Oral Answers to Questions

Alexander Stafford Excerpts

Tuesday 7th May 2024 Commons Chamber

[Bim Afolami]

I thank the hon. Gentleman for his point. I note his long-held interest in the co-operative sector, and the work that he does on it. So, what are the Government doing? They are doing two things specifically. First, they recently took the further step of backing the Co-operatives, Mutuals and Friendly Societies Act 2023; they also commissioned the Law Commission to review the Co-operative and Community Benefit Societies Act 2014 to make sure that co-operatives can do as much as possible to benefit the wider economy.

[Alexander Stafford (Rother Valley) (Con)]

Over the past two years, Rotherham Council has spent £240,000 promoting co-operatives and employee ownership. Does the Minister agree that this huge amount of money would be better spent on fixing potholes and opening youth clubs, rather than on an ideological viewpoint, with no measurable outcome for the people of Rotherham?

[Bim Afolami]

I do not wish to comment specifically on Rotherham, but the best way of promoting co-operatives in general is to allow them to thrive as best they can, and to support their members in doing what they do best, which is to help their local economies—not necessarily through huge amounts of public subsidy, but through doing what the co-operative movement was founded to do, which is, as I have said, to support local economies and local people.

National Insurance Contributions (Reduction in Rates) (No.2) Bill

Alexander Stafford Excerpts

2nd reading
Wednesday 13th March 2024 Commons Chamber

[Gareth Davies]

My hon. Friend is consistent in holding the administration in London to account. He is right: as we are still not out of the woods when it comes to the cost of living crisis, the Conservative party has made it clear that we disagree with the Mayor of London’s approach of making motorists poorer.

As I said, building on the changes in the autumn statement, we will once again be supporting working families by reducing the main rate of employee class 1 NICs by two percentage points to 8% on earnings between £12,570 and £50,270 from 6 April 2024. That will cut taxes for over 27 million employees. The average worker on £35,400 a year will save £450 a year, and the majority will see the benefit in their payslips at the start of the new tax year. Taken together with the cuts to NICs in the autumn statement, this tax cut is worth some £900 a year to the average worker.

In addition, we are implementing a further reduction in the main rate of class 4 NICs for the self-employed. The Chancellor announced in the autumn statement that the main rate of class 4 will be reduced from 9% to 8% from 6 April. Today, we are cutting the rate by an additional two percentage points from 8% to 6% from April 2024. That is a total cut of three percentage points in just six months. Combined with the abolition of the requirement to pay class 2, which was announced in the autumn statement, that will save an average self-employed person £650 a year, and benefit over 2 million people across the country.

Together with the autumn statement cuts, this is an overall tax cut worth some £20 billion per year—the largest-ever cut to employee and self-employed national insurance. Because of the action that we have taken, the average earner in the UK now has the lowest effective personal tax rate since 1975. The Government are committed to tax cuts that reward and incentivise work and that grow our economy sustainably and boost productivity. The Office for Budget Responsibility has said that the national insurance cuts announced in the spring Budget will increase the total hours worked by the equivalent of almost 100,000 full-time workers by 2028-29. Because of the cuts, just over 30,000 people will move into work. These reductions in tax will drive more people to seek employment. This is our plan for a simpler, fairer tax system that makes work pay.

[Alexander Stafford (Rother Valley) (Con)]

My hon. Friend is making a powerful Conservative speech about the importance of not just cutting tax but getting more people into work. Has the Department estimated how much more tax revenue will come in as a result of more people working because of these changes, so that we can show that lower taxes actually increase tax revenues for the Exchequer?

[Gareth Davies]

My hon. Friend is right to point that out. A fundamental benefit of reducing tax is that it improves growth in our economy, because more people will be in work and working longer hours. That obviously generates more productivity for our economy, and ultimately more tax revenues for the Exchequer. It is a fundamental Conservative principle that we want lower taxes, and we are delivering that today because it is fiscally responsible to do so, and we are able to do so.

--- Later in debate ---

[James Murray (Ealing North) (Lab/Co-op)]

Let me start by saying that the official Opposition will support the national insurance reductions before us. We have long said that the tax burden on working people is too high and should come down in a responsible way. In fact, when the now Prime Minster was pushing through a national insurance increase two years ago, we opposed it. Labour has consistently said that we want taxes on working people to be lower. Just as we supported the reductions in national insurance in January, we support the further measures announced in the Budget last week that are before us today.

The truth is, however, that neither the national insurance cuts nor anything else in the Budget changes the fact that people across Britain are worse off under the Conservatives. The Government are giving with one hand, but are taking far more with the other. Figures from the Office for Budget Responsibility show that for every £5 that working people will get back from the Government’s national insurance cuts, they will be losing a total of £10 thanks to the Conservatives’ tax plan. That tax plan will leave the average household £870 worse off and will drag 3.7 million more people into paying tax by 2028-29. Last week’s Budget confirms that, even after the changes we are considering today, the tax burden will continue to rise in each and every year of the forecast period, with the UK still set to have its highest tax burden in 70 years. That is the reality of Britain under the Conservatives, and that is why people across the country are saying it is time for change.

The national insurance reductions in the Bill were mentioned by the Chancellor toward the end of his Budget statement last Wednesday. The cuts had of course already been confirmed in the media by Government sources in the days before, so they came as no surprise. Many of us in the Chamber were wondering whether the Chancellor would follow the time-honoured tradition of ending his Budget by pulling an unexpected, and as yet unannounced, rabbit out of the hat. It turns out he did have a rabbit, but even after all the chaos of the Conservatives over the past few years, many of us could not quite believe what we were hearing: the Chancellor’s big pitch to the British people in the last Budget before the general election was a £46 billion unfunded tax plan.

As people across Britain continue to suffer the impact of the disastrous mini-Budget of 2022, the Conservative Chancellor announced that he would go into the general election with a plan to abolish national insurance, leave a £46 billion hole in the public finances, put family finances across the country at risk, and create huge uncertainty for pensioners. It is frankly the height of irresponsibility for the Chancellor to use the opportunity of last week’s Budget—an opportunity that should have been used to set out a long-term plan to grow the economy—to follow in the footsteps of his reckless predecessor with a £46 billion unfunded tax cut.

In fact, though, perhaps my comment is unfair to the Chancellor’s predecessor, because even he now seems to be critical of the current Chancellor’s approach. Yesterday, the right hon. Member for Spelthorne (Kwasi Kwarteng) told the BBC’s “Politics Live” that he thinks the Chancellor should indeed spell out how he will pay for the abolition of national insurance. It is quite something when the Chancellor who crashed the economy after his disastrous mini-Budget publicly calls on the current Government to be more responsible.

