Post Office Closures

Andrew Percy Excerpts

Tuesday 1st December 2015 Westminster Hall

[Andrew Percy (Brigg and Goole) (Con)]

Will my hon. Friend give way?

[Huw Merriman]

I will give way one more time, because I am a sucker.

[Andrew Percy]

I congratulate my hon. Friend on securing this debate. In my constituency we have exactly the same problem, with post offices closing and there being a long gap before they are replaced. There are problems even when people are willing to take on a post office. A sub-postmaster in my constituency wishes to take on a post office in another community, but he cannot because the Post Office demands that he goes through all these hoops, despite being a serving sub-postmaster. Often, because of the processes put in place by the Post Office, willing people will not accept the role, and we end up with no facility at all.

[Huw Merriman]

I very much agree with my hon. Friend. The compliance process is long and detailed. The current consultation in Heathfield means that we will not see a solution until February at the earliest.

Returning to my story, the portakabin was removed because the Post Office Ltd had no plan in place for portakabin roll-outs. If the closures that I believe will come do come, there needs to be a plan. The councillors realised that a permanent replacement was the only option, so they approached a number of national and local stores in the high street. I will give examples that show how difficult it now is to get businesses to take on a post office. Having previously hosted the post office, Sainsbury’s said no, despite losing footfall following the closing of the adjacent post office and having to compete with a new Waitrose. A WHSmith is opening soon, which is a good sign that the town is vibrant; one would think that the business would work well there, but it said no. As I say, Co-op said that it is not taking on post offices. The post office used to be sited in the sorting offices, but Royal Mail refused to accommodate even a temporary outlet. All other retailers declined to apply.

Finally, one local business, an off-licence, was willing to make an application. Thank goodness for that gentleman. That leads me to my fourth issue: the model now seems to be that neither village post offices—often called “locals”—nor main post offices in towns will operate as a stand-alone business now. That would be fine if existing businesses were willing to take on the operation, but as our experience in Heathfield shows, they are not. I question whether the commercial terms will stand the test of time for the other 11,500 post offices when renewal comes up.

As I said earlier, the Post Office is now in consultation with the community until January 2016. The expectation, if all goes well—touch wood—is that the new post office service will be in place in February 2016. That is almost a year after the doors closed to a post office that serves 11,500 to 12,000 residents.

Throughout the period of closure, the vast majority of customers have had to use services at a village a few miles from Heathfield. That is fine for those who have a car and can travel, but like many hon. Members here, I represent a rural constituency in which the bus service has been reduced. The proportion of over-65s in my constituency is 10% above the national average. The elderly cannot jump on a bus and then wait more than an hour in the cold to come back.

That leads me to my fifth issue and my second key question. Does the Government’s contract require the Post Office to provide a post office replacement following a closure if the branch serves a significant number of community members, or has been closed for, say, six months? It appears that it does not. Post Office Ltd must meet access criteria, as they are called, and overall branch numbers, but as somebody at the Post Office rather haughtily said to me,

“The way in which the Post Office meets the access criteria and branch numbers is an operational matter for the Post Office.”

That may be so, but it is also of great significance to my constituents and those of other hon. Members. The Post Office currently meets the access criteria, but I question how long it will continue to do so in the marketplace that I have described.

My concluding question is: what more can be done to ensure that Post Office Ltd is held responsible for better service provision? If the Government contract required either a temporary or permanent replacement to be in place within a set period, Heathfield would not have been without its post office for so long. I call for the contract terms to be amended to require a replacement post office to be in place within six months if the previous post office serviced a community of, say, 10,000 residents or more. If a replacement fails to be found, there should be financial penalties and ramifications on the career ladder. Although the Post Office staff have done everything they can, their roles are not subject to incentives, and there are no penalties if a post office closes, provided that the general access criteria are met. Those are the changes I ask for.

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[Dr Daniel Poulter (Central Suffolk and North Ipswich) (Con)]

It is a pleasure to serve under your chairmanship, Mrs Gillan. I congratulate my hon. Friend the Member for Bexhill and Battle (Huw Merriman) on securing the debate. I pay tribute to the hon. Member for Strangford (Jim Shannon), whose remarks, as always, were considered.

I hope to inject some optimism into the debate. Our debates in this place are often full of doom and gloom about issues facing our constituencies. Of course, it is right that we advocate on behalf of our constituents, who need to access local services, but some good things have been happening to post offices that have benefited my constituents. I will refer to a few of those things and talk about the issue, which my hon. Friend the Member for Bexhill and Battle raised, of the challenges that communities face when post offices temporarily close, often due to unforeseen circumstances.

Post offices are the lifeblood of many rural areas and of many of the shopping parades on the periphery of our larger town centres. That is certainly true of my constituency. The service that they provide to older people is particularly important, offering a focus in the village or community for people who have little daily contact and may otherwise be isolated. That is particularly true in rural areas of Suffolk. There is some cause for optimism, however, because the Government have taken supporting post offices seriously. At the beginning of the previous Parliament, as a result of the spending review, £1.3 billion was put into securing a modernisation programme for post offices both large and small, including Crown post offices, main post offices and local post offices. The programme is bringing benefits, certainly to my constituents. A further raft of £640 million was announced in 2013, £20 million of which is specifically for remote rural post offices. Residents in central Suffolk have benefited from that.

One issue that was flagged up when the modernisation programme was taken forward was that the Post Office needed to modernise some of its practices, recognising that we now live in a digital age. We need a Post Office that can benefit from economies of scale and from collocation with other community services. Post offices can benefit village shops by attracting more customers and helping to maintain the viability of shops and services that may otherwise be at risk as people move towards online shopping.

[Andrew Percy]

I hope my hon. Friend does not think that we are all being negative. The post offices at Pollington, Eastoft, Airmyn and Wrawby were all closed under the previous Government’s closure scheme, and we are pleased that that scheme has gone. The concern about the current positive policy is the huge delays when people are told that they are getting a new post office but then it does not open, meaning that people change their behaviour and start using other services or post offices elsewhere. That is the concern, and I would not want him to think that anyone who is criticising that is at all negative about what the Government have done on post offices. We have protected them in a way that previous Governments did not.

