Covid-19: Government Support for Business

Rachael Maskell Excerpts

Thursday 16th December 2021 Commons Chamber

[John Glen]

The hon. Lady makes a very reasonable case about businesses in her constituency. As I have said, we will be engaging with the sector to come forward with appropriate interventions based on the data and the experience across the economy.

[Rachael Maskell (York Central) (Lab/Co-op)]

One thing is clear: we can trust the word of the chief medical officer more than that of the Prime Minister, as the Government sleepwalk into another covid crisis. In York, we have a significant hospitality sector. It is really struggling, as are many other businesses. What steps is the Minister taking with Her Majesty’s Revenue and Customs, as the tax year comes to an end, to ensure greater flexibility for businesses so that they can have longer to repay money to the Treasury?

[John Glen]

As ever, the hon. Lady makes a reasonable point. We have to look at the range of interventions and ways that we could support the economy at this time. She raises an interesting area for us to focus on, and I am sure that will be a substantive area of considerations with the Chancellor.

Downing Street Christmas Parties Investigation

Rachael Maskell Excerpts

Thursday 9th December 2021 Commons Chamber

[Michael Ellis]

First, I do not think that this is my gathering—if it is anyone’s, it is Mr Speaker’s. I am sorry that the hon. Gentleman chooses again to criticise the police obliquely—I have no idea why he chooses to take that approach. We are blessed in this country with a police service of integrity and independence, and I have every confidence that just as they routinely investigate matters of extreme importance, so here they can be relied upon to investigate where appropriate—I emphasise the “where appropriate”. The Cabinet Secretary has said, and we have said, under the terms of the investigation, that if necessary—if criminality is uncovered during his investigation—he will, again, engage the police.

[Rachael Maskell (York Central) (Lab/Co-op)]

I know the pain and sacrifice my constituents in York have experienced over the past 18 months. They are sickened by what they have seen has happened at these so-called “gatherings” at No. 10, but they are also infuriated by the obfuscation of this Government, avoiding accountability. Therefore, will the right hon. and learned Gentleman refer these matters to the police, because my constituents have no confidence in an internal investigation? The investigation must be independent, in order for us all to be able to see what really happened.

[Michael Ellis]

The Cabinet Secretary is independent. Cabinet Secretaries in this country serve all the political parties, dependent on who is in government, and they can be relied upon to investigate the matter fully, independently. We will await the results of his investigation.

Dormant Assets Bill [Lords]

Rachael Maskell Excerpts

2nd reading
Monday 6th December 2021 Commons Chamber

[Rachael Maskell (York Central) (Lab/Co-op)]

In 2008, Labour set out a new principle in the House: to put dormant assets from bank and building society accounts to work, first by trying to reunite owners with their accounts but then, when connections failed to materialise, by moving assets to address social and environmental good causes. Labour’s vision has since released nearly £8 million to infrastructure bodies which, in turn, have multiplied the investment and expanded the work of civil society. I continue to argue that the pounds spent by civil society organisations stretch much further than those spent elsewhere in the economy.

This is a success to celebrate, but the last two years have been tough. As the sector's campaign slogan in response to the pandemic says, charities have been “#NeverMoreNeeded”. Demand went up and funding down as shops were shut and fundraising dried up. That is why this legislation is really “never more needed”, but it also furthers Labour’s ambition to introduce other assets into the reclaim fund, now that the principle has been established and the scheme has proved successful.

The three-year review should have taken place a decade ago, and the legislation before us today should have already released millions of pounds. If it had, the sector might have survived the last two years more securely rather than ending up where it is today. Today we are urging the Government to press on while also ensuring that the Bill is in good shape.

Charities have been tested throughout the last decade as the state failed to give the sector the back-up that it needed. Charities and Labour have shared values and a shared sense of purpose. We want to do all we can to transform our society, and that is why we value charities so highly. Bursting with dedication and expertise, civil society really is the heartbeat of all our communities.

[Danny Kruger (Devizes) (Con)]

Does the hon. Lady acknowledge that the Government put more than £150 million into the charity sector last year, and does she think that that was welcome, not enough or too much?

[Rachael Maskell]

As I was going on to say, that money reached only 14,000 charities out of 169,000. As we see demand spiralling, we are seeing charities struggling. The Government could have been far more generous, as they have been to many other sectors during the pandemic.

