Public Sector Pay: Proposed Strike Action

Clive Lewis Excerpts

Tuesday 1st November 2022 Westminster Hall

[Beth Winter]

Yes, and we all welcome the TUC coming to Parliament tomorrow for the day of action.

Early in the new year, there could be significant co-ordinated strike action, and the TUC is planning for such action. It is absolutely right to do so, because the Government are creating public sector poverty to balance their own books. We must understand why people are being forced to strike. Because of the burden of low pay in the context of the worst cost of living crisis in living memory, trade unionists in the public sector have no option but to consider industrial action. They are being forced to take action to survive. The Tories’ plan to suppress industrial action does not ease the financial burden on households.

I will briefly go through my three key points. First, the background to the current situation is the erosion of public sector pay over 12 years. When David Cameron came to power in 2010, his first speech in Downing Street referred to “difficult decisions”, and we heard the Prime Minister use the same line last week. The TUC has called the 10 subsequent years a “decade of lost pay”. Nurses and paramedics will see their pay shrink by £1,100 and £1,500 respectively this year.

It is worth reflecting on the human cost for workers on the ground, because behind all the figures are real people. One PCS member has said:

“To try and survive the cost of living crisis, I keep my lights off at home, live the vast majority of time in just one room and don’t use my central heating. I’ve already taken every conceivable cost-cutting measure I can.”

It is absolutely appalling that, in this day and age, somebody is forced to do that through no fault of their own. It is a damning indictment of the impact of 12 years of austerity that imposed pay freezes on our hard-working public sector staff. Those who sacrificed so much during the covid pandemic to keep our sectors running have been left badly exposed in the cost of living emergency.

Secondly, in this year’s pay review body consultations, unions were unequivocal in demanding an inflation-proof pay rise and stating that the Government’s offer was a significant real-terms pay cut for key workers. On teachers’ pay, the NEU was clear that Government evidence to the pay review body failed to explore the impact of pay cuts on

“teacher recruitment, retention and morale”.

On NHS pay, the RCN said that the pay announcement

“makes it harder, not easier, for them to cope with the rising cost of living.”

Unison’s Christina McAnea said:

“If there is to be a dispute in the NHS, ministers will have no one to blame but themselves.”

In a violation of the pay review body process, the civil service did not consult unions until it met the PCS union a few days before publication. The union said:

“this process was farcical and could not under any circumstances be considered a serious consultation.”

There are lots of questions to be answered.

Finally, local government workers have lost an average of 27.5% from the value of their pay when measured against the retail price index. It is unsurprising, then, that 78% of councils experience recruitment and retention difficulties. I am really pleased that we are joined today by Unison members from Barnet, who have been striking for 12 continuous days in support of a colleague regarding non-payment of sick pay. I know other Members will speak more about that in their contributions. I welcome the Unison members and thank them for joining us today.

I want to address the situation in Wales. Trade unions are balloting for strike action in Wales against the pay awards set by the Welsh pay review bodies, who have offered the same as in England. The offers are insufficient—just as much a pay cut—and need to be revised upwards. There is one significant difference: in Wales we are completely reliant on a funding settlement from the Treasury. When Conservative Ministers inflict pay cuts here, they offer little or no space for Wales to do differently.

I will quote our First Minister, Mark Drakeford, who said at the Labour party conference:

“As a point of principle I absolutely believe public sector workers should be fairly rewarded and that they shouldn’t see take-home pay eroded by inflation…they should at least match inflation.”

Rebecca Evans, the Finance Minister, said:

“we absolutely need the UK Government to undertake to provide a decent pay uplift.”

That fair funding demand has been echoed in my constituency. I undertook a cost of living survey and I delivered a petition to Parliament a couple of weeks ago for fair funding and an inflation-proofed income.

My third and final point is that there is absolutely no justification for public sector pay cuts when an inflation-proofed rise is affordable. When the human cost of more cuts is so great, we must surely explore alternatives to further cuts. If we are to give workers the inflation-proofed pay rise that they deserve and need, we have to fund a pay settlement that can match the 10.1%. That is not an unreasonable expectation. People are saying they do not wish to be poorer this year because they are key workers. We have to identify what that would cost.

