Financial and Social Emergency Support Package

Chi Onwurah Excerpts

Wednesday 25th March 2020 Commons Chamber

[Jesse Norman]

I was just discussing the process of improving the Government response through feedback, often from colleagues, so I am very grateful to the hon. Lady for giving her feedback on those specific areas. In so doing, she will have activated Government processes with the relevant Departments, which will then look at the issues that she has mentioned.

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

In the spirit of clarifying anomalies, I have been contacted by many businesses who tell me that, because they do not have business premises or work in co-working spaces, they appear not to be eligible for the business grants. I can understand why they would not be eligible for the rates support, but I do not understand why they would not be eligible for the grants. They are also telling me that they are required to put their own personal homes on the line to get the loans from the banks, so they do not want to take them up and get into debt.

[Jesse Norman]

I am grateful to the hon. Lady for raising that point. I will look into the question of whether there should be any relation between business loans; I am certainly not aware of one myself. It ought to be possible for people to claim business loans as she has described. As regards the business interruption loan scheme, borrowers are not required to pledge their house, but there may be some requirement for personal guarantees of other kinds, which is what one would expect, and which will open up lending in other ways. The Economic Secretary is very engaged on this issue. There are 40 lenders involved, so ironing out the guidance with all of them, to ensure a consistent picture, has not been the most straightforward thing one could imagine.

--- Later in debate ---

[Stephen Timms (East Ham) (Lab)]

I am pleased to follow my right hon. Friend the Member for North Durham (Mr Jones). I begin my echoing his appeal for support for local charities and community organisations, on which we are going to be very dependent over the next few weeks, and which we need to survive the challenges they face with loss of funding, bookings and so on in the period ahead.

I warmly welcome the employment support package announced by the Government last week, including the commitment to pay up to 80% of the wage costs of those employees who are furloughed. I welcome the fact that it came forward quickly, just one week after the Budget. A huge package was put together in a very short period and I congratulate those responsible for it. I must say that, over the following week, the package has stood up quite well to the scrutiny to which it has been subject. The Government and those involved can take credit for that.

Like others, I think it is a shame that we still do not know what is going to be done for self-employed people. It is particularly regrettable that we are not going to know before the House rises, so Members are not going to be able to scrutinise that package when it is unveiled. Inevitably, we need to talk about the position that self-employed people are going to find themselves in over the next few weeks. Whatever is in that package tomorrow or the following day—I have no idea what is going to be in it—it is clear that universal credit is going to have to carry a fair amount of strain in supporting people through the period ahead.

I therefore want to speak about universal credit, picking up on some of the points made by the hon. Member for Glasgow South West (Chris Stephens), who was at the Select Committee on Work and Pensions session that I chaired this morning. He has referred to the very large number of people who have applied for universal credit—470,000 since Tuesday of last week, and 105,000 yesterday—and it is a good thing that, so far, the systems have not collapsed. We can be thankful for that. Like others, I have seen screenshots telling people that they are in a queue—due to the incredible volume of new users, there is a queue—and:

“Number of users in queue ahead of you: 79129. Your estimated wait time is: more than an hour.”

Indeed, it is quite a lot more than an hour.

It is right, however, to pay tribute to all those in the Department for Work and Pensions who are working very hard to deliver much-needed urgent support over this period. I am grateful to the DWP’s permanent secretary for offering this morning to give the Select Committee weekly updates on how things are going. It is clearly very important that, once people apply for universal credit, they get the help to which they are entitled quickly, because people are going to need urgent help, including those self-employed constituents we have heard about whose businesses disappeared last week. They need help urgently.

[Chi Onwurah]

My right hon. Friend is making an incredibly important point about universal credit.   The system of universal credit has been in design for years and was supposedly designed, so we were told, to be agile, adaptable and scalable. Is this not absolute confirmation that the system cannot be effectively scaled? Does he agree that universal credit needs to be scrapped and a system put in place that actually works?

[Stephen Timms]

I am grateful to my hon. Friend. We took evidence this morning on that very point—the need to improve universal credit and change some of the problems. Unfortunately we were told that, because of the IT systems, there is very little that can be done in the short term.

For example, one thing the Government have agreed to do is reduce the maximum deduction from people’s standard payment of universal credit. There are deductions for people to pay back the advance they receive up front and for other reasons. There is a case for suspending those deductions for the time being, but that is not the Government’s intention at the moment. They have agreed that the maximum deduction will be reduced from 30% of the standard amount to 25%, but they tell us that they cannot do that until October 2021 because of the problems with the IT system.

