Fairness at Work and Power in Communities
Barry Gardiner Excerpts(2 years, 7 months ago)
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Dr Liam Fox (North Somerset) (Con)
It is always a pleasure to speak in this House, but it is a particular pleasure for me today, as it is 30 years to the day since I stood on almost the same spot to give my maiden speech in the House of Commons. It is a pleasure, too, to speak in a debate about the communities up and down our country.
Nothing undermines the stability of our economy, community and families more than inflation. It inevitably hits the poorest in society hardest, and it is therefore a moral as well as an economic hazard. As Milton Friedman said, inflation is taxation without legislation, except that no one wins, including the Treasury.
As a result of the covid-19 pandemic, the global economy suffered a negative supply shock, with an initial fall in output followed by an increase in prices. That has affected a wide range of global commodities, but nowhere has the effect been felt more than in the energy sector. The complication here is that the current surge in prices is the result not of a single shock of the pandemic, but of a number of supply and demand factors that have affected the market in recent times. Members who are interested in a detailed analysis of this subject should read the report by Carlos Fernandez Alvarez and Gergely Molnar, written and published by the International Energy Agency, because it answers the question that many of our constituents are asking us: why has energy suddenly become so expensive?
At the beginning of the pandemic, fossil fuel prices fell to their lowest in decades. That was followed by a strong rebound as the global economy recovered, and it was exacerbated by a cold winter in the northern hemisphere and lower than average wind generation in Europe. However, the main driver of price increases has come on the supply rather than the demand side. The commodity price collapses of 2014-15 and then 2020 resulted in diminished investments in oil and gas, which increased the vulnerability of the sector. Governments across the world have failed to sufficiently scale up clean energy sources, renewables and technologies to fill the inevitable gap.
Those problems were exacerbated by the recent lockdowns, which pushed essential maintenance work from 2020 into 2021. That led to restrictions on supply just as demand was quickly recovering. That was particularly true in the UK and the Norwegian sectors of the North sea. Similar problems affected the gas industry. The global economy has seen an unavoidable inflationary shock, but—and there is a big but—we can be sure that this is not the whole story when it comes to the price rises that British people face today, not only in energy but across a range of commodities. How can we be so sure? If we look across the global economy at the variability of inflation rates, we see a very large difference. In Japan, which imports all its fossil fuels, the latest inflation figure shows a rise to 1.2%. China is 1.5%. While inflation in the eurozone has surged to 7.5%, Switzerland, a European but non-eurozone country, has inflation of 2.5%. In the UK, we are above 7%, and the US is 8.5% and rising, so something other than energy prices has been behind our inflationary phenomenon.
In fact, we have two different inflationary surges—that of global commodity prices, as I mentioned, which affects everyone, and that of monetary inflation, which afflicts those countries where central banks have allowed persistent increases in the amount of money in circulation relative to existing output. The group-think mentality of central bankers in the United States, the eurozone and the UK has reinforced the idea that they have stumbled on some kind of monetary alchemy that makes it is possible to continually expand the money supply, unrelated to output, without creating inflation. Perhaps that is an uncharitable view, and they knew all along that they would create inflation but were simply responding to their political masters. However, that raises questions about the independence of the central bank in the first place. Either way, it is a wholly unacceptable position.
It is almost universally accepted that the first duty of Government is the protection of its citizens. As a former Defence Secretary, I am only too aware of the many external threats to the safety of our people and our country, but there are other threats that I believe we have a right to be protected from: the debasement of our currency, the erosion of our earnings and the devaluation of our savings. I believe it is fundamentally wrong for Governments to engage in structural profligacy, spending excessively across the economic cycle and passing ever-larger amounts of debt on to the next generation.
I also believe it is the duty of central banks to safeguard the value of our money and our savings. The Bank of England persisted beyond any rational interpretation of the data to tell us that inflation was transient, then that it would peak at 5%. It has consistently underestimated the threat.
There are three things I would like to see. First, the Treasury Committee should launch an investigation into why the Bank of England so comprehensively underestimated the inflationary threat; secondly, the monetary policy report should go back to being the inflation report and thirdly, the Government should think about what guidance might be given to the Bank of England on considering and reporting monetary stability.
I will say a word about the Government’s forthcoming Levelling Up and Regeneration Bill. We all understand the need for housing targets. We must have social mobility, ensuring that the next generation can participate in the benefits of home ownership. We need more affordable homes to allow young people to continue to live in the communities in which they grew up. However, targets for housing must be just that—targets for local authorities, not instructions to local authorities. I am delighted that the Government seem to have changed the direction of travel to move in a much more rational direction than previously.
We must also accept in planning that local authorities have competing priorities. To give one example, in my North Somerset constituency we accept that we need to have more housing and that the Government will set targets, but at the same time the Government say, understandably and correctly, “Don’t build on the green belt”, and, “Don’t build on floodplains.” That limits the space to build further housing. I would like to hear the Government make very clear that, where local plans are being constructed and conflicting priorities are being applied to them by Government, it is the local authority that will get the benefit of the doubt when it comes to the Planning Inspectorate.
That brings me to the issue of the green belt itself. According to the Government’s national planning policy framework, the green belt serves five purposes:
“to check the unrestricted sprawl of large built-up areas; to prevent neighbouring towns merging into one another; to assist in safeguarding the countryside from encroachment; to preserve the setting and special character of historic towns; and to assist in urban regeneration, by encouraging the recycling of derelict and other urban land.”
Barry Gardiner (Brent North) (Lab)
In order to secure that supply of land for building houses that the right hon. Gentleman spoke of, does he agree that it would make sense to reform the Land Compensation Act 1961 so that local authorities can purchase land closer to its existing value, rather than its hoped value?
Dr Fox
That is certainly something that we should look at. The passage and the Committee stage of the Levelling-up and Regeneration Bill are opportunities for Parliament to genuinely reform our planning laws to make them sensible for a 21st-century country. We must ensure that in that Bill, not only is our green belt protected, but the Government increase those protections. Once our green belt is gone, it is gone forever. I believe it is our duty to steward the green spaces in our land for future generations.
Barry Gardiner (Brent North) (Lab)
I pay tribute first of all to Her Majesty the Queen. It was a great sorrow to me that she was not able to give the Gracious Speech in person earlier this week. We have been privileged to live in the Elizabethan age. Most Members of Parliament serve many sovereigns; we have had the privilege of only serving one.
The Elizabethan age began as one of upheaval after the second world war. It became an age of opportunity and equality with the Labour Government and the equalities Acts from the 1960s. Now, however, it is becoming an age of insecurity—insecurity of income, insecurity of housing and insecurity in health, food and work.
Since the Prime Minister boasted last year that the UK was the fastest-growing economy in the G7, it has become the slowest-growing economy in the first quarter of this year. Indeed, we now find that we are the fastest-shrinking economy. We have gone from 0.8% growth at the beginning of this year to -0.1%. That is a shrinking economy.
The Bank of England projects 10% inflation by the end of the year. Meanwhile, real wages have been falling and 2 million people are going without food for more than a day, sometimes because they do not have the money to buy it, sometimes because they do not have the money to cook it and sometimes because they do not have the will to take it out of the mouths of their children. [Interruption.] It is shameful, as my hon. Friends say. We are the fifth-richest economy in the world, and it is shameful.
Let us examine these insecurities. This year’s Queen’s Speech, coming from any Government with any compassion, would have put at its core a right to food, as my hon. Friend the Member for Liverpool, West Derby (Ian Byrne) has been calling for for months. That should have been at the very centre of the Gracious Speech, because we cannot feel that we are doing our job as politicians, and I hope that Government Ministers feel that they cannot be doing their job as a Government, when there are people facing hunger on that scale in our country and when so many of our fellow citizens—millions—are reliant on food banks. This is not the Britain that we should aspire to be part of, and it is certainly not the Britain that any Government Minister should aspire to be a Minister in charge of. The insecurity in income is extreme, and it has been exacerbated by the fact that, even on the Government’s own figures, 900,000 individuals, many of whom have disabilities, will become worse off as a result of the transition from legacy benefits to universal credit. That is why the Government should have had at the heart of the Gracious Speech the need to restore the £20 cut to universal credit to protect the income of those adversely affected and to make sure that any recovery was not on the backs of the poor.
There is insecurity in work. This debate is entitled “Fairness at Work and Power in Communities”. Well, as so many of my colleagues have said, the gaping hole at the centre of the Queen’s Speech is the fact that there is no employment Bill, promised 20 times by Government Ministers—no legislative solution. I almost felt sorry for the Minister who opened the debate, because, as must have been obvious to so many of us, he was embarrassed because he knew that what had been committed to—what had been promised—had just slipped away, and he knew that he had no power to do anything about it. But there are people in the Government, in the Cabinet, who did have the power to do something about it, and they failed. These choices should have been made in the Queen’s Speech to protect people in work.
