Cryptoassets: Regulation

Christina Rees Excerpts

Wednesday 7th September 2022 Westminster Hall

[Martin Docherty-Hughes]

I do not disagree, but I will talk later about the reality of the existing regulation and how we should lead best practice.

It is important that regulation is able to make a clear delineation of where the legitimate business exists and outright scam cannot. Despite the halving of the value of Bitcoin since its peak in November, it remains at a price much higher than it held a few years ago. Although many will argue over the inherent value of crypto, the market remains remarkably buoyant, despite all that has happened.

Many of the challenges begin with the merest definitions involved in the whole business. As I said, I hate acronyms. All the DLTs, NFTs and CBDCs are confusing enough before we even get to the question of what crypto actually is. Is it an asset? Is it a technology? Is it an idea?

Another enduring problem of crypto, encapsulated in that Larry David advert, is its novelty: the idea that we have a genuinely world-changing thing before us. That idea falls apart immediately as it comes into contact with the real world. As an asset class, it has proven to be resilient neither to inflation nor to external shocks, never mind the fact that conventional and centrally regulated currencies have continued to attract a far larger interest as a holder of value in straitened economic times.

It has been difficult to keep up with the pretence of some of the more outlandish claims about the technology’s potential, as they struggle with the evidence of the past few years. International bank transfers, for example, are still cheaper, when taking into account the need to convert crypto into fiat currency. There remains a massive legitimacy problem given that the post-truth aspects of blockchain technology struggle when put beside existing institutions.

Even the idea of a decentralised and therefore more equitable structure has struggled against the demonstrable fact that so many cryptoassets remain in the hands of so-called whales—the few at the top who managed to get their timing right or to be there when the currency started. Far from being a novelty, the lived experience of the crypto bubble has reinforced the fact that there truly is nothing new under the sun. While so much of it remains a new arrangement of an old song, we hear riffs that echo debates that are being had outwith the crypto bubble; debates that have resonance in the fields of economics, sociology or computer science.

Solutionism is the idea that there is a clever, technological answer for all of life’s problems and that, somehow, human nature can be overridden with the application of the requisite solution. Crypto fits squarely in that space. One wag called it a solution in need of a problem, and a whole range of problems have been hastily set up to be solved by it. As we will see, that gets entirely in the way of the more durable and sustainable uses that it has.

Principal among those is the way in which many adherents seem to revel in the way that crypto offers the opportunity to turn the current logic of most of the internet on its head. The current logic is that we are offered free services in exchange for access to our metadata. Instead, this bold new vision goes, we should—or could—monetise these fractional shares of data, which we give back to, say, Facebook or Google. The value of popular tweets that we make could be released, as could that of those Instagram posts that have been gathering likes but no dollars. There is obviously not the same value to be released for everyone, especially a boring auld guy like me. [Interruption.] I am grateful for the support of my hon. Friends. There is a lot of doubt about how much that value would ever amount to, but the principal argument against this sort of future for crypto is that it adumbrates a dypstopia where every single aspect of our lives that could be monetised can be and where our maximum productivity can be released.

For many, including some in the House of Commons, that is the final step on the way to a new liberal utopia, where we know the price of everything, although the cynic in me thinks that we will miss out on the value of quite a lot. Given the way social media has descended into something of a mess, catering to what seems like a mixture of our lowest common denominator and our basest desires, I am not sure that giving human beings the ability to monetise absolutely everything creates a positive incentive.

This idea makes the assumption not only that the technology is the most efficient way to solve these problems, but that it is the most efficient version of itself. In speaking to those who have worked on the technical side of the crypto industry, it is remarkable how imperfect the technology itself is, mainly because it has humans involved in its creation. To take one example, coders make errors in one out of every 10 expressions, or every three lines of codes—code that is, of course, written in a way that reflects the biases of the person writing it.

In cryptocurrencies that seek to use the technology to incorporate smart contracts, and therefore programming languages, that opens up a whole range of exploits, with systems not working as they should and money being vulnerable to theft. According to one estimate, 5% of all decentralised finance—or DeFi—funds are lost in that way, which is especially problematic when most of those funds are uninsured.

The technical issues are dwarfed by the environmental impact of crypto, which is a truly vast problem that threatens to undo all the good that it could bring. Essentially, the technology inherent in most forms of crypto—nodes competing to solve puzzles to access coins—creates the incentive to use increasingly large, expensive and energy-intensive servers. Not only does that consume vast amounts of electricity—the equivalent of the annual energy use of Argentina, accordingly to legend—but it creates another brick in the wall of a crypto oligarchy, with the largest investors able to control far more of the servers and thus far more of whatever cryptocurrency is held there.

There are certainly workarounds, and I hope to explore some of that in my speech, but as we stand here today, looking at the landscape, it is not only another challenge that cryptocurrency advocates need to overcome but, added together with the other questions I have laid out, it becomes something more significant that needs to be addressed if they want crypto to become part of their daily lives.

Before I am accused of being too much of a negative Nancy, it is important to understand exactly where we are at the moment, because only by doing that can we better understand the potential for blockchain technology. Then we can focus better on the regulation that we need to bring in to ensure that it thrives. My biggest fear is that bringing in regulation means changing so much of the culture in the industry, and dialling down so many of the solutionist expectations of its adherents, that it may not be possible, but I am going to give it a shot.

It will be difficult to push back so much of interest that has been created in the crypto community and it is important to understand what is motivating these investors, many of whom are young or from non-traditional finance backgrounds, especially as we stare down the barrel of a cost of living crisis and the inevitable recession that will follow. Blockchain’s genesis, following the 2008 financial crisis, is central to this.

The possibilities for demystifying finance, and for allowing normal investors access to resources usually only available to those able to access corporate lawyers, is certainly within reach, if the capabilities of so-called distributed autonomous organisations—or DAOs—are realised, not only as an add-on for existing companies, businesses and commercial practices, but as a way of creating a new type of entity that can avoid the pitfalls of oligopolistic capitalism.

Blockchain’s birth as something of a libertarian project has obscured the incredible potential for the technology to improve government efficiency, clamp down on tax avoidance and increase accountability for those in public life. The best existing example of that can be found in the Republic of Estonia; I should probably add that I am chair of the all-party parliamentary group on Estonia. Estonia began a roll-out of blockchain in its governmental processes from the Ministry of Finance, and in doing so made all other Ministries reliant on the technology themselves and ensured that one of the central pillars of the social contract—the relationship between the taxpayer and the Government—was radically accountable.

As things stand, the necessarily slow pace of regulation means there is every incentive for individuals to stay a couple of steps ahead of regulation, exploiting loopholes and bending the rules as much as possible. They are of course supported by an industry of enablers and administrators who find ways for their clients to keep to the letter of the law while evading the spirit of it, although often not even succeeding at that. That means that Her Majesty’s Revenue and Customs is always playing catch-up, with any deterrence factor it represents always being ex post facto.

The radical solution offered by crypto is turning that calculation on its head, as Dr Robert Herian outlines in his book, “Regulating Blockchain”:

“Blockchain may offer an opportunity to recalibrate the power play between those who would engage in aggressive tax strategies and planning, and those charged with regulating or containing them by, for example, more effectively enforcing tax liabilities ahead of settlement on trust, rather than relying on bringing trustees to account post settlement.”

