Draft Recognised Auction Platforms (Amendment and Miscellaneous Provisions) Regulations 2021 Draft Greenhouse Gas Emissions Trading Scheme Auctioning Regulations 2021

Abena Oppong-Asare Excerpts

Wednesday 14th April 2021 General Committees

[Abena Oppong-Asare (Erith and Thamesmead) (Lab)]

It is a pleasure to serve under your chairmanship, Mrs Murray. I thank the Minister for providing an overview of the regulations. As she has said, the regulations take further steps to establish a UK ETS by setting out more detail on how the auctions will operate. The second set of regulations amend financial services legislation to allow the functioning of the new UK ETS and to continue the Financial Conduct Authority’s role in regulating aspects of it.

We do not oppose the regulations, but I wish to make a couple of points and ask the Minister some questions. There has been a long-running debate, not least among the Government themselves, about what should replace the EU ETS as the UK left the EU. Until relatively recently, the Government were considering three options: a stand-alone UK ETS, a linked scheme or a carbon tax. The uncertainty about carbon pricing left many UK businesses in a state of confusion last year. It is welcoming that some clarity is now being given by the Government, but it is far from ideal that they are bringing forward this detail after the UK ETS has already been in existence for over three months. Once again, businesses have been left in the lurch. I am afraid that this sort of last-minute policy making, which does not recognise the long lead-in times that businesses need to operate, is typical of the Government.

We welcome the Government’s decision to stick with the cap-and-trade principles rather than pursue a carbon tax, and we support the creation of a UK ETS. However, we believe it is critical that the UK ETS is linked with the EU ETS. I am sure the Minister agrees that the only way to address climate change is to do so in partnership with countries around the world, and that we need an international approach to reducing carbon emissions. I hope that the Government will not let political or ideological aversion to working with the EU get in the way of doing what is best for the environment.

The Government’s energy White Paper, published last December, said:

“The UK is also open to linking the UK ETS internationally in principle and we are considering a range of options, but no decision on our preferred linking partners has yet been made.”

Can the Minister update us on whether negotiations have started with the EU on this issue? Can she tell us whether the Government are considering linking with other schemes around the world? If so, which ones? We really need some clarity on this vital issue.

I turn now to some specific points about the regulations, which set the auction reserve price at £22 per tonne of carbon. That is an increase from the Government’s previous proposal, but the Minister will know that the EU ETS price has increased considerably in recent months and is currently around £44. Do the Government intend to make any further changes to ARP in the light of this? The auction reserve price must be set at a level that creates a robust market and ultimately drives down emissions.

There is also an issue of market volatility, which has the potential to be especially problematic, given the smaller size of the UK ETS versus the EU ETS. A report by the Climate Change Committee said that

“a standalone UK ETS faces potentially significant challenges in achieving market stability and liquidity.”

Clearly, linking with the EU ETS would mitigate the risk, as would expanding the range of sectors covered by the ETS. It has recently been reported that the Government are considering extending ETS to the agriculture sector. Can the Minister update us on the Government’s thinking on this issue, and can she set out what steps the Government will take to ensure the market functions correctly?

A well-functioning and ambitious emissions trading system will clearly be a critical tool in our path to net zero. It is extremely important that the Government get that detail of the system right, and I hope the Minister can provide some reassurances on this today.

Oral Answers to Questions

Abena Oppong-Asare Excerpts

Tuesday 9th March 2021 Commons Chamber

[Jesse Norman]

It is no secret that bus services are close to the Prime Minister’s heart. The Government have committed to improving bus services and since the start of the pandemic have supported operators with more than £1 billion of funding, as well as with £120 million at the spending review for the delivery of new zero emission buses. The national bus strategy is due to be published soon and will start to set out this wider ambition. I am also pleased to note that Budget 2020 allocated £166 million to the Sheffield city region from the transforming cities fund to support local transport investment, including bus infrastructure.

[Abena Oppong-Asare (Erith and Thamesmead) (Lab) [V]]

To deliver transport connectivity in every part of the United Kingdom, we need long-term investment in infrastructure but, staggeringly, the OBR analysis reveals that the Chancellor has cut capital investment plans by half a billion pounds since last March. The Budget also made no mention of Northern Powerhouse Rail and slashed the Transport for the North budget by 40%. Can the Minister explain why the reality of the Budget on infrastructure investment is so far from this Government’s rhetoric?

[Jesse Norman]

I do not recognise the figures the hon. Lady has used at all. The facts are that this Government published the “National Infrastructure Strategy” in November, which set out plans for £300 billion-worth of public investment over the next few years, as well as supporting £300 billion of private investment. Since then, the Chancellor has announced the new UK infrastructure bank, which will further support the development of infrastructure and levelling up, and the development of our green infrastructure across the UK.

Draft Social Security (Contributions) (Rates, Limits and Thresholds Amendments and National Insurance Funds Payments) Regulations 2021 Draft Tax Credits, Child Benefit and Guardian’s Allowance Up-rating Regulations 2021

Abena Oppong-Asare Excerpts

Tuesday 9th February 2021 General Committees

[Abena Oppong-Asare (Erith and Thamesmead) (Lab)]

I am grateful to the Minister for his explanation of the draft regulations. I will first address the draft Social Security (Contributions) (Rates, Limits and Thresholds Amendments and National Insurance Funds Payments) Regulations 2021, which give effect to the annual re-rating of the various national insurance contribution rates, limits and thresholds, as the Minister has just said.

The Opposition will not contest the regulations. However, we are concerned about the lack of targeting of the regulations and the lack of a cost-benefit analysis in relation to other measures. The lower earnings limit is a level of earnings at which employees start to gain access to certain contributory benefits. From April 2021—so, in just two months’ time—the lower earnings limit will be increased in line with the CPI. However, due to the rounding rules when calculating the lower earnings limit, this has resulted in no change occurring in cash terms, meaning that the lower earnings limit will remain at £120 per week. Does the Minister intend to continue raising the lower earnings limit in line with inflation? Does he feel that it is sufficient, given the current crisis that we face? And are additional measures needed to ensure that people can contribute towards the social security that they might need, which will all depend on the lower earnings limit?

The draft Tax Credits, Child Benefit and Guardian’s Allowance Up-rating Regulations 2021 relate to tax credits, child benefit and guardian’s allowance, and enact increases that had previously been announced in a written ministerial statement in November 2020. As with the previous regulations, these regulations are generally linked to the CPI. Again, the Opposition will not oppose them.

As the explanatory memorandum notes, the Coronavirus Act 2020 increased basic working tax credits from £1,995 to £3,040 for the 2020-21 tax year only. This £20 per week increase to the basic rate of working tax credit does not apply for the purposes of the annual review, and the annual rates for consideration will therefore be £1,995. Given that the economic situation is still dire for many families across our country, which I see in the cases that I get in my constituency as a local MP, we have also seen the worst recession in the G7 and one of the highest death rates in Europe.

