Budget Resolutions and Economic Situation

Adrian Bailey Excerpts

Wednesday 16th March 2016 Commons Chamber

[Neil Carmichael]

That was a year ago, when there were fewer academies. Now, 80% of academies are good or outstanding, which is a really impressive signal. We need to make sure that academies join up in multi-academy trusts.

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

Will the hon. Gentleman give way?

[Neil Carmichael]

No, I will keep going now. I am really excited about the idea of including university technology colleges in MATs, because that will give greater choice. The Government have already allowed sixth-form colleges to be included in MATs. We need economies of scale in sixth-form provision, and increasing the number of MATs will do just that.

It is a scandal that, according to a national mathematics charity, 78% of our adult population do not reach level 2 maths. That is not acceptable and it is absolutely right that maths should be taught as a compulsory subject up to the age of 18. I have frequently said that we should have a national baccalaureate to do just that, and I urge the Government to point out to Sir Adrian Smith that that would be at least one way of making sure that 16 to 18-year-olds are taught maths. I remind the House that we are the only country in the western world in which maths is not a statutory subject up to the age of 18. That is not acceptable.

I know that this is of no interest to the Scottish nationalists, but the Government have rightly decided to make sure that our schools have fairer funding. When I was a member of the all-party parliamentary group on Yorkshire and northern Lincolnshire, I was not surprised that there were concerns about Yorkshire schools and that people wanted a commission to improve them, because there are a large number of coastal and rural schools. Such schools often suffer most with regard to funding, so it is absolutely right for the Government to tackle that.

I salute and welcome the decision taken on sugary drinks. I am also very pleased that the money from that tax will go towards encouraging more sports participation. My Education Committee will look at that in detail.

I want to mention three other issues before I move on to Europe. First, I think that devolution is a really good thing and I am really pleased that so many cities and counties are considering mayoral solutions. I think that is the way forward. Any structure considering devolution must ensure that it has the right accountability and governance system in place. That is what the Government seek to achieve. I hope that my own county of Gloucestershire—the entire county; I do not want anything to be chopped off—will be a successful devolved power with a suitable governance structure. That is the way to harness business, education and other public services, make sure that the planning system is consistent with the overall interests of the county, and deliver for the people. That is how we can really make a difference, and this Budget helps that process.

It is absolutely right that we continue to invest in infrastructure. I think the key thing is to signal a plan for investment that businesses can look to with some certainty and know that it is happening, so that they can start thinking about the people they need to recruit and the resources that they need. A common complaint of organisations such as the Institution of Civil Engineers is that we do not have the planning capacity to make the decisions that we should be making ahead of starting a project. Forward planning in infrastructure projects is absolutely great, and the Budget does that to some extent, although I think that more could be done.

I am really pleased to see that business rates are being changed so that smaller businesses will simply be exempted. That is good news for a constituency such as mine, where we have a large number of small businesses, many of them in the retail sector. Many are starting to develop really interesting technologies that have huge potential and that will get somewhere if they are given a proper chance. The changes in business rates are really very good.

Back to the European Union. We have to accept that the OBR is right to point out that if we leave the world’s largest single market at a stroke—that is effectively what article 50 will do—we will cause a huge amount of disruption to investment and trade. If anyone thinks that signing 66 new free trade agreements will be easy, quick or comprehensive, they are wrong. As we saw with the discussion about Canada, if we replicated the position of Canada, our situation would not be helpful in terms of motor cars or financial services. That is not a solution.

We should also remind ourselves that proportionally, Norway pays about the same as we do to be in the single market, with no control over anything and no special dispensation over any aspect of the single market. We complain about paying the same amount, per ratio, as Norway, yet right now we have influence. What does that influence do? It effectively created the single market in the 1980s and has expanded it now, and it will continue to ensure that Britain has a leadership role in the European Union, where we can forge a stronger, better place for trade and extend beyond the European Union. The idea that we are in the European Union and that therefore can go nowhere else is utter nonsense. Germans export to China. The Netherlands beats us when it comes to exports to India. We, not Europe, really have to think about where we export and how we do it, and about the productivity issue that I have raised.

Those are the economic reasons for staying in Europe, and I will largely confine myself to them. I am interested, too, in the fact that Mark Carney, the Governor of the Bank of England, has taken the time to consider the implications if we decide to leave. He has recognised that there would be difficulties in our banking system if that were to be the case, and he has taken pre-emptive action. That is a signal that we are taking a risk by considering leaving the European Union. Instead, we should make up our minds and stay in. From then on, we should use our power in the European Union and beyond to shape a Union that represents our interests, deals with more competition, forges more trade links and gives people in Europe as a whole more security—for their own safety and national safety—and economic opportunities. That is why it is important to remain in the European Union, and that is why the OBR, the Bank of England, the CBI and, plainly, the Chancellor of the Exchequer think that we should do so.

--- Later in debate ---

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

We have got used to missed targets and U-turns in the Chancellor’s Budgets. I fear that this may be the quickest U-turn ever. This could well be known as the lame duck Budget. The Chancellor let the cat out of the bag when he was expressing his support for the EU, which I thoroughly share. All the predictions on which the Budget is based assume our continued membership of the EU. I marvel at the Government’s sheer lack of leadership in projecting their long-term economic plan and basing successive Budgets on it, then subjecting the core of their future economic strategy to a political process that puts it in jeopardy and exists only to satisfy the internal politics of the Conservative Government.

I support what the Chancellor said, but what he referred to has not just occurred over the past month or so. It has been the case for years. Had there been the necessary leadership from the Government, the issue would not be the subject of debate now and we would not risk the damage that the outcome could do to our economy and our future economic projections, and we would not potentially be facing another Budget in a far more pessimistic economic scenario in a few months.

Many speakers have pointed out the Chancellor’s missed targets and the failure to deliver on his early promises. The march of the makers has been talked about at great length. Sometimes when I look at Government policies and manufacturing production, I think it should have been called the ides of the march of the makers. This is the source of all the Government’s current difficulties. Our failure to invest in manufacturing has resulted in the current very low levels of productivity, which are undermining our economic growth and our export performance. Until we have Budgets which put this at the centre of Government policy, the problems outlined in every Budget, and re-addressed because of the failure to deal with them in previous Budgets, will continue.

