HMRC Office Closures

Andy McDonald Excerpts

Tuesday 24th November 2015 Commons Chamber

[Andy McDonald (Middlesbrough) (Lab)]

I congratulate the SNP on securing this debate. Attempts were made to get it on the Order Paper earlier, but important worldwide events obviously squeezed it out.

I also congratulate the Government on having, in one fell swoop, cheesed off every region and nation of the UK. Some 300 workers in Middlesbrough and 400 in Stockton South, the constituency represented by the northern powerhouse Minister, will be affected by these closures. The Middlesbrough and Stockton offices will close in 2018 and 2019. This follows the loss of 2,200 jobs at Sahaviriya Steel Industries, as well as of 1,000 contractor jobs and more than 6,000 in the supply chain. We also had 800 workers sent home when construction stopped at Air Products and, on the same day this announcement was snuck out, 700 redundancies at the Boulby potash mine. I have never known such a tidal wave of job losses, and for the Government to rub salt into Teesside’s wound at this time shows a callous disregard for the fortunes of Teessiders.

[Chris Stephens]

I extend the solidarity of my constituents to those of the hon. Gentleman. This is an insult to his constituency, given the pressures it is already under. Is it not extraordinary to hear Government Members say that this is about modernisation and people filling out tax returns online, given we were told only a fortnight ago that a trade union member could not use online balloting?

[Andy McDonald]

The hon. Gentleman makes a good point. It is interesting how that rationale is adopted for certain arguments, but not universally spread.

It was a disgrace how the announcement was made. It was not made at the Dispatch Box by a Minister answerable to Members, but was snuck out on the internet during the recess. It was disrespectful to the people losing their jobs and to the House. The Government should be ashamed of themselves. I rang the chief executive and said, “What on earth are you playing at?”, and I asked whether a socioeconomic assessment had been done. The Minister is not interested in the impact on people’s lives, but Opposition Members are. I am sick to death of hearing Government Members say, “I feel your pain,” and “We’re doing everything to help.” I was told that about Teesside staff. Well, it is a funny way to look after staff—to say, “By the way, your job’s going.” It is ridiculous.

Ministers say that more than half of staff will retire in situ, so that is okay: they will not suffer because they can stay until they retire. Those jobs will disappear. There will be no continuity or benefit for future generations. Every time we have this consolidation in the north-east of England, it is always Teesside that loses out, and the jobs go north. On this occasion, we are talking, in the first instance, about consolidation at Waterview Park in Sunderland. It is only 30 miles away, but it is two hours 25 minutes by bus. It will add five hours to people’s working day. How on earth will people go to their school open evenings, attend to their elderly parents, or run the girl guides, or whatever it might be? What sort of quality of life is that? There is never any regard for these things.

These jobs will not come back, and there is no way people can maintain a decent pattern of life. This will simply mean more pain for Teesside. The Government must stop these closures, on which there has been no proper consultation, and use the comprehensive spending review tomorrow to provide targeted assistance to help Teesside attract the high-quality, well-paid work that is so urgently needed.

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[Imran Hussain (Bradford East) (Lab)]

I align myself with comments made by Members across the House, and particularly those from my region, including my hon. Friend the Member for Sheffield, Heeley (Louise Haigh) and my near neighbour, the hon. Member for Shipley (Philip Davies), who made a persuasive and common-sense argument that I want to build on.

In reply to my question last week about HMRC and about meeting Bradford MPs, the Prime Minister’s response was welcome, and I appreciate the opportunity to meet the Minister to discuss my concerns. However, the second part of the Prime Minister’s response was, quite frankly, unacceptable. His reply with statistics about the falling claimant count in Bradford completely misses the point. In any case, the count is falling in Bradford not because we suddenly have lots of a good new jobs, but because of sanctions, dubious self-employment and low-wage zero-hour contracts. We need a proper industrial strategy that will address that shortfall, and will help to bring high-quality, well-paid jobs to the city.

The decision to close HMRC offices in Bradford will mean the loss of more than 2,000 jobs which are precisely the type of jobs that we need. Regardless of the number of jobs that are transferred, that will have a devastating effect on our local economy.

[Andy McDonald]

Does my hon. Friend agree with what was said by his near neighbour the hon. Member for Shipley (Philip Davies) about the costs that will be incurred by the transfer of the service to Leeds, an area with significantly higher rental values, to a property that does not exist? How on earth will that save money? Does my hon. Friend agree that this is just a false argument?

[Imran Hussain]

I entirely agree. As I said in an intervention, this decision has been ill thought out, and no economic or social case has been made against Bradford and the surrounding region. The decision has come as something of a hammer blow to Bradford, as there is a clear case for siting the office there: a case that makes clear the positive reasons for doing so, as well as the danger of a negative economic impact if work is pulled out of the city. We have a talented and young workforce who are crying out for opportunities such as this, and, as we heard from the hon. Member for Shipley, we have an identified site next door to the transport interchange. As well as being close to four top universities, we have the internationally renowned Bradford University School of Management.

Nor can I find any good reason for moving the entire operation to Leeds. The Public and Commercial Services Union—the civil servants’ union—has already complained about the lack of consultation and the fact that no one has had a chance to see, let alone scrutinise, the figures that have been used to come up with this plan.

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[Damian Hinds]

I will not just at the moment, if that is all right with my hon. Friend.

The primary objective is for HMRC to bring its workforce closer together in regional centres so that they can collaborate better, providing more opportunities for economies of scale and of scope and for individuals’ career progression. That will allow them to deliver higher quality public services at a lower cost to the taxpayer. It is simply not efficient to have HMRC’s 58,000 employees spread throughout 170 offices across the UK.

[Andy McDonald]

While the Minister is on the subject, does he want to tell the House what assessment he has made in socio-economic terms of the damage that will be caused by those tax offices and workers withdrawing from those very communities?