[Dr Poulter]

My hon. Friend makes a valid point. I am sure that the funding and investment that I have just outlined is welcomed by Members from both sides of the House, because it has gone directly to maintaining the viability of some of the most remote rural post offices. However, the challenge that my hon. Friend throws down, which was also raised at the outset by my hon. Friend the Member for Bexhill and Battle, is a good one.

When a post office is temporarily closed, such as the one that my hon. Friend the Member for Bexhill and Battle mentioned in Heathfield, a village with which I am familiar having spent some of my younger days in his constituency, the problem is that the closure can become de facto permanent. Even when a temporary closure is flagged up to the local community and the Post Office many months in advance, the Post Office does not always act quickly enough to put in place either a temporary or permanent solution. I am lucky to have an engaged parish council that considered a number of options for maintaining the viability of the post office in Stradbroke. I helped in that process, and I am pleased that we still have a functioning post office service.

As my hon. Friend pointed out, the danger, and the evidence from elsewhere, is that a temporary closure can last for many months. The viability of the service is then lost and many customers start to take their custom elsewhere, which can have a knock-on effect on the potentially fragile local economy that benefited from having a post office. When the original £1.3 billion was provided, conditions were imposed to ensure that services remained accessible and viable. I am interested in what the Minister has to say about how we can better work with the Post Office to deal with the issues around temporary closures and to speed up the process, so that such closures do not become de facto semi-permanent and so that services can be put back in place. At the moment, it seems that a good policy that has benefited and encouraged the viability of many rural post offices, particularly through collocation, can be undermined in some communities by temporary closures.

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[Stephen Barclay (North East Cambridgeshire) (Con)]

It is a pleasure to serve under your chairmanship, Mrs Gillan. I congratulate my hon. Friend the Member for Bexhill and Battle (Huw Merriman) on securing the debate and the way in which he has championed this issue most effectively since his election to Parliament. He raised a number of points that it may be helpful to address at the outset, on whether this is a new model in the Post Office, to what extent it is commercially attractive and how the Post Office is being held accountable.

Like my hon. Friend, I represent a rural constituency and I have a similar change programme in my area. I am also aware of the challenges in areas such as mine on public transport, to which he alluded. As for whether the franchise model is new, it is not; it has been around since the 1990s and it is long-held practice to collocate a post office and a shop. What is changing to a certain extent is the number and scale of post offices being collocated, and while in the past we had post offices with shops that sold sweets, birthday cards and various other things—many of us will remember that from our childhood—now we more often have shops with a post office attached to them.

On whether running a post office is commercially attractive, the footfall generated is very attractive to many shop owners. Indeed, having one counter as opposed to two can mean that customers do not have to queue twice and can make managing staff in the shop more efficient. There are therefore commercial attractions to collocating a post office in another business nearby, which is part of the appeal for many taking that approach forward.

The hon. Member for Strangford (Jim Shannon) rightly spoke of the social hub that the post office offers. That is why I hope he will support the Government’s manifesto commitment to secure 3,000 rural post offices and, as part of the arrangements with the Post Office, to maintain 11,500 branches as part of the network. The Government recognise, through the funding that has been allocated, the important social hub that post offices provide. Indeed, that is in stark contrast to the previous Labour Government, under which at least 5,000 branches closed as part of their closure programme. The Government have made a commitment to the Post Office in recognition of the exact point the hon. Gentleman raised—that post offices make an important social contribution to communities.

My hon. Friend the Member for Central Suffolk and North Ipswich (Dr Poulter) injected a welcome note of optimism to the debate, recognising that, in securing the network as the Government have done, we have increased significantly the hours that branches are open, often on Sundays, compared with the past.

Alongside the allocated funding, there is a specific £20 million community branch fund, which I urge Members to take advantage of. The fund encourages branches that may be the last shop in their community to bid for things they may need to make their businesses more viable, so measures are available within the funding mechanism to help preserve post offices where they are aligned with the last shop in a village or community. That is part of the wider £2 billion allocated since 2010 as part of this programme.

Before I come to the specific case in the constituency of my hon. Friend the Member for Bexhill and Battle and the chain of events behind the post office’s temporary closure there, I turn to my hon. Friend the Member for Brigg and Goole (Andrew Percy), who raised the issue of the hoops that have to be jumped through, causing frustration and adding to the time taken to open a new post office or appoint a new postmaster. I think we all share that frustration, but there are good reasons for it, given the significant position of trust that postmasters and postmistresses hold within their communities and the large sums of money they often handle. It is therefore right that a thorough consultation process is part of those appointments, but that can have an impact.

[Andrew Percy]

I think any reasonable person would accept that. We could perhaps do better by ensuring that interim measures are in place while something else is being worked on. That is the problem. Everyone understands the importance of a postmaster’s job and the compliance regime that must go behind it, but the length of time between the closure of a post office and the opening of a new one is unacceptable, and we need to smarten up on that.

[Stephen Barclay]

My hon. Friend raises a valid point. These things are looked at on a case-by-case basis, and each case tends to be different. That is highlighted in the case of the post office in the constituency of my hon. Friend the Member for Bexhill and Battle, where a number of interim measures were tried. He alluded to a portakabin being used and the attempt made to look at whether that could be located close to the store or needed to be further away. The issue of temporary staff was considered. A mobile van was also considered, which is sometimes suitable, but the volume of customers at the Heathfield store was too high. There were specific issues with the portakabin, but that solution was tried.

Attempts are made to mitigate the time taken, but sometimes local factors work against that. Unfortunately, in my hon. Friend’s case, a chain of events has made it more difficult to put the interim solution in place. I hope that better news is imminent. I know he supports the proposal for a new permanent host for the post office in Heathfield: Unique Wine Ltd, which is on the high street. The consultation is ongoing, so I hope there is light at the end of the tunnel for him.