The Institute for Fiscal Studies green budget from earlier this month, which the Library directed me to, makes it clear that departmental budgets were predicated on pay awards in the region of 3%. That is far below the current rate of inflation and below the pay awards of roughly 5% announced over the summer. The IFS estimates that offering an inflation-matching pay award to all public sector employees would add more like £17.8 billion. I am under no illusions—that is a significant amount of money—but we are talking about livelihoods, people’s lives, households and families, and the difference between existing and living. We therefore have to look at new ways of raising revenue to pay for it.

[Clive Lewis (Norwich South) (Lab)]

I thank my hon. Friend for this critical debate; I notice there are more civil servants in attendance than there are Government Members, which is shameful.

I want to pick up on the human cost that my hon. Friend mentioned. In 2011, on my first day in the job as a young parliamentary candidate, I stood on a picket line with Unison members in the mental health services. They were not just striking for pay, but because they were warning the public about the cuts coming to mental health. We have now had a decade of failure. I look now at GMB ambulance workers who have said that a third of the deaths that they see are because of delays caused by bottlenecks in the NHS—caused by the cuts. Does my hon. Friend agree with me that we cannot let the Government blame strikers, public servants or even climate activists for the deaths that occur because of what they are doing on their watch?

[Beth Winter]

I thank my hon. Friend for that powerful comment. I fully agree.

How will we pay for pay awards? The time has come for the Government to seriously look at establishing the infrastructure and valuation systems to levy taxation on wealth. There has been increasing interest in wealth taxation in recent months and years. The Wealth Tax Commission has given a rigorous academic base to understand how we could levy either a one-off or annual wealth tax. Tax Justice UK argued last week that the Government could raise up to £37 billion a year through a number of taxes on wealth, including equalising capital gains with income tax rates to raise £14 billion a year.

The Institute for Public Policy Research and Common Wealth think-tanks’ latest research on taxing share buyback profit transfers found we could raise £11 billion. The Wealth Tax Commission simulator suggests that around £18 billion could be raised through an annual wealth tax of 2% on wealth over £5 million. It is clear that the resources are there; the Government must examine and use them.

To conclude, this pay settlement is an attack on living standards, on top of a decade-long attack on people. There is an alternative that means we have to look at new revenue streams that tax wealth to increase public key worker pay. If the Government do not act to ensure a proper settlement on public sector pay and a progressive, fair taxation system to pay for it, living standards and livelihoods are going to get worse for the people that we all represent.

We have arrived at this crisis, and are experiencing it acutely and in an unequal way, due to policy choices—choices driven by political decisions and priorities. Society cannot thrive if we do not get our priorities right. My priority is the living standards of my constituents in Cynon Valley and every single person throughout the United Kingdom. I will continue to support all actions to make that happen, and stand shoulder to shoulder proudly with workers. Diolch yn fawr.

Climate Goals: Wellbeing Economy

Clive Lewis Excerpts

Tuesday 30th November 2021 Westminster Hall

[Claire Hanna (Belfast South) (SDLP)]

I thank the hon. Member for Brighton, Pavilion (Caroline Lucas) for bringing forward this debate and for many years of leadership, giving vision in this area and a lot of practical direction. The necessity for change, and the failures of the economic model that we currently operate, are all around us: in climate and nature breakdown, in inequality within and between nations of the world and between generations, in the depletion of resources and the hoarding of wealth, and in the mental ill health and lack of fulfilment that are beginning to engulf our populations.

The hon. Member for Stirling (Alyn Smith) outlined some of the absurdities of GDP as our sole measurement, with all of the negative effects simply written off as “externalities”. It is very clear that a system that accounts for tobacco sales and bets placed by gambling addicts, but does not find any way to capture time spent raising children or the value of clean air, is no longer fit for purpose. We have known that for decades.

The impacts of consumption and growth-driven production on our planet do not need to be articulated in this room. I know that because this country and others like it consume, drill, burn and dump at a rate that would require numerous planets to sustain it. That, of course, causes negative impacts for the planet and its inhabitants.

It would be one thing to keep pursuing this model if it resulted in a healthy and happy population, but it does not. We know that income inequality in the UK is higher than it has been for decades, and probably the highest in Europe. It affects people at every single point on the economic distribution scale, as well as overall societal cohesion. In the absence of any serious mitigation policies, that will unfortunately only get worse.