I am grateful to my hon. Friend the Member for Newcastle upon Tyne Central (Chi Onwurah) for reminding the House that, years ago, we were all told that this was going to be done in agile, precisely in order that changes could be made quickly. I am afraid that those promises have not been fulfilled. We were assured time after time that all the problems of the old DWP systems would be solved by adopting the agile approach. Sadly, that does not seem to be the case. Despite that, I am going to press this afternoon, as I and the Committee did this morning, for changes to universal credit. A way has to be found to overcome some of the problems and to get these things done much more quickly than is suggested will be the case.

I very much welcome the fact that the headline rate of universal credit and working tax credit has been increased, although only for a year. Given the long freeze in the rates of benefits, there is a case for making that increase permanent rather than temporary. That is something we will no doubt come back to in the months ahead.

When it comes to universal credit providing much needed support to the self-employed, people who come off zero-hours contracts and freelancers, there are some serious problems with the way it works at the moment. The Trussell Trust has found that people on universal credit are two and a half times more likely to need a food bank than people on legacy benefits, such as jobseeker’s allowance.

There is a remarkable article in this month’s issue of The Lancet Public Health about universal credit, which finds that

“an additional 63674…unemployed people will have experienced levels of psychological distress that are clinically significant due to the introduction of Universal Credit”.

It goes on to estimate that more than a third of those people

“might reach the diagnostic threshold for depression.”

A little further on, the article states:

“When the policy change was introduced, the prevalence of psychological distress started to increase among those eligible for Universal Credit; however, the prevalence remained constant for people not affected by the change”.

Lastly, the article states:

“We also tested if there was an increase in the number of participants transitioning from unemployment into work in the intervention group after the introduction of Universal Credit relative to the comparison group; the reform had no effect on employment”.

There are serious problems with the way universal credit is working, and we are now forcing—understandably—hundreds of thousands of additional people on to this benefit. What is the problem? Why does it cause so much more difficulty for people than jobseeker’s allowance and other past benefits? A big part of the answer is the fact that people have to wait five weeks after applying to receive their first regular benefit payment. That is inevitably pushing people into debt with the Department for Work and Pensions. A lot of people are then choosing to say, “In that case, I’d better not pay my rent for a bit,” and they are getting into rent arrears. The National Housing Federation is reporting that people on universal credit are significantly more likely to be behind with their rent than people on jobseeker’s allowance, both in the past and currently. This is a problem that will affect very large numbers of those who are now applying for universal credit.

It seems to me that it cannot be a good idea—given the boldness and generosity and the welcome characteristics of the package for employees that was introduced last week— to force self-employed people, by contrast, on to an arrangement where they do not get a substantive payment for five weeks.

--- Later in debate ---

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

It is a real privilege to speak in this incredibly important debate. As I am, I think, the last speaker from the Back Benches, it is appropriate to start by paying tribute to the Leader of the Opposition and the shadow Chancellor on the day of what may be their last appearances on the Front Bench. I regard both of them as comrades and friends, though I would not necessarily say that I have agreed with everything that they have said and done—but that is how it is in our great Labour movement. I particularly thank them for always bringing a deep care and concern for the most vulnerable in our society to the heart of our debates; for vanquishing austerity economics, which had such a grip on our political debate five years ago, and still has consequences for so many in our society today; and indeed for the way in which we are responding to the covid-19 crisis.

Like most Members here, I have been overwhelmed with emails from constituents—from a supply teacher who does not know how he will feed his family; from a plumber who feels that his health is in jeopardy, and feels abandoned by the Government; from a cancer survivor who needs to self-isolate, but does not know what she will eat on Monday; and from a circus owner who does not know whether her Newcastle-based circus will survive this crisis. Parliament should not be the only circus to survive the pandemic; I hope it is not disorderly to say that. It is really important that all our performers, and all our self-employed, of whom there are 5 million in this country, have the support that they so desperately need.

When I took the tube to Parliament today, I felt a bit of a fraud, because I did not feel like a key worker. I was not going to save lives. But when I thought about the impact of the Government’s delay and intransigence—I am sorry to have to use those words—in providing the support that is so desperately needed by freelancers and the self-employed, I realised just how much they need our voice. I have constituents who lost their jobs because the Chancellor delayed announcing the very welcome job retention package. The delay in respect of measures for the self-employed will not only cause lost jobs, but lead to deaths. The Minister shakes his head, but as we have heard in many excellent contributions, the absence of support for the self-employed is driving people to go to work when they should not, and to put themselves and others at risk, as well as causing enormous mental distress.

Parliament rises tonight, but I urge the Minister, Chancellor and Prime Minister to set out immediate measures to support the self-employed. Unfortunately, all those who are employed are not necessarily protected. We have heard again and again from Members of Parliament the desperate appeals from constituents whose employers are not protecting them from the coronavirus. I am going to name some from the emails I have received, and they can get in touch with me and explain how they are protecting their employees. DHL, the delivery service, is not offering any personal protection equipment to its deliverers and is not following the 2-metre guidance. Tolent builders are not following the 2-metre guidance. Serco and EE, which have many call centre employees in large rooms, are not following the 2-metre guidance. Santander is apparently bringing in contract workers to work on PPI, which I do not believe to be an essential service, and is not following the 2-metre guidance or social distancing. Then there is our very own Mike Ashley, the owner not only of Newcastle United but of SportsDirect, who, after claiming that SportsDirect was an essential service and finally—

[Bill Esterson]

It’s essential to his fortune.