In terms of locating a post office in an existing business—in that case, an off-licence—there are plenty of examples around the country of such collocation working well, not least due to the longer hours in which it enables the public to access the post office. I take slight issue with the suggestion from the hon. Member for Makerfield (Yvonne Fovargue) that the Post Office is imposing unfair terms by asking for longer hours. She also suggested that the public are not getting access to post offices. I think most customers will welcome the fact that a post office, through collocation, is open for longer hours. That is part of the public benefit.

Spending Review and Autumn Statement

Andrew Percy Excerpts

Wednesday 25th November 2015 Commons Chamber

[Mr Osborne]

The overseas aid budget, which is going up substantially as our economy grows, is being refocused so that as well as helping the world’s poorest— for example, in sub-Saharan Africa and in countries such as Pakistan—we will also have money to help those states on the borders of Europe that are fragile or failing. Some 50% of our overseas aid budget will go towards those fragile and failing states in the world. We are therefore able to increase the resources going to Lebanon, Jordan and the camps in Turkey that are helping the refugees of that terrible crisis. I hope the SNP will look carefully at the arguments that my right hon. Friend the Prime Minister will make tomorrow in this House.

[Andrew Percy (Brigg and Goole) (Con)]

I welcome the Chancellor’s recalibration of tax credits. In my dealings with him on the subject, he was always prepared to listen, polite and understanding of the concerns. On flood defence funding, he mentioned the Humber scheme on which he worked with the Environment Agency. That has now gone back to the EA, which has pooh-poohed the very proposals that it worked with us to create. That is extremely important for the Humber. Can my right hon. Friend assure us that he will do everything to work with local MPs to come up with a scheme that properly defends the Humber and all the investment that we have got coming?

[Mr Osborne]

I can give my hon. Friend that assurance. I thank him for what he said about the fact that we have had a very constructive dialogue. I have always been prepared to listen to the concerns that my hon. Friend raises, which I always think are heartfelt. On the Humber, we worked together to cut the bridge tolls, to get the enterprise zone, to get the Siemens factory there and to get the new roads to places such as Immingham. On the flood defences, I know that this has taken time, but we are trying to work on a sustainable solution that will protect the businesses of the Humber estuary. I know that he feels very strongly about it, as does my hon. Friend the Member for Cleethorpes (Martin Vickers), his neighbour. Let us work together and see if we can move forward with the Environment Agency. It has a rigorous way of assessing these projects. Let us try and make sure that the scheme meets those assessments.

Tax Credits

Andrew Percy Excerpts

Thursday 29th October 2015 Commons Chamber

[Frank Field]

There are two benefits—child tax credit and child benefit. The Prime Minister seems to misunderstand the difference between the two, because he said during the election that child tax credits would not be touched, but given that under this formula we are changing the clawback—or, as my hon. Friend the Member for Nottingham North (Mr Allen) would say, the amount of money people lose—by changing the threshold at which people begin to take back tax credits, and the rate at which tax credit income changes, we are affecting the value of child tax credit. There are questions about the sense of having two benefits serving the same purpose.

My second proposal is one that I guess many Tory MPs have made privately to the Government. I cannot imagine that Government Whips are different from Opposition Whips. If we had been in government making this proposal, our Whips would have been very busy last weekend phoning hon. Members to ask what they would tolerate as a minimum for reform. I would have thought that one very clear message coming back would be that bringing in these reforms next April is not acceptable

The third and more radical proposal, which again unites Back Benchers on both sides of the House, is that the changes to tax credits should apply only to new claimants. One of the problems of our popularity in shovelling around taxpayers’ money without realising that the music might stop some day and people might think the bill was not actually affordable is that in the meantime our constituents have responded to the very clear messages—in the form of incentives in the tax credits system—about what we wish them to do. In talking both publicly and privately with Conservative Members and certainly with Labour Members, I have noticed a sense that it is one thing to say there is a new contract for people who are not claiming tax credits now, but it is a totally different ball game to say to the others, “You’ve responded and you’ve done all we expected you to do, but, by Jove, we are going to clobber you now for doing so.”

[Andrew Percy (Brigg and Goole) (Con)]

I will make two points. The right hon. Gentleman is absolutely correct that for people in the system who have changed their behaviour—in terms of the vehicle they have bought, or the house they have chosen to buy or rent—we cannot change the rules afterwards and hit the poorest hardest, as the changes would.

I also want to put it on the record that I have made my view perfectly clear—certainly to Conservative Members—that the changes cannot go ahead next April and that any mitigation should be full mitigation. Mitigation must protect the poorest households, of which, owing to our low median salary, we have an awful lot in east Yorkshire.

[Frank Field]

I am grateful to the hon. Gentleman for his intervention.

Tax Credits

Andrew Percy Excerpts

Tuesday 20th October 2015 Commons Chamber

[Damian Hinds]

The harsh reality that we face is that we have a budget deficit equivalent to £3,300 for every household in the country. We need to take firm action on that now. It is right, as I said earlier, that the burden is spread right throughout society, but it is also right to shift the burden towards the upper end, which is what has happened with the tax burden.

[Andrew Percy (Brigg and Goole) (Con)]

The Minister will know that many Conservative Members, including me, are concerned about these changes. I will not, however, vote with the Opposition because of the nature of the vote and its non-binding effect. However, further to the reference point—[Interruption.] If a few more Labour Members had turned up at the original vote, we might have won. Let me take the Minister back to the point made by the hon. Member for North Down (Lady Hermon). Will he confirm that the autumn statement offers the opportunity for the Government to mitigate some of these effects, whether it be through a change to the order or through other tax changes? Can he confirm to me and many others on the Government side who are concerned that the Treasury is looking at other things that can be done to help this group of people?

[Damian Hinds]

There are a number of mitigating elements involved in the package. We have been talking about the national living wage, and there are major—[Interruption.] These things are all new. There are major extensions to childcare provision. We have reductions in social rents, and increases in the income tax personal allowance.

