Debt Advice (FCA Levy)

Adrian Bailey Excerpts

Tuesday 21st January 2014 Westminster Hall

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

It is a pleasure to serve under your chairmanship, Mr Hollobone. I would like to reiterate what the hon. Member for North Swindon (Justin Tomlinson) said about your commitment to Back-Bench involvement. I also thank the Backbench Business Committee for recommending this issue for debate.

Above all, I thank my colleague on the Business, Innovation and Skills Committee, the hon. Member for Worcester (Mr Walker), for having the foresight and judgment to table this debate at this time, because its timing is crucial. Last night, we debated payday loan companies in the Chamber. A number of headline-grabbing issues that have long been discussed publicly were debated, but there is a real danger that the significance of the BIS Committee’s recommendation on ring-fencing may have fallen below the radar. Certainly, in the numerous interviews that I have done with the media, I have yet to be asked a question on it. The sheer significance of it may well have gone unrecognised. He has taken up the issue and run with it, and the timing is impeccable. It is extremely important.

I emphasise that this is not just a dry academic issue. Debt advice does not sound very exciting, but I was first confronted with its importance in deprived areas when I was approached by members of my local branch of Christians Against Poverty, based at St Matthew’s church in Tipton, who wanted me to see the work that they had done. I have attended events run by the branch and talked to people who have spoken of the life-transformative experience of taking advice from Christians Against Poverty and adhering to the organisation’s recommendations and support. They were so grateful that it was almost unbelievable. It was very moving. Make no mistake: debt advice is not just about somebody sitting in an armchair talking to people on the other side of a desk. It is about talking to them, giving them support, comfort and advice, pointing them in the right direction and monitoring their life as they come out of the trough that debt imposes on them.

The issue is very important, and there is a danger if MAS goes for a flatline budget. We could be left in a position where although demand for the service is increasing hugely—all the indications are that it will continue to increase—the budget is static, meaning that an increasing number of people would not be able to access the support that they need to transform their lives. I support the recommendations made by the previous speakers. I will not go into all the detail, as they have argued the case effectively and I realise that others want to contribute to this debate, but to finish, I will say one thing to the Minister: this is an easy win. It does not cost the Government anything. Politically, it would be highly popular across the board to ensure that the major contributors to the problem fund at least part of the solution.

That is the positive side. The negative side is that the social cost of people running into heavy debt and the potential impact on families can be so devastating that the Government will incur costs by picking up the bill for the resulting social breakdown and deprivation. If the Government ignore the opportunity to get more money from the private sector that is creating the problem, they will incur greater social problems with a price tag, and they will have to pick up the tab. That is illogical and incoherent. There is an easy win that has popular and political support. It will benefit Government finances in the long run and address the problem that we confront.

[Mr Philip Hollobone (in the Chair)]

I am about to call the Front-Bench speakers. I thank all hon. Members for their contributions and for being so disciplined in the timing of their remarks. We have just over 35 minutes left. As this is a Back Bench-sponsored debate, I encourage Back-Bench Members who want to hold both Front Benches to account to do so through interventions.

Pub Companies

Adrian Bailey Excerpts

Tuesday 21st January 2014 Commons Chamber

[Toby Perkins]

I almost got carried away there, then my hon. Friend announced that his pub was in fact closed. However, the fact that his determination and vigour will ensure that it soon reopens gives us all a sense of enthusiasm and excitement.

My hon. Friend the Member for Edinburgh South (Ian Murray), a former Enterprise Inns landlord himself, will have the honour of winding up the debate. I also want to salute the many other hon. Members who are here today and who have previously raised this issue in debates here or in the press, or joined campaigns in their communities to highlight the problems caused by aggressive pub company behaviour.

In September 2011, the Business, Innovation and Skills Committee’s fourth review of pub companies finally settled on the view that only a statutory code with a mandatory rent-only option would put the pubco relationship on a fairer footing. I was therefore disappointed by the suggestion in today’s Government amendment that Labour should have regulated this issue before. The Government will know that it was precisely because the Select Committee wanted to give the pubcos time to get their house in order that they were given a final chance in 2010, with a timetable that the Secretary of State supported when he first came into office.

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

Does my hon. Friend agree that it is rather strange that the Government are using the previous Government’s decision to abide by a Select Committee recommendation as an excuse to ignore the current Select Committee recommendation?

[Toby Perkins]

My hon. Friend’s intervention gives me an excellent opportunity to put on record my gratitude—and that of the whole House and the wider coalition supporting the reform—for his work as Chairman of the Select Committee, which has led the way on this issue. I entirely agree that it is odd that, with such a large body of opinion in favour of the reform, it has been so difficult for the Government to support the recommendation that the previous Government were behind and that this Government said in 2011 that they would support.

--- Later in debate ---

[Vince Cable]

The simple one-word answer is no, but we will wait to hear the Government’s response.

