Terms and Conditions of Employment

Chi Onwurah Excerpts

Tuesday 19th February 2019 Commons Chamber

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

In the Labour party’s long history of standing up for working people, the introduction of the national minimum wage in 1998 was a particularly proud moment, and let us never forget that Conservative Members unanimously opposed that introduction.

I want to start by saying that we will not oppose this increase in the minimum wage for working people; any increase in pay for those on the lowest pay is to be welcomed. However, this small rise is entirely insufficient, and is emblematic of a Government who will only do the very barest minimum for working people, and often not even that.

There is a crisis in our country. Millions are struggling to make ends meet. Work is no longer a guarantor of a decent standard of living; indeed, work and poverty are no longer contradictory under this Government. The failed policy of austerity has had a terrible impact on our communities. Years of austerity have bred wage stagnation, which in turn has meant that 4 million workers across the country are living in poverty. Real wages are still almost £15 a week lower than 10 years ago, and they will not recover to those levels until the mid-2020s.

But at the same time, the rich are getting richer and our country gets even more unequal. Top executives are now paid 133 times more than the average worker, which means the salary of the average FTSE chief executive is the same as that of 386 workers on the minimum wage combined.

[Andrew Griffiths]

The hon. Lady is making a very good speech, but does she agree that as a result of the taxation policies of this Government, the richest are paying more tax than ever before, and that by changing the tax rates we have lifted the lowest paid in our society out of paying tax entirely?

[Chi Onwurah]

I thank the hon. Gentleman for his intervention, but it does show a lack of understanding of the economic realities in our country. The richest are not paying their fair share; the poorest are paying more in tax, particularly through that most unequal and unprogressive of taxes, value added tax, which the coalition Government immediately raised when they came into power. So the poorest in our country are being taxed more and the richest are not bearing their share of the burden.

[Andrew Griffiths]

The hon. Lady mentioned VAT. Is it her party’s policy to lower VAT, should it ever come into power?

[Daniel Zeichner (Cambridge) (Lab)]

Wait and see!

[Chi Onwurah]

As one of my colleagues helpfully says, the hon. Gentleman must wait and see. In our 2017 manifesto, we set out our fully funded taxation and spending policy. The hon. Gentleman needs to recognise that a fairer taxation policy would not only enable us to fund our public services better but ensure that our economy was growing and that the growth was shared by all those who contributed to it, unlike what is happening at the moment. Last month, we learned that household debt was at its highest rate ever. Many people are reliant on borrowing, not for luxuries but for essentials such as putting food on the table for their children, and food bank use has skyrocketed.

[Mike Kane (Wythenshawe and Sale East) (Lab)]

My hon. Friend is making a powerful case. Our 2017 manifesto was fully costed and full of figures, but the only figures in the Conservative manifesto were the page numbers. According to the StepChange charity, 3,500 families containing 5,000 children in my constituency are in toxic debt, owing about £14.5 million. Does she agree that this is because of eight years of austerity?

[Chi Onwurah]

My hon. Friend makes an excellent point. The burden of debt has been shifted. We still have our public debt, but the burden has been shifted on to our poorest families. The national figures for debt are a matter of great concern for our future economic stability. As a consequence, food bank use has skyrocketed, with wages no longer covering basic living costs. In my constituency, Newcastle’s West End food bank is the largest in the country. That is not an achievement of which we are proud, but we are proud of the generous Geordies who take on the role that this Government have abandoned in feeding the most vulnerable among us.

We know that 5.2 million people are trapped in low pay, and small single-figure percentage increases in the legal minimum wage will not put an end to this misery. Shockingly, one in four employees earning the minimum wage for five years have been unable to move out of that low pay, which is the highest figure since records began. Low pay is becoming a trap, and the workers least likely to escape the low pay trap are those in the north-east and women. They are being trapped by the lack of action from this Government. Will the Minister admit that, under the Tories, low pay means that work is not a protection against poverty? I want to make it clear that, despite its name, the Government’s minimum living wage is not a real living wage. The small increase that this statutory instrument introduces will not make it a real living wage. More than 5 million people are paid less than the living wage—a huge increase from the 3.4 million people in 2009.

[Mike Wood]

The shadow Minister refers to small increases in the minimum wage. An increase of 38p in the national minimum wage is now being introduced. Can she tell the House in how many of the 10 years after the introduction of the national minimum wage the Labour Government made a bigger increase than the 38p that workers will see under this increase?

[Chi Onwurah]

When we introduced the national minimum wage, it was a transformative change for the pay of so many low-paid people, and our commitment to a real living wage of £10 an hour will also be transformative for working people.

Research by the Living Wage Foundation, which the hon. Gentleman might be interested in, revealed that one in five workers—more than 5 million people—is paid less than the living wage, which is a huge increase from 3.4 million in 2009. In Newcastle, 30% of workers who live there and 20% of those who work there are paid less than the real living wage. In the north-east, around 238,000 jobs are not paid the living wage. I am therefore particularly proud that, despite having its budget halved by reckless Tory austerity over the past decade, in January Newcastle City Council renewed its commitment to pay all staff the real living wage. After a decade of imposing austerity, this Government will still not give workers a real living wage. Will the Minister tell me why the Government will not follow Newcastle City Council’s example and raise the minimum wage to a real living wage?

The Minister said that she does not represent the Department for Work and Pensions, but she does represent the Department for Business, Energy and Industrial Strategy, which is not paying the London living wage to all its staff. Will the Minister confirm the number of employees who are not receiving the London living wage? Will she explain how we can have confidence in her ability to enforce even the national minimum wage when her own staff are striking due to the lack of a decent wage from the Government of the day?

[Chris Stephens]

The shadow Minister makes an important point. UK Departments are not complying with the London living wage, and people are taking industrial action. Does she agree that that needs sorting out today?

[Chi Onwurah]

The hon. Gentleman is absolutely right. A Government who cannot even guarantee a decent wage to their own employees should not be able to speak in this debate. I hope that the Minister will clarify the points that I have raised and confirm that a real London living wage will be paid to the Government’s employees. It is totally within their ability to do so.

The increase in the minimum wage will be of some help to the lowest paid, but it will not be transformative. It will not tackle extreme and growing levels of inequality, and it will certainly not end the growing levels of in-work poverty faced by millions. Even if it was a sufficient safety net, the minimum wage would not catch all workers. With the growing gig economy forcing more and more workers into sham self-employment, it is more important than ever that every worker is paid a decent living wage. However, the minimum wage does not cover self-employment, and TUC figures show that almost half of self-employed people earn less than the minimum wage, meaning that 2 million self-employed workers are now stuck on poverty pay. Does the Minister think that that is acceptable? What is she doing to address poverty pay among the self-employed?

Another glaring inconsistency is the huge discrepancy in the minimum wage for people over 21 and for those aged 18 to 20. Will the Minister set out why the Government believe that workers aged 18 to 20 should be paid a far lower rate than those aged 21 for exactly the same work? Why is the adult rate for under 25s less than for those over 25? What is it about a 24-year-old doing exactly the same work as a 26-year-old that leads the Minister to believe the former deserves less?

[Layla Moran (Oxford West and Abingdon) (LD)]

Does the hon. Lady agree that the anger felt by young people is palpable? The message that the Government are sending is, “By being younger, you’re not worth as much as someone who is older than you.” What kind of message is that for young people?

[Chi Onwurah]

The hon. Lady makes an excellent point. What message is being sent to the under-25s about their contribution to our economy? They are exactly the people whose confidence and contribution we need to promote, especially during these difficult times.

In its latest report, the Low Pay Commission found that more than 200,000 workers were underpaid by a cumulative total of £15.6 million last year. From 2017, measured underpayment for those aged 25 and over increased to 23% of all those covered by the national living wage. Does the Minister agree that is simply not good enough?

Labour will stand up for workers against unscrupulous employers by properly resourcing Her Majesty’s Revenue and Customs, which is critical to enforcement, and will strengthen the enforcement of labour laws. We will crack down on employers that breach labour market rights and regulations through increased fines and sanctions.

Labour is committed to making work pay, which is why we will ensure a real living wage of at least £10 an hour for all workers aged 18 and over. There is no justification for differential rates based on age. Increasing wages, particularly for the lowest paid, would not only immediately help those workers and their families but would increase demand in our economy and reduce the subsidising of low pay by the state. Given the Government’s chaotic handling of Brexit and the perilous state of our economy as a consequence, does the Minister agree that the economic benefits that a significant increase in the living wage would create are desperately needed?

It is important that the state sets a minimum rate of pay based on the Low Pay Commission’s recommendations, but state minimums are just one part of the solution to low pay. Trade unions are the collective voice of workers and are best placed to bargain over what workers are paid, within a negotiating framework that includes employers. Does the Minister agree that it would be far better if workers had a direct voice in the setting of their pay through, for example, national sectoral collective bargaining?

Workers in this country deserve far better than this Government are offering, and they deserve far better than this Government. That is why Labour will set up a new Department to roll out sectoral collective bargaining, protect the interests of workers and strengthen trade unions, introducing new rights and freedoms so that every worker gets the support, security and pay at work they deserve. This Government are clearly incapable of doing that, but I hope the Minister will at least be able to answer my questions.

--- Later in debate ---

[Kelly Tolhurst]

I point out that we introduced the national living wage in 2016. As I said, we have made increases year on year and stuck to our commitment.