[Chi Onwurah]

It is an essential service for his fortune, but not in this crisis. He finally agreed to close his shops, hiking prices online while still making employees come into empty shops to act as security.

The Government’s payroll support and job retention scheme are very welcome, but we must have greater clarity for businesses on what they need to do to stand by their employees, as the Prime Minister said. Any private sector bail-out must have strings attached to it. Banks were bailed out in the 2008 financial crisis and people were rewarded with austerity. In this crisis, we must champion the good businesses that are doing the right thing.

[Ian Blackford]

I congratulate the hon. Lady, who is making a very gracious speech and a number of strong points. She is talking about the austerity that followed the bail-out of the banks, and one thing we need to put down as a marker today is that when we get through this crisis the poor must not pay the price a second time.

[Chi Onwurah]

The right hon. Gentlemen makes exactly the point that I was going to make. It is pleasing to see that that is at least agreed across the Opposition Benches, and I hope to hear a message from the Government that in this crisis, after this crisis, the people must be rewarded and not asked to bear the burden.

[Bill Esterson]

On the behaviour of the banks, I mentioned the 39.9% interest rates that the banks have announced that they will charge pretty much across the board—funny that, isn’t it? Does that not suggest that they are already embarked on exactly that approach of trying to make everybody else pay when they should be taking the opportunity to pay back for their role in the financial crisis?

[Chi Onwurah]

My hon. Friend makes an excellent point. Without wishing to go into the financial crisis and the, in my opinion, very well deserved backlash against the financial sector, which continued to make profits while so many people felt the impact of that crisis, it now has the opportunity to demonstrate the social value and support it can provide in times of crisis and emergency, especially, as my hon. Friend says, for those who have taken out loans or credit cards and those who need loans. Many businesses are still saying to me that they are not getting the loans that they are promised, particularly the tech sector start-ups, which rarely have the assets that banks feel are necessary to offer such loans. We want greater corporate citizenship from the financial sector and from other businesses, too.

I applaud and echo what many of my colleagues have said about those who are suffering the most in this crisis, but my focus is on the impact of the digital divide in our country in relation to coronavirus. We know that access to and ability to use the internet is not evenly spread across our society. In the UK, data from the Office for National Statistics indicates that in 2018, 10% of adults said they did not have access to the internet at home, while 4.3 million had no demonstrable digital skills. That data also showed that 12% of those aged between 11 and 18 years reported having no internet access at home from a computer or tablet.

Since 2011, adults over the age of 65 have consistently made up the largest proportion of adult non-users of the internet. More than half of all adult internet non-users were over the age of 75. Across all age groups, disabled adults make up a large proportion of adult internet non-users.

In normal times, access to the internet improves hugely the chances of, for example, finding work. It also, as we have heard, makes it easier to access universal credit—in fact, it is essential to access universal credit—and it enables people to connect and communicate better with family, friends and the community. These are not normal times, however, and for the next few weeks and perhaps the next few months, social distancing is going to be the norm. Social distancing must be accompanied by digital coming-together, and for that we need digital skills and digital access. We have heard about the implications for mental health of isolation without the ability to communicate. I want the Minister to think about what that means for the 11% who have no access to the internet.

What I want to see from the Government in the next few days is first, digital skills. There are those who have access to the internet but do not have the real digital skills to use it. They need to be able to take advantage of the many different courses and means of entertainment and so on, which are all fantastically being developed at the moment. They need the digital skills to be able to access that. In that respect, I recommend the work of Sue Black with the #techmums initiative, which is still rolling out during coronavirus, and also the work of many other charities.

Secondly, there is the question of capacity. Here I am really concerned, because all we have had from the internet service providers and network operators is general vague promises that there will be the capacity and it will all be fine and all right. To be frank—I have been known to mention this, but I will say it again—as someone who worked designing telecom networks as an engineer for 20 years, that does not reflect at all my experience. Capacity needs to be dimensioned and built in. There will be capacity now that is dedicated to business networks that may need to be moved over to support home networks with the huge increase we are seeing in working from home.

Moreover, we need to be able to secure capacity for our essential services. I am already hearing that in Newcastle, for example, Newcastle upon Tyne Hospitals NHS Foundation Trust cannot provide the capacity for administrative workers to work from home. If those essential services can be delivered from home, it frees up space and hospitals and car parks and so on.