This is the essence of blockchain for good—an idea that the all-party group, of which I am chair, very much tries to promote: both individuals and the Governments they elect should be given the ability to hold third parties accountable in liberal democracies, and hopefully beyond.

In ensuring that crypto plays the role that it could, regtech—regulatory technology—will come increasingly to the fore over the coming decades. Given its traditionally attributed birthdate of 2008, we should note that crypto is now entering its third decade of existence, and I like to think that that could herald a new-found maturity. If there is something that we need to take from the recent crash, it is that the wild west days of crypto are over. Too many people have been affected, and too much is now at stake. The Government now have the opportunity to rein in the crypto bros and ensure they make good on their promises to investors, creating the environment for an industry ready to realise its potential.

In that spirit, I hope to make a few suggestions of my own about I think the Government should proceed. In the spirit of there being nothing new under the sun, which I touched on earlier, it is important to start with the Government and stakeholders understanding how much law is already in place to curb the worst excesses of a supposedly unregulated market. To quote Dr Robert Herian again:

“sandbox culture as the sine qua non of contemporary regulatory standoffishness at the state level has ultimately spawned the problematic regulatory conundrum with which we are now faced, one in which innovations and solutions have been legitimised.”

Quite simply, in pretending that they have no levers at their disposal, the spies and speculators who have proliferated all the way through our economic history have re-emerged in the guise of the crypto bros. The biggest step that the Government could take to redress the balance is to enforce the law that they already have.

Fraud is fraud—there are no two ways about it. The police are overwhelmed dealing with novel scams, but scams are what they are. Better training for those dealing with enforcement, and ensuring that they are able to work with those in industry who are ahead on best practice, is crucial. All of that cascades from an empowered and properly funded Financial Conduct Authority, which is not deliberately, as many have speculated, underfunded and under-resourced as a way of ensuring that many offenders slip through the gaps.

This situation has created many of the trust issues that crypto seeks to address: smaller-scale investors get stung by unscrupulous practices that larger entities can use an army of lawyers to protect themselves from. Although we could get into a long philosophical discussion about trust and the possibilities for post-trust, it is important to note that this aspect of crypto has not proven as transformational as many of its adherents promised.

The idea that Bitcoin and other cryptocurrencies would prove to be immune from inflation, speculation and the like has proven to be demonstrably untrue, as has the idea that a new form of stablecoin could come in as a forum of neutral exchange between the various types of crypto. The problems experienced, for example, by the Tether stablecoin demonstrate this. A simple solution whereby every dollar of the stablecoin is backed by a dollar of assets fell apart under the lack of accountability for the company’s owners, and the markets reacted in the way that markets usually do when promises are not met. In this place, vital to the functioning of any sort of crypto culture, the deliberate lack of trust—the post-trust aspect of the crypto stablecoin—came off worse after coming into contact with the entirely rational human instinct to need the sort of trust that has hitherto been provided only by institutions and, in this context, central banks.

My second proposal for regulation is therefore that the Government not only bring forward the regulation expected in the Financial Services and Markets Bill, but do their utmost to ensure that debates around that exceptionally important crypto development are able to be had in the House—and not only when the Bill is in Committee. The Bank of England published feedback on central bank digital currency proposals in June last year. It stated five core principles, the first of which is the most important:

“Financial inclusion should be a prominent consideration in the design of any CBDC.”

Paying heed to that core principle means the scales being tipped back away from the crypto whales, who are increasingly hoarding the new assets, in favour of the average investor, realising the potential that gave so many, previously excluded from the system, some hope that they could be part of it.

Similarly, the opportunities for Government to enable financial inclusion through the development of proposals for decentralised autonomous organisations are vital to ensuring that the benefits of access to stable digital fiat currencies can be extended to the broader commercial sector. I hope that company and contract law can keep pace with such developments in an inclusionary way. At the heart of that is, obviously, the Financial Services and Markets Bill. I hope the Minister will allow time in his remarks to elaborate on those aspects that may not come to the fore in the limited time that will be allocated to the new occupant of No. 11.

I have presented two solid, legalistic opportunities for the Government to regulate crypto, but I should also like briefly to touch on the opportunities that exist for the environmental impacts of crypto to be negated, with the creation of carbon-neutral data centres. It will come as no surprise to anyone who has paid attention to the renewable energy sector that the nation of Scotland is ultimately blessed with resources that should see us well placed to make the transition not only to a carbon-neutral future but—and forgive me for saying it—an independent, sovereign one.

However, thanks to the work of fellow SNP member Stuart Evers, we can see that Scotland also has the opportunity to become a hub for carbon-neutral data centres, which make use of three qualities that Scotland has in abundance: not only the technical expertise to provide new network security in large data centres, but the physical security offered by our natural landscape and the energy security provided by ready access to what are called dual renewable resources, whereby a primary green energy source is always backed by another green source should it fail. That is best accomplished by a combination of wind and tidal energy. Thanks to Stuart’s preliminary work, we can see that Scotland hosts a plethora of potential locations for such centres, primarily along our west coast and in the Orcadian archipelago. That is certainly not crypto-specific, but it is an important point to make when we think about the ways in which the benefits of a well-regulated and well-run crypto industry could be felt across these islands.

I appreciate that I have taken up quite a lot of the time allocated for the debate. I have set out three solid areas where this Government could legislate to better realise the promise of the crypto industry, but my primary objective was to ensure that there was, for the first time, a forum for debate on the many areas for regulation of the sector. I hope that I have provided a suitable introduction to the challenges and opportunities that exist in an increasingly fast-paced industry. I look forward therefore not only to the Minister’s remarks but to what hon. Members have to say about the potential they see in making crypto work better for everybody.

[Christina Rees (in the Chair)]

I intend to start the winding-up speeches at about 10.25 am, so if Back Benchers are kind to each other, there is no need to put a time limit on speeches.

Co-operatives and Mutual Societies

Christina Rees Excerpts

Tuesday 14th December 2021 Westminster Hall

[Christina Rees (Neath) (Lab/Co-op)]

It is always a pleasure to serve with you in the Chair, Dame Angela.

Robert Owen is regarded as the founder of our co-operative movement. He believed that character is formed by environmental influences such as educational opportunities on the one hand and by poor working conditions on the other. His vision was for villages of co-operation, a new world order of mutual help and social equality, and his followers were called co-operators or socialists. I am very proud that Robert Owen was born on 14 May 1771 in Newtown, Powys, in my beautiful country of Wales.

The Co-op group traces its roots back to the start of modern co-operation in Rochdale in 1844, and 177 years later the Co-op group continues to put its members and their passions at the centre of its business, with a focus on working with others—co-operating. Since its launch in 2016, the Co-op group’s local community fund has provided approaching £100 million to more than 20,000 local good causes, making it one of the largest funding mechanisms for charities in the UK.

UK co-operators believe that too much power and wealth rests with a small number of investors, shareholders and executives. Decisions are often made for the benefit of the powerful and the wealthy and not for the benefit of communities, workers, consumers and the environment. I believe the answer lies in the Marcora law. I was fortunate to secure a Westminster Hall debate on 8 September about the co-operative purchase of companies. I urge the UK Government to learn from Italy, where the former Industry Minister, Giovanni Marcora, established the worker buy-out system more than 30 years ago.

