Post Office Horizon Scandal

Debate between Chi Onwurah and Kevin Hollinrake

Thursday 22nd February 2024 Commons Chamber

[Kevin Hollinrake]

I will be the first to admit that we want to deliver compensation more quickly than has happened in the past. As I said, 74% of claimants have received full and final compensation. It is absolutely right that the remaining 26%— as well as any more who come forward, and I am pleased that more are coming forward—receive that compensation too. It has never been a case of our trying to delay compensation. I do not believe there is a pattern here. These issues are complex but we are doing much to accelerate the process.

We did much to accelerate compensation payments prior to the ITV series, which is critical. The £600,000 fixed-sum award, which has been very effective in delivering rapid compensation, was brought in last October. We were looking at a blanket overturn in convictions some months before that series. We are trying to deliver the scheme at pace. It is not always straightforward to do that, but the hon. Gentleman has my commitment that we will do everything we can to deliver that compensation as quickly as possible.

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

The Post Office Horizon scandal is now commonly called one of the greatest miscarriages of justice in British history—so many lives devastated, some lost. An inevitable consequence of that is to undermine public confidence in the Post Office, in technology, as misrepresented by the Post Office and Fujitsu, and in the Minister’s Department, particularly following the performance—that is the right word for it—of the Secretary of State on Monday. What is he doing to restore public confidence in the Post Office, in technology and in his Department? Does he recognise that swift payment of compensation is an important part of that?

[Kevin Hollinrake]

Yes, it is the most important part of that. It is right that the Secretary of State responded to the serious and false allegations in the newspapers over the weekend. I hasten to add that those allegations were not about the Secretary of State but about a senior civil servant, who has been very clear that the allegations are false. The No. 1 way we can give confidence to those who might be submitting a claim, or have done so, is the fact that the processes do work for the vast majority of claimants. Of course, we want to improve the processes but we also want to reassure claimants that there is independence running through every single part of them. The No. 1 message we can give from the House is that if people come forward, they will be treated fairly and receive compensation as quickly as possible.

Oral Answers to Questions

Debate between Chi Onwurah and Kevin Hollinrake

Thursday 14th September 2023 Commons Chamber

[Kevin Hollinrake]

The hon. Member raises a very important point. Competition plays a role in this, of course. It is absolutely right that retail business should look at this and try to get the lowest cost for their customers in terms of courier charges. It is, as he acknowledges, a commercial decision for individual retailers, but I absolutely applaud the points he raises. These businesses should be aware of those costs, because they can add significantly to the costs of the products they are selling.

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

T1. If she will make a statement on her departmental responsibilities.

Post Office Horizon IT Scandal: Compensation

Debate between Chi Onwurah and Kevin Hollinrake

Tuesday 18th July 2023 Commons Chamber

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

Nine hundred prosecutions—all the postmasters involved have their own stories of dreams crushed, careers ruined, families destroyed, reputations smashed and lives lost. Innocent people have been bankrupted and imprisoned. This may well be the largest miscarriage of justice in our country’s history, and I pay tribute to Members on all sides of this House who have worked for justice, none more so than my right hon. Friend the Member for North Durham (Mr Jones). I also thank the advisory board and Sir Wyn for their work, as well as the Minister for the constructive approach he has taken on this issue to date.

However, as Sir Wyn’s interim report makes clear, the compensation schemes for postmasters are a mess. The commitment to give fair compensation should apply to all postmasters. Sir Wyn specifically recommends that terms of reference should enable the monitoring of individual cases. Can the Minister say that he will act on that recommendation, and when can we expect him to respond in full to the report’s recommendations, including maximising the use of the Horizon compensation advisory board and providing clarity about the tax status of compensation payments? Can he also provide a final figure for claims that have been made to the historical shortfall scheme and how much the Government anticipate the final compensation will cost?

I also ask the Minister what he is going to do about Post Office management. As the only shareholder in the Post Office, does his Department take responsibility for addressing those management issues? The leadership team accepted bonuses for their work on the inquiry, which is just unacceptable. When will the Minister deal with this? Sub-postmasters have had their lives ruined: they must be confident that lessons will be learned from those failures. Sadly, it seems that the Post Office has failed to do so.