Every organisation has had to reinvent itself, digging deeper into its reserves, borrowing where possible, and appealing to the ever-generous public for help. We saw charities and mutual aid groups spring up in every corner of every community. Where the state stopped, charities took their service ever more deeply into our communities. That is why this legislation really matters, and why Labour will support its passage through the Commons today. It arrives in a better state thanks to the extensive work undertaken in the other place, and I particularly thank Lord Bassam of Brighton for his skilful handling of it, to help it to reflect the priorities of civil society.

In looking at the detail of the Bill, we are pleased to see that the principles that Labour set out in 2008 remain, including that of reuniting assets with their owners through extensive tracing processes and ensuring that the owner will always be able to claim the value of their asset in full if they seek to do so. The principle of this being a voluntary scheme will remain, whereby participants can opt in, and I encourage everyone to do so. When dormant assets have been through thorough tracing processes, the asset then transfers to the reclaim fund, which is responsible for any reclaim that might occur, moving surplus into the hands of identified organisations. Labour is most grateful to Big Society Capital, Access, the Youth Futures Foundation and Fair4All Finance for the way in which they have multiplied the value of these assets and invested them wisely to help people in our communities. Likewise, we are grateful to organisations in the devolved countries.

Part 1 of the Bill expands the opportunity for the inclusion of other financial dormant assets. The consultations to get to this point have been thorough, and each new product carries its own racing mechanisms and timescales to reduce risk. We welcome the inclusion of all the named assets, but I want to press the Minister further on pension schemes. While there is some inclusion, I know that he is making the case that until the pensions dashboard has been thoroughly tested, he is reluctant to expand in this area. I appreciate that there has been significant delay in the introduction of the dashboard, which has caused the Government significant embarrassment. This delay is denying good causes the assets that they want to put to work.

Perhaps the Minister could set out a timeline for further widening the scheme to these kinds of products. It would be good to hear from him what other assets he is considering for later inclusion, whether they are direct cash or non-cash assets. Charities cannot wait to benefit, and nor can the public. The powerful testimonies from current beneficiaries demand that the Government seek to expand. I know that the Second Reading of the Bill in the other place raised many helpful suggestions as to how that could happen. Wherever funds can be identified, Labour wants to see them put to work for social and environmental good causes.

Part 2 of the Bill focuses on a number of themes, the first of which is the reclaim fund. Moving it under the auspices of the Treasury is a positive move, placing it independently but with lines into the Treasury. However, it is Labour’s consideration that, 13 years since the scheme’s passage through this place, it should be reviewed. Each reclaim product should be assessed separately according to the levels of real risk to the reclaim fund. If data from the first phase is observed, the scheme could be more generous in its support to beneficiaries. The sector agrees with that. A regular review would also help to identify any risk in the scheme. The Government will now be responsible for underwriting any deficit that might occur with a loan to the scheme, but it is far better to avoid such risk in the first place. My broader question is therefore: is the balance right?

Before I address the matter of where the money is spent, I also want to raise the question of the next stage of the Bill. After such detailed consultation over many years, we need to ensure that there is no further significant delay in preparing and instituting secondary legislation. Labour wants to see this process commence on the heels of this legislation, for it to be thorough and allow sufficient time for response and for it then to be expedited through secondary legislation.

I am most grateful for the addition of clause 29 to this legislation. It was added on Report in the other place and it highlights a deficiency in the distribution of the reclaim fund. That is impeding civil society from thriving across many communities and impeding the social levelling-up agenda. Imagine doing a jigsaw and finding one piece missing: it mars the whole picture. The reconstruction of civil society is the same. All the schemes need to be in place, but the exemption of the community wealth fund has meant that whole swathes of communities have been robbed of the opportunity to build the very partnerships that could tackle the deepest of challenges.

In my own constituency, we have a thriving and growing voluntary sector under the superb leadership of York CVS. However, we have areas of real deep entrenched deprivation. Tang Hall Big Local, a local trust, has now developed micro-level infrastructure to start tackling social injustice in the Tang Hall area. It is utterly amazing to see the multi-agency approach and the multiple offers, alongside community engagement—225 such areas have been mapped out.

