Outsourcing: Government Departments
Andy McDonald Excerpts(3 weeks, 3 days ago)
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Andy McDonald (Middlesbrough and Thornaby East) (Lab)
I beg to move,
That this House has considered outsourcing by Government departments.
It is a pleasure to see you in the Chair, Sir Jeremy. I am pleased to have secured this debate on outsourcing in Government Departments, in which I also intend to discuss the outsourcing of public services more widely, some of the negative consequences of outsourcing and the opportunities of a new wave of insourcing, and to acknowledge that the Government are putting together their national procurement policy, which the Chancellor said last week will be published shortly; I am sure the Minister will have a lot more to say on that.
I wish to draw attention to my entry in the Register of Members’ Financial Interests and the support I have received from a number of trade unions that have their own published policies on outsourcing of public services, some of which provided briefings for today’s debate.
First, I wish to set out the background to the outsourcing of public services and its growth in recent decades, before setting out some of the steps I hope the Government will take in the coming days and weeks to begin a new wave of insourcing. I believe there is a prevailing view on the Government Benches that essential public services should be run for the public, not to make a profit for shareholders. An emphasis on competition and markets has undermined the public service ethos associated with public services and has too often worked against the public interest.
Imran Hussain (Bradford East) (Ind)
I thank my hon. Friend for his years of work in this area; he has been instrumental in shaping the Government’s policy. All too often, particularly in the public sector, outsourcing is disguised in many shapes and forms, but the reality remains that it is back-door privatisation that leads to lower standards and higher costs. Most importantly, workers are treated as second-class citizens, and it has a disproportionate impact on black, Asian and minority ethnic communities. Does he agree that the central question is the one that was in the new deal: is it in the public interest? The answer is that it never is.
Andy McDonald
I thank my hon. Friend for his kind words and wholeheartedly agree with his comments. The whole premise of outsourcing has been to reduce costs, and that is visited on the workforce in terms of pay and other terms and conditions, with the disproportionate impact that he describes, which I will come on to shortly.
All too often, wider social, environmental and economic implications have been eclipsed by the pursuit of narrow short-term cost savings, with an insufficient assessment of the overall costs and longer-term impacts. Since 1979, under the Conservatives, starting with compulsory competitive tendering, there has been a huge growth of private business involvement in public service delivery and its scale. That has resulted in more fragmented, poorer-quality services run by companies seeking to renegotiate contract terms, with staff—often women and minority ethnic employees, as my hon. Friend described—the subject of squeezed terms and salaries.
The last Labour Government invested in public services but did not slow the growth of outsourcing. That allowed the coalition to expand it further, with austerity encouraging public bodies to turn to outsourcing as a means of reducing costs, while ideologically driving it through a White Paper, “Open Public Services”, which argued that few services should be exempt from outsourcing. That is where we were in the run-up to the recent general election, before which Labour set out a clear message on outsourcing.
In February 2021, at the height of the covid pandemic, the now Chancellor set out her concerns about outsourcing. Spend on outsourcing was worth £249 billion in 2014-15, and by 2019-20 had reached £296 billion—a significant sum that dwarfs the NHS budget. She said:
“Outsourced services are not integrated into the fabric of our communities. Unlike our public services and providers, like charities, many of which offer vital frontline services, outsourced companies have not built up trust over time and lack the vital local knowledge and flexibility required.”
Furthermore, she added:
“A shadow state has emerged and it is unaccountable to the people. Even before the pandemic, the government spent an extraordinary £292bn on outsourcing over a third of all public spending and that level is rising year on year. The public pays for these contracts yet so often it cannot adequately scrutinise many of them. This secrecy must stop.”
To set out the case for insourcing, I want to highlight the experience of outsourced workers represented by a number of unions. In the civil service, the Public and Commercial Services Union states that the two-tier gap between directly employed and outsourced workers is widening as pay and terms and conditions for the latter erode, with civil servants reliant on universal credit and workplace food banks. Departments’ budgets are stretched as they deal with the inefficiency of picking up the cost of tendering and awarding contacts, which have to deliver a profit for the contractors.
Kim Johnson (Liverpool Riverside) (Lab)
I thank my hon. Friend for securing this important debate. PCS workers in my constituency who work for the Disclosure and Barring Service are currently in dispute because of inadequate contracts, which put additional burden and stress on them. PCS has continually called for the insourcing of those contracts. Does my hon. Friend agree that the Government need to commit to their policy of insourcing? It is not only workers who are suffering, but children and other adults, because of the outsourcing of local authority services. That needs to change immediately.
Andy McDonald
My hon. Friend is entirely right. That is yet another example of the tension and conflict between delivering high-quality public services and driving down costs, which leaves the people who deliver the services in poverty. That has to be addressed.
Similarly, in the railways, the RMT says that outsourced workers struggle to make ends meet, and it directly attributes that to outsourcing firms profiting from low pay. Many outsourced workers’ wages are anchored to the minimum wage, and they do not have the right to occupational sick pay and decent pay schemes. The RMT argues that insourcing would not only lift living standards by putting money into people’s pockets, but raise workers’ productivity, tackle structural inequality and even achieve greater efficiency in public spending. It is time to start a wave of insourcing now.