I want to answer a few more questions, particularly the question that the hon. Member for Newcastle upon Tyne Central (Chi Onwurah) asked about pay for the Department’s security staff. We value all the staff, who deserve fair and competitive wages. The Department has agreed with its contractors to align the pay of cleaning, catering, mailroom and security staff with the median rates for those occupations. That will come into effect on 1 March.

[Chi Onwurah]

I thank the Minister for that clarification. Is she saying that all staff at the Department for Business, Energy and Industrial Strategy will be paid the London living wage from this financial year?

[Kelly Tolhurst]

I welcome the hon. Lady’s comment about the London living wage, and we value the work of the Living Wage Foundation. However, it is the Government’s responsibility to set the minimum rate and, as I said, it has been agreed that the wage rates will be aligned with the median rates for those occupations, and that will come into effect on 1 March.

As a result of the increases in pay that will come into effect in April, another 350,000 young workers will benefit. Nine out of 10 workers between the ages of 18 and 24 are paid more than the minimum rates. There has been much criticism of age-related rates, but they are not new. Age-related rates have been in place since the national minimum wage was introduced in 1999. In fact, this Government have asked the Low Pay Commission to review the youth rates this year to see whether they are fit for purpose, and it will report later in the year.

Oral Answers to Questions

Chi Onwurah Excerpts

Tuesday 12th February 2019 Commons Chamber

[Greg Clark]

I say to the right hon. Gentleman, who I know takes an interest in this, that I have always been clear, and indeed the “road to zero” strategy is very clear, that having a new diesel engine is a perfectly reasonable choice as we move towards zero-emission vehicles in the future. That is very clear: I have said it, my colleagues have said it and I am happy to repeat it to the House.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

Our car industry is a global success story facing existential challenges—climate change, technology change, market change and Brexit. As 80% of our imported parts come from the European Union and 80% of cars made are exported, including half to the European Union, motor manufacturers say a no deal could mean £4.5 billion in tariffs, affecting hundreds of thousands of jobs. The Secretary of State and the Under-Secretary of State for Business, Energy and Industrial Strategy, the hon. Member for Watford (Richard Harrington) are known to favour a customs union in private, but with 45 days to go, do they not have a duty to make the private public, to take no deal off the table and to stand up for a permanent customs union and British jobs?

[Greg Clark]

I would say that the hon. Lady and her colleagues have a duty to listen to what the employers that she mentions have to say. I could mention Ford, which said:

“It’s important that we get the agreement ratified that’s on the table at the moment”.

Aston Martin has said that it is “obvious” that the deal

“meets the needs of all the requests we put forward as an industry”,

and that its needs it to be ratified. McLaren has said that the withdrawal agreement would provide urgently needed certainty. If the hon. Lady wants to follow the representations of our employers, she should do what they say and back the deal.

Unpaid Work Trials

Chi Onwurah Excerpts

Tuesday 5th February 2019 Westminster Hall

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Hollobone. I thank the hon. Member for Glasgow South (Stewart Malcolm McDonald) for securing this important debate and for his excellent opening speech. Like him, I highlight the fantastic campaigns by trade unions, particularly the “Better Than Zero” campaign.

As several Members have set out, unpaid work trials have become a widespread practice in the hospitality, entertainment and retail sectors, but it is important that we place that development in the wider context of the so-called gig economy, as my hon. Friend the Member for Glasgow North East (Mr Sweeney) did. Characterised by increasingly exploitative working practices and conditions and insecure work, the gig economy affects millions who are struggling to make ends meet, making it harder for someone to say no to unreasonable and exploitative conditions set by employers.

That is the reality for so many, but it is being ignored, and even—dare I say it—encouraged by a Tory Government that represent only the wealthiest few. Everything about the current crisis of work is a consequence of an environment that is designed to reduce the burden on the employer at the expense of millions of workers.

In addition, more than £3 billion is lost in wages every year through unpaid work, with the continuing practice of unpaid work trials a key contributing factor. After a long campaign by the TUC and trade unions, and after attempts by Members—notably the hon. Member for Glasgow South—to introduce legislation have been repeatedly ignored, the Government attempted last December to set out when unpaid trial periods are acceptable. It was about time. As we have heard, a growing number of workers, particularly younger workers and those with learning disabilities, have been asked to work for free in recent years. Research by Unite has shown that, over the past three years, there has been a six-fold increase in complaints about unpaid shifts.

It is not only the trade unions and those who represent workers who say that the current system is not working. The Federation of Small Businesses has expressed concerns that unpaid trial shifts are shading into exploitation. Far too many employers have made people who are seeking work do a full-day trial shift, and in some cases employers have even demanded a full week of free work. That is not limited to small businesses; it includes large companies, as highlighted by my hon. Friends the Members for Ellesmere Port and Neston (Justin Madders) and for Coatbridge, Chryston and Bellshill (Hugh Gaffney), and the hon. Member for Strangford (Jim Shannon).

The TUC makes it clear that testing skills and abilities should be part of a structured recruitment process. Having worked in industry for 20 years before I came to Parliament, I support structured recruitment processes, which are far better than the old boys’ networks they often replace. However, there is absolutely no justification for employers demanding a period of free work as the price of entry into a job. In my view, and in the view of the TUC and other campaigners on this issue, employers who require candidates to do any productive work should be made to pay them at least the minimum wage—which, by the way, will be at least £10 an hour under a Labour Government. Why does the Minister think that productive work should go unpaid? Why will she not commit to a £10-per-hour minimum wage?

[David Linden]

I realise that this is probably an unpopular point to mention in this place, because the practice is rife, but does the hon. Lady agree that we need to have a conversation about the use of unpaid internships in this building? Often, people will work for an MP for several weeks and there is a possibility that they might get taken on afterwards. It is not quite an unpaid work trial, but there is still a culture, in this building and in other Parliaments across the UK, of unpaid internships.

[Chi Onwurah]

That is an excellent point, and I would welcome a debate on unpaid internships in this building. I myself offer living-wage paid internships. It also happens in other areas, such as the media, where the BBC and others offer unpaid internships. It is a barrier to entry into certain professions and a form of exploitation.

It is clearly bad employment practice to ask for real work and not pay for it. It also means that employers avoid paying taxes and making a relevant contribution. That leaves the taxpayer and the entire country out of pocket. Will the Minister commit to ending such tax avoidance by preventing unpaid trial shifts?

As the hon. Member for Glasgow East (David Linden) emphasised, without strong enforcement the new guidance is not worth the paper it is written on, but the organisations tasked with enforcement have faced huge cuts since 2010. The employment agency standards inspectorate has lost half its budget. That is why a Labour Government will invest in enforcement through a new Minister of Labour. How will the Minister prevent companies from simply choosing to ignore what are, after all, just guidelines?

Employers who require candidates to do any productive work should be made to pay them the national minimum wage. Will the Minister commit to these basic requirements when it comes to trial periods, and if not, why not? Workers deserve more. Ending exploitative unpaid trial shifts is just one aspect of redressing the balance in favour of workers, and that is why we will set up a new Ministry of Labour. If the Minister cannot match that, she should at least commit to ending unpaid trial shifts.

Draft Recognition of Professional Qualifications (Amendment Etc.) (EU Exit) Regulations 2018

Chi Onwurah Excerpts

Monday 4th February 2019 General Committees

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

It is a pleasure to serve under your chairmanship, Sir Gary. I will not attempt to out-do the Minister, who is famous throughout the House for his courtesy and compliments, but it is a real honour to be in this Committee.

I am less happy about the fact that we are discussing a statutory instrument that would make provision for the regulatory framework after Brexit in the event that we crash out without a deal. On the many occasions that we have had these discussions so far, my Labour colleagues and I have spelled out our objections to this Government’s approach to secondary legislation. Many of my shadow ministerial colleagues have made clear that the volume and flow of European Union exit secondary legislation is deeply concerning for accountability and proper scrutiny. The Government have assured the Opposition that no policy decisions are being taken. However, establishing a regulatory framework, for example, inevitably involves matters of judgment and raises questions about resourcing and capacity.

Secondary legislation ought to be used purely for technical, non-partisan, non-controversial changes, because of the limited accountability it allows. Instead, this Government continue to push through contentious legislation with high policy content via this vehicle. As legislators, we have to get it right. These draft regulations could represent real and substantive changes to the statute book. As such, they need proper, in-depth scrutiny. In that light, the Opposition put on record our deepest concerns that the process regarding these draft regulations is not as accessible, transparent or well scrutinised as it should be.

This statutory instrument deals with what would happen in the event of a no-deal Brexit. Labour believes a no-deal Brexit would risk huge damage to our economy, jobs and living standards. The vote last week shows that a majority in Parliament agree. Labour has called on the Government to take no deal off the table. I welcome the regulations’ transitional provisions to ensure certainty for individuals who have already had their qualifications recognised and for those who have already submitted an application. The General Medical Council said:

“this SI provides us with the necessary transitional arrangements to avoid any legal vacuum for applications made or actions begun but not yet completed by 29 March 2019, thus providing legal certainty for both regulators and professionals during this time.”

As the Minister set out, the regulations amend the European Union (Recognition of Professional Qualifications) Regulations 2015, which currently apply only to EEA and Swiss nationals. After the UK leaves the EU, it will no longer be appropriate to retain preferential treatment for EEA and Swiss nationals, so the SI means that individuals from third countries will be treated the same as those from the EEA and Switzerland when recognising professional qualifications. It also makes the primary consideration the country where the qualification was obtained, not nationality; the amended regulations will apply to anyone who holds an EEA or Swiss qualification and will no longer apply to third-country qualifications held by EEA or Swiss nationals.