The truth is that promises of unfunded tax cuts have nothing to do with growing the economy, and everything to do with propping up a weak Prime Minister who is desperately trying to survive in a divided Conservative party. This reckless behaviour shows that the Conservatives are blindly putting party first and country second. For the good of the economy and of the millions of hard-working people who are still paying the price for the disastrous mini-Budget, I urge Treasury Ministers when they respond finally to come clean about how they will pay for their £46 billion unfunded tax plan.

Over the past week, we have seen Ministers struggle with that question. The day after the Budget, the Secretary of State for Work and Pensions implied that he did not feel the need to explain how the commitment would be funded as it was only “an aspiration”. On Sky News that day, the Exchequer Secretary to the Treasury seemed to think that the Conservatives do not need to explain how they will fund their promise as it may “take several Parliaments”.

The position of the Prime Minister and Chancellor is clear, however. In an email to his party members on Budget day, the Chancellor confirmed that abolishing national insurance would be a priority for the next Parliament, if the Conservatives win. The next day, he suggested that that could be achieved by merging national insurance into income tax, a move that raises the prospect of a huge tax hike for pensioners. On the Saturday after the Budget, the Prime Minister confirmed again that abolishing national insurance would be a priority for the Conservatives in the next Parliament, if they are still in Government.

Let us be clear: this is a £46 billion unfunded tax plan. It is a plan that comes from the top of the Conservative party about what they would do in the next Parliament. It comes straight out of the same playbook as the Conservatives’ disastrous mini-Budget that crashed the economy. This unfunded plan is yet more chaos and recklessness from the Conservatives. Only Labour will bring stability and security back to the British economy.

If Treasury Ministers disagree that their party is the reckless party, they can clear this up today by explaining how they will pay for their £46 billion tax cut. Will it be funded by higher income tax? Will it be funded by cuts to public services? Will they push up borrowing? The Conservatives’ unfunded tax plan blows a £46 billion hole in funding earmarked for the state pension and the NHS. They need to come clean today about what that means for people’s tax bills, pensions and public services.

To be fair, the Chancellor has at least hinted how he thinks that the Conservatives could pay for the abolition of national insurance: his proposal to merge national insurance with income tax. Of course, taking that route and replacing the revenue from employee and self-employed national insurance contributions with greater basic and higher rates of income tax would mean rates of income tax going up by 6.5%. That would hit all income tax payers and cause particular alarm for pensioners. Under the Chancellor’s planned merger, pensioners—who do not currently pay national insurance—could see an average tax hike of about £800 each. A retired pensioner with an income of £25,000 from a mix of private and state pension paying an extra 6.5% on their income above the personal allowance would see their income tax bill rise by more than £800.

Furthermore, national insurance contributions are what determine people’s entitlement to the basic state pension. The Conservatives’ plan to abolish national insurance in the next Parliament would sever the link between contributions and pension entitlement. Will the Minister explain, under their plan to abolish national insurance, how people will know what their future entitlement to the state pension will be? What would be the basis for state pension entitlement without employee national insurance contributions? Does their plan mean the end of the state pension as we know it? I hope that the Minister will take this opportunity to give clear answers to all those questions, or else confirm that the Conservatives have dropped their unfunded plan to abolish national insurance altogether.

[Alexander Stafford]

I have a lot of respect for the hon. Gentleman. He comes from a professional background, and, compared with most people on the Labour Benches, normally knows what he is talking about. However, I want to follow his logic when it comes to what he claims is a reckless potential abolition of national insurance. If abolishing all national insurance is reckless and will lead to the country going to hell in a handcart, as he so wants to portray it, why is Labour not opposing a reduction in national insurance? Surely, if he does not oppose a reduction in national insurance, his argument completely falls down, because that means that national insurance can be got rid of.

[James Murray]

I thank the hon. Member for his intervention—I think. He misses the point. The commitment by the Chancellor, the Prime Minister and, I think, the Treasury Ministers, although they seem to oscillate a little in their position, is to get rid of national insurance entirely—to abolish it at a cost of £46 billion—but they are refusing to say how that would be funded. We saw what happened in autumn 2022 when unfunded tax cuts were proposed by the Conservative Government: it crashed the economy and pushed up people’s mortgages and rents. That is the risk of the Conservatives to the British people, that is the risk to the economy, and that is why we need a general election.

If the Conservatives want to move on from this discussion, they should give assurances on the matter when they respond to the debate. If they do not give those assurances and are not able to distance themselves and rule out their plan to abolish national insurance, we will know that they have essentially given up on governing, are incapable of acting responsibly, and are putting their party before the country with their reckless plans.

As I said at the start of my speech, we will support the Bill because, after 14 years of the Conservatives and 25 tax rises in this Parliament alone, the tax burden on working people is too high. Labour wants the tax burden on working people to come down in an economically and fiscally responsible way. However, let us be clear about the context of this Bill and the changes it makes to national insurance. Even with the Bill’s national insurance cuts in place, households across Britain are set to be an average of £870 worse off as a result of the Conservatives’ tax plans, and the tax burden in the UK is still set to rise to its highest in 70 years.

To make people better off and support public services, we need a plan to get the economy growing. We needed last week a Budget with a long-term plan to bring about growth and help to rebuild our public services. That is what the country needs, and that is what Labour is offering with our plan to grow the economy through stability, investment and reform. That is not what we saw last week, however. According to the British Retail Consortium, the Chancellor did

“little to promote growth and investment”.

The British Chambers of Commerce said this morning:

“the UK stills lacks a clear industrial strategy to unlock long-term growth.”

Faced with a record tax burden, failing public services and no plan for growth, we see the Conservatives grasping desperately for positive headlines by announcing a reckless, irresponsible and unfunded £46 billion tax plan.

I wonder whether the former Prime Minister, the right hon. Member for South West Norfolk (Elizabeth Truss), approves of this plan. Maybe she feels outdone, with this unfunded tax plan coming in at £1 billion more than hers. Either way, the conclusion is clear: chaos and recklessness are the currency of the Conservatives. Only Labour will bring stability, security and responsibility back to the economy, and only a general election will give the British people the chance to vote for change.

UK Economy

Alexander Stafford Excerpts

Monday 19th February 2024 Commons Chamber

[Bim Afolami]

The right hon. Gentleman makes an interesting point, but I would say that our economy entered difficult times at a different point in the cycle from certain other economies. To fully assess the performance of all economies, we have to wait for the end of this whole period, so I would not prejudge exactly at this stage. I simply say that the difficulties we are facing have affected every single economy, although the nature of different economies means that they are affected at different times. We are putting in place comprehensive growth measures and comprehensive measures to bring inflation down. I also note that UK interest rates are roughly middle-of-the-pack compared with other countries of comparable size. We will keep all this under review and, at the next fiscal event, will take further measures to increase our potential growth rate over the long term.