Imagine areas where there is no thriving CVS or a well-developed civil society sector, on which the new integrated care systems in the Health and Care Bill depend. Imagine this loss in the most deprived and challenged areas, as they often are. The amazing things that charities do just would not happen; the vital partnerships and social infrastructure would not be built. This is at the core of what the community wealth fund does. It empowers communities to develop the partnerships needed to transform themselves. Its inclusion will mean greater equality, which is surely what levelling up is all about.

That is why the inclusion of the community wealth fund in the Bill to build social infrastructure is so vital. The principles of the Bill and the 2008 Act are too broad to provide such a framework without clause 29, and the principle needs to be framed in primary legislation. Without it the funds could go elsewhere and will not meet the ambition that I trust the Government share with Labour.

The Government do not need further pilots, as there are 150 projects at various stages of development. Those projects have been evaluated and will continue to prove their value. When it comes to the civil society sector, the Government always seem to have the knack of overcomplicating things and missing the opportunity it presents. If they really wanted to build back better, they would have poured investment into community wealth funds and seized this moment to bring about social transformation. That is why Labour has pushed so hard so see it included in the Bill, and the Lords supported it. I trust for the sake of its impact that the Government will not lose the opportunity to reaffirm the principle of a community wealth fund in primary legislation to complete that picture.

In closing, I put on the record my thanks to the thousands of organisations that have shown their support for taking the reclaim fund forward, and to the participants in the dormant assets scheme to date for their co-operation and engagement. Across our communities, staff and volunteers are building civil society, fighting inequality and injustice, and supporting people with every need. Their contribution is outstanding and their support is utterly amazing. It gives us all such pride to reflect on all they do. Putting money to good work for them to multiply its benefits has always been a principle that Labour has advanced, and we will again throughout the passage of this Bill.

Climate Goals: Wellbeing Economy

Rachael Maskell Excerpts

Tuesday 30th November 2021 Westminster Hall

[Rachael Maskell (York Central) (Lab/Co-op)]

I am grateful to the hon. Member for Brighton, Pavilion (Caroline Lucas) for this hour to reflect on a different economic model—an hour that should pivot the wanton greed of state to one of restoring the scars of its heritage.

Leaving Glasgow with our planet heating at a dangerous rate and the failure to slam the brakes on climate destruction, the Government were given a year to reset. COP27 will be their reckoning. Right now, the global south is paying for the exploits of the global north, and this generation is paying for centuries of colonialisation, industrialisation and exploitation, as people and planet were exploited, minerals, crops and humanity were exploited, and carbon and hope were burnt. In this generation, it is our duty to restore. We have no choice.

Kate Raworth’s work on doughnut economics shows us a path out. York Central development, at the heart of my constituency, could be the first doughnut development, where we see the planned luxury apartments becoming sustainable housing that meets need. We could see that site being car free, wellbeing communities being built and a carbon negative future with our green new deal.

As I set out in my Adjournment debate last week, York is seeking to lead. Our green new deal, BioYorkshire, will create 4,000 green-collar jobs and upskill 25,000 people as it takes 2.8 million tonnes of carbon out of our atmosphere and repurposes 1.2 million tonnes of landfill. With research and development of new precision-farming agricultural practices, it is the point where international development will meet international trade. While partners from the University of York, Askham Bryan College and Fera Science have reached out into the region, it is my hope that this green new deal will reach out across the globe, such is the power of its science.

It is this project that will put pride back into my community—one that to this very day celebrates the Rowntree legacy of integrating good business with good employment and social practices. In parallel, York has developed the good business charter. I hope that the Minister is aware of the charter, supported by the CBI and TUC, as it sets out 10 principles, including a real living wage, employee wellbeing, environmental responsibility and ethical sourcing, resetting the terms for business, the economy and workers. Different parts of the economy should not be able to choose whether or not they opt into those initiatives. We need a comprehensive refocus. Labour in Wales was the first in the world to introduce a wellbeing Act—the Well-being of Future Generations (Wales) Act 2015—and the rest of the UK must now follow. Instead, this Government’s mantra seems to be, “Always need to take, not restore”, and that must be reversed.