The 2005 directive, which the Minister referred to, is a central component of freedom of movement as it allows EEA and Swiss nationals to have their professional qualifications recognised in other EEA states and Switzerland, allowing professionals to work abroad. Qualifications including chartered certified accountant, chartered engineer, and chartered surveyor are all subject to a system that requires regulators to recognise qualifications if they are considered equivalent to the same or similar UK qualifications. If they are not, the regulator must offer compensation measures or partial access if feasible. The draft regulations remove those obligations, allowing regulators to decide for themselves the application process, whether to grant access for equivalent qualifications and whether to put in place any compensation measures.

I have been in contact with various professional associations, including the General Medical Council, the Law Society, the Institute of Chartered Accountants in England and Wales and the Engineering Council. I am pleased to report that the Government have been in consultation with them, too. The Engineering Council welcomed the draft regulations and said that

“taken as a whole, these provisions would allow the UK to maintain the flow of competent engineering professionals who wish to be recognised in the UK while providing realistic safeguards.”

Those associations broadly support these changes, although some flagged potential issues, which I will turn to in a moment.

First, I will make what may be a declaration of interest. Before I came to the House, I was a professional. I have a professional qualification as a chartered electrical engineer. In that capacity, I worked all over the world, including in the European Union but also in the United States, Nigeria and other countries. Engineers, as well as chemists, accountants, lawyers and other professionals, are often highly mobile. Being able to work abroad not only allows them to develop their careers and have exciting opportunities but benefits the UK when they return, bringing back skills, knowledge and networks. There are many British professionals—lawyers who advise clients in Brussels on European Union law or work on global investigations, for example—whose job involves criss-crossing the channel.

Although what regulators in other countries decide to do is beyond the scope of the draft regulations, giving regulators freedom to choose the regulation process and which qualifications are equivalent may lead to accusations of unfairness or to European regulators refusing to recognise British professional qualifications in retaliation. The Institute of Chartered Accountants in England and Wales warned me:

“Elements of the SI are open to interpretation. A UK regulator could refuse an EEA applicant by saying the EEA qualification is not equivalent in some way. There is a chance that EU members states will notice this and potentially do the same in their provisions for considering UK nationals/UK qualification holders.”

What discussions has the Minister had with EEA and Swiss regulators about the recognition of UK professional qualifications?

The UK benefits from having access to a wide pool of professionals from Europe and beyond, so I welcome the fact that the draft regulations would open up access to third-country professionals. Several British industries rely on access to professionals from Europe and across the world, and we must avoid having a shortage after we leave the European Union. The draft regulations give individual regulators the power to introduce their own application processes. It is vital that those processes do not become too difficult or expensive and leave us with a deficit of highly skilled workers.

If regulators are unable to secure co-operation with EEA and Swiss regulators, responsibility for obtaining relevant documents may fall to applicants. That would put an additional burden on applicants and may prolong and complicate the application process, potentially dissuading talented individuals with the skills we need from coming to work in the UK. What discussions has the Minister had with regulators about the ease of future recognition processes for applicants and the protection of certain professions, such as engineer, that currently are not protected in EU law but are protected in certain European countries? I do not advocate that; I just wonder whether he has considered it.

As the Minister mentioned, once we leave the EU we will lose access to the internal market information system—the IMI—and the alert mechanism, which enables regulators to exchange information about applications and qualifications, and notify other states of professional or criminal sanctions and of professionals whose activities have been restricted or prohibited. This statutory instrument encourages regulators to communicate voluntarily with EEA and Swiss regulators. Regulators will have to request documents confirming the applicant’s fitness to practise and professional standing. It is vital that good co-operation is secured among regulators so UK regulators have full access to all the information they need to determine whether a person is allowed to work in sensitive positions—for example, as a solicitor or accountant.

What discussions has the Minister had with EEA and Swiss regulators about their willingness to co-operate with UK regulators on the sharing of information and documents? Finally, what discussions has he had with EEA and Swiss regulators about their willingness to co-operate with UK regulators to notify them of an individual’s professional or criminal sanctions?

--- Later in debate ---

[Richard Harrington]

There is quite a bit to be going on with; I shall do my best.

First, I must politely not accept the shadow Minister’s view that this is the wrong vehicle for the process. I perceive it as necessary; there are many SIs like it. I accept the hon. Lady’s fundamental point, but on other Committees we have discussed the subject and deem this to be the only available vehicle to achieve our objective which, as she and other speakers mentioned, is to have as much continuity as possible, given that we are leaving the European Union.

I agree entirely with what the shadow Minister said about a hard Brexit—crashing out—causing huge damage to the economy and to living standards, and I hope that she and her colleagues will consider that and vote for the Prime Minister’s deal when it comes back to the House, because most of it is in the areas that she, I and others have talked about. I do not accept the view of my hon. Friend the Member for Amber Valley that that would be a clean Brexit. I think it would be the dirtiest of Brexits. I am in favour of a clean one: a sensible transition period and then a sensible arrangement, so that for most of the business we do it is business as usual. That is what I call a clean Brexit. On the valid point my hon. Friend made about reciprocal rights, we are unilaterally recognising EEA and Swiss qualifications to mitigate the immediate impact of a no-deal exit, because it ensures the very continuity that anyone would want.

The shadow Minister made some good points about how much this country has benefited from people coming not just from the European Union but from all over the world, and vice versa—many people go to Switzerland and other countries to work, in the way that they should. What we have suggested at least means that we will have a system in place on exit day that recognises professional qualifications and that retains the essential parts of the current situation.

On meetings with the regulators about future recognition processes, I have not met the regulators—I do not want to give the impression that I have—but my officials have met them regularly. We reached the conclusion, as the hon. Member for Newcastle upon Tyne Central said, that on the whole, they support the changes. None of them anticipate extensive future burdens on applicants, which would be a very bad part of the system if they were to happen.

That also applies to our engagement with the devolved Administrations through regular meetings. The Department has had technical discussions about the proposed amendments to the regulations and how the policy approach and proposed amendments could have an impact on service provision in the devolved nations. I would not like any Committee member to think that that had been forgotten about or that we were just telling Edinburgh, or anywhere else for that matter, “This is what we are doing.” I hope that that has been fed back to the hon. Member for Central Ayrshire, who has excellent connections with the Scottish Government. We have not picked up anything adverse and I am sure she would be the first to bring something to our attention.

On the point about our professionals not automatically being able to work in the EU or EEA afterwards, because obviously we are giving unilateral rights, the European Commission has previously published guidance on that. Decisions made by another EU member state before exit day about the recognition of our professionals will not be affected by our withdrawal from the EU, but the Commission has advised holders of UK qualifications living in the EU to obtain recognition in an EU27 member state before exit. The Commission will ask member states to consider pending applications made by UK nationals before exit day as if we were still a member state.

In a no-deal scenario, the recognition of qualifications will be assessed under host member state rules. In that scenario, after exit day, our nationals will not be able to provide temporary and occasional professional services as they previously could under the directive, but that will be subject to their host members state’s laws and regulatory frameworks.

[Chi Onwurah]

Just to clarify, given that British citizens living in the European Union will be required to regularise their professional qualifications, does the Minister envisage that there could be circumstances in which they would not be able to continue working without doing so?

[Richard Harrington]

I envisage that there could be those circumstances, depending on the individual EU member state, as I explained, but I have every reason to believe that there will not be. The only way that that could not happen is for there to be no crashing out and for there to be a proper arrangement, which I am sure everybody wants to be the case. The hon. Lady has made valid point; I would not say it was a ridiculous point.

[Richard Harrington]

I am not sure of the answer to that, so I will drop the hon. Lady a note about it tomorrow, if that is acceptable. If she wishes to discuss it further, I would be happy to do so.

[Chi Onwurah]

It would be desirable if the Minister could ask his officials to look at the potential for those circumstances and the two or three areas that would need to follow, which would be to identify where UK citizens working in the European Union might be and to alert them to that potential, and to do some kind of impact assessment—or at least to write to me to say whether he considers that that needs to be done.

[Richard Harrington]

An off-the-cuff response—I know one should not give off-the-cuff responses—would be that given the current European Union regulations, and given that there is not a registration procedure at the moment, I do not know how we would know which UK nationals were working abroad. However, that is just an off-the-cuff answer, and the hon. Lady is probably going to tell me that I am completely wrong.

[Chi Onwurah]

I would never put it quite like that. What I would say is that my concern is not to identify the particular individuals, but the professions and the circumstances in which this situation might occur.

[Richard Harrington]

I apologise for my misunderstanding. I understand exactly what the hon. Lady is saying, and I will happily clarify that issue for her in the next day or so, if that is acceptable.