[Mr Bailey]

Will the Secretary of State be bringing forward legislation on this matter before May 2015?

[Vince Cable]

As I have said, I cannot anticipate exactly what the Government will say in their official response, but the whole purpose of the consultation was to seek views on legislative action, and our response will be built around that set of questions.

--- Later in debate ---

[Chloe Smith (Norwich North) (Con)]

I, too, welcome the debate. It is not the first time we have looked at the topic. I am in favour of the amendment, because I believe that the Government are taking action and that it is important to do that well, rather than rushing for reasons of political expediency. It is important to start by echoing the point that my hon. Friend the Member for Burton (Andrew Griffiths) made, which was that the previous Government did not act. They seemingly did something only two months before the 2010 general election. By contrast, this Government have taken the trouble to go through a large consultation process, which has been acknowledged to be very popular. I know that many of my constituents have responded to it. It is important that the Government offer a high-quality response.

[Mr Bailey]

The hon. Lady said that the previous Government did not act. Will she acknowledge that they did not act because the Business, Innovation and Skills Committee’s 2009 report did not recommend that legislation should be introduced?

[Chloe Smith]

I defer to the hon. Gentleman, who chairs that Committee, and leave it to him to explain its actions to the House.

I want to focus first on the proposals set out in the consultation. It is right to put in place a system to stop pub companies abusing the beer tie. It is good to look at having an adjudicator who can help tied pubs. It is also good to have independently chosen guest beers, which helps to support connected industries and manufacturing across the UK.

In the time I have been a Member of this House, like every Member present this afternoon, I have become well aware of the situation facing pubs in my constituency. I could talk about the Bull at Hellesdon, an Enterprise inn, which is a good pub at the heart of the community. In fact, that was one of the first pieces of casework I took up as a new Member of Parliament. I could also talk about the Maid’s Head in Old Catton, which is also an Enterprise inn. It hosts an enormous charity fundraiser—a walk around the ring road in Norwich. The only other hon. Member who might have done that is my hon. Friend the Member for Norwich South (Simon Wright). It is that kind of activity that puts pubs at the heart of the community, and rightly so.

I also take my cue from my hon. Friend the Member for North West Norfolk (Mr Bellingham), who noted the role of the Campaign for Real Ale in supporting and campaigning for pubs. CAMRA runs the large Norwich beer festival, which in turn makes large charitable donations, most recently to the Norfolk and Norwich Association for the Blind. The Norwich Evening News is also running its strong Love Your Local campaign. By focusing on a pub a week, it does something very practical to help what can be quite a beleaguered trade.

I think we all acknowledge that pubs are facing tough times because many of their customers are facing tough times. There is a far broader debate to be had in that respect. We might look at many long and short-term economic factors, for example, but we would also do well to recognise the other things that our constituents talk to us about, such as the introduction of the smoking ban, which is commonly thought to have changed the pub trade quite a lot, and competition from supermarkets, which I will talk about later. I have always believed that good pubs can do good trade, regardless of some of those external conditions. I also want to reiterate the point that pubs are at the heart of the community.

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

This is a debate that I never thought we would need to have again. Last year, we were given assurances that a statutory code would be introduced; a year later, there is still no sign of it. The motion reflects the sense of exasperation felt by Labour Members—and perhaps privately by many Government Members—about the lack of progress on this issue.

[Toby Perkins]

Does my hon. Friend share my fear that we will potentially be back here another year to have yet another debate? I am pencilling that into my diary.

--- Later in debate ---

[Mr Bailey]

Absolutely. The only debate I want to see again is on the proposed legislation when it comes forward —if it ever does. I would add to the sense of exasperation a sense of bafflement as to why that has not happened.

The work done by successive BIS Committees has had two characteristics: first, the overwhelming desire to get the industry into a position where it would regulate itself; and secondly, the need to ensure unanimity across all political parties on the measures to be proposed. Successive reports said what needed to be done, what progress—often very little—had been made, and what would happen to the industry if it did not regulate itself. It has been said in this debate—indeed, it is mentioned in the amendment—that the previous Government did not do anything, as if that is some sort of justification for this Government not doing something. In the conclusion to its 2010 report, the Committee, under the chairmanship of the hon. Member for Mid Worcestershire (Sir Peter Luff), said:

“The industry must be aware that this is its last opportunity for self-regulated reform. If it cannot deliver this time, then government intervention will be necessary. We do not advocate such intervention at this stage, but remain committed to a resolution to all the problems discussed in this Report and those of the 2004 and 2009 Reports. Should those problems persist beyond June 2011, we will not hesitate to recommend that legislation to provide statutory regulation be introduced.”

Significantly, it was never intended that there should be statutory regulation until all other procedures had been exhausted in 2011. The previous Government committed themselves to that course of action, as did the current Secretary of State when he came into office. Yet still, after all these years, we have not had statutory regulation despite the overwhelming body of evidence that clearly demonstrates that the industry was not prepared to regulate itself. I give credit to my colleague on the Committee, the hon. Member for Northampton South (Mr Binley), whom I think would have vigorously expounded similar views today but had an unavoidable commitment and was therefore unable to be here. I emphasise that successive Committees have tried to secure a consensus across the board on this.