Just as with personal protective equipment—we had a lot of time to prepare that was perhaps not best used, and there was a lot of talk about everything being okay, which has turned out not to be the case—I fear that over the next few weeks, when we are all confined to our homes with only the internet to serve as a social medium that we can take advantage of, we will find that there is not enough capacity. Networks will fall over. There will be delays and, as always, it will be the most vulnerable and the poorest who will suffer most. I would like to see modelling of the traffic impact on our networks. I would also like to see a commitment to digital access for all, particularly for young people and schoolchildren who will be expected to be learning from home. They need to have free access to the internet to enable them to do that.

Moving on, I want to say a little bit about where we need to go from here. In economics classes, we were taught that the virtue of a capitalist market economy is that it ensures the efficient allocation of capital, as market competition drives inefficiencies out of the system, ensuring the cheapest, most innovative products and services possible. The best the state can do, we were told, is to get out of the way. But the capacity to deal with a major health or economic shock is, by definition, inefficient when that shock is not there, so extra ventilators and stocks of masks or toilet paper are inefficiencies that the free market system drives out. They can only be provided and stocked by the state, and the problem with the lean, mean state machine that the Conservatives advocate and have done their best to create over the 10 years of austerity is that the state is then no longer equipped to provide the resilience, the stock and the inefficiencies that are necessary to support our population in a time of crisis as we have now.

This is a war, and as a war it has real heroes—NHS workers, care workers, teachers, transport workers and cleaners. Not all of them are in the public sector: we have heroes in the private sector too, in supermarkets with our retail workers, and those isolating at home, which is something we have never asked people to do before. As a woman of colour, I know that there is despair at the realisation that natural hair may no longer be a choice, but the only option for us. There are many sacrifices, large and small, which are expected to be made over the next few weeks. Obviously, not everybody faces the particular challenge I just mentioned.

The heroes of this war must be rewarded. After the second world war, we had the national health service, homes fit for heroes and the welfare state. After this battle, we need an economy fit for heroes. We who have the privilege of walking in these corridors of power are insulated from some of the worst impacts—the desperation, the fear and the confusion that I know is going on in homes across Newcastle. I want the Minister’s reassurance that we will build a better and fairer economy out of this desperate crisis in order to be an economy fit for the heroes who are now helping us to drive out coronavirus.

I want to end on a note of hope and optimism, because in Newcastle and across the country we have vibrant, active people who want to do the right thing and want to support and look after others. We have great communities across our country, such as in Newcastle with the Newcastle City Council city lifeline, which allows people to volunteer their time to support community organisations and projects. We have already heard that the national Government scheme for national health service volunteers has been inundated.

Newcastle upon Tyne Central has 11 active community Facebook groups that residents can post their needs and volunteers commit their time to. Slatyford tenants association in my constituency, which offers bingo and tea once a week, has closed down for the duration of the coronavirus crisis, but is looking forward to opening again. Mrs T’s Café in Blakelaw, which supports the local community through excellent nutritious food, is looking forward to getting back.

Of course, we also have our food banks. Newcastle United Supporters Trust is one of the most impressive organisations I have ever seen. As a Newcastle United supporter, one of the most inspiring sights on a Saturday when walking past St James’ Park is the Newcastle United Supporters Trust stall, where those shaking the buckets, as I have done, will find people putting in £1, £5, £10 or £20. We should not need food banks, but when we do, such generosity from Geordies and people across the country is inspiring. Although we cannot have stalls on the streets—we have no more football matches for a while—we still get fantastic support online. Food is being donated by businesses such as Fenwick, TK Maxx and Thorntons. Geordies from Newcastle, but also from Brighton, London and, I understand, the Falkland Islands have donated money online. We also have Newcastle United Foundation, which is delivering hot meals to schoolchildren. They all need our support, as do our theatres, cinemas and charities.

Much of the real world is going online and we need to ensure that we have a real-world community, as well as real employment and a real support and welfare sector for when the crisis is over, when we can build an economy fit for the heroes we will create.

Royal Assent

[Madam Deputy Speaker (Dame Eleanor Laing)]

I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified her Royal Assent to the following Acts:

Contingencies Fund Act 2020

Coronavirus Act 2020.

Coronavirus Bill

Chi Onwurah Excerpts

Committee stage & 3rd reading & 3rd reading: House of Commons & Committee: 1st sitting & Committee: 1st sitting: House of Commons
Monday 23rd March 2020 Commons Chamber

[Nick Thomas-Symonds]

I am grateful to the Minister for that intervention.

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

On that point, I should emphasise that equality of access to healthcare must surely apply to our excellent healthcare workers. Some concerns have been raised with me that healthcare workers are receiving advice from their national health service trusts that is different from that given to ordinary working people, particularly when it comes to isolation when there are symptoms at home. As one person put it to me, the applause and support for healthcare workers is all very well, but they also want to know that their health and wellbeing is considered to be just as important as everybody else’s, if not more so.