Oral Answers to Questions

Chi Onwurah Excerpts

Tuesday 8th January 2019 Commons Chamber

[Greg Clark]

It has always been my view, and I know it is my hon. Friend’s view, that the more we can trade on what has been a very successful model the better. He represents a west midlands constituency and knows how important it is in the west midlands that we have flourishing trade, to the benefit of our economy and those of our neighbours and friends on the continent.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

From Airbus in Bristol to Nissan in Sunderland, millions of British jobs depend upon supply chains that crisscross the channel. Ministers fantasise about replacing them with American or Australian ones, and then, as they did yesterday, hire 80 trucks to drive around Kent in a ghost of Brexit future pantomime of the chaos to come. The Minister for Business, Energy and Industrial Strategy has acted honourably in saying he will not be part of a Government who allow a no-deal Brexit, so will the Secretary of State reassure Aston Martin, Brompton the bicycle manufacturer, and the other businesses stockpiling parts—spending money that could be spent creating jobs—by saying he understands the requirements of business and geography and rule out a no deal now?

[Greg Clark]

I completely understand the requirements of business, including the manufacturers the hon. Lady mentions. It is essential that we be able to continue to trade, which is why I have always been clear—representing very strongly the views of small business and large business—that no deal should not be contemplated, but the way to avoid no deal is to do what the motor manufacturers, the Institute of Directors, the Federation of Small Businesses, the British Chambers of Commerce and all the business organisations say we should do, which is vote for the agreement that will come before the House next week.

Leaving the EU: State Aid, Public Ownership and Workers’ Rights

Chi Onwurah Excerpts

Tuesday 11th December 2018 Westminster Hall

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

It is a great pleasure to serve under your chairmanship, Mr Hollobone, and I congratulate my hon. Friend the Member for Crewe and Nantwich (Laura Smith) on securing this important debate, which is now the only piece of Brexit business tabled today—not what I was expecting.

State aid, public ownership, and workers’ rights are the critical building blocks of our nation’s economic model, and getting them right will be crucial to our future prosperity and the nature of any post-Brexit settlement. As my hon. Friend expressed so clearly, the Brexit vote has exposed the flawed foundations of our economic model. After decades of crying that “there is no alternative” to neo-liberal privatisation, laissez-faire economics, and deregulated labour markets, it was a Conservative Chancellor who, after the Brexit vote, threatened to “change our economic model”. Of course, he was actually proposing an acceleration of neoliberal reform without the constraints of European law—a “race to the bottom” in workers’ rights and protections, as the Leader of the Opposition put it in Lisbon last week.

The European Union delivers and guarantees important rights to British workers that we cannot allow to be taken away, but it has not always fulfilled the promise of a social Europe. I was also in Lisbon last week, representing the British Labour party at the congress of the party of European Socialists. I told them that no matter what happens with Brexit, we must all fight for socialist values within Europe: strengthening the rights of workers and trade unions, and ending austerity and wage suppression.

Yesterday in France President Macron finally recognised that French working people need higher incomes, not lower ones, if France is to prosper. It should not take riots in the street for our leaders to get that point. Here in Britain the real issue underlying Brexit is that working people want and deserve real rights, a real voice, and better lives. The Brexit deal must therefore defend what we have won in a European context by upholding workers’ rights and social protections, and if Brexit does not mean that, it is a total fraud against working people. The deal must also allow us to make further gains in the context of our continuing economic relationship with Europe, whether by strengthening European works councils, or restoring public ownership of public goods. That is what the Leader of the Opposition meant when he said in Lisbon:

“As socialists and trade unionists, we will work together to help build a real social Europe, a people’s European socialist Europe”.

What should that mean in practice for state aid, public ownership, and workers’ rights? As many hon. Friends have eloquently said, Labour Members reject the Government’s position that the best the state can do for the economy is get out of the way of the private sector. In the words of the renowned economist Mariana Mazzucato, we believe in an entrepreneurial state that stands shoulder to shoulder with the private sector. We are not talking about uneconomic subsidies for dying industries or failing firms; we want targeted interventions that support a prosperous, competitive, growing, and technologically driven economy that works for all. Yes, that should include public ownership where there is a natural monopoly or important public goods are at stake. Mazzucato also observed that, much like taxation and regulation, state aid rules are often used as an excuse for no investment and general inertia, and as my hon. Friend the Member for Stroud (Dr Drew) pointed out, that is particularly true for the UK Government. One example of that is in my region, the north-east, where the steel sector was allowed to decline and suffer because of Conservative inaction.

The UK has never gone as far as European Union law allows to enable the state to support the UK economy. As a percentage of GDP, we spend far less on state aid than our European neighbours—roughly 0.3%, compared with 0.6% in France and 1.2% in Germany. Public ownership is common on the continent, guaranteed by article 345 of the Lisbon treaty, which allows countries to make their own decisions on ownership. SNCF is France’s national state-owned railway company, and the German energy sector is experiencing a return to public and communal ownership. In this country we have Scottish Water, which was mentioned by the hon. Member for Glasgow East (David Linden). Some French and German public companies even own parts of our privatised utilities, and in that far-left enclave, the Netherlands, private ownership of water companies is illegal.

Although it is true that European Union member states are bound by a requirement to provide aid only on the basis of a level playing field, public service compensation does not constitute state aid when it applies to services of general economic interest. Those are economic activities that deliver outcomes in the overall public good that would not be supplied by the market—or would be supplied under different conditions regarding objective quality, safety, affordability, equal treatment or universal access—without public intervention. That could refer to a number of services, so will the Minister commit to report back to Parliament on which of our services of general economic interest we need to protect?

Before entering Parliament I had a job as Head of Telecoms Technology for Ofcom, the communications regulator, and I spent many months comparing our use of provisions for services of general economic interest with the way they were used by our European neighbours. I can confirm to the House, and especially my hon. Friend the Member for Crewe and Nantwich, that we do not use such provisions. The Government do not even seem committed to protecting our public services in new trade deals. Will the Minister commit to ensuring that future trade deals do not threaten the public ownership of crucial national assets such as our NHS?

As my hon. Friend the Member for Barnsley East (Stephanie Peacock) remarked, regardless of whether people voted leave or remain in the European Union referendum, no one voted for worse rights at work. Well, at least not at their work. Members of the European Research Group may well have voted for worse rights for others, while wishing to retain and indeed expand their privileges as parliamentarians. They want working people back in the middle ages, but not the sanctions that MPs received at that time. A poll commissioned by the Institute for Public Policy Research in February this year found that more than 70% of people want European Union rights at work to be strengthened or maintained after Brexit—more than double the number who thought they should be watered down.

The Prime Minister has repeatedly promised to maintain workers’ rights post Brexit. For example, she said at her party conference in 2016 that

“existing workers’ legal rights will continue to be guaranteed in law—and they will be guaranteed as long as I am Prime Minister.”

Only last month, she assured the House that her deal successfully safeguarded workers’ rights. Yet, as colleagues pointed out, this Government repeatedly voted down Labour amendments to the European Union (Withdrawal) Bill that would have required primary legislation if future Governments sought to reduce workers’ rights. With that rejection, our rights are left vulnerable to deregulation by ministerial diktat.

By not allowing new European works councils to form or having a contingency plan to replace them, the Tories would leave British workers at a disadvantage to their European Union colleagues. Will the Minister commit to reversing the decision to scrap European works councils?

The Government’s withdrawal agreement contains significant flaws with regard to workers’ rights. As was pointed out, one of the provisions of the backstop is a non-regression clause on labour standards, which would prevent either party from lowering protections below their current levels. However, it allows for some divergence, meaning that a UK Government would still be able to water down workers’ rights—a worrying possibility given this Government’s track record on labour protections.

Moreover, the non-regression clause would not require us to update our labour legislation alongside the European Union, meaning that over time we could end up with significantly poorer protections. That is a real concern given the growth of the so-called gig economy. Only last month, Tory MEPs joined the UK Independence party in voting against new rights for gig economy workers in the European Parliament. Will the Minister commit to updating workers’ rights in line with European best practice following the end of the transition period?

My party has pledged to protect workers and their hard-won rights, reject no deal as a viable option, and negotiate transitional arrangements to avoid a cliff edge for the UK economy and workers. We have pledged to ensure workers are represented on company boards and to require firms with more than 250 employees to set up ownership funds, making workers part-owners of their companies.

My party will make full use of the powers the state has, and should have, to build an economy that supports workers’ rights, trade union rights, innovation and industry in every region of our country, and that works for my constituents in Newcastle and for the constituents of the hon. Member for Henley (John Howell)—in short, an economy that works for the many, not the few.

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[Chris Skidmore]

Apologies—the hon. Member for Glasgow South West (Chris Stephens). I was deeply impressed by the hon. Gentleman’s ability to speak through his vocal impairment; he was cutting quite loudly through it by the end of his speech. We also heard from the hon. Member for Newcastle upon Tyne Central (Chi Onwurah) and, last but not least, the hon. Member for Stroud (Dr Drew), whom I thank for his generous congratulations on my fifth day in my new role.

[Chi Onwurah]

I regret that I did not take the opportunity to welcome the Minister to his new role and I wish him every success for the period he occupies it.

[Chris Skidmore]

I am deeply grateful for those kind words. I am getting stuck into the job by appearing at this debate, but I am here to represent the views of my Department as a replacement Minister. My hon. Friend the Member for Rochester and Strood (Kelly Tolhurst), the Minister for Small Business, Consumers and Corporate Responsibility, sends her profuse apologises that she has been unable to attend. She is representing the Department in the debate on the Accounts and Reports (Amendment) (EU Exit) Regulations 2018 in Committee corridor. I am here in her place to represent the Department’s views.