[Alexander Stafford (Rother Valley) (Con)]

Does the Minister welcome the news that the South Yorkshire Mayor has finally recognised the economic importance of Doncaster-Sheffield Airport and is at last starting to use the powers given to him to begin the process of getting it up and running again? Does he agree that that has taken far too long—it is years since the airport closed —and that the South Yorkshire Mayor should have used his powers years ago, rather than waiting until nine weeks before he is re-elected?

[Bim Afolami]

I thank my hon. Friend for pointing out once again what a brilliant champion he is for his constituency. I am sure his constituents have heard that comment, and that he will continue to make that point.

Oral Answers to Questions

Alexander Stafford Excerpts

Tuesday 14th November 2023 Commons Chamber

[Laura Trott]

We understand that things are really tough at the moment, which is why we have put in place £900 of cost of living support this year, but we also all need to work on bearing down on inflation. We are seeing it start to come down, but we know it is still too high, and we hope we will reach the Prime Minister’s pledge of halving inflation, because that is the biggest help we can give to households this year.

[Alexander Stafford (Rother Valley) (Con)]

8. What steps his Department is taking to help mitigate the potential impact of environmental, social and governance practices of financial institutions on levels of investment in the defence sector.

[The Economic Secretary to the Treasury (Bim Afolami)]

The Secretary of State for Defence and my predecessor, my hon. Friend the Member for Arundel and South Downs (Andrew Griffith), recently set out that the values within ESG practices of financial institutions should never undermine capabilities developed to help us preserve peace and security. The Treasury recently consulted on a potential regulatory framework for ESG ratings providers, which aims to improve transparency and promote good conduct. I hope this will address some of the issues that defence companies have raised.

[Alexander Stafford]

ESG is so vital when it comes to investing in all our services, including defence. We were promised that the “Greening Finance” road map would come out at the end of 2022. Then we were told that the consultation would come out by autumn this year. It is still just about autumn, and it is yet to come out. Why are the Government kicking ESG down the road? Why have they stopped caring about ESG, and when will we have the consultation to get a UK green taxonomy sorted?

[Bim Afolami]

I thank my hon. Friend for his question. [Interruption.] I do; I know how much he cares about these issues and campaigns on them frequently in the House, and I commend him for it. The Government are committed to delivering on a UK green taxonomy to provide investors with clarity on which economic activity should be labelled as green. We expect to consult this autumn. The green taxonomy will provide an important tool for enabling the supply of relevant and reliable sustainability information for the market, and information will come in due course.

Environmental, Social and Governance Developments

Alexander Stafford Excerpts

Monday 23rd October 2023 Commons Chamber

[Alexander Stafford (Rother Valley) (Con)]

As the founding chairman of the all-party parliamentary group on environmental, social and governance, I am delighted to have secured the first ever debate on environmental, social and governance developments in the UK in this place. I refer the House to my entry in the Register of Members’ Financial Interests and to the all-party group’s interests as well.

ESG is a set of characteristics that can be used to assess the non-financial elements of an investment or business decision. In its simplest form, ESG is a way to take into account potential risks and rewards that might not be obvious from a balance sheet. Everyone, in their own way, incorporates ESG criteria into each and every economic decision, even if unknowingly.

For instance, the property developer does not buy land next to a crumbling cliff; a family might choose not to go to a particular shop because they have heard that it treats its employees badly; or a woman might change jobs to work for a firm that is fighting the gender pay gap. ESG is simply the use of non-financial criteria in decision making—a way for investors, companies and individuals to get a bigger picture of the impact of their investments, which will help them better understand the risks and, more importantly, the rewards.

Recently, there has been much debate about ESG, as it has risen in prominence. The number of ESG assets under management has grown by more than 150% since 2015, with global ESG assets expected to exceed £41 trillion or about four times the value of all the assets held in the UK. They will also account for a third of all assets under management by 2025. This scale-up has been met with some concern about ESG perhaps having some underlying political current. This is wrong. In its true form, ESG is simply an investment strategy—one that, like all investment strategies, aspires to low risk and high return. ESG is not a political stance, a way of life or a mantra for investors, although of course in some situations it is unfortunately used wrongly to pursue certain political agendas. In others, it is seen as shorthand for ethical or impact investing. However, it is neither.

In this debate, I will be sticking to our definition of ESG as an investment strategy and hoping to make the case to Government for why we should be encouraging it, what problems we have to overcome and how best to claim the crown, and the associated benefits, as the world leaders of ESG investing.

[Jim Shannon (Strangford) (DUP)]

I commend the hon. Gentleman for securing this debate. Does he agree that if we create a science-based and world-beating taxonomy, businesses that can show alignment with the UK green taxonomy will automatically be in alignment with international taxonomies, which should ensure that there is no divergence, which should subsequently enhance our capacity? Does he further agree that Government and the Minister have a role to play in assisting businesses to achieve that potential, so that all of us in the United Kingdom of Great Britain and Northern Ireland can gain and everybody can be a winner?

[Alexander Stafford]

I thank the hon. Member for intervening; it is always a pleasure when he joins such debates. He mentioned the Minister, who I know has a good, keen, personal interest in ESG, having worked in the field prior to coming to this place. The hon. Member is completely right about the green taxonomy. We need a robust taxonomy—I will come to that later—but it is a shame that we are behind where we should be with the green taxonomy. We need to be careful to ensure that our green taxonomy is robust and world leading. One of the many benefits of leaving the European Union is that we can define what we want and how we want it ourselves. By having a UK green taxonomy, we can ensure that we are world leaders in the UK, including in Northern Ireland especially, which I know has a high level of financial services.

Let me go back to the meat of my speech. It is not the case that those investing along ESG lines do not want to see good done for planet and people—they do. For example, we know that ESG investors are sometimes willing to pay higher fees and to see lower returns than their more returns-focused peers. The Wall Street Journal reported earlier this year that ESG funds could charge up to three times more. I do not exclude those types of companies and investors from this discussion. Rather, in holding the first ever debate on ESG in the House, I hope that more discourse will lead to more action.

It is clear that using non-financial metrics, and thereby factoring in all the data available to make the most rational, informed investment decision possible, will lead to financial returns. For example, more ESG-aligned employers will be able to hire better candidates for less—something known as taking a green cut, which is the attitude that up to 48% of younger people were recently reported as taking. Equally, improving environmental ratings through technology can lead to huge efficiency savings for companies. For example, some studies have shown that using low-energy lighting has a payback of less than 12 months, which is a win for the company’s bottom line and its sustainability standards. This reflexive impact of ESG is known as “double materiality”, which is how a business is affected by changing conditions—be they climate, social, or governance—and what that company is doing to contribute to or militate against those changes. That is becoming more and more important for investors to factor in.

There are also huge financial benefits to be gained from embracing ESG for the whole country, including Northern Ireland. The UK is already home to the oldest and most trusted conventional financial centre. That is coupled with the City of London’s commitment to sustainability, topping the Global Green Finance Index. Therefore, with a little extra effect, we will secure a home for ESG investors inside our border.