Coronavirus: Employment Support

Chi Onwurah Excerpts

Thursday 19th March 2020 Commons Chamber

[John Glen]

The Government are very aware of that particular category. We are looking very carefully at what we can do and an urgent announcement will be made with respect to that issue.

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

Can I say to the Minister as constructively as possible that his Government’s economic response is undermining the public health response? Job losses are contagious. Fear of economic hardship will spread the virus. The technical details can wait, but he needs to say now—today—that in principle he will guarantee the incomes of everyone at a level that provides security.

[John Glen]

We will do what it takes to support workers who are in distress. We have brought forward a package of measures, some of which will be imminently delivered, such as the unprecedented loan scheme. We have also added a number of grant schemes available through local authorities and reliefs from business rates, and additional measures will be coming imminently.

Economic Update

Chi Onwurah Excerpts

Tuesday 17th March 2020 Commons Chamber

[Rishi Sunak]

My hon. Friend is absolutely right to highlight the vital importance of our ports, particularly Dover. They are conduits for trade and everything else that our country needs at this critical time, and, of course, we stand ready to listen and hear what they need.

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

Last night, a constituent in the hospitality trade contacted me to express concern at the Prime Minister’s measures and to ask what could be done about them. Today, she emailed me to say that she had been made redundant and to ask how she could pay her rent. The Chancellor does not seem to grasp the scale of the fear, the uncertainty and the desperation in the country now. Will he guarantee to me now that every renter will have the means to pay their rent, and every small business the means to pay their staff?

No-deal Brexit: Short Positions against the Pound

Chi Onwurah Excerpts

Monday 30th September 2019 Commons Chamber

[Mr Clarke]

The short selling regulations cover the sale of shares, so that falls within the remit of the existing legislation. Clearly, we all want to see our country thrive and move forward towards a better future. That will be best done by voting for a deal, as of course many of the members of the hon. Gentleman’s former trade union will have done.

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

I hope the Minister recognises that we are talking not about companies protecting themselves in good faith from the devastating impact of a no-deal Brexit, but about large-scale—industrial—shorting of the pound, that that can drive extreme behaviours, as well as market crashes, and that, at the very least, this needs to be investigated by the Electoral Commission, in order to see what the influence is. But my question to the Minister is simple: does he know the level of exposure to the shorting of the pound?

[Mr Clarke]

The Government do not take a view on this issue. [Interruption.] But what is clear is that the hon. Lady can avoid the outcome that she so wants to avoid, by voting for a deal when one is brought forward—that is, and always remains, the case. So we now need to move forward with some purpose, rather than with wild speculation, trying to smear the Government as somehow being in hock to these interests—it is not working. Any rational observer will see that this is not an argument that sustains itself.

Discrimination in Football

Chi Onwurah Excerpts

Thursday 11th April 2019 Commons Chamber

[Mims Davies]

I thank my hon. Friend for raising that. I think that football has come an incredibly long way from where we were in the ’80s, but frankly that is not good enough. Football is a family game and is incredibly welcoming, but small pockets of people continue to use it as a cloak—although it is no disguise, frankly—for intolerance. They should know better. They should look around and see that it is they who have got it wrong.

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

I and the vast majority of Newcastle United fans condemn utterly the racist abuse that Zaha received after the Crystal Palace game on Saturday. I was at the game and there was certainly no abuse in the Gallowgate end, where I was. That would not have been the case 30 or 40 years ago, when I would avoid St James’ Park because of the racists there, but the club, football institutions and fans came together to kick the racists out. That has not happened in certain European countries, which are frankly still in the dark ages, so will the Minister look at taking UEFA to the European Court of Human Rights? Footballers are working when they are playing the beautiful game, and they have a right to work in an atmosphere where abuse is absolutely not tolerated.

[Mims Davies]

I thank the hon. Lady, who always highlights the beauty of her football club. I intend to meet UEFA and FIFA in due course. These international bodies have a chance to work with us and use their global standing to make change. No one is going wait any longer.

Oral Answers to Questions

Chi Onwurah Excerpts

Tuesday 9th April 2019 Commons Chamber

[Mr Hammond]

I am bemused by the disappearance of Mr Angry, who I am quite used to dealing with at the Dispatch Box. As I said earlier, we have a good track record on decarbonisation and addressing air quality challenges. We provide substantial support for ultra low emission vehicles, we have a highly differentiated vehicle excise duty and company car tax regime, which encourages the purchase of the cleanest and most efficient vehicles, and we will go on seeking to change behaviour through a carefully constructed tax system.