[Kevin Hollinrake]

I add my thanks to the advisory board and the right hon. Member for North Durham, but also to Lord Arbuthnot—who is a tremendous campaigner in this area—and other individuals such as Professor Moorhead, who we were keen to include on the advisory board. I also thank campaigners on both sides of this House who made sure that the issue came to light and that action was taken to address these horrendous situations.

On individual cases, as I said to the right hon. Member for North Durham, we are looking at Sir Wyn’s recommendation. There is an appeals mechanism, and condition D of the terms of reference does not prevent us from looking to make sure that claims have been settled fairly and fully. That is something we are looking at and we will respond in due course. On the tax position, as I said earlier, we have provided an extra £26 million to address that. We are keen to make sure that not only all the settlements, but all the tax treatments of those settlements are fair across the board. On the totals for the historical shortfall scheme, we have made offers totalling over £100 million in value and £72.8 million has been accepted, so we have made good progress, but we are keen to make further progress on the remaining claims that are yet to be accepted.

On the Post Office management, there have been a number of unacceptable matters relating to what has happened in the governance of the Post Office. That is why we put in place a governance review, which is being conducted by a very competent legal firm. It is due to report by the end of this month. We will study that review carefully and respond accordingly.

Oral Answers to Questions

Debate between Chi Onwurah and Kevin Hollinrake

Thursday 18th May 2023 Commons Chamber

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

Twenty billion pounds! That is the amount of money currently held up in late payments—more than the entire science budget. It should be flowing to small businesses, allowing them to innovate, develop new products, create new jobs, drive our local economies or simply stay afloat. Instead, every day thousands of our great British small and medium-sized enterprises are wasting precious time and money chasing late payments, at an estimated cost of £684 million a year. For the sake of British business, will this Government take a leaf out of Labour’s policy book and properly legislate to tackle late payments to small businesses?

[Kevin Hollinrake]

Well, £90 billion is the amount of Labour’s uncosted spending plans, but let us talk about the £20 billion for now. The hon. Member is absolutely right to raise the issue of late payments. I attended a roundtable yesterday as part of our payment and cash flow review consultation, which is hugely important. We have significant engagement with businesses across the piece. We are determined and ambitious to reform the rules on late payments to ensure that businesses get paid on time. We have made significant progress in recent years in our international performance, so we are not an outlier. Nevertheless, we can and shall do more. The results of the consultation will be made available shortly.

Draft Radio Equipment (Amendment) (Northern Ireland) Regulations 2023

Debate between Chi Onwurah and Kevin Hollinrake

Wednesday 22nd February 2023 General Committees

[Chi Onwurah]

I am glad to see that the hon. Member for Lichfield is as amusing as he always is—even if he is not as accurate as he should be.

The debate has been much livelier than was anticipated—

[Kevin Hollinrake]

And longer.

--- Later in debate ---

[Kevin Hollinrake]

I will try to go through the points raised as quickly as possible. The hon. Member for Newcastle upon Tyne Central asked whether Government Members consider “regulation” to be a dirty word. The answer is absolutely not. What we do believe, though, is that we should regulate and intervene in markets only when absolutely necessary. That is our position. The rest of the time, the best thing we can do for consumers is allow business to deliver solutions. Competition is the best thing for consumers.

On the incremental increase in cost and the 95% to 100%, I do not know the figure.

I am happy to speak to the OPSS to see whether we have a number. Of course we will keep it under review, as I said in my opening speech.

The principal point raised by the hon. Lady related to resilience, and my hon. Friend the Member for Lichfield also made some points. In addition to the EU’s Galileo system, the other main global navigation satellite systems are the United States global positioning system, Russia’s GLONASS and China’s BeiDou navigation satellite system—GNSS is a generic term—so there is resilience. Whenever we in this place are spending taxpayers’ money or deciding whether we should do so, we need to be very careful. Any duplication of spend is an unnecessary and inappropriate way of spending taxpayers’ money. We believe that there is resilience in the system and that manufacturers are already providing a solution in terms of the 95% already covered.

The hon. Member for Newcastle upon Tyne Central asked why this has been delayed. She will have noticed that quite a lot of legislation has been brought to this place over the past few years, and there are other factors, not least parliamentary drafting time, that have delayed some of the issues we would like to bring forward. But we are here now—that is the important thing.