This week, 127 people at Richmond upon Thames College—the entire teaching staff—were told, “You’re fired unless you sign a new contract taking 10 days off your entitlement. Go away and think about it.” Of course, because of the trade union legislation it was not possible for the union to fight back immediately—it had to consult, ballot and notify. But it has balloted, and, on an 88% turnout, 97% voted in favour of strike action, because the situation is disgraceful. Yet the management of the college are now calling in those workers one by one, putting pressure on them by saying, “What are you going to do if you don’t have a job because you’re failing to sign this new contract? What are you going to do at the end of the week if you can’t pay your rent or feed your kids—if you’re one of those people who need to use food banks?” That is the pressure that is being put on people by insecurity in employment. That is why all the things that my hon. Friend the Member for Middlesbrough (Andy McDonald) talked about—all the things that he put together in the employment rights green paper—are so vital if we want to have equality and fairness at work, as the title of this debate says we should. We do not have it; we need to.
There is insecurity in health. I tabled an amendment to the Queen’s Speech in which I talked of the 6.1 million people who have been referred to a consultant and are waiting for treatment. Today that figure was uprated by 300,000, with now 6.4 million people who have been referred to a consultant still waiting for treatment, over 2 million of them waiting more than the 18-week maximum period and 300,000 waiting for more than a year. When the Minister winds up, let them not say that this is because of the pandemic, because we already knew that it was building up. The figure was 4.43 million before the pandemic even started—and that was because of a decade of underfunding of our health service.
We have insecurity of income, we have insecurity at work, we have insecurity in health, and we have insecurity in housing. How many times have we had to stand in this Chamber and talk about the plight of those trapped in accommodation where there are known fire safety defects? They are unable to move on with their lives, unable to sell— partly because the EWS1 forms but not only that—unable even to get insurance on their properties, and being charged through the nose by unscrupulous managing agents for scaffolding or waking watches. They wait just to get on with their lives. They cannot have a new child because they do not have the bedroom space. They cannot separate if they want to get divorced. They cannot move to go to a new job. Their lives are frozen because of the failure of the Government to act.
The insecurity that climate change puts over all our lives needs to be tackled in a comprehensive housing policy. For all the talk about a windfall tax—and we should talk about it—the cheapest energy is the energy that we do not use, so we should insulate the 19 million homes that need insulation. The Government have known this for years. Every Select Committee of this House has told them what to do and there has been complete inaction. Where in the Gracious Address is the real sense of commitment to tackling this as part of the housing crisis? There has been a 38% rise in street homelessness and a net loss of 22,000 social homes across England. We need the Government to tackle the housing crisis.
Looking to the second part of the debate’s title—“Power in Communities”—how do we give power to communities? By making their lives secure and by enabling them to stand up for themselves. That means having security of income and security of health, and it means someone having the security of having a home they are confident in, where they do not feel trapped and in danger.
Power is something that resides in land. It is extraordinary that 1,000 years on from the Domesday Book in 1086, half of the land of the United Kingdom is still owned by fewer than 6,000 individuals. That is why we urgently need land reform. I was delighted when the right hon. Member for North Somerset (Dr Fox) this morning agreed with me that we need reform of the Land Compensation Act 1961 so that councils can buy land at a price closer to its existing value, rather than its hoped-for value. That would free up land in this country for housing, but we need to go much further.
We need to look at what Milton Friedman—quoted by the right hon. Member this morning—described as the “least bad tax”. He was referring to the land value tax. Unless we challenge the 1,000-year land ownership that has given so few people in this country the power over their communities—I note that one such magnate spoke earlier in the debate—and give that power back to the people through a genuine programme of land reform, we will not have the right to talk about power in communities and fairness in our society.
Kemi Badenoch
The fact remains that we have already made progress on legislating to strengthen workers’ rights. We have closed the loophole that saw agency workers employed on cheaper rates than permanent workers and we have quadruped the maximum fine for employers who treat their workers badly. The fact is, we on the Government side measure how well we are doing not by the title of legislation but by the fact that we have delivered record high levels of employment.
Moving on to the points made by the hon. Member for Wigan (Lisa Nandy), she criticises us for not doing enough on the cost of living. I remind the House that at the autumn Budget, when she and all her colleagues had an opportunity to reduce the cost of living, like the rest of them she voted against measures in the autumn Budget to reduce the universal credit taper rate, which effectively gave low-income families a £1,000 tax cut. So they failed to support those on the lowest incomes. We do not buy their argument that they are interested in the cost of living, because when the legislation comes forward they vote against it.
The hon. Lady also criticised the Levelling-up and Regeneration Bill, just as she did the levelling up White Paper. I remember her comments during the debate on that. They were all sneering and no substance from someone who, again, clearly had not taken the time, like the hon. Member for Enfield North, to read it. She is constantly playing catch-up, because her immediate priority is to criticise instead of engaging with the policy detail. That is why the five-point plan she wrote in January consisted of five recycled policies we are already carrying out and some sour finger-pointing. That is not an action plan.
The fact is that we have done quite a bit on the cost of living. We are supporting families with the cost of living through £22 billion of support in 2022-23 and delivering the biggest net cut to personal taxes in over a quarter of a century. Our plan for jobs, as I mentioned earlier, is bringing unemployment back below pre-pandemic levels. We are delivering a £9.1 billion energy rebate with the £150 council tax rebate. We are increasing the value of the warm home discount to £150 and expanding eligibility to cover nearly 3 million households.
Kemi Badenoch
I am not giving way, because Opposition Members do not want me to list these things. We are protecting the vulnerable, including pensioners, with winter fuel payments of up to £300 and cold weather payments of £25 a week. We delivered a record cash increase in the national living wage, meaning a £1,000 salary boost for full-time workers. We raised the national insurance threshold from July, saving an average worker £330 a year. We cut fuel duty by 5p for 12 months. As I mentioned, we cut the universal credit taper rate.
Income Tax (Charge)
Barry Gardiner Excerpts(3 years, 1 month ago)
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Barry Gardiner (Brent North) (Lab)
The mistake with Budgets is to think that they are the beginning of a financial process. Often, they are the result of one. This Budget is the result of 11 years of austerity and under-investment. Wages flatlined, and our public services and infrastructure were ill-equipped for the pandemic and to be the engine of growth that we need to bring us out of the economic crisis it has precipitated.
The Budget is uncomfortable for Conservative Members of Parliament. No Government since the war has implemented a higher tax take from the people of this country.
Lucy Allan (Telford) (Con)
The hon. Gentleman said that it has been an uncomfortable Budget for Government Members. I have to say that I am extremely proud of the Budget, and later I will have the opportunity to say why.
Barry Gardiner
I am sure that the hon. Lady will explain exactly why she is so proud of the Budget. That is her right. However, it is clear that many of her colleagues feel that it is pulling them in different directions. I will come to explain why that is the case.
As I said, no Government since the war have implemented a higher tax take from the people of this country, yet wages are scarcely where they were 10 years ago, growth in the next three years will slow to a sluggish 1.3% and our country’s debt stands at the astonishing figure of £2.2 trillion. It was notable that yesterday the Chancellor referred to underlying debt rather than gross debt. Underlying debt is still a staggering 85.2% of GDP and, on his own admission, set to rise over the next three years. Gross debt is now 103% of GDP.
What of the deficit? After the global financial crisis had seen it skyrocket from £50 billion to £103 billion in 2010, George Osborne said he would eliminate it by 2015. The deficit at its peak in 2010 was £103 billion, or 6.9% of GDP. At year end in March, the last ONS release said that the UK’s deficit was £304 billion, or 14.5% of GDP. The hon. Lady may not feel uncomfortable about that, but I think that a number of her colleagues do, yet the Chancellor had the extraordinary brass neck to the tell the House that
“it is the Conservatives, and only the Conservatives, who can be trusted with taxpayers’ money.”—[Official Report, 27 October 2021; Vol. 702, c. 276.]
The Chancellor talked about building a stronger economy. His party has had 11 years to do that and it has failed. What should be of real concern is the Budget’s lack of direction. There is an extraordinary tension between No. 10 and No. 11, which are operating like a Doctor Dolittle character, with the Chancellor pushing for fiscal conservatism and the Prime Minister pulling for a bout of sunny optimism and lax monetary control. The truth is, they are afraid of the electorate and it showed in their spending decisions.
The Government are rightly relaxing the public sector wages freeze—to the horror of their Back Benchers—but they have wrongly imposed a £4 billion clawback on the very poorest in our society who rely on universal credit. Their changes to the taper relief show only how fearful they really are, but those changes do not nullify the impact of the clawback.
The Government have no strategy to tax wealth on unearned income. It is shameful that a cleaner on universal credit doing three jobs to make ends meet pays a higher rate of marginal tax and national insurance than her landlord. It is extraordinary that, instead of working with international partners to develop a proper tax framework for companies such as Amazon, they have done all they can to block one. It is extraordinary that the Chancellor has given £1 billion of tax cuts to the banks. Working families get tax rises; banks get tax cuts.