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[Ian Blackford]

I will give way in a second, but I want to make a little bit of progress.

Let me pose this question to Conservative Members. What will you say next year to constituents, hard-working, decent folk, many of whom will have voted for you, and who have just seen their incomes cut by more than £1,000? Are you going to tell them that their hard work is paying dividends—that for them, work is paying? You do not have an answer, because there isn’t one. The policy is wrong, and you have the opportunity to change it: to do the right thing for the country, and to do the right thing for hard-working families in your constituencies.

[Andrew Percy]

As the hon. Gentleman knows, he is making many points with which I agree. I know that he is keen to be honest with the House, but will he be clear about one thing? Tonight’s vote will not overturn the changes in tax credits, although a vote in the other place may do so at some point in the future. Today’s debate is a good opportunity for us to express our concerns, but I do not want the hon. Gentleman to lead anyone who is watching it to believe that the vote will be on tax credits. Even if the motion is passed, it will make no difference. Will the hon. Gentleman be clear about that, please?

[Ian Blackford]

rose—

Tax Credits

Andrew Percy Excerpts

Tuesday 15th September 2015 Commons Chamber

[Peter Aldous]

I thank the hon. Gentleman for making that point, but I am constrained specifically to the issues we are debating.

It is wrong that the Government are subsidising employers in this way. Moreover, the current system of tapering income thresholds and interconnectivity with other benefits is ridiculously complicated and opaque.

I welcome the Government’s proposals to increase the personal allowance and to introduce the national living wage. It is right that working taxpayers, especially those on low pay, should keep more of the money that they earn as an incentive to work. My concern is that in the short term, over the course of the next two to three years, those who will be hit hardest by these measures are working families, often with children, on low wages. These are the hard-working families—the people doing the right thing—that all political parties say they support and must support.

In my constituency, where the median wage is just under £24,000, many people will be seriously affected by these changes. As of May this year, 4,200 families were receiving working tax credits.

[Andrew Percy (Brigg and Goole) (Con)]

Representing a constituency where the median salary is even lower, at £17,500, I entirely concur with my hon. Friend’s concerns about this measure, and that is why I will not support it. Does he agree, though, that if it goes through, there is time between now and next year to make changes, be they to national insurance, emergency tax codes, or whatever, to mitigate the impact on the poorest?

[Peter Aldous]

I agree with my hon. Friend. I will come to that when I conclude.

Yes, the rise in the tax threshold and the introduction of a national living wage will help, but, as shown in research by the House of Commons Library, they will not on their own make up for what will be significant reductions in income.

Finance Bill

Andrew Percy Excerpts

Tuesday 8th September 2015 Commons Chamber

[Andrew Percy (Brigg and Goole) (Con)]

Eggborough power station employs a lot of my constituents, as it does my hon. Friend’s. Does he agree that the assessment undertaken by Ofgem is simply not robust enough and does not take account of that 4% figure? All it will take in 2016-17 is for the wind not to blow, for there to be a problem elsewhere on the plant or for the winter to be a little bit colder, and if Eggborough goes we will face blackouts. As I said on the radio recently, Governments that allow blackouts on their watch normally get their lights put out at the next election.

[Nigel Adams]

I could not agree more with my hon. Friend and neighbour. Whoever is in charge of ensuring that we have security of supply must ensure that they have robust numbers, and I am sure that my hon. Friend and I will be asking serious questions of them over the forthcoming weeks.

It saddens me greatly that this is not an isolated event. Many Members have communities that have been affected in some way by similar announcements in recent months: Longannet in Scotland, Didcot in Oxfordshire, and Ferrybridge, right next to my constituency in west Yorkshire. The Chancellor is rightly keen to create a northern powerhouse, and so am I, but I would rather see a northern powerhouse with some power in it. I do not want to see a no-power house.

There are no easy answers left on energy policy. I urge those hon. Members in opposition and in government who believe otherwise to think again, or to visit areas such as mine and talk to the constituents whose livelihoods are being put at risk. This is a commercially challenging time for the energy sector. Wholesale electricity prices are at the lowest level in years, in no small part due to the crash and the glut of oil in the global marketplace. That makes the investment case for any energy project, be it biomass, nuclear, gas or wind, incredibly challenging.

It is at times like these that our constituents and the energy industry look to Government for genuine leadership, and it saddens me greatly to say that on this issue the Government led by my party appear to have fallen short. “Investor confidence” is a phrase that is readily thrown around in debates like this and is perhaps too easily taken for granted, but when an esteemed member of the investment community such as Neil Woodford is quoted in a national newspaper in the days following the Government’s announcement on this issue as saying:

“If Government cannot be trusted to fulfil its long-term commitments then it will have to accept that it cannot rely on support from institutional investors”,

it would be irresponsible of me and other hon. Members not to heed his words.

It seems sensible to me that at a time when the energy sector is in such a sensitive and precarious place, policy decisions should be taken in the round rather than in isolation. The Government have already made public the saving they believe they would accrue as a result of removing the CCL exemption, but what about the consequences, intended or otherwise?

Drax Group, an energy company of which Members will be aware and that is based in my constituency, has invested hundreds of millions of pounds in recent years to become the largest renewable generator in the UK. It lost £425 million of its value on Budget day—£425 million in one day, a third of its total value. To me, it is incredible that a Conservative Government have effectively done that to a company that has done all that has been asked of it. The superb management team at that station has delivered Europe’s largest decarbonisation project. It is producing the lowest-cost renewable power available when we take into consideration full system costs, and it has done so while providing 8% of the UK’s power day in, day out. Furthermore, that is money that could otherwise have been invested back in the company further to fund its biomass operations or to support White Rose, one of the country’s two flagship carbon capture and storage projects. That is not an isolated case. I understand that many other renewables companies saw huge falls in their value on the back of the decision.

