Leaving the EU: Customs Arrangements

Alex Sobel Excerpts

Tuesday 10th July 2018 Westminster Hall

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

It is a pleasure to see you in the Chair, Mr Streeter, and I congratulate the hon. Member for Wimbledon (Stephen Hammond) on securing this debate. I do not wish to do him any harm, but I can say honestly that I am always prepared to listen to him, and I found his speech lucid, informed and persuasive.

You will understand what I mean, Mr Streeter, when I say that when I was sitting in the Library yesterday, this was not an easy debate to prepare for. Major issues within the Cabinet were being resolved in public, and it was not clear whether today would begin with the Prime Minister being in a position to say that she can go forward and deliver the Brexit deal that protects jobs and the economy that we all want. I do not say that with any pleasure or partisanship, because as I listened to the hon. Gentleman, I could not help thinking that at this stage we should not even be having this debate. We should know the answers to many of the questions he raised, or at least we should know the UK’s preferred answer to those questions.

We cannot deny that, since the referendum result, there has been a lot of delay and dithering, and the lack of clarity that that has caused has put jobs and living standards at risk. That delay and lack of clarity is operating within an economy that still faces many significant challenges, such as the collapse in growth, huge problems with productivity, and the fact that many of our constituents live very difficult lives—those on both Front Benches agree about those challenges, even if we propose different solutions.

It seems reasonable to say that the Government by now should have come up with a credible and comprehensive customs plan for post-Brexit. Recent events at Chequers indicate that the Government are moving away from the type of Brexit advocated by many Tory Brexiteers and towards what we might call a soft Brexit—I would simply call it an economically realistic Brexit—but the Government’s proposals at Chequers stop short of the comprehensive customs solution we feel is needed. Meanwhile workers, businesses and everyone who voted in the referendum, no matter how they chose to vote, are reasonably seeking reassurance and security over what Brexit is likely to mean for their future and that of the country.

As the Opposition, our message has been clear and consistent: we respect the result of the referendum, but we still want to work with European partners in the economic interests of the country. Our priority is simply to get the best deal for jobs, living standards and the economy, and we are pragmatic about how that should be done. We will reject any race to the bottom in workers’ rights, environmental safeguards, consumer protections or food safety standards. We want people in this country to continue to enjoy the same protections as our cousins on the continent. That is why Labour proposes to negotiate a new comprehensive UK-EU customs union to ensure frictionless trade between the UK and EU. In particular, we want to ensure that there are no tariffs with Europe and the continuation of advanced supply chains, particularly in manufacturing, which was well described in speeches today. Crucially, we want to help avoid a hard border in Northern Ireland.

[Alex Sobel (Leeds North West) (Lab/Co-op)]

A number of northern businesses have come to me. They are all globally owned, global manufacturing and exporting businesses that use the port of Dover. They have said they are now looking at contingency with other ports because of the proposed customs arrangements. They are concerned that every port will have the arrangements and their businesses will have to move outside the UK. Are the proposals that my hon. Friend is outlining not exactly the sort of proposals that will alleviate the fears of those businesses?

[Jonathan Reynolds]

My hon. Friend is absolutely right. I say to all Ministers that, for many of us, this matter is not an abstract question. I am a little younger than my hon. Friend the Member for Bishop Auckland (Helen Goodman), but I grew up in the north-east in the 1980s, not far from her constituency. It was clearly a time of substantial turmoil. We had the miners’ strike and the shipyards closing. The modern prosperity of those areas has been built around a relationship with the single market, the European Union and inward investment. Many of my schoolfriends work in that Nissan plant, which is the most efficient car factory in the world. There is a plant in Mexico that disputes that, but we are pretty sure we have got it. The Government should not underestimate just how willing many of us are to fight to ensure that the next generation do not have to undergo the kind of economic turmoil that many of grew up within. They should recognise the benefits that have been brought from that relationship.

The Taxation (Cross-border Trade) Bill—many of us here are veterans of its Committee—ostensibly sets out from the Government’s point of view how we will create a functioning customs framework for the United Kingdom once we leave the European Union. Many of us have read all of that Bill, and there is nothing in it that guarantees frictionless trade through UK ports from the moment of exit. There are no measures that properly resource Her Majesty’s Revenue and Customs for the task ahead. There is nowhere near sufficient detail on the powers and provisions of the Trade Remedies Authority, which will be charged with securing vital British interests.