Priorities are the stuff of politics and the Chancellor has made his party’s priorities clear. But, in addition to the wrong priorities, the Government have been incompetent and profligate. The total investment announced yesterday for the next three years was £150 billion. That same day, the Public Accounts Committee reported that, despite being allocated an eye-watering £37 billion, Test and Trace failed to achieve its objectives, failed in its key purpose and, at the most critical time, failed to disrupt onward transmission. The Prime Minister had a phrase for money wasted like that—it referred to something being done up a wall. Delicacy prevents me from saying what it was.
The past 11 years of Conservative Government have seen our economy grow at just 1.8% per annum. Even taking into account the impact of the global financial crisis, in the years from’ 97 to 2010, when Labour were in government, the economy grew by 2.3%. No wonder the only person on the Conservative Benches to look pleased at the Chancellor’s discomfiture yesterday was the Foreign Secretary. The truth is he has taxed more and more unwisely, while presiding over unacceptably slow growth.
Many of us will recall the Government’s response to Labour’s manifesto commitment to invest £200 billion in the infrastructure of the country. They called it a magic money tree, but since then they have discovered a forest, even if their £130 billion infrastructure strategy now looks scarcely adequate to turbocharge our economy in the way that is required.
Let me now turn to the way that is required. It is to be regretted that the Chancellor does not use public transport when in London. Were he to do so, he would have seen the poster campaign that says, “The world is looking to you, COP26.” One of those posters says, “Secure our priceless planet. Or argue over cost.” Yesterday, the Chancellor could truly have given us a Budget of optimism: a Budget that addressed the infrastructure needs of our country, the skills development required for a just transition to a net zero economy, and the basis for sustainable economic growth. He failed, and did so in a way that displayed such an astonishing lack of awareness of the problem and what one can only call contempt for the reality of the crisis that it appeared a deliberate provocation to all those about to meet this weekend in Glasgow for COP26.
The Chancellor referred to the tax super-deduction of 130% allowances for capital investment. He failed to mention that these have no environmental or climate filter and that some of the biggest fossil fuel companies will be able to use them to receive from the taxpayer not only the entire cost of their polluting capital investments but a bonus 30% for doing so, in projects like the Cambo oil field,. This incentivises the very behaviour COP26 is trying to curtail.
The Chancellor announced a new lower rate of air passenger duty on domestic flights and support for regional domestic airports to incentivise air travel within the UK. Other countries have banned domestic flights where a fast rail link exists and have been investing in their low-carbon rail infrastructure. It is, frankly, obscene that it is often cheaper to fly within the UK than to take the train. My hon. Friend the Member for Bristol South (Karin Smyth) earlier remarked that a flight from her constituency in Bristol to Glasgow costs just £29.99, while the train costs £97.20. The Government’s investment priorities on this are wrong. They are wrong economically and they are wrong morally.
Mr McFadden
If the hon. Member reads the OBR report, he will find that it says very clearly that the effect of the pandemic is smaller in the long run than the effect of the low growth over which his party has presided for more than a decade.
As I was saying, in the decade before the Conservatives came to office, growth averaged 2.3%. Let us look at what the difference between those rates means to people. The difference, added up over the years, is worth £9,000 a year to every household in the country, and from the Exchequer’s point of view, the difference would be £30 billion a year more to fund our public services. It is that more than anything—that appalling record on economic growth—which has forced the Chancellor to raise taxes. The British people are being forced to pay the price of the Government’s long-term economic failures.
The long-term effect of this lack of growth is far greater than the impact of the pandemic. When we look beyond the huge fall in GDP last year, due to the pandemic, and the bounce back from it this year and next, the growth picture does not change. The OBR is predicting economic growth averaging about 1.5% between 2024 and 2026. It is that low growth which creates the projections of real wages barely rising in the coming years. In his dreams, the Prime Minister is Winston Churchill; in his rhetoric, the Chancellor is Margaret Thatcher; but in its actions, this Government is Ted Heath.
The Chancellor and the Prime Minister have trapped the country in a vicious circle of low growth, rising inflation, stagnating incomes and rising taxes. The economic legacy of this Chancellor will be a country on the path of low growth and high taxation, but his political legacy will be as the man who buried forever the Tories’ reputation as a low-tax party.
Barry Gardiner
I entirely agree with all the points that my right hon. Friend is making. The Chancellor said yesterday that in three years’ time we would still have growth of 1.3%—negligible growth. If we look back to the years of the Labour Government, we see that even in 2010, after the global recession, we still had growth of 2.3%.
Mr McFadden
That is precisely the point I am making. The long-term growth trend makes a huge difference to the Government’s choices and their power to fund public services.
In the face of that, what was remarkable about yesterday’s Budget was the total absence of any plan for economic growth, and nowhere is that clearer than in education. The Chancellor expects us to applaud a lap of honour where in a couple of years’ time, funding per pupil only just gets back to its 2010 level. Let us think about that for a moment: almost 15 years with no real increase in investment in the workforce of the future. A generation of schoolchildren will have gone through their whole education with fewer resources than their predecessors.
How can the Government talk realistically about levelling up when their record is long-term neglect of educational opportunity? What an appalling dereliction of duty to young people in this country. There can be no more short-sighted decision than to stop talent flourishing—to take away the platform from which dreams can be fulfilled. For people born without money or without means, education is the only way in which that can happen. It is the means by which people can change the circumstances into which they were born. It is the platform to ensure that the course of life is not dictated by the hand that they were dealt at birth. Yet, for 11 years, this Government have neglected it. Then, when they were presented with a catch-up plan to help children to recover from the education lost during the pandemic, they shredded it. That is not only socially unjust; it is economically self-defeating, and that record on education is a major contributor to the weak, anaemic, stunted growth that has resulted in the tax levels we are seeing today.
This was not a Budget written in a few weeks in the Treasury. These high taxes and stagnating household incomes are not the product of the short-term crisis through which we have been living. This was a Budget written over 11 long years. Where was the plan for growth? Where was the plan to back the best of British creativity and enterprise? Where was the plan to ensure that we succeed in the technologies of the future? Where was the plan to ensure that, when it comes to levelling up, it is people and the talents that they hold, not just bricks and mortar, that are at the heart of it?
It is not just our view that the Budget did not measure up. The CBI has said that it will not
“do enough to transform the UK economy for a post-covid world”.
The Federation of Small Businesses asked:
“Is there enough here to deliver the Government’s vision for a low-tax, high-productivity economy? Unfortunately not.”
The Government ditched their industrial strategy out of ideological spite. The transition plan for net zero produced just last week was a damp squib. One of the biggest challenges that we face is how to transform the heating in our homes, yet their plan would partially cover just one in 250 of the replacement boilers needed. The long-term reform of business rates, which several Conservative Members said they supported, has been ditched once again. Time after time it is ditched. And the Government have only just discovered the importance of early years education, a decade after taking a wrecking ball to Sure Start and setting back a good start in life for millions of children around the country.
It is not just the fact that we have the highest taxes in living memory; it is that those taxes are not being used for any coherent long-term plan for the country. They are being used to firefight one issue after another as it momentarily occupies the mind of the Prime Minister. There is only one plan that the Chancellor has here, and it is as clear as day. It is to hold some money back in order to offer tax cuts before the next election. If that plan succeeded and the Tories won, what do we think would happen afterwards? We know what would happen. There would be a big speech about how taxes now had to go up because we had to pay our way and could not borrow what we could not afford. And the reason for that would still be the Tories’ lamentable failure on economic growth. That is not a moral mission. It is just a Tory election plan, and it is one that has been funded by hard-working taxpayers.
There is a better path. There is a better future and a different way, and that is to put our efforts into raising medium-term growth prospects and to get out of this bind of high inflation, high taxes and poor growth that 11 years of Conservative Government have left us in. That is the better path to prosperity and security. That is the path to ensuring that talent is used and to making the most of the UK’s potential. On the Labour Benches, we want to work with business, not treat it as a scapegoat for every problem that comes along. We want a fair deal for the workers in business, with good pay and decent conditions. We want to support wealth creation every bit as much as we support fair wealth distribution. We want to invest in the skills and talents of all our people, whatever their circumstances, from the youngest age possible, and we will have a net zero plan that meets the challenge of the moment and gets the best possible economic and employment benefits for the country. That is a better plan than the high-tax, high-inflation, low-growth model that the Conservative party has been pursuing, not for two years, not for one year but for 11 long years. It is that failure that gave rise to yesterday’s Budget and the tax burden being imposed on the country by this Chancellor and this Government.
Lucy Frazer
As the hon. Lady knows, we are on a trajectory to get the national living wage to a higher rate. We need to increase the national living wage, as we have by 6.6% this time round, and it will go up again in time. She will have heard Conservative Members asking how it will work for the businesses that are paying it, so there is a balance to be struck. This Government are progressing on that trajectory to the right path.