ESG’s recent rise in popularity has caused some growing pains. Primarily, the lack of universal frameworks and metrics mean that trust in ESG is at an all-time low, as we have seen in anti-ESG proposals approved by boards globally. In ESG investing, as in all business, trust is paramount. Just as an investor must be sure that their investment is sound, and that they will not suddenly find themselves out of pocket, an ESG investor needs to be sure that any claims to sustainability are true.

We have a rich history of accounting for financial accuracy in this country, with the Domesday Book perhaps being the earliest example—in that case, the new, or relatively new, King William checking that his investment was as profitable as he had thought. That invasion of 1066 did not come cheap. It took 800 years, and a parliamentary Select Committee to develop something closer to modern accountancy practices, but the UK is now an oasis of bookkeeping and verifiable investing. Fraudulent financial claims can be easily spotted and shut down. Why then, is the same not the case for fraudulent ESG claims?

One of the main causes of the problem is that much of what ESG seeks to account for is intangible and therefore incalculable with our current frameworks. How, for example, might a company begin to calculate its effect on biodiversity? What metric can an investor look for to see an investment’s diversity score? This problem is not insurmountable. Twenty years ago, as major economies were waking up to the true effects of increasing carbon emissions and climate change, the issue of how to count carbon seemed similarly difficult. Today, after much trial and error and leadership from the UK, we can quickly and easily calculate the carbon footprint of any business, person, or product.

Developing frameworks to help business understand, quantify and account for non-financial factors is difficult but very important. Proper frameworks are the first lines of defence against a full breakdown in trust in ESG reporting and investing. They will also help to stop so-called greenwashing, where a product or investment is marketed as being more sustainable than it is. Despite the name, this applies across all three ESG objectives. Such distrust is made worse by some ESG advisers and ratings agencies, whose business plans seem to depend on being able to sell five-star ESG ratings to the highest bidder, without giving any proof of them whatever—a veritable wild west of the ESG world. Of course, many of these businesses are doing comprehensive evaluations of the products, but given the difficulty that an investor would have in distinguishing the good ratings from the bad, it is hardly the confidence-inspiring boost that they need.

I know that the Treasury is well aware of the concerns, and I am pleased that there was a consultation held earlier this year on how best to introduce regulation on ESG ratings. This is a good and necessary step, but we are in danger of winning the battle but losing the war if we delay any further. I urge the Minister to speed up this regulation as much as possible.

We can go further than regulation, however, and set up the frameworks we need to allow any investor or company to understand quickly and easily the ESG impacts of their investments. A taxonomy—essentially a classification of what is and what is not allowed—would do just that, and the Treasury’s plan to develop a UK green taxonomy is exactly the right step. This taxonomy, as well as its social and governance cousins, would clearly outline investments that are sustainable—and therefore could be marketed as such—and those that are not. Given that the EU’s version of a green taxonomy is dead in the water—it is a bureaucratic nightmare that is no longer fit for purpose—we can make our own decisions here.

We are lucky that, thanks to Brexit, we have been given the chance to design our own robust taxonomy, one that could and should lead the world and entrench the UK as the true home of sustainable finance. Sadly, we have seen our taxonomy delayed and delayed and delayed. I was pleased to see the UK green taxonomy mentioned in this year’s green finance strategy update, but on the original timeline we should already be halfway through the legislative process by now.

--- Later in debate ---

[Mr Deputy Speaker (Sir Roger Gale)]

I am not sure whether the hon. Gentleman is aware, but one of the arcane practices is that because the Adjournment debate started before 10 o’clock, we had to move the motion again at 10. The hon. Gentleman has the Floor.

[Alexander Stafford]

Thank you for that guidance, Mr Deputy Speaker, and for explaining some of the wonderful aspects of this House.

I ask the Minister whether he will ensure that investors have a framework to separate the sustainable from the spurious, and whether he will take this chance to outline the full timetable for the taxonomy. He will have plenty of time to do so, as we have more time for this Adjournment debate. I look forward to a full and detailed timeline of when we will get this taxonomy. I am willing for him to intervene now if he so wishes. Clearly he does not.

Perhaps another, less discussed difficulty facing ESG is imbalance. The heavy focus has been on environmental considerations as being the most important, often at the cost of social and governance factors. Let me refer to one recent example of the consequences of failing to take that holistic approach. Dame Alison Rose is clearly a champion for socially sustainable business, particularly around gender equality. She is a torchbearer for women in business, having smashed the glass ceiling to become the first woman to lead a major UK bank. However, despite her very strong credentials in social sustainability and the progressive environmental policy of NatWest Group as a whole, under her leadership there was a clear failure in governance when discussing a customer’s private banking details with a journalist—I think that we all know the gentleman I am referring to.

I am sure that all Members will agree that it is right that Dame Alison resigned over that abject failure of governance, but I also know that many will join me in expressing our disappointment that the further empowering of women in business and entrepreneurship will suffer because of that failure of governance. Excelling in one area does not absolve someone from indiscretions in others. The E, S and G cannot and should not be separated; a failure in one is a failure in them all. Clearer metrics and frameworks, both within each strand of ESG and encompassing all three elements, will allow for better reporting and therefore better understanding for investors and companies. That will, in turn, return the trust that ESG has been lacking.

It is easy to oversimplify the true impact of more data and disclosures, and we cannot ignore the practical implications of such policies, particularly on smaller businesses and individual investors. Since the turn of the millennium there has been a 647% increase in ESG regulations, alongside miles of other red tape in all shapes and sizes. The disclosure burden on investors and businesses is bigger than at any previous point, leading to whole sectors and teams devoted to auditing every aspect of a business. The EU’s own research indicates that its disclosure requirements will cost large firms upwards of €100,000 a year in paperwork alone.

Likewise, the UK green taxonomy, when it is eventually published, will join about 30 other environmentally focused taxonomies across the globe, each needing different types of disclosures. Large companies may be able to absorb that, but it is a potentially lethal issue for small and medium-sized enterprises, which make up 99% of British businesses and have a far more limited staffing and budgetary ability to process those types of disclosures. In pushing for more comprehensive reporting frameworks, we should not bury small businesses under piles of paperwork.

Over the course of my time chairing the all-party parliamentary group, I have been delighted to meet many small businesses that want to integrate ESG into their practices. Many of them, however, have expressed to me their nerves about how to keep up with a continually changing regulatory landscape, and the addition of further disclosures hangs like a dark cloud, so how do we achieve better ESG reporting without overburdening businesses and, perhaps more importantly for those businesses, why should they engage in this space? How do we make ESG work for businesses rather than making businesses work for ESG?