Like other Members, I was delighted when the Secretary of State changed his position and agreed to have a Government consultation. That took place in the early part of last year, and the Government have had the results since June. Again, there is an increasing sense of exasperation as to why those results have not been published. All right, it was the Government’s own consultation, but as my right hon. Friend the Member for Torfaen (Paul Murphy) said, the Secretary of State has the people to analyse it, and there appears to be no coherent logic as to why it has been delayed for so long. When the consultation was published, the Committee was asked whether it would have a session looking at it, as though it were the Committee’s job to analyse it. We refused in somewhat robust manner.

I will give the Government credit for one thing—they are perhaps the one organisation to have made the British Beer and Pub Association’s speed of operation look positively dynamic. I can think of no reason whatever why they could not have introduced legislation soon after the consultation process was concluded. There was nothing dramatically different in the consultation from the evidence unearthed by Select Committees or the points made in debates in the Chamber. The Groceries Code Adjudicator Act 2013 could provide a model for that legislation. Although there might be different opinions on different recommendations in the Select Committee report, it would have been appropriate to put those recommendations in legislation and have a debate on them in the Chamber. The different opinions are not in themselves an excuse for legislation not having been brought forward.

I wish to emphasise the sense of embarrassment that I feel, as the Select Committee Chair, about the fact that all the work that has been done over the years still shows no tangible result. My sense of exasperation is reflected by tenants up and down the country, who want to know what is happening and why parliamentarians support the pubs in their constituencies in debate after debate but do not seem prepared to vote to bring forward legislation to do something about the situation. I know that some Government Members have been even more vigorous than I have in upholding the need for legislation to be introduced quickly. The public at large and pub tenants will be mystified as to why they are not prepared to back the Opposition motion today.

I cannot help but feel that the lack of progress demonstrates something more profound than just sympathy for publicans—tensions within the Government and a lack of political will to translate promises into legislative action. The result of that will be disillusionment among the public and the tenants who need reforms, and above all, disillusionment with Parliament as an institution, which has demonstrated that it cannot make its will prevail over the Government.

Payday Loan Companies

Adrian Bailey Excerpts

Monday 20th January 2014 Commons Chamber

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

I beg to move,

That this House has considered payday loan companies.

I thank the Backbench Business Committee for providing time for a debate on an issue which has been gathering importance and significance, and which was the subject of a second Select Committee report fairly recently. The report was published just before Christmas.

Before I deal with the substance of the report’s recommendations, let me thank my colleagues on the Business, Innovation and Skills Committee for their assiduous work and their commitment to promoting the recommendations, which went far beyond just supporting them in the Committee. While I recognise that there has been a huge body of support for the recommendations on both sides of the House, and that people have campaigned for them for a long time, I feel that I should mention in particular my hon. Friend the Member for Sheffield Central (Paul Blomfield), who has fought a long, sustained and robust battle to secure the recommendations, and will continue to do so until he sees them enshrined in appropriate regulation.

We wanted the issue to be debated today because this is a particularly strategic time for such a debate to take place. Historically, the regulation of payday lenders has been the responsibility of the Office of Fair Trading, but in April that responsibility will be taken over by the Financial Conduct Authority. The FCA has conducted a consultation on the rules that it is proposing, and we felt that it was timely for the Select Committee’s recommendations to be given an even more public airing before the authority published its conclusions.

The impact of the payday lending industry has been a subject of growing concern for a long time. I could probably spend 20 minutes giving the House statistics about the impact that it has had on particular sections of the public, but I shall try to confine myself to one or two particularly relevant ones.

A personal debt survey that was conducted in December last year found that 5% of adults admitted to having taken out payday loans. An even more significant finding was that 6% said they would consider taking out such a loan in the next six months. The turnover of the market increased from £900 million in 2008-09 to £2.26 billion in 2011-12, and all the indications are that the more recent figures will show an even greater increase. According to StepChange, an organisation that provides advice on debt, 36,000 people approached it for advice in 2012, and 30,000 people did so during the first six months of 2013. That means that what was a very large number of people in the first place has almost doubled over the past year.

The payday lending industry gives rise to many reasons for concern, but given the time that is available to me this evening, I shall not try to deal with all of them.

[Sir Tony Baldry (Banbury) (Con)]

The hon. Gentleman is right to focus on the need for us to review the existing regulations. He is also right to draw attention to the problems involved in payday lending. As he will know, the Archbishop of Canterbury is keen for us to try to compete payday lenders out of existence. I hope that he and the House will be pleased to learn that the Archbishop has appointed Sir Hector Sants to lead a taskforce that will try to establish what more can be done to improve competition and the alternative market. Of course, that will not happen overnight.