The Marcora law was established in a period of economic crisis in the 1980s to encourage workers to become entrepreneurs, saving their jobs by taking their entitlements plus three years’ projected social security payments in a lump sum to invest in a new company, supported by Government loans and advice. Specifically, the Marcora law established a rotation fund for the promotion and development of co-operation, and a special fund for the protection of employment levels. It gives workers the pre-emption right to purchase their companies and, more importantly, the financial support to buy out all or parts of an at-risk business and to establish it as a worker-owned co-operative.

The Cooperazione Finanza Impresa—CFI—operates the Marcora law on behalf of the Ministry of Economic Development of the Italian Government. The CFI is an institutional investor and has been implementing the Marcora law since 1986. The Ministry holds a 98.6% share of the capital investment and has an overseeing role on the CFI board. The CFI has made investments of more than €300 million in 560 companies, saving the jobs of 25,000 workers and retaining the skills and experience of the Italian workforce. Hundreds of Italian businesses at risk of closure have been preserved as worker co-operatives, with a return of more than six times the capital invested by the CFI funding mechanism. Our UK Co-operative party public polling shows that 64% believe that the economy would benefit if workers could buy their businesses when they were at risk of closure.

During my debate, I urged the UK Government to introduce legislation that would give workers an adequate opportunity to request ownership during business succession and to provide an early-warning system to warn workers in advance of insolvency or when viable businesses are at risk of disposal. That would give workers the time and ability to assess the scope of acquisition and prepare a co-operative business model, and it would provide an opportunity to bid for a business at risk of shrinking or closure. A UK Marcora law would sustain businesses and help the UK shift to a fair and democratic economy through our co-operative values.

I asked the Under-Secretary of State for Business, Energy and Industrial Strategy, the hon. Member for Sutton and Cheam (Paul Scully), whether he would introduce a UK Marcora law and he told me that there were no plans but that the Government were open to proposals. Mark Drakeford, the First Minister of Wales, and his Welsh Labour Government were overwhelmingly re-elected last May on a Senedd election manifesto that pledged to provide greater support for worker buy-outs. Mark has stated many times that he will work with the co-operative sector and the Wales Co-operative Centre to double the number of worker-owned businesses in Wales, and he appointed Vaughan Gething, the Minister for Economy, with specific responsibilities for the co-operative sector in Wales.

In Wales, we are proud to have the Wales Co-operative Centre, set up by the Wales Trades Union Congress in 1982 to provide business support to co-operatives in Wales. The centre’s research shows a business succession timebomb. Small and medium-sized enterprises make up 99% of businesses and 62% of private sector employment in Wales, but 43% do not have a succession plan and only 12% of family firms make it to the third generation. One in five SMEs faces the prospect of closure or succession in the next five years, with 29% under the same ownership for the past 21 years. So 15,000 business owners may be leaving their businesses. That is one of the reasons a UK Marcora law is so important: to save family businesses.

My friend Huw Irranca-Davies, MS for Ogmore and a former MP, who is chair of the Senedd co-operative group, introduced an employee ownership Bill to the Welsh Parliament to give workers support to buy out their workplace if it is at risk of failure. It received cross-party support in principle in the Senedd from Labour, Plaid Cymru and the Liberal Democrats. Huw will now meet Welsh Government Ministers to see how to progress his Bill.

While I was disappointed with the response from the Under-Secretary of State to my debate of 8 September, a few days later I had a lovely surprise. I received a letter from Camillo De Berardinis, the CEO of the CFI, saying that he had watched my speech in the Westminster Hall debate and that he was inviting me to be the guest speaker at the 35th anniversary of the CFI on 16 November to celebrate the commitment of all the Italian workers who had bravely tackled the crisis of the company they worked for and successfully recovered it. I was honoured to accept that invitation. It was virtual, by the way; I did not manage to get to Italy, but there we go.

The Minister will be pleased to know that I will not be giving up campaigning to have a UK Marcora law. On 11 January, I will introduce a ten-minute rule Bill entitled the co-operatives employee company ownership Bill. I know the Minister is very magnanimous and he does listen, so, to conclude, does he now have any plans to introduce a UK Marcora law?

--- Later in debate ---

[Luke Pollard]

My hon. Friend is exactly right. There is an energy around this policy area not only because it returns good outcomes but because it is the scene of so many good ideas and so much innovation. That innovation is often at the periphery, because co-operatives and mutual are not mainstreamed in the way that they really need to be. There is not an accelerator that moves those ideas into the mainstream. As co-operators, many of us are quite nice, decent people, and mutualism has a reputation of being nice and caring for and lovely, which often means that we are quite comfortable sitting in a corner. As an economy, we often say, “We have got a fair mutual side; it’s over there in the corner.” We know it is important because we put it in the corner where we put all our important things. It is time now to move mutual and co-operative policies into the mainstream, not only as niche providers but as an alternative to mainstream provision that would give those mainstream business models a run for their money. To do that, some of those legislative and, in particular, financial resourcing barriers need to be removed. There is an opportunity to go through them progressively and remove them, to make sure that we are getting there.

Creating a co-operative development agency in England, following the lead of Wales, would make a big difference. We could put new duties on Governments to promote the growth of co-operatives, not just of businesses. We could look at new capital instruments, such as a national co-operative-held investment bank, which would allow better investment in UK co-operatives. We could consider a new duty on banks to encourage greater lending to co-operatives and to ensure banks are held to account over the types of businesses they support. There is sometimes discrimination in funding to co-operatives because their corporate structures can be a little bit different, a little bit challenging. However, the social benefit and opportunities that come from that investment can be even bigger than investing in the usual type of business models. There is an opportunity there to make that happen.

[Christina Rees]

My hon. Friend is giving a passionate and comprehensive speech. The number of co-operatives is low. Perhaps there is a case for a business model in which a co-operative’s share of a private or public enterprise could be incorporated into the model, so that we raise awareness of the advantages of being part of a shared ownership scheme.

[Luke Pollard]

I am grateful to my hon. Friend for that. Long before I had grey hair and was elected to this place, I wrote an article for the Co-operative party about co-operative insurgency—the idea that a harder, bolder form of co-operation could also come out of a purposeful building out of a co-operative shareholding in business models. To follow my hon. Friend’s idea, it is not only about creating a co-operative or mutual from day one; it can be about mutualising a business model. Even a small, co-operatively held component of a big publicly listed company could help drive and direct an ethos and culture change within that business, which could produce better outcomes for staff and the overall business model.

However, I am afraid that not all is well in our co-operative sector in Plymouth. Our Plymouth credit union is on the verge of closure, which I worry will deny access to finance for people on the margins of finance and society in particular. The City of Plymouth Credit Union’s office is opposite my office, on Frankfort Gate, and at the end of the week, the queues that come out of that credit union show a number of individuals who always face challenges—not only economic and financial challenges but challenges elsewhere. We must also be aware of the closure of credit unions. I do not know what will replace the provision the Plymouth credit union gives to some of those most marginalised people, but we need to find an alternative. The basic bank accounts that the Treasury has been promoting via businesses will not be enough to replace the service provided by Plymouth credit union, and I encourage the Minister to look at what happens when credit unions fail.

--- Later in debate ---

[Christina Rees]

I thank the Minister for his offer to have further discussions. Can I bring more information about the success of the Marcora law in Italy to share with him at that discussion?

[John Glen]

Absolutely. I sincerely look forward to that and we will engage with the substance of the information.