--- Later in debate ---

[Damian Hinds]

There are a great number of job opportunities in Liverpool, near the hon. Gentleman’s constituency. This will be a different type of operation, with more disciplines co-located in the same building, so there will be more opportunities for collaborative and efficient working and for career progression and development. Everyone working for HMRC will have the opportunity to discuss their personal circumstances with their manager ahead of any office closures or moves, including any issues that need to be taken into account when making decisions.

[Andy McDonald]

Will the Exchequer Secretary give way?

[Damian Hinds]

Not at the moment. As I have said, HMRC has mapped the geographical location of all of its employees, to work out which locations work best for most people. We envisage that the new office structure will give more people more opportunities, which is good for them as well as for the organisations as a whole.

I have not given way as much as I might have done, because I wanted to respond to as many as possible of the points that have been raised during the debate. The questions were many and the minutes available are few, but I shall do my best. If I omit anything crucial that has been raised, I will write to the hon. Member concerned.

The official Opposition spokesman, the hon. Member for Wolverhampton South West (Rob Marris), rightly raised the question of the Mapeley leases. It is precisely because of the expiration date of those leases, which account for about two thirds of the estate, at the end of the private finance initiative contract in 2021 that this is a one-off opportunity to make this change to the estate footprint. If the opportunity is missed, there will not be another one like it for some 15 years.

I have been asked a number of times, quite rightly, about the number of compulsory redundancies. Of 58,000 staff in total, 4,000 are expected not to be in reasonable travel time of a regional centre, but that is not the same as saying that there will be 4,000 compulsory redundancies. Every year, many people retire or move away from organisations, including HMRC.

[Andy McDonald]

What counts as reasonable travel time?

[Damian Hinds]

I will in a moment come to the point that the hon. Gentleman is shouting out from his seat. The average age of employees in the organisation is late 40s or early 50s, and this is a 10-year plan, so compulsory redundancy should be a last resort.

What counts as reasonable travel time will depend on the circumstances of the individual and will include consideration of factors such as caring responsibilities, which is one reason for providing the opportunity of one-to-one discussions, quite rightly, with all employees. Typically, reasonable travel time is taken to mean around an hour, but that does not mean that that is correct for everybody in every circumstance in every location.

A number of hon. Members, including the hon. Members for Middlesbrough (Andy McDonald) and for Bootle (Peter Dowd), my hon. Friend the Member for Shipley (Philip Davies) and the hon. Member for Wrexham (Ian C. Lucas), complained about the manner in which the announcement came out. I make no apology for the fact that the staff were told first. On the day of the announcement, the entire HMRC senior team was out in the field at those office locations to carry out face-to-face discussions with staff. The direction of travel had been shared with staff 18 months earlier, and in the intervening time some 2,000 events had been held up and down the country to discuss the changes. In terms of contact with MPs, I can confirm that HMRC will be happy to discuss the situation with them.

Tax Credits

Andy McDonald Excerpts

Tuesday 15th September 2015 Commons Chamber

[Frank Field (Birkenhead) (Lab)]

I wrote to the Prime Minister to ask for this debate on the Floor of the House for a number of reasons. First, this is the most important aspect of the first Conservative Budget for many years; I have forgotten how many. Yet, by the nature of how the authorities decide how we give or withhold authority, we were not able to vote on the biggest change proposed in that Budget. I therefore think it important that we have the opportunity to debate it, and I am grateful to the Prime Minister for giving the whole House the chance to debate the “crown jewel” of the first Conservative Budget.

The second reason has already begun to erupt on the Conservative Benches. Not only is this the most significant fiscal change a Conservative Government have made, but it affects disproportionately the poor. Many Members will want to put on the record their disquiet with the Government—not just Labour Members, as one would expect, but Conservative Members, too.

The figures speak for themselves. We are talking about people at the bottom of the income pile. Just one headline figure tells us that well over 3 million of the lowest paid workers in this country will lose in the region of £1,300 a year. That might affect the standard of living of MPs; it will certainly affect the standard of living of many of our constituents and the choices that they will be able to make, whether they are represented by Opposition or Government Members.

[Andy McDonald (Middlesbrough) (Lab)]

Will my right hon. Friend give way?

[Frank Field]

I will not, partly because I am anxious that other Members have the opportunity to contribute.

I am surprised that the Chancellor is not present—this was my main reason for calling for this debate—because he was clearly the architect of the Budget. He is the most political Chancellor I have known in my whole period in the House of Commons. In the lead-up to the last election, and during it and since, he managed to push Labour into a very unpleasant corner where we were the welfare party and the Conservatives were the party of the strivers. In one single move, he has destroyed his 2020 election strategy. We heard the Chancellor’s very powerful speeches saying that the Conservative party was in favour of individuals who, when they got up in the morning to do grotty jobs for very low pay, passed the windows with the curtains still drawn of their neighbours on benefits. Individuals in this country who still get up with the work motive, which is so important for both economic and human advance, will know as they pass the windows with the curtains drawn that they do so with, on average, £1,300 a year less in their pocket.

It is an advantage to debate this proposed change in the House. The Government may not be harmed that much in the vote, but this issue will rumble and then catch fire in Members’ constituencies when the cuts come through. If Mrs Thatcher would bend under pressure from her Back Benchers when they did not like what they were hearing in their constituencies, I would be very surprised if our most political Chancellor did not bend like her.

Budget Resolutions and Economic Situation

Andy McDonald Excerpts

Monday 13th July 2015 Commons Chamber

[Greg Clark]

On that fateful day, in those dramatic circumstances, a Conservative-led Government did what history has regularly called on Conservatives to do and begin to pull the nation back from the brink of ruin after the disastrous denouement of a period of Labour Government. During the five years that followed, Britain’s prospects have been transformed, with the deficit cut by half, 1 million low earners taken out of income tax and spending on the NHS and schools safeguarded. More people are working than ever before in our history and Britain’s economy is the strongest growing in the western world. Thanks to the hard work and enterprise of the British people, our nation is on the rise again, but our task is far from complete. On 7 May this year, the British people looked at the past, looked to the future and asked us to finish the job. We are determined to repay their trust.