[Mr Bailey]

I broadly support that course of action. I think that there is a sector of the market to which payday lenders can be relevant, but that sector must be closely regulated and transparent, and there must be a process that prevents lenders from adding to the problems of those who apply to them for loans. I shall say more about that, and about the important issue of competition.

I intend to talk about just one significant part of the industry, but let me first point out that much of the publicity about the industry has focused on the interest rate charged by payday lenders and the associated costs. That is obviously crucial in terms of the impact that it has on the people who take out the loans, but I think that we should view the issue much more broadly. We should think about the way in which payday lenders promote themselves, and the way in which they lure people into taking out loans. We should think about the processes in which they engage, which do not ensure that the loans given to people are appropriate to their personal needs, as well as how much they charge and how much they make from those charges. The Select Committee’s recommendations cover all those issues.

I think that the main problem—which was reflected in the 2013 OFT review of payday websites—is that payday lenders who are in competition with each other do not operate on a competitive price-offering basis; they operate on the basis of speed of access to such loans and lack of accountability. Anybody who goes on a payday loan site will see that the key aspects of every company advert are speed of access and lack of accountability. The OFT review made a substantial impact. As a result of the investigation, 19 of the 50 operators left the market, three had their licences revoked and three surrendered them. That alone shows the appalling misrepresentation that was going on at that point, but should anybody believe that that problem is over as a result of that action, even a cursory glance at their advertising will show that it is not. There are still many areas of enormous concern, and I know other Members will want to comment on them.

I want to concentrate on the advertising element. I have mentioned that the emphasis is on speed, ease of reading and ease of application. I took one advert at random. It says, “Great news!” and

“We have 7 lenders who can offer you £1,000—paid online today!..Complete our 1-minute verification form.”

For an industry that claims to be cleaning up its act and not to be lending to those who cannot afford to pay back, to offer to verify the appropriateness of a loan to somebody in a one-minute online process defies all credibility.

I looked at another advert that had a beautifully seductive cheery pink pig. I could not help but marvel at how the piggy-bank, a symbol over the decades of thrift and financial responsibility, should be misused in such a way to promote what is perhaps some of the most irresponsible lending, but that is how these companies advertise on their websites.

We found the television advertising to be the most concerning of all, however. Ofcom carried out research on this. In 2008 there were 12 million impacts, and in 2012 there were 7.56 billion impacts, with 152 loan adverts per viewer per year. Most seriously of all, children aged between four and 15 saw 3 million adverts, an average of 70 per child per year.

The Committee recommends that all advertising targeted at children should be banned. I acknowledge that there are problems around this, because the amount of advertising aired directly in children’s programmes is relatively small. However, there is an enormous amount shown during programmes that children are likely to watch. These adverts are largely focused on daytime and early-evening television, which is far more likely to be seen by children.

I shall now quote an e-mail I received from a teacher. She said:

“I asked the children what they could do if there was something they wanted to buy and didn’t have the money for yet. Almost all the hands went up (Only one child said they should save up) and I was given the names of several payday loan companies…They said that it was on TV and then most of them sang the song in the advert.”

Certainly the cartoon style of some of the adverts can only be interpreted as being geared for children.

The teacher went on to say:

“The advertising seems to have ‘normalised’ payday loans for the children as a way to buy things instead of saving and I feel that by the time these children are adults they won’t think twice about taking out a payday loan to pay for it. I spoke to them about interest charges and none of them had realised that these companies were anything other than a benign service helping people to pay for things.”

This ties in with the research done by Martin Lewis. He stated in his evidence to the Committee that he thought that in effect these companies were grooming children. Those are strong words, but the evidence so far is that the number of children seeing these adverts and the impact they are having on them is such that we cannot stand aside and disregard that. I understand the broader issues about regulating advertisements, but I feel there is now a huge body of evidence to demonstrate that the Advertising Standards Authority should be working with the financial services industry and others to ensure that there is a code of practice so that children are not subjected to such a level of pressure.

I cannot believe all this is coincidental. Parents respond to pester-power from their children, and if those children believe it is so easy to obtain money, the pressures that adults may feel are multiplied many times. That is reinforced by constant demands from their children to spend money they cannot afford.

I have spoken about just one element of this issue. There are many others that are equally important and significant and equally damaging to people’s personal financial situations. I know many colleagues will want to highlight those and I will not try to pre-empt them. I will instead conclude my remarks at this point, having highlighted that particular recommendation.

[Several hon. Members]

rose—

--- Later in debate ---

[Mr Bailey]

I thank all Members who participated in this debate, particularly members of my Committee. An enormous number of contributions from across the House have brought to this Chamber the detail of Members’ experience and expertise, and in some cases some imaginative solutions.