Just imagine if those principles had been embedded in our approach to the covid-19 vaccine. We would not be debating omicron today. Given that the west has hoarded and destroyed global vaccine supplies—and taken at least three vaccines for each of us—the vaccine rate in developing countries is just 3%. For the sake of profit for big pharma, this Government are prepared to sacrifice the global south. However, in this interconnected world, we too will fall prey to a virus that does not play by the rules. That is why we need to change the rules that govern us. It may not be omicron that calls us short—it may be the pyro or sigma variants.

This is about moving from a mindset of economic nationalism to one of responsible internationalism. The Government were sent to Glasgow to keep the idea of 1.5° alive, but it is now in critical care. Everything must be injected into rehabilitating our economy. The cost of not doing so will be fatal.

[Mr Clive Betts (in the Chair)]

I thank hon. Members for keeping to time in this debate. We can now move on to the Front Benchers. First, I call Patrick Grady for the Scottish National party, who has five minutes.

Oral Answers to Questions

Rachael Maskell Excerpts

Tuesday 2nd November 2021 Commons Chamber

[Helen Whately]

We are delighted that we are introducing the draft relief to support the on trade for people purchasing drinks in pubs and hospitality venues. We will consult on the details, including keg size. We will also bring forward the technical changes to small brewers relief, which my hon. Friend asks about.

[Rachael Maskell (York Central) (Lab/Co-op)]

The pretence has to stop. The Budget was climate-illiterate, with just £7.8 billion of new money given to climate and nature mitigation to reach the 2024 target, when £62.9 billion is required. How will the Chancellor close that gap, or is the Prime Minister’s performance at COP26 simply a façade?

[Mr Clarke]

The hon. Lady is not doing justice to what the Government have committed to. We have the £30 billion net zero strategy just the week before this fiscal event, and clearly we have had a number of announcements during COP already, including today’s on forests. That is clear evidence of how this Government are moving to ensure we double down on our international commitments and show the rest of the world the way to deliver on net zero.

Brexit: Opportunities

Rachael Maskell Excerpts

Thursday 16th September 2021 Commons Chamber

[Michael Ellis]

My hon. Friend could not be more right, if I can put it that way. Those who were naysayers and gainsayers, those who were so relentlessly negative, are clearly wrong. They now know they are in the wrong. They were saying that nothing could be done to improve this country’s position post Brexit. That is clearly wrong. Britain can lead the world. It is leading the world in many areas and will continue to do so under this Government. We are liberated and we are continuing to liberate our industries, trade and services from the shackles of bureaucracy. We will continue to do that, while at the same time, as he ably says, levelling up the whole of this country.

[Rachael Maskell (York Central) (Lab/Co-op)]

I listened carefully to the Paymaster General’s statement. A significant amount of legislation has come from Europe to protects workers, whether it is health and safety, workers’ rights or equalities legislation. Will he guarantee that under this new bonfire of regulation he will not diminish any of those workers’ rights, which have been hard-fought for by working people across Europe?

[Michael Ellis]

Of course, this is not about negatively affecting health and safety. This is about supporting workers. This is about supporting business. It is about making life easier for people and building the economy of this country. That is what it will do.

Demutualisation of Liverpool Victoria

Rachael Maskell Excerpts

Wednesday 15th September 2021 Commons Chamber

[Gareth Thomas (Harrow West) (Lab/Co-op)]

The proposed demutualisation of Liverpool Victoria is the first proposed demutualisation of a major financial services business since the financial crash. If the demutualisation goes ahead, it will see controversial United States private equity giant Bain Capital given ownership of a British customer-owned business with considerable financial assets. The tidal wave of private equity money apparently available for purchases of British firms prompts the inevitable question of whether this proposed demutualisation is a one-off or whether it is the start of another wave of demutualisation.

The all-party parliamentary group for mutuals, which I am fortunate to chair, conducted an inquiry into the proposed demutualisation earlier this year. We interviewed Mark Hartigan, who is the current chief executive of Liverpool Victoria, as well as Matt Popoli of Bain Capital, the regulators, the Association of Financial Mutuals and representatives of other mutuals, and we received submissions from individual consumer-owners of Liverpool Victoria. I am grateful to the hon. Member for Wycombe (Mr Baker), my hon. Friend the Member for Rochdale (Tony Lloyd), the hon. Member for Thirsk and Malton (Kevin Hollinrake), my hon. Friend the Member for Neath (Christina Rees), the hon. Member for Harrow East (Bob Blackman), the noble Lords Curry and Wrigglesworth, and Viscount Trenchard for their assistance and support. We have written subsequently to the Prudential Regulation Authority and the Financial Conduct Authority, and I have also written to the Pensions Regulator.

