronavirus. It was not scheduled in the usual way and instead announced at short notice, in response to an Urgent Question submitted by the shadow Chancellor, Anneliese Dodds. The Treasury says it replaces the planned Autumn Statement. It is another example of Ministers reacting to events, rather than attempting to shape them—of allowing problems to grow, rather than acting quickly and decisively to prevent them in the first place. We have seen it on test and trace and now on the economy.

We recognise and welcome that the Government seem to have acknowledged what we have been saying for months: that action was needed to avoid a cliff edge for workers. The Statement offers a degree of certainty for some, even if it is not as comprehensive as we would like. The continuation of the scheme for the self-employed, for example, is a positive step, even if its well-known shortcomings remain. A new form of wage support is also welcome. It is not perfect but it is something. However, my overall impression is that the measures offered amount to too little, too late.

In relation to the new job support scheme, it is worth noting that Labour has long called for a change in the Government’s approach. The Chancellor has been asked to reconsider the planned one-size-fits-all withdrawal of job support on no fewer than 40 occasions. The Treasury cannot pretend that there was not time to get this right. While it is of course welcome that some workers will enjoy the protection of the new scheme, the cracks are beginning to show. Labour Party analysis observes that it will be cheaper for many businesses to retain one full-time member of staff than to preserve two jobs on short hours. The impact of that on unemployment could be, and probably is, profound.

As with the current furlough arrangement, there is virtually no conditionality on businesses. No commitment must be made to keep jobs open in the medium-to-long term. Instead the Chancellor is now admitting that jobs will be lost. He says that the new scheme has been designed with that in mind, with his priority to protect those jobs and people whose futures are deemed “viable”. What a callous word to use. Many loyal, talented and hard-working people will lose their jobs as a result of the economic difficulties we are facing. It will be no reflection on their character or ability; in many cases, businesses will agonise over the arbitrary decisions that they are required to make. Many businesses are operating with low capacity, not because they are not viable but because they are compliant with HMG’s public health guidance.

On 12 August, the Chancellor promised that

“no one will be left without hope or opportunity”.

For probably more than a million people, there will be no opportunity. Does the Chancellor believe that these human beings should survive on hope? I have been unemployed three times in my career. My abiding memory is one of terror, not hope. Until one has faced the loss of self-worth after multiple rejections, one cannot understand unemployment.

We accept that it is not possible to save every single job. However, each job loss is a personal tragedy and deserves to be recognised as such. I hope that the Minister takes that on board and ensures that he uses different language. Can he outline why the Government have not offered meaningful support to those who have already lost their jobs? Why is there no mention of help for those who may be about to lose their jobs as a result of recent policy decisions based on the Treasury’s modelling? Just how many jobs are expected to be lost during the lifetime of the scheme? Why is there nothing substantive on skills and training? Labour and the trade unions have consistently called for concrete action to help to reskill people so that they can find good-quality jobs when the economy recovers. Why are the Government content to leave certain people behind?

Why are the Government still not providing tailored support for those sectors most in need of help? Hospitality venues are required to close early, having only recently reopened. Theatres and music venues are still unable to reopen, and we are familiar with the challenges facing sports clubs outside the top tier. Tourism and aviation will also continue to be impacted, probably for quite some time. The Minister will no doubt point to various pots of money that have been found over the past six months. However, consistent with my earlier point, such funds have been established only when sectors have reached breaking point. Early assistance could have made more meaningful differences.

I recognise that the Government cannot single-handedly fix every problem faced by the UK economy. However, the points that I have raised are neither new nor likely to go away. A competent Government would have addressed them long ago. Just how long are we going to have to wait?

[Baroness Kramer (LD)]

My Lords, the Government have not really grasped the double whammy of Covid and our departure from the single market and the customs union, even assuming that there is a free trade deal.

The measures announced last week, including job support modelled on the German Kurzarbeit, are welcome but fall far short. Many jobs in sectors such as the creative industries, sports and hospitality are long-term viable if they can survive the next six months, so can the Minister explain why the Chancellor has not targeted the necessary funds to get them through that six-month period? Three million members of our workforce were excluded from support the first time around, especially a swathe of independent contractors. Why are they excluded again, especially when so many who have become redundant will become independent contractors if they are to live?