In the civil service, the Government have come into office with numerous disputes having recently taken place, or currently taking place, between outsourced service contractors and their employees, including various instances of industrial action. That is disruptive and costly to the civil service, and it is a result of those service providers holding down the pay of their staff, particularly in facilities maintenance areas such as cleaning, catering and security.
PCS, the union representing those workers, wrote to the Prime Minister in mid-July to discuss matters faced by workers across the UK civil service, including those working in contracted out and devolved areas. I know that the Chancellor of the Duchy of Lancaster met with the FDA, Prospect and PCS in June, at the earliest opportunity after taking office, but the number of civil service disputes in contracts inherited from the Government’s predecessors requires action. There are multiple disputes involving PCS members employed as cleaners, post room staff, porters, catering and reception staff in several Government Departments, and they are not limited to one outsourced employer, but concern G4S, ISS and OCS.
Imran Hussain
My hon. Friend is making a powerful case. In Bradford, there was an attempt at outsourced back-door privatisation, which was successfully fought off by me alongside trade unions. Does he agree that trade unions play a crucial role and that it is shameful that, in the disputes he talks of, many of the organisations that hold public contracts have refused even to recognise trade unions?
Andy McDonald
We are giving a lot of attention to the recognition of trade unions. As the Employment Rights Bill progresses, we will want to ensure that that gets proper attention. The people we are talking about are the ones who kept the country going through the covid pandemic. We have come out of that but they are still in dire straits.
I want to mention the dispute involving G4S, as it has resulted in Department for Work and Pensions buildings, including jobcentres, closing for several days. The DWP has been asked to intervene in the dispute and to set out the sanctions it has issued to G4S for failing to deliver its contractual responsibilities. Not many months ago, I was on a picket line outside our jobcentre in Middlesbrough with G4S security guards who were expected to put food on the table at £11.40 per hour—their employer was not the DWP but G4S. We have to ask whether that is a legitimate and moral way to organise our public services.
There are other disputes between the PCS and G4S, ISS and OCS in the Department for Business and Trade, the Department for Education, the Department for Energy Security and Net Zero, the Foreign, Commonwealth and Development Office, the Department for Science, Innovation and Technology and the Cabinet Office. The Government should intervene and ensure that the Government Property Agency meets PCS to help reach a conclusion with the outsourced firms.
We need a hard stop to new outsourcing, because not only have the Government inherited poorly performing outsourced contracts, but there is concern that they might be about to re-let to private providers that have already failed in His Majesty’s Prison and Probation Service. In the halcyon days when I was a member of Select Committees, we made trips to other jurisdictions and we were met with horror by other parliamentarians who found it anathema that prisons were in private hands. They thought that it was contradictory and unacceptable for anybody other than the state to be involved in incarceration. There is a fundamental question we need to ask ourselves.
The Government have the opportunity to put this right by insourcing facilities and estates management, rather than increasing the profits of private companies. If prisoners are living in squalor, those union members are working in squalor. Just as unions have argued that it is not too late to invite in-house tenders, it is now time to invest in existing prisons—not just new prisons—by ensuring that the Prison Service runs its own maintenance and facilities management.
Prison maintenance in England and Wales was fully privatised in 2015, with Amey winning the contract for the north and Carillion the one for the south, later replaced by Gov Facilities Services Ltd—GFSL—which took over its contracts. A race to the bottom continued, and 10 years later there is widespread prison squalor and an estimated maintenance backlog of almost £2 billion.
Amey and GFSL’s contracts were extended in 2020 and are up for renewal over the coming months. The prison unions are calling for maintenance to be brought back in-house—not with GFSL, but with a return to full works departments in every establishment. However, the Government have previously stated that the public sector will not be invited to bid for the new contracts, after a 2023 assessment apparently determined that a privatised solution was the preferred option for meeting prison maintenance service needs.
It was welcome that the Prisons Minister, Lord Timpson, recently promised:
“As future prison maintenance contracts approach expiry, we will conduct detailed assessments to inform decisions about whether to continue to outsource services”.—[Official Report, House of Lords, 23 January 2025; Vol. 842, c. 1804.]
I was pleased to hear the Prisons Minister tell the House yesterday that the Government still have an open mind on maintenance contracts. The private sector has completely failed to deliver on its promises around prison maintenance, with staff, inmates and the taxpayer all paying the price. Will the Minister explain why the Government seem to be following the last Government’s privatisation plans, despite the obvious failure of running key prison services for profit?
The Minister set out to the House last autumn how the new national procurement policy framework would be a legal framework to deliver greater value for money and improve social value, which the previous policy statement did not do. Will the Minister give some indication as to whether the framework might be founded upon such a review?
The task before the Government is twofold. First, in the civil service, the Government must intervene in industrial disputes and ensure that public services are not disrupted by contractors prioritising profit over public service and at the expense of public servants’ livelihoods. Secondly, I encourage the Government not to enter into any further outsourced contract arrangements in the civil service or elsewhere before a review into the costs and impact of the outsourcing is complete, and before a new strategy setting out the case for a new wave of insourcing has been published. I agree with the PCS proposal to
“seek an agreement on a programme of civil service insourcing and rights for contractor staff. Whilst services remain outsourced”
the PCS
“seek an agreement on union recognition for all facilities management workers and selected outsourced staff. A key element of that agreement would be parity for private sector workers with civil servants in respect of pay and terms and conditions of employment.”