Discontinuing the CCL exemption would also eliminate the only financial incentive for businesses in the UK to use renewable energy instead of fossil fuels, and it has been in place for over a decade. Hon. Members will know that it is a rare occurrence indeed when I agree with Friends of the Earth, but its observation that the situation is comparable to imposing an alcohol tax on apple juice seems spot on. It appears to me to be a retrograde step, and one that will put small business owners, for whom I have the greatest respect, given my background before entering the House, in a position of uncertainty. Furthermore, as a Conservative it pains me to say that, far from being the removal of an unnecessary burden on business, the removal of the CCL exemption is the extension of a tax. Every business in the UK, whether large or small, must now pay the CCL; they can no longer avoid it by using renewable power.

I understand that one of the Government’s principal objectives in removing the CCL exemption is to prevent taxpayers’ money benefiting renewable generation abroad. However, the reality is that more than 70% of the income generated by levy exemption certificates went to UK-based energy producers. Furthermore, generators supplying renewable energy to the UK through interconnectors are currently exempt from a range of transmission charges that British generators are required to pay. Surely it would be better for the Government to look carefully at that loophole, rather than at measures, such as those proposed in the Bill, that will make the economics of generating in the UK less appealing.

As hon. Friends will know, I am not given to highlighting problems without suggesting solutions. I believe that all that Drax and the renewals industry are asking for is to be treated the same as other industries. When exemptions were removed from the combined heat and power industry, it was given two years’ notice. That contrasts with the 28 days’ notice given this time.

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Clause 45 speaks clearly to the Government’s wider business and economic approach, which undermines investment and is short-termist in outlook both economically and on climate change. It falls well short of the bar that the Chancellor has set to rebalance our economy and create a higher-skilled and more productive one. In short, the Government have made it clear that they consistently put placating their Back Benchers who are opposed to renewable energy generation above the jobs and investment that moving to a low-carbon economy would provide. That is the ultimate consequence of clause 45 and a damning verdict on the Government so early in this Parliament. As new clause 2 indicates, it is time Ministers face up to the truly damaging impacts of clause 45.

[Andrew Percy]

It is a pleasure to follow the hon. Member for Wirral South (Alison McGovern), and I agreed with much of what she said.

I find myself, not for the first time, standing to criticise a Government of my own party, but they should pay heed when Members such as my hon. Friend the Member for Selby and Ainsty (Nigel Adams) make such speeches. When my hon. Friend and neighbour makes such a speech, the Government need to consider whether they are in the right place, because he is not a serial trouble causer, as some of us are sometimes labelled—for a Yorkshireman, it is a badge of honour. Given that he made the speech he made, I hope the Government listen to him.

I support my hon. Friend, representing the constituency that I represent, and having looked through the proposals and the impact they will have on my area. I will say something about Drax in a moment, but I agree entirely with my hon. Friend on Eggborough. It is a deeply concerning situation. We are not addressing Department of Energy and Climate Change Ministers tonight, but it is fair to say, having seen the Budget, that DECC is now a wholly owned subsidiary of the Treasury. Perhaps a message will get back to those who are really running DECC.

Our concern about Eggborough is significant. A range of factors affect Eggborough, not all of which are in the Government’s gift. However, they need to be conscious of the potential crunch that is coming. When we had meetings a year or so ago, we were told that Eggborough would probably not close and that it was playing something of a game. That is certainly not what has come to pass. The warnings, which my hon. Friend was making privately a year or so ago, have come to pass. He should have been listened to then as he should be listened to now.

I hope the Government give great weight to the significant dangers if we lose 4% of generating capacity next year, given the crunch that will come in 2016-17. I hope Ministers consider what more can be done to support Eggborough and the brilliant workers, many of whom live in my constituency, who make their living there.

I do not agree with the comments of the hon. Member for Brighton, Pavilion (Caroline Lucas) on solar and onshore wind—she perhaps would not expect me to do so. We have fought off a number of proposed solar farms on grade A agricultural land in my constituency and my constituents cannot be described as being in favour of the solar farms that have appeared. I feel no sorrow for what is happening to onshore wind and solar—my constituency is peppered with hundreds of onshore wind turbines and we will be pleased to see the back of further support for them, given that we have been dumped with far more of them than anybody could have reasonably expected. They continue to be dumped on us.

On biomass, I am concerned about the impact that the measure will have on Drax. I should declare an interest: I live opposite Drax. If I invited you up to my bedroom, Mr Howarth, you would see Drax power station. [Hon. Members: “What?”] It is not going to happen, Mr Howarth, but you could look further and see Eggborough and Ferrybridge. We have a string of power stations that we are proud of. We are proud of the contribution we make to energy supply in this country and of the skilled and well paid jobs that are created by those industries. We are proud of the role we have played in the industrial development of the country, through pits such as Kellingley, which unfortunately is to close, in the neighbouring constituency of my hon. Friend the Member for Selby and Ainsty. We are proud of the contribution that coal-fired generation has made to this country and proud of the contribution we continue to make through biomass and through some coal still at Drax power station.

Drax provides 1,300 jobs for those living in my hon. Friend’s constituency and mine, and in the other constituencies around us in Yorkshire. They depend strongly on Drax, so it is very significant and concerning that, as my hon. Friend pointed out, £450 million was wiped off the value of Drax overnight from a decision that nobody saw coming. As Dorothy Thompson, the chief executive of Drax, said after the Budget:

“We are surprised and disappointed at this retrospective change to a support regime which has been in place since 2001 specifically to encourage green energy and support renewable investment decisions.”

I have met people from Drax countless times, as have a number of other Members. The one thing they have always asked of us during the past few years is stability to secure investment. To remove that stability overnight with a click of the fingers is not good decision making. That is not joined-up government and it does not provide the confidence that investors such as Drax require. I do not need to reiterate the point about the impact on international versus domestic companies. My hon. Friend and others have made it clear that 70% of the income from the exemption currently goes to UK generators. In the case of Drax, the levy exemption certificates are worth about £4 a megawatt-hour, which provides an additional source of income on top of the generating revenues.