We concluded that it was very difficult for an individual member of LV= to be able to assess whether the proposed demutualisation was in their interests, given the scarcity of information with which they had been provided. We agreed that, on the basis of the evidence available to us, the leadership of LV= had not been open and transparent with members about its intentions for their business. Indeed, we felt that there had been a notable disregard for the interests of members and a cavalier attitude towards the member governance of the business.

We concluded, too, that the plans would damage the diversity of financial services providers in the UK, and that there had been insufficient policy attention on mutuals in recent times, particularly on the need to be able to raise capital. Lastly, we concluded that regulators needed to have a fundamentally different approach to the threat of demutualisation. Indeed, we were staggered that no lessons had been learned from the pre-crash wave of building society demutualisations.

I believe now that Alan Cook, the chairman of Liverpool Victoria, has a series of questions to answer about the proposed demutualisation and sale to Bain Capital. Earlier this week I formally invited him to Parliament to enable him to do just that.

Since our report was published, and despite many invitations to do so, the leadership of Liverpool Victoria have thus far refused to provide a more open and transparent explanation of their motives and their intentions. First, there has never been a clear, easy-to-understand explanation as to why demutualisation is needed. The business is well capitalised—indeed, it recently sold its general insurance business for over £1 billion—and it has raised significant sums on the capital markets. Both the chairman and the chief executive were arguing that the business was in very good financial shape right up until their plans for putting Liverpool Victoria up for sale were leaked to the media.

So why, really, is this plan being pushed? Why can Liverpool Victoria not survive as a stand-alone business in its own right? Its members, I believe, have a right to know. If, for a moment, we take at face value the idea that the new chief executive spotted a major flaw in the business model of his predecessor, so great that significant investment was needed for Liverpool Victoria’s customers to continue to enjoy the fruits of their investment with LV=, then why did they not choose another mutual? Indeed, there are persistent rumours that a major mutual offered more money than Bain Capital offered. The consumer-owners of Liverpool Victoria have a right to know whether that is true and why, if so, it was turned down.

Secondly, it is difficult to see how the members or owners of Liverpool Victoria will benefit from the demutualisation. Previous demutualisations have always been driven by the chair, chief executive and board, who usually benefit from significantly enhanced remuneration packages. It is time for the board to be honest. For example, by how much more will the chairman and chief executive benefit if this deal goes ahead? Thirdly, the way in which Liverpool Victoria’s chairman and board have gone about the process of demutualising raises the question as to whether—I say this gently—they knowingly misled the regulator and their customer-owners about their plans.

The board of Liverpool Victoria successfully persuaded their members to approve Liverpool Victoria’s conversion from a friendly society to a company limited by guarantee. At the time, they proposed this to their members, the chairman, Mr Cook, explicitly assured members that this would mean no change to the mutual status of Liverpool Victoria. With that assurance, the consumer-owners of LV= approved the conversion to a company limited by guarantee in May 2019. The real significance of that change in legal governance only emerged much later. In LV=’s rulebook, to demutualise, it needs a 50% turnout of the membership in any such vote and 75% of those voting to vote in favour. In short, practically, it is impossible—deliberately so. It was a rule put there to protect future consumer-owners of LV= against the greed of carpetbaggers and directors.

Given the assurances of Mr Cook, the board and the chief executive, one might have assumed that LV=’s mutual future would continue, notwithstanding the change from a friendly society. Under the rules governing companies, however, boards can approach our courts to ask for a scheme of arrangement for permission to ignore a particular rule in their constitution. That is not currently within the friendly society rules. Assuming there is even a small majority voting in favour of demutualisation, this is what LV=’s leadership are now determined to do. Revealingly, in February this year, in a webinar for LV= customers, Mr Cook noted that his plan to demutualise and sell to Bain Capital would not have been possible if they had not converted to a company limited by guarantee. It appears—again, I say this advisedly—that Mr Cook, the chairman of LV=, has been determined to demutualise for some time and has not been straight with the consumer-members of LV=.