In my role as Economic Secretary, I would like to focus on the role of mutuals as providers of financial services, because they can play a significant role there. I see these organisations as key to providing people with greater financial stability and therefore greater choice. Indeed, I believe this is levelling up in action.

Credit unions are at the core of this. A few weeks ago, I visited the Glasgow Credit Union that the hon. Member for Glasgow South West (Chris Stephens) mentioned, and a few years ago I visited 1st Class Credit Union in Glasgow. They are two of the largest and most successful credit unions of the 402 that exist across the United Kingdom. The Glasgow Credit Union even offers mortgages, consequential of the deep relationships and bonds it has with its members and its understanding of their financial position. That demonstrates the potential that well-organised, well-supported credit unions can provide in communities.

The hon. Member for Strangford (Jim Shannon) listed the 13 credit unions in his constituency and talked about the distinct tradition that exists in Northern Ireland with respect to credit unions, across multiple sectors. Credit union and co-operative legislation is devolved in Northern Ireland, but I continue to listen carefully to what the hon. Gentleman has to say on this matter.

Affordable finance is key to generating opportunity, wealth and liberty for people around the country.

Decarbonising the UK: Role of Shipping Emissions

Christina Rees Excerpts

Tuesday 14th September 2021 Westminster Hall

[Christina Rees (in the Chair)]

Before we begin, I encourage Members to wear masks when they are not speaking, in line with Government guidance and that of the House of Commons Commission. Please give each other and members of staff space when seated and when entering and leaving the room. Members should send their speaking notes by email to hansardnotes@ parliament.uk. Similarly, officials should communicate electronically with Ministers.

[Alexander Stafford (Rother Valley) (Con)]

I beg to move,

That this House has considered the role of shipping emissions in decarbonising the UK.

I refer the Chamber to my entry in the Register of Members’ Financial Interests. It is a pleasure to speak in this important debate with my fellow MPs from across the House, and I hope my position reflects their views that decarbonisation is an issue where we need to be truly united in our approach. In truth, the title of the debate is a misnomer, as I wish to discuss the positive contribution that the shipping industry and our excellent port infrastructure across the UK can make to achieving a low-carbon future. In particular, in the year of COP26, I wish to highlight the role that shipping carbon dioxide and hydrogen can play in ensuring a prosperous and environmentally sustainable future for British industry.

In the year of COP26, when the United Kingdom will be placed on the global stage, we must make significant progress towards our collective net zero targets. While we know that great strides are being made to decarbonise our electricity networks, with arrays of wind farms and solar panels covering our countryside, we must also pay attention to industry, where hundreds of thousands of jobs and significant segments of our economy are deployed. These sectors, such as our world-leading cement, glass, steel and petrochemicals, are not easy to switch to electrical power and will need to utilise carbon capture, utilisation and storage technologies—CCUS—to decarbonise.

The North sea has been the bedrock of our economy for decades, providing an economic shot in the arm to UK plc and delivering a world-leading expertise base that has been exported globally. Now is the time to turn our attention to putting the skills and infrastructure of this valuable national industry into the ports developing carbon capture and storage, which is essential in helping hard-to-abate sectors to decarbonise and in ensuring that natural gas supports the development of the emerging hydrogen economy. In essence, it is putting the upstream industry in reverse to develop CCUS.

We must recognise the support the Government have already placed behind this emerging sector, with a significant programme to support four industrial clusters. However, we should also recognise the guidance from the Committee on Climate Change, which calls for more ambition and the need to support as many potential CCUS industrial clusters as possible, whether that is in the Acorn Project in Scotland or projects in Teesside, Humberside or the north-west. These clusters are blessed with some of the best sub-surface geology to support permanent carbon dioxide storage. The projects are relatively simple to understand, whether they are reforming hydrogen from natural gas coming onshore and then pumping the CO₂ captured back into depleted reservoirs, or perhaps CCUS-enabled power stations, such as the innovative net zero Whitetail clean energy NET power station planned for Teesside.

The UK is also seeking to become a global leader, with Europe’s first at-scale direct air capture facility being developed by the UK-based Storegga in north-east Scotland, sucking CO₂ from the air and storing it underground. Whether we seek to reuse existing oil and gas infrastructure or to deploy new pipelines, CCUS has the potential to support communities and regional economies around the North-sea coastline for decades to come, as well as places further inland like Rother Valley.

Climate change is not an issue that is confined to the North sea or the Irish sea. The United Kingdom must come together to develop a net zero future. In Scotland, we see the UK’s first hydrogen-powered community, but equally the Thames estuary and the Solent are embracing the potential for transitioning to a hydrogen-fuelled grid and energy generation. That presents a challenge. Without suitable geological storage, these hard-to-abate emissions are not able to sequester the carbon and prevent it from reaching the atmosphere. This is where our proud island nation is able to respond to the challenge and work collaboratively to provide a vibrant, low-carbon shipping and transportation network, connecting industrial clusters, such as refineries on the south coast, the south Wales emitters and the Thames estuary, to regions such as north-east Scotland. The latter possesses a world-leading geological storage resource, with more than a third of the UK’s identified storage resource located within 50 km of existing gas pipeline infrastructure, which can be repurposed to take CO₂ offshore.

The Scottish cluster is a superb example, with the Acorn Project one of the most mature UK CCUS and hydrogen projects, with the backing of both the UK and Scottish Governments and even, dare I say it, the European Union. It will enable carbon capture deployment across a diverse set of emitters, capturing at least 6.2 megatonnes per annum of carbon dioxide by 2030. That represents around 60% of the ambition set out in the Government’s great 10-point plan and is a vital part of it. To make that a reality, emitters from across the UK are seeking to make use of that national resource, along with storage locations along the east coast and the north west. The UK’s port network needs to stand ready to respond to that demand and needs to invest in the significant infrastructure required to create a UK port network capable of handling large volumes of CO₂ and hydrogen shipping. Shipyards from Appledore to the Clyde will also need to mobilise to build the shipping tonnage needed to support this nascent industry.

From Peterhead port, Europe’s largest fishing port, to Grangemouth, Scotland is readying itself to make investments to ensure that it can support the transition to a low-carbon economy. Existing jetties can be repurposed to support the berthing of ships bringing CO₂ for storage, and proximity to the network of existing oil and gas pipelines offers the possibility of easy access to eventual storage sites. For example, with the conversion of Peterhead power station to gas, which will be delivered by pipe from St Fergus, the jetty can be repurposed for handling both bulk CO₂ imports and hydrogen exports. That will allow shipping to commence on a more cost and time-efficient basis than would have been the case for a cold start, and that would save up to about £50 million in up-front investment and three years for consenting and construction. We are already on the way and that provides a natural advantage.

Supported by associated infrastructure, pipe routes and with nearby land suitable for development, Peterhead port can play a strategically important role in the emerging energy transition, especially in handling CO₂ for eventual storage and hydrogen for eventual export. That is important. We want to export the hydrogen. We do not just want to make it for the UK; we want to be a world leader and export the technology and the resource abroad. As the sector evolves, and to take maximum advantage of the opportunities available for national and international trade, it is likely that a second berth will be required in the port within a few years to handle the volumes of potential CO₂ and hydrogen shipments, requiring further investment of up to £30 million.