Frankly, it is just an enabling Bill. The political decisions that will be required to decide whether we use the powers within that Bill have not yet been taken. They may have been taken at Chequers, but we will need to see more detail on that and the political fallout. It is still fair to say that the Government have failed to offer specifics on what the new customs system will look like, how it will work and, crucially, whether it will be ready on time. Huge underlying questions remain about whether the current customs declaration service programme can deal with the sheer workload and pressure coming its way post-Brexit.

Everyone in the House agrees that we must avoid the nightmare scenario of gridlock at UK ports with lorry queues stretching as far as the eye can see, yet the Government continue to refuse to acknowledge that HMRC has had its staffing levels cut substantially—they have been cut by nearly a fifth since 2010. There are still plans to close 137 HMRC offices across the country. HMRC has 2,000 less staff today than it did on the day of the referendum. That has to bring into question our ability to deal with a future customs regime.

In contrast, we recognise the urgent need to hire and train more customs officers and HMRC staff, particularly if the Government are to meet their ambitious target of a fully operational customs system by 2019. In addition, the Public and Commercial Services Union only last week warned that strike action looks increasingly likely after the Treasury announced without consultation that the pay cap would be lifted only through cuts and increased workloads across Departments. That is not an ideal position to be in, based on where we are today.

Post-Brexit, we will need the ability to enforce against the dumping of unfairly priced goods. At the moment, those remedies are provided in conjunction with the EU, but on leaving the UK will have to enact and manage its own trade remedies. The measures are spread across a number of pieces of legislation and are of great interest and importance to UK manufacturers. The manufacturing industry remains an indispensable part of the UK economy. Some of the speakers today, particularly my hon. Friend the Member for Bishop Auckland, articulated just how specific and detailed the questions are that we are receiving from constituents on how the system will work. The complexity of modern manufacturing does not seem to tally with some of the Government’s aspirations for how the system will work going forward.

We want the Government to set out a clear path to our mutual objective of creating a functioning institutional framework for the handling of customs once we leave the European Union. Crucially, we must recognise that the final customs regime post-Brexit will be a result of the deal we strike with the EU, not the deal we strike among ourselves in Parliament or between different factions of the Conservative party. We must be ready for that regime, but we feel that the overwhelming evidence favours the UK entering into a continued and renewed customs union with the EU. The Government perhaps moved some way towards that last weekend. Perhaps they will go just that little bit further to get us the post-Brexit customs regime that this country needs.

Banking Misconduct and the FCA

Alex Sobel Excerpts

Thursday 10th May 2018 Commons Chamber

[Martin Whitfield]

Absolutely. The cost of bringing a case to get rectification is so important.

The FCA has repeatedly said that it does not have the powers to deal with commercial lending and that it is up to Parliament to decide if it wants those powers to be extended. However, in various statements, the Treasury has repeatedly stated that this is a matter for the FCA and that if the FCA feels it needs more powers, it should ask for them. All that is happening is that this hot potato is being kicked between two different areas, and we are not getting answers that, in reality, are satisfactory to anyone. I would appreciate clarification from the FCA on the parameters of what it needs in order for it to ask for more powers. At the moment, we are seeing the widespread and systematic destruction of British businesses, which in my mind certainly seems to qualify as a reason to request additional powers.

The lack of mechanisms for redress and of action in general has severely undermined public confidence in the integrity of our system, and it is time that we tackled this head-on. We are therefore calling today for a full public inquiry into the ecosystem of commercial lending, and particularly into the treatment of businesses in financial distress. This cross-departmental issue covers both the Department for Business, Energy and Industrial Strategy and the Treasury, so it is too wide-reaching to come under the remit of just one Select Committee in Parliament.

I will briefly turn to the role of professional advisers and the wider issue of commercial funding. I welcome the focus that section 166 has placed on the inherent conflict of interest that exists between financial institutions, surveyors, lawyers and insolvency practitioners. For too long, we have focused solely on financial institutions, but not on the professionals that support them, often in the form of secondments from within the walls of the very financial institutions themselves. Frankly, it beggars belief that this is an accepted industry practice. The mechanisms involved in taking control of businesses and their assets are operated via LPA receivers and insolvency practitioners.