[Clive Lewis (Norwich South) (Lab)]

I thank the hon. Lady for giving way in her fantastic speech. She may agree that part of the growth delusion—this constant demand for GDP and growth—is that it will actually begin to trickle down to poorer members of society, both domestically and internationally, yet that does not happen. Rather than keeping on growing the pie, destroying the economy and the planet, would it not be better to better share out the pie we already have within the current limits of the ecology and the environment?

Health and Social Care Levy Bill

Clive Lewis Excerpts

Committee stage & 3rd reading
Tuesday 14th September 2021 Commons Chamber

[Jesse Norman]

My hon. Friend invites us to think of social care as a completely separate thing, but of course there is a tremendous overlap between social care and some aspects of health. It is important to make sure that the system, which I think all hon. Members realise is too disjointed, is more joined up. This treatment therefore appears to be more appropriate to an area where we want to see more integration.

[Clive Lewis (Norwich South) (Lab)]

Will the Minister give way?

[Jesse Norman]

The hon. Gentleman has not featured in the debate so far, so I will make a bit more progress before happily taking his intervention.

Amendment 7, tabled by my hon. Friend the Member for Yeovil (Mr Fysh), seeks to ensure that proceeds from the levy can be used in any tax year. As the Committee will be aware, the levy is designed to mirror the approach of the national insurance system, which has always operated on a pay-as-you-go basis. Indeed, that has been the case since the NHS and the National Insurance Fund were established in 1948. This means that national insurance contributions collected in one year are used to pay for the NHS and contributory benefits paid out in the same year. The pay-as-you-go basis provides a clear precedent for how the levy should operate and that also ensures simplicity and consistency across the NICs system. So I hope that my hon. Friend will not press his amendment, for the reasons I have outlined.

[Clive Lewis]

On the point made by the hon. Member for Christchurch (Sir Christopher Chope), one reason the Government have used the term “health and social care” is that they have established a principle that people pay at the point of delivery. As we see health and social care begin to integrate, the fear for many Labour Members is that this is a Trojan horse for introducing those payments for healthcare—for the NHS. One of my fears when the Prime Minister spoke of this delivering “profoundly Conservative” outcomes was just that danger.

[Jesse Norman]

It is helpful to have a diagnosis of why Labour Members might be opposed to or worried by this, but the fear is entirely without foundation. There is no suggestion that the Government wish to create a system that is anything other than free at the point of delivery, and that is the basis on which the Government have always proceeded and proceed now. We are trying to put a longer-term arrangement in place for social care that allows us to bring the same kind of clarity to it that people have enjoyed for many years with the NHS.

Oral Answers to Questions

Clive Lewis Excerpts

Tuesday 7th July 2020 Commons Chamber

[Steve Barclay]

The hon. Gentleman will know that the cost for local councils will be uncertain for some time, not least in terms of the impact of lost tax income. That is why we have addressed the short-term pressure through the £3.7 billion grant and additional funding that has been allocated, including the recent £600 million for infection control.

[Clive Lewis (Norwich South) (Lab)]

What assessment he has made of the potential merits of including a four-day working week as part of the Government's covid-19 recovery strategy.

[The Exchequer Secretary to the Treasury (Kemi Badenoch)]

The Prime Minister recently set out the first steps of the Government’s strategy to rebuild and fuel economic recovery in response to covid-19. The Government believe the best way to secure a recovery is to invest across the UK to level up, while ensuring that we create the conditions for private enterprise to flourish.

[Clive Lewis [V]]

The Chancellor will have received a letter signed by Members from across the House, including myself, asking him to consider introducing a four-day working week as a way of helping the country recover and creating a better future post-covid-19. So will he commit to the Treasury exploring a four-day working week as part of its economic planning for the recovery? Will he also meet me and other Members to discuss how we can work together to make shorter working times a reality?

[Kemi Badenoch]

The Government believe that the best way of dealing with these issues is for workers to look at existing options available for flexible working and discuss them directly with their employers, rather than the Government legislating for the entire UK work- force. However, I am happy to meet the hon. Gentleman to discuss this topic further, if he would like.

Oral Answers to Questions

Clive Lewis Excerpts

Tuesday 7th January 2020 Commons Chamber

[Mr Clarke]

I thank my right hon. Friend for that question. It is worth noting that between 1990 and 2016 the UK reduced its greenhouse gas emissions by 42% while growing its economy by more than two thirds. We should be proud of that record; it shows that we are on track to meet our targets.