We are also reducing the universal credit taper rate from 63% to 55%, which, combined with a £500 increase in the work allowance, means an effective tax cut worth more than £2 billion a year. The hon. Member for Glasgow Central said that that would not help families, so let me give an example: a single mum living in Darlington who works full time on the national living wage would see a £1,200 increase in her pay by December, and that would be £1,900 in April when the new national living wage comes in. My hon. Friend the Member for Harrogate and Knaresborough (Andrew Jones) acknowledged the transformative effect that the increases to the national living wage and the universal credit taper will have for many of his constituents. I am grateful for the constructive comments made by the hon. Member for Ceredigion (Ben Lake) in welcoming the national living wage and public sector pay increases.
With fuel prices at their highest level in eight years, we are not prepared to add to the squeeze on families and small businesses, which is why the Budget freezes fuel duty for the 12th year in a row. The hon. Member for Newport East (Jessica Morden) is wrong to say that we are not supporting people with their gas bills: in addition to the fuel-duty freeze, we have the warm homes discount, which supports 2.2 million people, who receive a £140 rebate on their bills. Like the hon. Member for Cardiff North (Anna McMorrin), the hon. Member for Newport East called for a cut to VAT on fuel bills—something the Labour party calls for—but what would that do? What would happen if we cut VAT on fuel? Such a cut would apply for everyone, across the board, so who would it help as well as the low-paid? It would help the wealthy. I am quite surprised to hear Opposition Members suggest that.
Barry Gardiner
Does the Minister recognise that it is the poor who pay the largest portion of their disposable income in fuel costs? She is absolutely right that such a cut would, of course, be of greater benefit in monetary terms to the wealthy, who tend to spend more on energy, but in terms of the difference made to lives, 5.7% of the disposable income of the very poorest goes on energy costs.
Lucy Frazer
The hon. Member makes a valid point and I absolutely recognise that, but the way to solve that problem is not to give a tax benefit to a large group of people who simply do not need it, but to give discrete, directed support to those who do need it. That is what this Government have done: the hon. Member will know that six weeks ago we announced £500 milllion to support the most vulnerable families when they absolutely need it.
Members from all parties mentioned the support for families and for family hubs and welcomed the measures in the Budget. I was pleased to hear the support from my hon. Friends the Members for Don Valley (Nick Fletcher) and for Newton Abbot (Anne Marie Morris). My hon. Friend the Member for Telford (Lucy Allan) made a good speech about how important it is to support struggling families, and I was interested to hear what my hon. Friend the Member for Crewe and Nantwich said about the importance of not only supporting young families financially—we have heard how important it is to support recent mums and dads—but giving them emotional security as well.
I was disappointed to hear the shadow spokesperson, the right hon. Member for Wolverhampton South-East, speak about our lack of support for education, because we have invested significantly in education, not only in this Budget but in previous ones. This Budget provides a wide variety of support through the education system. We are increasing the core funding for schools, with an additional £1,500 per pupil, and providing catch-up funding, with an additional £1.7 billion bringing the sum up to £5 billion, In addition, as my hon. Friend the Member for Ipswich said, we are increasing the funding for SEND provision, with an extra 30,000 places for pupils with high needs. Through our new Multiply programme, we are helping school leavers who did not get the maths skills that they ought to have got at school.
Employment and Trade Union Rights (Dismissal and Re-engagement) Bill
Barry Gardiner Excerpts(3 years, 2 months ago)
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Laura Farris
I hope that what I am going to say will answer the hon. Gentleman’s criticism.
There is another point that I cannot ignore. I invite every Member to turn to proposed section 187F, which deals with the proposed “Award of compensation” to be made by any employer who fails to comply with the proposed new consultation requirements. It states:
“ The amount of compensation awarded shall, subject to the following provisions, be such as the employment tribunal considers just and equitable in all the circumstances”.
That is exactly the same compensation measure that is used in whistleblowing and in discrimination law. It opens the door to uncapped compensation in the area of unfair dismissal, which has a cap, It therefore drives a coach and horses through the entire principle of compensation in unfair dismissal hearings. It would make fire and rehire the only form of unfair dismissal in which the employee could receive an uncapped compensatory award. If the employee had been dismissed for gross misconduct or for being bad at his or her job, the award would have been capped at 80 grand. That cannot be right.
What will all this do to the employer who is thinking about renegotiating terms of employment? The employer will be too nervous to do it, and will lay people off. Let us take the employer in the case of Garside & Laycock v. Booth 2011, who had proposed a 5% reduction in wages which every single balloted member of staff except one had accepted. Employers would not do that; they would lay off the whole workforce. Is it better or worse for people to take a less attractive variation in their terms of employment or to lose their jobs altogether?
Barry Gardiner
I am grateful to the hon. Lady for engaging so closely with the Bill. I think she knows she is over-egging it, because any tribunal would look at the situation in the round. The Bill is drafted as it is because it chimes with the legislation on redundancy. Again, to be technically proficient, the Bill has to merge with the other Acts.
Laura Farris
I am afraid the hon. Gentleman is incorrect. This concern was raised by my head of chambers and it is shared across the employment Bar. We cannot have a just and equitable jurisdiction in the law of unfair dismissal as it does not work.
The hon. Member for Feltham and Heston (Seema Malhotra) raised a point about the aviation sector. The conduct of British Airways was poor, but there is an important issue at stake. If in primary legislation the risks of fire and rehire are so great that employers are more inclined to lay people off, think what that would mean for airline pilots, for example. Airline pilots must fly within a two-year period to retain their flying licence. If they are sacked by British Airways at a time when the entire travel sector is struggling badly, they would be very unlikely to get a job and it could easily be two years. It is not just the loss of a job; it is the loss of an entire career. We need to tread very carefully when we consider primary legislation in the area of fire and rehire.
Christine Jardine (Edinburgh West) (LD)
The hon. Lady is making some excellent points and, like the hon. Member for Swansea West (Geraint Davies), I feel they might be better made in Committee. Does the hon. Lady agree that part of the motivation for the Bill is not to do away with the practice completely? It says that fire and rehire or change of contracts in exceptional circumstances can be done with negotiation, consultations and so on. The motivation was that several major companies appeared to be using the current crisis as something to hide behind and institute unfair fire and rehire practices at a time of already mounting stress and emotional trauma for a lot of people.
Madam Deputy Speaker (Dame Rosie Winterton)
The hon. Lady needs to answer the first intervention before taking another.
Laura Farris
Thank you, Madam Deputy Speaker. I will take those first two points in succession. The first was about whether these issues are not better raised in Committee. The answer, respectfully, is no, because I do not think an area as technically difficult as this belongs in primary legislation, and I have explained why the Bill is at odds with the Trade Union and Labour Relations (Consolidation) Act 1992, the intentions of Parliament when that Act was passed and the existing web of laws at section 98 of the Employment Rights Act 1996 dealing with unfair dismissal. The issues covered in the Bill belong in a code of practice backed up with financial penalties, rather than in primary legislation.
To take the point made by the hon. Member for Edinburgh West (Christine Jardine), I of course accept the stress that people were subjected to, and all the work that Members on the Government side of the House are doing is directed at minimising that, but the solution we are considering and discussing must not give employers leeway to abuse employment rights. We have been thinking about that just as much.
It is precisely because I do not think employees should have a gun to their head at the start of consultations that I cannot support clause 1 of the Bill, which requires employers to lay all their cards on the table on the issue of fire and rehire from the start. Rather than demanding full disclosure from day one, we should be much more sensitive to the legitimate desires of businesses to remedy defects before they have to reveal they are on the verge of failure, given what that might mean for their business at a stage before they would wish to disclose it.
Barry Gardiner
I agree that it really important to take the heat out of the situation at the very beginning. The hon. Lady is absolutely right—I mentioned it myself—about the importance of not having section 188 on the table immediately. That is why, starting at line 20, the Bill says:
“The employer shall consult with a view to reaching an agreement to avoid decisions being taken to terminate contracts of employment, or to introduce changes in work organisation or in contractual relations.”
The precise point that the hon. Lady has made is there on the face of the Bill.
Laura Farris
The hon. Gentleman knows that proposed new section 187B(2) says:
“The information to be disclosed is all information relating to the employer's undertaking”.
It would be almost impossible for an employer to comply with that without its having to put on the table the fact that it is considering dismissal in the first instance.
I hope that, if my speech has strayed into technical issues of industrial relations law, that reveals how difficult this question is and how any attempt to impose primary legislation runs significant risks of unintended consequences that would be much worse for workers’ rights and job losses. We on the Conservative Benches depart from the Opposition in that we think there is strength and flexibility in existing employment law, but we also think that it could do with being robustly reinforced through potential financial penalties. I hope the hon. Member for Brent North is reassured that we take this issue as seriously as he does. We are also thinking hard about it, and I am confident that we will deliver for workers’ rights.