I would like to have seen in this Budget measures on business rates. We have the most incoherent business rate regime imaginable. The Chancellor spoke today about reducing corporation tax. That may be an element that business favours, and it may help business. On the other hand, what happens under the business rate regime to a manufacturing company that invests in new machinery so that it can increase productivity and export? The business rate goes up, and the company gets penalised. In the context of business policy, it is no good looking at one element of the taxation regime without looking at the others. The Government need to look at the whole package if businesses are to have a basis on which they can invest without being penalised, producing all the economic benefits that will play such an important part in the future growth of our economy. The Government have signally failed to do that, and we might say that some of their measures amount to just trying to mend the roof while the rain is pouring.

I would briefly mention two other elements of productivity the Government have failed to address: skills and construction infrastructure. We have had boasts of millions of pounds being invested in apprenticeships and the academisation of schools, but the outcome is that there are still acute skills shortages in science, technology, engineering and maths-based subjects, which are central to the capability of our manufacturing industry to develop, grow and export. Something is going wrong somewhere, and I saw nothing in the Budget that would address that.

The other issue is infrastructure. I welcome the proposed infrastructure projects, but I would have more faith in their ability to impact on our productivity if infrastructure investment had not dropped by nearly half over the last five years. The Government have started to deliver on only 9% of the projects they have in the pipeline, and those projects that there are are heavily concentrated in London and the south-east. I am not knocking any particular programme there, but the fact is that London and the south-east have had higher economic growth, than the rest of the country.

[Mike Wood (Dudley South) (Con)]

Will the hon. Gentleman give way?

[Mr Bailey]

No, I will not give way, because I respect the ability of others to have time to make their points as well.

The Government have simply moved from a short-term, politically expedient solution, subjected it to political window dressing and then had to explain its failure in a subsequent Budget. This is a Government of missed targets, U-turns, incoherence and, quite frankly, incompetence.

Equitable Life

Adrian Bailey Excerpts

Thursday 11th February 2016 Commons Chamber

[Bob Blackman]

I thank my hon. Friend for that clear conclusion.

The Government allocated £1.5 billion of compensation to policyholders who had lost money. Some £45 million was then promised and delivered to the pre-1992 trapped annuitants. The Chancellor accepted at the Dispatch Box in November 2010 that the total loss was some £4.1 billion, so the shortfall in compensation is £2.6 billion.

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

I congratulate the hon. Gentleman on bringing this issue forward for debate in the Chamber. I am sure that, like me, he has received representations from elderly decent people who have done the right thing throughout their life and who invested in Equitable Life in order, they thought, that they had a secure pension in the long term. The Government need to foster a savings culture and promote pensions. Does he not think that the failure to compensate people in full for what they did responsibly and in good faith risks undermining the culture that we need to develop for the future of this country?

[Bob Blackman]

When people make an investment decision, they understand that the market can go up or down. What made this scheme different from other investment choices was that it was a scam, and we should recognise it as such. It was a scandal. There is a moral duty, as hon. Members have said, on the Government to provide full compensation.

What has changed is that the Government set a time limit for the submission of new applications for compensation and said that they had to be in by 31 December 2015. Therefore, we now know the total number of people who are due compensation and can look at how the compensation scheme is operating. I have no doubt that the Minister will outline the progress that has been made in compensating individual policyholders.

I want to draw attention to two elements. A contingency fund of £100 million was deliberately set aside because, at that time, it was not known how many policyholders would need to be compensated. Also, because it has not been possible to trace a large number of policyholders—I think it is about 110,000—there has been an underspend of some £39 million. My first ask of the Minister is that that £139 million goes to the people who have suffered loss. That would not cost the Treasury anything because it has already allocated that money.

Short Money and Policy Development Grant

Adrian Bailey Excerpts

Thursday 11th February 2016 Commons Chamber

[John Penrose]

I believe that I already have. The cost of Spads has fallen since the general election.

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

The Minister is right when he says that in times of austerity politicians have to take their cut in expenditure. Will he therefore give a commitment that any percentage drop in Short money for the Opposition is more than matched by cuts in expenditure on Government Spads?

[John Penrose]

I can go broader than that. I can promise that the proposed cuts are the same as those being applied to all non-protected Departments right the way across the Government. This is not picking on any particular area at all. This is the standard cut, which every other Department that has not been protected has had to deal with. That is an important point to get across to the rest of the country.

Royal Bank of Scotland

Adrian Bailey Excerpts

Thursday 5th November 2015 Commons Chamber

[Jon Cruddas]

I agree. I was talking about co-operative banking across the whole of Europe, not the specific case of the Co-operative bank here in the UK, which does have problems. [Interruption.]

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

It never had to be nationalised.

[Jon Cruddas]

Point taken. The stakeholder banks across Europe kept the real economy going while commercial banks’ lending was crashing.

The third point is that in the UK we paid the price for having deliberately dismantled stakeholder banks in the 1980s via demutualisation. We left ourselves with nothing to break the catastrophic fall in lending by the big banks, and since the crisis we have done next to nothing to address that fatal structural flaw. I would have thought that we could all agree that a more resilient capitalism is a desirable outcome.

--- Later in debate ---

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

I congratulate my hon. Friend the Member for Edmonton (Kate Osamor) on securing this debate. I totally agree with her that, given the fact that RBS is a major public asset and that its proposed sale is of huge significance, the level of both public and parliamentary debates has been very limited. This debate will at least go some way towards addressing that.

I will not labour that point, but I will start from the perspective of the taxpayer, who has a huge interest in the issue. There are two specific but overlapping interests. The first, which has already been debated, is the issue of recouping the money the taxpayer has invested in the bank. The second is the need to ensure that, even if the bank is sold, it supports the wider community interest and the overall economy in a way that will boost the economy and future tax receipts. The sale as mooted does not seem to do either of those things.

I am grateful to the New Economics Foundation for some of the figures I will mention. From February 2014 to February 2015, RBS traded at an average of 349p per share, way below the UK Financial Investments assessment of the 482p per share needed to recoup the taxpayers’ investment. If we also consider the additional uncertainties about the costs of fines and litigation related to the mis-selling of products and the manipulation of LIBOR, we will see that there is a big question mark over what the market will stand.