[Alex Sobel (Leeds North West) (Lab/Co-op)]

Does my hon. Friend agree with me that these professional practitioners are quite often working hand in glove with the banks? Does he also agree that the fees, particularly in insolvency practice, are very high, which, on top of the issue with the banks, can push businesses under?

[Martin Whitfield]

I am grateful to my hon. Friend for that intervention, and I would draw attention to the very basic case of those owning a business that has constantly paid back its loans on time and maintained contact with the bank, who may suddenly, through a simple slip of a pen in the valuation or revaluation of the business by part of the bank’s organisation, find themselves in breach of their loans—and they lose their business. That is not a question for the shareholders or for the directors; with a movement of a pen, their business becomes the bank’s.

RBS has been at pains to point out that the Promontory report did not find any evidence of deliberate under- valuations, but in any event the report could not in many cases find any evidence about how valuations were conducted, and there is a suggestion that they were simply made up. These valuations could then be used to appoint an insolvency practitioner, subject to huge costs, and a cosy relationship between a surveyor, an insolvency practitioner and a bank suddenly means that another family business has been lost.

Capital Needs of Co-operatives

Alex Sobel Excerpts

Wednesday 25th April 2018 Westminster Hall

[Gareth Thomas]

The hon. Gentleman makes an extremely good point. If he can use his not inconsiderable influence on the Minister to support what I will say, we might be able to accelerate the addressing of some of the problems co-ops face in investing in social housing. Unless co-operatives can raise additional capital, they cannot expand or develop to their true potential. At worst, they are at risk of demutualisation, as I will set out. Co-operatives do not issue shares in the same way as investor-owned companies—to do so would mean demutualising—so bigger co-operatives can face considerable difficulties raising additional capital at the level they need. Their growth inevitably is limited and their ability to compete on equal terms is reduced.

In short, legislation is needed to fix this problem—legislation that protects that unique governance model of co-operatives, but allows them to issue permanent investment shares. Such shares could allow consumer co-ops to grow by acquisition and by developing new business offers for their customer members. Football supporter-owned clubs could fund the development of new stadium facilities, grow their businesses, serve their communities and consolidate their income streams. Co-operative-owned energy generators could attract long-term investment to build even more energy infrastructure of the sort we need in this country. A lack of capital limits a co-operative’s growth and ability to develop new services. The growth rate of that co-operative is constrained by its relative inability to add significant capital through retained earnings.

[Alex Sobel (Leeds North West) (Lab/Co-op)]

In my constituency, the Headingley Development Trust is doing its second community share offer. It has already managed to raise £232,395 from individuals—I declare an interest as an investor in that share scheme. That money is being matched by £100,000 from the community shares booster programme from Co-ops UK, Locality and Power to Change. The trust can have only £100,000 because of the cap. Energy, community facilities and social care can all be aided by lifting the cap.

[Gareth Thomas]

My hon. Friend raises a good example of the difficulties that co-operatives face. I pay tribute to his work championing the co-operative he mentioned. He also underlined my point about the good work that Co-ops UK has done in championing community shares. His fundamental point is absolutely spot on: there is a limit to the amount of capital that co-operatives can raise because they do not have the instruments available to them that are available to many of the non-co-operative businesses that operate in our economy.

Like all businesses, co-operatives need to be able to benefit from the economies of scale that are often available only by growing their businesses. They need to gather sufficient capital to serve their members well, to extend services to new members and to expand their services. Without new capital, many co-operatives could be driven into inappropriate corporate forms through demutualisation. Many of us in the co-operative movement can think of many examples where that has already happened. If co-operatives convert to other corporate forms, consumer choice in our economy is reduced and large numbers of consumers would no longer have non-listed, member-owned options in the marketplace. That reduces competitive pressure from the operation of different business models in the same market and adds to systemic risk to the economy.

There is inevitably a limit to the amount of debt that can or should be raised by any business. Mutual shares would present an opportunity for small mutuals to raise funds that they may not be able to raise otherwise, and for larger co-operatives to raise funds that subordinated debt does not provide.

Additional capital helps in a number of ways. It could be used in tactical acquisitions, which would help businesses’ competitiveness. They could also look at local infrastructure development potential. There are a number of examples overseas of similar co-operative share offerings. Examples from Canada, the Netherlands and across the European Union show how mutuals can enlist their members in raising capital through the issue of new deferred shares. In summary, the benefits offered provide evidence that Government support for such a Bill would create a viable new opportunity for mutuals to attract new capital and deliver positive outcomes for mutuals and consumers.