In those circumstances, can the Minister say whether the Treasury is considering a review of its approach to tax credit uplift as part of the upcoming Budget? The Secretary of State for Work and Pensions refused to make her position clear on whether the uplift ought to be removed in the middle of the pandemic when facing questions from the Work and Pensions Committee last week. Can the Minister update us any further?

What has become grimly clear in the last 11 months is that the UK social security safety net is severely inadequate. However, I must emphasise again that the major omission from this debate is clarity over the proposed withdrawal of the £20 a week uplift to universal credit that is due to take place in April 2021. The Opposition believe that it is deeply irresponsible for the Chancellor to be winding down the support for families with his cut to universal credit, which will leave unemployment support at a 30-year low in the middle of an economic crisis.  The Government should do the right thing and secure our economy by cancelling the cuts to universal credit. It is discriminatory and unfair that the £20-a-week uplift was never extended to people on legacy benefits, many of whom are carers or disabled.

Although we do not oppose either of the instruments presented to us today, we remain concerned about the Government’s approach to ensuring social security for the people of Britain, and about the lack of adequate support for so many families who are struggling to get through this crisis.

Oral Answers to Questions

Abena Oppong-Asare Excerpts

Tuesday 26th January 2021 Commons Chamber

[Jesse Norman]

As I have said, the Government are doing everything they can and have been working round the clock for a year to address the full needs of the country across all the different aspect of our economy and society, including through support for the self-employed.

[Abena Oppong-Asare (Erith and Thamesmead) (Lab) [V]]

The self-employment income support scheme’s third grant closes this Friday. The crisis has not ended, but the Chancellor has not provided many details on the future of the scheme. Will the Minister explain why he thinks it is right that employees can be furloughed until 30 April but self-employed people have no clarity about the future of support beyond the end of this week?

[Jesse Norman]

I think that it is well-understood that the Chancellor will be setting out further plans in the March Budget. It is normal for this time of year for different decisions to be consolidated into that important fiscal event for well-known reasons.

Draft Tax Credits Reviews and Appeals (Amendment) Order 2020

Abena Oppong-Asare Excerpts

Monday 11th January 2021 General Committees

[Abena Oppong-Asare (Erith and Thamesmead) (Lab)]

I will not speak for long; given the brevity of the draft order, I hope we can address our concerns briskly. The order not only fixes an error in a 2014 statutory instrument, as the Minister pointed out, but seems to improve the legal framework for people whose claim for a relevant disability benefit is determined in their favour, so we will not push for a vote today, but the Minister will understand that the Opposition like to be thorough, so I will ask him to explain two points to the Committee, and to provide assurance on a third.

First, we fully accept that everyone is human, and that minor errors in drafting legislation will occur, especially in things such as cross-references. It is testimony to the immense skill of the amazing staff in the office of the parliamentary counsel that mistakes in our legislation are not more common. Will the Minister outline how and when exactly the error referred to in article 2(4)(a) of the order was identifed? For six years, during which the provisions were administered, it was not spotted and rectified; that seems a very long time.

Secondly, can the Minister outline something of the history of why it proved necessary to have article 2(5), which inserts proposed new section 21C of the Tax Credits Act 2002? It would be helpful to be clear about the circumstances that the section addresses; how often the issue arose before this order was drafted; how many people were materially affected by the section’s absence; and what the financial benefit to them would have been if the new section had always been there.

Thirdly, and most substantively, does the Minister propose using the power in proposed new section 21C(7)? The Opposition fully appreciate the need for proper information to be supplied in good time. HMRC can only take decisions on the basis of such information as it has. However, the Minister will understand that we are always cautious about people being asked to supply information in an unreasonable timeframe, especially if failure to do so costs them money, but saves money for the administrative authorities.

Finally, will the Minister reassure us that the power in proposed new section 21C(7) will not be used unreasonably in the light of the timeframe that citizens are given for responding to HMRC? What sort of timeframe does he expect HMRC to give for the supply of such information, and what timeframe would he regard as unreasonable? Will he give us an understanding of the minimum timeframe that might be given?

Financial Reward for Government Workers and Key Workers

Abena Oppong-Asare Excerpts

Monday 14th December 2020 Westminster Hall

[Abena Oppong-Asare (Erith and Thamesmead) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Stringer. I thank my hon. Friend the Member for Gower (Tonia Antoniazzi) for securing this important debate. It is important that we continue to support key workers as they have supported us through this difficult time for the whole country. She spoke about a number of things, but I will touch on her point about the Welsh Government trying to reward care homes and the Chancellor trying to tax them. She mentioned value for money for taxpayers. I agree that public sector workers pay their taxes too and deserve to be treated fairly.

I thank all hon. Members who have spoken to support key workers in their constituencies. I am disappointed that not a single Tory Back Bencher has turned up to speak. It is important that we speak for the individuals we seek to represent. The fact that not a single one has turned up speaks volumes.

Several hon. Members have made moving and passionate contributions that have highlighted the strength and passion of key workers across the country. My right hon. Friend the Member for Hayes and Harlington (John McDonnell) talked about the 10-year pay freeze. People are hurting. I echo his point that the Minister should get back to the roundtable with the unions to negotiate a decent pay rise. I hope she takes that forward.

Like many others, my hon. Friends the Members for Bootle (Peter Dowd), for Jarrow (Kate Osborne) and for Newport West (Ruth Jones) talked about how important it is for public sector workers to get a pay rise. My hon. Friends the Members for Liverpool, Wavertree (Paula Barker) and for Enfield, Southgate (Bambos Charalambous) talked about their direct experience of working in local government. My hon. Friend the Member for Enfield, Southgate also talked about how he has been delivering food parcels.

My hon. Friends the Members for Liverpool, Wavertree and for Stockport (Navendu Mishra) talked about the pressures that civil servants are facing. A recommendation was made to move towards a national infrastructure for the recovery. I am interested to hear what the Minister says on that point. I echo the comments of my hon. Friends the Members for Easington (Grahame Morris) and for City of Durham (Mary Kelly Foy) about treating prison officers with respect. I have three prisons in my constituency and I know the amount of pressure that prison officers are facing.

My hon. Friend the Member for Nottingham South (Lilian Greenwood) rightly pointed out that council tax will go up, which will have an impact on key workers whose salaries have been frozen for some time. How is that sustainable? My hon. Friend the Member for York Central (Rachael Maskell) talked about the cuts to pensions and how the story is essentially repeating itself. She said that the Government have not really addressed the economic crisis and the 10p an hour increase is an insult. She talked about how pay injustice has affected women, ethnic minorities and disabled people.

Freezing public sector pay was one of the coalition Government’s first actions in 2010. That was followed by a six-year pay cap of 1%. Over the past decade, NHS workers have lost an average of 15% of their wages as their salaries have failed to rise in line with inflation. On Friday, I heard from Royal College of Nursing members about the impact that that was having on them mentally, and the amount of pressure that they are under.

The average civil servant on a salary of £26,000 is now worse off by £2,110 a year. As hon. Members have mentioned, the Chancellor announced in his spending review that the 2.1 million public sector workers who earn less than £24,000 will receive a minimum £250 increase because of inflation. A £250 pay increase will result in a pay cut for any public sector worker earning less than £18,000. Once again, the Government have shown how much they value key workers by hiding a pay cut at the heart of their false promises.