Failure to recoup taxpayers’ money might, in certain circumstances, be justified if the returns from the capital receipt contributed substantially to public finances. The Government have committed themselves to using the money raised from the sale to pay off public debt, but, as things stand, interest rates are low and the amount that would be paid off would be modest. It is reasonable for the House to ask for an exercise to be completed calculating the amount that would be paid off compared with the amount the taxpayer may get as a result of restructuring the bank and of the investment in our wider economy and the increased tax receipts that would generate. That would not be a simple exercise, but, given the significance of the proposed sale of the bank, it is reasonable to expect the Government to perform it and to put it before the public and Parliament before they justify their decision.

I will make a few comments about the financial services industry in general. Britain is a world leader, and I would not wish in any way to detract from the industry’s crucial position in the economy. However, in fulfilling its secondary objective of underpinning growth in the rest of the economy, it has been much less successful and lags behind many of the banking services of our key international competitors. UK banks have increasingly favoured lending to other banks and for real estate, rather than to production sectors of the economy such as construction, manufacturing, transport, communications and retailing.

That has really been brought home to me by recent events. It is ironic: we have a Government who talk about the status of our financial services industry and are philosophically and ideologically committed to the free market and the capitalist process of wealth creation, yet when we need major investment in infrastructure and regional development, they have to cosy up to China, the foremost communist country on the globe. I do not think that there can be any clearer demonstration of the total dysfunctionality of our financial services market.

[Kelvin Hopkins]

It is ironic that the Government are intent on privatising, yet when they privatise they often sell off British assets to foreign Governments. Nationalisation is all right so long as assets go to a foreign Government, not to the British Government.

[Mr Bailey]

I take my hon. Friend’s point.

[Mr Baker]

I share the hon. Gentleman’s sense of irony, but is it not the case that communist China has such assets only in so far as it has adopted the market economy principles of private property rights and the freedom to make contracts?

[Mr Bailey]

I broadly agree with the hon. Gentleman’s thesis, but I do not think that he would agree with mine: that if we had the sort of financial services industry that was focused in the right direction, it would not really matter anyway what progress they were making.

[George Kerevan]

Is it not ironic that the Government are privatising the UK Green Investment Bank, which is a de facto regional investment bank with its headquarters in Edinburgh, and are instead about to invest £2 billion in the Chinese-led Asian Infrastructure Investment Bank to provide local area funding for infrastructure and companies in Asia?

[Mr Bailey]

The hon. Gentleman’s intervention reinforces the sheer incoherence, inconsistency and irony of the Government’s policies towards the financial sector.

I want to speak for a few moments about small and medium-sized enterprises. The Government talk about rebalancing the economy, first from service industries to manufacturing and then from London and the south-east to other regions. If we look at the economy, we see that that must be done through SMEs. They constitute 90% of our businesses, 60% of employment and 50% of output. Although those in manufacturing may represent only 12% of our total GDP, they are hugely significant and crucial to driving up productivity and in our export performance, which are key pillars in driving forward our economy.

It would be reasonable to look at our financial services sector to see what it delivers to help to drive forward the economy. Finance and investment are the fuel for this engine of growth, but the problem is that the fuel is flowing in exactly the wrong direction. Despite Government schemes to boost investment loans to small businesses, the number of such loans has declined. The level of lending is highest in London, which has the smallest manufacturing sector and the largest service sector, and lowest in the regions, where there is a higher proportion of manufacturing. Take my own region of the west midlands, the region with the highest manufacturing output: it receives 9% of investment while London receives 20%.

As was articulated by my hon. Friend the Member for Edmonton, one of the reasons behind the situation is the decline of branch banking. We have an over-centralised system. The demise of local banking and the growth of digitalisation have led to a consequential reduction in the local knowledge and insight required to understand the needs of both local communities and local business.

[Kelvin Hopkins]

Will my hon. Friend give way?

[Mr Bailey]

I will, but I am conscious that other Members wish to speak.

[Kelvin Hopkins]

It is tragic that Britain’s manufacturing as a proportion of GDP is about half that of Germany’s. Germany has used its banks properly; we have not. We now have an absolutely enormous balance of trade deficit simply because we cannot produce enough for our own use.

[Mr Bailey]

That was a well-timed intervention because my next comment was going to be that the opposite is true in countries such as Germany, where there is a tradition of regional banking, local engagement and long-term support for small businesses.

We would reasonably expect the Government, given their stated policy objectives of rebalancing the economy and boosting our exports and productivity, to look at the banking system as a whole and, given their ownership of RBS, to consider what they could do to address the gap in the market and achieve their policy objectives. Even their flagship British Business Bank seems to be replicating the sort of business-support models that have not previously worked. That market failure has led to the growth—I might add that that growth is very welcome—in community finance companies and peer-to-peer lending. They are playing a vital role in providing sources of finance in ways not addressed by the major, highly concentrated banks in this country. We would reasonably expect a Government who own RBS to look at its potential to support businesses.

The alternative Government policy seems to be to correct market failures through local enterprise partnerships and the regional growth schemes, some of which have been quite successful. One of the most successful schemes, operating through a community development finance institution under a £60 million regional growth fund programme, has outperformed nearly all other RGF schemes. What will happen? Nobody knows, because there is no commitment to fund it after 2016. The Government are selling off a bank that they control to the private sector, which has no record of supporting the very areas of business we most need for economic growth yet they are neglecting the sector that can deliver such investment.

In February, the British Business Bank commissioned a report on the community development finance sector. The report was supposed to be ready in time for the comprehensive review, but there has been a four-month delay and no report has yet been made. The sector therefore has no idea what its future funding support will be in continuing very effectively to deliver investment for small businesses that are being neglected by the existing banking sector.

To summarise quickly, we have a banking sector that is brilliant at making money, but fails to use its strength for the rest of the economy. The sector is over-centralised and fails to reflect the diversity of provision needed to meet the wider demands of our economy. Government schemes have failed to reach their full potential because they use existing banking structures. Where alternative structures exist, banks do not engage as they should. That is a major obstacle to delivering the Government’s policy objectives on exports, productivity and regional growth. In that context, the Government have a window of opportunity to make a change, and they have an enormous investment in a significant bank with the potential to drive such a change.

As it currently stands, the policy decision is based on political expediency, rather than the needs of the economy or the stated objectives of Government policy. Indeed, it actually contradicts elements of Government policy. I support the motion because it is time to think again.