The pace of companies being dropped from European supply networks is accelerating. Future FTAs outside the EU only marginally offset the lost business. This is completely aside from the issue of chaos at the borders. Why are these injured firms and workers not getting meaningful help? Are they now considered non-viable? Where are the scaled-up and innovative retraining schemes that are needed to deal with over a million redundancies by year end? Firms of all sizes are accruing levels of debt that will cripple their future growth. Where is the fund to recapitalise overindebted SMEs? Can the Minister explain how Scotland and Wales can meet their constitutional responsibilities to set a budget with no Budget this year from the UK? When will we hear from the OBR and get a good working forecast that deals with the situation as we now understand it? Being £2 trillion in debt may be something which the Government are comfortable with, but most of us would like to know what the principles are going to be on how that will be tackled and how it will eventually be reduced and repaid.

Restriction of Public Sector Exit Payments Regulations 2020

Lord Tunnicliffe Excerpts

Wednesday 23rd September 2020 Lords Chamber

[Lord Tunnicliffe (Lab) [V]]

My Lords, public sector workers carry out vital work each and every day. Over the past six months, their importance has become ever more apparent as they have provided the essential services that have kept the country running. To introduce these measures at a time when we appear to be entering a second wave of Covid-19 is not only unnecessary but, frankly, extraordinary.

The Government claim that the regulations are about ensuring value for money when spending public funds. That is a noble cause, and the Labour Party certainly does not believe in huge public sector exit payments for the sake of them. However, we have fundamental objections to how this policy is being implemented. It does not appear to be fully thought through.

We are told not to be concerned as the vast majority of those affected by the cap will be those who are highly paid. Indeed, the manifesto commitment was clear: the cap was for “the best paid public sector workers”. However, it is simply not the case that only high earners will be affected. Contrary to previous promises, the cap will quite easily capture midwives, social workers and librarians who have served their communities for decades and who, when nearing retirement, happen to find their employment being terminated through no fault of their own. Does the Minister really think it is fair to arbitrarily limit the settlement that these workers would receive?

Noble Lords will be aware that there is no index-linking on the cap, meaning that the threshold will slowly reduce in real terms. The figure of £95,000 is the same amount floated by the Government back in 2015. How does the Minister justify the decision to set the limit at this level, which represents a real-term decrease on when the policy was announced?

Paragraph 10.4 of the Explanatory Memorandum mentions the introduction of a new waiver system

“for use in exceptional circumstances”.

How will this operate in practice? Will figures relating to its use be published and, if so, in what form? Paragraphs 10.6 and 10.7 outline two options—an earnings threshold and a phased implementation—which were considered by the Government but either not consulted on or not taken forward. Does that not suggest that the 2019 consultation and the department’s meeting with the Trades Union Congress were mere box-ticking exercises rather than an attempt to find a mutually agreeable way forward?

The Scottish Government took the decision not to include pension strain costs when implementing a similar regulation. The UK Government’s decision to include such costs means that the regulations are likely to affect far more people than might have been expected. Has the department undertaken modelling on this point, and if so, what was the outcome?

I understand that no equality impact assessment was undertaken for the scheme, which strikes me as problematic. While the judiciary is excluded, staff of the Crown Prosecution Service are included. Can the Minister confirm whether his department looked at the demographic profiles of staff in these different elements of the justice system before that determination was made?

I hope the Minister can also provide a justification for including nuclear decommissioning workers within the scope of the regulations. He will know that such workers are often employed by private sector organisations which assist in the realisation of public policy. Why should the Government interfere in the redundancy arrangements of such workers, when their very success is defined by making themselves redundant?

We will not be formally opposing this instrument, as it is not the role of your Lordships’ House to do so. However, I simply cannot understand why the Government have decided to proceed now when there is more work required, and at a time when implementing this change will send such a negative message to the public servants we rely on. Just yesterday, the Prime Minister talked of how our collective compliance with the coronavirus guidance forms a protective ring around the NHS and other public workers. Why, then, is the Minister still seeking approval for an instrument that would unfairly penalise thousands of them? I hope he will urge his colleagues to pause this process, think again and do the right thing by those who were never supposed to be subject to this arbitrary cap.