There is clearly a serious problem, and the proposed measures on capping credit and interest rates are very welcome but will not in themselves be sufficient to deal with the scale of it. The issues raised included roll-overs, continuous payment authorities, affordability tests, real-time data sharing, free debt advice services, financial education, and advertising. Dealing with those is all part and parcel of a comprehensive solution to the problem. I recognise that the FCA does not have all the powers it needs to do so, and that requires Government to look at other means of addressing the issues. My hon. Friend the Member for Glasgow North (Ann McKechin) made a pertinent comment when she said that regulation is behind the curve. That is true. We must now ensure that the Government and Parliament are ahead of the curve in order that the appropriate measures are put in place.

Question put and agreed to.

Resolved,

That this House has considered payday loan companies.

Autumn Statement

Adrian Bailey Excerpts

Thursday 5th December 2013 Commons Chamber

[Mr Osborne]

The short answer I can give my hon. Friend is yes. He brought to the Treasury an innovative scheme, on behalf of the people of Gloucester, to deal with the debts in the housing sector and enable the building of new homes. In our document, we reference the scheme specifically and give it our support in principle.

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

In the past, the Chancellor often condemned economic growth based on an expansion of consumer spending and consumer debt, as opposed to investment and exports. We now have economic growth based on consumer spending, while exports and investment lag. I think there was in part an acknowledgement of that in the extra money for UK export finance. Unfortunately, he did not clarify whether the main obstacle to small businesses exporting our way out of recession is the drop in the minimum threshold for a deal from £5 million to a lower level, which the CBI says would bring in an extra £20 billion if implemented. Will he clarify whether he is doing that?

[Mr Osborne]

I will look at the hon. Gentleman’s specific point. We are expanding the scheme to help small businesses export, which is one of our central objectives. If we can go further, I will happily look at that and take it forward in the Budget, because that is our shared objective. We want more exports, but the issue is that our main export markets have been in a deep recession for the past year. It is not surprising, unfortunately, that exports have been hit. That has led to companies exploring opportunities much further afield. One of the best things to do for small exporters is to ensure that, when they turn up in places such as Shanghai, there is a helping hand, with facilities and an office available for them to start their search for partners. That kind of thing is precisely what we are funding today.

Economic Growth

Adrian Bailey Excerpts

Wednesday 15th May 2013 Commons Chamber

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

It is a pleasure to follow the hon. Member for Stroud (Neil Carmichael). I agreed with virtually every word he said—I am sorry if that ruins his future career.

We are now in the fourth year of this Government, and during their time in office we have had flatlining economic growth, a squeeze on family incomes with a reduction of something like £2,000 per family per annum, and mounting debt, borrowing having increased by £245 billion. The growth industries are the payday loan companies or food banks, and in such a situation one might have thought we would have a Queen’s Speech that addressed those problems.

Instead, we have a Queen’s Speech that, as the Prime Minister said, contains as its flagship piece of legislation a Bill on immigration. Since then, an amendment to the speech has demonstrated that the preoccupation of a great majority of Government Back Benchers is with Europe and not issues that directly address the everyday concerns of our constituents. I looked at the Queen’s Speech and at the Prime Minister’s introductory remarks in support of it, and I could not help thinking that although some measures will be beneficial to the economy, the overall tone of its language and the way he introduced it could be profoundly prejudicial to our economic growth.

Let me start with the proposed legislation on immigration. The Prime Minister said:

“Backing aspiration means sorting out our immigration system.”—[Official Report, 8 May 2013; Vol. 563, c. 25.]

I cannot think of a more profound slur on the generation of migrants who came to my area, set up businesses, employed people and promoted economic growth in the black country. It is an insult to people such as the modern Polish worker—that demonised character—in David Manners, the Jaguar Land Rover spares company, which is a small business in my constituency. He uses his ability to speak Russian and Czech to work and find markets abroad for the seller of those parts, and last year he created £200,000 in extra contracts for his local company. The comments are also an insult to other countries and a repudiation of would-be students who want to come to the UK, study and contribute—at least for a limited time—to boost our economy.

We have an expanding world market in bright graduates worldwide. There were more than 4 million in the last academic year, which is increasing by 7% per year. They contribute £8 billion in this country alone. If we really want economic growth, one would think there would be a legislative and market strategy to reinforce the genuine affection that many of those students will have for this country, and their desire to use our first-class education system and research facilities to contribute to universities, local economies and the national economy.

In another quote—I cannot resist this one—the Prime Minister stated that

“from India to Indonesia, from Brazil to China. We must forge new trade deals that will bring new jobs and greater prosperity. We must use our commitment to open economies, open Governments and open societies to support enterprise and growth right across the world.”—[Official Report, 8 May 2013; Vol. 563, c. 22.]

That is at the same time as he introduces immigration legislation with the most inflammatory language, and while his Back Benchers are totally preoccupied with a policy in Europe that will marginalise us in that market.

I would like to go into these issues in more detail, but time prevents me from doing so. The core message, however, is that the headline issue in this Queen’s Speech, and the subsequent reaction of Conservative Back Benchers, is damaging to economic growth, which is the underlying issue that must be addressed to help the people of this country.