Royal Bank of Scotland

Adrian Bailey Excerpts

Thursday 11th June 2015 Commons Chamber

[Harriett Baldwin]

My hon. Friend is absolutely right to highlight a very important part of the Governor of the Bank of England’s announcement last night—the “Fair and Effective Markets Review”; bringing a range of fixed income, currency and commodity markets within the regulatory perimeter; and aspiring to be not only the most competitive country in the world in which to locate a financial services business, but the one with the best, cleanest and most competitive regulatory system.

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

I join others in welcoming the hon. Lady to her new role. The sale price of Royal Mail shares last night— £5 per share—totally vindicates the cross-party conclusion of the former Business, Innovation and Skills Committee that Royal Mail shares were underpriced in the original sale. One reason was the over-reliance on institutional investors and the under-participation of the public. Will the Minister assure us that that lesson will be learned in the sale of RBS?

[Harriett Baldwin]

I have to disagree with the hon. Gentleman. A long time has passed since the initial flotation, during which the markets have done a lot better. The markets have welcomed the re-election of a strong Conservative Government who have turned the economy around and made huge improvements in our public finances. It is largely due to that that the price is so much higher.

Amendment of the Law

Adrian Bailey Excerpts

Thursday 19th March 2015 Commons Chamber

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

I shall confine my remarks to the Chancellor’s speech yesterday. According to him, Britain is now walking tall and basking in the glow of economic recovery. From my constituency perspective, those words will ring hollow to many. It is difficult to feel pride or walk tall when going to a food bank, which is the reality for an increasing number of people desperate for alleviation of the policies that the Government have implemented over the past five years. Talk of walking tall and the sun shining rings hollow in their ears.

This is not just about those at the sharpest end of the Government’s policies, however; it also applies to the average family. Indeed, we have already debated income levels for average families over the past five years, and the overwhelming consensus of opinion and analysis is that there has been a considerable reduction in average incomes over those years. That is certainly the day-to-day experience of most MPs, either in their surgeries or knocking on doors. We cannot blame the public for being so cynical. If they hear the litany of Government achievements, they cannot help comparing it with their day-to-day lives.

Then there is the fear. The Government tell us that in spite of all this success more cuts need to follow and that those cuts will be sharper over the next few years than in the last. We cannot blame people for wondering, if we are doing so well and have suffered so much, why we have to have another round of cuts. It is because the so-called long-term economic plan is in reality just an extension of the Government’s failed short-term economic plan. They failed to reach their target on deficit reduction because, in spite of the headline economic fears, they have driven us in the direction of a low-income, low-productivity economy, resulting in a reduction of the tax receipts necessary to reduce the deficit.

Presented with the conundrum of how to get economic growth with lower tax receipts, all the Government have to offer is more of the same. They have outlined another £30 billion-worth of cuts to come, with £13 billion coming from departmental spending—I shall address the implications of that in a minute—and £12 billion from welfare. Can we blame the public for being cynical, given that the Government have been promising welfare cuts for the last couple of years but welfare spending has in fact increased?

The Government also say they will protect pensions. What does that mean for the balance of welfare provision for other people? It implies huge cuts. We cannot blame the public for being concerned. The Government say that £5 billion will come from blocking tax avoidance and evasion. Given their rather dubious record on securing money from that source so far, we cannot blame the public for being cynical.

There has been an improvement in manufacturing—part of the Government’s so-called rebalancing exercise—but it has been very modest. Indeed, in January, it actually declined. We were told that we had a £1 trillion export target for 2020, but we are less than halfway there. Research and development, which is key to keeping Britain’s advanced technology advantage over other countries, has been falling behind other developed and developing countries, and according to the OBR projection it is going to fall further. Bank lending to business—essential to get the investment needed to expand our economy—has lagged throughout.

One element that bothers me in particular about the headline £13 billion cut to departmental spending is this: if some Departments are protected, others will not be and will have to take a disproportionate spending cut, and one of those will be the Department for Business, Innovation and Skills. Notwithstanding our occasional differences, I recognise that the Secretary of State has been a doughty champion of business interests in this country, and to have a disproportionate amount of those cuts focused on his Department could have the most profound long-term implications for the so-called long-term economic plan. I fear for the future of BIS and the policies it promotes, which are vital to getting the sort of economic growth we need.

I want to conclude with a couple of remarks about a potential gaping hole in the figures. We have already debated student loans, tuition fees and so on, but I find it astonishing that the Secretary of State did not refer to the resource accounting and budgeting charge—the cost of the non-repayment of student loans and its future implications for the budget. It is now reaching about 50% and is estimated to be about £30 billion by 2030. The implications are enormous. Labour’s policies would address at least part of the problem. The Government can accuse Labour of being irresponsible, but they have failed to demonstrate how it is responsible to introduce a system that will leave a legacy financial black hole on the scale they are talking about.

According to the OBR, the Government are going to sell the student loan book after all—I praise the Secretary of State for blocking it. When we heard evidence on that point, experts told us that if they wished to sell it, they would have to offer sweeteners or sell it at a hugely discounted rate. I would like to know whether the Chancellor has factored in the cost of selling the student loan book and whether the sum involved will meet the Government’s financial projections.

Tax Avoidance (HSBC)

Adrian Bailey Excerpts

Monday 9th February 2015 Commons Chamber

[Mr Gauke]

I refer back to the point made by my hon. Friend the Member for Wyre Forest (Mark Garnier) about the work undertaken by the Banking Commission. I hope we have built a consensus around the significant reforms that occurred under this Government, which have put our banking sector on a much firmer footing.

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

Small businesses, which are the life blood of our economy, often complain to me about the lack of flexibility they receive when dealing with HMRC. How can the Minister justify promoting the former chief executive of a bank that was actively promoting tax evasion and avoidance to Ministers? What sort of message does that send to small businesses and wealth creators in my constituency?

[Mr Gauke]

HMRC has successfully run the time to pay arrangements over a number of years, which has provided support to a large number of small businesses up and down the country. Lord Green was a very good trade Minister—[Interruption.] Yes, “was”, because he is no longer a Minister, which may have escaped the notice of some Opposition Members. He was qualified to perform the role of trade Minister, and there is no evidence to suggest that he was involved in any of these activities.