Kevin Hollinrake
My principal concern is the amount of bureaucracy in and the interpretation of the Bill. I have many good lawyer friends—this usually has a “but” attached to it, doesn’t it?—but there are bound to be different interpretations of this kind of legislation. My hon. Friend the Member for Newbury (Laura Farris) set that out very clearly. Let us take just the phrase “all information”—that can mean virtually anything. A process can be subject to challenge all the way down the line and there can then be a claim for wrongful dismissal on the basis of a simple document that was not provided. Who would decide whether all the information has been provided? The appointed representative, at any point, could challenge the fact that all the information was not provided. It could be a very small piece of information that the employer never considered relevant to the discussion. Again, there is a huge opportunity for interpretation and bureaucracy. That cannot be positive for a good business environment.
There is also the issue of capacity. We already have issues about capacity for employment tribunals. This also brings in a whole new set of responsibilities for the Central Arbitration Committee and there is no understanding of whether that capacity can be filled.
Barry Gardiner
There is much in what the hon. Gentleman has said that I agree with. I just point out that the Bill does not actually ask for the disclosure of “all information”. It asks for the disclosure of
“all information…without which the appropriate representatives would be to a material extent impeded in carrying on consultation with the employer, and… which it would be in accordance with good industrial relations practice that the employer should disclose”.
That is not a catch-all. It is specifically about the information necessary to conduct proper consultations about the future of the business. He is being very fair in the remarks that he has made, but he must not misrepresent the Bill in that way.
Kevin Hollinrake
I certainly do not seek to do that. Proposed new section 187B(2) of the 1992 Act says:
“The information to be disclosed is all information relating to the employer’s undertaking (including information relating to use of agency workers in that undertaking) which is in the employer’s possession, or that of an associated employer”.
There is a double requirement, so “all information” does seem to apply.
Kevin Hollinrake
I would like to be able to, but I am not sure that is incumbent on anybody who opposes the Bill. It is right for somebody who introduces the Bill to state alongside it what extra capacity will be needed, and the cost of that to the taxpayer or the businesses concerned. To my knowledge, that work has not been done.
I am also concerned about clause 27D, on the unilateral variation of employment contracts. No doubt some of the evidence taken showed that some contracts of employment allow unilateral variation. That is not something I have never done in my business practice, but nevertheless the Bill seeks to make those provisions unworkable or not legal, meaning that employers will not be able to rely on that in future, and those elements of the contract will effectively become null and void. I do not blame the hon. Member for Brent North for seeking to do that. As an employer I would not involve myself in such a practice, but it seems to be retrospective legislation. It is bound to make businesses nervous if we legislate retrospectively about such matters, and I wonder whether he has considered that point.
Barry Gardiner
Indeed. The hon. Gentleman is right, and the courts find it disagreeable that such a clause, purporting to allow retrospective variation of the contract, should be embedded within the contract. I would support the hon. Gentleman’s objection if indeed it were retrospective legislation, but the precise point is that any such clause purports to give a right to one party in the contract, and in effect to dispense with the entire contract and simply change it at will. That is what is so objectionable about it, that is what the court found objectionable, and that is what the Bill seeks to change.
Kevin Hollinrake
It is an interesting point, and I appreciate the hon. Gentleman’s clarification. My final point is on clause 187E, which seems to say that in almost any circumstance where new terms are offered, the employee has an automatic right to go to a tribunal. That seems to me strange. If any of the things outlined in subsection (1)(a)(iii) happened and an offer has been made, the clause seems to give an automatic right for someone to go to an employment tribunal, without requiring the provisions in clause 187A or B. I might have read that wrong, but it is certainly seems to be the case. Admittedly, that kind of point could be picked up in Committee, but my overriding point is this that issue requires cross-party thought. I would much rather see the provisions become effective through guidelines, financial sanctions or other means, and I do not feel that I could support the Bill were it to be voted on today.
Richard Fuller
I understand where the hon. Gentleman is coming from, but I do not think the facts of history indicate that what he suggests is the right approach. The truth is that throughout the period of the last Labour Government it was not seen fit to bring forward such legislation. As I mentioned earlier, there were no calls for it when we went through a severe financial crisis, although there was widespread fire and rehire. It is precisely because there was an exceptional event last year that I am conflating that with this legislation. In my view, the Bill has been stimulated by that experience but will sit on the statute book for the future of more regular business, though I am not sure what that will be.
Furthermore, there is a little confusion about the intent of the Bill, which perhaps the hon. Member for Brent North can help to clarify now he is back in his place. Many of us have seen Labour MPs—socialists—campaigning to outlaw fire and rehire, and one would anticipate that many of them have turned up today to vote to do that, yet we heard from the Bill’s sponsor that it does not do that. It got so confusing that the shadow Front-Bench spokesman, the hon. Member for Bradford East, urged hon. Members to “support fire and rehire”. Between those on the Opposition Benches who say that they want to ban it, the promoter of the Bill who says that his Bill does not ban it, and the shadow Front-Bench spokesman who wants us to do more of it, I wonder whether they know what indeed they are doing.
Barry Gardiner
I am grateful for the hon. Gentleman’s good humour. The Bill does not ban fire and rehire, but we want—I think all hon. Members want—to end it as a tactic. That is the point. When people say, “Let’s end fire and rehire,” they mean, “Let’s end it as a tactic, as a bad practice used by disreputable employers to do the wrong thing.” I hope that that clarifies it.
Richard Fuller
I am very pleased that the hon. Gentleman is back. He is showing the steps that he is taking to create consensus. I think he will find that as we move forward, perhaps with an alternative approach. I would gently mention that only on 6 May this year 145 of his colleagues signed a letter to the Prime Minister urging that fire and rehire be outlawed, and he must accept that his proposal must be a severe disappointment to them, given what he has said today.
There is an important reason why I would urge the hon. Gentleman to continue his journey, perhaps towards a code of practice approach. For me, and I think for many, the work of business, the work of capitalism, is a good for society. Capitalism is good. Capitalism creates. Capitalism creates higher wages, better skills, stronger businesses and a more global Britain. It is through capitalism that this country has grown the strength to provide public services for so many of our people. It is through capitalism that we have been able to have the highest increases in wages for the lowest paid that we have had for decades. It is capitalism that gives hope to people who want to start their own business. It is capitalism that is going to close the gender pay gap and the discrimination against people based on colour, because capitalism seeks out talent. It is upon the captains of capitalism—the women and men who lead our businesses—who understand how to get that great concoction of people and investment to create wealth and security, that we should be entrusting the responsibilities to act ethically and responsibly.
In my view, that purpose is best accomplished through a code of practice that works with the best grain of business rather than against it.
Mark Pawsey
I think I understand the point, and I think the hon. Lady, if she has been here throughout the debate, will understand that there is a desire from this side for that not to happen, and for discussions and negotiations to take place at a much earlier stage.
We have had reference to the ACAS paper that was published in June 2021, which of course makes interesting reading. It tells us that dismissal and re-engagement is not new and has been around for some time, and it sets out the scenarios where it has been applied. Those of course include the harmonising of terms and conditions. There are many businesses that make acquisitions and find that they have staff on different terms from businesses that have come together over a number of years, and it is not appropriate for one set of employees in a business to be operating on different terms and conditions from those elsewhere in the business. There is a prima facie case, an immediate case, for why there should be some standardisation. During the pandemic, businesses have been required to introduce temporary or permanent flexibility in respect of hours worked, shift patterns and the security of hours. Covid has substantially affected—
Barry Gardiner
claimed to move the closure (Standing Order No. 36).
Question put forthwith, That the Question be now put.
Paul Scully
I will cover that as I continue with my remarks. I am not sure that we should equate child labour with fire and rehire, but I will develop that argument.
Barry Gardiner
The Minister referred to JDE at Banbury and the fact that, ultimately, an accommodation was reached about the least disagreeable way forward. He must know, however, if he has spoken to any of the 291 workers involved in that dispute, about the huge stress that was placed on their families and the complete disregard that they felt they were shown by that company for all the loyal service that they had given it for years. To hold it up as an example of a resolution of a dispute is beneath him.
Paul Scully
I raised it as an interesting point. I do not underestimate the stress, and I will cover that later when I talk about the solution we have come up with. It was a resolution, but none the less we want to get rid of the bully-boy tactics—the use of fire and rehire as a tactic of negotiation—because that should never be able to happen. As we have said, it has been exacerbated by the pandemic, but we want to make sure that we get our resolution and our approach correct so that it does what it says on the tin rather than have some of the unintended consequences that we have heard about today.
I was talking about the recovery. We have one of the fastest recoveries of any major economy in the world, thanks to this Government’s will to act and plan to deliver. My right hon. Friend the Prime Minister said at our conference that we were embarking on a change of direction for the UK economy, away from the broken model of low wages, low growth, low skills and low productivity; away from a broken model underpinned by reliance on uncontrolled immigration to keep wages low. We want to build back better in a new direction towards a high-wage, high-skill, high-productivity economy, which the people of this country—workers and employers—need and deserve.