Let me start with what state aid rules are and why they exist, what is and is not state aid, and when it is allowed. Put simply, state aid is Government support or subsidy of an economic operator that gives it an advantage it could not get on the open market and distorts competition in the single market. The EU has tough rules governing the way subsidies can be given, to stop companies from getting an unfair advantage over their competitors and to ensure that countries with deep pockets do not subsidise their companies to the detriment of companies in other member states. However, where there are good policy justifications for state aid—where the benefit from giving aid outweighs the potential harm of a subsidy—the rules enable aid to be given.

Not all Government spending is aid. In fact, less than 1% of UK Government spending meets the technical definition of state aid. The state aid rules are about supporting fair and open competition, and the UK has long been a vocal proponent of them. The rules exist to stop countries from subsidising their industries unfairly, which would put businesses out of business and workers out of work.

A second misconception is that state aid rules prevent nationalisation. As long as the Government do not pay more than the market price for any assets acquired, the rules do not prevent that. However, the rules oblige the state to act as a normal market investor. That is good, because it prevents public authorities from unfairly distorting markets. State aid rules are neutral on public ownership and on the detail of spending decisions.

State aid rules are also fundamental to any free trade agreement. The political declaration on the framework for the future relationship between the EU and the UK recognises that. Free and fair trade is not possible if one party is able to subsidise without restraint. In a single customs territory that allowed the free trade of goods, as provided for in the draft withdrawal agreement, neither the EU nor the UK would be able to apply tariffs as measures against unfair subsidies by the other party. To ensure fair and open competition, it is absolutely necessary for the same state aid rules to apply consistently within the single customs territory, not to be frozen or disapplied for one bit of it.

I turn to workers’ rights, which have been the predominant topic of discussion. It is important to be clear that we are not making a choice between protecting state aid rules and protecting workers’ rights. As a responsible Government, we will work both to prevent unfair subsidies and to protect the rights of workers. The UK—we had several history lessons through some of the learned contributions to the debate—has a long-standing record of ensuring that workers’ rights are protected. Those include employment and equality rights, and protections for health and safety at work.

The decision to leave the European Union does not change that. This Government have made a firm commitment to protect workers’ rights and to maintain the protections covered in the Equality Acts.

Draft Package Travel And Linked Travel Arrangements (Amendment) (EU Exit) Regulations 2018

Chi Onwurah Excerpts

Tuesday 4th December 2018 General Committees

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

It is a pleasure to serve under your chairmanship for the first time, Mr Hosie. As the Minister indicated, with the rise of the internet and the boom in low-cost airlines, the way we book our holidays has changed significantly. Last year, 38% of all holidays abroad by UK residents—17.5 million holidays—were package holidays. Holidays to the European Union made up 79% of all holidays, and 74% of package holidays, by UK residents. Consumers often buy packaged holidays a long time in advance. They often spend a considerable amount of money—a very significant proportion of their income—on a holiday, including on flights, hotels and car rental.

As the popularity of package holidays rises, so do the risks, including the risk of trader insolvency leaving consumers stranded, the risk of accommodation providers going bust, and the risk of difficulties with access to information, help or redress, to name just a few. That is why the EU directive was an important step forward in protecting consumers in both the UK and the EU.

As the Minister outlined, this statutory instrument amends EU-derived regulations that protect consumers buying package holidays or linked travel arrangements to ensure that these protections continue to operate effectively after the UK’s departure from the European Union. It proposes a new obligation on UK businesses that sell package holidays put together by a European Union business. Those UK businesses will be required to comply with UK insolvency protection requirements, unless they can demonstrate that the EU business has taken out appropriate insolvency protection.

Clearly it is vital that insolvency protection schemes work. To give just one example, in 2016, Lowcostholidays failed, which left 140,000 UK consumers at risk of losing the money they had paid for their holiday, and some stranded overseas. At the time of the failure, the company, which sold primarily to the UK market, was based in the Spanish Balearic islands, following a controversial move in 2013, and its insolvency arrangements were held there. The UK regulator, the CAA, was powerless to prevent the company selling to UK consumers, or to obtain information on its insolvency arrangements. Fortunately, in that case, the majority of UK consumers ended up receiving refunds through the Consumer Credit Act 1974, which covers refunds of credit card payments. However, it has since emerged that the company’s insolvency protection came nowhere near to covering the sales it had made. That illustrates the potential risks of insolvency protection schemes not working in a joined up manner. It is not enough to have a scheme; it needs to work in a joined up way.

The intention behind the mutual recognition rules is to prevent this type of scenario occurring, but without those rules, the only way to do that is to require UK sales to be protected here. As a result of the regulations, the mutual recognition of insolvency protection with EU member states will end. As part of the withdrawal negotiations, have the Government attempted to negotiate continued mutual recognition of this? If not, do they intend to?

As UK individuals and businesses will no longer benefit from mutual recognition of insolvency protection, they could see a reduction in their consumer rights. Is that compatible with the Prime Minister’s statement in October 2017 that she wanted a partnership with the European Union based on strong consumer rights?

Furthermore, the Minister will know when this SI came to the Committee in May, an impact assessment was undertaken, as it was recognised that businesses offering packages that would be newly within the scope of the package travel directive of 2015 would face costs of £21 million in ensuring proper performance of the package. Does she not agree that an impact assessment should have been prepared prior to this debate? The right hon. Member for South Holland and The Deepings asked how businesses could be made more aware of these changes; should that not have been costed as part of an impact assessment? Will she estimate what exactly the cost will be to businesses?

The Minister did talk about an impact assessment. What assessment has she and her Department made of the number of travel companies that may move away from the UK market as a result of the new changes in insolvency protection? Finally, what discussions has she had with British trading standards on the impact these amendments will have on its workload? We know British trading standards has, unfortunately, been underfunded. Will this add to its workload without adding resources? My final question: given the 56% reduction in staffing for trading standards due to Government cuts, has the Minister any assurance to make?

[Sir Hugo Swire (East Devon) (Con)]

How much more money would the hon. Lady’s party give to the trading standards body?

[Chi Onwurah]

I thank the right hon. Gentleman for his intervention, even though it is a little mischievous in nature. As he knows, we would have undertaken these negotiations in an entirely different and more effective way. To ask questions on the detail of what we would do—

[Sir Hugo Swire]

Will the hon. Lady give way?

[Chi Onwurah]

I will finish answering the right hon. Gentleman’s first point before I give way a second time. Asking how we would mitigate the negative consequences of agreements that are part of the Government’s deal—we will see whether it will be approved by the House in a week’s time—is taking hypothetical questions to the extreme.

[Sir Hugo Swire]

For the sake of the Hansard reporters, let me state that I would never want to be accused of saying that the Opposition were strong on detail, but the hon. Lady has just accused the Government of cuts, and of reducing the amount payable to a body, which suggests that her party would commit more funds. It is not hypothetical; we need to know what she means by this.

[Chi Onwurah]

It is entirely wrong to say that I am making an accusation against the Government by simply stating that there was a 56% reduction in staff numbers. How is that an accusation? That is a statement of fact, a statement of the consequence of this Government’s and the preceding Government’s austerity agenda, which has led to our consumer protection services being decimated. The right hon. Gentleman was looking for more detail on this point, and I am happy to give it to him. Our services have been decimated as a consequence of the Government’s austerity agenda. His Prime Minister has said that austerity has ended, but his Chancellor has in no way committed the funds to make that real.

[Sir Hugo Swire]

Will the hon. Lady give way?

[Chi Onwurah]

Again, I would like to answer the right hon. Gentleman’s first point before giving way another time. A Labour Government will ensure that our public services are properly funded. We need to see exactly what mess this Government leaves for us before we can say exactly how much that will cost.

[Sir Hugo Swire]

Hopefully it will not be as great a mess as the one we inherited from her Government in 2010. People are beginning to rumble the Opposition for being opportunistic. The hon. Lady has talked about cuts and decimation; she has accused the Government of decimating this particular body. It is entirely right that, as parliamentarians, we should know what her counter-proposals are. It is no good trying to lose the room in blandishments and vague promises. We need to know, if she has looked at this, how she would better resource it.

[Chi Onwurah]

Our commitments are to comprehensive investment in our public services and our infrastructure, and to strengthening consumer rights and protections. I will not go through every line of funding in our first Budget as a Labour Government, because I am not in a position to do that. However, I am in a position to say categorically that we would not have indulged in the failed economic policy of austerity, which has cut our public services while also giving us the lowest economic growth within the Organisation for Economic Co-operation and Development, and the second lowest within the European Union. If that is successful economic investment, then I think the right hon. Gentleman has a lot to learn about a successful economic policy.

[Sir John Hayes]

Might I be helpful? I realise that I cannot match the assertiveness of my right hon. Friend the Member for East Devon, but this seems to be less about trading standards than about the way in which people book holidays. When I looked at these matters as a Minister, as I mentioned earlier, it became clear that the regime that has prevailed for some time was based on the fact that most people booked their holiday through a supplier, as a package. Increasingly, people construct their holiday by a variety of means, including through the internet. There is a reasonable point to be made about this being a dynamic sector that requires a moving regulatory environment.

When I challenged the Minister on this, she very helpfully committed—I thought she would—to providing information to all those bodies associated with that highly dynamic part of the market, as the explanatory note implied that we should. I am not putting words into the mouth of the hon. Member for Newcastle upon Tyne Central, but a more telling critique would be about that, rather than taking this more conventional approach around trading standards.