Autumn Statement

Adrian Bailey Excerpts

Wednesday 3rd December 2014 Commons Chamber

[Mr Osborne]

My hon. Friend is a great champion of his constituency in Lancashire. He has raised with me and the rest of the Government the great work that St John’s hospice does and the unfair treatment, in comparison with the NHS, that it and other hospices have endured because of VAT. We have listened to him and to other hon. Members and have taken this step forward. We wish the staff at St John’s well with all the great work they do.

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

I welcome the belated recognition from the Chancellor of the importance of investment in the regions, but may I remind him that the west midlands has the second highest number of unemployed and the second lowest growth in employment in the country? What provisions are there in the Budget to respond to the proposals in the joint submission by the Black Country and Greater Birmingham and Solihull local enterprise partnerships? Those proposals are designed to expand the black country enterprise zone and the transport infrastructure between the two areas to ensure that Birmingham and the black country become the powerhouse of the west midlands.

[Mr Osborne]

I am absolutely ready to engage with authorities, including of course Labour authorities, in Birmingham and in the rest of the west midlands on what more we can do to invest in the west midlands. We have had a good and productive cross-party relationship with the Labour leaders in Manchester, and I would like to see that replicated in Birmingham, with Albert Bore, and with the Conservative, Labour and Liberal Democrat authorities in the black country. We are willing to do that and to hear their good ideas.

A number of proposals have been made on enterprise zones. We will make an announcement in the Budget. A lot of good ideas have come in. We were not ready to assess all the different bids to make a decision in time for the autumn statement, but we will do that in time for the Budget.

Amendment of the Law

Adrian Bailey Excerpts

Thursday 20th March 2014 Commons Chamber

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

My first comments are about the nature of growth and the Chancellor’s triumphalist approach to the growing economy. Yes, it is growing, and that is welcome, but this is not economic growth led by sustainable increases in investment—that has been pretty stable during the last few years. It is not led by an increase in exports; again they have not reached anything like the level needed to get us out of recession. Rather it has been led by an increase in consumption and household debt, and by a housing-fuelled boom in London and the south-east.

Of the job growth in the private sector, 80% has been created in London. That totally contradicts the Prime Minister’s assertion yesterday in Prime Minister’s questions when he claimed that it was the other way round. I checked with the Library to see whether my insight into this was incorrect, but it referred me to the Centre for Cities study, which clearly says that 80% was concentrated in London. I hope that the Minister can explain the apparent contradiction between the Prime Minister’s assertion and the best available evidence.

I would like to focus for a few moments on what I consider to be a huge potential black hole in the Budget projections. In the autumn statement—the hon. Member for Somerton and Frome (Mr Heath) commented on the connection between the autumn statement and the Budget—the Chancellor announced funding for an additional 60,000 higher education student places, funded by the sale of the student loan book. He said:

“The new loans will be financed by selling the old student loan book, allowing thousands more to achieve their potential.”—[Official Report, 5 December 2013; Vol. 571, c. 1110.]

When the Minister for Universities and Science appeared before the Business, Innovation and Skills Committee, he was questioned about what appears to be an inherently risky way of funding a long-term commitment. He informed us that it would be fully funded irrespective of the sale of the student loan book. That is welcome, but it has not been factored into any OBR predictions I have seen. The cost could be as much as £12 billion. The Government’s own advisers, Rothschild, said that without sweeteners and some form of subsidy, only £2 billion might be reclaimed.

That leaves a potentially huge hole in the Budget predictions, and I have not seen it adequately covered by the OBR or in the Red Book. When challenged on that, the Minister said that the Rothschild report is old and that market conditions have changed. If that is so, I would reasonably expect the Government to be confident enough about their assertion to put forward the figures and funding bases on which the policy has been built.

The other part of the potential black hole is the increasing resource allocation budget charges on the student loans arising from the increase in default rates. It is estimated that if those reach 47%, the cost of the current student-funded scheme will outweigh the old system. We are already at about 40% to 42%, and the latest predictions indicate that it will reach the threshold very shortly. That is acknowledged by the OBR, although there is no acknowledgment of how this will be funded.

I believe that there is a huge potential hole in the Government’s Budget predictions, because they are locked into a financial funding model for higher education that is increasingly becoming unfunded. Furthermore, they have grafted on to it a welcome commitment to funding extra places, but on the basis of a model that does not appear to be viable and a funding regime—the sale of the student loan book—that looks unlikely to realise the necessary amount of money.

I would like to have been able to talk at some length about exports. I will simply quote a press release from the Black Country chamber of commerce:

“This was nothing more than a political budget with a nod to Scotland and another example of the disconnect between politicians and the world of business”.

The fact is that the rhetoric does not match the reality on the ground.

Consumer Rights Bill

Adrian Bailey Excerpts

Tuesday 28th January 2014 Commons Chamber

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

As Chair of the Select Committee on Business, Innovation and Skills, which spent four sessions examining and discussing the Bill, I understand the point made by my hon. Friend the Member for Barrow and Furness (John Woodcock), although I do not totally agree with it. It is not often that an intervention gets such currency throughout a debate. While some of the issues in the Bill are extremely arcane and legally complex, the consequences of not getting them right could be devastating for individual consumers, as well as detrimental to the economy and to the culture of informed consumerism that we want to underpin and drive better standards of business provision in this country.

Several hon. Members have unfairly criticised my hon. Friend the Member for Walthamstow (Stella Creasy) for the range of issues with which she dealt, but of course not only do consumer rights encompass a huge range of issues, but how goods and services are delivered changes all the time. The growth of online retailing and the digital revolution have thrown up new products and purchasing and marketing processes, all of which, to the unscrupulous, offer new opportunities to rip off the consumer. I agree with hon. Members who have said it is impossible to devise consumer rights legislation that deals with every possible eventuality, but we can consider certain basic elements of legislation that will at least inform consumers and make them less susceptible to being ripped off in what is a rapidly changing and sometimes pretty vicious business world.