A key part of the building of that economy will be to continue to champion a flexible and dynamic labour market, creating the conditions for new jobs, protecting existing ones and maintaining the UK’s excellent record on workers’ rights—one of the best records in the world.
Border Carbon Adjustment Tariffs and Decarbonisation
Barry Gardiner Excerpts(4 years ago)
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Jerome Mayhew
I say that we go it alone. I think it is one of the great freedoms that we have from Brexit. We have taken the trouble to get our independence. What use is it if we are not prepared to use it—if we are too scared to use our independence to make a bold statement and say, “This is the right thing to do. We are going to do it. Follow us if you like.”?
Barry Gardiner (Brent North) (Lab)
I am delighted to hear the depth with which the hon. Member is exploring this subject. What he has been saying is fascinating. Does he agree, though, that if it is about the right thing to do, the first thing we must do is to stop the subsidies and tax concessions that currently go to carbon industries domestically, and that it only makes sense as part of a whole package if we do that?
Jerome Mayhew
The hon. Member recognises that we are on a journey in our decarbonisation of industry. I would be delighted if I managed to persuade the Minister to accept this one element of the policy without rewriting the entire economic agenda for the next period, but it is clearly true that, over time, we will be moving away from petrochemicals, and the economic case—the business case—for subsidising what will soon become stranded assets becomes less and less clear.
Our hosting of COP26 would be the perfect forum to crystallise these disparate movements that we have already identified around the world into a coherent whole. What better objective for the conference could there be? Politics is full of mis-steps and compromise. Very rarely do the stars align in favour of a truly inspiring act of political and economic leadership—one that can transform the future of our country and the world for the better. The stars are aligning for border carbon adjustments, if only the Government will believe in the Prime Minister’s vision of a post-Brexit Britain and be bold.
Kwasi Kwarteng
This is an interesting debate. My hon. Friend suggests that a unilateral approach, punishing other countries for not adopting the climate change agenda—that is effectively what we would be doing—might work. As I have had to say repeatedly, I think that a multilateral approach is the best way forward. There is an open debate about the effectiveness of a unilateral approach when every other country in the world would not be disadvantaging these products.
Barry Gardiner
Does the Minister recognise that at the moment, £10.5 billion of public money goes from the Treasury as subsidy to fossil fuels in this country? That is more than any other country in the EU, where the average is about £6.5 billion. Therefore, if we are to go down the route suggested by the hon. Member for Broadland (Jerome Mayhew) and his colleagues on the Government Benches, it is important that the UK shows good faith and does not punish other countries for what it is doing worse itself. To punish those countries for the carbon encapsulated in their industries while subsidising our own fossil fuel industries more than all the rest would seem rather ridiculous.
Kwasi Kwarteng
The hon. Gentleman makes a fair point. That is exactly what I was trying to say with regard to TCFD disclosures. We have to look at carbon accounting and carbon pricing in the round. It is a global market and we have to look at what we are doing on discouraging carbon-emitting behaviour in the wider context of international trade. That is a fair point.
Barry Gardiner
So will the Minister speak with the Chancellor about how we can reduce the subsidies to fossil fuels in this country—domestically—so that some of the innovative ideas that the hon. Member for Broadland (Jerome Mayhew) has put forward this evening might be taken forward with credibility? [Interruption.]
Kwasi Kwarteng
Sorry—I was just respectfully pointing out to my hon. Friend the Member for South Cambridgeshire that he cannot intervene on an intervention.
I am very happy to take up that point. Of course, I discuss with my right hon. Friend the Chancellor all the time how we can capture carbon accounting more effectively in order to pursue the goal that we all seek, which is a net zero world and certainly a net zero British economy.
Kwasi Kwarteng
My hon. Friend is right. It is pretty extraordinary to say that we are somehow the laggards on this subject. When a country such as Germany is phasing out its coal dependency only in 2038, it is a bit extraordinary for Opposition Members to make that claim. We are very much the leaders in this arena, and my hon. Friend was quite right to point that out.
Kwasi Kwarteng
I am not going to take any more interventions, I am afraid.
As my hon. Friend the Member for Broadland has ably demonstrated, this is a fascinating subject, and it will continue to exercise many minds and much passion. In fact, no more serious subject could be debated here, and I commend him for bringing it to our attention, for debating it in a very open and, dare I say, friendly way, and for giving one of the best speeches I have heard from the Back Benches this Parliament in terms of the thoroughness with which he presented his material and the passion with which he stated his arguments.
Question put and agreed to.
Climate Change Assembly UK: The Path to Net Zero
Barry Gardiner Excerpts(4 years ago)
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Barry Gardiner (Brent North) (Lab)
Please do not worry, Madam Deputy Speaker, it is not my speech that I am holding. You and I have seen a lot of reports since we came into the House, and I have here the “Millennium Ecosystem Assessment”, the “UK National Ecosystem Assessment”, the “State of Nature” report, “Net Zero: The UK’s contribution to stopping global warming”, the “Clean Air Strategy 2019”, “Land use: Policies for a Net Zero UK”, “Reducing UK emissions: Progress Report to Parliament” and “How carbon pricing can help Britain achieve net zero by 2050”—just a small selection of what is on my shelf. Do we really need another report? Yes, we do.
All those reports are politicians telling the public what needs to be done. This Climate Assembly UK report, “The path to net zero”, is the public telling the politicians what needs to be done. About time too! Some fantastic principles have been used to get there. The report is 552 pages long—it is a big read—but it is underpinned by fundamental principles: education and information, fairness, freedom of choice, protecting nature and restoring our natural environment, strong joined-up leadership from Government and a joined-up approach. That is what makes it different.
I want to go straight to recommendation 1:
“We want the transition to net zero to be a cross-political party issue, and not a partisan issue”.
I take it that everyone in this Chamber is in agreement that we need to achieve that. If anything that I say to the Minister sounds like a criticism, it is not because I want to play party politics. I want to co-operate with the Minister, to work with him and to achieve what we have all set our face to achieve.
I want to focus on how the report looks at joined-up government. In that respect, I recommend to everyone yet another report, the National Audit Office report on “Achieving government’s long-term environmental goals”. It states that the 25-year environment plan
“brings together a number of government’s environmental commitments and aspirations in one place, but it does not provide a clear and coherent set of objectives…and…government has yet to set a clear course for the development of a coherent and complete set of environmental objectives, and for a full set of costed delivery plans”.
The report goes on to say that
“government has yet to set out whether or how it will clarify long-term ambitions for the five environmental goals that it has not designated as priority areas…and…that neither Defra nor HM Treasury yet has a good understanding of the long-term costs involved in delivering the Plan as a whole…Defra is developing governance arrangements to help manage the links between different environmental issues”,
and has set up the “two oversight groups”, but:
“In July 2020 the Implementation Board started work to assign responsibilities for managing the links between goal areas, although it has not yet agreed what the most important links are.”
Furthermore, the report recommends that DEFRA
“maps out the most significant interdependencies between the goals in the 25 Year Environment Plan and sets out how decisions about any significant trade-offs will be made, and by who”,
and states:
“Government’s arrangements for joint working between departments on environmental issues are”
simply not good enough. There are
“no clear indications of senior ownership outside Defra and its arms-length bodies for the Plan as a whole…and…no regular, formal arrangements at all for Defra to engage other departments”.
I now go to page 539 of the Climate Assembly report, where it states that 78% of people engaged in the assembly agreed:
““There should be a Minister with exclusive responsibility and accountability for ensuring net zero targets are met and government departments are co-ordinated in their efforts and achievements to meet their targets”.
The Minister must act and do that.
The Minister for Business, Energy and Clean Growth (Kwasi Kwarteng)
I thank all Members; this is one of the best debates I have seen in the House. I thought it was temperate, with lots of extremely well considered and informative speeches, so I am very pleased to take part in it.
I thank the hon. Member for Bristol North West (Darren Jones) for bringing this debate to the Floor of the House. I particularly thank the citizens who gave up their time to take part in the Climate Assembly UK. The Secretary of State for Business, Energy and Industrial Strategy spoke at the launch of the report, and we have taken this report extremely seriously in the Department in which I serve as a Minister. Initiatives such as the Climate Assembly play an important role in helping to develop policies that are achievable and fair.
In response to the point from the hon. Member for Greenwich and Woolwich (Matthew Pennycook), clearly, citizen engagement—the engagement of our people—is absolutely necessary if we are going to achieve the net zero carbon emissions target that we have set ourselves. I am very pleased that the Select Committees of this House took the initiative and were able to inaugurate this process. Many of the recommendations—people have said this—of the Climate Assembly report have been reflected in the Prime Minister’s 10-point plan that was announced last week, and I will return to some of those at the conclusion of my speech.