What has added to that sense is that the previous chief executive of LV, Richard Rowney, left the organisation in December 2019, and it is difficult not to think that he was fired for not wanting to demutualise. His replacement, Mark Hartigan, was announced just 10 days later, and within less than three months Liverpool Victoria was up for sale—this at a time when assurances of Liverpool Victoria’s continuity as a mutual were being given. Frankly, it is stretching credibility to believe that the decision to sell was the unexpected decision of a strategic review landed by an incoming chief executive with no experience of working for a mutual and after less than three months in the job. What is also remarkable is the decision of the Financial Conduct Authority not to investigate whether members of LV= were deceived into supporting the conversion to a company limited by guarantee.

[Rachael Maskell (York Central) (Lab/Co-op)]

I thank my hon. Friend for the excellent speech he is making. Benenden Health is a significant mutual in my constituency, and it has serious concerns about the ramifications of this demutualisation for the whole mutual sector and its reputation. How does he believe that regulation could be tightened to avoid this kind of situation occurring again?

[Gareth Thomas]

My hon. Friend and Benenden are right to be concerned about whether there are wider implications and we will see other businesses demutualising. The current vice-chair of Yorkshire Building Society sits on the board of Liverpool Victoria and appears to have been actively involved in the demutualisation plans, prompting a rather obvious question about the future of Yorkshire Building Society.

The conversion to a company limited by guarantee and the decision to pursue demutualisation are both fundamental to the treatment of Liverpool Victoria’s consumers. The FCA is refusing to consider both decisions together and to investigate, as I have indicated, whether the chairman in particular and other members of the board knew much earlier than they have been willing to admit thus far that demutualisation was their desired end point. The failure to consider interlinked business decisions in a holistic way was a fundamental failing identified by Dame Elizabeth Gloster in her devastating report on the London Capital & Finance debacle. This appears to be a clear repeat of that mistake, albeit with a very different business.

There are other concerns about the performance of the regulators, the PRA and the FCA. Together, they have admitted that they have had nearly 60 meetings to discuss the demutualisation with the board of LV=, but not one with LV=’s consumers and owners. The FCA should at the very least require the so-called independent experts who have been appointed by LV=’s board, who have been briefed by LV= and who will be paid by LV=, to set up meetings to explain the background to what one presumes will be their inevitable decision to recommend to members a vote for demutualisation and sale to Bain. Will the Minister ask the FCA to make that happen?

--- Later in debate ---

[Rachael Maskell]

My hon. Friend is being generous. I also want to ask about the impact the proposals will have on staffing levels. We know that staff are fearful that many could lose their jobs at this time. What guarantees have been given to staff that their jobs will be safe?

[Gareth Thomas]

My hon. Friend will know that when we saw the last wave of building society demutualisations, there were large numbers of job losses. I gently warn those who work for Liverpool Victoria to be wary of any assurances they have been given about their jobs if the sale to Bain and the demutualisation go ahead.

After the financial crash, there was recognition across the House that the wave of demutualisations of building societies had been, at best, a dismal episode, that corporate diversity needed to be encouraged, and that financial mutuals in particular had a crucial role to play in maintaining competition and the interests of consumers. For the Government and this Minister in particular—I welcome him to his place, as I know he is diligent in his interest in the mutual sector—I hope that the demutualisation of Liverpool Victoria will be a further wake-up call to look more seriously at the needs of financial mutuals and specifically their ability to raise capital, and to put into law disincentives to demutualise. We need protections for legacy assets, and we need a review of how financial mutuals are regulated under the Financial Services Act 2012. Certainly representations we had from the Association of Financial Mutuals suggest an urgent review to modernise that Act is overdue.

I hope that the Minister will also ask the chief executive of the FCA to revisit the question of whether the owners of LV=—its consumers—were misled when the conversion to a company by guarantee took place.