The Secretary of State himself said that the Bill was only part of the picture. The much bigger picture includes competition and transparency, and the idea that we can solve all consumer rights problems with one piece of legislation is fanciful. It must be accompanied by a range of policies across Government designed to improve competition and transparency, so that those who wish to exercise their consumer rights have the right information basis on which to do so. I would single out three elements as being essential for everyone: first, clarity of pricing; secondly, clarity of contracts; and thirdly, and in some respects most important of all, clarity in the mechanism by which someone can obtain redress if they are not satisfied with either the quality or pricing of a particular good or service. The Bill tries to address some of those, but could be improved in certain areas.

The Committee heard evidence from business and consumer rights groups, and both Government and local government organisations, and received 43 pieces of written evidence. In its report, the Committee welcomed the aims of the reforms but also raised a range of issues that it felt merited further examination and it made stronger recommendations on those. A rough count of the Government’s responses would indicate that they have accepted about 70%, which is a decent hit rate for pre-legislative scrutiny. We recognise the Government’s willingness to listen to the Committee’s arguments and to take them on board.

I will not pick out those that the Government rejected and re-argue the arguments from the Committee, as I am sure that they will form part of the debate that will take place in the Public Bill Committee. Having said that, I will single out some issues where I feel the Government have not delivered and which merit further debate in Committee. The first is the sale of goods. The Bill retains the provision for “deduction for use” which, in effect, is a discounting of the refund for something that is faulty that may be made if the consumer exercises his or her final right to reject. The Committee—based to a certain extent on the Law Commission’s recommendation—said that that should be removed. The Government’s arguments for not doing so, which they will no doubt rehearse during the Bill’s progress, is that that would lead to complications in terms of the time scale involved, the level of use and so on. They asked whether it would be fair to give anybody a total refund or replacement for something that they had had, and had used, for a while.

We proposed a fallback position, which happily the Government accepted: if the Government retained the deduction for use provision, they should have a formula that was fairer than the ones that were debated beforehand. I will not go into the technical elements of that but basically the provision should reflect the cost to the consumer for the loss of use rather than the market condition or the cost to the business providing that product.

On digital content, we felt that the remedies for tangible content—for example, CDs—and intangible content, such as a download, were inconsistent. There are again some complex legal issues surrounding that but we felt that the Government had taken the safest position and perhaps should try to equalise the rights of redress so that anybody could get a refund for downloaded content as well. I recognise that the Government have gone some way towards that but the issue is complicated and needs further examination.

On services, it is fair to say that that was a subject of considerable debate and disagreement among witnesses in the evidence that the Government and the Committee have had. Where there is the provision of a service—the Minister mentioned cowboy builders—it is true that the Bill contains the opportunity for redress. But the Government have retained the legal liability standard of where a service is provided with reasonable care and skill, rather than the one that the Committee preferred, which was basically an outcomes-based model; if the service were not provided, full stop, the person who paid for the service should be entitled to a refund.

To encapsulate the different perspectives on that, there was an argument that one could have a very competent and expert French teacher who took somebody on a course for which that person paid but, at the end, the person—for various personal reasons—was no better at speaking French. Would that person have a right of redress notwithstanding the quality of the teaching received? I agree that there are issues there. However, I would have thought it possible to build into the legislation some conditions that recognise that one could measure reasonable care and skill rather than the outcome.

The Government looked at the other perspective in their reply to the consultation, using the example of an electrician who rewired a house very competently but, for one reason or another, could not wire it up to the mains. The Government said that because that electrician had exercised reasonable care and competence in rewiring the house, the person who paid for the service should not get the full compensation. In effect, the electrician would be entitled to discount the compensation because he had done at least part of the job correctly. That was the Government’s example but I could not help but feel that if an electrician did not start off on the basis that he could connect a house to the mains, that would be a fundamental flaw in their competence. We would reasonably expect a person, whatever the electrician’s skill, who could not access electricity in their house to be entitled to a full refund.

I mention those examples to demonstrate the different perspectives and complexities involved, but the Committee would have preferred a harder line to be taken, not least from the point of view of the consumer, because it is much more difficult to prove that a person has not exercised reasonable care and skill—and much more difficult for a consumer to take that through a legal process—than if there is a simple outcomes-based standard based on the failure of someone providing a service to deliver that service.

On unfair contract terms, the Bill does not add a term to the grey list, with which MPs may not be familiar; it is the indicative list of contract terms that may be regarded as unfair. The Bill does not add a term concerning a change by the trader where the consumer is not free to dissolve the contract without being disadvantaged. Again, that is an arcane point but here is an example to give it some depth. In at least one quoted example, a bank changed its interest rate halfway through a mortgage period and a person paying that interest was highly disadvantaged. There was an option in the contract to get out but there was no alternative provider. It was felt that, where a person was locked into a contract—even by default—they could be severely disadvantaged by a change in the terms of the contract. If that change were for no reason other than the desire of the company to get extra profit, that should be put in the grey list of unfair contract terms. I hope that the Government will look at that further in Committee.

Earlier I outlined three elements where it was essential that the Bill should demonstrate that it empowered consumers; pricing, contracts and redress. Members may not have seen the excellent briefing from Citizens Advice, whose recommendation of a legislative requirement for a trader to promote that statutory right to the purchaser at the point of sale was supported by the Select Committee. It should be possible for a receipt to contain information about how and where the purchaser of a good or service can obtain redress if for any reason that good or service is not up to scratch. The Government have made sympathetic noises, but they have yet to agree to implement that recommendation.

Surely the first stage in the creation of an informed consumer society involves enabling consumers to know exactly where they need to go and what they need to do in order to obtain redress if what they have purchased is not what it ought to be. We are living in a highly complex world, in which goods and services are delivered in all sorts of ways. I believe that that one simple change would do an enormous amount to create that society of informed consumers, which could then drive our economy, and hence drive the business practices of those who provide goods and services.

I could go into much more detail, but I think that I have exercised the patience of Members to a sufficient degree. I hope that the Select Committee’s arguments and recommendations will be examined again in the Public Bill Committee, perhaps in a more politically robust way. Overall, however, although I do not think that this is the most ambitious of Bills—it is essentially a consolidating Bill, and it has a long way to go before it can realise the visionary objective of transforming consumers’ awareness—I think that it is a step in the right direction, and that if the Government accepted the Select Committee’s other recommendations, they would take a few more steps in the right direction.