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

2. What recent assessment the Government have made of trends in the level of manufacturing output.

[The Exchequer Secretary to the Treasury (Robert Jenrick)]

Manufacturing output has grown by 8.3% since the start of 2010, having fallen sharply as a result of the financial crisis. The manufacturing sector has seen productivity increase more than three times faster than the UK economy as a whole over the past 10 years. It accounts for almost half of UK exports, and directly employs 2.6 million people.

[Chi Onwurah]

According to Make UK, we now have the highest level of manufacturing stockpiling of any country in the G7 ever. The chamber of commerce tells me that, in the north-east, stockpiling is putting huge pressure on warehousing and cash flow. That is a direct consequence of Brexit uncertainty. What additional support will the Minister offer to manufacturers? I asked a similar question of the Brexit Minister last week, and he did not seem to know what I was talking about. Will the Minister acknowledge the link between manufacturing output, stockpiling, cash flow and financial viability?

[Robert Jenrick]

My right hon. Friend the Chancellor and other Treasury Ministers are working with the banks, which tell us that they are making funds available to businesses that need support as their cash flow is under pressure and need working capital in the months ahead. Of course, the best service that any of us in this House can do for manufacturers and businesses across the United Kingdom is to support a negotiated exit from the European Union as soon as possible.

Sport in the UK

Chi Onwurah Excerpts

Monday 4th February 2019 Commons Chamber

[Mims Davies]

I thank the hon. Gentleman for raising that issue. It is something we have heard across the House, and in my first three months in this job, it has been raised time and again. I looked into the eyes of the premiership leadership last week and spoke about many issues with them, such as how the Football Foundation is doing and how that £100 million that the league gives actually works. I am hot on their heels on this one and it is absolutely right that we continue to work together for all our grassroots sport.

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

I know that the Minister shares my concerns about financial transparency in the Premier League so that we can see not only how money is being used to support grassroots, but to enable the continuing economic benefits that the Minister spoke about so eloquently. Newcastle United Foundation in my constituency does fantastic work in using the power of football to inspire young people. Unfortunately, the Premier League clubs’ financial transparency does not enable us to see what is really happening to the money in the club itself.

[Mims Davies]

I hear the hon. Lady—she always wears the outfit of the day when mentioning her football club. It is absolutely vital that when sports clubs are doing well, the economic benefits are felt in the city. Southampton has had a difficult time recently and I know that the city, which is close to me, has felt those pains. I absolutely hear the hon. Lady about the transparency issue and the Premier League. There is work to do to keep those conversations going, but I hear her loudly, once again.

Equitable Life

Chi Onwurah Excerpts

Thursday 31st January 2019 Commons Chamber

[Bob Blackman]

Thus far my constituency has not been offered any additional funds for my voting for anything—that is not the basis on which I vote in this House—but I can understand the hon. Gentleman’s concern.

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

Many of my constituents who have been affected by the Equitable Life issue regard the APPG as their only voice in not only this place, but the country. Does the hon. Gentleman agree that the failure to compensate the Equitable Life victims not only has a hugely detrimental effect on their lives, with their not be able to retire in the comfort that they deserve, as they thought they would, but also affects faith in this House and in the pensions system at a time when people are living longer and need to be doing more to prepare for retirement?

[Bob Blackman]

It is clearly a view that people are not saving in the way in which they used to. Young people are being discouraged from saving as a result of what they see as the scandals that took place.

Newcastle United Football Club: Regulation

Chi Onwurah Excerpts

Thursday 24th January 2019 Commons Chamber

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

Madam Deputy Speaker, I must start by declaring an interest: I am a Newcastle United fan. [Hon. Members: “Hear, hear!”] Thank you. When I raised this with the House authorities, I was told I did not need to declare it as I “derived no real benefit” from it. I would dispute that. Supporting Newcastle United has brought me great joy, and a sense of belonging, shared purpose and community, as well as the opportunity to watch the beautiful game at its beautiful best in that cathedral to football, St James’ Park. But it has also brought me deep despair and disappointment, particularly in the last few years. I also wanted to present myself in my Newcastle team shirt today, but I was told in no uncertain terms that that was not allowed. Instead, I have settled for a Newcastle Libraries T-shirt with our city on it.

Newcastle United is at the heart of the city. Unlike Liverpool or London, we have only one professional football team and we are united in our support. And what support it is! Hon. Members may recall that, back when we had regional development authorities and investment in our regions, the One NorthEast tourism slogan was “Passionate people, passionate places”. Well, the passion of Newcastle is football. We have consistently high attendances—some of the highest in the league until recent times—and the economy of the city is influenced by the success on the pitch. If we are winning, we are singing—and spending. If we are losing, the gloom hovers over all our heads like individual storm clouds. It is part of our culture.