To respond to the hon. Member for Weaver Vale, the maximum penalty is three months in jail. He asked about exceptional circumstances. This is about consumer detriment and I think that those are the kinds of serious concerns that could be raised. As I have said, we expect enforcement agencies to deal with those in a proportionate manner. It is very difficult to specify the exact situations in which a case may be brought forward, but I think that such cases would be very serious and very rare and that they would relate to consumer detriment.

If the hon. Member for Newcastle upon Tyne Central does not mind, I will not be drawn on the Northern Ireland protocol, other than to say that we need to make sure that we maintain the delicate political balance in Northern Ireland, about which there are concerns, as she knows.

[Chi Onwurah]

Will the Minister give way?

Oral Answers to Questions

Debate between Chi Onwurah and Kevin Hollinrake

Tuesday 17th January 2023 Commons Chamber

[Kevin Hollinrake]

Most of the businesses that we deal with pay business rates rather than council tax, but we nevertheless have to make sure that the schemes are as affordable as they can be, which is why we have stepped in with £13.6 billion of business rate discounts, targeted at SMEs. We have to look at the ongoing situation and make sure that support is available, as we are doing in many different respects, not least by helping those small businesses that have premises.

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

AMLo Biosciences is a Newcastle University spin-out whose groundbreaking research will save lives by making cancer diagnosis easier and more accurate. AMLo spends millions on research and reinvests all its research and development tax credits into R&D. The Government’s tax credit changes will halve what AMLo can claim, meaning less research and fewer new jobs. Its investors may ask for it to move abroad, where R&D is cheaper. Many Members have similar examples in their constituencies. Will the Minister explain why the Government issued no guidance, gave no support and had no consultation on the changes to SME R&D tax credits? Does he accept that whether in respect of hospitality heating bills or spin-out science spend, the Government are abandoning small businesses?

[Kevin Hollinrake]

Clearly, we have to balance the interests of the taxpayer with the interests of small business. We have to make sure that the money that is being utilised for R&D is properly spent, and there were concerns about abuse of the small business R&D scheme. It is good that the Treasury is now looking into the matter and looking to move towards a simplified universal scheme, which I would welcome and on which there is a consultation. I absolutely agree that we need to make sure we have the right support for research and development in this country, not least for SMEs.

Future of Postal Services

Debate between Chi Onwurah and Kevin Hollinrake

Tuesday 10th January 2023 Westminster Hall

[Kevin Hollinrake]

Thank you. It is a pleasure to serve under your chairmanship, Sir Gary, and I congratulate the hon. Member for Birmingham, Hall Green, on securing today’s debate about the future of postal services, particularly given his experience and expertise. When somebody with that kind of experience and expertise speaks, we should all listen very carefully.

I agree with the hon. Gentleman that postal services are an integral part of the modern economy, allowing the smallest of businesses to connect with customers across the world and providing consumers with access to a vast range of products. The importance of the postal service to keeping people connected was never more apparent than during the coronavirus pandemic, and I am hugely grateful to the delivery workers who worked exceptionally hard to deliver letters and parcels in those very difficult circumstances. The post office network also plays a unique and vital role as part of the UK postal system, and I will address the points that were raised regarding that network shortly.

To deal first and foremost with the future of the universal postal service, which was raised by the hon. Member for Birmingham, Hall Green, the right hon. Members for Orkney and Shetland (Mr Carmichael) and for Islington North (Jeremy Corbyn), and others, the Government’s postal policy objective continues to be a financially sustainable and efficient universal service that meets the needs of users within an open and competitive postal market. That is why the six-day week, “one price goes anywhere” and the universal service remain at the heart of the regulatory regime, and why Ofcom has a primary duty to secure that provision.

To be completely clear, the Government currently have no plans to change the statutory minimum requirements of a universal postal service, which are set out in the Postal Services Act 2011. However, we accept that the universal postal service is facing challenges, particularly given the decline in letter volumes, which have halved since privatisation in 2013. That answers the question raised by the shadow Minister, the hon. Member for Newcastle upon Tyne Central (Chi Onwurah), about why people are paying more for less. Part of the difficulty is that the volumes have fallen so much, which affects revenue.

[Chi Onwurah]

Will the Minister give way?

[Kevin Hollinrake]

Very briefly, as I have very little time.