Similarly, Unison has set out its concern:
“Any decisions by public bodies to outsource any services should have to pass a key public interest test.”
That test should consider: the quality of the service that would be delivered; value for money; the effects on workers’ job conditions, such as pay and holiday entitlements; the implications for other public services and their budgets; the impact on the local economy and its job market; and the ability of the contractor to meet climate targets and equality considerations. Unison has also said that
“the test should be applied to contracts coming up for renewal whilst providing services in-house should become the default position.”
I wholeheartedly agree with that notion.
In her speech in 2021, the Chancellor said that
“under Keir Starmer’s Labour government we will see the biggest wave of insourcing of public services for a generation.”
It is now time to deliver just that.
Several hon. Members rose—
Speaker’s Statement
Andy McDonald Excerpts(2 months, 4 weeks ago)
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David Davis (Goole and Pocklington) (Con)
Further to that point of order, Mr Speaker. When I first arrived in the House, it was common in the Conservative party—the Thatcherite Conservative party, I say to my right hon. Friend the Member for Gainsborough (Sir Edward Leigh)—to view John Prescott as public enemy No. 1. It was an act that he loved playing into, in public at least. That being said, outside the studio or the Chamber, he was friendly and helpful, certainly to me. Indeed, he was almost the best possible constituency neighbour one could want.
John Prescott was quintessentially a working-class hero—an identity that I suspect the current Deputy Prime Minister also adopts. Of course, he was a brilliant constituency ally and a forceful defender of the interests of the people of Hull, with the emphasis on force. However, he was also a necessary champion of the new Labour party. The Prime Minister referred implicitly to the fact that John Prescott delivered one man, one vote. We should remember that it was an act of huge courage for him to take on his own union allies, I think at about one hour’s notice, and persuade them to support the neophyte Tony Blair.
Frankly, despite the snobbery of the London establishment about John Prescott’s education, it was a very unwise person who underestimated his intellect. He was a formidable and brilliant innovator on—I am looking at the Environment Secretary—the environment, on Europe, on devolution and on a whole range of things. He was what we would all hope to be: not a creature of history, but a changer of history. For that, we should always admire him.
To put to one side all those grand things, he was also greatly, greatly loved by his family. On that basis, I offer my condolences to Pauline and the rest of the family.
Andy McDonald (Middlesbrough and Thornaby East) (Lab)
Further to that point of order, Mr Speaker. I want to add my own few words to the tributes that have been made, and especially to welcome the comments from my hon. Friend the Member for Kingston upon Hull East (Karl Turner), which were so warm and personal.
John Prescott’s great many achievements—his commitment to climate change and other matters—have already been spoken of. He was a truly authentic working-class hero, and somebody who always attracted a crowd wherever he went. He persevered with his famous battle bus through good times and poorer ones. What may sometimes be missed is his commitment to devolution, and the great efforts he made in the north-east of England, where he committed to the campaign for a north-eastern assembly. We were not successful on that occasion—the referendum was not won—but, ultimately, John’s legacy prevails in the devolved institutions and authorities that we have seen ever since.
On a personal note, I want to put on record my thanks to John for his personal support to me. I found myself propelled on to the shadow Front Bench a little bit prematurely and unexpectedly, but he was of great support to me in discharging the transport brief. He retained such immense knowledge, and on every single occasion he offered encouragement, for which I will be eternally grateful. He was a true giant of the Labour movement. We will miss him enormously, but his legacy remains. I, too, pass on my sincere condolences to Pauline and to all his family.
Pete Wishart (Perth and Kinross-shire) (SNP)
Further to that point of order, Mr Speaker. On behalf of the Scottish National party, I pass on our sincerest condolences to Pauline, to John’s family and to his many friends, colleagues and comrades right across the Labour movement. You have lost a colossus of a man, and an inspiration to working-class people right across the United Kingdom who were encouraged by his example to go into politics.
I remember coming down here as a new MP in 2001 and observing the Labour Front Bench—titans, all of them, and all known to the UK public, but dominant among them was John Prescott, and it was John Prescott the public wanted to hear from. When he appeared on the TV screens, the public paid attention and listened to what he had to say. He resonated with the British public, who held him in a curious affection. If what he had could have been bottled, I am sure we would all take a little sup of it today.
I will never forget where I was, as a candidate in 2001, when that famous incident came in that the hon. Member for Newport East (Jessica Morden) referred to—who could? I think we all know where we were. I was with a bunch of sixth-formers at a hustings at Brechin high school, and one of the senior pupils said to me, “If it’s like that every day in your political life, I want a bit of that.” There’s inspiration for you, Mr Speaker.
John was a huge music fan and a great supporter of our music act, MP4. We could never quite master the jazz that he seemed to favour—although maybe as a tribute to him we will get round to doing one of those numbers—but it was something he completely loved.
Everyone has talked about John’s commitment to climate change, but there was also his commitment to devolution, which a few colleagues have mentioned. John Prescott was the engine who drove that path towards a Scottish Parliament and the regional assemblies which will be happening as a matter of course with this new Labour Government.
John was part of a generation that we are sadly beginning to lose, but he will stand out as one of the true great parliamentarians in this House of the past few decades and we will all miss him dearly.