Currently, co-operatives largely have to generate capital for growth internally. They have no shares to sell and hence no access to equity markets. Ongoing capital in co-operatives consists of retained earnings and bank borrowing, with some smaller co-ops also raising withdrawable share capital. The lack of access to reliable capital can be a serious limiting factor on the growth and development of consumer mutuals. How these businesses are constructed means that the introduction of external capital without additional safeguards, such as limits on voting rights and distributions, would water down the mutual purpose of the organisation. The International Co-operative Alliance said that co-operative capital needs to offer

“a financial proposition which provides a return, but without destroying co-operative identity; and which enables people to access their funds when they need them. It also means exploring wider options for access to capital outside traditional membership, but without compromising on member control”.

Consolidation between mutual businesses has been the short-term response to pressure in the past. That has created a small number of firms of critical size that are better able to compete in their markets. Without access to new capital, however, organic growth has remained a difficult challenge. In staying true to their business purpose, customer mutuals are therefore limited by their options to access capital for growth. Some external capital instruments do exist in mutuals. In building societies, more than a billion pounds of deferred shares have been issued. Nationwide building society and Cambridge building society have issued core capital deferred shares. That new capital instrument is designed for mutual building societies and enables them to raise common equity tier 1 capital to supplement retained earnings and diversify their capital base.

The Government supported legislation for mutual insurers and friendly societies to issue deferred shares in 2015, although I note that the restrictive position of Her Majesty’s Revenue and Customs has prevented its full implementation and the relevant orders from being laid before the House. It would be good hear whether the Minister can unlock that particular blockage.

The mechanisms for funding co-operatives are more restricted than those for companies. It is not possible for co-operatives to have equity share capital, as understood in the company law context, because equity ownership is incompatible with the co-operative principles and would therefore be prima facie unregistrable. It is also not possible for societies for the benefit of the community because distributions of income and capital are not permitted.

Co-op societies, like building societies, were historically funded by their member customers, who were required to subscribe a minimum amount of share capital in order to be afforded full membership rights. That might be built up over a period of time, including by leaving undrawn dividends. Subject to the minimum capital requirements, therefore, members were permitted to withdraw funds from their account, and share capital was typically withdrawable. One of the consequences of that was that members’ share capital remained static in value. Although it was risk capital in the sense that it could be lost on insolvency in paying debts owed to creditors, it did not give members an undivided share in the value of the underlying business.

While the co-operative carried on trading, members therefore had no expectation of any entitlement to more than the repayment of their original capital. Their real interest was in the continuity of the existence of their society, providing goods and services to meet their needs. As a direct result of that approach to funding and ownership, any undistributed surplus was retained as reserves and shown as such in the accounts, and although such reserves constituted members’ funds for accounting purposes while the society remained a going concern, they did not belong in a traditional ownership sense to the members. They were more like assets currently being held by the body of members, almost as trustees for the purposes of the society.

An appropriate and sustainable basis of funding is a prerequisite for any business if it is to start up and survive, and the requirements for funding are likely to change or evolve over the life of the business. The restrictions in relation to the funding of co-operatives, which are created by legislation, are therefore fundamental to the future use of the co-operative form, and to the future viability of co-operatives.

I do not expect the Minister to give a guarantee of support today for the new form of investment capital for co-operatives, but I hope he will take time to reflect. Although I appreciate he has committed to meet me on another issue, perhaps he will be willing to meet me with Mutuo, the think-tank in the co-operative world, which has been developing this instrument, and which supported Lord Naseby when he introduced similar measures in 2015 which, as I said, are currently held up as a result of the unfortunate attitude of HMRC.

Another new type of raising capital that I want to put on the table comes from Italy. Worker co-operatives can play a significant part in rejuvenating firms that would otherwise close in places where there is a supportive policy and business infrastructure to facilitate that. It can act as an essential component of a progressive employment policy. Perhaps the best example of this is the so-called Marcora law from Italy, where conversions take place as negotiated employee buy-outs between workers, the exiting owners, the co-operative sector, the nearby local authorities, and bankruptcy courts. Under a legal framework—the Marcora law—an infrastructure of support has been created to assist the worker buy-out of firms. State funding that would otherwise be spent on unemployment benefits is used to finance the new co-operatives. It has been remarkably efficient for the Italian taxpayer. It is estimated that that investment has safeguarded nearly 14,000 jobs in 270 businesses and generated an economic return for the Italian state of almost seven times the capital invested.