Similar infrastructure and expertise can be used to support the import or export of hydrogen at other ports around the UK, such as the Forth ports. Given the proximity of the Forth ports to proposed blue hydrogen projects and to the UK’s biggest source of offshore wind, that could be vital for the deployment of the UK’s hydrogen sector, although it is worth saying that we should be aiming for green hydrogen, rather than blue. Blue is only the journey to get to where we want with green hydrogen. I want to make that perfectly clear: blue hydrogen is not the ultimate answer.

That port infrastructure and the shipping industry can also play a central role in supporting other areas of the UK to reduce emissions. The south Wales industrial cluster is the second largest CO₂ emitting cluster in the UK. It contains several key UK assets, including the UK’s largest steelworks, where my father-in-law used to work, and the UK’s largest combined-cycle gas turbine, the UK’s largest energy port, the UK’s only nickel refinery and the Royal Mint, as well as several key and core manufacturing industries. Around 20% to 30% of the UK’s natural gas supply is imported into the UK through south Wales. With steel, cement, chemicals, refining and natural gas supplies all present in the region, CCUS will be essential for delivering net zero in south Wales. However, south Wales does not have any known local geological storage of CO₂ available, which means the development of a CO₂ shipping fleet would be essential for its decarbonisation. The south Wales industrial cluster includes several deep-water harbours and ports that could accommodate CO₂ shipping, and with the right investment, can develop a shipping network that can effectively ship and store CO₂ from this cluster at the Acorn Project and other sites.

On Teesside, meanwhile, innovative net zero power stations will also need access to resilient geological storage of CO_2. The Whitetail clean energy plant itself uses the highly innovative NET power technology, which combusts natural gas with oxygen, rather than with air, and uses supercritical CO₂ as a working fluid to drive a turbine instead of steam. As a result, nearly all air emissions, including traditional pollutants and CO₂, are eliminated and pipeline-quality CO₂ is produced, so that it can be captured and sent by ship from Teesside to storage locations. That is further proof of the UK being a global science and technology powerhouse. It is critical that this plant and further plants have optionality to send CO₂ to distributed stores.

Similarly, the Cavendish project in the Thames estuary is a large-scale, low-carbon hydrogen generation project. Based on the Isle of Grain, the hydrogen production facility will be near gas and electricity networks, power stations and a liquefied natural gas facility. It is expected to meet the large energy demand of London and the south-east for power, heating and transport. Again, this project will need the ability to capture and sequester its CO₂ emissions, but there is no suitable geological storage nearby, so shipping infrastructure will be essential for the project to sequester its CO₂ in suitable storage locations.

These are just a few examples of vital low-carbon projects for which access to port infrastructure and a shipping network capable of transporting CO₂ and hydrogen is not just nice to have but absolutely business-critical if we are to hit our ambitious targets. They are ambitious targets, but I know we will get there. However, we can only get there as one country—one country of England, Wales, Scotland and Northern Ireland combined—and if we can move around the CO₂, which is to say the “bad” CO₂. We need that shipping infrastructure to help us do that.

We are an island nation; we are Nelson’s nation. We are a nation of sailors, and that is what we should do with our CO₂. We should embrace our former fleets; we should have the same clarion cry that we had with the merchant fleets of old, to move our CO₂ around and defeat the enemy that is climate change.

In this year of COP26, I am sure that the Minister and colleagues across the House will recognise the importance of shipping’s role in reducing CO₂ emissions and I hope that we can work together to ensure that policy supports the development of the shipping infrastructure we must successfully transport CO₂ emissions and hydrogen, as needed, to achieve a net zero future for the whole of the UK. That will bolster the economy, lower our emissions and really turbocharge UK plc into the next millennium. I know that will happen and I also know that, although ports are important, Rother Valley will still be at the heart of hydrogen production in the future.

Government's Management of the Economy

Christina Rees Excerpts

Tuesday 23rd February 2021 Commons Chamber

[Christina Rees (Neath) (Lab/Co-op) [V]]

There is no starker contrast of how flawed the UK Government’s economic model has been than when compared with the approach of the Welsh Labour Government. More than a decade of Tory austerity has left the UK completely unprepared to deal with the global pandemic. Despite UK Government cuts and austerity across Wales, our wonderful NHS staff, council workers, emergency services and many more work tirelessly to keep us safe and keep Wales running.

The Welsh Labour Government have provided extra support for local authorities: £500 million to deliver key services such as social care and test, trace, protect; and to make sure that businesses receive vital support grants. In Wales, nine out of 10 people who test positive for coronavirus provide details of their close contacts, and almost 90% are successfully contacted and advised. The Welsh system is working because it is a public service run locally. The Welsh Labour Government have made a special £500 payment to more than 67,000 social care staff working in people’s houses and in care homes, including for domestic and personal assistance. They continued their commitment to free school meals when Wales became the first UK nation to guarantee provision throughout school holidays, and they have now extended this to Easter 2022, feeding over 105,000 children in Wales. At the beginning of the pandemic, the Welsh Labour Government helped homeless people into accommodation, and more than 3,200 people are now in temporary accommodation.

Businesses in Wales have had access to the most generous support package in the UK. The £2 billion economic resilience fund alone has secured 141,000 jobs. At the 2016 Senedd elections, the Welsh Labour manifesto set out six key pledges, and it has delivered on every pledge: an additional £100 million for schools; 100,000 all-age apprenticeships; a cut to business rates for local businesses; a new £80 million treatment fund; doubling the capital limit for older people going into residential care; and 30 hours’ free childcare for 48 weeks for parents of three and four-year-olds. Today, the Welsh Labour Government have announced their strategy to rebuild the post-pandemic Welsh economy, taking the opportunity to look to the future, with a long-term focus on wellbeing, dignity and fairness for people, and supporting workers, businesses and communities to succeed and prosper.

Covid-19 Support Schemes: Ineligible People

Christina Rees Excerpts

Wednesday 9th December 2020 Westminster Hall

[Christina Rees (in the Chair)]

I remind hon. Members that there have been some changes to normal practice in order to support the new call list system and to ensure that social distancing can be respected. I remind Members that they must arrive for the start of debates in Westminster Hall. Members are expected to remain for the wind-ups, provided there is space in the room. Members are also asked to respect the one-way system around the room. Please exit by the door on the left.

Members should sanitise their microphones before they use them, using the cleaning materials that have been provided, and they should dispose of the materials they have used as they leave the room. Members in the latter stages of the call list should use the seats in the Public Gallery and move on to the horseshoe when seats become available. Members can only speak from the horseshoe.

[Munira Wilson (Twickenham) (LD)]

I beg to move,

That this House has considered support for people ineligible for Government covid-19 support schemes.

It is a pleasure to serve under your chairmanship, Ms Rees.

“Feelings of betrayal, hopelessness, abandonment and not belonging have caused me immense anguish over the last 9 months”.

Those are the words of Lisa from London, who spent 34 years as a pay-as-you-earn taxpayer and was newly self-employed in April 2019.

I am incredibly grateful, as are the many thousands of people who have been in touch—both directly and indirectly—to share their stories with me, to have been granted this very important debate, which also addresses three petitions. I am aware that many Members were unable to make the crowded call list today.