The Chancellor’s Budget puts our economic security first by cutting the deficit at the same pace as in the last Parliament until we have a surplus and ensuring that Britain pays its way in the world. It will help working people, support aspiration and boost productivity. It will reward work and allow people to keep more of the money they have earned. As the Chancellor said last week, the Budget is a new settlement for Britain.

Let me be frank: not every Budget goes according to plan. Some are cheered and others are jeered, such are the ups and downs of government, but it takes a special kind of genius to have an omnishambles Budget while in Opposition. I am sure that the whole House is eagerly awaiting the latest news from the hon. Member for Wolverhampton North East (Emma Reynolds) on whether the Opposition have a view on the Budget. Yesterday, the acting Leader of the Opposition announced that Labour would support the welfare cap and the restrictions on family tax credits, but within hours of her announcement three of the four leadership contenders—the right hon. Members for Normanton, Pontefract and Castleford (Yvette Cooper) and for Leigh (Andy Burnham) and the hon. Member for Islington North (Jeremy Corbyn)—denounced her and a policy that they had presumably agreed. We await the view of the hon. Member for Leicester West (Liz Kendall), but we have her representative on earth here—the hon. Member for Wolverhampton North East, who supports her campaign—and we want to find out whether the chaos is complete or partial. After the disarray of the last 24 hours, who could disagree with the hon. Member for Stoke-on-Trent Central (Tristram Hunt) when he said yesterday:

“The speed and rapidity with which we are beginning to be regarded as irrelevant…is really terrifying”?

We on the Government Benches have a settled view on the matters at hand. This afternoon, I will talk about two aspects of the Budget in particular: the opportunity that it offers to every part of the country to participate in our national success; and the imperative that it sets to move our economy to one of high productivity by addressing vital challenges, at the centre of which is building more homes.

[Andy McDonald (Middlesbrough) (Lab)]

rose—

[Emily Thornberry]

rose—

[Greg Clark]

I will give way to the hon. Member for Middlesbrough (Andy McDonald)—the Member for my home town.

[Andy McDonald (Middlesbrough) (Lab)]

May I tell the Minister what is truly terrifying? It is his Government’s proposal to introduce a two-child policy that will punish the most vulnerable and the poorest in our society. That is the terrifying thing about this Budget.

[Greg Clark]

The hon. Gentleman can make that intervention in the parliamentary Labour party meeting later this afternoon, because I understand that that is the official Labour party policy.

Let me say a few words about devolution. As we recover from the recession and look to the future, it is clear that economic progress cannot come from London alone. One of the most striking achievements of the past five years is that the recovery has come from every part of our country. Businesses have created 2 million jobs over the past five years. Before 2010, only one in three jobs was created outside London and the south-east; now the figure is three in every five.

Where are exports growing fastest in the country? Is it in London? No, it is in the north-east, the home region of the hon. Member for Middlesbrough and myself. Where in England has the largest trade surplus? Is it London, or the south-east? No, it is the north-east again. Where is employment rising fastest? Is it in the south-east? No, it is in the north-west of England. For Britain to succeed, every part of the country must be firing on all cylinders.

That requires that we ask every city, town and county what they need to prosper. No two places are the same —Manchester cannot be confused with Margate, nor Newcastle with Newquay—so it should be obvious that a central plan for everywhere will end up working nowhere. For decades, however, that is exactly what central Government Departments tried to do; they prescribed blanket solutions for diverse local problems, which were enforced through unaccountable and expensive regional bureaucracies.

During the last Parliament, we made great strides towards reversing the failures of centralisation by devolving powers on planning, housing and economic growth. The Chancellor has already set out a bold vision for building the northern powerhouse, and this Budget will take us further.

Oral Answers to Questions

Andy McDonald Excerpts

Tuesday 10th March 2015 Commons Chamber

[Danny Alexander]

I certainly can. In the final Treasury questions of this Parliament it is worth reflecting on the fact that, despite the tough economic decisions we have had to make, this country is making the largest investment in our rail network since Victorian times and the largest investment in our road network since the 1970s, and we have a programme to roll out superfast broadband across the entire country. Those things will leave our economy with a stronger long-term growth potential, as well as having given us the best growth rates in the European Union at the moment.

[Andy McDonald (Middlesbrough) (Lab)]

T5. Is it not the case that those earning more than £1 million a year have benefited from an average tax cut of up to £100,000 a year in this Parliament? Does that not illustrate that, as ever under the Tories, the mega-rich get richer and the poor get poorer—and that this time they have been aided and abetted by the Liberal Democrats?

[The Financial Secretary to the Treasury (Mr David Gauke)]

It is this Government who have dealt with disguised remuneration by which loans were never repaid, benefiting the highest earners. It is this Government who have increased the rates of stamp duty land tax on high-end properties and ensured that they are properly enforced. It is under this Government that capital gains tax has gone up so that cleaners do not pay a higher rate of tax than hedge fund managers. It is this Government who have ensured that those with the broadest shoulders bear the greatest burden, as the Institute for Fiscal Studies confirmed last week.

Consumer Rights Bill

Andy McDonald Excerpts

Monday 16th June 2014 Commons Chamber

When I challenged estate agents at Douglas Allen in Walthamstow about their behaviour, they admitted openly that they expected buyers to factor the introductory fee into their offers. Sellers do not benefit from the fee that is being offered. They do not gain the benefit of the additional sum that the buyers are paying for their asset—not the estate agent’s asset—but the estate agent does. That the sellers are paying for the privilege of the marketing of their houses in that way only compounds the scam that is affecting too many people in our country.