[Sam Tarry (Ilford South) (Lab)]

Will my hon. Friend give way?

[Graham Stringer (in the Chair)]

Order. If the hon. Gentleman had been here at the beginning of the debate, he would have heard me explain that hon. Members can take part only if they are present at the beginning, regardless of whether it is to make an intervention or give a speech.

[Abena Oppong-Asare]

Young people in my constituency of Erith and Thamesmead have been submitting portraits of key workers as part of my Christmas card competition. I asked them to write why the key worker they have drawn means so much to them, and one young person said to me:

“I have chosen to draw many different key workers…They have been pushing themselves every day so they can help us. They have put us first and we should be indebted to them.”

Does the Minister agree that we are indebted to key workers, given their hard work and sacrifice during this pandemic?

Freezing pay for public sector workers is not only insulting, but irresponsible. I am curious to know whether the Minister has given due regard to the impacts that the pay freeze will have. Has the Minister read the report by the TUC, which found that public sector pay increases could boost GDP significantly? That has been echoed by a number of Members in the debate. Does the Minister recognise that imposing a real-terms pay cut, when 1.8 million key workers already earn less than the real living wage, risks driving thousands into poverty? Can the Minister explain how she plans to tackle the shortage of over 80,000 NHS and care sector jobs at the same time as freezing public sector pay?

Over 1 million key workers face a real-terms pay cut next year. That includes 125,000 police officers, 500,000 teachers, 300,000 civil service staff and 125,000 armed forces personnel. By failing to reaffirm the Government’s manifesto commitment to ensure that teachers’ starting salaries reach £30,000 by 2022, the Chancellor has made it clear that he has no intention to back our public sector workers. Cutting universal credit, and giving the go-ahead for council tax rises in the middle of a pandemic, is pushing more people into poverty. The Government are making poor spending decisions that threaten to push our economy and public services to breaking point.

I want to conclude by quoting my hon. Friend the Member for Gower. Public sector workers are not asking for a lot. They just want their contributions to be recognised, and claps do not pay the bills.

[Graham Stringer (in the Chair)]

I ask the Minister to leave enough time at the end—we have plenty of time—for the proposer of the debate to wind up.

Tobacco Products Duty (Alteration of Rates) Order 2020

Abena Oppong-Asare Excerpts

Monday 7th December 2020 General Committees

[Abena Oppong-Asare (Erith and Thamesmead) (Lab)]

It is nice to see you chairing the sitting, Mr Efford. On behalf of the shadow Treasury team, I welcome the opportunity to address the order, which will increase the rates of excise duty on tobacco products to take account of inflation and the Government’s commitment to the tobacco duty escalator, as the Minister outlined. In the 2020 spring Budget, the Government announced that they would continue with the tobacco duty escalator in this Parliament, even though, as of 1 January next year, the UK would be well within its rights to depart from the European Union directives that presently cover the structure of tobacco duties.

The Government’s justification for this instrument and for maintaining high duty rates on tobacco is that they are seen as an established tool to reduce smoking and to ensure that tobacco duties continue to contribute to the Government’s revenues. The official Opposition recognise and welcome instruments that support the public to make healthier choices and help the UK towards being smoke-free by 2030. However, this instrument feels a little blunt. It will place the burden of public health on the shoulders of individuals who are most likely to be in the grip of, and paralysed by, addiction.

The Government’s justification for this instrument states that the higher rates of tobacco duty will be welcomed by health lobby groups. The shadow Cabinet has been working closely with experts from the health sector, who have told us what they would welcome. Year on year, the health sector has listened to the Government’s statements about prevention being better than cure, and we are waiting for the Government to properly and sustainably fund the services that prevent ill health. Even before the pandemic hit the UK, local public health services were struggling to keep up with the growing demand, and health inequalities were rising.

This instrument will place duties on tobacco and will support the public purse. However, there has been a disproportionate increase in the duty on hand-rolling tobacco, by over 7%, in comparison to a little over 3% on all other tobacco products, including cigars. I am no smoker, so I wonder whether the Minister can explain the rationale behind that.

The Government have cut the public health grant by more than a fifth—22% in fact—since 2015-16, despite a growing and urgent need for investment in public health and prevention. The public health grant funds local authorities to deliver functions and services that promote health and prevent ill health in the most deprived areas. Those areas have poorer health outcomes, and therefore have the greatest need for local public health activity and funding, but they have had the greatest reduction in spending.

The Minister mentioned some data from the World Health Organisation. Data from Cancer Research UK shows that cuts in the poorest areas have been around six times greater than in the least deprived, further compromising the delivery of equitable care and the Government’s levelling-up agenda. In 2020-21, the public health grant was valued at £3.2 billion, which was about £80 million higher than the previous year’s grant. This year’s spending review said that local authority spending through the public health grant will continue to be maintained, which suggests that it will not get a real-terms increase. The Government must deliver an increase, with a sustainable, long-term funding settlement for public health in England. Based on analysis by the Health Foundation, at least an extra £0.9 billion per year is needed to restore the cuts made in 2015-16. However, a greater level of investment is also needed to support a greater focus on preventing ill health and reducing health inequalities.

It is true that comprehensive tobacco control functions that reduce smoking uptake and support smokers to quit are essential to achieve the Government’s ambitious smoke-free commitment by 2030. Despite political support for tobacco control remaining strong, local investment has decreased over recent years. Experts say that among the local authorities that still had a budget for stop smoking services, 35% had cut it between 2018-19 and 2019-20—the fifth successive year in which more than a third of local authorities had to cut that budget. Can the Minister inform me what assessment has been made of the effects of public spending cuts on the provision of those services?

To add weight to the stats that I have mentioned, more than three quarters of local authorities have reported that the biggest threat to their tobacco control budgets is funding cuts. In 2019, local smoking cessation services, which offer people the best chance of quitting for good, were universally available only in just over half of local authorities. The order does not recognise or take into account the sheer scale of the problem or the fact that smoking, like all other addictions, requires a thorough, in-depth, holistic public health approach. Smokers need to be supported to quit, not punished for dependency issues.

The economic benefits from treating smoking with a public health approach and as a preventable disease are also significant, which further strengthens the case for investing now in local public health and prevention to prevent significant economic costs in the future. In England alone, smoking is estimated to cost society £12.5 billion a year, which I would say is a substantial amount of money.

Smoking rates in England are at an all-time low, which shows the success of initiatives brought in by successive Governments to encourage the decline of smoking. However, I do have concerns about recent Government actions that could work against those measures. It is greatly concerning that the Government recently made the decision to axe Public Health England, which has played a crucial role in smoke-free initiatives, including strong regional delivery of evidence-based local action. Given that the likelihood that someone will smoke is four times higher in the most deprived areas of England, it is essential that that local work is continued as part of a UK-wide strategy to become smoke-free by 2030. I would be keen to hear from the Minister how, alongside the order, the Government plan to ensure that stop smoking campaigns can continue to be delivered in the areas most affected by smoking.