[Clive Lewis (Norwich South) (Lab)]

First, let me associate myself with the comments welcoming you to your place and your Chair, Mr Speaker—long may you sit there.

For what have been described as a “post-truth” Government, here are two clear and simple facts: first, COP 26 is coming to the UK and, secondly, the eyes of the world will be on this Government’s climate crisis policies—or, rather, the appalling lack of them. As Australia burns, millions in African states face climate-driven famine and floods have swept the north of England, will this Government give a damn about this existential threat and act, not posture?

[Mr Clarke]

It must be said that that was a rather ungracious recognition of the Government’s work in this area. We are clear that COP 26 is the centrepiece of the Government’s work on climate this year; the Prime Minister gave a presentation to Cabinet on it today. There is no question but that, led by our former Friend on these Benches Claire Perry, we have an excellent head of the COP, and we will have maximum ambition. The UK is clear that we are committed to the Paris agreement and delivering on it in full, and by committing to net zero we have led the world in this area.

Economic Growth and Environmental Limits

Clive Lewis Excerpts

Wednesday 10th July 2019 Westminster Hall

[Caroline Lucas]

I thank the hon. Gentleman for his wise intervention. Certainly, if we are not going to make the economy bigger by growing it and growing it—we simply cannot, within environmental limits—arguments about redistribution become absolutely central to the whole debate. Everything that I am saying is about social justice and environmental justice being inextricably linked. They must be, because we have to tackle them together. Although it is quite hard to find opportunities when the environmental data is so grim, there is an opportunity to get our social systems and inclusiveness right, and to get our inequality sorted, at the same time as taking serious steps towards making the way we organise our economy genuinely sustainable.

On climate, as on biodiversity, I believe strongly that we must look at the science. The Intergovernmental Panel on Climate Change’s October report, entitled “Global Warming of 1.5 ºC”, says that we need

“rapid, far-reaching and unprecedented change across all aspects of society”.

We have barely a decade to cut global emissions by half. As the co-chair of an IPCC working group put it,

“The next few years are probably the most important in our history.”

The Treasury is doing a very good impression of ignoring the urgency of taking action. The Government boast about emission cuts and about legislating for a net zero emission goal to be reached in three decades’ time. However, the Committee on Climate Change said in its new report, which was published this morning, that the next 18 months are make or break, especially as the UK

“is lagging far behind what is needed, even to meet previous, less stringent, emissions targets.”

The UK’s carbon reduction statistics ignore consumption-based emissions. Our exported emissions are one factor that explains why global emissions continue to rise, and why we are still heading for a devastating 3° of warming, even if countries deliver on their Paris pledges.

This is all to say that the pursuit of economic growth is devouring our efforts to decarbonise. I will quote the work of Jason Hickel, a leading environmental economist at Goldsmiths. He has explained the situation by examining the IPCC’s trajectories on reaching net zero by mid-century. The IPCC is telling us that we have until 2050 to get to net zero, but the global economy is set to nearly triple in size during the same period, which means three times more production and consumption. It is hard enough to decarbonise the current economy in such a short time span. The idea that we will be able to do it three times over is, frankly, for the birds. However heroic our assumptions about the potential for decoupling, there is no evidence that it can be completed quickly enough in the timeframe that we have.

There is some hope, because the IPCC report contains one lifeline scenario that does not rely on speculative and harmful negative emissions technologies to keep global heating under 1.5°. That scenario is our emergency exit from climate breakdown. So what does it look like? Fundamentally, it is about scaling down material consumption by 20% globally, with rich countries such as the UK leading the way. As yesterday’s European Environmental Bureau report concluded,

“Policy-makers have to acknowledge the fact that addressing”

the climate and biodiversity crises

“may require a direct downscaling of economic production and consumption in the wealthiest countries.”

I should add, “among the wealthiest people in the wealthiest countries,” because I take the point made by the hon. Member for Luton North (Kelvin Hopkins); equality and justice needs to be at the heart of this process.

As I say, the ONS work on wellbeing indicators beyond GDP and on natural capital is important and welcome, but it is clearly not the priority. It is not a primary consideration in Treasury decision making. Nor is the wellbeing work integrated with environmental considerations. Will the Minister commit to ensuring the ONS has the resources and the direction required to integrate environmental limits into its “Beyond GDP” work, including, as a priority, consumption-based carbon emissions? While I am making requests of the Minister, can he tell us what has happened to the latest release of those “Beyond GDP” statistics? If they are quarterly, as the ONS website states, the latest were due a couple of months ago, back in May.