[Andy McDonald (Middlesbrough) (Lab)]

Is not the ability to charge two parties to a potential transaction nothing less than a direct conflict of interests? It should not be possible to owe a duty to a buyer and a seller in equal measure. An agent has one client, and it must remain that way.

[Stella Creasy]

My hon. Friend is entirely right. Let me give an example of the way in which this conflict of interests operates in practice. The example was given to us by a young first-time buyer who, because of her restricted ability to buy a property in the area where she wanted to live, accepted that she would have to take part in a “sale by tender” arrangement, and that she would have to pay an introductory fee of 2.5% of the sale price of the property. She made an offer of £258,000 for a house that was well within the guide price, and therefore committed herself to paying about £6,000 in fees to the estate agent. Her offer was accepted as the highest offer in the sealed-bid process. She then contacted us to say that her offer had not been accepted by the seller, and the agent was putting pressure on her to up her offer to £262,000. If she did not do so, the property would be put back on the market for another “sale by tender” exercise, because the seller wanted more. That was despite the fact that she was the one who had committed herself to paying the fee that the estate agent wanted to charge.

Some Members may think that that is an indication of the overheated London housing market, and the fact that house prices in my constituency have risen by 30% reflects that overheating. However, we are hearing about examples of double charging throughout the country. In the north-west, for instance, a gentleman who tried to buy a house for £45,000 was told that, as well as finding the £45,000 and the fee for the conveyancing, he would have to find £2,880 in order to pay the introductory fee to the estate agent. In the south-west, an estate agent wanted an introductory fee of nearly £6,000 plus VAT from someone who wanted to buy a house for £296,000. I must stress that the sellers of the properties, who do not benefit from the additional £6,000, are also paying a fee for the service.

The Minister had admitted that double charging is a potentially worrying emerging trend which seems to be on the increase, but at every stage in the Bill when we have sought to outlaw this conflict of interests, the Government have voted against our attempts, although the property ombudsman has agreed that the new approach to selling properties

“can also potentially disadvantage the seller. He”—

or she—

“will no doubt have to agree to accept only prospective buyers that follow the agent’s agreement with those prospective buyers and if a prospective buyer declines to submit to paying the fee, he”—

or she—

“will be out of the picture and the seller will have lost an opportunity to sell his house.”

That is what the property ombudsman has told us about the practice.

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We believe it is important that consumers are able to access independent advice in dealing with issues around legal insurance and whether there is an inadvertent conflict of interests. We therefore believe consumers should have the right to get independent advice before being sold such policies, so they know the consequences for their legal cover if they take out a policy. We also believe it should be an unfair contract term to sell a consumer a contract for a service that limits their access to independent advice.

[Andy McDonald]

Does my hon. Friend share my concern that the Ministry of Defence has approved a particular policy under the banner of PAX that prescribes a single point of reference for legal advice and does not give members of our armed forces freedom of choice in that respect? Is it not reprehensible that we are in that situation?

[Stella Creasy]

My hon. Friend has just illustrated why I believe him to be the expert on this issue. I hope that he will contribute to the debate to explain why this concern about independent advice is so important. He is right about upholding the need for independent advice.

I am conscious that other Members wish to speak in this debate, so let me say a little about net neutrality, and our amendment to amendment 19. I recognise that this is a new and evolving debate. Our discussions have ranged from the Victorian bill of sale to the contemporary net neutrality, both of which reflect this stress over conflicts of interest. For those Members of this House who have not yet had the chance to watch the viral videos about net neutrality, let me explain the concern. Net neutrality is the principle that internet service providers and Governments should treat all data on the internet equally. They should not discriminate or charge by user, content, site, platform, or application. In layman’s terms that means that, whether we are looking at iPlayer, Sky on the Go or Netflix, there would be equal access to services. There would be no speed differential in accessing them.

In America, some broadband and internet providers have been exploring the idea of charging companies different rates for providing their services. That means that they could offer access to some websites at a faster rate than others, and therefore change the way in which consumers access them. The fear is that that would create a two-tier internet, because it will limit the number of sites that consumers can access with ease, and the number of companies that can access and operate services equally. In particular, if large companies were to use their financial muscle, or their internet provision, to restrict access to their competitors or to new entrants to the market, it could limit creativity and innovation in the provision of services. An internet without net neutrality moves huge market power to those who are the gatekeepers to our online services. It is little wonder that 100 companies, including Google, Facebook, Twitter and Amazon, have expressed concern about this issue. Indeed, “father of the internet” Tim Berners-Lee, who was rather unfairly described as a web developer recently, has argued that there is a real concern. He says:

“Unless we have an open, neutral internet we can rely on without worrying about what’s happening at the back door, we can’t have open government, good democracy, good healthcare, connected communities and diversity of culture. It’s not naive to think we can have that, but it is naive to think we can just sit back and get it.”

We welcome the amendment that has been tabled by the hon. Member for Shipley (Philip Davies), but we are concerned that the way in which it has been drafted may inadvertently imply that those sites that are providing pay-per-view services, such as Netflix, would be required also to provide access to some of their competitors, and I am sure that that was not what he intended. We have tabled a clarifying amendment to make it clear that we are talking about those services that provide access to the internet, rather than content.

It would be useful to hear from the Minister about what discussions she has had with her colleagues on the issue of net neutrality and about what action she is taking to ensure that consumers’ interests in the operation of net architecture are being upheld so that we do not have the concerns and challenges experienced by America. In particular, does she feel that existing protocols are strong enough to protect the interests of consumers and avoid competition issues between content providers, and has she done an assessment of the impact on consumers in the UK of a possible two-tier internet?