The Italian method of creating staff buy-outs is essentially a negotiated conversion and business restructuring mechanism, with a unique set of supportive policies and a financing structure facilitated by a collaborative approach between staff, the co-op sector and the Government. Some resources are provided by the Italian state Treasury. Again, I do not expect the Minister to commit to this measure today, but in due course it would be good to hear his reflections on that example.

Perhaps on another occasion it would be good hear what further steps the Minister will take to try to encourage the expansion of the credit union sector, where capital remains a significant issue. The lack of resources for marketing is probably one of the biggest things holding back that sector’s development.

Financial Guidance and Claims Bill [Lords]

Alex Sobel Excerpts

3rd reading: House of Commons & Report: 3rd sitting: House of Commons
Tuesday 24th April 2018 Commons Chamber

A total ban on cold calling would be likely to lead to a fall in the harvesting of false holiday sickness claims. Two recent cases that were taken to court show that the practice is not only improper and immoral, but unlawful, with one particular couple from Merseyside receiving a prison sentence. Deborah Briton was sentenced to nine months and her partner Paul Roberts for 15 months, not least because they had advertised what a good holiday they were having only then to be encouraged by a claims management company to submit a false claim when they got back home.

[Alex Sobel (Leeds North West) (Lab/Co-op)]

My hon. Friend referred to Jet2, which is headquartered in my constituency and has raised this issue with me on many occasions. It says that these vexatious claims are increasing the cost of flights and holidays for the rest of us. Is it not true that closing this loophole will effectively mean that we can all enjoy a holiday at a much more reasonable price?

[Jack Dromey]

My hon. Friend is absolutely right. When a reputable company such as Jet2 makes the point that the consequence of this practice might be price increases and a reluctance among some hoteliers to enter into agreements, it is clear that innocent holidaymakers will pay the price.

It is not just travel companies that are suffering due to the large number of cold calls. Around 51 million personal injury-related calls and texts are sent by regulated claims management companies each year. The Association of Personal Injury Lawyers has long called for a ban on personal injury cold calls from CMCs, especially as solicitors themselves are already banned from cold calling. Ironically, only recently, the Justice Secretary said that there would be a “forthcoming ban on cold calling” when discussing personal injury claims. If the Justice Secretary believes that there is a forthcoming ban, why do we not act now and include it in this Bill? As Lord Sharkey said in the other place, the ban is necessary to deal with the “omnipresent” menace of cold calls. Baroness Altmann has said:

“People need protection from this nuisance now. They shouldn’t have to wait still more years for a ban....Direct approaches to people on their mobiles or home phones should have no place in the modern world of business.”

The Government, in the public interest, must accept the amendment to ban cold calls when this Bill passes.

--- Later in debate ---

Let me spell it out: I welcome the action that will be taken to try to protect those whose pension pots are the target of tricksters and speculators; but we also need to ban the claims management companies that phone people up to tell them about the accident that they have been involved in or the compensation they are entitled to for the tummy bug that wrecked their holiday. Those companies are nothing more than scam merchants, and this place should exist to expose them and put an end to their shoddy practices. Nothing else will convince the public that this Government are genuine when the Prime Minister talks about being on the side of the little person, rather than vested interests. We should demonstrate whose side we are on tonight. I want to hear the Minister say that he is going to put an end to this practice once and for all, and I hope that my own Front Benchers, having reflected on the situation, might indicate that they are willing to put further pressure on Ministers with regard to new clause 8.

[Alex Sobel]

I am here to support the amendments in the names of my hon. Friends the Members for Walthamstow (Stella Creasy) and for Harrow West (Gareth Thomas), which are complementary. I have also put my name to amendments 1, 2 and 31 in the name of my hon. Friend the Member for Harrow West.

Why do the poorest in our society have to pay more for the same services as the wealthiest? Why do they have to pay more for the same gas and electricity? Why do they have to pay more interest for the same loans? Why is credit more difficult to access and at much higher interest for the poorest in society? The structure of our society is such that growing inequality is in-built, because those with capital can further accrue it through cheap finance and lower costs, while those without capital cannot pursue their dreams through the high costs and limited availability of debt finance. Today we have an opportunity to make a small step in reversing that trend, casting light on the practices of high-cost credit providers and enshrining the duty to ensure that information about credit unions is provided by the single financial guidance body. The very mission of credit unions is to provide low-cost finance to people who are deemed high risk by traditional institutions, and they are owned by their own members.