Anniversary of 7 October Attacks: Middle East
Andy McDonald Excerpts(4 months, 2 weeks ago)
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The Prime Minister
We of course have to be careful to ensure that any agency absolutely complies with international law and, where there are any allegations, we must ensure that they are properly investigated and any wrongdoing is rooted out. We do have to provide, or help to provide, aid across the region, but that is caveated by the first part of my statement in relation to the point that the right hon. Gentleman rightly raises.
Andy McDonald (Middlesbrough and Thornaby East) (Lab)
I wish to put on the record my sorrow at the appallingly violent events of 7 October one year ago in southern Israel, and at all the days of violence we have witnessed since. Since the House last met, the forced displacement of almost 2 million residents of Gaza by Israel’s military action has been compounded by a further half a million people forcibly displaced in Lebanon, again by Israeli military action. Does the Prime Minister share the concerns of the United Nations High Commissioner for Refugees, Filippo Grandi, that in destroying civilian infrastructure, killing civilians and impacting humanitarian operations, the Israeli invasion is a breach of international law? What further steps will the Prime Minister take to enforce a ceasefire?
The Prime Minister
I am not going to accept invitations to agree with other people’s assessments. I will make my own. I have been absolutely clear that Israel has the right to defend herself in accordance with international law. The displacement is a very serious issue across the region. Very many people have been displaced and many of them simply want to go home. That includes Israelis who have been displaced from their homes as well. That is why we need to de-escalate: to ensure that those displaced can return back and live safely in their own communities.
Iran-Israel Update
Andy McDonald Excerpts(10 months, 1 week ago)
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Andy McDonald (Middlesbrough) (Lab)
I would just point out to the Prime Minister that a nation state’s capacity to observe international humanitarian law is quite different from its actually doing so. At this terrifying moment for the world, we are all mightily relieved that Iran, which must be condemned for what it did, failed to inflict serious loss of life on people in the region. The de-escalation call is correct, as is the commitment not to engage in offensive action. He was explicit in his statement that all people are entitled to security and peace, but sadly for the people of Gaza the calls for restraint have not worked. What additional options is he considering? Surely an immediate ceasefire and the funding of UNRWA is the best way to secure security for the region and the release of all the hostages.
The Prime Minister
It is important that the hostages are released, and that is what we continue to call for. As the hon. Gentleman knows, it was Hamas, yet again this weekend, who rejected the latest round of negotiations to get those hostages back to safety.
Ministerial Code: Investigation of Potential Breach
Andy McDonald Excerpts(1 year, 8 months ago)
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Jeremy Quin
The hon. and learned Lady knows more than me about this subject, because she has read the full article and I just saw the tweet. I cannot really comment on that. I understand it was something that the Home Secretary did with Cherie Blair and others some considerable time ago, a charitable endeavour before she entered Parliament—that is just what I got from the tweet. I cannot comment any more than that, as the hon. and learned Lady will understand.
Andy McDonald (Middlesbrough) (Lab)
I received a letter from the Under-Secretary of State for Levelling Up, Housing and Communities, the hon. Member for Bishop Auckland (Dehenna Davison), to whom I have given reference that I would raise this matter today, in response to concerns I raised about the activities at Teesworks. She advised me that nothing untoward was at play, although I was not provided—[Interruption.]
Mr Speaker
Order. I think that might be better asked as a point of order, rather than in the middle of where we are now. Is this about the ministerial code and this particular Minister?
Andy McDonald
Exactly, Mr Speaker, because importantly the Under-Secretary of State for Levelling Up, Housing and Communities was the recipient of a properly declared four-figure donation from a party directly connected to those dealings. Surely she should have recused herself, and in failing to do so was in direct contravention of the ministerial code at paragraph 7.1 and onwards. Does the Minister agree?
International Trade and Geopolitics
Andy McDonald Excerpts(1 year, 10 months ago)
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Darren Jones
I will do so briefly so that I do not test the patience of the Chair too much, given the number of pages I have left to read before the end of my speech. My initial observations are that it is in the UK’s interest to be a global leader on the net zero transition, both because that is the right thing to do and because it is a significant industrial opportunity, and that we should be partnering with the European Union to do so through our trade deal. In my view—I have not taken evidence on this; it is just my view—that would generate a larger rate of return for the British economy and British people than some of the other opportunities that have been presented.
Andy McDonald (Middlesbrough) (Lab)
Does my hon. Friend share my concern that in pursuance of net zero and the decarbonisation agenda, the automotive industry, for example, faces significant challenges in ensuring not only that we have a self-contained supply chain, but that we can engage with the European Union on our doorstep given restrictions on rules of origin? Will that present a difficulty, and is there an opportunity with the review of the trade and co-operation agreement to address that issue once and for all?
Darren Jones
My hon. Friend is exactly right, and electric vehicles are a prime example. He and I were in Sweden last week on a Select Committee visit to look at how its electric vehicle battery manufacturing looks in comparison with the UK. If we are to continue to export cars to the European Union, we will have to hit the so-called rules of origin requirements where the components come from local or regional sources. Eventually they will have carbon embedded within them, in order to meet carbon border adjustment mechanisms and net zero targets. It is therefore crucial that the UK Government work with the private sector successfully to deliver that industrial policy outcome, or I fear we will see the near total decline of car manufacturing in the UK. While it is not for me as Chair of the Business, Energy and Industrial Strategy Committee to prejudge the conclusion of its inquiry into this issue, the contrast between what we saw in Europe last week, and what is happening in the UK, was stark.