I turn to the positive case for ousting GDP as a measure of progress, and to some of the alternatives that we could adopt. There is an extensive and expanding evidence base to suggest that ousting GDP as a measure of progress is essential to achieve both environmental and social justice. Transitioning away from the growth dogma is not about hurting people’s welfare—quite the opposite. It is about placing wellbeing centre stage, reducing inequalities, cutting out waste and inefficiencies, and prioritising quality of life over quantity of things.

There is a chorus of experts—academics, economists and campaigners—proposing concrete, credible alternatives to get us out of the GDP gulag. Many of them are members of the global Wellbeing Economy Alliance. I will briefly give four examples. The hon. Member for Leeds North West (Alex Sobel) will be very happy, because the first example I will give is from the University of Leeds, where researchers are exploring a

“good life for all within planetary boundaries.”

This shows that the UK and other wealthy nations are well past the tipping point at which

“using even more resources adds almost nothing to human well-being.”

The researchers explain that this means countries such as the UK could

“substantially reduce the amount of carbon emitted or materials consumed with no loss of well-being.”

A second example comes in the shape of a doughnut. In her book, “Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist”, Kat Raworth sets out to replace the dominant image of the economy as a closed, self-generating loop with a picture of the economy that shows energy flowing in from the sun, and waste and heat flowing out. Her doughnut image requires us to recognise that all economic activity is embedded in the Earth’s living systems and in society. Instead of maximising GDP, we need to change our goals to meet

“the human rights of every person within the means of our life-giving planet.”

Crucially, this model combines environmental limits with social factors such as housing, equity, political voice, education and income. The inner boundary of the doughnut is the social floor, below which wellbeing suffers. The outer boundary is an ecological ceiling, beyond which we overshoot the Earth’s support systems. The doughnut’s fundamental point, which the Treasury seems to have not yet grasped, is that the current economic system is failing on both human wellbeing and environmental health grounds.

A third example is a call from 238 academics for the EU and member states to plan for a post-growth future, in which human and ecological wellbeing are prioritised over GDP. They say:

“Growth is…becoming harder to achieve due to declining productivity gains, market saturation and ecological degradation. If current trends continue, there may be no growth at all in Europe within a decade. Right now the response is to try to fuel growth by issuing more debt, shredding environmental regulations, extending working hours, and cutting social protections. This aggressive pursuit of growth at all costs divides society, creates economic instability, and undermines democracy.”

The academics end by offering some measured and moderate practical next steps, including constituting

“a special commission on Post-Growth Futures”

in order to

“actively debate the future of growth, devise policy alternatives for post-growth futures, and reconsider the pursuit of growth as an overarching policy goal.”

I would love to see citizens’ assemblies play a major part in that.

Secondly, the academics suggest prioritising alternative indicators over GDP in all economic decision making. Thirdly, they propose establishing a Ministry for economic transition, to drive the shift to a new economy that focuses directly on human and ecological wellbeing, and away from one that is structurally dependent on economic growth.

The fourth and final example is New Zealand, where the Treasury has conducted the world’s first wellbeing budget. Finance Minister Grant Robinson explained that GDP growth was simply not translating into higher standards or better opportunities. Instead, the wellbeing budget looks at spending on the basis of a project’s contribution to the wellbeing of the population, as measured through four dimensions: human capital, social capital, natural capital, and financial and physical capital. The former Cabinet Secretary, Lord Gus O’Donnell, recently launched a report by the all-party parliamentary group on wellbeing economics that makes a similar case for wellbeing to replace growth as the main aim of UK spending in the forthcoming spending review. Those are just some examples.

[Clive Lewis (Norwich South) (Lab)]

The hon. Lady is giving a fantastic speech. She has mentioned the views of four different people on the limits of using GDP, what it is, what good it does in our economy, and what good growth does. Some 51 years ago, Robert F. Kennedy—hardly an economic radical; he was a Democrat—gave a speech on the limits of GDP. I add that because he is someone that I and many people across the political divide can respect. He was well ahead of the curve on this issue.

[Caroline Lucas]

The hon. Gentleman is a very good friend and colleague, but he has just taken my final point; I was building up to that speech from Bobby Kennedy. I forgive him, because he is a good colleague and it was very good point.