In this debate, I have mostly spoken about ESG as a risk management tool that investors can use as part of their normal investment analysis. There are, however, many upsides for both businesses and the UK as a whole. I have already outlined how a business might utilise ESG to increase efficiency or improve its workforce. For the UK as a whole, though, SMEs are the perfect vehicle for public policy objectives to be achieved without the need for public sector financing or burdensome legislation.

The all-party parliamentary group’s latest report—on women in business, to be published tomorrow—is perhaps a good example. It is a sad fact that women are still under-represented in business today. That is not only a social problem; it also represents a £250 billion gap in our economy. Luckily, as in other areas, the private sector is far ahead of policymakers here. Thanks to private firms and independent groups, the UK has one of the highest levels of female representation on boards in the world; it is beaten only by countries that have legislated to force companies to adhere to quotas. Top-down government can make serious strides, but the home straight will always require us to rely on great British businesses. We cannot let them down.

ESG adds value to business, but it cannot become a barrier. Many Members will, like me, have heard concerning reports about some companies, particularly those involved in defence, being excluded from access to investment and capital on ESG grounds. As the Government’s defence Command Paper points out, there is no contradiction between investing along ESG principles and the defence industry.

I have already spoken about the concerning anti-ESG movement, much of it stemming from the view that a movement for divestment in such contentious businesses is because of a political stance. Again, I argue that that is a mischaracterisation of ESG. Instead, and like the Government, I believe that ESG allows investors to factor in the environmental, social and governance impacts of these firms into their decision-making process and helps firms to take action that will result in better returns. These factors should not be unduly taken out of context for political reasons.

Governments need to create an environment where businesses can disclose problem areas without the fear of backlash, so long as they are responsible. Good investors can be a driving force behind companies cleaning up their acts. We must continue to ensure that all businesses have access to the capital they need from reputable, interested investors. We have seen continued protests as part of an environmental campaign, calling for businesses to divest away from oil and gas. But that would actually be detrimental to the world’s overall climate ambitions.

Once contentious industries such as oil and gas, defence, tobacco or alcohol can no longer rely on investment from large, public companies that are open and clear about their business ethos, they will most likely leverage finance from less savoury investors. It is in our interests to engage, not divest, and make sure that trusted investors retain a hand on the wheel of these industries, to steer them to a more sustainable and better future.

The issue is not just about a handful of industries. When faced with challenges that may bring public and investor backlash, all firms need to feel secure that they are able to disclose bad practices and work to rectify them, rather than quietly divesting of the malpractice. I will give one example: the International Labour Organisation estimates that there are nearly 50 million modern slaves across the world today. It is almost impossible, therefore, for any large company not to use modern slavery at some point in its supply chain. As much as 20% of worldwide cotton production stems from slave-labour—Members in the Chamber today could be wearing slave-manufactured clothing.

What should a responsible clothing business do if it discovers that it has been accidentally buying slavery-produced goods? Should it quietly switch suppliers and hope that the next one does not have the same problem, or should it work with the supply chain to end the practice of slavery? Divestment for fear of repercussions will not solve environmental, social or governance problems, and companies should not be penalised for bringing accidental wrongdoings to light.

Making ESG work for businesses requires that they should be able to show investors what they are doing to tackle poor business practices without fearing that they will be left without access to capital. The frameworks we build must include room for transitional sustainability improvements, allowing investors and companies to own up to their failings and work to improve them, rather than divesting and passing the problem along.

Having outlined why we should be encouraging ESG, what problems we face in doing so and how it can help business, investors and the UK as a whole, we must now ask what real action we can take to achieve this. I have in this debate referred consistently to frameworks or metrics, which will give certainty and clarity, but what form should they take? Any framework needs to be credible, useable and, importantly, international. What is more, we need to act quickly to ensure that the UK is the go-to place for ESG. Will the Minister be sure to look into speeding up the publication of frameworks and regulations designed to restore trust in ESG?

The importance of credibility in a framework was confirmed by the EU’s recent green taxonomy failures. As Members will know, the EU decided to include natural gas in its green taxonomy, effectively allowing any product using energy derived from fossil fuels to claim it was “green.” That is perhaps the most serious and egregious example of greenwashing, and it completely undermines any pretence that the EU’s taxonomy can be relied upon to build the trust that I have been so clear we need. Our own framework, and certainly our own green taxonomy, must not have the same problem. Can the Minister assure me that any framework will be science-led, and that ensuring trust will be a key consideration in the design of those frameworks? We may be delayed in our green taxonomy, so ours may not be the first, but let us make it the best. Let us learn from the mistakes made by other countries so that the UK is the gold standard.

Going further, if the UK is to be the ultimate home for ESG, we need to create metrics for ESG criteria that are currently unquantifiable. Much of the work that has already taken place has gone into fleshing out areas with existing data, but in order to ensure that greenwashing cannot happen across any element of ESG, we need to drive forward progress on creating standardised metrics for areas such as biodiversity, community impacts, management structures and so much more. To ensure that the UK is truly world-leading, will the Minister be sure to speak to his colleagues at the Department for Environment, Food and Rural Affairs and the Department for Work and Pensions to create cross-governmental taskforces that will be able to create those types of framework?

Usability is also vital. As I have mentioned, particularly in reference to SMEs, burdening investors and businesses with extra regulation should not be the objective of any Government, let alone a robust Conservative Government. Any framework must allow for companies to disclose failures and work hard to redeem themselves. Companies’ work to achieve better results should be what they are judged by, rather than their failures. To encourage businesses to use ESG to their advantage along the lines that I have described, and so that the UK can leverage the firepower provided by our booming private sector, will the Minister ensure that making the UK an ESG hub will not have negative impacts on businesses and investors? We must look after SMEs.

Today’s supply chains, employees and financial flows span the world. It is our duty as policymakers to help British businesses and investors benefit from being part of the global economy. When it comes to ESG, that will mean working with the frameworks of our international partners and using our Brexit freedoms to design a system that allows for international co-operation. The Government’s signal earlier this year that we will be adopting wholesale the international financial reporting standards created by the International Sustainability Standards Board is a great start and will ensure that we remain international players, but I want us to be international leaders, especially as the EU will continue to build its own full disclosure system. Can the Minister confirm that we will continue along this path whenever possible?

ESG is not going away, and the UK should not be concerned about or discouraging of it. I must again pay tribute to the Government for already being proactive in creating a welcome environment for ESG, of which I know the Chancellor is already a keen advocate, but if we are to become the global home for ESG, we must move faster and do ever more. I hope that this place sees many more debates on the topic, and that we continue to open lines of communication and inquiry on one of the fastest growing sectors across the UK. As a home for ESG, we have strong foundations, but before we can fully welcome ESG inside, we must make sure that the structure is solid, or it risks total collapse.