We have here some very different but interlinked issues around conflicts of interest, freedom of markets and consumer interest, and an effective piece of consumer rights legislation should provide consumers with the tools with which they can mount a challenge to any of them. We hope the Minister will accept our amendments in the spirit in which they are intended, which is about applying clarity in what is meant to the list of unfair contract terms that would give consumers the right to challenge issues in court. I therefore hope that the House will support them accordingly.

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[Jenny Willott]

May I add my congratulations to you, Madam Deputy Speaker? You will get bored with it soon, but at the moment I am sure it is probably still quite a novel surprise.

I share the concerns of the hon. Member for Walthamstow (Stella Creasy) about the practice of double charging by estate agents. That issue has been raised in the House a number of times and in Committee. Under existing legislation—in particular consumer protection regulations and the unfair contract terms law—as well as their own industry codes, estate agents must already make fees and charges clear for consumers. I believe that there are risks in rushing into further legislative measures and applying them prematurely, which is why a better way of addressing the issue is through estate agent redress schemes.

As the hon. Member for Walthamstow mentioned, on 7 May I met the property ombudsman and ombudsman services: property, to draw their attention to my concerns on this issue, and those raised by hon. Members in Committee and the House. Both redress schemes have agreed to monitor any complaints they receive, and more is being done. The property ombudsman has committed to producing new guidance that will put in place strict controls on the practice of charging the buyer a fee, or charges being placed on both buyer and seller, and the potential for conflicts of interest. That guidance will ensure that agents recognise their obligations under the ombudsman’s code of practice for transparency, disclosure and avoidance of conflicts of interest. If the guidance is not complied with, agents will be in breach of that code.

Estate agents must belong to an ombudsman service, and ombudsmen have strong powers to tackle bad behaviour by estate agents. For example, they can give a financial award to the complainant or enforce obligations on the estate agent. As a last resort, estate agents can be struck off a redress scheme. Because it is a requirement on estate agents to belong to a redress scheme, if they have been struck off, they are effectively out of business and cannot continue to operate. If they continue to operate under those circumstances, it is a criminal offence.

[Andy McDonald]

Does the Minister accept that instead of codes of practice and all that paraphernalia going round the houses, it is fundamentally a breach of the fiduciary duty that an estate agent owes to one client if they are in discussions with another and charging a fee for the same transaction? The interests are not united; they are completely and utterly divergent. Would it not be better to say simply, “You cannot charge two contracting parties a fee for the same service”?

[Jenny Willott]

As I said, I met both ombudsmen in May and discussed the best way forward. As a result, they are looking at the conflict of interest, which I think is key to this issue, and at how guidance can be tightened so that the responsibility estate agents have to the buyer and seller is made clear.

Consumer Rights Bill

Andy McDonald Excerpts

Tuesday 28th January 2014 Commons Chamber

[James Wharton (Stockton South) (Con)]

I welcome this important Bill. We have heard much about its impact and the positive benefits that it will bring to consumers, and I will talk about that shortly. When I was even younger and a law student studying the myriad regulations and legislation that made up consumer protection, I remember spending many a sober hour late into the night trying to get my head around a very complex area of law, which was beyond the reach of many lay people who would not have been able to devote the time that I, as a student, could. Occasionally, I suspect, it was also beyond my reach as a law student. Therefore, it is welcome that we see a real and genuine attempt by the Government to consolidate much of that regulation and legislation into a clear and straightforward Bill which will, I hope, become a clear and straightforward Act, and will empower consumers and enable them to enforce the rights to which they are entitled.

As a starting point, this consolidation Bill, which is part of what it is, is welcome. Compared with other consolidation Acts, such as, to recall again my days as a young law student, the Trade Union and Labour Relations (Consolidation) Act 1992—a monster of an Act, which tries to do many things and to bring together many pieces of legislation, and is so complex that it is very hard to decipher—this is clear and straightforward. We know what it says and what it means. We know what it means for our constituents and what it will mean for consumers in this country and for our economy. That is a positive benefit.

It is also worth noting that the Bill updates our consumer law for the 21st century—not my words, but the words of the chief executive of Which?—because it talks about protection for digital downloads and digital content. It is a glaring omission that our consumer regulations have not been able successfully and adequately to keep up with what is now such an important part of our economy. In 2012, more than £1 billion was spent downloading digital content, and more than 16 million people who did that had a problem of one sort or another with what they downloaded. That is not a good situation, but it is even worse when we have a regulatory framework that does not address it and does not directly give people the sorts of rights that they need in order to be protected in an increasingly important part of our economy.

[Andy McDonald (Middlesbrough) (Lab)]

Given what the hon. Gentleman has just said, does he welcome the European directive on alternative dispute resolution?

[James Wharton]

The hon. Gentleman makes a good point. I welcome the fact that competition regulation can be properly done across borders, across Europe, in a way that allows us to continue to trade together and to have a functioning free market within the European Union. I welcome the directive. It is something that we can do ourselves, and are doing ourselves, but that does not mean that I am against it in principle. It is an important point. This is something on which we can unite across the House because it is about getting the right deal for our constituents. This is about protecting people, some of whom—we have heard examples of constituency casework—are vulnerable, are pressured by unscrupulous sellers and need protection in the form of legislation, and others of whom, while they may not be vulnerable, find themselves, through unfortunate circumstances, with goods or services that do not meet the standards that they expect. It is right that we have a clear and straightforward framework that offers them the protection that they should be able to expect to rely on. That is what the Bill does, and that is what the Bill extends to digital content, which is incredibly welcome.

I do not intend to detain the House for long, but it is important that, on behalf of law students throughout the country and consumers in our economy, we recognise that the Bill does a good thing. It simplifies and consolidates an important area of law and regulation, and it will make life better for people who buy goods and services and rely on the functioning economy that lies behind the selling and providing of goods and services in this country. I welcome it. I hope it will gather support across the House and that it will be successful and become an Act.