As we know, smoking still causes more than 70,000 deaths per year. I am pleased that the Government and the Opposition are on the same page in believing that that cost in human life is quite frankly unacceptable. I know that, for that reason, my colleagues in the shadow health team and quite a number of colleagues across the House have been supportive of the order and other measures to reduce smoking. However, the approach needs to be improved so that it does not hit those who are already economically deprived harder than those who can shoulder an increase in tobacco duties. I am eager for us to work closely together to ensure that the Government achieve their smoke-free target by 2030 and to work with the NHS to help people to quit smoking.

Financial Services Bill (Twelfth sitting)

Abena Oppong-Asare Excerpts

Committee stage & Committee Debate: 12th sitting: House of Commons
Thursday 3rd December 2020 Public Bill Committees

[The Chair]

When we reach it on the amendment paper, so not quite yet.

New Clause 8

Money laundering: electronic money institutions

‘(1) The Proceeds of Crime Act 2002 is amended as follows.

(2) In section 303Z1(1) after “bank” insert “, authorised electronic money institution”.

(3) In section 303Z1(6) after “Building Societies Act 1986;” insert—

““authorised electronic money institution” has the same meaning as in the Electronic Money Regulations 2011.”

(4) In section 340(14)(b) after “Bank” insert “, or

(c) a business which engages in the activity of issuing electronic money”.’—(Abena Oppong-Asare.)

This new clause would update definitions in the Proceeds of Crime Act 2002 to reflect the growth of financial technology companies in the UK by equalising the treatment of fin tech companies with banks on money laundering and Account Freezing Orders.

Brought up, and read the First time.

[Abena Oppong-Asare (Erith and Thamesmead) (Lab)]

I beg to move, That the clause be read a Second time.

It is a pleasure to have you chairing this sitting, Dr Huq. I rise to speak in favour of new clause 8, which would be good for consumers. [Interruption.] I see that the Minister is agreeing with me—or, at least, he is smiling with me—so I think we are almost getting there.

This new clause would be good for Britain’s world-leading FinTech sector. At the same time, it will improve the ability of our crime prevention agencies to do the job that we all want them to do—that is, to crack down on criminal activity and, in this case, money laundering. It would achieve those objectives by updating definitions in the Proceeds of Crime Act 2002 to ensure that customers of FinTech are treated in the same way as customers of traditional banks with regard to anti-money laundering provisions and account freezing orders. These outcomes would help. We have tabled this new clause because this is an opportunity in the Bill to address the technical deficiencies in the anti-money laundering regime; it is not political in nature. We hope that the new clause will therefore receive cross-party support, as we believe that we are all united in our desire to clamp down on money laundering.

The need for this new clause has arisen because outdated definitions in the Proceeds of Crime Act 2002 are disadvantaging customers, placing unnecessary pressure on law enforcement, and could allow suspected criminals to avoid complying with law enforcement requirements to forfeit illicit funds. Simply put, this legislation was written before FinTechs existed, and we really need to look at updating the law now because so many people use them. I understand that there is considerable support from the sector and law enforcement for updating the relevant definitions in the Proceeds of Crime Act to reflect the growth of FinTechs, and the passage of the Bill provides the ideal opportunity to do so. We need to act now by amending the Bill, rather than waiting for dedicated legislation, because the problems for consumers, the sector and our crime agencies are getting worse due to the rapid growth of the FinTech sector. I hope that the Minister will therefore accept this simple, highly targeted and rather uncontroversial new clause.

Let me turn to the details. The new clause fixes two specific problems. First, it updates the legislation relating to the defence against money-laundering processes. The second problem relates to account-freezing orders. Under the existing legislation, when financial services firms suspect that someone is engaged in money laundering, it is normal practice for their account to be frozen and for an appropriate decision to be made as to what should be done with the funds, which might include, for example, returning them to source. However, in order legally to be able to return the funds to source, the regulated firm is required to request a legal defence from the National Crime Agency—the so-called defence against money laundering, or DAML—to carry out this activity. DAMLs take two weeks to process. During this period, firms cannot even communicate with customers or allow them to withdraw funds. As we know, the covid pandemic is a particularly difficult period for a lot of consumers.

For reasons of practicality, an exemption was introduced in 2005 such that banks do not request a DAML if the transaction they are to carry out is below £250, but the FinTech sector did not exist at that time so the exemption does not apply to it. Electronic money institutions—that is what most FinTechs are regulated as—are still required to request DAMLs for all transactions, even those of a low value. Low-value DAMLs do not provide useful intelligence to the NCA. I understand that when the UK Financial Intelligence Unit reviewed a sample of 2019-20 DAMLs, it found no refusals for requests under £250.

The rapid growth in the FinTech sector and its inability to use the £250 exemption means that the number of DAMLs has grown from 15,000 in 2015-16 to 34,000 in 2018-19 and 62,000 in 2019-20. According to the NCA’s recently published annual report, the most significant growth was seen from financial technology companies. The report says that such firms submitted 32,454 DAMLs and suspicious activity reports, which is up 247.36% from the previous year, when there were 9,343. The number of DAMLs will continue to grow rapidly until the threshold is extended to EMIs.

That rapid growth is placing significant pressures on FinTechs, customers and law enforcement. For example, a recent article in The Times showed that many customers have their accounts locked out for extended periods. More worryingly, the head of the UK Financial Intelligence Unit, Ian Mynot, told the Financial Times last week that unnecessary DAML reports are affecting the NCA’s ability to investigate criminals. I am sure the Committee will agree that that is really worrying. The article says:

“The…National Crime Agency has called for deeper reform of the system for flagging potential money laundering”

There are concerns out there; it is not just Opposition Members who are concerned.

I am concerned that FinTechs have to spend significant amounts of time and money sending requests to the NCA, which provides the agency with extra admin and work that it does not want to do. That time and money could be used to build new products and services that would benefit customers and businesses and therefore be more cost-effective.

Subsection (4) of the new clause would extend the DAML threshold eligibility to electronic money institutions. When the Minister replies, will he give his assessment of how many DAMLs have been submitted this year and, of those, how many have been for sums under £250? Are the numbers now in the tens of thousands? How many DAMLs for sums under £250 have been refused in the past year? Is it zero? If so, what was the associated cost to the economy of all that unnecessary paperwork, not to mention the diversion of law enforcement resources from proactive investigation to dealing with administration and the intangible costs and frustrations to customers who have had their accounts frozen with no reason given? What is the Minister’s estimate of the amount of time and money FinTechs have expended on submitting DAMLs that the NCA does not want? Does that put the UK FinTech sector at a competitive disadvantage? I realise I am asking a lot of questions, but I have just a few more. How many DAMLS does the Minister expect to be submitted in each of the next three years if the definition in POCA is not updated through the Bill?