It is 261 days since the furlough scheme was announced and 258 days since the self-employment income support scheme was announced, yet those very welcome schemes had gaping holes in them. We know that some 3 million people—approximately one in 10 of the workforce—fell through those gaps. Often, they were ineligible for universal credit, so they were left without a penny of Government support over the past nine months. Their plight has been raised time and again in this place, and the largest all-party parliamentary group has been formed to champion their cause. Yet the Treasury has repeatedly refused to do anything to address this glaring injustice.

Those who have been excluded span many different categories of workers, including, but not limited to, employees who were denied furlough or were ineligible for it, which includes new starters; the self-employed, including those newly self-employed; those over the £50,000 threshold; those who earn less than 50% of their income from self-employment; directors of limited companies who are paid annually or via dividends, or directors of such companies that are not yet in profit; PAYE freelancers; those on zero-hours contracts; and new mothers. These 3 million individuals are from all walks of life, from beauticians to builders, teachers, driving instructors, taxi drivers, lawyers, those working in our world-leading creative industries, and many, many more.

I will address up front some of the misrepresentations that exist, then touch on the impact of this injustice and, importantly, refer to some of the solutions that have been proposed. To date, the responses that we have had from the Government include, “It is too difficult and complex to include these groups.” I am afraid that, nine months on, that just does not wash. I understand that the schemes were set up at speed, but there has been ample time to work through and implement solutions. Another response was that the schemes were targeted where help was most needed. It is clear from the thousands of case studies received and the surveys conducted by the House of Commons digital engagement team, the Organise group and ExcludedUK that that is simply not true. There are heartbreaking stories of desperate need, including the use of food banks and people not being able to switch the heating on this winter.

There has, at times, been a suggestion that some of the excluded are highly paid and dodging tax in some way, especially those paid via dividends. My constituent, Fraser Wilkin, who runs a travel company in Twickenham, pays himself by dividends because of the huge fluctuation in annual income due to events outside his control, such as the coronavirus. If he had drawn a regular salary through the year, he would have been unable to fulfil his statutory and contractual obligations to his clients, in terms of prompt refunds when their holidays were cancelled due to the pandemic.

Universal credit is cited as the fall-back. A survey of more than 3,000 individuals found that almost three quarters were unable to access universal credit. Let us face it: we all know that universal credit is not meaningful support. Otherwise, the Government would not have felt the need to create the furlough scheme or the self-employed income support scheme.

We know that the mental health impacts on many of those excluded from support have been stark. There have already been eight reported suicides, and one respondent to the House of Commons digital engagement team said that she almost took her life several times, and one week spent every day in contact with the Samaritans.

The Centre for Mental Health has said that covid-related unemployment has caused an additional almost 30,000 people to request services for depression. Those mental health impacts spread well beyond the 3 million individuals to their families and support networks. Many report having to move back in with elderly parents and rely on their pensions. Marriages and relationships have been strained or ended. Parents of young children talk about the stress it is putting on their children. An anonymous respondent from the north-west said:

“my mental health has plummeted and my family are anxious too, so much so my teenage daughter is getting counselling for her anxiety”.

Personal debt is rising. Rachel from the south-east says:

“I am selling my house, cannot get a mortgage, selling my personal belongings just to put food on the table. Getting into so much debt. Never been so scared in my life. I’m also a single parent and it’s heart-breaking telling my daughter that Santa can’t afford much this year”.

In terms of the wider economic impact, those businesses and entrepreneurs, who are natural risk-takers, are the wealth creators and the lifeblood of our economy. Retaining their skills and health, and stopping their businesses going to the wall are critical to our post-covid economic recovery. It is incredibly short-sighted to cast them aside in this way.

Moving on to solutions, many proposals have been put forward by a number of groups, such as the Association of Independent Professionals and the Self-Employed, the Treasury Committee, the Federation of Small Businesses, the gaps in support all-party parliamentary group and the various representative groups for those who have been excluded.

I have limited time today, but some of the solutions include using HMRC data to support claims for those with PAYE income history; widening the accepted evidence for demonstrating proof of employment; extending cut-off dates; looking at the two specific schemes that have been put forward for directors of limited companies; removing the 50% rule; removing bereavement payouts and carers’ allowance from the calculation of PAYE income; and extending the criteria for discretionary business grants. Many of those solutions just require imagination and will. Plenty of experts stand by to help make them implementable.

I want to conclude by sharing from a children’s book sent to me by Kev Payne, who was a teacher and became an illustrator in 2018. He is ineligible for support because of the 50% rule. He wrote a story to try to explain how he feels. In it, the mice are the taxpaying workers and the bear is the Government. A storm hits and the bear provides food and shelter for all the animals, but the mice are left out and told that there is no space for them:

“‘But I gave you my food’, said Mouse. ‘You said you would help me.’

‘I cannot help you now,’ said Bear. ‘I will see you when the storm is over.’

‘But…’ began Mouse. Bear glared and growled at Mouse. It turned its vast back against her.”

My plea to the Minister is to listen to how these hard-working, tax-paying people are feeling and to look at the long-term impact of his policy. The Chancellor does not have to be the big, bad bear; he can be Santa Claus this Christmas.

[Christina Rees (in the Chair)]

I will start the winding-up speeches at 5.10 pm. There are lots of Members who want to speak, so I am afraid we will have to have a time limit of two minutes.

--- Later in debate ---

[Nick Fletcher (Don Valley) (Con)]

I thank the hon. Member for Twickenham (Munira Wilson), and declare my interest as a director of two limited companies. As I have said countless times before in the Chamber, and in Westminster Hall, the Government’s economic response to the pandemic has been unprecedented. As we promoted Small Business Saturday over the weekend, I was pleased to note that almost 1,500 businesses in my constituency have benefited from bounce back loans, and 3,500 people have kept their jobs because of the furlough scheme. As I made clear three weeks ago, it is time for the Government to provide support for directors of limited companies.

Being a limited company has some small benefits with regard to national insurance payments, although much of that is negated by the payment of corporation tax. The main reason for being a limited company is, as is indicated by the name, to limit one’s liability as an individual. To be penalised because one is a director and takes remuneration through a dividend seems harsh.

A week is a long time in politics; three weeks, it seems, is a lifetime. On 18 November I stood in the Chamber along with many of my colleagues and called for large supermarkets to return the rate relief they had received from the Government, as they had not been hit financially by covid. I am pleased to say that since then £1.8 billion has been issued back.

With this in mind, I call on the Minister to do three things: ensure that those businesses and sectors that were not in financial trouble return the moneys gained through rate relief; give businesses the option to tick an opt-out box to ensure they do not receive unneeded support in the first place; and, most importantly, listen to the concerns and recognise the plight of the self-employed directors. We are receiving funds back from supermarkets and other businesses; now is the time to use this money wisely to allow businesses to stay afloat as we begin to reach the light at the end of the tunnel.

[Christina Rees (in the Chair)]

I thank hon. Members for adhering to the time limit; it is much appreciated.

--- Later in debate ---

[Bridget Phillipson (Houghton and Sunderland South) (Lab)]

It is a pleasure to see you in the chair, Ms Rees. I appreciate that we are slightly pushed for time. I am grateful to the hon. Member for Twickenham (Munira Wilson) for securing such an important debate on a timely issue. For nine long months now, many workers have had no support whatsoever from the Government due to glaring gaps in the Government’s various schemes and wider provisions—inadequacies that the Opposition have highlighted time and again. Many of these problems could be fixed with political will, but the Government so far have chosen to do nothing. Those problems have festered and worsened, and today they are endangering our economic recovery.