Finance (No. 2) Bill

Andy McDonald Excerpts

Thursday 18th April 2013 Commons Chamber

[Jacob Rees-Mogg]

I am grateful to the hon. Gentleman for that intervention, because it demonstrates an unduly simplistic approach. Indeed, poorer people may have a higher propensity to spend than richer people, but that is not the end point of the economic cycle. There need to be deposits in banks so that money can be lent to businesses—small businesses as well as large—and so that people can take out mortgages. There is a cycle and a flow of money.

[Andy McDonald (Middlesbrough) (Lab)]

Will the hon. Gentleman explain why, when I speak to banks—I had a conversation with Barclays bank not many weeks ago—they say that they do have deposits and the ability to lend, but that money is not flowing out because people are not approaching them? Is that the reason or is it that the terms on which they propose to lend money are so onerous that the transactions do not proceed? Whichever it is, my understanding is that the banks do have the funds.

[Jacob Rees-Mogg]

One of the major flaws that led to the banking crisis was that loan-to-deposit ratios across the banking sector were out of kilter. Banks were lending more than they had on deposit and were therefore entirely dependent on the wholesale market. The wholesale market dried up, which led to a huge calling in of loans. That was at the heart of the financial crisis.

The banks may be saying that they are more comfortable with their loan-to-deposit ratios, but if one looks at the figures, even HSBC’s loan-to-deposit ratio—for its UK business, rather than its international business—is about 100%. Historically, banks have been more comfortable in the 70% to 80% range. We therefore do need more savings in the economy and those come from the better-off saving some of the income that they earn.

[Jacob Rees-Mogg]

I do not agree with the hon. Gentleman on that at all, because this country attracts a huge amount of foreign investment. Sticking to the example of the Hongkong and Shanghai Banking Corporation, that company was able to ease its way through the financial crisis because it could lend its overseas deposits to its British business. It was on the backs of savers in Hong Kong and China that HSBC was secure during that period.

Rich people saving their income is a good thing economically because it boosts the pool of saving that is available for productive investment, such as loans to businesses and individuals. Even if the argument were right that this policy is a great boondoggle for the wealthy, which it is not, it would be beneficial because it would help the economy get back on to a path to growth by providing the capital that is needed for the banks to lend.

In summary, it is clear that putting rates up leads to less tax. That is not a sensible thing to do when the Government are short of money. It is not fair, indeed it is unfair, because it puts a greater burden on other members of society who have less ability to pay. It is not morally defensible because high rates of tax are not a moral good and low rates a moral evil; in fact, it is the other way round. People have a right to keep the money that they earn, unless the state can show that it is essential to take it. That is economically beneficial because one of the great problems of our economy is a lack of saving. We are not in the paradox of thrift circumstance, in which excess savings deflate the economy.

For all those reasons, the amendment should be rejected and Her Majesty’s Government should be proud of what they have done. Indeed, they should go further and look to get the higher rate of tax down to 40% and perhaps even to that magic figure of 37%, which, as I said earlier, some studies show would be the perfect rate to maximise revenue, encourage people to work hard and continue us on our path to success.

[Andy McDonald]

It is a pleasure to serve under your chairmanship, Mr Hood.

I will address the amendment directly. The lowering of the top rate of income tax to 45p will benefit 267,000 people who earn more than £150,000. In my view, it cannot be right that those who earn more than £1 million a year will receive a tax cut of more than £100,000. Families across the country will be £891 worse off on average as a result of the Chancellor’s changes to tax, tax credits and benefits since 2010. I am at a loss as to how that fits with the concept that we are all in it together. The 1% cap on tax credits and working-age benefits means a cut in real terms. At the bottom, inflation outstrips increases in earnings, whereas at the top, earnings outstrip inflation.

Acres of copy have been written about Baroness Thatcher over the past week, but one of her utterances that has not received the attention that it deserves is her expression of disappointment that, despite having made it possible for a small minority of people to gain control of the majority of the wealth of this country, that has not given rise to a greater degree of charity or generosity. Interestingly, it is often those who have the least who give the most. Two examples of such generosity are imprinted on my mind. The first was in 1984, when people from my community made regular trips up to Easington colliery with bags and boxes of food to assist families in County Durham who were finding life such a struggle.

The second example is from recent weeks, when I visited one of the five food banks in my constituency run by the Trussell Trust. It was heartbreaking to hear from the local director of the trust, Nigel Perrott, that food parcels were being sent to my town of Middlesbrough from places such as York and Thirsk. He hails from the home counties and credits people in that part of the country with tremendous generosity. However, he said that he had been surprised and overwhelmed by the generosity of the people of Middlesbrough. When they come out of the supermarkets, they do not donate the occasional tin of beans or packet of rice, but bags and bags of food. It seems that everything changes, but nothing changes. It is perhaps no coincidence that such desperate need arises when the Conservative party is in power.

We used to hear a lot from the Prime Minister about the big society, although a lot less so recently. The genuine big society is, as it ever was, ordinary people looking after each other.

[Robert Flello]

I am enjoying my hon. Friend’s contribution, albeit that it is tinged with quite a lot of despair. To reinforce his point, last Saturday a trolley push organised by the Trussell Trust gathered more than 325 kilos of food from the people of Stoke-on-Trent for the people of Stoke-on-Trent.

[Andy McDonald]

My hon. Friend makes a telling point and I would not want to diminish the importance of what I am saying by qualifying what he said about despair. As in his constituency, this Friday we will have a wonderful demonstration of generosity in my constituency with the same sort of event—a trolley push. My point, however, which I wish to reinforce, is that there is such a spirit of determination and people are so resilient that they will not be beaten by this situation. However, they will come through it not because of this Government but despite them.