[Chi Onwurah]

I hesitate to disagree with the right hon. Gentleman, who is so well informed in many areas, but as I said in my opening remarks, while it is absolutely true that consumer behaviour has changed in terms of how holidays are booked, that does not mean that the need for protection and for trading standards has reduced. For example, if we look at how crime has moved from the high street to the virtual high street, then some might argue that there was a greater need for trading standards and for protection of consumers. While I take the point that any consumer protection regime needs to reflect consumer behaviours, I do not think that that in any way reduces the need for trading standards bodies to have the proper resources.

[Sir John Hayes]

rose—

[Sir John Hayes]

I am always guided by your wisdom, Mr Hosie. The point is that this is a complex area. The hon. Member for Newcastle upon Tyne Central is right that trading standards matter, but that is not all that matters. The Minister has made it clear that she is determined to make sure that information is provided to the businesses, voluntary organisations and charities that are likely to be affected, in exactly the way that I requested.

[Chi Onwurah]

Thank you for your advice, Mr Hosie. Let me reflect the right hon. Gentleman’s point and ask the Minister specifically what assurance she will make to resource British trading standards adequately to reflect additional workload. Assurances are very well, but it takes resource and funding to make them into reality. What resources will she put behind the information and communication campaign that she has apparently committed to in this debate?

Draft European Research Infrastructure Consortium (Amendment) (EU Exit) Regulations 2018

Chi Onwurah Excerpts

Monday 3rd December 2018 General Committees

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

It is a real pleasure to serve under your chairpersonship on such an important subject, Mr Sharma. With the article 50 deadline so close and the Government in such disarray—as demonstrated by the recent resignation of the former Science Minister, the hon. Member for East Surrey (Mr Gyimah)—we need more than ever the process of scrutiny that statutory instrument Committees allow.

Science is a great British success story, supporting jobs and growth across the country. From Newton to Hawking, and from Lovelace to Franklin, British scientific giants have bestrode the world. It is a global success story: in science and innovation, we are the partner of choice of our European neighbours and countries across the world. British science has benefited from what the director of the Campaign for Science and Engineering, Dr Sarah Main, describes as:

“A web of collaborations, shared facilities and cross-border research programmes…which has led to a rich flow of ideas, people and research funds into the UK.”

According to the Government’s 2013 report, the increasing internationalisation of UK science, powered in part by European collaboration, has allowed us to surpass the United States in science productivity.

As the Minister has explained, ERICs are one of the legal forms that underpin this collaboration, and they are crucial to the success of British science. We take a leading role in many pan-European organisations, with facilities often located in our country. Instruct-ERIC, for example, was set up to support structural biology research infrastructure, and has six centres in the UK. ECCSEL ERIC, which provides laboratory infrastructure for important research in carbon capture and storage, has a near surface gas monitoring facility and six carbon dioxide capturing facilities in the UK.

Even when such facilities are not located in the UK, participation in ERICs gives our researchers access to facilities, data, knowledge and contracts that would otherwise be inaccessible. That is beneficial not just for public research organisations but for the private sector, both through the tendering of construction opportunities to private businesses and through the use of ERICs to disburse funding for research projects, to which private organisations may be contributing. ERICs are therefore an important interface between research funding at the state and pan-European levels and the research endeavours of public and private institutions. Strengthening that interface will be crucial if we are to achieve the ambition shared on both sides of the House of meeting—and on the Opposition side, surpassing—the OECD average of 2.4% of gross domestic product invested in research and development.

The draft regulations are an attempt to pave the way for the continuation of current laws governing the establishment of ERICs when we leave the European Union. I will not go into the details that the Minister set out, but the Opposition are satisfied that the SI does not represent a policy change. The Government’s impact assessment says that the SI will not have a direct impact on business and research organisations, and that is true in the strictest sense. The SI does not change the process for joining an ERIC, or the rules under which they are governed. Crucially, as the Minister set out, countries do not need to be members of the European Union or its framework programmes to be a member of an ERIC, so we will continue to participate in ERICs even if we are not able to join Horizon Europe as an associate member.

However, I emphasise that it would be naive to assume, as the Minister seems to be doing, that the level of our participation in European framework programmes will have no impact on whether the UK continues to join new and existing ERICs. Science funding and investment have already been severely knocked by the chilling impact of not knowing what our relationship with Horizon will be after Brexit. Funding for UK science from Horizon 2020 was down by a fifth last year, while more and more universities tell me that Brexit chaos is freezing them out of funding opportunities. It is vital that we secure associated status with Horizon Europe, as CaSE and the Royal Society have called for and as Labour has pledged. I am glad that the Government are committed to seeking associated status, but am concerned by the lack of any apparent contingency plan if negotiations fail to secure that status.

That uncertainty is compounded by confusion at domestic level. Despite their lofty rhetoric on science spending, the Government have not produced a long-term funding plan. Disbursement through the challenge fund is uneven and unpredictable, while measures to support innovation through the tax code are continually being introduced and then axed. Finally, with the Government’s long-anticipated White Paper on migration supposedly around the corner, British science needs clarity on how and to what extent it will be able to access European talent after breakfast—Brexit. [Hon. Members: “Ah!”] Perhaps we will just have breakfast instead.

In conclusion, the Opposition will approve the SI, as we believe it is necessary for the continuing functioning of our science sector post-Brexit. However, the Government would do well to consider what else they need to do to ensure that we continue to be the scientific partner of choice for the world.

--- Later in debate ---

[Claire Perry]

I thank hon. Members for that series of interesting and helpful questions, which I will try to answer.

There was a series of questions about our post-Brexit position on ERICs and the scientific leadership that we wish to exert. It is absolutely right that we continue to discuss this. I should have declared an interest, Mr Sharma: I am married to a world-leading scientist—Professor O’Neill of Cambridge University—who has participated not in ERICs, but in a number of Europe-wide research projects. I know very clearly what the risks and benefits are of continuing or not continuing international collaboration.

The point about the talent pool is significant, because of course scientists are not fungible. Part of the reason why we have been able to attract so much investment, both domestically from private sector sources and from overseas, including Horizon—as of 28 September, we were second only to Germany in the funding commitments we have received—is that we have an astonishingly strong science and innovation research base. Arguably, we need to focus on scale-up to get from research to commercialisation, but that has nothing to do with our position in the European Union; it is to do with our will to harness industrial investment after early stage research and development.

I and the Department remain very positive about the outlook for the UK’s role in participating in world-leading science and innovation. We have taken a couple of domestic measures, including providing an additional £7 billion to the public funding of R&D from 2017 to 2020, which I understand to be the biggest increase that has ever been made. We are also working through sector deals to try to align the principles of the industrial strategy with the very practical steps that different sectors are taking forward, including on R&D-specific projects, places and individuals funded through those sector deals. It feels to me entirely fundamental to the UK’s progress—I believe that this should have happened regardless of our decision on Brexit—to harness that world-leading science and innovation base in a way that delivers more of an alignment with the industrial strategy.

[Chi Onwurah]

I thank the Minister for the tone of her response, but I take issue with her proposition that the ability of UK companies to scale up is not related to whether we are part of the European Union. Funding is one thing, but access to talent and potential markets for scale-ups are obviously related to whether we have access to one of the world’s biggest trading blocs.

[Claire Perry]

The hon. Lady is right. It is why the proposed framework is to have as close as possible alignment on goods. I know she speaks to many universities and researchers, so she will know that we have an endemic problem with scale-up. What tends to happen is that the intellectual property is sold overseas before the commercialisation stage, and often the full commercialisation of projects and services is done by overseas companies, rather than the IP being held back in the UK—but I am digressing slightly. Forgive me, Mr Sharma.

I am going to address the migration points. I thank the hon. Member for Wallasey for her contributions to the European Statutory Instruments Committee. I know she has a lot of stuff going on with that, and these are important questions. Third countries cannot host ERICs, so there is a question about hosting versus participation. We host two ERICs and we are members of 12. This relates to our future negotiations, which are spelled out in the political declaration, but we have expressed a desire to continue to host. We hope that our special status as one of the world leaders—I cannot remember the patent numbers, but I believe we are up there with economies very much larger than ours—will allow us some special status for ERICs hosting. I believe that is part of the future negotiations.

--- Later in debate ---

[Claire Perry]

Thank you, Mr Sharma.

[Chi Onwurah]

In the context of ERICs, I feel that it is important to emphasise that we all wish for more women not just to come forward, but to be encouraged to be part of science. Speaking as an engineer myself, I know the virtue of collaboration is that different people from different disciplines and different backgrounds come together to create innovation. That is not an issue with regard to whether or not home-grown women are accessing the skills pool.

[Claire Perry]

The hon. Lady is absolutely right. I think she rather supports the point that I made earlier, which is that scientists are not fungible. That is why I believe that we should maintain very strong confidence in the UK’s incredible reputation in science and innovation. We have world-leading science bases and research, and that is entirely strengthened by collaboration, as she said. Projects such as ERIC will help to facilitate such collaboration. I would be grateful to the Committee for allowing the regulations to proceed, because they are simply a technical clearing out of some rules that will no longer apply, and they will enable us to maintain our membership of ERICs post-exit, or to join new projects. I therefore commend the regulations to the Committee.

Question put and agreed to.