Before moving on, Dr Huq, it is worth pointing out that the new clause does not affect the parallel requirement for regulated firms to submit suspicious activity reports to the NCA every time a firm knows or suspects that someone is engaged in money laundering, regardless of the sums involved. I reassure hon. Members that the new clause would not change the SAR process. Does the Minister think that DAMLs of under £250 provide any useful intelligence to the NCA, given that it already receives SARs and given the comments of Mr Mynot? Can the Minister address that in his response?

The second issue that the new clause addresses relates to account-freezing orders, or AFOs. The Proceeds of Crime Act includes provisions that enable law enforcement agencies to freeze and forfeit funds held in UK bank or building society accounts, where there are reasonable grounds for suspecting that those funds are the proceeds of crime. In order to freeze funds in an account, a senior law enforcement officer has to apply to the courts for an account freezing order. Under POCA, AFOs can only be used to freeze funds held in bank or building society accounts.

The Minister may be able to correct me on this, but I understand that AFOs cannot be used to freeze funds held in accounts of FinTechs, which are regulated as electronic money institutions. It seems to me that there is clearly a significant risk that criminals will exploit that loophole and run illicit activities through FinTech accounts to avoid having their funds frozen.

Subsections (2) and (3) of the new clause would update the necessary definitions in POCA, meaning that law enforcement could use AFOs to freeze funds held in FinTech accounts in the same way that they can in standard current accounts. In his response, can the Minister let the Committee know if his Department is aware of any suspected money launderers exploiting this AFO loophole? That is important if we are to move forward. What are the sums involved? Have any police forces or law enforcement agencies made representations to the Minister urging him to adopt the measure? If so, does he agree with us that the loophole needs to be closed as a matter of urgency, and that the change in definitions cannot wait any longer?

Dr Huq, we all want to make progress on this issue. I will therefore be listening very carefully to the Minister’s response to my questions. As I said at the outset, I hope that we can use the opportunity today to obtain a cross-party consensus to fix these issues during the passage of the Bill. That would be good for consumers, it would support our crime prevention agencies and send a strong message of support to our fast-growing FinTechs. If the Minister is unable to commit to looking at this issue during the passage of the Bill, we would welcome his bringing it up at a later stage. I look forward to the Minister’s response.

--- Later in debate ---

[Abena Oppong-Asare]

I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

New Clause 9

Public country-by-country reporting by financial services companies

‘(1) The Treasury must, every year, publish and lay before both Houses of Parliament a report on its progress in pursuit of international action on public country-by-country reporting by relevant bodies.

(2) The report must include an update on whether the Treasury intends to require the group tax strategies of relevant bodies to include a country-by-country report, pursuant to paragraph 17(6) of Schedule 19 to the Finance Act 2016.

(3) The first report must be laid before both Houses of Parliament within six months of this Act being passed.

(4) For the purposes of this section, a “relevant body” means a body authorised by or registered with the Financial Conduct Authority.’—(Abena Oppong-Asare.)

This new clause would require the Treasury to report on a regular basis to Parliament on its progress, for FCA-registered and authorised companies, towards international agreement on a model of public country-by-country reporting and whether it will use powers in the Finance Act 2016 to require public country-by-country reporting in the UK.

Brought up, and read the First time.

[Abena Oppong-Asare]

I beg to move, That the Clause be read a Second time.

If agreed to, new clause 9 would be good for the country and at the same time would tackle widespread concerns about multinational enterprises exploiting the way national systems interact in order to minimise the total amount of corporation tax they pay. It would help create greater transparency around the taxation of multinational companies, achieving those objectives by requiring the Treasury to report on a regular basis to Parliament on its progress in pursuit of international action on public country-by-country reporting by relevant bodies.

Let me say at the outset that those outcomes are what we want to see. Labour’s aim in tabling new clause 9 is to use the Bill as an opportunity to help make the UK a world leader in financial transparency. I appreciate, as the Minister mentioned earlier, that financial legislation is complex, but we hope that on this occasion we will be able to receive cross-party support, as I believe we are all united in our desire to have far greater transparency.

The Government currently have the power to require multinational enterprises to publicly report their tax payments on a country-by-country basis, but so far they have resisted using that power. As I mentioned earlier, there is widespread concern about how multinational enterprises successfully exploit the way national systems interact in order to minimise the total amount of corporation tax they pay. New clause 9 is one way of tackling that. It is quite simple: it just requires public country-by-country reporting of the amount of tax multinational enterprises pay in each country where they have operations.

Schedule 19 of the Finance Act 2016 introduced a requirement for UK-headed multinational enterprises, or UK sub-groups of multinational enterprises, to publish a tax strategy. Paragraph 17(6) gives the Treasury the power to require those tax strategies to include country-by-country reports of tax paid. However, while the Government do not appear to disagree with the principle of country-by-country reporting, we still have not seen the full use of powers to require that. They say they want international agreement on public reporting first.

I am sure the Minister agrees that there has been recent pressure on the Government to use the power in the Finance Act 2016 to introduce public country-by-country reporting. It was most recently discussed during the passage of the Finance Bill this year. On Report, on 1 July, the right hon. Member for Barking (Dame Margaret Hodge) tabled new clause 33, which would have required a tax strategy published by a group liable for the digital services tax to include any relevant country-by-country reports. At the time, new clause 33 received cross-party support, including from our own shadow Chief Secretary to the Treasury, my hon. Friend the Member for Houghton and Sunderland South (Bridget Phillipson), and Conservative Members such as the right hon. Member for Haltemprice and Howden (Mr Davis), the hon. Member for Thirsk and Malton (Kevin Hollinrake) and the right hon. Member for Sutton Coldfield (Mr Mitchell). I echo the comments made by the shadow Chief Secretary to the Treasury, who said:

“For years, the Opposition have urged the Government to commit to country-by-country reporting on a public basis…the way in which they have held up progress at an international level, has been a source of deep frustration to those of us who want to see far greater transparency around the taxation of multinational companies.”—[Official Report, 1 July 2020; Vol. 678, c. 367.]

The right hon. Member for Sutton Coldfield said:

“The new clause would allow Parliament, journalists, campaigners and civil society to see clearly whether these businesses are paying their fair share of taxation. If the Government accept the new clause, that would, as the hon. Member for Houghton and Sunderland South suggested, make the UK a world leader in financial transparency.”—[Official Report, 1 July 2020; Vol. 678, c. 369.]

There are companies already undertaking voluntary country-by-country reporting. For example, SSE—one of the largest electricity network companies in the UK—has been awarded the fair tax mark for the fourth year in the row. It provides a shining example of how this could be done. We are seeing companies doing this on a voluntary basis, and the new clause would ensure that all companies do it and that it is not a difficult process.

The Government have made quite a big deal about wanting to be a global leader next year—it is not just me saying that; those are the Government’s words—particularly post Brexit and with our presidency of the G7. If the Government genuinely want to show global leadership, should they not be at the forefront of pushing these kinds of measures, rather than passively waiting for an international agreement to be reached? This is a perfect time to implement this provision. It would be great if we could get just one amendment through on this occasion.