Drax has done everything that has been asked of it and more in its conversion to biomass. The power station is part of a network along the Humber in east Yorkshire and north Lincolnshire that has seen significant investment to support the conversion to biomass at Drax. As I have said, 1,300 people are currently employed at Drax. My village is a power-generating village: power is the main source of income for many people, including our neighbours. It is how we make our livings locally. After the conversion to biomass at Drax, and what we hoped for at Eggborough, we were convinced that that would continue. I really hope the Government will pay heed to today’s debate and ensure it will continue.

Drax invested significantly to improve delivery facilities, surveying the investment landscape and concluding it was stable. Some £125 million was invested directly in importing facilities, in particular at the Immingham renewable fuel terminal. One can trudge along my constituency and follow the biomass as it arrives at Immingham in the Cleethorpes constituency and travels by rail through my constituency up to Drax. Some 100 jobs were created during the construction phase at the port and 100 more once the facilities were operational.

We thought the new facilities underlined the Humber’s reputation as the UK’s energy estuary, something that is at the heart of the northern powerhouse. When I was asked by the Chancellor only a year or so ago what the vision was for the Humber, I said that our vision is very clear and simple: to be the UK’s premier energy estuary. That includes the support going into offshore wind. It is not just offshore wind, although it has been much of the focus locally. The point we have always tried to make absolutely clear is that other power generation is at the heart of our economy in our bit of the northern powerhouse. The jobs in place at the moment relate very strongly to biomass and its importation from the United States and elsewhere. Drax’s £700 million conversion project was going to reduce carbon emissions by 80%. That is exactly what we should be aiming for: providing sustainable replacement for coal and generation that is stable in the market and on the grid. That project, alongside the carbon capture and storage project, White Rose, which we have also been keen to emphasise, will support 3,200 jobs. So this is a significant issue for my constituents and those of my hon. Friend the Member for Selby and Ainsty.

Biomass and the future stability of Drax are significant for the whole UK. Drax accounts for 8% of generating capacity, while Eggborough accounts for 4%—of course we are losing Ferrybridge, the third power station in the M62 corridor. When the chief executive of a company that provides 8% of the electricity generated in this country says we are on the wrong side on this issue, we have to listen, and that is what I hope the Government will do. Along with my hon. Friend, who made a fine speech—a better speech than I could on this—I will not support the Government on this issue. I have been unimpressed by other things in the Budget and will vote accordingly next week. I have a lot of sympathy for new clause 2, tabled by the hon. Member for Worsley and Eccles South (Barbara Keeley), and I will lend that my support this evening.

[Helen Goodman]

It is a pleasure to see you in the Chair this evening, Mr Howarth.

I am pleased to follow the hon. Member for Brigg and Goole (Andrew Percy), who made an excellent speech in support of the industry in his constituency. I agreed with much of what he said. The hon. Member for Selby and Ainsty (Nigel Adams) made an outstandingly good speech, contextualising the issue and setting it in the framework of the energy market in this country. His was a very helpful contribution.

Just before the summer recess, I became a member of the Treasury Select Committee, and in July we took evidence from the Chancellor, so I took the opportunity to ask him why he had taken this decision on the climate change levy. The first question I asked was:

“Are you a climate change denier?”,

to which he responded:

“I am not sure I accept that phrase as a general term in British politics, but what I will certainly say is that I think climate change is happening, that it is caused by human beings, in part, and that it is not good for our society, going forward.”

This did not seem a very strong endorsement from the greenest Government ever—as they like to think of themselves—so I asked whether he supported the international work and whether he was

“looking for a good, strong commitment in Paris, internationally agreed, on climate change”.

“Yes”, he said. So then I asked about the domestic legal framework:

“Do you wish to see any changes to the legal frameworks that we have in this country? So, the carbon budgets out to 2027, the target to have 15% of our electricity generated through renewables by 2020, or our target to see carbon dioxide emissions reduced by 80% by 2050; are you looking to change any of those frameworks?”

“No”, he said.

As hon. Members have said, the pattern of words and actions do not seem to fit, so I said to the Chancellor:

“Notwithstanding the fact that you are committed to all of those, you have removed the climate change levy exemption for renewables, removed the subsidy for onshore wind, restructured VED, and ended the zero carbon homes commitment”—

since then, of course, he has also changed the solar subsidies as well. The papers the Committee had from HMRC said, with respect to the climate change levy, that there would not be any impact on climate change, so I asked him whether, taking all four measures together, there would be

“any reduction in the rate at which we are reducing our carbon emissions from the measures you have taken”.

He said:

“We can go through each one individually, but I think for different reasons they are not effective or good value for money, and I think there are better ways to meet these targets.”

He said we needed to meet the targets, but in a cost-effective way, so I asked him:

“Do you have any forecast or any scenario setting out how you think that the environmental objectives will be achieved on your new policy framework?”

“Yes”, said the Chancellor.

“I am happy to send you some analysis.”

Finance Bill

Andrew Percy Excerpts

Tuesday 21st July 2015 Commons Chamber

[Edward Argar]

It is absolutely right that we remove the levy to ensure that, over time, we bring energy prices down and so that we do not subsidise an industry that I do not believe should receive those subsidies.

To conclude, this is a package that rewards work, pays down the deficit and debt, drives growth and productivity, and puts the country securely on track for a secure and stable economic future, with everyone having the opportunity to benefit.

[Andrew Percy (Brigg and Goole) (Con)]

Will my hon. Friend give way?

[Edward Argar]

I will not, because I am about to conclude.

This is a Finance Bill that truly reaffirms the position of the Conservatives as the genuine party of one nation and of hard-working people and families.

--- Later in debate ---

[Roger Mullin]

Climate change is largely man-made and carbon is no friend to the environment in that regard. I am sorry to disagree with the hon. Gentleman. I would add, as the owner of a hybrid car, that it seems perverse to add an estimated £1,000 to the cost of buying a greener car—more confirmation of the Chancellor’s addiction to carbon.