Oral Answers to Questions

Chi Onwurah Excerpts

Tuesday 20th November 2018 Commons Chamber

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

“High tech manufacturing in every part of the country”—the Secretary of State’s words. General Electric is closing in Rugby and Michelin is closing in Dundee. From Swansea to Copeland to Lowestoft, his energy policies destroy more jobs than they create. By ending the enhanced capital allowance, the Budget took hundreds of millions of pounds from manufacturers, while doling out billions in corporate tax cuts. Manufacturing demand is now dropping at its fastest rate since 2015, yet the Cabinet is in meltdown over whether to walk out on the customs union in four months with no deal or in 24 months with the Prime Minister’s plan. Does the Minister agree that a permanent customs union is essential for British manufacturing and British jobs?

[Richard Harrington]

It will come as no surprise to you, Mr Speaker, that I disagree with a lot of what the hon. Lady has said. She says the Cabinet is in meltdown. It is not. [Interruption.] The Cabinet is not in meltdown. On her substantive question about energy, to the best of my knowledge, offshore energy is producing a lot of jobs, including in Tyneside. [Interruption.] It very much is. She must be aware, as far as the customs union part of her question is concerned, of the importance of the Government’s proposals, which provide the benefit of a very close relationship with all the countries in the EU. They also mean that this country will be able to enter into negotiations to sign free trade agreements with countries all over the world.

Budget Resolutions

Chi Onwurah Excerpts

Wednesday 31st October 2018 Commons Chamber

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

With the leave of the House, I shall speak instead of the shadow Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Salford and Eccles (Rebecca Long Bailey), who has been taken ill and is disappointed not to be here today. We wish her a speedy recovery.

Every Opposition Member is disappointed by the Chancellor’s Budget, which can best be described as a “broken promises” Budget, despite the spin that the Secretary of State has tried to place on it. The Prime Minister promised the end of austerity, but the Chancellor was already backtracking within the first few minutes of his speech, simply saying that austerity is “coming to an end” and even that turned out not to be true. Austerity is certainly not over.

The truth is that the small giveaways in this Budget do not begin to even touch the sides of the cuts made since the Government took office. The £1.7 billion promised to universal credit is less than a third of the £7 billion of social security cuts still to come. School funding has been cut by 8%, but there was nothing to fill the gap, and the Chancellor’s idea that schools should be grateful for a one-off payment of £400 million for “little extras” is insulting. Local councils still face a funding gap of £7.8 billion by 2025, and budgets will be cut by a further £1.3 billion next year. How is that the end of austerity? In fact, the Resolution Foundation has predicted that the Department for Business, Energy and Industrial Strategy will have suffered a real-terms per capita cut of over 50% by 2024.

[Dan Carden (Liverpool, Walton) (Lab)]

The Secretary of State just mentioned Liverpool. Since 2010, Liverpool’s local authority budget has been cut by 64%. That is the problem that Liverpool is facing today.

[Chi Onwurah]

My hon. Friend makes an excellent point. All our constituents have had to suffer cuts to services, so for the Secretary of State to say that austerity is over is an insult to our intelligence.

[Mr Kevan Jones (North Durham) (Lab)]

Like Liverpool, Durham County Council has lost nearly half its budget since 2010, and the cuts are still going on. This Budget contained no change to next year’s cuts in revenue support grant, so another £40 million will be taken out of the council’s budget.

[Chi Onwurah]

My hon. Friend is absolutely right. The services that make such a difference to our constituents’ daily lives face increased cuts, which is why our constituents know that austerity is not ending under this Government.

[Mr Simon Clarke]

Do the hon. Lady’s constituents want to pay billions more in tax or to have the nation weighed down by billions or even trillions more in borrowing?

[Chi Onwurah]

Our manifesto commitments show that 95% of the people of this country would not suffer any tax increase under a Labour Government. The Conservatives have managed to double our debt, while preaching austerity—doubling the debt because the economy did not grow significantly under the austerity ideology.

The Secretary of State may point to the increased spend on the NHS as an example of austerity ending, but the Health Foundation has branded it as simply not enough. Paul Johnson of the Institute for Fiscal Studies said yesterday that if we look at total spending—[Interruption.] The Secretary of State seems to suggest that health spending is not relevant to the economy, but it is the wellbeing of all our constituents that enables us to deliver an economy that works for everyone. Paul Johnson of the IFS said:

“If you look at total spending beyond the NHS it’s not really going anywhere… If you look at total spending as a fraction of national income, it’s not really going anywhere... This is not a dramatic change in the sense of undoing much of the cuts we’ve had over the last eight years.”

The Chancellor has squandered an opportunity to repair the damage done to our public services and our economy by his predecessor’s pursuit of a failed economic ideology. That ideology has created many of the problems holding back our economy today, from chronically low productivity and business investment to eye-watering levels of inequality in terms of both income and geography.

[Vicky Ford]

What was eye watering was the debt under the previous Labour Government. Does the hon. Lady not agree that growth of over 1.5% going hand in hand with public spending is a phenomenal achievement and is thanks to a balanced economy?

[Chi Onwurah]

The hon. Lady should finally recognise that the economic crisis—the crash—was caused by casino capitalism and reckless bankers, and the Conservative party chose to make the poorest people pay for it, and they continue to pay, given the slowest recovery since the Napoleonic era.

[Mr Paul Sweeney (Glasgow North East) (Lab/Co-op)]

Does my hon. Friend agree that the economy was growing and national debt was below 50% when Labour left Government? Debt has grown to 85% under this Government because of their failed austerity programme. Indeed, when we built the NHS in 1948, debt was 250% of GDP, but it dropped because we invested in the economy.

[Chi Onwurah]

My hon. Friend is absolutely right. He could give a lesson in basic economics to most Conservative Members.

[Mr Kevan Jones]

Is it not a fact that debt was 43% of GDP when Labour came to office in 1997 and went down to 40% by 2006? That was down to good management of the economy before the crash. Through those years, the Conservative party was not just agreeing to our spending commitments, but asking for more expenditure, so we will have no lessons from the Tory party about reckless spending.

[Chi Onwurah]

Absolutely. The Conservative party initiated and promoted the reckless deregulation of our financial sector, which contributed significantly to the financial crisis, and then failed to manage the economy in such a way as to ensure sustained, significant growth. Under this Government, we have had half the historical level of growth.

The prognosis for growth is reflected in business investment, which is the lowest in the G7. We are the only major economy in which investment is falling. Our productivity is 15% lower than in other major economies, and it has not grown this slowly since the Napoleonic wars—there is an achievement. The average real wage growth since the second world war is 2.4% a year, but under the Conservatives, pay has fallen by 3% and the UK remains the most regionally unequal country in Europe.

We needed a big Budget to rebalance our economy and to provide the industrial strategy with the backing it needs to address the serious problems, but the Budget is deeply disappointing. We got an arbitrary announcement of more funding for the national productivity investment fund, but that will be in 2023, with no information on where the money will be allocated.

On research and development, we had another repackaging of money that was announced last year dressed up as additional funding when, in fact, of the £1.6 billion cited by the Government only £180 million, barely 10%, is new. Although we are pleased that there has been a marked increase in R&D expenditure, there is still no overarching strategy for its direction or for how the Government intend to meet their target of spending 2.4% of GDP on R&D. We are a world leader in science, but, let us be clear, the Government’s 2.4% target is average when it comes to R&D spend. Labour’s target is 3% to become one of the leading nations in R&D spend.

What little information there was in the Budget again focused on sexy high-tech areas like nuclear fusion and quantum mechanics. As an engineer, I understand the desire of the Prime Minister and the Secretary of State to be associated with sexy technologies, and it is of course a vital part of our industrial strategy to support the industries of the future, but the Secretary of State has repeatedly failed to recognise that supporting our biggest sectors to improve their productivity through technology and investment is so important.

Retail is one of the biggest employers outside the public sector, and it is facing a unique crisis. Over 100,000 jobs have been lost in the past three years, and over 25,000 shops stand empty. High streets are the centre of communities, and they should and can continue to be vibrant spaces of which communities are proud, but to achieve that we need proactive policies from the Government, as Labour have been demanding for months.

The Secretary of State has been a bit cheeky and stolen a number of Labour’s policies in this area. A register of empty properties, an adjustment to business rates and a high street taskforce were just some of the policy proposals in the conference speech of my hon. Friend the shadow Secretary of State. It would be churlish of me to demand our policies back, but that is where the consensus ends.

The Government’s overall package, “Our Plan for the High Street,” simply does not do enough. Business rates relief would not have saved a single House of Fraser or Debenhams—the vast majority of retail workers are employed in such shops. The British Retail Consortium has said that the Government

“must engage in more extensive business rates reform to help all retailers and their employees through this period of transformation.”

The CBI responded:

“Smaller businesses will be relieved by the support on Business Rates… But larger retailers and manufactures—and the millions they employ across the UK—will continue to suffer needlessly until there is a full, in-depth review.”

Yet the Budget contained no commitment to a review of business rates.

The future high streets fund is yet another fund allocated out of the national productivity investment fund, and there are no details of where the money will be targeted, who will be responsible for administering it or how quickly funds will be made available. The proposals for planning reform have missed the point. It seems that the Government’s idea to save our high streets is to turn them into non-high streets. Frankly, much more work is needed if we are to protect our high streets and the millions of workers who rely on them.