The new clause would require the Government to publish an annual report to Parliament on their progress towards the international agreement, including whether they intend to use the power in the Finance Act 2016 to require public country-by-country reporting and publish tax strategies. We would welcome the Minister taking this opportunity to give us the latest update on progress towards the international agreements on public country-by-country reporting, including what specific discussions the Government have had with international partners and whether the Government anticipate any progress on this matter in 2021.

[John Glen]

New clause 9 would require the Treasury to publish and lay before both Houses of Parliament an annual report that outlines its progress towards international action on public country-by-country reporting, and provides an update as to whether it intends to expand the existing tax strategy reporting requirement to include country-by-country reports of financial services companies. As the hon. Lady has acknowledged, the Government have championed tax transparency through initiatives at the international level, including tax authority country-by-country reporting and global standards for exchange of information, and through domestic action such as the requirement for groups to publish tax strategies.

In relation to public country-by-country reporting, the Government continue to believe that only a multilateral approach would be effective in achieving transparency objectives, and avoiding disproportionate impacts on the UK’s competitors or distortions regarding group structures. Different global initiatives to increase tax transparency and to help protect against multinational avoidance continue to be discussed in the international forums, such as the OECD, in which the UK is an active and leading participant. However, although the Government will continue to be clear and transparent about our broad objectives in this area, it would not be appropriate for the Treasury to provide a detailed report each year assessing the status and evaluating the progress of fast-moving, complex discussions that typically take place between countries on a confidential basis, nor do we think it appropriate to approach that from the narrow focus of financial services as the new clause suggests.

Although the Bill makes specific amendments to the scope of country-by-country reporting required in order to reflect the changes to the prudential regimes, the question of whether corporates should be required to publish country-by-country reports as part of their tax disclosures is a wider question that is relevant to large multinationals operating in all industry sectors, not just those in regulated financial services sectors. For those reasons, I ask the hon. Lady to withdraw the new clause.

[Abena Oppong-Asare]

I beg to ask leave to withdraw the clause.

Clause, by leave, withdrawn.

New Clause 10

FCA recommendation to remove a self-regulatory organisation: Ministerial statement

“(1) When the FCA makes a recommendation that a self-regulatory organisation be removed from Schedule 1 to the MLR pursuant to Paragraph 17 of the Oversight of Professional Body Anti-Money Laundering and Counter Terrorist Financing Supervision Regulations 2017, the Treasury must make a statement to Parliament.

(2) The statement must be made within four weeks of the recommendation being made.

(3) The statement to Parliament must set out—

(a) the Government’s response to the FCA’s recommendation;

(b) the likely impact on the sector of any action the Government is proposing to take, including—

(i) the impact of the organisation retaining its Anti-Money Laundering supervisory responsibilities if the Government decides not to remove the organisation from Schedule 1 to the MLR; and

(ii) where the Government intends to place an organisation’s Anti-Money Laundering supervisory responsibilities if it decides to remove the organisation from Schedule 1 to the MLR; and

(c) where applicable, a timescale for the removal of the self-regulatory organisation from Schedule 1 to the MLR.

(4) For the purposes of this section, “MLR” means the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017.”—(Abena Oppong-Asare.)

This new clause would require the Treasury to report to Parliament on its response to any recommendation by the FCA that an organisation have its anti-money laundering supervisory responsibilities removed, including the impact of either accepting or rejecting any such recommendation.

Brought up, and read the First time.

[Abena Oppong-Asare]

I beg to move, That the clause be read a Second time.

New clause 10 would be good for consumers. At the same time, it would improve the ability of our crime prevention agencies to do the job that we all want them to do—namely, to crack down on criminal activity and, in this case, money laundering. Our aim in tabling the new clause was to take the opportunity offered by the Bill to address technical deficiencies in the anti-money laundering regime. Again, I hope that we will receive cross-party support for our proposal, as I believe we are all united in a desire to clamp down on money laundering.

Tackling money laundering has a strong international aspect, but the Government need to ensure that we have clear and effective anti-money laundering measures within the UK. The intergovernmental Financial Action Task Force was founded by the G7 in 1989 to design and promote policies to combat money laundering around the world. In the EU, FATF standards are implemented by way of money laundering directives, which are designed to establish a consistent regulatory environment across member states. As I said, there is clearly a strong international aspect to the work, but it is the responsibility of the UK Government to implement effective measures in this country. Implementing new clause 10 would certainly help to address that.

There are concerns about fragmentation. Indeed, that is a long-standing concern about the UK’s anti-money laundering supervisory regime. In the UK, there are, in the accountancy and legal sectors, 22 different professional bodies with responsibility for monitoring compliance by their members with anti-money laundering measures. The EU’s fourth money laundering directive made it clear that bodies that represent members of a profession may have a role in supervising and monitoring them. As I said, however, the supervisory landscape in the UK has been criticised for being highly fragmented.

In 2015, that was recognised by the Government in the “UK national risk assessment of money laundering and terrorist financing”, the first such assessment, which highlighted the challenge of having a large number of supervisory organisations. Advocacy organisations such as Transparency International, which gave evidence to our Committee a few weeks ago, have long criticised the fragmented nature of the UK’s anti-money laundering supervisory regime.

In 2018, the Government created a new office within the Financial Conduct Authority to improve standards among professional supervisory bodies—the Minister will probably mention that—but concerns have been raised about its effectiveness. For example, the Oversight of Professional Body Anti-Money Laundering and Counter Terrorist Financing Supervision Regulations 2017 gave the FCA the role of ensuring that the anti-money laundering work of the professional supervisory bodies was effective. That would be done through the new office within the FCA, the Office for Professional Body Anti-Money Laundering Supervision. The 22 professional bodies that OPBAS regulates are named in schedule 1 to the 2017 regulations.

However, a Treasury Committee report from last year, entitled “Economic Crime - Anti-money laundering supervision and sanctions implementation”, concluded that it was not clear how the Treasury would respond to an OPBAS recommendation to remove a professional body’s supervisory role. In particular, the Treasury Committee said that there was not an adequate indication of where the Treasury would move a body’s supervisory responsibilities if it was stripped of them. It concluded that the lack of preparation created a risk that a supervisor might become “too important to fail”. That is quite concerning to me. The Committee recommended that the Treasury publish within six months a detailed consideration of how it would respond to a recommendation from OPBAS.

In their “Economic Crime Plan 2019-22”, which was published in July last year, the Government committed to meeting the Treasury Committee’s recommendation by publishing

“a detailed consideration of the process for responding to an OPBAS recommendation to remove a professional body supervisor’s status as an AML/CTF supervisor, including managing changes in supervisory responsibilities, by September 2019.”

In a letter to the Chair of the Treasury Committee dated 17 October last year, the Economic Secretary to the Treasury set out in a few paragraphs the Treasury’s response to an OPBAS recommendation. The letter provided little extra information and cannot be taken to constitute the

“detailed consideration of the process”

promised in the economic crime plan.

In September this year, the Royal United Services Institute noted:

“OPBAS are working with HM Treasury on designing a process in the event that a supervisor is removed from the Schedule 1 list of approved supervisors. This work is nearing completion, but has been delayed to autumn 2020 by the Covid-19 situation.”