Anyone who moves to Newcastle—and we certainly have an unparalleled quality of life, so I recommend that everyone does so—will find it an open, welcoming and warm city, but whereas elsewhere people might get away with talking about the weather, in Newcastle they will need to know how the Toon are doing. It is part of our mental wellbeing—90 minutes spent at the Gallowgate end would be enough to convince anyone of that—and this is true not only in Newcastle, as my hon. Friends—and fellow fans—the Members for Gateshead (Ian Mearns) and for North Tyneside (Mary Glindon) can attest. They would have liked to be here today.

Football is the lifeblood of many cities, particularly in the north, and that remains the case despite changes that have seen money, not fans, become the driving force of football thanks to the creation of the Premier League and billions of pounds from Sky Sports. While I will speak mainly about Newcastle United football club, its finances and its owner, much of what I say applies to football as a whole.

Since 2008, Newcastle United has been owned by Mike Ashley, who also owns Sports Direct, House of Fraser and several other retail businesses. In July last year, I presented a petition reflecting the concerns of fans groups, such as If Rafa Goes We Go and the Magpie Group, and that caught the attention of Mr Ashley, something which I had been unable to do as the MP for St James’ Park, despite writing to him to ask for a meeting. It is testimony to the power of Parliament that, after announcing this debate, I was able to meet Mr Ashley on Saturday. I committed to Mr Ashley that I would make no personal attacks on him—I will not avail myself of parliamentary privilege to do so—and I say to all the fans that personal attacks on Mr Ashley or his employees are wrong and hurt our cause.

I shared with Mr Ashley my concerns about financial transparency and funding, and he was passionate in his defence of his investments and in saying that he has not taken any money out of the club other than, he said, short-term funding on a temporary basis. That, he said, was in contrast with the period prior to his ownership. He also emphasised that he had made it clear the club must stand on its own two feet and can spend only the money it generates. Well, to put it diplomatically, we disagreed. The meeting was open, frank and robust, with strong views on both sides, and I hope to continue the dialogue. Indeed, this debate is part of that dialogue. It has to be, because I have still to receive a reply to my letter of last year in which I raised several critical issues that I have also raised in correspondence with the Secretary of State for Digital, Culture, Media and Sport and the previous Sports Minister, the hon. Member for Chatham and Aylesford (Tracey Crouch).

Mr Ashley said that the club can spend only what it is generates—a form of austerity economics of which those on the Tory Benches could be proud—but Newcastle United needs investment to reach its potential. Earnings have been hit by uncertainty and the bad feeling between fans and the owner, but even if we accept what he says, how are we to know what income the club generates? As the Secretary of State said in his letter to me, clubs are treated as any other private business and must submit accounts to Companies House. I am not an accountant, but I have an MA in business administration, studied corporate finance and worked in business for 20 years. However, I have looked at the NUFC accounts and cannot work out what is going on.

Faith in Newcastle’s accounts has not been helped by comments made by Mr Ashley at the Housing, Communities and Local Government Committee last December, when he said:

“People cheat. That is what businesses do.”

He also said:

“Accountants are able—this is their job, by the way—to move the numbers about pretty much at will.”

That seems to be what is happening at Newcastle. Mr Ashley’s ownership of the club passes through four separate companies: Mash Holdings, St James Holdings, Newcastle United and Newcastle United Football Holdings. In addition, dozens of other companies are associated with the club and Mike Ashley, and managing director Lee Charnley has more than 30 other directorships. Newcastle United’s accounts do not include a cash flow statement, although having one is a requirement of reputable accounting. All that seems designed to make it harder to follow the money and see what income is being generated.

I hope that the Minister will agree that that is unacceptable and that she will commit to ensuring that the following income streams can be identified. First, TV payments. These should be more than £123 million, but they are not reported separately. Secondly, merchandise. Mr Ashley turned the club shop into a Sports Direct shop, but the revenues from Sports Direct do not go to the club. Thirdly, player sales. The way in which the purchase and sale of players is booked and amortised is in itself arcane. Newcastle United is consistently reported as having one of the lowest spends on players in the English premiership, and many estimates indicate the club has actually made a profit on player sales overall during Mr Ashley’s ownership. Does the Minister agree that we should be able to calculate that sum?

Fourthly, advertising. Sports Direct hoardings are all over St James’ Park and, yet again, we do not see the revenue in the accounts. Finally, land sales. Next to St James’ Park is an area called Strawberry Place, which Mr Ashley allegedly purchased from the club for less than it was worth—we do not know, because the price is not visible. What we do know is that Strawberry Place is being developed for student accommodation. Selling the land stopped any further expansion of the stadium, and fans believe that the profit from the sale of that land will not benefit the club, but how are we to know? There is also an issue about land and property apparently sold to companies called Project J Newco No.39 and Project J Newco No.40, which appear to be connected to Mr Ashley, but there is no evidence of any payment.

[Eddie Hughes (Walsall North) (Con)]

Has the hon. Lady seen Deloitte’s “Football Money League” report? It seems to identify some of those incomes, such as £27 million for match day, £143 million for broadcasting and £32 million for commercial, figures that we can only dream of for Walsall football club.