Darren Jones
I have to take the hon. Gentleman’s suggestion at his word as he knows much more about his constituency and farming than I do. If there are export opportunities that is great, but the question is whether that will deliver the wholesale economic growth that we need across the whole UK economy. It will be an important piece of the puzzle, but my proposition is that there is a much broader area where there are problems, and where Government policy is lacking.
In Sweden last week, we learnt about the sheer complexity of delivering a so-called gigafactory for electric vehicle battery manufacturing. We held in our hands, physically, fossil fuel-free iron made using hydrogen, which was being turned into low-carbon steel. I finally saw, after years, a carbon capture facility working, plugged in and capturing carbon in real life. Here in the UK, we just have ministerial statements setting out our intention to be world leading, without anything real or tangible to show for it. The British people will soon realise, if they have not already, that at the end of this yellow brick road set out by the Government there are just Conservative Ministers blowing smoke. The tragedy is that this is not just a dream: it is 13 years of Conservative economic mismanagement that will take years to clean up.
This sorry story is not just about what is happening in the European Union; it is about what is happening in the United States, too. During our Committee visits last year, it quickly became clear that the US is doing what Europe is doing, but on steroids. The Inflation Reduction Act, which is really a green new deal for the United States, sets long-term, multi-decade, easy-to-access tax incentives, grants, loans and market-setting standards to not only drive the net zero agenda but reinvest in the industrial capacity of the United States. This $500 billion multi-decade initiative is acting like a magnet, pulling investment, jobs and businesses into the American economy. Access to those tax incentives, grants and state-level support is predicated on agreements to train and employ Americans in areas that have been crying out for investment for years. In some circumstances, it is even predicated on business owners investing in childcare to help optimise the economic activity of the American labour market, including women.
Andy McDonald
Was my hon. Friend not struck by the stark report on Sky News, I think from Ed Conway, from AMTE Power in Thurso, one of the British manufacturers of car batteries? It was indeed attracted by the Inflation Reduction Act, so much so that we risk that factory—a gigafactory we do have—being relocated to the United States. Should that not be sending a signal warning to the Government that time is not on our side?
Darren Jones
Once again, my hon. Friend is absolutely right. That is why the European Union has responded to what is happening in America, but what do we have here in the United Kingdom? I tried to be generous to the Government in a collegiate fashion, but the only thing I could find that allowed me to give the Government credit was the recent establishment of the Office for Investment, whose job it is to secure inward investment to the UK. But it has no budget.
As I understand it, when two American businesses looked at the UK as an investment destination, they did not know who to contact. Was it the Department for International Trade, the Department for Business, the Department for Transport, the Treasury, the regional mayor or the local council? The Germans, meanwhile, put together an inward investment package with significant incentives and the Americans presented a map with different options in different states, topped up with significant federal incentives. In the UK, we have an Office for Investment whose job it is to go around Whitehall, cap in hand, trying to put together an offer within existing budgets. The tragedy is that the reason those companies were looking at the UK in the first place was that we have great natural resources: huge potential for low-carbon fuel energy supplies, great industrial clusters, world-leading research and development, and great pools of highly skilled labour. But we just did not compete and we lost out on both investments.
Let me take another example, which we have already talked about: the semiconductor industry. The United States is securing multibillion dollar inward investments, as too are the Europeans. As my Committee concluded in its recent report, while we will never have end-to-end supply chains in the UK, we should be collaborating with our American and European allies to agree that the UK invests in the parts of the supply chain where we excel: chip design and advanced compound semi- conductors. Britain can play a crucial exporting role within a multinational supply chain. So when the Government take decisions to decline or unwind Chinese-linked investments, such as Newport Wafer Fab, they must follow through with finding new investment and new owners. Instead, we have a semiconductor strategy that is now even more delayed than it was already because, as it was reported, Ministers cannot decide who is going to announce it. Meanwhile, other countries are racing ahead of us.
It seems to me that we have Ministers stuck in the headlights of a changing world, convinced that the best thing to do is for the state to get out of the way and let the free market fix our problems, praying that someone, somewhere might find the sunlit uplands of post-Brexit Britain that Conservative Prime Minsters promised to deliver—while our competitors race ahead of us. The question, therefore, is what should we do about it? Beyond the obvious points of having a proper industrial policy, ideally a stable Government, a stable economy and a stable policy framework; beyond the obvious point that we continue to fail to highlight the importance and value of the service economy to our exports—we are the largest exporter of services in the world after the United States—and beyond the obvious point that we must improve our trade deal with the EU, what can we do that is new, global and in Britain’s interests?
We should be leading the debate about a new model of multilateral co-operation between democracies. We clearly already collaborate on defence matters, but what we define as critical supply chains or as critical national infrastructure, what we think resilient supply chains should look like to create economic security for our countries, and how we collaborate as allies and partners to show that democracies will continue to prevail over authoritarian regimes—those issues warrant a new partnership, a new model of multilateral working. It is in Britain’s interest to lead that debate and to play a central role in it.
Some will understandably say that there is a risk of decoupling the existing post-war institutional frameworks. My response is that this is already happening and that Britain can do little to stop it. That does not mean walking away from the UN, the World Trade Organisation or the G7—of course not. And it certainly does not mean Britain should play fast and loose in breach of agreed global rules. But it does mean that we must respond to lead and to influence what happens next.