This demutualisation is proof that we need again to celebrate and enhance the position of mutuals in our markets. After all—I say this gently and reluctantly—what is being proposed in the demutualisation of LV= is the looting of nearly two centuries of legacy assets. Of course, it is being dressed up as something different, but that is money built up from the working capital of the business over years of transactions, starting with small contributions from the working people who were the original members of the Liverpool Victoria Burial Society, who set the society up to avoid the Victorian scandal of a pauper’s funeral. Over time, those small contributions became a substantial sum, and they were augmented by the funds transferred into the friendly society from a series of mergers with other mutuals. In good faith, those other mutuals brought their assets to share with a broader membership for their common purpose.

Today, we have the spectacle of a demutualisation that looks to be driven by the simple desire to appropriate this money. None of the promoters of the demutualisation has made any contribution to the accumulation of the assets, yet they want to take advantage of them. It seems that the attraction of the assets means that the executives, the board members and the private equity players will do whatever is necessary to appropriate them. Token windfall payments to members in exchange for their vote will, just like in every other demutualisation, transfer the value from those who contributed and their descendants to those who did not. I gently suggest that that can never be fair, and it is wrong that, to date, our legislative and regulatory regime not only permits that to happen but actively facilitates it.

Health and Social Care Levy Bill

Rachael Maskell Excerpts

2nd reading
Tuesday 14th September 2021 Commons Chamber

[Rachael Maskell (York Central) (Lab/Co-op)]

Take no comfort, nor relief. Those things you dread will still be true. But now, poorer through life and poorer through death. Through life, you will pay. When frail, you will pay. Disabled people will pay and pay and pay. For what? None of us knows. Time and again, we have been promised that social care plan. Like the emperor’s new clothes, there is nothing to show. But, rest assured, things are about to get tougher, budgets tighter and ends not meeting. That personal debt will grow.

Two weeks ago, there was no plan. The Prime Minister tossed a coin, and this is where it has landed. Now he is rushing through this Bill with no pre-legislative scrutiny, no impact assessment and no plan to fix the care crisis for those already in the system or the 1.5 million longing for help. There is nothing for unpaid carers, and £8 billion has been cut from the system. As ever, the Prime Minister is throwing out the headlines with little thought and then moving on, leaving a path of destruction behind him for someone else to clear up and, in this case, to pay up.

This will not clear the NHS backlog. As we have heard today, the staff shortages are not being addressed, and how can they be in such a short period. Just this weekend, we were 74 nurses short in York. That is the scale of the challenge, and one that the Government have not answered.

A decade into this Tory Government, there is still no plan. We just pay up, and one day we may learn what for. For starters, if someone holds assets above the thresholds, they will still pay £86,000—the vast majority of average care costs—and will still need to sell their home. Then there will be accommodation, if needing residential care, and living costs on top, and no cap until October 2023. This is why we need a public national care service that is free at the point of use and fairly contributed to by all.

With 84% of care home beds owned by private investors, including private equity firms, who are not paying this levy and whose sole purpose is to profit—profit from the frail—it is the social care reform we need that we should be debating today. Just one provider in my constituency made a 25% profit increase ahead of the pandemic, but it will be its staff, who were promised a pay rise while clapped by the Prime Minister, who will now have to pay the levy instead. But we have been denied the opportunity to debate what this nation is paying for.

The Labour party cannot consent. We believe that those who have more, should pay more. Take the London School of Economics wealth tax commission, which reported last December. It found that a tax on assets worth over £500,000 at 5% would draw a pot of £260 billion, which would pay for health and social care and that much-needed pay rise. The tax would be assessed on individuals rather than households, with the rate of tax being 5%, albeit with a standard payment period of five years, allowing a tax rate of 1% to be paid for each of those five years. The amount raised is the equivalent of income tax at 9%. Alternatively, if the threshold was £2 million, £80 billion would still be raised.

That would start another conversation: instead of low-paid workers funding the social care of the wealthy, the wealthy would be funding the social care of all. I ask Members: is this fair? This may not be the full answer, but it starts a different conversation—one that, in rushing through the legislation today, the Government are running away from.

Health and Social Care Levy

Rachael Maskell Excerpts

1st reading
Wednesday 8th September 2021 Commons Chamber

[Jesse Norman]

No. I have already taken a few, and I will go on a bit further, if I may, and then I will take some more interventions. [Interruption.] Well, the hon. Gentleman has had a fairly substantial go at points of order already, and I welcome his later intervention.