I have dealt with many statutory instruments, and I have rarely experienced such unity among those taking part. The important point about this unity is that the individuals involved all have in-depth understanding of this environment. The hostility to these regulations surely should cause the Minister to pause the process, think again, take account of all the points made today and bring these regulations back in a much healthier form.

Equivalence Determinations for Financial Services (Amendment etc.) (EU Exit) Regulations 2020

Lord Tunnicliffe Excerpts

Wednesday 2nd September 2020 Grand Committee

[Lord Tunnicliffe (Lab) [V]]

My Lords, I thank the Minister for presenting this SI. As he knows, the Opposition will not oppose it as it would create a constitutional crisis. Nevertheless, it is the duty of Her Majesty’s loyal Opposition to scrutinise the instrument.

As we have discussed on previous occasions, the volume of and interplay between the Treasury’s EU exit SIs makes keeping track of the changes somewhat difficult. The intricacies of this instrument, which simultaneously amends and supplements a 2019 measure, is a case in point. I thank Vanessa McKay, the designated Treasury contact, for helping me to achieve a limited understanding of the regulation and the equivalence framework in which it fits.

I conclude that the instrument is technical in nature and complements the actions taken under the authority of the equivalence regulations of 2019 and 2020. The instrument provides for subsequent co-operation arrangements and regulatory decisions. I do not believe that it introduces any significant new policy. I would value an assurance from the Minister on that point.

Nevertheless, having previously met the Commons Minister on this issue, I am dissatisfied with the level of understanding that I was able to achieve on first reading the supporting documentation. It may be inevitable that the instrument is written in impenetrable language but surely the Explanatory Memorandum is supposed to overcome this barrier. In January 2020, the Secondary Legislation Scrutiny Committee published guidance for departments on statutory instruments. I quote from paragraph 4 of Part 2:

“The purpose of an EM is to provide the Houses and the public with a plain English, free-standing, explanation of the effect of an instrument and how it is intended to operate. It is not meant for lawyers. Legal explanations of the changes are given in the Explanatory Note that forms part of an SI and should not be duplicated.”


This Explanatory Memorandum clearly fails this test. Perhaps it is what comes of reading such documents during Recess, but I fear that if somebody like myself who has dealt with 50 of these instruments has difficulties in following the commentary, an interested citizen without prior knowledge stands no chance. For example, paragraph 2.2 of the Explanatory Memorandum contains a circa 100-word, nine-line sentence. I understand that there are more Treasury SIs to come. I hope that Her Majesty’s Treasury will prioritise EMs that are easier to read, set the SI in context and require less prior knowledge. I would be happy to discuss this matter with the Minister and his officials if they feel this would be of use.

The essence of today’s debate is equivalence for financial services. The guidance in this area is provided in paragraphs 35, 36 and 37 of the political declaration. It envisages concluding,

“these assessments before the end of June 2020.”

I understand that that deadline was missed. What are the implications of this in terms of the trade negotiations and the preparedness of financial services firms? Does the Minister have an estimate of when the process will be completed?

John Glen, Economic Secretary to the Treasury, said in a letter of 27 May 2020 to the noble Lord, Lord Sharkey, chair of the EU Financial Affairs Sub-Committee:

“Successfully concluding equivalence assessment and delivering comprehensive positive findings will be in the UK and EU’s mutual interest and we can see no reason why the UK and EU will not be able to find each other equivalent across all existing equivalence regimes. As you will be aware, equivalence assessments are unilateral processes and thus not part of the ongoing negotiations on the future EU/UK partnership.”


Further, the concluding sentence of paragraph 2.1 of the EM says:

“This statutory instrument … is not linked to the ongoing UK-EU negotiations on a free trade agreement.”


These statements imply that the determination of equivalence is independent of the free trade negotiations. Does this not display heroic optimism and naivety in the light of the Swiss experience? Switzerland lost its equivalence recognition over a lack of progress in an unrelated negotiation.

Further, what is the Minister’s view of the recent statement by Mr Dombrovskis, an executive vice-president of the European Commission? The Financial Times reports him as saying that Brussels would not be ready in the coming months to assess whether Britain qualifies for some pan-EU access rights, known as equivalence provisions, because the bloc’s own regulations are in flux.