--- Later in debate ---

[Jenny Willott]

Some of the issues that the hon. Lady raised related to unfair contract terms, which I shall come on to in a minute. Many other issues relating to banking legislation and the regulation of energy markets do not fall within the remit of the Bill, and they are the responsibility of other Departments. However, I shall come on to the points that she made about ticket touting.

As the hon. Member for Mid Norfolk (George Freeman) said, many good businesses already offer enhanced rights to their customers. The Bill will help them, because it will create a level playing field, and it will help us to have fair competition. The hon. Member for Windsor (Adam Afriyie) made it clear that the Bill will bring significant benefits to businesses, saving them time and money, and helping them to provide a better service to customers. It will also make the market more competitive, which helps everyone.

On the specific matters raised, the hon. Member for West Bromwich West mentioned the issue of deductions for use when a product is returned to the trader. As he said, we accepted some of his Committee’s recommendations, and it is vital that we begin the debate by recognising the fact that current legislation allows for a deduction for use whenever the customer exercises their second-tier right to reject. The Bill strengthens that by saying that a deduction for use cannot be made until after the first six months from purchase with a limited exception. As a result of the pre-legislative scrutiny, ably led by the hon. Gentleman, we decided to tighten and limit that exception even further. It is important to maintain the ability to deduct for use, but to ensure that there is a fair balance between the rights of consumers and the pressures on business.

The hon. Member for East Antrim (Sammy Wilson) raised the issue of time- limiting the period available for repairing products, as did another hon. Member. A number of factors will be beyond the control of the trader and a fixed time limit may impose a significant burden on them. When providing a repair the trader must carry out a number of actions, including taking delivery of the goods, diagnosing the faults, and perhaps sending the goods away for repair or ordering in parts. Similarly, the trader may have to order in a replacement. We are concerned that imposing a time limit may lead to a reduction in the quality of the repairs, which may in turn lead to a loss of faith in the repairs, and ultimately to an increase in the number of goods being rejected. We do not want to see that, so we do not propose to lay down a specific time limit in legislation because it could be counter-productive to the interests of consumers.

A number of hon. Members raised the issue of digital content. For the first time, the Bill introduces consumer rights for digital content. We are one of the first countries in the world to legislate in this area. I hope that as well as benefiting consumers, this will help to give this sector of the economy a competitive edge in the future. Such an important and rapidly growing industry needs to be governed by a clear and effective consumer framework. Many consumers assume that they have rights at the moment and are confused and concerned when they find out that they do not. We heard from a number of Members about the scale of this. During the last year, 16 million consumers have had a problem with downloaded material. I accept that, where possible, we should align the digital regime with goods and services to make it as clear and simple as possible for consumers, but we should do that only where it makes sense, and we need to ensure that we neither over nor under-regulate this important sector to ensure that it can grow.

Another issue that was raised by the hon. Member for West Bromwich West concerned the outcome-based quality standard for services. The Bill reflects the current position, which, as he knows, requires services to be undertaken with reasonable care and skill. As part of the consultation ahead of the Bill, the Government asked for comments on additional proposals to move the services regime closer to the regime for goods by introducing an outcome-based quality standard for certain services, but the responses that we received gave a wide range of views, including contradictory views on whether an outcome-based standard would be easier to understand. While in some cases, such as repair or certain installation services, it may be quite simple, in other cases a view on the quality of a service is subjective, and therefore much harder to determine.

As the hon. Gentleman said, the issue is complicated and difficult. I completely understand where he and his Committee are coming from, but the Government feel that the evidence does not fully support the conclusion that they came to and we have decided to stick with the current legal position requiring reasonable care and skill rather than introducing an outcomes-based quality standard. The current system is understood and it seems easier to apply, rather than introducing a new system that could be complicated and subjective, particularly as there are strong views on either side.

[Mr Bailey]

I hesitate to have a mini-debate, but the difficulty is that under the reasonable care and skill provision, anybody who felt that they had a case to bring against a service provider would have no other course of action but a recourse to law. It is extremely difficult for them to prove that if they are not professionally qualified in the service that has been provided for them. An outcomes-based approach would at least give clarity and strengthen consumer rights because they would know that if they took action they had a much better chance of winning.

[Jenny Willott]

Because the services sector is so incredibly broad and varied, what is the case in one area would not necessarily be the case in another. For example, I like the way my hair has been cut, but someone else might not have the same view. That is much more subjective and difficult to identify, whereas whether or not it has been cut with due care and attention is a totally different matter. It is clearly a difficult issue, and one to which I am sure we will return in Committee, because there are strong arguments on both sides. It is a matter of weighing up the evidence and deciding which side to come down on. There is not necessarily a right or wrong answer; either is a possible outcome.

Alternative dispute resolution and an ombudsman service were mentioned. I believe that we must first consult on how to implement the alternative dispute resolution directive, which the Select Committee mentioned in its pre-legislative scrutiny. Having a single consumer ombudsman is one of several options that we are considering, but it would not be appropriate to legislate for that until after we have properly consulted and decided which avenue to pursue and how to pursue it. We intend to publish a consultation document shortly, and I look forward to hearing people’s views on what approach we should be taking and on having a single consumer ombudsman, but this Bill is not the vehicle for that.

I would like to clarify a point made about collective redress. The hon. Member for Windsor mentioned the right of small businesses to participate in collective redress. The proposals in the Bill on competition-based measures and collective action will be available to consumers and small businesses in the specific area of the competition tribunal. On the broader issue of whether small businesses should be eligible to access more of the rights in this legislation, I understand that research by the Federation of Small Businesses will be produced fairly shortly. I am interested to see the case it makes. I am fairly sympathetic to the idea, but I do not think that this legislation is the place to introduce it, because it is specifically about business-to-consumer relationships, not business-to-business or consumer-to-consumer relationships. We want to maintain that clarity. However, this is an issue that will come up again, so I look forward to reading the FSB research.

The unfair terms legislation relates to a very complex area of law. The Bill will make it easier for businesses to apply the law in practice while ensuring that consumers are not tripped up by the small print. The Government agree that consumers should be protected from terms that allow traders to make unilateral changes to a contract, and the so-called grey list of potentially unfair terms already includes terms that permit the trader unilaterally to alter the characteristics of a consumer contract. Through the Bill, we are protecting consumers from terms that are not made prominent and are left in the small print, because they can be considered for fairness by the court. We think that will address many of the problems that have occurred.