[Andrew Percy]

The hon. Gentleman mentioned the “insane attack” on, I assume, onshore wind. In areas such as mine, where people are surrounded by 100 turbines, they are driven literally to tears in my surgeries. They are genuinely concerned about the growth of onshore wind, and what we are saying is that we have reached the limit of onshore wind. We are responding to genuine concerns from real people, and my constituents are not insane for having the concerns they have.

[Roger Mullin]

I gently point out to the hon. Gentleman that the area of the United Kingdom that has made most progress in wind generation is Scotland. The Government’s attack pays no regard to the interests of Scotland or the policies of the Scottish Government. We are keen to develop renewable energy, not see it set aside.

Allow me to turn now to an area in which I hope the Government will find it easy to demonstrate some good will towards Scotland. Using the cover of technical consideration, Scotland’s police, fire and rescue services, unlike those elsewhere in the UK, are liable for VAT. However, I see from the Finance Bill that it is perfectly within the power of the Government to make special adjustments to taxation requirements. In part 4 of the Finance Bill, the Government have devoted six paragraphs to the London anniversary games, starting this week. In essence, they are deeming non-resident competitors to be free from the burden of having to pay income tax on earnings. It is even being backdated to 8 July. I am not complaining about that, but I would ask the Government to look again at exempting the Scottish police, fire and rescue services from the burden of VAT, with suitable backdating.

I declare an interest of sorts. My daughter’s partner, Dave, is a retained firefighter in Drumnadrochit in the highlands of Scotland. He often is called out to very difficult and tragic events. It is surely disgraceful that people performing such remarkable services for the community in Scotland should see their service penalised because of a technicality that the Government could easily resolve. If the Government right that wrong, I will be the first to thank and praise them for listening to Scotland. I hope that the Government will indicate a willingness to at least seriously consider an amendment to remove that unnecessary burden on Scotland’s police, fire and rescue services.

I commend the amendment to the House.

[Mike Wood (Dudley South) (Con)]

It seems slightly rude to intrude on the private squabbles between the Labour and SNP Front Benches, but I am delighted to speak in support of the Finance Bill, which implements many of the measures in the summer Budget.

Last week’s black country day celebrated our region’s industrial heritage, and the measures announced in the Budget will do much to develop the framework for businesses in my constituency and across the country. In Dudley South, many of the businesses that I visit are thriving, whether we are talking about Pressvess, which exports to south America and the middle east, or Mechatherm, which designs and exports foundries all the way to Taiwan. Those small and medium-sized businesses are the lifeblood of our local economy and the driving force behind securing economic recovery, increases in employment and greater prosperity for our constituents. Those businesses and others like them account for 60% of employment and almost half of turnover. The measures announced by the Chancellor a few weeks ago will ensure that such businesses can go from strength to strength and create the new jobs that our communities need—for example, the increase in the employment allowance from £2,000 to £3,000, cutting non-wage costs and making it cheaper to create new jobs and to invest in local people.

One of the first companies I visited as the local Conservative party candidate ahead of the general election makes tools and components for the aerospace and automotive industries. Among the frustrations it voiced to me was that, while it invests large amounts of money, effort, staff time and good will in apprenticeships and in training all its staff from apprentice to the boardroom, other companies seem to want a free ride on the backs of those who invest in that way. I therefore welcome the apprenticeship levy on large firms that the Chancellor announced in the Budget, because it will reward businesses that invest in their workforce and penalise those that attempt to get a free ride.

I am proud that the Government have demonstrated their recognition of people’s natural aspirations. They are on the side of people who want to succeed and make the most of their lives. It is vital that we press ahead with the economic reform we put to the country in the general election in May to ensure we secure the financial stability that safeguards people’s jobs and mortgages.

In the past few years, we have seen spending on out-of-work benefits fall to its lowest level since before the recession. The number of people in work in my constituency, and elsewhere across the country, has shot up. For far too long during the boom years before the recession, welfare spending spiralled. We know that many measures were introduced with the very best of intentions. I do not think anybody would argue with those intentions, but unfortunately it sometimes seemed as though too little thought was given to the consequences of the complexity of the systems being built.

[Andrew Percy]

I agree with everything my hon. Friend says about the complexity of the system. Does he agree that in making changes and trying to get away from the laudable aim of reducing in-work benefits, we have to be incredibly careful and ensure that the changes coming in next April do not go too far? I hope that—I am glad Ministers on the Government Front Bench will hear this—as we scrutinise the proposed reductions further, we will perhaps think a little more about the impact some of them could have on some of our working constituents.

[Mike Wood]

I am not sure that that intervention was necessarily directed at me. I agree with much of the sentiment behind it, but we have to be firm in the need to continue with reform while, as my hon. Friend says, being aware of the impact it will have. I am sure, like other hon. Members, he will have his attention drawn to that impact very regularly through his mailbox.

The consequences of the complexity of that welfare system did not help the millions who were trapped within the system, with little hope or opportunity to escape and to progress. It is important that the Government’s reforms continue to support people into work, but it is just as important to make sure that it pays to be in work. The Finance Bill moves the Government another step closer to achieving that goal. Securing our finances and ensuring welfare reform are essential to our long-term economic plan. Enormous progress has been made in the past year and in the past five years. We can see the evidence in our communities and in the employment statistics. There are more than 250,000 more people in work in the past year alone and nearly 2 million more in work over the past five years. The economy is continuing to recover and job creation is booming, which is why the measures in the Bill to secure that recovery are so important.

In my constituency of Dudley South, the claimant count has fallen by 29% in the past year, with 584 fewer people out of work and claiming benefits. Across the west midlands overall, the unemployment rate has fallen more than in any other UK region. This is not just a recovery for London and the south-east. The Government’s long-term economic plan offers the best strategy to ensure that that continues. They have shown that they have the courage to take the difficult decisions needed, and to put the measures in place to support working people. The measures we have already discussed go hand in hand with tax cuts for working people: the increases in the personal allowances rising even further than announced in the April Budget, alongside the new national living wage. A new, higher guaranteed wage will mean an immediate pay rise for 2.5 million people.