[Chi Onwurah]

I appreciate the hon. Gentleman’s interest in Newcastle United, and I have seen the figures in Deloitte’s report, which make Newcastle United the 19th richest club in the world. My concern is that those figures should be reported visibly for all clubs, particularly in the Premier League, where there is so much money going around.

Mr Ashley appears to be able to move assets between his privately owned companies at will, despite the club being a historic cultural icon and the other companies being of somewhat less reputable status and longevity.

We do not know what income the club is generating and whether that money is being used on the club. What is certain is that this transfer window, like the last one, is closing without money being spent on players or training facilities. Mr Ashley’s principal investment in the club has been in the form of loans, rather than equity—presumably to protect his financial exposure. Those loans are interest free, which is good, but as loans they can be called in if needed, so the sustainability of Newcastle United depends on his other businesses being successful.

That leads me to Mr Ashley’s business practices more generally. The BEIS Committee likened them to a Victorian workhouse, with employees being paid below the minimum wage. A “Dispatches” investigation found employees were publicly shamed for talking, spending too long in the toilet or falling ill, and lived in fear of being fired. Now Mr Ashley says that he is going to save the high street. Forgive me for being somewhat cynical, having seen how he has saved Newcastle United.

Newcastle United is an asset to our city, a cultural giant in our lives. I explicitly pay tribute to the fantastic Newcastle United Foundation, which uses the power and passion of football to do great work across the north-east and is, in part, funded by the club, although again that funding is not transparent. The Premier League also uses some of its vast wealth for the benefit of local communities, at least what can be spared from expenditure such as its £5 million farewell gift to departing executive chairman Richard Scudamore.

Neither Newcastle United nor the Premier League consider themselves to be accountable to fans. As many constituents have made clear to me, fans feel powerless before the slow destruction of what we believe in. Newcastle United is the beating heart of our city, and we should be able to protect it.

That goes to the heart of the matter. Why is it that a person can buy a stately home in the wilds of Wiltshire and not be able to change even a window frame, but they can buy Newcastle United, which is in the heart of Newcastle, and strip it of its assets without so much as an eyebrow being raised? Why is football left largely to regulate itself when other businesses, from pubs to social media companies, must meet social requirements?

I know that the Minister recognises the importance of football clubs and the custodian role of owners, because she said so during the recent debate on Coventry City. Will she now put that recognition into action? Will she launch an inquiry into the reporting requirements of premiership clubs, using Newcastle United as a test case? Will she ensure that that inquiry answers the financial questions that I have raised? Will she ensure that supporters have a voice on football club boards, as Labour has called for? Will she make reputable custodianship a requirement of club ownership? The fit and proper person test is clearly not fit for purpose.

It is with great sadness that I say that I have come to the conclusion that football is broken. Its governance has not kept pace with its income, and money has won over sport. We cannot turn back the clock, but we can put in place effective regulation so that financial transparency enables the beautiful game’s true splendour to shine forth once more.

[The Parliamentary Under-Secretary of State for Digital, Culture, Media and Sport (Mims Davies)]

I congratulate the hon. Member for Newcastle upon Tyne Central (Chi Onwurah) not only on her outfit, but on securing this wonderful and important debate. I was wearing black and white shoes this morning, and I thought I might have had to declare some sort of interest. I understand the reasons behind her sartorial elegance this evening.

Before I respond fully to today’s debate, I will acknowledge that the search for Cardiff City football club’s Argentine striker Emiliano Sala, and his pilot David Ibbotson, had to be called off this afternoon. We offer sincere condolences to their families and friends at this deeply concerning time. It has been a difficult few days in the game.

[Chi Onwurah]

I thank the Minister for what she has said, and I echo her comments. I was at St James’s Park to see Cardiff City last week. It must be a terrible time for the family and friends, and for Cardiff City fans.

[Mims Davies]

I turn to the points that have been raised in this debate. Newcastle United are 17th in the premier league, with some uncertainty about the manager and no signings so far in the transfer window, but last week they had a good win in the FA cup. I would like to say that not all football clubs are feeling that pain, but there others at the bottom of the premier mix, including Cardiff, Fulham, Burnley, Huddersfield, Southampton and Crystal Palace. I have to declare an interest when it comes to Southampton, which is very near to my constituency and has many fans. I also understand the impact on the economy when they are not winning.

I am surprised not to see the hon. Member for Strangford (Jim Shannon) here, because we are talking about football—I am surprised not to be interrupted by him. My hon. Friend the Member for Walsall North (Eddie Hughes) spoke about the love and affection in north Walsall for the football club there. I was in that area recently to visit a local school, and there was huge affection for the club. The area has so much to look forward to with the Commonwealth games. It is not all doom and gloom.