While tax cuts are being handed out to millionaires, 40% of children in my constituency are living in poverty. I cannot see how fairness and the apparent principles of a big society are influencing or informing this Government’s policies one iota. I do not wish to dwell too much on the negativity, but it is unavoidable given that my constituency is the second worst in the country for long-term unemployment. We are asking for fair treatment. North-east England is the only net exporting region in the country; our contribution to the national economy is massive but the people see little of the benefits. It is about fairness.

The Prime Minister and Chancellor have repeatedly said that those with the broadest shoulders should bear the largest load. They claim that the 45p tax rate raises more revenue, but one data point is totally unreliable, as has been exposed in the Chamber today. It is also clear that the richest will arrange their affairs, especially when such a reduction was so well telegraphed. The richest have benefited most from our society, and the amount of tax they pay is proportionately more than their numbers, but proportionately less than their wealth. Relative to their income, the Chancellor’s biggest tax rise—that on VAT—hurts those at the bottom most. The rich still do very well, with company directors getting inflation-busting pay increases, and bank executives getting huge bonuses, which the Prime Minister went to Brussels to defend.

[Geraint Davies (Swansea West) (Lab/Co-op)]

The Committee may already know, and people will be interested to hear that, in the past two years, pay increases for the top 10% were on average 5.5% in both years. The top 10% have increased their pay by 11%. The Government claim that the rich are making a greater contribution, but they have very thick wallets to start with and, frankly, are sitting comfortably.

[Andy McDonald]

That is exactly right. I was going to make that point another way and say that company directors of the FTSE 100 received on average a 50% pay rise in 2011—Income Data Service provided that information. The well-off enjoy the benefits of many interesting incentive schemes that are not available to ordinary working people such as Mrs O’Reilly or Mr Hussain in my constituency, where the average income for a full-time employee is less than £500.

--- Later in debate ---

[Geraint Davies]

I am grateful to my hon. Friend for his enormous generosity in giving way. I have a schedule from a constituent that details his personal means. Until the beginning of this month he had £21.25 a week left for food and clothing after paying his utility bills and allowing £6 for bus fares. After the introduction of the empty bedroom tax, which will cost £10.31, he will end up with under £11 a week for food. Some problem could happen along the lines mentioned by my hon. Friend, but assuming that nothing else is needed, he will have just £11 a week. We would not want that desperate situation to happen in a developing country, let alone in Britain. How can we justify giving money to the richest when people are in despair and poverty?

[Andy McDonald]

I absolutely agree. People are getting down to the pennies, not the pounds, yet this month multimillionaires will get an extra £2,000 a week. We should be thoroughly ashamed of delivering that to our people. I sometimes wonder what on earth we mean by patriotism in our land. We can wave our flags and hold the necessary ceremonial events, but where do the people come in? For my money, patriotism must be about our people. We sometimes lose sight of that and get confused by the panoply and array of colourful images of patriotism that do not go to the heart of the living and working conditions of our people.

[Geraint Davies]

My hon. Friend mentions patriotism, which reminds me of yesterday’s great spectacle of Baroness Thatcher’s funeral, which many people would have enjoyed watching on television. However, let us not forget that that £10 million would have kept my constituent going on his previous income for 10,000 years, and on his new income for 20,000 years. Is that not a disgrace?

--- Later in debate ---

[Andy McDonald]

My hon. Friend’s point is well made —he expresses it well.

I shall conclude by highlighting the lack, as I perceive it, of any conversion among Departments. There is a desire to offer assistance to the insurance industry, which will no doubt be delighted that it will no longer have to pay compensation to people in the circumstances I have described. I strongly suspect that the measure will not help our industries one jot—I do not foresee any massive reduction in the employers’ liability premiums that will be charged as a result of the measure—and, frankly, the insurance industry is laughing all the way to the bank. I do not know whether it is laughing with or at the Government, but in any event, it is has received a fabulous return at the country’s expense.

All that is happening in the run-up to workers memorial day. It saddens me immensely that we will commemorate the dead and fight for the living on that day when employers know that the regulations we have fought so hard to introduce to our workplaces to promote a safety culture have no teeth whatever. As a result of the measures, there will be an increase in deaths and serious injuries in the workplace. That, too, will be visited on the statutory services. We are compounding error on error. I urge the Government to think carefully about the impact of those policies.

The point is well made that the Treasury is defending the rich and powerful against ordinary working people. The reflex of Government Members is to protect the powerful against the powerless; those with a voice against the voiceless; and those who control the wealth of this nation against those who build it.

[Several hon. Members]

rose—

Oral Answers to Questions

Andy McDonald Excerpts

Tuesday 12th March 2013 Commons Chamber

[Sajid Javid]

My hon. Friend makes a good point. If the country were now following the Labour party’s plans, independent assessments show that the country would be borrowing £200 billion more: more debt, more deficit. As we bring the deficit under control we will be able to invest in things such as broadband plans in Swansea and help growth in this country.

[Andy McDonald (Middlesbrough) (Lab)]

7. What assessment he has made of the effect on child poverty of his changes to the uprating of tax credits and other payments announced in the autumn statement.

[Mr David Hanson (Delyn) (Lab)]

10. What assessment he has made of the effect on child poverty of his changes to the uprating of tax credits and other payments announced in the autumn statement.

[The Economic Secretary to the Treasury (Sajid Javid)]

The Government have protected poor and vulnerable groups while undertaking the urgent task of tackling the fiscal deficit. Work remains the best and most immediate way out of poverty, and we have continued to prioritise providing the best possible work incentives for welfare reform and increasing the personal allowance.

[Andy McDonald]

The Government’s own impact assessment says that 200,000 more children will be pushed into poverty as a result of the cuts to tax credits and benefits next month. The Children’s Society says that 40% of the children in my constituency now live in poverty. Will the Minister provide an assessment of how many more children in Middlesbrough will be in absolute poverty in 2016 as a result of the Chancellor’s failures, with not enough money for their food, warmth and shelter?