I give a shout out to the all-party parliamentary group on economic wellbeing and the APPG on limits to growth, of which I am a co-chair, and which works closely with the Centre for the Understanding of Sustainable Prosperity under the leadership of Professor Tim Jackson, who does good work in this area.

I want to leave time for the Minister to respond, so I will conclude. The climate and biodiversity crisis means that urgency is becoming emergency, in terms of getting economic transformation going. I will skip most of my lovely Bobby Kennedy quote, but his words ring as true today as they ever did, so I will keep the last bit. He said that GDP

“measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country, it measures everything in short, except that which makes life worthwhile.”

I have three requests of the Treasury to which I hope the Minister will respond. First, will he put rocket boosters behind the ONS “Beyond GDP” work, ensure that the environment is fully integrated alongside social factors, and commit to adopting those indicators and using them alongside or, even better, instead of GDP growth? I would even let him use them alongside GDP growth, as long as that were done regularly, so that we could see those indicators as a key measure of the nation’s progress.

Secondly, from this year on, will the Minister publish consumption-based carbon emissions, material throughput and wellbeing statistics alongside quarterly GDP figures? Thirdly, will he meet me and some of the leading economists, academics and practitioners working on this issue, to inform the forthcoming spending review?

As Kenneth Boulding said more than 50 years ago,

“Anyone who believes exponential growth can go on forever in a finite world is either a madman or an economist.”

Thankfully, we now have a new generation of environmentally literate economists, and it is time that we listened to what they have to say.

--- Later in debate ---

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

I thank the hon. Member for Brighton, Pavilion (Caroline Lucas) for tabling this debate and other hon. Members who intervened or who came to listen to and support her. I am always partial to a good Robert Kennedy quote, so I am sorry to see that the hon. Lady’s thunder was stolen at the end of her speech, but I enjoyed it none the less.

As the hon. Lady eloquently set out, it is now more important than ever that the Government and institutions such as the Treasury, which is at the heart of this debate, confront head on the question of how we continue to grow the economy while protecting our environment and tackling climate change with all the vigour and urgency that she and others would like. I believe that the two can and will be done together, and can be mutually beneficial.

The UK is a world leader in this area, but I appreciate that many people—me included—would like us to go further. Between 1990 and 2016, the UK reduced its greenhouse gas emissions by 42% while growing the economy by more than two thirds, demonstrating that environmental action need not come at the cost of economic prosperity.

The Government are determined to continue to build concern for the environment into our economic model. In a moment, I will explain some of the workstreams that we have already undertaken and where we could go further. We want to ensure that environmental policies are well considered and that the Treasury as an organisation is leading them, as I believe it is. The hon. Lady argued that it is time fundamentally to change economic models if we want to address the climate emergency. She questioned in particular whether GDP is a sensible measure of our economic wellbeing, so I will begin by addressing that.

GDP remains one of the most important economic indicators, but it is by no means the only one that is of concern to us or which is used by other major economies around the world. It is closely correlated with employment, incomes and tax receipts, which makes it perhaps the most useful indicator currently available to us. It is used by the Government, the Treasury, and the Bank of England to set economic policy and manage the public finances and, as the system of national accounts framework is set at UN level, GDP is easily comparable across countries and time periods, both historically and in the future. It is important that any changes in the economic modelling that we use are made internationally, and the UK needs to show leadership on that.

The Government recognise, however, that GDP undoubtedly has its limitations and should not be seen as an all-encompassing measure of welfare and wellbeing, and we entirely accept that it was never designed to be. Former Chancellor George Osborne commissioned Sir Charles Bean to undertake an independent review of economic statistics. The review acknowledged some of those limitations, such as the challenge of capturing activities where no market transaction takes place, the challenge posed to GDP and to some of our existing modelling by technology, transforming the way that we measure welling and productivity and, as the hon. Lady mentioned, the fact that GDP estimates make no allowance for the depletion of natural resources,

The Government fully supported the recommendations of the Bean review, which we commissioned, and we have provided the ONS with an additional £25 million to help improve UK economic statistics and implement the Bean review. That was the “Beyond GDP” initiative that the hon. Lady mentioned, which aims to address the limitations of GDP by developing a broader measure of welfare and activity. In response to the hon. Lady’s question about the publication of statistics, the ONS is an independent organisation, so we do not control it in that respect, but I am happy to pass on her comments and ask the ONS to respond.