If this Government had a real mission-led approach to the UK economy, we would see co-ordinated strategic action from No. 10, the Treasury, the Foreign Office, the Department for Business and Trade, the Department for Science, Innovation and Technology, and others. But we do not. We do not see that because the Prime Minister does not have an answer. He cannot tell us what our path to prosperity is, what he thinks our unique selling points as a country are, or how Britain will maintain its standing as one of the largest, most advanced economies on the planet.
I have had the good fortune, over the past few years, of being able to represent our Parliament in many countries. From Brussels to Washington, Sydney to Tokyo and elsewhere, I keep being asked, “Are you guys okay? What’s happening to the UK?” It is embarrassing and it must stop.
Richard Fuller
The hon. Gentleman reinforces my point. He is suggesting that if a company chooses to use its shareholders’ money to drive down a road that runs out, somehow taxpayers should pay for the extension of the road. The whole point of capitalist markets is that it is a business’s responsibility if it makes incorrect allocations of capital and its shareholders lose money. It is the job of business and business leadership to have the insight to understand how best to create value for shareholders in the long term.
Businesses are now coming to smart Labour Members—who are desperate to show that after years of hating business the Labour party now thinks prawn cocktails are a nice idea—and saying, “Can you spare us a few bob, mate? We’d like to support your party and we’ve got this really sexy thing we want to do, but frankly we don’t want to use our own capital because we know that the Labour party in government will be suckers enough to use taxpayers’ money to pay for it.”
Andy McDonald
I hope that the hon. Gentleman, as a former member of our Select Committee, will take this point in good heart. Just last week, we visited HYBRIT in Sweden, which has made some incredible advances in creating sponge iron and is on the road to creating green steel. One of its major partners in that enterprise, without which it would not have been possible, is the state-owned utility company Vattenfall. I ask the hon. Gentleman to consider that point.
This country’s version is to plough hundreds of millions of pounds of taxpayers’ money into the South Tees Development Corporation, transferring those assets to private individuals in return for options for land—for buttons—leaving the state on the hook for the environmental remediations. There could be no bigger contrast with more intelligent responses to industrial challenges. I trust that the hon. Gentleman will take that point in good heart and look at the differences in practice between the United Kingdom and Sweden.
Richard Fuller
Actually, the hon. Gentleman is exactly right. He and I share a concern for the defence of taxpayers’ money: if it is going to be spent, it should be spent wisely. If a strategy is not working, that is fine, but the point that I raised at the start of my speech was that we hold different points of view on whether industrial strategy per se will be an answer to the problems. My general position is that leaving the market and businesses to themselves and allowing the free allocation of capital in open and competitive markets has proven time, time and time again to be the best way to achieve progress, with better living standards for households in this country and around the free world. That is why the developed nations are the developed nations: because we have supported that approach.
Richard Fuller
The Chair of the Select Committee nods. It is nice to have an area of agreement.
Let me move on to the second area about which the hon. Gentleman spoke: the Inflation Reduction Act and the associated EU measures. As he well knows, that Act represents a $370 billion commitment of US federal funds, or their equivalent in tax credits. It followed the Infrastructure Investment and Jobs Act of 2021, which meant $1 trillion of investment, not only in infrastructure but in green energy. By purchasing power parity, the US economy is approximately six times the size of the UK’s. An equivalent response, which is what the hon. Gentleman says we need, would essentially require writing a cheque for £40 billion, £50 billion or £60 billion. If industrial strategy is not about expenditure, what are we supposed to be doing to compete, other than putting in that amount of money? There seems to be a part missing.
The hon. Gentleman also spoke about inward investment and said that we should be sharpening up our act. He is absolutely right. In countries such as Germany, which he mentioned, the package on offer to those who are interested in investing is not just a financial package, but a coherent one. When someone looks into making an inward investment, there are people to sort out all the Government intricacies for them at a single point on day one. That is how the UK did it when Margaret Thatcher was leading efforts with Lord Young, but over the intervening years we have made things a little too complicated and we have not found our way. I would be interested to hear the Minister address that point; it may not be directly in her remit, but it would be interesting for all hon. Members present to know the Government’s view. What are the Government doing to make sure people know that the UK can take a foreign company from thinking it wants to invest in this country to actually getting going and investing in this country, whether that involves, say, bricks and mortar or servers? What can we do to make that easier?
I know this sounds as though I am picking the hon. Gentleman’s speech apart. I am not picking it apart but asking questions about it, and I trust he is happy with that. He talked about economic security and collaboration. I think the short-term version of that is called friendshoring, which essentially means saying, “Let us conduct a geopolitical review of important strategic supply chains, and then let us be smart and make sure we are doing business with countries that are our allies.” That is a massive change, because there is no clarity about what the extent of friendshoring areas should be. Does this apply only to strategic industries determined by the United Kingdom, or is it imposed on the United Kingdom because other friends think we should be doing business with someone else? Are we prepared as a country to outsource the way in which British companies do business to the Government of the United States?
Andy McDonald
The hon. Gentleman is making an interesting point, but does he not agree that when it comes to critical areas of our economy such as energy security and the opportunities presented by carbon capture, utilisation and storage, it makes consummate sense to have strong relationships with those neighbouring countries with which we are aligned? As we face the spectre of Putin, who has caused so much damage to our energy security of late, would it not be infinitely more sensible to look to the new technologies and look to those neighbours to work together in that domain for our mutual economic benefit? Surely that makes sense.