[The Exchequer Secretary to the Treasury (Gareth Davies)]

I congratulate my hon. Friend the Member for Rother Valley (Alexander Stafford) on securing the debate, not least because, amazingly, it is the House’s first dedicated debate on this subject, which is remarkable—it will certainly not be the last. I know that he cares a great deal about this subject, not only as the chair of the APPG on ESG, but from his career. He speaks with great authority and knowledge of the subject, and I am grateful to him for the opportunity to set out the Government’s position on the important issues that he raised.

My hon. Friend will be aware of our steadfast commitment, enshrined in law, to reach net zero greenhouse gas emissions by the year 2050. We already lead the world on tackling climate change: we have decarbonised faster than any other major economy since 1990, reducing our emissions by nearly half while growing our economy by some two thirds. Renewables have gone from less than 7% of our electricity supply in 2010 to 48% in the first quarter of this year, which is fantastic progress. However, as the Prime Minister has said recently, we will not stop there. The Chancellor has set out his view that the UK’s green industries are key to creating growth across this United Kingdom and our whole economy, and the Prime Minister’s announcements have outlined how the Government are working to unblock key barriers to investment and decarbonisation.

Growing the sustainable finance sector to support the transition to net zero is a major priority for this Government, and in March we published our green finance strategy. The strategy sets out the policies, regulatory changes and frameworks that we will be focusing on and taking forward in the next two to three years, helping businesses to have more certainty. It includes, for example, our commitment to deliver a useful and usable UK green taxonomy—an important evidence-based classification tool that will clearly define what is meant by “green” so that the market knows where to channel investment. As the hon. Member for Strangford (Jim Shannon) rightly highlighted, that supply of relevant and reliable information will help guide us all in financing activities that actually support our net zero and environmental objectives, while making clearer where damaging greenwashing is taking place.

Businesses that claim to be delivering green outcomes while doing no such thing not only continue to damage our environment, but damage our collective efforts to reduce the impact on the natural world by undermining the efforts of their competitors and the confidence of the public. This is clearly something that we need to tackle. The Competition and Markets Authority has led a crackdown on greenwashing advertising; the green taxonomy will go much further, making it easier to test and verify claims across the board. I can tell my hon. Friend the Member for Rother Valley that our next step towards delivering that taxonomy—something that he has directly asked for—is direct consultation, as he would expect. That consultation will take place this autumn, ensuring that we gain market views. It is right that we do so, as that will help build trust in the process and build on lessons learned in other parts of the world.

[Alexander Stafford]

I am pleased that my hon. Friend is speaking so passionately from the Dispatch Box about the importance of building up trust. Does he agree that if we get this wrong, ESG greenwashing could be the next payment protection insurance scandal—something that everyone signed up for decades ago, for which we are still paying the price even now? If we get this wrong, we will face huge financial disadvantages and penalties down the line, so we must get the taxonomy right.

[Gareth Davies]

One of the reasons why we are looking at a UK taxonomy and being clear that we want to introduce one is to ensure that there is great transparency and clarity for investors; that, when they buy an investment product, they know what they are getting. One of the things that has historically been lacking in the market is an understanding of what fund managers mean by “green”, so investors are put at a disadvantage and at risk of not purchasing what they believe to be a green product. We will see how that consultation goes, but I assure my hon. Friend that it will take place this autumn.

On a global scale, the markets for ESG ratings and data are rapidly developing, and they are increasingly relied on by investors to guide their decision making. The growth of the integration of ESG into the investment process is expected to continue across all jurisdictions. However, ESG ratings providers currently fall outside the regulatory perimeter. This raises the risk of harm with unrated ratings, which often lack transparency, directing capital flows towards some companies and projects, and away from others. We are therefore exploring action to address these growing ESG investment trends, to ensure that this activity is robust, and that it protects UK markets and, ultimately, consumers. Alongside the updated green finance strategy, the Treasury has published a consultation seeking views for a potential future regulatory scheme for ESG ratings providers. The consultation closed on 30 June, with 94 responses received from industry, and we are reviewing those responses to inform the next stages of our work.

Any potential regulation would be aligned with recommendations made by the International Organisation of Security Commissions on how ESG data and ratings providers could improve their activities, such as improving transparency and mitigating conflicts of interest. It would also seek to be aligned with other jurisdictions, including those of Japan, Singapore and the EU, which are putting forward initiatives in this space. More transparent ESG ratings would build confidence in these products and the wider sustainable investment market, as investors would be better able to understand how their money is put to use.

Since the UK is at the forefront of international efforts on this issue, we have the opportunity to shape the approach of other jurisdictions. If they are to follow us, it is incumbent on us to set a good example, so we must recognise and address where ESG principles are misapplied. As my hon. Friend has pointed out, we have seen concerns around banking raised recently. We have been clear that, as a matter of public policy, it is wrong to remove someone’s bank account simply because of their political views. Free speech and the legitimate expression of differing views are essential British principles, just as much as is ESG.

Let me conclude by saying that I hope that, in the time I have been given, and in the time we had listening to my hon. Friend, he and other hon. Members can now appreciate that this country has built a sustainable finance market, product set and industry of which we should all be proud. We are one of the world’s great democracies, a country that advocates for the fair and considerate treatment of the environment and the people of this world, and one that practises what it preaches. We are determined to carry that on, making conscientious decisions that work for our country, supporting our finance industry to play an important role in our economy and, of course, in society.

Question put and agreed to.

Oral Answers to Questions

Alexander Stafford Excerpts

Tuesday 20th June 2023 Commons Chamber

[Andrew Griffith]

Yes, I will. I have had conversations with the hon. Member about that, and I will take up the case of any unwarranted delays.

[Alexander Stafford (Rother Valley) (Con)]

8. What fiscal steps he is taking to support the technology sector.

[Laura Farris (Newbury) (Con)]

15. What fiscal steps he is taking to support the technology sector.

[The Chancellor of the Exchequer (Jeremy Hunt)]

I have set out our national ambition to be the world’s next silicon valley. We are making good progress; last year we were ranked the world’s third largest technology market after the United States and China.

[Alexander Stafford]

Ultimate Battery in Thurcroft in Rother Valley is developing groundbreaking battery technologies and is on track to create 500 new jobs by 2025. What help can the Department give me and my constituents to help burgeoning businesses such as Ultimate Battery, to make Rother Valley and other places across the north technology hubs?

[Jeremy Hunt]

I thank my hon. Friend for his support for this really important sector in Rother Valley. We have a number of schemes, including £541 million of funding available in the Faraday battery challenge. We also have the £1 billion automotive transformation fund. As a result of the efforts that he and many others have made, we now get 40% of our electricity from renewable sources—the second highest in Europe—and much more progress is to come.