In the time left, I will briefly mention a number of other steps that the Government have taken. The Treasury’s Green Book, our guidance on the appraisal and evaluation of infrastructure and other investments, is essential to a number of decisions that are made by the Government. In 2018, we refreshed the Green Book to include additional environmental values, such as greenhouse gases, air quality and noise pollution. We also included a social cost-benefit analysis, which I hope is making a significant difference. It will be very important in the upcoming spending review. That work is well perceived internationally. My right hon. Friend the Chancellor of the Exchequer has now convened international Finance Ministers, and the area that the UK will likely lead on internationally is that of economic modelling and how we can do that better on a global scale.

[Clive Lewis]

The Minister spoke about the Green Book, which is still—despite the changes—essentially a neoclassical economic model based on equilibrium economics. Most scientists and economists on the fringes of economic thinking would tell us that we are moving into a disequilibrium position in our economic model. The two are completely incompatible and the Green Book is not fit for purpose as we enter a climate crisis in which many of its assumptions are no longer credible.

[Robert Jenrick]

I do not agree with the hon. Gentleman, but the theme behind his remarks is one of the reasons why we have amended the Green Book. We have created this concept of social value, so we now take into account negative externalities to the environment and to people’s lifestyles as a result of greenhouse gas emissions, for example. I am happy to have a further conversation with him on that after the debate, as there is very little time left.

We are working closely with Dieter Helm’s review and recommendations. I met him to discuss the issue of natural capital accounts, which we are taking seriously—it is a big endeavour. We are working with the ONS and the Department for Environment, Food and Rural Affairs to bring that forward. I hope that we will be one of the first countries in the world to take the issue forward.

Following the report by the Committee on Climate Change, the Chancellor and I met Lord Deben and accepted his recommendation over the summer that the Treasury should do a major and urgent piece of work on how we can fund in a fair way the changes that we need to make as a society as a result of the Committee’s recommendations. That work is under way. I am very happy to meet the hon. Lady to give her more detail on some of those initiatives, which are extremely important. We want to take them forward with gusto in the months ahead.

Question put and agreed to.

Oral Answers to Questions

Clive Lewis Excerpts

Tuesday 9th April 2019 Commons Chamber

[Robert Jenrick]

The UK Government are supporting tidal energy. We have looked at any schemes that have become available to us. We have to balance the interests of the ratepayer, the taxpayer, to ensure that the schemes that we do support are the right strategic technology and the right value for money for the UK.

[Clive Lewis (Norwich South) (Lab)]

Will the Minister join me in paying tribute to one of this country’s most successful publicly funded renewable energy programmes ever? I am of course talking about the last Labour Government’s export tariff, the feed-in tariff scheme, the biggest single democratisation of energy that the UK has ever seen, cutting 700,000 tonnes of carbon. This month, however, in an act of supreme national and international self-harm, the Government killed it off—kaput, finito, game over. In the real world, how can anyone, anywhere believe that this Government take their climate change obligations seriously?

[Robert Jenrick]

The facts speak for themselves. The UK is on track to over-deliver comfortably on the first three carbon budgets out to 2022. The clean growth strategy sets out how we will meet our fourth and fifth carbon budgets, which take us to 2032, while keeping down costs for consumers, creating good jobs in the clean energy market and growing the economy.

Oral Answers to Questions

Clive Lewis Excerpts

Tuesday 5th March 2019 Commons Chamber

[Mr Hammond]

I started work in 1977 and I am not sure I ever remember that traditional nine-to-five, but the Government are helping people to be more productive and work flexibly by committing over £1 billion of public money to next-generation digital infrastructure, including full fibre broadband and 5G. Obviously, the primary investment will come from the private sector, but the public investment ensures that those parts of the country that would not otherwise be served because they are not commercial can share in this important technology. We are also supporting workplace productivity in other ways, including by investing £56 million to help small businesses to develop leadership and management skills in partnership with “be the business” programme.

[Clive Lewis (Norwich South) (Lab)]

I am sorry, but when it comes to funding the new technologies that really matter, this Government, and especially the Treasury, have been abysmal. The climate crisis is upon us now, but this Government’s reaction has been to axe carbon capture and storage funding; to cancel the Swansea lagoon, despite the fact that we were poised to be a world leader in tidal technology; and to slap innovative emerging storage technologies with business rates. At the same time, they are throwing billions into new tax breaks for oil and gas. Does the Chancellor agree that this Government are not facing the climate emergency but creating it?