[Chi Onwurah]

I thank him for giving way, but he has not answered my question at all. There is a decline in one part of the market, but another part is growing. My question was: what is the vision?

[Kevin Hollinrake]

That is a separate point that I will come to, if I may. I have yet to hear a convincing case for the need for change to meet users’ needs and ensure the financial sustainability of a universal postal service. I have met with both Ofcom and Royal Mail management to discuss that issue. I have made it clear to Royal Mail that it needs to make any case for change to Ofcom, and that I will fully consider any advice the regulator gives me on the future scope of the universal postal service.

The hon. Members for Chesham and Amersham (Sarah Green) and for Motherwell and Wishaw (Marion Fellows), who I have worked with closely on other matters regarding the Post Office, raised concerns about quality of service. I am aware that over the last few years the business has faced increased pressures on its operations for a variety of reasons. First, there was the covid pandemic and its lingering effects; secondly, operational revisions were required to modernise and transform the business; and, most recently, there was the industrial dispute with the Communication Workers Union. I do not accept the point made by the hon. Member for Leeds East (Richard Burgon) that this is union busting. The management has been clear that there will be no compulsory redundancies, but these issues impact both the business and users of postal services, particularly when important mail items are delayed.

Draft Internal Market Information System Regulation (Amendment etc.) Regulations 2021

Debate between Chi Onwurah and Kevin Hollinrake

Thursday 1st December 2022 General Committees

[Kevin Hollinrake]

I join the hon. Member for Newcastle upon Tyne Central in thanking the two Committees whose work preceded this debate, and I thank hon. Members for their consideration of this statutory instrument and for their contributions.

As I previously set out, the SI makes technical amendments so as to reflect the current position regarding the UK’s access to the IMI. In terms of wider debate on the Northern Ireland Protocol Bill and the Retained EU Law (Revocation and Reform) Bill, the hon. Member for Newcastle upon Tyne Central has every opportunity to raise concerns about that legislation at the appropriate time on the Floor of the House, as the Bills pass through both Houses. That is the right place to do that.

The hon. Member also said that sunsetting the legislation by the end of next year is irresponsible. Personally, I think it is irresponsible not to set a date, because timings will just drift if we do not do so. I urge her to engage with these issues within the relevant debates. She could set out her previous position on a second referendum, which I think she once called for, on leaving the European Union. Government Members are committed to making Brexit work. That is where we stand and where we will remain.

[Chi Onwurah]

The Minister has a desire to refight the Brexit debate at every opportunity. We are trying to make the SI work and are asking the questions to make it work. I ask him to please set out to us how it is going to work.

[Kevin Hollinrake]

We do not want to refight previous battles, and that is what a second referendum would open up for people. That is not where we want to be. We want to move forward, and that is what we are trying to do today.

In terms of further changes beyond those under discussion, if any are necessary they could be part of the ongoing negotiations between us and the European Commission. It is very important that we have those negotiations, but also that they take place in a framework where we have a strong position, not a weak one. That is the position we have taken.

In terms of the timing of the measures, the UK was given a right to access the IMI under the withdrawal agreement for a period of nine months in order to deal with outstanding applications for European professional cards from nurses, physiotherapists and pharmacists. The EU and the UK agreed to extend the UK’s right of access to the IMI beyond the nine-month period, to process the remaining outstanding applications. The need for that temporary access has now been resolved and we are now in a position to progress the SI. In terms of the specific timing, one of the powers used to make the instrument under section 8 of the European Union (Withdrawal Act) 2018 expires at the end of the year, so it is necessary to legislate as we are doing now right now.

With the statute book updated, the SI will provide clarity to businesses, citizens and public authorities about the sharing of data between the UK, EU member states and the European Commission

[Chi Onwurah]

The Minister talks about providing clarity. I hope he is going to address my point about the divergence of the data protection regimes in this country and the European Union, and the impact that that will have.

[Kevin Hollinrake]

That has absolutely nothing to do with this debate, so I will not get into that at all.

[Chi Onwurah]

The Minister just said that he is looking to provide clarity on data sharing. He also said very specifically that data sharing would be in accordance with the regulatory frameworks in the country, yet those regulatory frameworks are going to differ.

[Kevin Hollinrake]

This statutory instrument is about data sharing within the IMI, not within the wider context of the relationship between the UK and the European Union—that is what it deals with. The hon. Lady wants to extend the debate into areas that are not relevant to this SI, in my view, and I think it is inappropriate that we do so.