Martin Luther King said:

“it is obvious that if a man is to redeem his spiritual and moral ‘lag,’ he must go all out to bridge the social and economic gulf between the ‘haves’ and ‘have not’s’ of the world. Poverty is one of the most urgent items on the agenda of modern life.”

Today we have the opportunity to pass these most excellent amendments and make a step towards bridging that social and economic gulf, not just because it makes sense in terms of financial justice, but on a spiritual and moral level.

The United States acted 40 years ago on the spiritual and moral lag that Dr King talked about, by introducing the Community Reinvestment Act. The Act was established to ensure that banking needs were met and monitored in low-income neighbourhoods, which had seen a retreat of traditional banking services and rising interest—a situation that we have faced in this country for far too long. My hon. Friend the Member for Harrow West gave an excellent explanation of the Community Reinvestment Act, so I will not repeat it. The banks in America have responded to the Community Reinvestment Act by establishing plans to service those communities and ensure that their services are not restricted. Banks in the US with community investment plans not only commit capital at affordable rates for loans, but invest in community development.

The amendments are needed before we can implement a community reinvestment Act. Without the disclosure of financial data and a statutory duty to promote credit unions, we cannot achieve community reinvestment by the large banks. The amendments are a necessary but insufficient precursor to getting real financial justice for communities that struggle to access affordable credit, but today we can make the first step to ensuring financial justice and legislating for a full community reinvestment Act. I hope that the Treasury Bench takes on board these excellent amendments and responds to them in kind.

[Alex Cunningham]

I want to speak briefly to new clause 2. While I am sure, Madam Deputy Speaker, that you have many years to go before you reach your own mid-life point, I am sure you will understand that we could all use a bit of advice at times—even though those of us with six decades or so behind us think it our duty to pass on pearls of wisdom to the younger generation.

There is plenty of talk about young people and their finances—about how they can manage their cash and get on the property ladder, which is of course impossible for many these days. This Bill does something to help young people, and I am pleased about that, but what it fails to do is help those in the mid-life stage—people who may have saved a bit, joined a pension scheme, or bought an ISA or two. More importantly, it does nothing to help those who have done none of those things and simply do not know who or where to turn to when planning their later life.

Although some excellent initiatives have passed through this House, such as Labour’s policy of auto-enrolment into workplace pensions, there have been a number of failures, not least around the issue of ’50s-born women and their state pension age, which was extended by the Tory-Lib Dem coalition by several years, condemning many such people to poverty when they should have been enjoying retirement. We could have hoped that the experience of thousands of women left facing difficulty and uncertainty would act as a salutary lesson to everyone else that they cannot really depend on Governments to deliver the security they need in retirement, but need to find ways to make provision for themselves.

People are now looking at their expected pension provision, if they have any, and then panicking about how they are going to afford to live when they retire, or are faced with the reality that they will have to work beyond retirement age in order to make ends meet. We also have people who have lived their lives just getting by—who have never been able to buy their own home and now do not know how they will afford their rent once they retire. Uncertainty is very much the name of the game in the 21st century, so we have a responsibility in Parliament to make provision to ensure that everyone, whether they can afford it or not, is able to work out how they will live when they are no longer receiving a wage. This new clause to provide targeted information to people from the age of 50 delivers that.

We all know that people can now expect to have several jobs throughout their career, and redundancy, zero-hours contracts and insecure work are clouds hanging over millions of people every day. Some people in their 50s find that they need to retrain for another role, but many do not know where to begin or where to get to the facts. This body, backed by the right promotional campaigns, including multimedia, could be a lifeline for those who ignore their money problems. I am, however, concerned about the capacity of the new body. We need to guarantee that it can expand if we are to reach many more people with guidance. I am yet to be convinced that that capacity will be there. I hope that the Minister will say something about how it can expand. I also hope that he can extend its services to provide the mid-life advice that people need.

Air Quality and Shore-to-Ship Charging

Alex Sobel Excerpts

Thursday 29th March 2018 Commons Chamber

[Dr Whitehead]

There is certainly a case for doing that. In California, regulations require a certain proportion of ships visiting ports to use shore-to-ship facilities. However, in California the facilities are already there.