[Charlie Elphicke (Dover) (Con)]

It is a pleasure to follow the hon. Member for West Bromwich West (Mr Bailey) who is the true voice of the Labour party, particularly in his refreshing directness—we do not hear enough these days of the Labour party’s belief in open-door, unchecked migration to this country. My constituents in Dover and Deal raise migration on the doorstep time and again and say they are concerned.

[Mr Bailey]

Will the hon. Gentleman give way?

[Charlie Elphicke]

I will give way in a moment. My constituents know that 5 million people in this country could work but do not—

[Mr Bailey]

Will the hon. Gentleman give way?

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. I am sure the hon. Gentleman will give way very shortly after he has made those comments.

[Charlie Elphicke]

I will give way to the hon. Gentleman in a moment.

My constituents feel that 5 million in this country could work but do not. They ought to have more investment and opportunity, and more chances to fulfil their potential. That is why the reforms to welfare to make work pay, the reforms to the skills agenda, the reforms to control migration, and the reforms to control, police and secure our borders are important—they give our fellow citizens more of a chance to do well and succeed in life, and to see their potential unleashed.

[Mr Bailey]

I thank the hon. Gentleman for belatedly giving way. His response to my speech—he has attempted to put words in my mouth that I did not say—demonstrates the exact problem within the Government. They are prejudicial and damaging to the carefully constructed and reasoned debate on immigration that we need in order to get a policy that suits our economy.

[Charlie Elphicke]

I thank the hon. Gentleman for his intervention. I have set out my concerns on behalf of my constituents, who raise immigration on the doorstep time and again. They simply say to me, “I want my sons and daughters to have a chance. I want to be able to get a job, do well and succeed in life.” The Conservative party is the party of aspiration and success, and the party of realising the potential that each and every one of us has. I support the Government’s reforms.

I also support the Government’s reforms on tax avoidance and evasion. Let us imagine the Labour party’s response if the Government doubled income tax and let “their chums” in big business off the hook. There would be howls of rage, and accusations that the Government are on the side of the rich and attacking the poor—accusations that they are latter-day sheriffs of Nottingham—but that is exactly what happened in 13 years of Labour government. Income tax receipts went up by 81%. The working people of this country were soaked with Labour party taxes. Meanwhile, leaving aside oil duties, corporation taxes went up by only 6%. Such is the legacy of the prawn cocktail offensive, representatives of which are in the Chamber.

The Labour Government sold the pass on fair and open competition for smaller businesses in this country in favour of large multinationals. People who work hard for a living were hit with high income taxes while large businesses were allowed to avoid taxes on an industrial scale. That is the legacy of 13 years of Labour. I am delighted that the Chancellor and the Queen’s Speech rightly take action on that.

YouGov polls show that 62% of the public consider legal tax avoidance—it is all perfectly legal, is it not?—to be unacceptable. A ComRes poll has found that 84% agree that the Government should crack down on tax avoidance by businesses operating in the UK. Indeed, 60% are prepared to call the bluff of every large corporation that threatens to disinvest from the rich, highly vibrant and successful UK market, saying that the Government should crack down on business tax avoidance even if it caused unemployment and caused some companies to leave the UK.

That is how strongly the British people feel. I feel strongly, and I was delighted to hear that my hon. Friend the Member for Redcar (Ian Swales) does, too. The Government are right to deal with the legacy of tax avoidance on an industrial scale. They are right to tackle the problem as an international problem, requiring international action. I therefore welcome the Chancellor’s use of the UK presidency of the G8 to take collective action to deal with tax avoidance and evasion.

In particular, we need to reform tax presence. The idea that Amazon is based in Luxembourg defies reality to the ordinary person. They look askance at Amazon warehouses from the motorway and just do not buy the idea that Amazon is based in Luxembourg. The rules need to be updated to cope with the globalised, competitive, internet-enabled world in which we live.

Economic Policy

Adrian Bailey Excerpts

Monday 25th February 2013 Commons Chamber

[Mr Osborne]

I can assure my hon. Friend that we are not going to repeat the mistakes of the last Labour Government. We are absolutely clear, when it comes to regulating the City and banking—I am about to give evidence to the Banking Commission—that we are taking the tough action. [Interruption.] The right hon. Member for Morley and Outwood (Ed Balls) says “Pathetic”, but he was the City Minister when the Royal Bank of Scotland bought ABN-AMRO and when Northern Rock was offering 125% mortgages. He was the City Minister when the City got completely out of control, and he should get up and apologise for it.

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

In May last year, the Chancellor said that when Britain’s outlook was moved off negative, it demonstrated that the country now had economic stability. Now that it is being downgraded, would he like to give his assessment of our economic stability?

[Mr Osborne]

I know that Labour MPs keep reading out the Whips’ note, but perhaps the Whips will also circulate a note on what Labour’s economic policy is, and then we can have a more constructive debate.