[Chi Onwurah]

Will the Minister give way?

[Kevin Hollinrake]

For a final time.

[Chi Onwurah]

Is the Minister clear, therefore, that the regulatory framework under which the data sharing will take place in this SI is the regulatory framework of the single market, and not the regulatory framework of the Department for International Trade?

[Kevin Hollinrake]

The position is that the Data Protection and Digital Information Bill, which was introduced to the House of Commons on Monday 18 July 2022, will amend the existing legislation and adapt the UK general data protection regulation to create a new, bespoke British data protection framework that is business and consumer friendly, and that keeps people’s personal data secure. We are working with businesses and other stakeholders to make sure that it is fit for purpose. But, as I say, that is not relevant to this SI.

This statutory instrument introduces no new costs, obligations or powers. As I have set out, it ensures that UK public authorities can continue to access the IMI, where necessary, in order to enable them to securely, effectively and efficiently deliver their obligations under the Northern Ireland protocol. The statutory instrument also ensures that the UK’s statute book accurately reflects the changes in access to IMI following the UK’s departure from the European Union. I commend the draft regulations to the Committee.

Question put and agreed to.

DRAFT STATE AID (REVOCATIONS AND AMENDMENTS) (EU EXIT) REGULATIONS 2020

Debate between Chi Onwurah and Kevin Hollinrake

Tuesday 3rd November 2020 General Committees

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

It is a great pleasure to serve under your chairship, Mr Davies. I am glad to be on the Committee considering the regulations.

I am particularly pleased that a Conservative Government recognise the role that state aid can play in the development of key sectors in a nation’s economy. If deployed as part of a robust industrial strategy, it can help to create decent jobs, kick-start businesses and rebalance regional inequalities. State aid, public ownership and workers’ rights are important 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. EU state aid rules on innovation clusters, broadband, culture and heritage, as well as on small and medium-sized enterprises, general economic interest and local infrastructure projects, have allowed member states lots of room to invest in and pursue their domestic priorities.

I should declare an interest here. When I worked for Ofcom I worked on state aid rules with particular regard to investment in broadband—for many years and in quite a lot of detail, although I shall not indulge myself by going into that during this debate, Members will be glad to know. However, I can say that state aid rules allow for support for industries of general economic interest. It is true that they prohibit heavy-handed state aid when it distorts competition, but there have always been ways to strengthen and support industries without falling foul of EU guidance.

State aid rules are a critical concern in providing the right level of financial and other support, but even within the EU different countries have interpreted state aid rules in different ways. Other countries within the European Union have always, shall we say, been far more innovative, creative and supportive with their strategic industrial capacity than the UK, despite the same state aid rules environment. The UK did not keep up with strategic investments. For example, the Government provided just 0.38% of GDP in state aid in 2018, compared with France’s 0.79%, Germany’s 1.45% and Denmark’s 1.55%.

I give those figures to emphasise to the Minister that the Government cannot continue to hide behind the false excuse that it was the EU regime that was the reason for the lack of strategic investment. Further, it is strange that the state aid regulations should cause such an impasse in the negotiations, given the lack of support from the Conservative Government over many years for strategic investment and subsidy. While the Minister says that state aid is an EU concept, it is certainly recognised in the WTO subsidy regimes, which are essentially the same thing. When I asked the Secretary of State for International Trade in the House on 14 September, at column 35, what the difference was between the European Union state aid rules, which had been rejected, and the Japan trade deal state aid rules, which were being accepted, I did not get an answer. I hope that the Minister will perhaps give us some clarity on that.

[Kevin Hollinrake]

Is not the difference the fact that we would be able to make our own rules unilaterally; but if we remained part of the jurisdiction of EU state aid we would have to go to the European Court of Justice, potentially, or to the European Commission, to determine what support we might offer to business? Does the hon. Lady propose that should still be the case once we have left the European Union?

[Chi Onwurah]

I am afraid that the hon. Gentleman has entirely misunderstood me. We are leaving the European Union, as I said. In fact, we have left the European Union and the transition period is coming to an end. My question, like my question to the International Trade Secretary, was very specific. It was about the difference between state aid rules. In the case of what was agreed with Japan it is not something unilateral. In the Japanese trade deal state aid rules were agreed—as they are in all trade deals; it is difficult to agree them unilaterally with another country. My question was about the difference between those rules and those that were rejected as part of the European Union trade negotiations.