Oral Answers to Questions

Alexander Stafford Excerpts

Tuesday 9th May 2023 Commons Chamber

[Alexander Stafford (Rother Valley) (Con)]

7. What steps he is taking to support financially people on lower incomes.

[David Simmonds (Ruislip, Northwood and Pinner) (Con)]

15. What steps he is taking to support financially people on lower incomes.

[The Chief Secretary to the Treasury (John Glen)]

The Government are taking action to protect struggling families by providing support, worth £3,300 per household on average over this year and last, to help with higher bills. That includes targeted support for the most vulnerable in our society through additional cost of living payments and the uprating of benefits by 10.1% this year. The Government have also increased the national living wage by 9.7%, representing an increase of more than £1,600 in the annual earnings of a full-time worker on the national living wage.

[Alexander Stafford]

Does my right hon. Friend agree that the best support in the cost of living crisis, beyond the £94 billion that the Government have already spent, is the cutting of inflation to ease pressures—especially on food, fuel and energy—for families in Rother Valley and up and down the country?

[John Glen]

I absolutely agree. The Government are doing three things to reduce inflation: we are remaining steadfast in supporting the independent Monetary Policy Committee at the Bank of England as it continues to take action to return inflation to target; we are making responsible decisions on tax and spending, so that we are not adding fuel to the fire; and we are tackling high energy prices by holding down energy bills for households and businesses, alongside investing in long-term energy security.

Cost of Living Increases

Alexander Stafford Excerpts

Tuesday 25th April 2023 Commons Chamber

[Tulip Siddiq]

I am just about to come to the part of my speech about the windfall tax and business rates, so if the hon. Gentleman listens carefully, he will hear. The talents and efforts of working people and British businesses mean that we lead the way in financial and legal services, and the tech and life sciences sectors. With a proper industrial strategy, the UK economy will not just lead the pack again, but communities written off by the Conservatives will have the backing they need to make their full contribution to our great nation. Labour will achieve that by forging a new covenant between Government and industry, bringing in public investment through our green prosperity plan to support new industries. That will include investment in areas such as fuel cell manufacturing, nuclear, hydrogen and home insulation to bring down energy prices and create well-paid jobs in the industries of the future across the UK, while fixing the holes in the Brexit deal and bringing in a proper supply chain strategy will help to tackle inflation and build the resilient trading economy we need to get ahead.

Labour will work in partnership with businesses to help people get the skills and opportunities they need. We will not leave potential untapped. We will fix the apprenticeship levy, improve local employment services and help first-time buyers get on the housing ladder through a comprehensive mortgage guarantee scheme to boost local living standards. Only Labour, through our plan to grow the economy, will create the conditions for a good life in every part of the country. We will create well-paid jobs, bring home ownership back within reach for young families and ensure that the NHS delivers for all.

[Alexander Stafford (Rother Valley) (Con)]

Will the hon. Lady give way?

Oral Answers to Questions

Alexander Stafford Excerpts

Tuesday 21st March 2023 Commons Chamber

[Jeremy Hunt]

It is not just about doctors leaving the profession, but doctors reducing their hours. The Royal College of Surgeons says that 69% of its members have reduced their hours as a result of the way that pension taxes used to work. Doctors themselves have welcomed the Budget warmly and as potentially transformative for the NHS.

[Alexander Stafford (Rother Valley) (Con)]

T10. On behalf of all the residents of Rother Valley and especially Dinnington, I thank the Chancellor for the £12 million that we got in the Budget out of the new fund for capital regeneration projects to revitalise our high street, taking out the burnt-out building and rejuvenating the whole high street. Of course, there are other high streets across Rother Valley, such as in Maltby, Thurcroft and Swallownest, that also need help. Can the Chancellor therefore look favourably on future applications for those high streets so that they, too, can get the money that Dinnington has so necessarily got?

[John Glen]

I hesitate, because my hon. Friend is so effective in campaigning for his constituency. I am glad that we were able to confirm that extra £20 million in the Budget. We will continue to look with a constructive mindset at all the many bids that he brings forward to the Treasury.

Greening the Financial System

Alexander Stafford Excerpts

Wednesday 30th November 2022 Westminster Hall

[Alexander Stafford (Rother Valley) (Con)]

Thank you, Mr Bone. It is a pleasure to serve under your chairmanship and I am glad that you ignored the orders given to you from high above. I appreciate that in all aspects of life.

First of all, I congratulate the hon. Member for Sheffield, Hallam (Olivia Blake) on securing this debate. She is a south Yorkshire colleague, and we have appeared together on various panels and at numerous events, both in south Yorkshire and in this place, since we were elected in 2019. I know that she shares my passion about building a greener future for the people of south Yorkshire and for Britain as a whole.

I think the hon. Lady also agrees with me that greening our financial system is not something that any one person, business or party can do alone. I know that people in financial services across the UK are working together to encourage green investment and green banking. I also know that many Members from across the House are working together to encourage green finance. I am grateful to her for giving me the opportunity to do my bit to push this cause.

First of all, I declare an interest as chair of the all-party parliamentary group on environmental, social and governance, or ESG. Our group has been hard at work on this topic for the past 18 months, since I founded it. We have looked a lot at sustainable finance. I am particularly pleased to be able to speak today, because tomorrow—I know the Minister is listening carefully—the APPG is publishing a report on the upcoming UK green taxonomy, which will be an essential part of the UK’s green finance strategy. Although I do not want to beat the press by saying what is going to be in that report, I am sure the Minister is looking forward to reading it; I will write to him to encourage to read it and ask questions in the House to make sure that he has.

A UK green taxonomy, first announced in the Treasury’s “Greening Finance: A Roadmap to Sustainable Investing” policy paper just over a year ago, is simply a classification system for sustainable finance. Members who do not know about it should think of it as a tool to help investors understand whether an economic activity is environmentally sustainable or not. It helps businesses to navigate the sea of transition to reach the lands of the low-carbon economy. Crucially, it will hopefully spell the end of greenwashing by clearly showing what is sustainable and what is not. Once the report is published, firms will no longer be able falsely to claim green credentials that they do not deserve or to fool investors by fluffy sustainability reports that do not have any meat to them.

Under this upcoming green taxonomy, any economic activity that meets the strict scientific requirements for being sustainable can be designated as taxonomy-aligned. That will enable investors, firms and funds proudly to label their investments or products as being aligned with the taxonomy, thus boosting such funds and giving consumers confidence to invest in them. British firms will then be able to root out greenwashed investments and replace them with products scientifically proven to be sustainable.

This will not only change the game within our own economy; it will also propel the UK back to the forefront of global green finance. As I am sure many Members will know, the UK has one of the deepest pools of internationally oriented capital, with 12% of the global total of foreign companies listed in the UK, and at least 80% of equity and 50% of debt invested in by UK asset managers is directed overseas. That means that there is a visible multiplier effect; any changes made here in the UK will echo around the world. We have a real opportunity to retake our position as the leader in green finance.