Autumn Statement

Adrian Bailey Excerpts

Wednesday 5th December 2012 Commons Chamber

[Mr Osborne]

I am glad that my right hon. Friend welcomes the decision to increase the A1 to motorway standard between the M25 and Newcastle. He makes a powerful point about the A1 north of Newcastle, and I can tell him that the Chief Secretary to the Treasury is also a powerful advocate of that road scheme. It is one of the things that the Department for Transport will look at as well, so it is certainly not off the cards. What I have committed to today is the dualling of the A1 up to motorway standard all the way to Newcastle.

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

The Chancellor has re-announced the creation of the business bank and the funding for it, which is welcome in itself. However, there is widespread incomprehension in the business community as to how that will facilitate lending to small and medium-sized enterprises. Will he take this opportunity to explain how the bank will fill in for small businesses in a way that the existing banking structure does not?

[Mr Osborne]

My right hon. Friend the Business Secretary will set out more detail about the business bank. What I have confirmed today is the £1 billion of additional capital. Our ambition is that this will help to lever in private sector capital as well. Through the business finance partnership, which is not included in this £1 billion, we have already undertaken work to get more non-bank financing to medium-sized companies in particular. We are looking at similar models for the business bank, and my right hon. Friend will make an announcement on that. We are also going to use the opportunity to bring together all the myriad schemes announced by various Governments on business finance, finance for SMEs and the like, which are sometimes confusing, so that the business community has just one place to go to. As I have said, I have announced £1 billion extra for the business bank.

Oral Answers to Questions

Adrian Bailey Excerpts

Tuesday 26th June 2012 Commons Chamber

[Mr Osborne]

The liquidity auction undertaken by the Bank of England last week was very welcome, and the Bank is proposing future auctions. My hon. Friend, who chairs the Treasury Committee, has been prescient in pointing to some of the procyclical nature—if unintended—of some of the liquidity regulation in the United Kingdom in recent years. The Financial Policy Committee was set up to look at risks on both the downside and the upside. The Financial Services Authority must make its own independent decisions, but I am sure that it will have paid close attention to my speech and to the speech of the Governor of the Bank of England at the Mansion House.

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

Notwithstanding the Chancellor’s warm words about the impact of quantitative easing, I have yet to meet a banker, a businessman or indeed a Government representative who can identify the benefits that have accrued as a result of its introduction. While I do not necessarily oppose it, all the evidence that I am being given by bankers suggests that lack of demand is causing the main problem. Will the Chancellor do something to stimulate consumer demand and investment confidence in order to maximise the potential that quantitative easing might bring?

[Mr Osborne]

In conducting its most recent assessment of the UK economy, the IMF explicitly looked at unconventional monetary policy tools that are currently being used, and concluded that quantitative easing was having a positive impact. I think that we should welcome that. I believe that we are able to pursue loose monetary policy—that we are able to use all the tools that are available to us on the monetary policy side—precisely because we have international credibility on the fiscal side.

Business and the Economy

Adrian Bailey Excerpts

Monday 14th May 2012 Commons Chamber

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

Above all, the Queen’s Speech demonstrates that it is impossible to legislate ourselves out of a problem created by a Treasury-imposed economic fiscal policy that is demonstrably causing such damage to the economy. The economy is flatlining, the number of business insolvencies is rising, real incomes, and therefore consumption levels for British business, are being squeezed, unemployment is rising and, perhaps most frightening of all, about two thirds of the potential public sector cuts, the impact of which on consumer spending could be devastating to British business, are yet to be realised. This Queen’s Speech contains a series of measures. Some of them are not bad in themselves, but they are essentially micro-measures designed to deal with macro problems. I am afraid that, typically, they are accompanied with overblown rhetoric about their potential impact, and if experience is anything to go by, their speed of implementation will be sclerotic.

Let us take the enterprise and regulatory reform Bill. The Government have been trumpeting their one-in, one-out policy and their red tape challenge. However, the Department’s annual report for last year highlights some of the regulations that they have abolished, which include article 22 of the Distribution of German Enemy Property (No. 1) Order 1950 and regulation 24(6) of the Gas Appliances (Safety) Regulations 1995. I am sure there are perfectly sound reasons for abolishing those regulations, but the idea that doing so will cause the economy to take off requires, shall we say, a leap of faith to which I do not think even this Government could subscribe.

We have heard about the potential impact on the regional growth fund, but in the west midlands there have so far been 72 bids, only one of which has received any funding yet. I have been questioning Ministers over the last year about the number of jobs created by the regional growth fund, but I could not get an answer. My hon. Friend the Member for Streatham (Mr Umunna) has now revealed that the National Audit Office has some idea, but the answer is nothing like the number of jobs created by the previous regional development agencies, which were so quickly abolished, and the cost is proportionately much greater.