[Kevin Hollinrake]

The European Union position in the negotiations is that it wants us to be accountable to the European Union. That is exactly what it is saying, and that is what is different. Whereas in the Japan deal that was not the case, with the EU it is. There would be a requirement for us to agree our measures with the European Union. Is that what the hon. Lady wants? That is what the EU wants. That is its position.

[Chi Onwurah]

What I wanted to understand was the difference—comparing the rules agreed with Japan and the existing rules within the European Union state aid agreement. The way in which they are managed in the future is obviously part of the negotiations, but I wanted to understand the difference. I still do not understand what the difference is, and am not sure whether it has been set out clearly anyway; but I am sure the Minister will explain it to me.

As has been said, we have left the European Union, and the end of the transition period is fast approaching, so we call on the Government to protect British jobs and support regional communities that have been held back after 10 years of austerity. State aid can and should play an important role in that. Labour does not want a return to top-down subsidies and command-and-control intervention in the economy. Instead, we want to build an economy where public bodies work with the private sector to promote innovation and drive economic growth. The Government have had over four years to put together a replacement state aid regime. We were promised a framework way back in March 2020 and we are still waiting to see it. We agree with the need for this statutory instrument and will not be opposing it, but we believe it important for businesses and, indeed, for all of us, to have greater clarity.

With less than two months to go, there is regrettably no time left to carry out a meaningful consultation on a new, ambitious plan for state aid before the end of the transition period. Businesses that I am talking to are understandably frustrated. As we have discussed, negotiations with the European Union broke down earlier this month and Lord Frost confirmed that the UK would be operating under WTO rules from January 2021. While this gives a modicum of clarity to stakeholders—which is to be welcomed—we know that WTO rules are suboptimal, lacking in important detail on state aid. They also do not include provisions on services, which is a critical part of the UK economy.

On 11 March, the Chancellor of the Duchy of Lancaster told the Committee on the Future Relationship with the European Union that Great Britain-based businesses trading with Northern Ireland would categorically not be subject to European Union state aid rules come January 2021. Many experts say that WTO do not operate effectively as a subsidy control regime, and that a reliance on WTO rules should only be a stopgap. Does the Minister agree? Will he give an indication of what a future state aid regime built on the proposed WTO framework would look like?

We hope the Government will improve on the WTO baseline quickly and get this implemented, not only because that would that give further clarity to UK businesses, but because it would improve free trade negotiations with the EU and other countries.

Businesses have raised concerns that under the Government’s current proposals, subsidies made outside of Northern Ireland might still be regarded to have a potential effect on trade between the European Union and Northern Ireland. The Minister talked about the impact of these rules on Northern Ireland, but these outside subsidies could necessitate a European Union state aid assessment. What is the Minister’s view and can he allay those concerns by confirming that the Government will prevent EU state aid rules from reaching back into the UK for trade between Great Britain and Northern Ireland, which is covered by the Northern Ireland protocol?

Before I conclude, I wish to say that we have long been concerned about how the Government’s flagship shared prosperity fund might interact with a UK state aid regime. The Government have promised that details regarding would come with a comprehensive spending review, but the CSR has been curtailed to just one year and the consultation has not even started yet. Can the Minister assure us that we will have some details of the framework before the end of the transition period? Will that framework ensure that regional leaders and devolved Administrations are consulted and included in decision making?

We should remember that the structural funds received from the European Union were always allocated based on where they were most needed according to relative deprivation. Will a future state aid regime reflect that? Given the controversy around allocations from the towns fund, how can the Government assure us that the appropriate safeguards will be in place to prevent cronyism arising from Ministers’ own “qualitative analysis”? Finally, I would like to hear from the Minister the ways in which the Government intend to allocate state aid funding other than via the shared prosperity fund.