[Dr Roberta Blackman-Woods (City of Durham) (Lab)]

My hon. Friend is making an excellent point about the high street. Does she agree that it is ridiculous of the Chancellor to ask that local authorities develop a plan for their high streets, which is something we support, while he is taking away the means for them to be able to plan for their high streets by introducing yet more permitted development?

--- Later in debate ---

[Chi Onwurah]

My hon. Friend makes an excellent point. The attack on the capacity of local authorities, as well as on their powers, means that their ability to determine the future of our high streets is severely limited.

Retail is our biggest employment sector, and many of the job losses will be in towns and cities outside London and the south-east where good jobs are already hard to find. The precariousness of work in the retail sector is one symptom of the crisis blighting high streets across the UK.

There is very little in this Budget for workers, across all sectors, who after eight years of austerity are facing an uncertain future. Only yesterday, workers marched on Parliament to demand proper pay and terms and conditions. Many of those workers are outsourced to private providers and are on precarious, poorly paid contracts. Yet the Government continue to turn a blind eye, and there is absolutely nothing in the Budget to improve the lives of those marching.

[Stewart Malcolm McDonald (Glasgow South) (SNP)]

The hon. Lady is completely right on that point. Does she agree that it is a disgrace that, after Ministers from the Department for Business, Energy and Industrial Strategy talked out my private Member’s Bill to ban unpaid trial shifts, which are a blight on retail, the Government now refuse to meet anybody to talk about it, despite acknowledging that unpaid trial shifts are a major problem?

[Chi Onwurah]

The hon. Gentleman makes an excellent point, and I look forward to the Government’s response.

[Vicky Ford]

Will the hon. Lady give way?

[Chi Onwurah]

I will now make some progress, as I am sure Mr Speaker will not indulge me much longer.

I am not sure what is needed for the Conservative Government to see that their economic policies are causing more harm than good. Rising prices and stagnating wages mean that people are now £800 a year worse off than they were a decade ago. Just under half a million young people are still unemployed, and one in nine are in insecure agency work, on a zero-hours contract or in low-paid self-employment. That is the everyday reality for millions of working people—the people behind the supposed record levels of employment bandied about by the Government as the marker of a successful labour market.

The truth is that there are real issues in our labour market—rising insecurity, stagnating wages and a productivity crisis—so it is disappointing to see so little to address them in the Budget. There are increases to the minimum wage or, as the Government have rebranded it, the national living wage, but it is still significantly below the rate set for the real living wage. One in five people earn less than the wage they need to get by, according to the Living Wage Foundation, and the increases will not change that. In addition, unlike the Government’s minimum wage, the real living wage is based on a review of the evidence on what is happening to people’s living standards right now.

The Government’s failure to immediately reform the IR35 rules, which govern how much tax those working as contractors pay, shows that they are refusing to take tax avoidance seriously. By pushing back those reforms to 2020, the Government are denying themselves much-needed revenue, which could be used to properly fund our schools and the NHS, or to pay workers a decent wage. How many more people need to take to the streets protesting about their precarious working conditions? How bad do things have to get before the Government finally take action?

We have heard lots of warm words about defence spending, but they are cold comfort to many of the workers in the shipbuilding industry, such as at Cammell Laird and Appledore, who are facing real uncertainty as to whether their jobs are safe. It is disappointing that the Government failed to announce any support for our manufacturing or shipbuilding industries, which are vital to our long-term economic success.

In the same month that the Intergovernmental Panel on Climate Change, the leading authority on climate change, set out the devastating consequences for human civilisation of a business-as-usual approach and the scale of ambition needed to avoid dangerous climate change, what did the Chancellor do? He did not even mention climate change, and the Red Book was little better. The Chancellor left the carbon price support unchanged and said that the Government would seek to reduce the rate if the total carbon price remains high—that is as clear as mud. The Chancellor tinkered at the edges of the climate change levy, a policy introduced by Labour but undermined by his predecessor, George Osborne, who removed exemptions for renewable energy. The Government did announce a £315 million industrial energy transformation fund to support businesses to increase their energy-efficiency. That sounds good, but when we realise that it will be paid for entirely by money saved from scrapping capital allowances for energy and water efficiency, which enabled businesses to claim back the costs of investments, we see that it is really just rearranging the furniture.

What else was there? As has been said, the Government announced £20 million for nuclear fusion. I do not know whether the Chancellor’s understanding of nuclear fusion is as limited as his understanding of blockchain, but these figures should illustrate the challenge here: £20 million is 330 times smaller than the €6.6 billion the EU will contribute to one nuclear fusion experimental facility in France—this is not even a drop in the nuclear ocean. Of renewable energy—wind, solar and tidal—not a single mention was made, at a time when electricity and gas wholesale prices are rising, and we enter another winter with household bills surging and millions facing fuel poverty. There was £10 million for urban tree planting and a commitment to purchase £50 million-worth of carbon credits from tree planting, although it is unclear whether that is new funding. The lack of action on climate mitigations is disappointing.

[John Howell]

I think the hon. Lady’s figures on fusion technology are completely wrong, as she is not comparing like with like. The project in the south of France is a commercial project to make fusion possible at a commercial scale. That means that the projects continuing in the UK do not have to be at that scale, and the £20 million is an enormous contribution to what they are trying to do.

[Chi Onwurah]

I thank the hon. Gentleman for his intervention, but in fact he illustrates the scale of the problem. Nuclear fusion requires significant investment in order to commercialise it, as he would agree. The level of investment that this Government are making in it is entirely inadequate to meet the challenge and in respect of the contribution fusion can make to our economic and climate future.

Labour is serious about achieving a net zero emissions economy before 2050. We are developing policies to dramatically decarbonise energy and insulate 4 million homes in our first term, as part of our green jobs revolution. We believe in the power of people, the power of leadership and the power of government to address what are frankly existential challenges. After eight years of austerity and counting, it is evident that the Tories have given up on this. This Budget shows the Tories giving up on the planet, too. They lack both ideas and the courage to do what is needed. They must step aside.

--- Later in debate ---

[Vicky Ford (Chelmsford) (Con)]

It is a pleasure to speak in favour of the Budget tonight. The decade since the financial crisis has been tough, and it is very good to know that the corner has been turned. The economy must come first, because without a strong economy we cannot afford other priorities such as healthcare, welfare, defence and education. Today in Chelmsford unemployment stands at 1.6%; we have record numbers of jobs and opportunities. We know that politicians do not make jobs—businesses do—but we can help. Businesses often tell me how low corporation taxes have helped them to invest here. Chelmsford businesses ask me for lower business rates, fixed VAT thresholds and a level playing field between online and offline trade, because tech giants should pay tax too. I am really glad that all three of those asks have been addressed in the Budget.

We know that innovation drives growth and keeps us ahead of the pack, and I am proud that this Government have increased investment in science and research by more than any Government in the past 40 years. We on this side do not underestimate the importance of collaboration in science, which is why our EU strategy keeps us in those European networks. I am glad that the Minister for Immigration is here. She knows that we need a fair and fast immigration system to enable scientists to continue to come here.

Fundamental research in science is key. Ideas involving liquid crystals, molecular machines and gas phase chemistry were once just intellectual curiosities, but they have now driven real transformational breakthroughs. We need to ensure that the ideas we have here are made into reality here. The hon. Member for Newcastle upon Tyne Central (Chi Onwurah) dismissed quantum technology as a “sexy” sector, but my biggest employer in Chelmsford has embraced the quantum revolution. It has made the cold atom trap—

[Chi Onwurah]

I thank the hon. Lady for giving way in what is the final Back-Bench speech of the debate. I feel that it is wholly unjustified to say that I should not call technology sexy. One of the things I would like to do as an engineer is to show people how sexy and important technology and engineering are. Calling it sexy was not dismissing it. I was just saying that we need to celebrate all different types of technology, not just quantum technology.

[Vicky Ford]

Maybe it was the tone that felt dismissive. In my constituency, we have embraced quantum technology. We are making a cold atom trap and the oscillator for a quantum clock. There is nothing wrong with being in a “sexy” sector. Last week, that employer called in 120 of its lowest-paid workers and gave them a pay rise of between 8% and 18%. These are real products, real sales, real profits and real pay rises. That is what will drive our country’s future.

I thank the Treasury for the investment in infrastructure. People in my constituency spend too much time in traffic jams and on delayed trains. It is a waste of their personal time and it hits the country’s productivity. We are building tens of thousands of homes in my constituency, and we need the infrastructure too. We need the second railway station and the north-east bypass, and we have got our bids in to the housing infrastructure fund—it is great to see that fund being increased—and the local roads fund. We need money for main roads, cash for cycleways and pounds for our potholes, but in Chelmsford, my pinch point is the ancient Army and Navy flyover. I want our local roads fund to be Ford’s flyover fund, please.

There are three other things in the Budget that I would really like to praise. The first is the tax on virgin plastics. We need a game changer in the way we use plastics on this planet, and I am really glad that Britain is leading the way on this. The second is the improvement in universal credit. That is welcomed not only by us on this side of the Chamber but by the Joseph Rowntree Foundation, the Trussell Trust and the Resolution Foundation. All those organisations are real experts in fighting poverty. The third thing is the massive boost for the NHS in the form of £20 billion for health and mental health, which is not funded through hiking up taxes. We are putting more money into the pockets of our lowest-paid workers by freezing and raising their tax thresholds.

There is a great deal in this Budget to be proud of, and I am proud to be the last Back-Bencher to speak in favour of it tonight.