I pay tribute to the Members we have heard from, whose contributions showed the impact that being shut out of support has had on many of their constituents right across the United Kingdom, particularly my hon. Friends the Members for South Shields (Mrs Lewell-Buck), for Batley and Spen (Tracy Brabin), for Portsmouth South (Stephen Morgan) and for Manchester, Withington (Jeff Smith), who made such passionate cases on their constituents’ behalf. Like many Members, I have also heard from constituents who find themselves in this position. One constituent, newly self-employed after starting his own business, told me:

“I am from a working class background. I’ve worked and paid taxes since leaving school, funded my own retraining. I’ve not claimed any benefits at all during this time. I’ve worked hard to earn everything that I have achieved. I admit to feeling disappointed and let down, that due to a quirk of timing and dates, I won’t be afforded the same level of Government support.”

I have also heard from many of the unions representing working people in this country: Community, Equity, the Musicians’ Union, the Writers’ Guild, Prospect and the GMB about how many of their members are in similar situations. I have also heard from the Federation of Small Businesses. Across professions, the same issues come up time and again: the exclusion of the newly self-employed, the 50% threshold, and people who are not eligible for universal credit despite a huge drop in income. We also know that, despite some recent welcome changes, there is ongoing discrimination against women who have taken maternity leave.

I have said before, and will say again, that the Opposition accept that it was difficult to get everything right when the Government set up these income support schemes back in March—but we are months into this pandemic now. We know where the gaps are. We have pointed them out repeatedly and Members have made the case here today. I ask the Minister, again, what is being done to sort out these issues? No doubt he will list the schemes the Government have already made available, but surely he must understand that this will be cold comfort for those still unable to access support. Does he have anything new to say today?

The Government’s failure to address these issues is also storing up problems down the line. There are many self-employed people who have put money aside into savings accounts to pay for end-of-year tax bills. In many cases, these savings trigger an end to their universal credit eligibility or they can only claim at a reduced rate. This means that not only are they going without support for longer, but that they will face even greater financial difficulties when required to pay their end-of-year tax bill. As we have heard today, Government inaction risks the very economic recovery we all desperately need and want.

Entrepreneurship is the backbone of our economy. A dynamic economy needs people who are willing to take risks, become self-employed and start their own businesses. After all, after the 2008 financial crash, it was SMEs that spearheaded economic recovery and gave people hope and work. Now, however, when so many self-employed people are in need, the Government are not there to help.

Self-employed people have seen how the Government have treated them, and I worry that they will be wary of taking steps that could help to drive our recovery. As we have heard today, many people who are already self-employed are considering giving up on their careers and their businesses. That is of particular concern among women, those from low-income backgrounds, and black, Asian and minority ethnic communities.

We should do everything we can to ensure that an economic recovery benefits everyone in our country, and we should give the self-employed the confidence to keep going, not leave them to sink or swim. If we do not, we will face a much slower and less inclusive recovery. That is in the Minister’s hands. It is not too late to listen; it is not too late to act.

[Christina Rees (in the Chair)]

Would the Minister mind leaving a few minutes at the end for the summing up? Thank you.

Concentrix

Christina Rees Excerpts

Wednesday 26th October 2016 Commons Chamber

[Rebecca Long Bailey]

The hon. Gentleman makes an interesting point. I will come on in due course to the issue of the contract and how it is delivered, because there needs to be a wider investigation and discussion about that.

In 2014-15, there were no appeals against a decision. In 2015-16, there were 365, and from April to August 2016, there were 176. A similar spike is clear in the number of mandatory reconsiderations, which more than quadrupled between 2014-15 and 2015-16. It is even more shocking that that number almost quadrupled again in the period up to mid-August.

[Christina Rees (Neath) (Lab/Co-op)]

Does my hon. Friend agree that the Government should commit to an official investigation into Concentrix’s conduct since it was awarded the contract in 2014, so that we know how what she has described was allowed to happen?

[Rebecca Long Bailey]

I completely agree with my hon. Friend. It is hard to believe that the number of fraudulent tax credit claimants suddenly increased so dramatically in those two years. What is clear, however, is that there is an ever-growing evidence base suggesting that Concentrix has been unfairly and unjustly stopping people’s tax credits, leaving them in financial difficulty, along with the anxiety that that causes.

I am pleased that the Government have accepted that the contract was not working. Indeed, they were forced to concede that point in an answer to a parliamentary question asked by my hon. Friend the Member for Sheffield, Heeley early last month. The response revealed:

“Since mid-October 2015 there has been 120 instances where Concentrix has not fully met the performance standards set out in the contract out of a total of 1625.”

Following mounting pressure from Opposition Members, the Government announced that they would not renew the Concentrix contract when it ends in May, and that they would redeploy 150 members of Her Majesty’s Revenue and Customs to clear the backlog of cases.

Oral Answers to Questions

Christina Rees Excerpts

Tuesday 25th October 2016 Commons Chamber

[Simon Kirby]

Yes, he can.

[Christina Rees (Neath) (Lab/Co-op)]

10. What steps his Department is taking to compensate people affected by incorrect withdrawal of tax credits as a result of errors by Concentrix.

[The Financial Secretary to the Treasury (Jane Ellison)]

If anyone feels their tax credits have been incorrectly withdrawn owing to errors by Concentrix, they should urgently contact Her Majesty’s Revenue and Customs, which will review all complaint cases and will, and indeed does, pay redress where appropriate.

[Christina Rees]

Labour welcomes the cancellation of the Concentrix contract and the fact that it will be administered in-house by HMRC staff. Will the Minister reassure the thousands of single parents and families, many in my Neath constituency, that their tax credits erroneously stopped by Concentrix will be reinstated immediately so their children can be kept safe and warm and not go unfed as winter approaches?

[Jane Ellison]

The hon. Lady is absolutely right to draw the House’s attention to the importance of prioritising vulnerable claimants. HMRC held a further drop-in for colleagues recently, on 19 October; it was attended by 15 Members, and a number of complaints and issues were raised, which we are on the way to resolving.

On restarting claims, the key is to get the right information. HMRC has taken back a vast number of cases, and I will say more about this tomorrow. The priority is to get the right information, to get claims started again as soon as the facts are established.

Concentrix: Tax Credit Claimants

Christina Rees Excerpts

Tuesday 18th October 2016 Westminster Hall

[Fiona Mactaggart (Slough) (Lab)]

I beg to move,

That this House has considered the performance of Concentrix in dealing with tax credit claimants.

This is the first time that I have spoken in a debate in this Chamber that you have chaired, Mr Nuttall, and I look forward to it.

Just hours after I successfully persuaded the House of Commons Backbench Business Committee to table this debate, Concentrix’s contract was ended. I called for this debate because the company has bullied people who depend on tax credits and targeted single mothers, many of whom have had their tax credits stopped without fair notice. Concentrix is paid by results, which means that it has a financial incentive to stop payments. Its decisions are frequently made on the basis of wrong information, and people who depend on tax credits to make ends meet have been left without funds for weeks while errors have been corrected, causing hardship for them and their children.