Exiting the European Union (Structural and Investment Funds)

Debate between Chi Onwurah and Kevin Hollinrake

Tuesday 19th February 2019 Commons Chamber

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

I thank the Minister for setting out the technical details of the statutory instrument so clearly. Here we have yet another statutory instrument that makes provision for the regulatory framework after Brexit if we crash out without a deal. The parliamentary recess has been cancelled because of the sheer volume of SIs to be dealt with before 29 March. Of the 442 laid since June, 269 have yet to be passed. Of the 20 SIs relating to the Department for Business, Energy and Industrial Strategy passed in 2019, only two had impact assessments available.

As many of my shadow ministerial colleagues have made clear, the volume and flow of secondary legislation on European Union exit is deeply worrying in the context of accountability and proper scrutiny. The Government have assured the Opposition that no policy decisions are being taken, but the establishment of a regulatory framework inevitably involves matters of judgment and raises questions about resourcing and capacity. In that light, the Opposition wish to put on record our deepest concerns about the process for the regulations.

Labour will not oppose the statutory instrument, given the importance of the European structural and investment funds to the United Kingdom. We recognise the necessity of ensuring that the requisite regulations are in place to allow the UK to manage such funding, but we have serious concerns about the scope of this SI and the Government’s complete failure to take effective action to reduce regional inequality in the UK. The Government have presided over the UK becoming the most regionally unequal country in the European Union. We are the second most unequal country in the OECD, with only Mexico ahead of us. We are home to the richest region in northern Europe—London—but we also have six of the 10 poorest regions. In London, disposable income per household is almost 60% higher than it is in Wales and in many regions in England. Transport spending per head is 15 times higher in London than it is in Yorkshire.

The Government have not only failed to tackle regional inequality, but increased it. Their local government finance settlement shows a party so beholden to ideology that they will willingly deepen the crisis in our councils, which have been

“gutted by a series of government policies.”

Those are not my words, but those of the UN special rapporteur on extreme poverty and human rights. European structural and investment funding plays a significant role in tackling just such economic and developmental disparities between regions. It is all the more important because of the impact of the past 10 years of Tory Government.

[Kevin Hollinrake]

The hon. Lady refers to some figures that, I think, come from the Institute for Public Policy Research, saying that the spending in Yorkshire is 15 times lower than it is in London.

[Chi Onwurah]

On transport.

[Kevin Hollinrake]

Yes, but those figures are inaccurate. The contribution from central Government is pretty much on a par on a per capita basis. The difference comes when we add in local authority spending on transport infrastructure and private sector investment. It is about 3:1, which is still too great a differential, but it is important that we look at the figures in the round and factually, rather than at some of the headline figures.

[Chi Onwurah]

I thank the hon. Gentleman for his intervention. It is important that we look at the background to the statistics that we use. I can say to him very clearly that, for example, the statistics used by Transport for the North and other reputable bodies show consistently higher per head spending in London than in our regions, including in his and mine.

In the hon. Gentleman’s region, in my region and across the country, ESI funding supports our people, our businesses and our innovation. Those things are simply too important for us to leave questions about transition unanswered. Over the current 2014 to 2020 funding cycle, the European structural and investment funds are worth more than €19 billion to the UK, including €10 billion in direct investment. Wales alone, as one of the poorest regions in the UK, is receiving €2.4 billion in the current period. The impact of that funding is huge; the impact of losing it would be greater.

In the past 10 years, it is estimated that European Union investment has created more than 115,000 jobs and 25,000 businesses. In my constituency, funding from the European regional development fund supported the construction of The Core, part of the Newcastle Helix, and the growth of more than 800 local businesses through Supply Chain North East. Throughout the UK, EU funding has driven growth in the low-carbon economy, particularly through investment in research and innovation, and it has ensured that it is local economies that have benefited. It is not just income that the European Union funds provide: the security guaranteed by the seven-year funding cycle of structural funds allows economic planning in partnership across local authorities, the private and third sectors over a longer period than our domestic funding. That security is crucial to attracting the necessary match funding from donor partners.

The statutory instrument deals purely with projects that start before the Brexit exit day on 29 March and enables them to be administered according to pre-agreed frameworks. None the less, we need more clarity. Does that refer to projects that have been approved before 29 March, or just projects that have actually started, and how is started to be defined? What of projects started after exit? How are those to be administered?

We have been promised that funding for all projects up to 2020 is guaranteed and that projects will continue to be signed under the same terms until 2020. What we have not been told is anything about how these projects are to be run, how decisions are to be made and how funding is to be allocated. According to the instrument, these frameworks are still being drawn up. It states merely that delivery frameworks for future projects will be

“based on the pre-exit framework and the same investment priorities as have been applied for existing Structural Fund projects.”