[Sajid Javid]

The hon. Gentleman knows that the official measure for child poverty is flawed. It is based on changes in relative income, which has meant, for example, that under Labour child poverty fell by 300,000 during a recession—clearly a nonsense. This Government are focused on the causes of child poverty, such as unemployment. I would have thought that the hon. Gentleman would welcome the fact that more people are employed in Britain today than at any time in our history.

The Economy

Andy McDonald Excerpts

Tuesday 11th December 2012 Commons Chamber

[Andy McDonald (Middlesbrough) (Lab)]

I am greatly honoured and feel immensely humbled and privileged to be in this place, representing the town of my birth. The circumstances that have caused me to be here were of course most tragic and sudden and I wish to make some comment about my immediate predecessor Sir Stuart Bell, who sadly died on 13 October 2012.

Sir Stuart became MP for Middlesbrough in 1983 after beating a certain Tony Blair in the selection process and represented the Middlesbrough constituency for almost 30 years until 2012. Such a lengthy period of service is quite remarkable and he was duly knighted in 2004 for his services to Parliament, as well as being awarded the Légion d’Honneur in 2006 for his contribution to British-French relations. Seven successive general election victories is a record that speaks for itself.

Middlesbrough is still a comparatively young town, and in the early part of the 19th century was nothing more than four farmhouses with a population of some 25 souls. It was the discovery of ironstone in the Eston hills and the subsequent production of pig iron that saw Middlesbrough’s Klondike-like growth over a relatively few short years. Indeed, the first MP for Middlesbrough was Henry Bolckow. a German national until his naturalisation as a British subject in 1841. He is undoubtedly one of the founders of modern Middlesbrough.

In 1851, at the time Bolckow opened his blast furnaces on Teesside, the population was 8,000; by 1871 it had grown to 40,000. In 1853, the town received a charter of incorporation and Bolckow became its first mayor and the town’s first MP when it was granted the status of a parliamentary borough in 1868. I have been labouring under the misapprehension that I was the first locally born MP for Middlesbrough, but I discovered that Penry Williams beat me to it when he was first elected as a Liberal MP in 1910. However, I think I can lay claim to being the first Labour MP for Middlesbrough to have been born in the town.

I could not let this occasion pass without mentioning one of my most notable predecessors, namely Ellen Wilkinson, otherwise known as “Red Ellen”, who first won the Middlesbrough East seat in 1924. She was of course a leading light in the women’s suffrage movement and, having lost Middlesbrough East in 1931, went on to become the Labour MP for Jarrow, holding ministerial office as well as taking part in the famous Jarrow march. It was lovely during the course of the election to meet Bob Carter of Bellamy court in Pallister park, who is well into his 90s and was a runner for Ellen Wilkinson. He was vote-catching in that last election.

The town motto is “Erimus” which means “We shall be” and is a direct response to the motto of the Brus family who owned the site on which Middlesbrough is built. Their motto “Fuimus” means “We have been'” and the town motto was chosen to signify the town’s will to grow and become great from its foundation. It encapsulates the energy, ambition and aspiration of the people who came from all over the British isles and beyond to seek employment in the burgeoning industries of the mid and late 19th century.

Since those times people have continued to come from far and wide to work in our world-class industries of steel, bridge and shipbuilding, petro-chemicals and oil and gas, and now in our digital and renewable energy industries. By definition, glancing back over just a few generations, we in Middlesbrough can all trace our forebears to other parts of these islands and much further afield—right across the globe. In short, we all came from somewhere else.

Our magnificent Teesside university, which in very recent times was awarded the title of university of the year, continues to draw students from all over the world and contributes in no small measure to the development of new industries, especially in the area of digital technologies. That all adds to our diversity and the rich cultural mix of our town, and it is a joy for me to be at the service of all the people of Middlesbrough of whatever background, or whatever faith, or of none, in full recognition of the common values at large in our community as we work towards our shared values of social justice, understanding, peace and tolerance.

We have a real sense of community in Middlesbrough, and we have a lot to be proud of, including our wonderful James Cook University hospital and our schools, the majority of which have either been rebuilt or refurbished over the last 10 years or so. We also have MIMA—the Middlesbrough Institute of Modern Art—and, of course, the magnificent, trophy-winning Middlesbrough football club. Undoubtedly, however, we face very challenging economic times. Our rates of unemployment are unenviably high, which is why I will conclude my speech with a plea.

Although the entire House will undoubtedly agree with me that it is never acceptable for an individual to reject the genuine opportunity of work, it seems to be increasingly part of the accepted orthodoxy that those who suffer the indignity of unemployment do so as a result of the lifestyle choice that they make. That is a gross and offensive misrepresentation.

In a town where more than 10 people currently chase each and every job that comes along, it is a most cruel slight and insult to say, as some assert with unremitting regularity, that all such people are somehow by definition scroungers. To all those who would say such things, I make this plea: if they are fortunate enough to be in employment or to have other means and if they can heat their homes and support their families, they should tread carefully on the sensitivities of those who cannot make such boasts. Such attacks on the powerless and impoverished serve only to reaffirm their sense of alienation and desperation, which in turn fractures our society and offends against the finest of British traditions that in times of hardship, we protect, support and care for one another.

It is my belief that the overwhelming majority of the British people expect us in this House to speak up for working families that are having their budgets squeezed and for young people who are struggling to find their first job. In recent weeks, I have talked to thousands of people in Middlesbrough, so I know that people are anxious and scared for the future of their families. To make matters worse, there is a sense that some politicians are determined to set community against community and neighbour against neighbour. It is my fervent belief that we must strenuously resist the temptation of such politically expedient arguments, and as an alternative we should engender a real sense of one nation so that we can rebuild our country and restore fairness so that everyone has a stake and not just a privileged few.