In short, the Government committed to publishing a detailed consideration by September last year but still have not done so. It is now December 2020, so it has been more than a year.

Labour’s new clause seeks to underline the importance of the Treasury having a clear and credible response to OPBAS recommendations. For OPBAS’s role to be as effective as possible, it is crucial that its ultimate sanction must have credibility, so the Treasury must be clear of its response to a recommendation from OPBAS to remove a professional body’s supervisory responsibilities. Our new clause attempts to formalise the process of a Treasury response by committing the Government to publishing their response within four weeks of an OPBAS recommendation to remove an organisation from schedule 1. The response must make clear what the Government intend to do and, crucially, the impact of their decision either to leave an organisation on schedule 1 or to remove it.

We would welcome a commitment from the Minster today—this is my third time trying, with a third new clause—on when the Government will finally publish their

“detailed consideration of the process”

for responding to OPBAS recommendations to remove a professional body supervisor from schedule 1. This is also an opportunity for the Minister to set out the Government’s intended approach to complying with the FATF standards after the end of the transition period, and whether the Government intend to meet or exceed future EU money laundering directives. For that reason, the new clause really must be added to the Bill to help the Treasury finally to meet its obligations.

[John Glen]

The Government are committed to ensuring consistently high standards across the UK’s anti-money laundering supervision system, and the FCA’s Office for Professional Body Anti-Money Laundering Supervision—known as OPBAS—is a key part of that. It works with the 22 professional body supervisors to address any weaknesses identified in their supervisory responsibilities. When OPBAS has identified deficiencies in professional body supervisor oversight arrangements or practices, it has taken robust action, including by using powers of direction. OPBAS will continue to take such action with supervisors when appropriate, to ensure that consistent high standards of supervision are achieved.

Regulation 17 of the regulations that establish the role of OPBAS ensures that there is a clear route to removal if OPBAS has significant concerns about a supervisor’s effectiveness. As the hon. Lady pointed out, following the Treasury Committee’s economic crime inquiry, I wrote to the Committee to set out the process by which the Treasury would respond to a recommendation from OPBAS for such a removal. That covers each of the points that have been included in subsection (3) of the proposed new clause.

The removal of a professional body supervisor would be a highly significant decision; the Treasury would carefully consider any recommendation and, if approved, would work with other professional body supervisors, OPBAS and the statutory supervisors to ensure the continuation of anti-money laundering supervision for the affected professional body supervisor’s members. That would also require the agreement of a transition period before the removal of the professional body supervisor from schedule 1 of the money laundering regulations. It could not just be done abruptly without due recourse to what interim measures or further successor measures would need to be put in place.

It is essential that any recommendation is given due consideration and planning before a decision is announced, and the introduction of a four-week statutory deadline from the issuance of a recommendation would place that at risk. If a decision has not been reached, any enactment or publication of details of the recommendation would be inconsistent with regulation 21(2) of the OPBAS regulations, which prohibits such publication.

While any recommendation for removal would be treated with urgency by the Treasury, the length of the process would be dependent on the circumstances. We therefore believe that it would be wrong for a statutory deadline to be placed on reaching an effective outcome. In the event of OPBAS’s recommending the removal of a professional body supervisor, a notice would be placed on gov.uk once a decision on removal had been reached and, if necessary, plans would be agreed for the transition of affected businesses. I therefore ask the right hon. Member for Wolverhampton South East and the hon. Members for Erith and Thamesmead and for Manchester, Withington not to press the new clause.

[Abena Oppong-Asare]

I beg to ask leave to withdraw the clause.

Clause, by leave, withdrawn.

New Clause 16

Consumer credit: extension of FCA rule-making duty

“(1) Section 137C of the Financial Services and Markets Act 2000 shall be amended as follows.

(2) In subsection (1A), substitute

‘one or more specified descriptions of regulated’

for ‘all forms of consumer’.”—(Stella Creasy.)

This new clause would extend the responsibility of the FCA to make rules with a view to securing an appropriate degree of protection for borrowers against excessive charges to all forms of consumer credit.

Brought up, and read the First time.

[Stella Creasy (Walthamstow) (Lab/Co-op)]

I beg to move, That the clause be read a Second time.

Financial Services Bill (Tenth sitting)

Abena Oppong-Asare Excerpts

Committee stage & Committee Debate: 10th sitting: House of Commons
Tuesday 1st December 2020 Public Bill Committees

[John Glen]

The clause will insert new paragraph 13A into schedule 2 of the Savings (Government Contributions) Act 2017. The clause gives the Treasury a power to make regulations that provide for the transfer of funds from a mature Help to Save account to a new or existing savings account with NSNI in the National Savings Bank where the account holder has not provided instructions upon maturity for it to be transferred elsewhere. It will be known as the successor account. The clause also provides that any regulations made under it cannot override the account holder’s instructions for the transfer of the balance to an account of their choosing. Where a transfer is made to a successor account, no charge may be imposed on the account holder for the transfer.

The Help to Save scheme supports individuals on low incomes to build a savings fund over four years, providing a generous 50% bonus. More than 222,000 accounts have been opened as of July 2020, and more than 47,200 savers have benefited from their first bonus. At the end of the four-year term of the Help to Save account, savers will be encouraged to provide instructions on where they want their savings transferred—for example, to a new or an existing savings account. However, some savers might not provide instructions, and the Government are in the process of evaluating the best way to support such customers, who have become disengaged from their accounts, to continue to save. A successor account is one of a number of options that are being considered. I therefore recommend that the clause stand part of the Bill.

[Abena Oppong-Asare (Erith and Thamesmead) (Lab)]

It is a pleasure to be under your chairmanship, Mr Davies. I would like to speak to new clause 3, which calls on the Government to prepare and publish an annual report on the Help to Save scheme for each financial year that it remains open to new accounts.

The Help to Save scheme is a form of savings account that allows eligible people to receive a bonus of 50p for every pound they save over four years. The scheme is particularly good, as it targets people who are entitled to working tax credits or who are in receipt of universal credit. Given the failure to support jobs during covid-19, the number of households currently receiving universal credit has risen from 1.8 million in May 2019 to almost 4.6 million as of October 2020. I am sure everybody on the Committee agrees that that is a very high figure, although I appreciate that we are going through really difficult times because of covid.

One of the things that I am seeing as a local MP in my constituency—I am sure it is the same for everybody on the Committee—is a huge increase in universal credit claimants. We are likely to see an even bigger increase as people are no longer able to rely on their personal savings, so the Help to Save scheme is more important than ever.

After a two-year delay, the Help to Save scheme was launched by the Government in September 2018, to much anticipation. However, the scheme to date cannot be considered a success, and I am eager to find out why. We tabled the new clause because we feel that an annual report would help us in uncovering that. Of the 2.8 million people eligible to take up the scheme, only 132,150 accounts had been opened by July 2019—just 4.6% of those eligible for the scheme. I am still struggling to understand those figures and to believe that the Government are truly committed to a savings scheme and to creating a culture of household saving.