Who will make these decisions, and how do the Government intend to replace EU structural funding in the longer term?

The Government have committed to a successor fund—the shared prosperity fund—and to holding a consultation on that fund by the end of 2018. In case the Minister has not noticed, it is now 2019. We are just 38 days away from 29 March, but we have yet to hear a single detail about how that fund is supposed to work. How do the Government plan to replicate the security of the seven-year EU funding period, and how do they intend to administer the shared prosperity fund? The Minister said that that was not within the scope of this statutory instrument, but I think that to give confidence in the ongoing funding and the decisions that the Minister is taking, it is necessary that we understand that there is a strategic vision for what will happen after Brexit.

EU structural and investment funding has traditionally been focused through regional and sub-regional bodies and aligned to regional priority programmes. That has given our local areas a strong degree of direct influence and control over resources and the ability to align them with other local and regional investment—an ability that is all too often missing in relation to central Government funding. Unfortunately, because the coalition Government chose to abolish regional development agencies, the current ESIF programme lost much of that local knowledge. Instead we have a national approach with regional allocations, and leadership and administration of funds moving from regional development agencies to central Government Departments. Despite the committed work of local enterprise partnerships and their partners working in the regions, the loss of regional control over funds has resulted in their being targeted less effectively and subjected to significant delay in approvals and delivery, as well as being less responsive to local needs and aspirations.

How does the Minister intend to make the right decisions for regions, given the lack of regional development authorities? We need clarity; we need details, not just empty promises, because real jobs, businesses and communities are at risk. This Government’s continued failure to address regional inequality is the hallmark of a Tory party that places narrow party interests above the good of the country.

The absence of any plans that deal with projects started after exit day and the deafening silence about the shared prosperity fund leave our regional economies in jeopardy. While we are not opposed to the statutory instrument, we want to know how the Government will do more to safeguard the future of our communities. Labour has committed to matching European Union funding for regional development for at least the next decade. Why will the Minister not follow suit? A Labour Government would invest £250 billion in a national transformation fund to meet the infrastructural needs of every part of our country, and create a network of regional development banks to ensure growth in the areas that most need it.

We need a viable plan for sustainable and equitable regional development—one that reflects the needs of the region, one that empowers local people and grows local economies, and one that can guarantee funding for all our communities. It is evidently one that only a Labour Government can provide.

O’Neill Review

Debate between Chi Onwurah and Kevin Hollinrake

Tuesday 7th March 2017 Westminster Hall

[Kevin Hollinrake]

That is right. I had a test myself at a drop-in session in Portcullis House that showed me that I was not ill—I did not think I was ill, but they told me that I was not, which was reassuring. Again, we need to ensure that prescriptions are given when they will be effective. One other area that we do not seem to have control over at the moment is the online sale of antibiotics: whether through UK-based pharmacies or those based overseas, it is too easy to access drugs without a proper prescription.

The second key point that the O’Neill review highlights is the need for a global public awareness campaign so that people are aware of the issues. Again on Twitter yesterday, a student who had undertaken some analysis said that 80% of the people she had spoken to had no awareness of antibiotic resistance. We need a significant national and international effort to draw public attention to the problem. As people have already said, we need a reduction of usage in agriculture. That is clearly set out in the O’Neill review as one of the four main recommendations.

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

The hon. Gentleman is making an important point about the dangers of antibiotic resistance. Does he agree that as well as not prescribing antibiotics for illnesses, it is important to recognise when there are alternatives that will reduce the use of antibiotics overall? For example, there is research being done at Newcastle University into using antiseptics for urinary diseases.

[Kevin Hollinrake]

Yes, what we need is a mixture of solutions. The UK by its own admission is mid-range across Europe in its use of antibiotics in agriculture. That is one thing, but we have been world leaders on this issue and for me mid-range is not where we need to be; we need to be at the forefront and world leaders in terms of best practice, whatever aspect of this issue we are dealing with.

There are four key recommendations in the O’Neill review’s 10 main recommendations. The last one is on market entry rewards to solve the problem of pharmas not investing in research and development, as well as a possible levy on drug companies that do not invest in research.