I thought that this debate would focus on those shocking failures, and that I would use the time to share how the lives of my constituents, and the constituents of many Members here, have been made miserable by the cavalier way in which Concentrix has used the flimsiest of excuses to end tax credit claims, and by its shocking customer service, which has left claimants hanging on to telephone calls for hours without resolution. However, since then, there have been many parliamentary opportunities to highlight such stories. I am glad that the pressure from me and other MPs has led the tax authorities to end Concentrix’s contract. I am particularly glad that the National Audit Office is to look into its operation. As a former member of the Public Accounts Committee, I am confident that the NAO will get to the bottom of whether Her Majesty’s Revenue and Customs or Concentrix is responsible. I think it possible that we have sometimes blamed the company when we ought to have blamed the Government.

[Christina Rees (Neath) (Lab/Co-op)]

I congratulate my right hon. Friend on securing this important debate. Concentrix took the approach of stopping payments without warning. Many single mothers in my constituency have told me that they discovered that their payments had stopped only by checking their bank accounts. Does she agree that HMRC should not have given Concentrix the authority to stop payments, and that the process must stop?

[Fiona Mactaggart]

I think that the best thing that we can do with this debate is ensure that lessons are learned from this failure, and that the whole Government act on them. It is time to get answers from the Treasury about the extent to which it, rather than Concentrix, is responsible for the failure.

--- Later in debate ---

[Fiona Mactaggart]

My hon. Friend is absolutely right. Indeed, for most of the victims of this situation, there has also been a significant effect on their self-confidence and on their reputation. Some get these letters at very stressful times in their lives—following a difficult divorce, while they are trying hard to separate themselves from a violent partner or after childbirth. The behaviour of Concentrix just added to their stress.

[Christina Rees]

My right hon. Friend has been very generous in giving way. She talked about the burden of proof. One woman claimant in my Neath constituency came in to see me because her payments had been stopped, as she had not replied to a letter that she had not received and there were no follow-up letters. Where does the burden of proof lie there?

[Fiona Mactaggart]

The law is clear that the burden of proof lies with the Government and they need to have a proper reason to believe these things. As we know, however, many of the reasons why investigations were initiated were not what any court would describe as proper. That is a fundamental problem.

The Government announcement of the termination of the contract sought to reassure

“customers who have had their tax credits stopped that we will prioritise their cases, and make sure that they are processed as quickly as possible.”

That was a nice thought, was it not? However, Concentrix has informed me that, just on mandatory reconsideration cases, which were returned to HMRC on 19 September, nothing at all was done until 3 October. So not only is Concentrix operating on the basis of really flimsy information; it is also telling lies to Parliament and to the Government, because I do not consider that to be prioritising cases and making sure they are processed “as quickly as possible.”

I hope the Minister will answer the specific points that I have raised. This contract has been something that, frankly, we should all be ashamed of. The way that we have treated the mums and dads on low pay who are bringing up the next generation has been shameful. And actually, although I asked for this debate about the performance of Concentrix, the responsibility for this situation fundamentally lies with the Treasury and HMRC. The process is clear. Again, I quote Concentrix:

“Whilst the initial decision to halt an individual’s tax credit claim may, at the end of the process, prove to have been unnecessary”—

it did not feel “unnecessary” to the victims—

“the process is set by HMRC. Whether it is Concentrix managing this process or HMRC directly, the same hurdles and challenges are experienced because of the information held by HMRC at the outset.”

It seems to me that this goes to the heart of the Government’s use of information about citizens. The Government have a responsibility to assist citizens in giving them the information they require in order to assess their entitlement to something such as tax credits. The Government did that at the beginning of a tax credit claim, but their process for doing that as a tax credit claim continues is fundamentally flawed, and those flaws were made worse by the way that Concentrix operated.

I come to the conclusion that there are certain tasks that the Government simply should not delegate to a private company or to anyone else, and the collection of taxes and the issuing of tax credits is one of them. I hope that this will be the last experiment in that vein. I want to pay my taxes to the Government; I do not want to pay taxes to some company that I do not understand. Equally, I want to receive tax credits therefrom.

In future, no policy that has a disproportionate impact on women, especially those struggling to bring up a family, should be tolerated by the Government. I hope that the Minister will say that when things like this are contemplated in the future, Ministers will consider which groups in society will be disproportionately affected by their policies, in order to ensure that they do not continue to target women in the way that, frankly, this Government have throughout their existence.

Tax Credits: Concentrix

Christina Rees Excerpts

Wednesday 14th September 2016 Commons Chamber

[Jane Ellison]

In the normal course of events, we would always look to how things should be arranged in the future after reflecting on what we can learn from things that have already happened. That would happen through a normal process of review and consideration. We shall have to agree to differ on the issue of whether an inquiry is needed.

[Christina Rees (Neath) (Lab/Co-op)]

I have been contacted by many distressed women in my Neath constituency about how awful Concentrix really is. Some Concentrix advisers have suggested to mums, who are desperately trying to renew their tax credits, to get payday loans to feed their children while their claims are being processed. A group has been formed, called “Concentrix Mums”, whose more than 5,000 members can share their horror stories. Let me provide just a couple.

[Mr Speaker]

No. I think one will suffice.

[Christina Rees]

One it is, Mr Speaker.

[Mr Speaker]

I fear the hon. Lady has caught what might be called “the Burnley condition”.

[Christina Rees]

I hope not. Does it involve shoehorning? One mum had not eaten for three days so that she could feed her children. This is sickening: it should be stopped and it should have been stopped a long time ago.

The Economy and Work

Christina Rees Excerpts

Thursday 26th May 2016 Commons Chamber

[Christina Rees (Neath) (Lab)]

The Queen’s Speech was a missed opportunity to change course on the decision to make cuts that will result in 2.5 million working families losing more than £2,100 a year, the impact of which will be to hit the vulnerable people in our society the hardest. The opportunity provided by universal credit to create a simpler benefits system is being undermined by financial decisions and, as a result, we are failing to protect vulnerable groups in particular.

I want to focus on a vulnerable group who are often overlooked, namely young carers. At present, severely disabled adults who are living without a non-disabled adult to provide care for them may be eligible to receive the severe disability premium, which is intended to help them with the additional costs they face. The Government have proposed to have no equivalent of the SDP in universal credit. They propose to use the savings from the SDP to raise the level of benefit paid to those entitled to receive the higher disability addition. However, once universal credit has been fully implemented, severely disabled people with no adult to assist them will be entitled to about £58 less a week than those in the current system.

Between the Office for National Statistics censuses in 2001 and 2011, there was a 20% rise in the number of unpaid carers. As a Welsh MP, I am particularly concerned about the issue, because Wales has a higher proportion than England of young carers providing unpaid care. More than 11,500 children in Wales aged between five and 17 provide unpaid care. If their parents do not have support and protection through universal credit, those children will face additional disadvantage. In four out of 10 households with a disabled lone parent, children help them for more than 15 hours a week. Around 25,000 disabled lone parents receive the severe disability premium. In those families, young carers, especially children aged over 10, are taking on a significant caring role.

The impact of the loss of SDB could be very severe: 83% of those who are eligible for it said that a reduction in benefit would mean that they had to cut back on food, and 80% said that they would have to cut back on heating. Will the Government please consider implementing the Children’s Society recommendation that universal credit should include a self-care element to provide additional support to disabled adults who have no other adult to look after them, to help them with the additional costs that they incur and to ensure that the burden of additional care costs is not placed on young carers?