Richard Fuller
There are two parts to what the hon. Gentleman has said. Is it sensible for us to ensure that our national security is itself sensible, along with some of the elements that are important for national security? I do not think there are too many concerns about that; the issue is, should we be focusing our policy on the issue of only going with our allies, or at least making that the primary consideration?
I think this will be a problem if it becomes part of the international discourse. The Chair of the Select Committee seemed to be talking about unbundling the existing international organisation, paying it respect but recognising the “reality” of what is happening, but then looking at ways in which we can make side arrangements with our friends. I fear that that will mean pooling the understanding of what is a friend and what is not among others, which is a substantial change in the way in which this country seeks to run its economy. My view is that the United Kingdom should be an open society, an open trading economy, and that we should lean primarily towards openness.
Richard Fuller
Obviously not with Russia. We have already imposed substantial trade sanctions on Russia, and I think there is consensus in the House about what our response should be when one country invades another. However, to conflate Russia with China, which has not, as far as I know, invaded another country, is to move into a different area. My point is philosophical: the United Kingdom’s history of success has been as an open trading nation, and the current push, in this country and others, for us to engage in friendshoring strikes me as a significant change from the way in which, historically, we have created wealth.
The Minister of State, Department for Business and Trade (Ms Nusrat Ghani)
I thank the hon. Member for Bristol North West (Darren Jones) for securing this important debate. I too was on the Select Committee with my hon. Friend the Member for North East Bedfordshire (Richard Fuller) and the right hon. Member for Hayes and Harlington, so this feels like a Tuesday morning love-in all over again.
To continue that love-in, I must say that many points that the Select Committee chair made were valid, although unfortunately others were somewhat completely off the mark. As always, I will defer to my hon. Friend the Member for North East Bedfordshire; we played a good tag team on the Select Committee, so it is fantastic to have him here in the Chamber. I thank all colleagues from across the House for their valuable contributions and I will do my very best to reference all of the very important questions that they raised.
Andy McDonald
I am grateful for the praise; I just want to point out that I am the Member of Parliament for Middlesbrough—my right hon. Friend the Member for Hayes and Harlington (John McDonnell) is a different guy altogether.
Ms Ghani
Goodness—I am no longer on the Christmas card list, so things are already going downhill. You have made it clear, Madam Deputy Speaker, that I do not have as much time to speak as I thought I had, so I will do my best to refer to all the contributions.
First, to the Chair of the Select Committee, you were such an optimist when I was on the Select Committee, but there has been nothing but negativity today. You touched on UK investment—
Ministerial Appointments: Vetting and Managing Conflicts of Interest
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Jeremy Quin
As I know from my work in the Cabinet Office, there is a huge focus across Government on ensuring that we go after tax evasion in all its forms. It is incredibly important that we do so and that we cut waste across Government, particularly when it results from fraudulent behaviour. That is what we do every day, and HMRC is responsible for following it up and making certain that people pay the tax that is owed.
Andy McDonald (Middlesbrough) (Lab)
I am hearing from constituents that they are heartily sick and tired of incessantly reading stories about tax irregularities, cheating and fraud, and the self-serving elite. Faith in politics and in this institution is at an all-time low, as is faith in the BBC in the light of these revelations. The one common denominator is the Conservative party, and this will only ever be cleared up once that lot are out of the door and out of government.
Jeremy Quin
I am not certain what the question was, but I certainly disagree with the tone taken by the hon. Gentleman. I think that we have an incredibly valuable organisation in the shape of the BBC. I for one support it, and I think it is unfortunate to start making allegations about the BBC as a whole on the basis of something the facts of which are disputed.
Oral Answers to Questions
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The Prime Minister
We are determined to do whatever it takes to break the business model of the people smugglers, who are causing the needless loss of life of people in the channel and putting unsustainable pressure on our asylum system. Our Nationality and Borders Act 2022, opposed by the Labour party, gives us new powers, which we fully intend to use. We will take further measures as required to properly control our borders and reduce the number of illegal crossings.
Andy McDonald (Middlesbrough) (Lab)
The Prime Minister
I have nothing but admiration and gratitude for our nurses for all the work they do, but it is simply unreasonable and unaffordable to have a 19% pay rise. If that is what the hon. Gentleman thinks is reasonable, I am sure the Labour party can explain to us how it would pay for that and the impact it would have on inflation. If he really wants to support working people, maybe he should get off the picket line and end the strikes.
Oral Answers to Questions
Andy McDonald Excerpts(2 years, 8 months ago)
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Dominic Raab
My hon. Friend is absolutely right. Let me just talk him through what we are doing. The in-cell technology in the new prisons will give them much greater access for the purposes he described. We are also delivering digital upgrades to a further 11 prisons. The prison employment advisory boards will be crucial in linking local businesses with prisons. Critically, not only have we got key performance indicators, but I have increased the weighting for employment and skills from below 1% to 20%, so that governors focus on it. That will drive a step change in getting offenders into work.
Andy McDonald (Middlesbrough) (Lab)
Dominic Raab
I thank the hon. Gentleman for highlighting good examples of best practice, particularly in getting offenders off drugs. We know that that is the key, along with skills and getting them into work. If he writes to me on the facts of the case, I will certainly make sure that we look at it very carefully.