Furthermore, in last year’s spring statement of March 2019, the Government’s Budget watchdog slashed by half its forecast of how much the taxman would have to spend on Help to Save by 2021, citing lower than expected take-up. However, as I mentioned, I am in favour of the scheme and want it to succeed. That is, after all, why the previous Labour Government spent time highlighting the scheme and planning to launch it in 2010 as a savings gateway, only for it to be scrapped in 2010 by the then Chancellor.

Members may agree that the information we have so far does not paint a picture of commitment from the Government to supporting people to save. When the savings gateway was created, Labour worked with banks, building societies and credit unions, which invested in software and promotional literature for the launch. Some potential savers had received letters informing them of their eligibility and telling them about local providers just hours before the scheme was scrapped by the incoming Conservative Government.

I am really interested to hear what measures the Government have implemented to promote take-up of the scheme. I could raise many issues about universal credit and working tax credits, but as you advised, Mr Davies, we need to keep to the new clause, so I will raise them another time. My primary concern is to ensure that those who are eligible can access the scheme, now and in the future.

The Government’s pilot scheme found that 45,000 individuals saved a total of £3 billion during the trial period. We know that the scheme works. Charities and debt support services are hopeful that it can directly tackle asset poverty. The Help to Save scheme is due to come to a close in three years’ time, in September 2023, which means that we still have time to support people to save over £800, if we act now to make the scheme more widely accessible.

Publishing an annual report on the scheme, as provided for by the new clause, would allow us to see in detail where take-up has been successful and what we can do to ensure that people are aware of the scheme and how to engage with it. We feel very strongly that a report would help us to capture what areas we need to improve. The Minister mentioned that the Government are committed to providing support. I hope that they are, but agreeing to have an annual report would show further commitment.

In the meantime, I believe that more can be done, particularly to integrate with credit unions and debt management services so that the scheme functions more effectively in the years it has left to run. I would also be really interested, in lieu of an annual report for 2020, given that at the end of last year it was estimated that only 4% of eligible people have signed up to the Government’s Help to Save scheme, if the Minister could tell the Committee whether he thinks it has been unsuccessful and what the Government are doing to promote take-up.

[Stella Creasy]

I rise to support what my Front-Bench colleague said on new clause 3 and to speak to new clause 14, which seeks to underline the question that she set. Given that this is a good scheme, why has it not been taken up more widely?

The Minister may have thought that I was just a one-trick pony, obsessed with debt. Let me tell him that my difficult second album is very much about savings. I know that he had concerns about the drafting of my previous amendments and I want to put on the record my thanks to the Clerks, who have been incredibly helpful and patient with me in seeking to get the wording right. We all appreciate the hard work that they do behind the scenes to ensure that our drafting is intelligible, even if it is not inevitably accepted by the Minister.

I hope that the Minister will accept this new clause and my difficult second album about savings. This is two sides of the same coin of how people make ends meet. I would wager that that is why he has put them together in this portmanteau or Christmas tree Bill––given that it is 1 December, we may as well call it that. It is about how we make sure that people have the money they need, whatever the weather or time of year and whether things are going well or badly for them. Just as we would want people to get help when they get into debt, we also want them to get help to have rainy day money, as it might quaintly be called now. I said that to a member of my staff who looked blank and probably tried to look it up on Instagram.

Clearly, helping people on low incomes to save is critical. One reason why I support the new clauses is that I do not think we can have a conversation about savings without talking about assets. There are increasing inequalities in our society. Indeed, the new inequality is not so much about income as assets. We are looking at why people do not take up the scheme, what we can do to make it work and whether it serves the purpose that we are trying to get at. While we come from different political traditions, I hope that the Minister would agree that income inequality is of itself a negative draw on our economy and social cohesion. Perhaps that is the best way I can put it to him. One day, I will tempt him towards the more radical socialism of egalitarianism.

When we have people who have plenty and people who have very little, or indeed no access to anything, our society suffers. The Help to Save scheme is about improving that situation. It is increasingly obvious that in constituencies and communities like mine that are riven by gentrification and inequality, it is assets that are the difference between success and failure. That is necessarily different from savings accounts, and it is right that when we are looking at what we are doing to help those on the poorest incomes succeed in life, we are cognisant of that fact and include it in our thinking.

What do I mean in layman’s––or perhaps laywoman’s––terms? One in five mortgages are issued with the help of the bank of mum and dad. People with the bank of mum and dad are always going to be more successful and stable than many of those constituents who do not have access to that. Those are the people at whom the scheme is targeted. The 10 million households that have no savings at all stand in a very different place from the one in 10 children born in the 1980s who will inherit more than half average lifetime earnings. Property is the divider within our society and that trend has got a lot worse over the last 30 years, yet very little Government policy on tax and savings begins to address that and the income inequalities that it creates.

When we are looking at a savings scheme and expecting people to have money to put aside––even what might seem very modest sums––we have to set it in the context of the other assets they have access to if we really want to get to grips with those inequalities in society. In looking at tax and benefit policies, and savings policies, the fact that someone can inherit £1 million in property without paying any tax at all stands against those families with £15,000 of debt who will never be able to put any money aside because they will always owe somebody else. All Governments of all colours have been burned before in trying to address some of these factors, and in taking a narrow view purely of income levels. I am old enough to remember TESSAs—not just the fantastic Dame Tessa Jowell who is sadly no longer with us, but tax-exempt special savings accounts, which drove income inequality in this country in terms of people’s ability to put money aside.



It is right that we ask ourselves whether this measure will get to the root of that problem—to the communities and people we represent who will not be able to save and whose lives will always be askew, because their counterparts have been able to benefit from that growing asset wealth, whether that is people who have inherited property or people who are now in communities such as mine, where housing costs and housing values have risen to such an extent that their children will be able to benefit from them, including from schemes such as remortgaging. In situations such as that with covid, which we know is an income shock, people might be expected to use their savings account, but they cannot because they do not have any money in it, so it is even more apposite to ask whether they have other assets that they might be able to draw on in comparison with their counterparts.

Oral Answers to Questions

Abena Oppong-Asare Excerpts

Tuesday 1st December 2020 Commons Chamber

[Jesse Norman]

As my hon. Friend will be aware, I have a history of being closely involved with the performing arts sector. As I have indicated, I will be meeting many of the groups representing people in this situation. He should be aware that, in addition to the £1.57 billion culture recovery fund, the Government have put in place the film and TV insurance scheme, to which more than 150 applications have been made so far. The Government do and continue to take these issues extremely seriously.

[Abena Oppong-Asare (Erith and Thamesmead) (Lab)]

The situation for the self-employed is especially difficult in areas with additional restrictions and for those working in the hardest hit sectors. The Government’s additional restrictions grant must go further in areas that have been in restrictions for longer. What plans do the Government have to improve this situation?

[Jesse Norman]

The hon. Lady will be aware that we have backdated business grants to address some of these concerns. It is also worth mentioning that the third phase alone of the self-employed scheme is expected to cost more than £7 billion. As the Chancellor said, it is part of a wider package of support that we are trying to give to businesses and individuals affected by the crisis.