The arguments for doing nothing have some limited grounds, but unless the facilities are there, ships will have no incentive to equip themselves to use them, and, as I have said, there is currently no mandate for their use. Equipping a berth for large vessels would cost about £3 million, and fully equipping all Britain’s major and medium-sized ports would probably come to about £100 million.

[Alex Sobel (Leeds North West) (Lab/Co-op)]

Before I came to this place, I was a deputy executive member on Leeds City Council, and I attended many workshops with Southampton city councillors where I heard those same arguments. It was said that Southampton and other city councils were too hard pressed to introduce such measures. Does my hon. Friend agree that they are doing all that they can, but need Government support?

[Dr Whitehead]

I do agree, and in a moment I shall refer to the support that the Government might be able to provide. If we are to roll out shore-to-ship power across the country, we shall need a combination of stick and carrot.

The £100 million that I have just mentioned would, however, largely be recovered—eventually—in fees in subsequent years, because ships coming into port would be charged for the electricity that they used, although it would be cheaper for them than using their own bunker fuel. It is true that some companies are making an effort to modify the fuel that is used by generators when ships are in port so that they run on, say, liquid petroleum gas rather than diesel or bunker fuel, but nothing comes close to the benefit of shore-to-ship supply.

So how can we make a break in the apparent stand-off that currently exists in the UK? Ports may be aware that shore-to-ship power is beginning to happen seriously around the world, and ships are increasingly turning up ready to go, but everyone is looking over their shoulder to see whether anyone else is moving first. It might, commendably, be Southampton—although even then the initiative is for only one berth, which is a start but leaves a long way to go—but Southampton should not be in such a position.

My central call this afternoon is for Government to take the lead in the creation of a level playing field for all ports in the UK for shore-to-ship installations by giving notice of an intention to mandate their use in ports by a specified date and, if I can venture a suggestion, to place aside a modest fund to assist ports in installing the necessary equipment over the specified implementation period.

That is not exactly a novel idea, because an EU directive already exists—directive 2014/94/EU, to be precise, known as the alternative fuels infrastructure directive or AFID. It says this on shore-to-ship power, in article 4(5):

“Member States shall ensure that the need for shore-side electricity supply for inland waterway…and seagoing ships in maritime and inland ports is assessed in their national policy frameworks. Such shore-side electricity supply shall be installed as a priority in ports of the TEN-T Core Network, and in other ports, by 31 December 2025”.

Article 4(6) states:

“Member States shall ensure that shore-side electricity supply installations for maritime transport, deployed or renewed as from 18 November 2017, comply with the technical specifications set out in point 1.7 of Annex II.”

The Government have consulted and responded to the consultation on the directive, except that in the consultation they have scrupulously put the implementation of article 4(6) into train by insisting that statutory operators

“must ensure that new or renewed shore side supply installations must comply with certain technical standards”.

Frankly, I imagine that that will be fairly easy to comply with given that none exist. Of course, there is not a mention in the consultation or response of the rather more difficult point made in article 4(5).

In other words, as far as I can see, the Department does not intend to do anything about that. So my other call this afternoon—or rather perhaps a question—is about why the Department has apparently ignored one of the central points of the alternative fuels directive. Does it intend to put that right and get on with a programme of installing shore-to-ship charging before we are no longer mandated to do so at the end of the transition period of leaving the EU? Or does it just intend that such a mandate might just slip away and get lost after our exit from the EU is complete? If the latter is the case, that will be a sad outcome both for Southampton and all the populations of the ports around the country who welcome and support the port activity in their towns and cities but want those ports to be contributors to the health and clean air of their cities rather than detractors.

I hope that the Minister has a positive response for me this afternoon so that I can wish her, as well as everybody else, a happy Easter.

Public Sector Pay

Alex Sobel Excerpts

Monday 4th December 2017 Westminster Hall

[Alex Sobel (Leeds North West) (Lab/Co-op)]

It is a pleasure to serve under your chairship, Mr Hanson. I thank my hon. Friend the Member for Warrington North (Helen Jones) for so eloquently leading the debate. As a GMB member, I feel privileged to be able to speak in a debate on pay and pay inequality, because it is surely one of the most important issues facing the United Kingdom today. I have had hundreds of emails from Unison members and hundreds of postcards from members of the Royal College of Nursing on this very issue. In summer 2016, the Prime Minister promised to fight against what she called the “burning injustices” in British society. This weekend, the four key members of the Prime Minister’s Social Mobility Commission resigned, citing little hope that the Government could deliver a more equal society. What more damning indication is there that the Government are failing?