If an equivalence ruling is not given, or at least not in a timely manner, what is the Minister’s assessment of the impact on cross-border financial services trade between the UK and the EU? Is he concerned about a financial stability impact if access is withdrawn suddenly after 31 December? What assessment has he made of London’s attractiveness as a place from which financial services firms operate if their ability to sell services into the EU on the basis of equivalence is withdrawn?

Finance Bill

Lord Tunnicliffe Excerpts

2nd reading & Committee negatived & 3rd reading & 2nd reading (Hansard) & 2nd reading (Hansard): House of Lords & 3rd reading (Hansard) & 3rd reading (Hansard): House of Lords & Committee negatived (Hansard) & Committee negatived (Hansard): House of Lords
Friday 17th July 2020 Lords Chamber

[Lord Tunnicliffe (Lab) [V]]

My Lords, this debate has come at an interesting time. Despite the limitations on speeches, we have had a number of insightful and diverse contributions. I am sympathetic with the Minister in the number of ideas he has to comment on.

On Tuesday the ONS published May’s GDP estimate, which suggests a weaker return to growth than many had anticipated. We also saw the OBR’s Fiscal Sustainability Report, which contained a range of potential post-Covid outcomes that give cause for concern.

Yesterday we learned that nearly 650,000 people have fallen off UK payrolls as a result of coronavirus. A survey by the British Chambers of Commerce found that just under a third of companies planned to lay off staff in the next three months, meaning that the furlough scheme will be able to disguise the scale of the problem only for so long.

Last week’s announcement of the job retention bonus has been met with bewilderment by many. Like many of the other schemes announced by the Chancellor, it was not deemed by officials to be value for money and therefore required a ministerial direction for preparation to proceed. Primark has announced that it does not intend to accept the funds, and other firms, including John Lewis, are believed to be sceptical. Despite the job retention bonus, thousands more job losses have been announced, each a personal tragedy. The Government must do more to prevent mass unemployment.

I hope the Minister will accept that the Labour Party is trying to be a constructive and co-operative Opposition throughout the coronavirus crisis. In doing so, we have pointed out what we perceive as flaws in the approach taken, and that includes in relation to the measures contained in the Bills we are considering today. For example, we did not oppose the stamp duty Bill in the Commons, despite the concerns that the measures do not necessarily help those most in need of support.

Despite playing that role and giving the Government space to formulate one, we still lack a cohesive plan for exiting lockdown. The situation was summed up by a senior Cabinet Minister telling the country on Sunday that it should not be compulsory for people to wear masks in shops, only for an announcement on Tuesday to make it compulsory. Such instances increase confusion, which in turn undermines public confidence and hence the economic recovery.

If the country’s recovery falters, the problems already felt by central and local government before the pandemic are likely to be substantially worse. This is true of the shortfalls faced by many councils, many of which feel that Ministers have failed to fulfil their promise to deliver whatever resources are necessary. That applies equally to the welfare system, which was struggling with the rollout of the flawed universal credit even before millions more suddenly required its support.

As I have raised on a number of occasions, specific sectors of our economy are at a disproportionate disadvantage as a result of recent events. Aviation, which the Government have so far failed to support in any meaningful and joined-up way, will not get back to its pre-crisis state for some years. The same applies for much of the hospitality sector, as well as the performing arts. Although the former has started to reopen and the latter will receive new support, concerns remain over the long-term viability of businesses and jobs.

With the two Bills we are discussing soon to be on the statute book, the question is: what comes next? We have all read the reports that government departments are being asked to identify substantial savings. I say to the Minister that a decade of austerity is a large part of the reason why the economy has suffered so badly from the coronavirus crisis. A return to cutting budgets for the sake of it is not the answer, especially locally, where this simply is not possible without drastic consequences for local communities.

The area we should prioritise is the immediate review of the tax system, including tax reliefs. Some of the 1,190 reliefs have their benefits, but many noble Lords will have read the NAO’s February report, which notes that the UK relies more heavily on them than other countries. It has called for significantly more oversight of tax expenditure by the Treasury and HMRC, suggesting that some costs far exceed published forecasts.