On that point, the most important takeaway from the APPG’s report, which will be published tomorrow, is—as I am sure all Members will agree when they read it—that we need this taxonomy now. The EU’s green taxonomy was launched over two years ago, and new taxonomies are being designed in green finance hubs worldwide, such as China, Korea and South Africa.

Right now, we have what I would call the second-mover advantage. We have missed the initial go, but we can build on the mistakes made in the EU’s taxonomy, such as on different types of fuel and gas, to create a better and stronger taxonomy that will be mirrored by international partners the world over. We can learn from the taxonomies out there and make ours the best—we can make the UK the world leader again. However, the longer we wait, and as more and more countries come out with their own taxonomies, the less this advantage matters to us, and the less we can learn and improve; we will just be following. If we keep delaying in the fashion that we have done, we will lose our advantage, and our taxonomy will simply fall into being just one of the roughly 30 taxonomies being developed worldwide. We need to move fast and publish it soon, so that we can retake our rightful position.

Although speed is of the essence, we must be sure not to sacrifice quality, and the taxonomy has to be robust. The Treasury must make sure that our green taxonomy is widely consulted on, and I urge it to begin the consultation that was promised to commence in March. Stakeholders, academics, firms and investors must be consulted in order to build a taxonomy that is credible, usable and interoperable. Fundamentally, it must also have the confidence of the consumer. If our taxonomy fails to hit all three of those marks, it will have failed before it has even begun.

Greenwashing has instilled market distrust of anything held out as sustainable or green. We must work hard to rebuild trust, and a credible, science-based taxonomy that is usable, that does not present yet more compliance and that is more internationally focused should be the aspiration for the way forward. We must ensure that we get rid of the greenwash in our system; if the greenwash keeps happening, consumer confidence will be lost and consumers and the public will turn their backs on green financial measures.

I am sure the hon. Member for Sheffield, Hallam will agree with me that a UK green taxonomy, as described in the upcoming report, is essential to a good UK financial system. I hope the Minister will read the report, and I look forward to hearing his comments when he has.

--- Later in debate ---

[James Cartlidge]

You are very kind, Mr Bone. As I was saying, SDR will incorporate international sustainability standards, including the global baseline standards being developed by the International Financial Reporting Standards Foundation.

The SNP spokesman, the hon. Member for Kilmarnock and Loudoun, raised the subject of transition. A central element of SDR is transition plans for financial firms. We recognise the importance of requiring firms to set out how they will adapt as the world transitions towards a low-carbon economy. Transition plans form a key part of the UK’s ambition to become the world’s first net zero-aligned financial centre, and will see organisations setting out how they plan to adapt as the world transitions to a low-carbon economy. That is why we launched the transition plan taskforce in May to create the gold standard for transition planning. I was pleased to announce at COP a few weeks ago the launch of the TPT’s disclosure framework and implementation guidance consultation. The documents are a huge step and set out clear recommendations for the preparation and disclosure of high-quality transition plans.

Let me turn to the important issue of stewardship. More than 70% of the UK public say they want their investments to avoid harm and achieve good for people and planet. In 2020, on average UK savers put almost £1 billion a month into responsible investment funds—a clear sign that a shift is under way. As made clear in “Greening Finance: A Roadmap to Sustainable Investing”, the Government expect the UK’s pension investment sectors to act as responsible stewards of capital.

The FCA’s consultation on SDR and investment labels includes proposals to promote integrity and trust in the market, protect consumers, allow consumers to better compare products and reduce the risk of what my hon. Friend the Member for Rother Valley (Alexander Stafford) quite rightly referred to as greenwashing. In November, the FCA convened the vote reporting group to develop a more comprehensive and standardised vote disclosure regime.

On the specifics of the greening financing programme, Members will know that the UK kick-started a greening finance programme with a record-breaking debut sovereign green bond last September. The UK plans on raising an additional £10 billion from green gilts this financial year, with transactions worth £6 billion so far. That means we have raised more than £22 billion from green gilts and retail green savings bonds since September 2021, helping to finance projects to tackle climate change and other environmental challenges. The world sees the progress we have made. There is a lot of talk about the competitiveness of the City and UK financial institutions. Just last month, London was once again ranked one of the leading centres in the world for green finance in Z/Yen’s global green finance index.

Let me turn briefly to the UK Infrastructure Bank, for which we are legislating at this very moment to put it on a sound footing. The bank has £22 billion of capital to invest in infrastructure that supports two objectives: helping to tackle climate change and levelling up the UK. Based on the 10 investments it has announced so far, UKIB estimates it has already crowded in £4.5 billion of private investment. Notably, its first private-sector deal was to support a £500 million subsidy-free solar fund—a good example of exactly what we are setting out to achieve.

Of course, it is about not just tackling climate change but the key issue of nature. The Government have invested significantly in financial sector transparency and the disclosure of nature-related financial risk. The UK is the largest financial backer of the taskforce on nature-related financial disclosures and supports its work developing a framework for financial institutions and corporates to assess and report on their nature-related dependencies, impacts and risks.

Let me turn to some of the points raised by colleagues. My hon. Friend the Member for Rother Valley—we were right not to ignore him—made a good contribution, and I note his previous work with WWF before becoming an MP. He is right about green taxonomy—it must be about quality not speed—and I look forward to receiving a copy of his report. The Government will be engaging with the market on the design of a policy approach to guide investors on how they can best support the transition to net zero, and the value of taxonomy rests on its credibility as a practical and useful tool for regulators, companies and investors. It is important that we learn from the approach taken in other jurisdictions and take the time to get this right for the UK and the market.

[Alexander Stafford]

I invite the Minister to attend the all-party group meeting to discuss the report with our members as a priority.

[James Cartlidge]

I would never say to my hon. Friend that he should be ignored. On that basis, I will certainly consider his invitation, alongside reading his interesting report.

The hon. Member for Sheffield, Hallam raised the issue of insulation. Our new £1 billion ECO+ scheme will see hundreds of thousands of homes receiving new home insulation worth approximately £310 a year each. Of course, the autumn statement made significant and ambitious commitments on energy efficiency.

The hon. Members for Bristol East and for Strangford spoke about charging points. Since 2020 we have committed £1.6 billion on charging points, but I know that people want to see us go further and faster, and we are making huge progress on the transition to electric vehicles.

The hon. Member for Strangford and my right hon. Friend the Member for Epsom and Ewell (Chris Grayling), who is not in his place, mentioned the important issue of deforestation. The Environment Act 2021 includes due diligence requirements for companies to check and eliminate illegal deforestation, and a significant pledge was made at COP26. To be clear about financial services, the UK is focused on transparency with regard to deforestation and has included that very point about disclosing that sort of activity in our disclosure framework, as part of the taskforce on nature-related financial disclosures. That is the key point about the financial services sector: it is all about disclosure. [Interruption.]