[Robert Flello (Stoke-on-Trent South) (Lab)]

What would my hon. Friend say about the figures that have been published suggesting that the cost per job is roughly £200,000, which contrasts with the Remploy workers, who are being put out of their jobs, and where the cost per job is far smaller?

[Mr Bailey]

The figures my hon. Friend quotes are quite self-evidently a demonstration of the Government’s ridiculous priorities.

Let me turn to the green investment bank, which was Labour’s idea. It has been talked about for a very long time by this Government and now, two years later, we actually have it. However, it is inadequate, and unfortunately the Government have already introduced a series of policies on feed-in tariffs that will decimate many of the companies that would potentially have benefited from the green investment bank. Again, it is difficult to see how we will lift ourselves out of recession on the back of that.

There are certain measures that are welcome, such as the Groceries Code Adjudicator Bill. However, earlier I spoke about the slowness of implementation. Both the Select Committee on Environment, Food and Rural Affairs and the Select Committee on Business, Innovation and Skills, which I chair, examined the issue before the last summer recess, and we did so quickly at the request of the Government. The Bill could have been implemented last autumn or at the beginning of this year. Indeed, the parliamentary business over the last three months was hardly so crowded that such a quick and simple Bill that had received so much pre-legislative scrutiny could not have been introduced. Why is it being introduced only now?

[Andrew George]

Given that the hon. Gentleman is the Chair of a Select Committee and will want to be seen to be even-handed in this matter, does he agree that it was a great disappointment that the previous Government failed to act on the recommendations of the Competition Commission, which reported on 30 April 2008, and did not implement the measure during their time of office?

[Mr Bailey]

May I compliment the hon. Gentleman, who I know has been an ardent campaigner on this issue for many years? All credit to him for that. The measure was in the Labour party manifesto for implementation, and I am sure that it would have been implemented far more quickly, and perhaps more profoundly, than what is currently proposed.

I want to raise two issues about the measure, the first of which is fines. I welcome the Secretary of State’s comments about that, because our Committee recommended that there should be fines, not just a name-and-shame process. It would appear that he may be moving in that direction, although we will question him more closely on it. However, something that he did not mention was the ability of third parties such as trade associations to submit complaints. If individual companies or farmers have to make a complaint, they might fear discrimination. No doubt we shall tease out these issues during the Bill’s passage through Parliament.

I am most concerned about the missing elements from the Queen’s Speech. As a Labour and Co-operative party Member of Parliament, I am particularly concerned that, despite the Prime Minister’s trumpeting of his commitment to a co-operatives Bill, such a Bill is mysteriously missing. There is a degree of cynicism in the co-operative movement over the Government’s motives. They are keen to trumpet their commitment to co-operation when it is politically expedient to do so, but the absence of the Bill that the Prime Minister promised us during this parliamentary Session is bound to create a suspicion about their true commitment and motives in this regard.

The most astonishing omission of all from the Queen’s Speech was a Bill on higher education. My Committee carried out a long inquiry into this matter, and offered a raft of recommendations to the Government last November. To date, the Committee has not even had a reply to its recommendations. On two occasions, excuses have been given. The consultation on the White Paper ended in January, and we were told that further consultation was needed. We were also told that the matter would best be dealt with as part of an announcement of the Government’s policies in the Queen’s Speech in the new Session, yet the Queen’s Speech contained absolutely nothing about it. The inevitable suspicion is that there is such profound disagreement between the coalition partners on this subject that we shall have a White Paper and a consultation but no Bill on an issue of profound importance to hundreds of thousands, if not millions, of students in this country. This is also a serious matter in that higher education is one of the biggest export earners for this country. The omission of a Bill demonstrates a complete lack of consistency and commitment to it.

Oral Answers to Questions

Adrian Bailey Excerpts

Tuesday 24th April 2012 Commons Chamber

[Danny Alexander]

I was indeed shocked to hear the shadow Chief Secretary say on “Newsnight” that she opposed the cut in corporation tax. I would have thought that the Labour party would welcome such a measure, as it is designed to increase investment in British businesses and support economic growth—that is something that Labour Members say they want to see. The constituency firm to which my right hon. Friend refers could benefit from the national loan guarantee scheme and the credit easing scheme that the Chancellor announced at the Budget, and it could participate in the advanced manufacturing supply chain initiative, which the Department for Business, Innovation and Skills has announced, whereby £125 million is being spent to help manufacturers improve their performance.

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

Manufacturing businesses in the black country are adamant that what will help them improve their investment is an increase in capital allowances, rather than cuts and cuts in corporation tax. Why do the Government not do that?

[Danny Alexander]

The hon. Gentleman will know that we have put in place enhanced capital allowances in a number of enterprise zones around the country, particularly to focus investment in plant and equipment in such areas. We announced in the autumn statement improvements to the short-life capital allowances regime, which had been a major request by manufacturing and, in particular, the engineering sector. I would have thought that he would have welcomed those changes.