Referral of Prime Minister to Committee of Privileges
Andy McDonald Excerpts(2 years, 10 months ago)
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Mr Baker
Not for the first time, the hon. Lady tempts me to give her references. On the point about repeated offences and forgiveness, I would encourage her to look at Romans 7. She invites me to clarify what I said. Of course all offences are retrospective. My point is that the police are treating Downing Street staff especially harshly in a way that the rest of the public are not being treated. [Interruption.] If the hon. Member for Middlesbrough (Andy McDonald) wants to say that is not true, I will take his intervention.
Andy McDonald (Middlesbrough) (Lab)
There are people up and down this country who have received fines way beyond what was imposed on those in Downing Street. The hon. Gentleman has to get his facts straight before he stands up and says they have been treated more harshly. That is simply not accurate.
Mr Baker
Of course people up and down the country have been fined, punished and all the rest of it, and the hon. Gentleman knows perfectly well that I have stood here and complained about those things far more than he or any Opposition Member has. The point I am making is that the police are going back some months to offences committed some time ago in a way that they are not doing for other people. I think that that is accurate and that my hon. Friend the Minister was nodding along earlier.
Andy McDonald (Middlesbrough) (Lab)
It is a pleasure to follow the hon. Member for Devizes (Danny Kruger), but may I politely and respectfully point out the difference between the approach of the Prime Minister and that of the Leader of the Opposition? When the Leader of the Opposition erred, he came straight to the Dispatch Box and amended the record, and that is what we are asking the Prime Minister to do. There is a huge distinction between the two cases.
We are at a crisis point for our democracy. The Nolan principles provide clear guidance as to conduct in public office, but they are being honoured more in the breach than in the observance. We know that, when the Prime Minister stood at the Dispatch Box and told this House that there had been no parties and that all guidance was followed at all times, neither of those statements were true. They were palpably untrue, and this matters. It is beyond the realms of credibility that the Prime Minister could possibly have thought that either of those things were truthful when he said them. He has gone through his life with the rules not applying to him, but the public have made their mind up. In opinion poll after opinion poll, the public have said very clearly that the Prime Minister of our country has lied, and this sorry issue has to be resolved.
Catherine West (Hornsey and Wood Green) (Lab)
Does my hon. Friend agree that this boils down to trust, and that the motion refers to trust within this House, trusting a Committee that reflects the proportional balance of the House to deal with the matter in a proportionate way once all the evidence is in?
Andy McDonald
I wholeheartedly agree with my hon. Friend. It all comes down to trust in this place. As other Members have pointed out, it is trust that we need if leaders are going to make important decisions about the cost of living crisis and interventions that may be demanded of us in Ukraine as we go forward. That is why trust matters.
It is bad enough that a serving Prime Minister has broken the law, but the public are certain that he lied when he denied that he had broken the law, and his lame defences as to what he believed are now in tatters. It is therefore imperative that the appropriate mechanisms of this House are engaged, as so expertly described by colleagues and as on the Order Paper, and that this behaviour be referred to the Committee of Privileges to see whether the Prime Minister is in contempt of this place and, indeed, in contempt of the country.
Steve Brine (Winchester) (Con)
To go back to the hon. Gentleman’s point about this sorry issue having to be resolved, he knows I had the privilege of serving as the cancer Minister in this House. Right now this House should be discussing childhood cancers. If one were a parent of a child with cancer, I suggest one would rather the House were discussing that than this. That is not to minimise this. This issue needs to be resolved and we need to move on. For that reason, I will be supporting the motion—with him, I suspect—this evening.
Andy McDonald
I am grateful to the hon. Member, who speaks so wisely. He is right that we all want to move on from this, but we will find that, unless this issue is resolved, we will be back to it forever until such time as the Prime Minister accepts the consequences of his actions. We need that leadership, and we are robbed of it at the moment. That is the entire point. Of course, cancer in children is critically more important and we want to get on to that, but we cannot have this issue hanging over us.
Sadly, this wanton disregard for the principles of public office is part of a wider malaise and we see it in many of our public offices. I will not stray to recite them, Madam Deputy Speaker, but I plead with Conservative Members to actively vote for the motion. I am pleased that the Government have made the movement they have thus far today, but we have heard so eloquently described how the people need to have trust in this place and democracy is at stake. It is therefore imperative that people come forward and actively support the motion.
I will finish with this, Madam Deputy Speaker. I do not know whether you heard it, but on LBC there was a heartbreaking interview with a veteran. That man could not contain his emotions as he spoke not only of his own service, but of the loss of his son serving this country in Afghanistan, and his anger at the lying of the Prime Minister overwhelmed him. He wrongly criticised himself for sacrificing so much for his country and felt that it had all been for nothing.
In the excellent speeches of the hon. Member for Hazel Grove (Mr Wragg), my hon. Friend the Member for Rhondda (Chris Bryant) and, indeed, the hon. Member for Wycombe (Mr Baker), who spoke so courageously, we have heard that people in this place care deeply about this nation and its democracy. We all do. For that reason, we should stand up for its integrity and reputation, which, I regret to say, is trashed on a daily basis by this disreputable Prime Minister. I urge Members across the House to vote for the motion.