Oral Answers to Questions

Andrew Percy Excerpts

Tuesday 16th June 2015 Commons Chamber

[Mr Osborne]

As I have said repeatedly, we are certainly going to take part in the debate. I am sure that the Treasury will publish assessments of the merits of membership and the risks of a lack of reform in the European Union, including the damage that that could do to Britain’s interests. For example, in my Mansion House speech, I talked about the risks for Britain as a non-euro member as the eurozone continues to integrate and about how that needs to be addressed as part of the negotiations. We will take part in the debate. The more that we get on to the big issues that are at stake, rather than focusing on the process details, the better informed the public will be.

[Andrew Percy (Brigg and Goole) (Con)]

2. What recent steps he has taken to rebalance the economy and create a northern powerhouse.

[Oliver Colvile (Plymouth, Sutton and Devonport) (Con)]

3. What recent steps he has taken to rebalance the economy and create a northern powerhouse.

--- Later in debate ---

[Andrew Percy]

My hon. Friend the Member for Cleethorpes (Martin Vickers) and I were delighted in the previous Parliament that the Humber was at the centre of the northern powerhouse. Will the Chancellor confirm that the East Riding of Yorkshire and north Lincolnshire will continue to enjoy that position? I have a specific local issue in mind. Will he continue to prioritise flood defence funding for our region, because it is important for encouraging investment into the Humber?

[Mr Osborne]

I can confirm to my hon. Friend that the Humber, the East Riding and northern Lincolnshire are a central part of the northern powerhouse. When we originally set out the vision of the northern powerhouse last year, we talked about the belt stretching all the way from Merseyside across to the Humber. I know about his passionate commitment to improving the flood defences in the Humber. He achieved marked success last year, but has an even more ambitious project in mind. As he knows, because of his work and that of my hon. Friend the Member for Cleethorpes (Martin Vickers), the Environment Agency is undertaking a study of that proposal.

Oral Answers to Questions

Andrew Percy Excerpts

Tuesday 27th January 2015 Commons Chamber

[Michael Fabricant (Lichfield) (Con)]

3. What assessment he has made of the effects of recent trends in the price of oil on the economy; and if he will make a statement.

[Andrew Percy (Brigg and Goole) (Con)]

5. What assessment he has made of the effect of falling oil prices on households.

[The Chancellor of the Exchequer (Mr George Osborne)]

The fall in the oil price clearly means that certain sectors such as the North sea face real pressure, which the Chief Secretary and I are determined to help them with, but overall this is a good thing for the United Kingdom and for British families. Today’s GDP figures confirm that the recovery is on track, and our plan is protecting Britain from the economic storm with the fastest growth of any major economy in 2014. However, the international climate is getting worse, and with 100 days to go to the election, now is not the time to abandon the plan and return Britain to economic chaos.

[Mr Osborne]

Inflation is at 0.5% and wages are growing at three times that rate. If the oil price is fully passed on—and we have put pressure on the petrol and utility companies to do so—British families will on average be £750 better off. If we had accepted the ludicrous price freeze proposed by the Opposition we would have locked in those high oil prices and people would not see the benefit in their utility bills.

[Andrew Percy]

The good folk of Brigg and Goole have noticed that the price of a gallon of petrol has fallen significantly and they welcome that. Many of my residents, however, are off the grid and their heating oil bills have not necessarily fallen as they should have. What steps can the Chancellor take to put pressure on heating oil companies to make sure that the cost of heating also falls for those residents off the grid, in line with oil prices?

[Mr Osborne]

My hon. Friend has been a champion for his constituents and for all the 1.5 million people who are off the grid and rely on heating oil to warm their homes. That price has fallen by 20%, so people are seeing the benefit of the falling oil price, but we continue to put pressure on the heating oil companies, and we have met them in the Treasury to continue to reinforce the argument that those prices must be passed on and must continue to be passed on.

Oral Answers to Questions

Andrew Percy Excerpts

Tuesday 9th December 2014 Commons Chamber

[Danny Alexander]

In case the hon. Gentleman does not remember, he was present in the last Parliament when his party was in government and caused the most severe economic crash that this country had experienced for very many decades. The housing market, of course, gets affected by the economic cycle, which is precisely why this Government have presided over the highest level of affordable house building in this country for 20 years. Under the hon. Gentleman’s party, the number of affordable houses in this country fell by 421,000; under this Government, it has risen by hundreds of thousands.

[Andrew Percy (Brigg and Goole) (Con)]

2. What steps the Government are taking to support economic growth in the Humber.

[The Chief Secretary to the Treasury (Danny Alexander)]

The Government have taken many steps to rebalance the economy and strengthen every part of the United Kingdom. In the case of the Humber, the growth deal was announced in July, building on the success of the city deal, which was announced in 2013. We have also just announced £80 million for flood defences for the Humber estuary. I am pleased to see that our investment in that part of the country is working. Employment in Yorkshire and the Humber is now at the highest level on record at 2.51 million.

[Andrew Percy]

Key to economic development in east Yorkshire and north Lincolnshire are, of course, our tidal flood defences, which are so important. Last week the Government announced that the Environment Agency would undertake a review of the package proposed by myself, other local MPs and local authorities. Will the Chief Secretary ensure that Treasury and, if possible, Cabinet officials will also be involved in that process? It needs to be Treasury-led, rather than EA-led, to give us the result we require.

[Danny Alexander]

My hon. Friend makes a good point. The proposal by the local enterprise partnership is incredibly important and it needs to be assessed in detail by experts at the EA. The National Audit Office recently commended the EA on the way in which it carries out such appraisals. None the less, given the significance of the issue and the fact that it was announced as part of the national infrastructure plan, I shall make sure that Treasury officials are also involved in the process.