Public engagement of this kind, as I have said, is absolutely necessary. We completely agree with the spirit of the Climate Assembly’s recommendation on greater citizenship involvement, and that point was very ably raised by my hon. Friends the Members for Broadland (Jerome Mayhew) and for South Cambridgeshire (Anthony Browne), who is not in his place, and it was alluded to by the hon. Member for Greenwich and Woolwich. The Government will continue to engage with the public on the changes that are needed to develop our ambitions on net zero and to listen very attentively to feedback. People from all over the UK are already doing their bit on climate change, and, with the Together for our Planet campaign, we aim to celebrate this and inspire even more of our fellow citizens to join them.
As a Government, we have also increased dramatically our engagement with the public on policies for net zero. In the past year, we held deliberative workshops with the public on transport, heat, carbon capture and, particularly, on the environment. Last week, as I said and as has been mentioned many times, we saw the Prime Minister announce the 10-point plan. I remind the House that that 10-point plan delivered and reflected many of Climate Assembly UK’s recommendations. The assembly called for a green recovery. The 10-point plan is the Government’s plan for that green recovery, particularly focused on jobs.
Kwasi Kwarteng
There is limited time, so I will just allow one intervention.
Barry Gardiner
I am very grateful to the Minister. Speaking of the recommendations, the second most-supported at 94% was:
“We need much more transparency in the relationship between big energy companies and the government, due to concerns over lobbying and influence”.
His Department is responsible for that, so will he take that on board, because transparency is absolutely at the heart of gaining public confidence?
Kwasi Kwarteng
I agree with the hon. Gentleman. Transparency is absolutely central to any governing process, but particularly in respect of the challenge of fighting climate change.
The assembly called for more wind and solar power. We have stated not only in the manifesto on which we stood last year, but also in the 10-point plan, that we would quadruple offshore wind capacity to 40 GW by 2030. The assembly called for the driving of the growth of low-carbon hydrogen, and the 10-point plan committed £500 million in the first instance for low-carbon hydrogen production across the decade.
The assembly called for a faster transition to net zero emissions vehicles, and I was very pleased to hear the hon. Member for Richmond Park (Sarah Olney) mention that in her remarks. She pointed out the fact that in London, and particularly in her constituency, congestion, traffic and pollution are huge issues, and they apply equally to my constituency, which is only a few miles away from hers as the crow flies. I am very pleased to say that that call was listened to, and we have brought forward the zero emissions vehicles target to 2030. I have to add at this point that many natural supporters of the Government have been somewhat sceptical about that ambition, but it is something we are absolutely focused on delivering.
Furthermore, the assembly called for the Government to invest in low-carbon buses and trains. Again, we have committed in the plan to £4.2 billion on city public transport and £5 billion on buses, cycling and walking. The assembly requested that the Government speed up progress on low-carbon aviation, and that point was raised directly by the hon. Member for Brentford and Isleworth (Ruth Cadbury). Once again, as the MP for Spelthorne, which is even closer to Brentford and Isleworth than it is to Richmond Park, I fully endorse that move. I am pleased to announce that the 10-point plan commits to research projects for zero emissions planes and also for sustainable aviation fuels.
The assembly called for a strong policy on greening our buildings, and that point was ably raised by my hon. Friend the Member for Wantage (David Johnston). I am pleased to say that the 10-point plan provides £1 billion to extend the schemes announced by the Chancellor earlier in the year to put energy efficiency at the centre of our building strategy. The green homes grant has been inaugurated and we have extended its deadline. We hope to achieve further successes in the roll-out.
Finally, the assembly recommended maintaining and restoring our natural environment, and that is central to the Government’s ambition to meet the net zero carbon target. It is an ongoing area of policy. Initially, the plan has committed £40 million for a second round of the green recovery challenge fund, but I feel strongly that there will be more to come in that respect. Next year, we will publish a comprehensive net zero strategy and, crucially and critically, we will use our G7 and COP26 presidencies to promote international climate action and to provide the leadership that the hon. Member for Bristol North West spoke of in his remarks.
Oral Answers to Questions
Barry Gardiner Excerpts(4 years, 11 months ago)
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Kwasi Kwarteng
Plenty has been done, and I commend my hon. Friend and welcome him back to his seat after a hard-fought campaign. He will know that through the Treasury and the £400 million fund, we are extending the provision of charging facilities for electric vehicles—that issue is the single reason that prevents people from buying EVs. Manufacturers are clear about our intentions and our 2040 target for the full roll-out of EVs. We are looking to bring that target forward, and the cost curve is coming down.
Barry Gardiner (Brent North) (Lab)
I am genuinely sorry that the Minister did not attend the International Renewable Energy Agency assembly earlier this month. Had he done so, he would have learned that solar auctions are now achieving 1.7 cents per kilowatt hour, which is less than £14 per megawatt hour. Is it time to consider making a global green grid alliance an objective of COP26, and seeing whether a feed-in tariff from the UK could incentivise the development of an interconnection with Morocco to deliver such low priced electric power in the UK?
Kwasi Kwarteng
Obviously, I am delighted to see the hon. Gentleman back in his place. I was more troubled to see that his leadership campaign was perhaps not launched with the sufficient energy and enthusiasm he shows so often at the Dispatch Box. On building alliances, the Government’s position is that we are always open to building alliances internationally. We are taking leadership with the COP26 conference. On the climate change agenda, we are taking coal off the grid. We are always open to building alliances internationally.
Thomas Cook Customers
Barry Gardiner Excerpts(5 years, 1 month ago)
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Andrea Leadsom
I am glad that the hon. Gentleman recognises the Government’s efforts, particularly on the repatriation of customers stranded overseas and, of course, in the work, which I know through chairing the Government taskforce, to try to ensure that we get the best possible arrangements for Thomas Cook staff. He asks why the Government did not bail out Thomas Cook. He will be aware that, according to court reports, there was about £1.9 billion of debt on Thomas Cook’s balance sheet. It did approach Government looking for a loan facility of up to £250 million, but it is clear that, had the Government put that significant sum of taxpayers’ money into Thomas Cook, we would have ended up in the same position as we are in today. We would have had to repatriate those customers. We would have to have done exactly as we have done, but the taxpayer would have been £250 million worse off, so it was not an appropriate use of taxpayers’ money. It is very sad that Thomas Cook went bust, but it is not right that Government should just bail out every business. Businesses need to stand on their own two feet.
The hon. Gentleman made some very important points about regulation. I can tell him that I wrote to the Financial Reporting Council asking it to prioritise as a matter of urgency consideration of an investigation into the audit of Thomas Cook’s 2018 accounts, as well as the conduct of its directors. He asked why the Government did not foresee this.
It was never envisaged that a UK tour operator would fail to insure itself fully to cover claims for personal accident or fail to ensure that it had ring fenced the funds to meet those liabilities so that they were safe if the company got into difficulty. The company has a legal obligation to cover personal injury claims arising from package holidays abroad, and that is why I have asked the official receiver to investigate, in particular, this aspect of the conduct of Thomas Cook’s directors.
Andrea Leadsom
The hon. Gentleman asks from a sedentary position who the auditors were. They were EY, and they will be investigated by the official receiver.
The hon. Member for Sefton Central (Bill Esterson) asked how the Insolvency Service supported Thomas Cook employees. It has received over 8,000 claims for unpaid liabilities from former employees and has paid out over £41 million so far to claimants for arrears in pay, compensatory notice pay, holiday pay accrued, holiday pay not taken, notice worked not paid and redundancy pay. The Insolvency Service continues to work to offer, for example, the services of BUPA’s employee assistance programme and the Centre for Crisis Psychology to Thomas Cook employees as a particular request that came from the taskforce. The Government continue to do everything possible to support those affected and we are delighted that Hays has taken over the shops, providing jobs for well over 2,000 of those who lost their jobs under Thomas Cook.
Finally, I am very keen on the BEIS Committee’s report into audit. As I made clear when I appeared before it, I will bring forward fundamental changes to audit. I expect that to be in the first quarter of next year. I am very interested to read its report and, as I also made clear, I want to see Donald Brydon’s report, which I believe he expects to provide to Government by the end of this year.
International Climate Action
Barry Gardiner Excerpts(5 years, 2 months ago)
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Mr Speaker
Order. Before I call the shadow Secretary of State, it might be helpful if I indicate an intention to move on at 1.50 pm.
Barry Gardiner (Brent North) (Lab)
I thank the Secretary of State for advance sight of her statement.
The climate emergency is worse than we feared. Yesterday, the Intergovernmental Panel on Climate Change published its special report on oceans and the cryosphere, which set out the danger starkly. Sea levels threaten nearly 1 billion people who live in low-lying coastal regions, and tipping points in the permafrost could release hundreds of billions of tonnes of carbon. The report makes it clear, yet again, that we must do everything to reduce emissions as fast as possible to limit global warming to 1.5°, beyond which climate breakdown will be catastrophic.
The purpose of the UN climate action summit was to spur on greater climate ambition towards that aim, but none of the world’s large polluters met the challenge. China, India and the EU were all unable to announce tougher nationally determined contributions. Brazil and the USA refused even to turn up. Our country must step forward to fill that vacuum of political leadership on the world stage.