To respond to one of the concerns raised by the hon. Member for Walthamstow, under recent regulations implementing the EU consumer rights directive, traders cannot hide costs; they must make all charges and costs clear up front before the consumer buys. That will come into force in June 2014. We have already taken action to tackle hidden costs and do not believe that we need to legislate on it further.

As the hon. Member for West Bromwich West said, we also looked at proposals to make it harder for businesses to change terms, even when they are flagged to consumers as liable to change in certain circumstances, but we believe that could make businesses less likely to offer consumers good deals and bargains for fear of not being able to be flexible in future and to respond to changes outside their control. Our concern is that consumers would ultimately lose out, which clearly we do not want to see. That is why we have not gone ahead with those proposals.

The hon. Member for Washington and Sunderland West (Mrs Hodgson) talked about the charges added by ticketing authorities. That will be covered by the provisions on unfair terms. If consumers are subject to extra charges that are hidden, that would be covered by the measures in the Bill. We have also legislated to prevent companies from charging more to process a credit card payment than it actually costs them, so that should offer customers further protection. I am sure that we will debate that further in Committee.

My hon. Friend the Member for Eastbourne (Stephen Lloyd) raised the important issue of funding for those who tackle breaches of consumer law, and that was also mentioned by the hon. Member for Edinburgh South (Ian Murray). As my right hon. Friend the Secretary of State said, BIS is providing additional funding of about £13 million through the National Trading Standards Board for enforcement to tackle national issues, which is separate from the budget for local issues. It will ensure better co-ordination across local authority borders and improved intelligence-gathering.

Ultimately, the provision of local trading standards services, which I know is the concern, is a matter for individual local authorities, but by supporting the National Trading Standards Board we are working to help trading standards services make better use of their money and co-ordinate better across borders. We are also helping trading standards officers to make more efficient use of their time by introducing 48 hours’ notice for routine inspections, which was welcomed by the hon. Member for Dudley South (Chris Kelly). Businesses, especially small ones, welcome the requirement for notice, because it means that they can ensure the right people are present and that the paperwork is ready, which saves time for both businesses and trading standards officers.

We do not believe that the measure will reduce the ability of enforcers to tackle rogue traders and breaches of consumer law as it applies only to routine visits. Trading standards officers can still turn up unannounced if they feel that providing notice would defeat the purpose of the visit or if they suspect a breach or an imminent risk to public health and safety. The introduction of notice only for routine visits will help trading standards to operate more effectively and efficiently, and save time and effort for both trading standards and small businesses.

The hon. Member for Edinburgh East (Sheila Gilmore) raised the issue of collective action, as well as the cost to consumers of taking individual action. The Bill will tackle that by giving public enforcers more flexibility to seek redress on behalf of consumers, so it will substantially improve the likelihood of consumers being able to get redress without having a court case, which is better for everybody, both consumers and businesses.

We are allowing for the business and the enforcer to reach agreement without the need to go to court, although the option to seek a court order will be available if agreement cannot be reached. The Bill will also allow for more flexible options to get the right solutions—for example, agreeing new delivery times for overdue goods, which might be more appropriate for the customer, or putting in place a better complaints system and joining an ombudsman service, as well as financial recompense. There is therefore a broad range of things that businesses could agree with enforcers to find a way forward. We want a system that is flexible enough to provide the most appropriate redress for consumers, and we believe that that is the right way to do so.

A couple of hon. Members mentioned the need to let people know about their rights and asked what we are doing to let them know about the changes. We have established an implementation group with members from the business community, consumer groups and the enforcement community. It is helping us to put together a strategy to ensure that consumers and businesses know about their rights and the changes that will be made by the Bill.

I completely agree with hon. Members who highlighted that information is absolutely key. The whole point of the Bill is to make legislation so much simpler that consumers will be much more able to understand their rights and to act when they feel that they have not been given the service or quality of goods they deserve. That is very important to us, and we are making sure that it runs alongside our work in the House.

The Bill will improve clarity and reduce the complexity of consumer law for both businesses and consumers. It will reduce the cost and time spent by both parties in resolving disputes, and it will lead to happier consumers and more successful businesses. The consumer law framework will be made fit for purpose in the 21st century by the introduction of a new category of digital content, and it will encourage consumers to shop around and take a risk on new businesses, helping our burgeoning digital industry to grow and to create wealth and jobs. The reforms will also build on and enhance the success of the current consumer and competition law enforcement regimes, making markets fairer and clearer. I therefore commend the Bill to the House.

Question put and agreed to.

Bill accordingly read a Second time.

Consumer Rights Bill (Programme)

Motion made, and Question put forthwith (Standing Order No. 83A(7)),

That the following provisions shall apply to the Consumer Rights Bill:

Committal

(1) The Bill shall be committed to a Public Bill Committee.

Proceedings in Public Bill Committee

(2) Proceedings in the Public Bill Committee shall (so far as not previously concluded) be brought to a conclusion on Thursday 13 March 2014.

(3) The Public Bill Committee shall have leave to sit twice on the first day on which it meets.

Consideration and Third Reading

(4) Proceedings on Consideration shall (so far as not previously concluded) be brought to a conclusion three hours after the commencement of the proceedings.

(5) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion four hours after the commencement of proceedings on Consideration.

(6) Standing Order No. 83B (Programming committees) shall not apply to proceedings on Consideration and Third Reading.

Other proceedings

(7) Any other proceedings on the Bill (including any proceedings on consideration of Lords Amendments or on any further messages from the Lords) may be programmed.—(Gavin Barwell.)

Question agreed to.

Consumer Rights Bill (Money)

Queen’s recommendation signified.

Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),

That, for the purposes of any Act resulting from the Consumer Rights Bill, it is expedient to authorise the payment out of money provided by Parliament of:

(a) any expenses incurred by a Minister of the Crown or a government department under the Act; and

(b) any increase attributable to the Act in the sums payable under any other Act out of money so provided.—(Gavin Barwell.)

Question agreed to.

Consumer Rights Bill (Carry-over)

Motion made, and Question put forthwith (Standing Order No. 80A(1)(a)),

That if, at the conclusion of this Session of Parliament, proceedings on the Consumer Rights Bill have not been completed, they shall be resumed in the next Session.—(Gavin Barwell.)

Question agreed to.