The levy will apply UK-wide to taxpayers liable to class 1 employee and employer, class 1A, class 1B and class 4 self-employed NICs. However, it will not apply where taxpayers pay class 2 NICs or class 3 NICs. It will be introduced from April 2022, and then from April 2023 the levy will also apply to those working over the state pension age. As my hon. and right hon. Friends will understand, it takes time for Her Majesty’s Revenue and Customs to prepare its systems for such a major shift. That is why, in 2022-23, the levy will be delivered through a temporary increase in NICs rates of 1.25% for one year only. All revenues generated by this increase will be ring-fenced and paid to NHS England, NHS Scotland, NHS Wales and the equivalent in Northern Ireland.

[Rachael Maskell (York Central) (Lab/Co-op)]

Does the Minister not recognise the burden he is placing on small businesses, many of which the Government completely excluded and failed to support during the pandemic, in their now having to pay this extra levy, as opposed to making a fair taxation system that falls on those who can pay the most?

[Jesse Norman]

The hon. Lady will be aware that, because of the employment allowance, the bottom 40% of businesses will pay nothing and the next 40% will pay an average of £450. So this does not fall heavily on the bottom end of businesses, and of course it comes in a context in which the Government have provided over £400 billion of support to business and to the nation as a whole in the course of fighting the pandemic. In that sense it is, and it has been recognised to be by reputable independent commentators, a broad-based approach.

From April 2023, once HMRC systems have been updated, a formal legal surcharge of 1.25% will replace the temporary increase in NICs rates, which will return to their previous level. Again, this revenue will be ring-fenced in law for health and for social care only. As the Chancellor stated yesterday, this levy is no stealth tax. That is why the exact amount that each employee pays will also be visible as a separate line on their payslip. Finally, the levy will be administered by HMRC, and collected by the current reporting and collection procedures for NICs—pay-as-you-earn and income tax self-assessment.

Covid-19: Government Support

Rachael Maskell Excerpts

Wednesday 7th July 2021 Westminster Hall

[Rachael Maskell (York Central) (Lab/Co-op)]

It is a pleasure to speak with you in the Chair, Mr Mundell.

Since the first covid cases in the UK were identified in York 18 months ago, we have been inundated by businesses that are challenged. Although Government relief has been welcome, those ineligible for it have struggled. As covid cases soar again, we worry. This last year, those denied help have seen their life’s work slip through their hands. Many self-employed directors are an example, as are those in the tourism, theatre, events and travel sectors, and those in the supply chains. Even when safe solutions were offered, the Government simply said that they were unwilling to build the capacity to implement them.

Often, it has been the inconsistencies in Government guidance and support that have caused confusion and hardship. For instance, caravan parks with shared showers were open but holiday flats with shared hallways were closed, and those running them were not eligible for support.

As restrictions lift, we are already seeing infection levels spike in York, meaning staff isolating and businesses closing. It is set to get worse, given the Government’s illiterate plans. The economy is being hit and loyal customers are retreating into their homes, once more feeling unsafe. Reality and Government rhetoric are far apart in communities such as mine. The Government have seriously misjudged things and once again businesses and charities are calling for help, both for now and the longer term. Ineligible for support, they cannot depend on this season either. They urgently need a bridge to carry them through, so that they can then grow again.

I will turn to charities. On 8 April, the Government provided support lasting just 12 weeks. Charities have been ineligible for much Government funding. Many have had nothing at all and have had to cut back, yet all the while demand for their services has increased. Understanding of this sector, which forms a crucial part of our social infrastructure, has been severely lacking from the Treasury, which fails to recognise the role that charities have played throughout the pandemic and will play throughout the recovery. Generic schemes simply do not work for them. Will the Minister at least meet the sector’s leaders and listen to their calls for the support they need right now?

Perhaps the most frustrating thing of all has been how impervious the Treasury team have been when they have been written to. We hold the future of local companies in our hands, but we have been given a stock response, often unrelated to the issues that we have been trying to resolve. Businesses have been ignored; support has been denied. Recovery funds for businesses and charities are needed. While the Government are trying to race on, covid infections are racing up. Businesses and charities that have worked so hard to cling on feel that the rope is being cut. We have called for help; we have offered solutions. All we need is for the Government to engage, to rebuild socially and economically. That need has never been greater than it is now.