The UK’s commitments at the summit need close scrutiny. The new Ayrton fund that the Government have announced allocates £1 billion to help British scientists and innovators create new clean technology. That is great, but the funding has come from the aid budget. We should not siphon off overseas development assistance to spend on UK universities and firms. They should be funded by non-ODA finance, so will the Secretary of State explain why the funding diverts precious resources from mitigation in climate-vulnerable nations? If she claims that the money is classified as aid because it will help export clean technologies to the developing world, perhaps she can today commit to following Labour’s lead and pledge to provide to the citizens of the global south free or cheap access to green technologies that we develop here.
The Government’s pledge to double international climate finance, while welcome, also raises questions. Will the Secretary of State confirm that that money will be disbursed predominantly through grants rather than loans, which unfairly saddle the poorest nations with debt to pay the costs of a problem they did little to cause? Climate change is already wreaking hundreds of billions of dollars worth of damage on those communities. Will she commit to devoting any of the resources to covering loss and damage caused by climate disasters? After all, the Government perpetuate the fossil fuel economy for the poorest nations abroad, completely undermining our international climate finance. From 2013 to 2018, UK Export Finance gave £2.6 billion in export support to the energy sector, of which 96% went to fossil fuel projects, overwhelmingly in low and middle-income countries. Will she therefore commit today to ending taxpayer support for fossil fuels abroad, as so many other countries have done?
What we do abroad matters more than ever. The UK is hosting the UN climate conference, COP 26, in Glasgow next year. It is the most important climate summit since the Paris agreement. The right hon. Member for Devizes (Claire Perry) is president of COP 26, but COP presidents are normally Ministers in their Governments, and she has indicated her intention to stand down at the next general election. I therefore ask the Government what staffing resources the office of the COP president will be provided with; how much funding the Government intend to provide for COP 26 preparations; what regular reports the COP president will be able to give to Cabinet; and what objectives the COP president has been set by the Cabinet.
Those resources must be provided because at COP 26 we will need to use our diplomatic leverage to persuade other nations to bring forward much tougher NDCs. I am deeply concerned that staffing levels are inadequate. In 2009, under the Labour Government, the Foreign Office had an army of climate staff 277-strong. Seven subsequent years of austerity halved that. When the Prime Minister was Foreign Secretary, the number of officials working full-time on climate change fell to 55. Do the Government intend to restore the workforce to levels last seen a decade ago in recognition of the diplomatic resource that is now required to support the agenda of a UK-led COP 26?
The failures of the UN climate action summit raise the stakes of COP 26 so much higher. We cannot afford for the talks, or those at COP 25 in Chile, to stumble. The issue of climate breakdown is far greater than the party-political divides that afflict this Parliament, and I urge all Members to find common ground in the pursuit of a healthy and stable climate. In that spirit, I make an offer to the Secretary of State: I and my colleagues in the Labour party are fully committed to doing everything we can in a cross-party manner to ensure that COP 26 delivers the highest possible ambition.
Andrea Leadsom
I thank the hon. Gentleman. He and I worked together on energy matters some years ago and I welcome his willingness to work cross party on the issue, about which I know he cares a great deal and on which he is extremely knowledgeable. I also pay tribute to the right hon. Member for Doncaster North (Edward Miliband) for his excellent efforts on the Climate Change Act 2008, from which so much of the UK’s ambition in this space derives. I encourage the hon. Member for Brent North (Barry Gardiner) to work cross-party. I will be delighted to meet him and his colleagues to discuss how we can take the matter forward in a shared endeavour to tackle global climate change.
The hon. Gentleman asked some specific questions. I will try to answer them all, but if I cannot or if I miss some, I would be delighted to meet and tackle them further. He is right that the recent IPCC report provides the best available science on the wide range of impacts of climate change on the ocean and the cryosphere, and outlines potential measures for building resilience to those impacts. The Government welcome the report. We are very concerned about the impact of climate change on the oceans. Of course, as island nations, the United Kingdom, its overseas territories, our Commonwealth partners and close friends are especially dependent on a healthy and sustainably managed ocean, so we will be looking carefully at those recommendations.
The hon. Gentleman is right to ask about the tougher NDCs not being met at the climate summit, and he will be aware that those targets are supposed to be raised by February 2020. The UK is committed to doing that and we will, of course, be urging all others to raise their NDCs by next February.
On the Ayrton fund and its use for scientific work, the Government’s recently published green finance strategy committed to aligning all UK overseas development aid with the Paris agreement so that all our development finance is consistent with climate-resilient and low greenhouse gas development pathways. Such aid is, of course, essential because so much of the problem for vulnerable communities overseas is related to climate change, so those things are inextricably linked. Again, I am happy to speak to the hon. Gentleman more about that.
On grants versus loans, they will almost all be grants. Again, we can speak further about that.
On fossil fuel export finance, as the hon. Gentleman will know, the Committee on Climate Change has made it clear that, actually, achieving net zero requires a transition through lower-carbon fossil fuels, and I point again to the fact that, in just the past six years, we have gone from a 40% reliance on coal—the dirtiest fossil fuel—to only a 5% reliance today, which is quite an achievement. There is much more to be done, but we recognise there will be an ongoing need to use fossil fuels during the transition period.
On staffing resources for COP 26, the hon. Gentleman will be aware that the president is a prime ministerial appointment. I will be working closely with my right hon. Friend the Member for Devizes (Claire Perry), the COP president, to make sure that all the parliamentary updates will be made available on time. I will also be working closely cross-party. The UK has a huge ambition to decarbonise and to retain our global leadership in tackling global climate change.
Oral Answers to Questions
Barry Gardiner Excerpts(5 years, 5 months ago)
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Andrew Stephenson
I thank my hon. Friend for her question. She will know that the Secretary of State and I are actively involved in the British Steel support group, which meets weekly. We will raise the concerns of her local business at that support group and I will come back to her.
Barry Gardiner (Brent North) (Lab)
The Minister will know that last month’s statistics on foreign direct investment show that new projects are down by 14%, new jobs are down by 24% and existing jobs safeguarded by new investment are down by 54%. That is an 80% drop in FDI over the past five years. What discussions has he had with the Chancellor about the effect of that on manufacturing output?
Andrew Stephenson
I am proud that we remain one of the most attractive destinations in the world for foreign direct investment. UK unemployment has now fallen below 3.8% for the first time since 1974, average wages are growing twice as fast as inflation and by the fastest rate in over a decade, and all while we borrow half as much as Labour did in the five years before the crash.
Oral Answers to Questions
Barry Gardiner Excerpts(5 years, 6 months ago)
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Chris Skidmore
I will certainly be present to listen to the hon. Lady’s Bill. I want to make that commitment, but I recognise that across this House, across all parties, we cannot do this simply by taking a party political approach. It was her Government that passed the landmark Climate Change Act 2008, which introduced the carbon budgets that now allow us to adapt the legislation to look towards net zero.
There must be a whole Government approach, and I want to be able to work towards that. When it comes to looking at carbon budgets and the baselines, those are specific issues on which I want to work with the Committee on Climate Change. I look forward to hearing the hon. Lady’s Bill, on which we all want to move forward together.
Barry Gardiner (Brent North) (Lab)
I welcome the Minister to his new responsibilities while the right hon. Member for Devizes (Claire Perry) is on compassionate leave. We hope the right hon. Lady makes a speedy return to the House.
Assuming the Government will do the right thing and legislate for net zero by 2050, in line with the recommendations of the Committee on Climate Change, why has the Minister decided to weaken the third carbon budget by carrying over surplus emissions from the second carbon budget, against the committee’s specific advice?
While the Minister is at the Dispatch Box, perhaps he will confirm that net zero can be achieved within the current cost envelope for an 80% reduction of 1% to 2% of GDP. The Chancellor’s claim of £1 trillion spuriously adds together all the costs over the next 21 years and fails to subtract any of the benefits or savings.
Chris Skidmore
It is important to put on record the content of the Government’s letter to the Committee on Climate Change. After careful consideration of the committee’s advice, the Government decided to hold in reserve a small proportion of over performance from carbon budget 2—88 megatonnes of a total over performance of 384 megatonnes. The reserve will act solely as a contingency. [Interruption.] I have 384 mega- tonnes, but I will happily correct the record when I look at the statistics. Eighty-eight megatonnes are being held in reserve and act solely as a contingency against changes in the baseline. This will be released once it is clear that it will not be needed to address any technical changes to the baseline. We have also asked the Committee on Climate Change to look at those technical changes. We would not have asked the committee to take forward work on net zero if we did not believe we will be able to implement this.
When it comes to the cost reduction, I entirely agree with the hon. Gentleman that costs have come down on technology and will continue to come down. The Committee on Climate Change has made it clear that it can be done within the envelope of 1% to 2% of GDP, as set out for the 80% reduction.