[Graham Stringer in the Chair]

It is clear that this country has a problem with wealth inequality. A recent report by the Resolution Foundation states that 1% of adults own 14% of the nation’s assets. At the other end of the scale, 15% of the British people own no assets at all. The reality now is that wealth inequality is hitting public sector workers—our social workers, police officers and firefighters—who are the very backbone of our society. That is largely down to the public sector pay cap: one of the most iniquitous policies the Government have come up with, and a policy not just of this Government but of the previous coalition Government with the Liberal Democrats—one might note that they are not in the Chamber.

In 2010, when the coalition Government was formed, the country was told it needed to make sacrifices to reduce the national debt. David Cameron’s exact words— I am sure we all remember them—were:

“we’re all in this together”.

Seven long years later, debt is still rising. The date for the eradication of debt, as my hon. Friend the Member for Crewe and Nantwich (Laura Smith) said, has been pushed further and further back; and all our public sector is in crisis, because of the harsh austerity economics of those two Governments. All in all, the cost of living has risen by about 22%, while public sector pay has not just stagnated but fallen back, in real terms.

The Government have created a system in which the people we rely on most cannot afford to live in 21st-century Britain. To me, that does not scream of a society where we are all in it together; I am sure it does not to the other Members in the Chamber, either—or perhaps that is not true of all of them. Is it not entirely reasonable for public sector staff to ask what their sacrifice has been for? Is it not reasonable for nurses to ask why more and more of them are having to take second jobs, or use food banks, to feed their families? Is it not reasonable for firefighters to ask why 27% of their colleagues have contemplated suicide because of the stress of reduced budgets and increased pressures? Is it not reasonable for teachers to ask why teaching staff and their families across the south of England are ending up homeless because their wages have stagnated while rents have sky-rocketed?

I recently spoke to one of my constituents, who has worked in social care for more than 20 years. He explained the effect that what is essentially a seven-year wage cut has had on his life and his family’s lives. He could have put a down payment on a house, paid for his child to go to university, or saved up for a more comfortable retirement. Yet, despite it all, he told me how they would have accepted a temporary pay cap, to protect the services that he has dedicated his life to. He is not unique; that is the norm for public sector workers, not just in Leeds North West but throughout the country, and I am proud of him and all public sector workers.

While such people have had to make money stretch further, the services they work in have been slashed and they are working twice as hard for less money to keep cash-strapped services from collapse. The Institute for Fiscal Studies has warned that the public sector faces a recruitment and retention crisis as a direct result of the pay cap. On any one day there are 90,000 vacancies for social care jobs in England. Just under 340,000 social care employees leave their job each year. Schools have been forced to increase money spent on advertising for teachers by 61%; that is money being wasted in the education system on recruitment rather than being spent on retaining excellent teachers.

[Mike Amesbury (Weaver Vale) (Lab)]

Would it make sense for the Government to reverse the ludicrous tax cuts for the incredibly wealthy and corporations, amounting to some £19 billion, to fund public servants and end the pay cap?

[Alex Sobel]

That is an excellent point, and if the right hon. Member for Chesham and Amersham (Mrs Gillan) had stayed in her place she would have heard her question answered by my hon. Friend. It is right: corporation tax rates have fallen consistently, but large corporations have not paid their burden of taxation. If they did, it would be to the good of all society, including their own workers and shareholders.

The Metropolitan police have had to take the extreme measure of asking retired police officers to return to work to help them cope with demand. The argument is not only a moral one—although it is a moral one; clearly the pay cap is a false economy, and maintaining it is costing billions. It is not just the recruitment crisis that is costing the country billions; the TUC has also shown that the pay cap has meant public sector staff spending £48 billion less on the high street since it was introduced in 2010, undermining private sector as well as public sector jobs and pay. I have a simple question for Conservative Members—those who are left: who will you turn to when there is no one to put out the fire in your house, when no one keeps criminals off your streets, and there is no one to care for you when you are sick, old or unable to care for yourself? The hypocrisy of the Government is staggering. Praise is lavished upon public sector workers, but is not reflected in their pay packet. Praise does not pay the rent, feed a family, or heat a home.