[Mr Hammond]

No, we are committing additional funding to innovation and to research and development—the Faraday battery challenge is a good example—and lots of that money is going into the technologies that will underpin the decarbonisation of our economy. However, we have to get the balance right. Consumers of energy in this country do not want to see their bills rising because we have made imprudent decisions. We have to do this in a way that takes public opinion with us as we decarbonise our energy sector, our homes and our industry in a sustainable way.

Draft Small Charitable Donations Act (Amendment) Order 2019

Clive Lewis Excerpts

Tuesday 12th February 2019 General Committees

[Clive Lewis (Norwich South) (Lab)]

Good morning, Mrs Moon. As the Minister outlined, the Small Charitable Donations Act 2012, which came into force on 6 April 2013, introduced a new scheme to enable charities and community amateur sports clubs to claim a gift aid-style top-up payment on small cash donations of up to £20 in circumstances in which it is not practical or feasible to obtain a gift aid declaration. The draft order will increase to £30 the maximum individual small charitable donation on which such payments can be claimed. My understanding is that eligible charities and CASCs can claim top-up payments up to £8,000 for small donations each year.

As hon. Members are probably aware, the gift aid small donations scheme was established in 2012 with cross-party support. The Small Charitable Donations and Childcare Payments Act 2017 then made several changes to gift aid small donations to simplify and increase access to the scheme, particularly for smaller and newer charities, including allowing small donations covered by the scheme to be made by contactless payment from April 2017. Although the Opposition welcomed that streamlining to create legislative clarity and coherence, we have continued to emphasise the need for robust Government monitoring of the gift aid small donations scheme, especially in relation to its use for fraud or tax evasion. Will the Government publish any information that they have on the matter?

Unfortunately, there have been cases of charities being used as vehicles for tax avoidance and fraud. It is incumbent on us to make it as hard as possible to abuse charitable status. During the passage of the 2017 Act, the Opposition tabled a new clause that would have required a review of the prevention of fraud and abuse in the small donations scheme. Such a review would need to address the number of penalties imposed under the 2012 Act and the circumstances giving rise to the imposition of such penalties. It should also include HMRC’s assessment of the extent to which charities have been established or have operated for the primary purpose of securing benefits from the small donations scheme, and of the evidence available on the role of the gift aid matching rule in preventing fraud and abuse. Will the Minister update us on whether the Government will consider such a review?

Has there been any evidence of the gift aid small donations scheme being used for fraud or tax evasion? Will the Government publish any information that they have on it? Will the Minister also update us on the Treasury’s monitoring of any potential loopholes? The explanatory memorandum to the draft order notes that

“20 per cent of organisations currently participating in the GASDS are already claiming at, or close to, the overall limit of £8,000 per charity (or community building).”

I note that charities can claim up to £8,000 per building; do the Government have data on how many organisations are claiming for more than one building? How much of the gift aid small donations scheme benefit has accrued to large organisations claiming for more than one building? Are there any plans to increase or decrease the £8,000 limit after the donation size has been increased?

The Government’s policy paper states:

“Following stakeholder feedback the government has decided to increase the individual donations limit for GASDS to £30. A consultation is not needed to make this small change.”

However, an increase of 50% from £20 to £30 is very significant. What is the evidence base for that figure? What estimate have the Government made of the effect on how and by whom donations are made? The policy paper further states:

“This measure will be monitored through information provided in correspondence and regular feedback from the charity sector.”

The draft order is exempt from the requirement to provide a review provision in accordance with section 28(3)(c) of the Small Business, Enterprise and Employment Act 2015, as it relates to

“the giving of grants…by…a public authority”.

None the less, as the Opposition have noted a number of times, it would be advantageous to have a more comprehensive and transparent process in place.

[Patrick Grady (Glasgow North) (SNP)]

The spokesperson for the official Opposition, the hon. Member for Norwich South, raised some interesting points, but I did not pick up whether he supports the draft order. It is important that his questions be answered and considered, but the draft order will make a relatively minor change that I think will broadly be welcomed by the charitable sector. In my experience in the sector before coming to Parliament, I have seen the difference that gift aid can make to the operation of charities, especially small and community-based organisations and churches, which the Minister mentioned. The opportunity to reclaim from the likes of street collections, where it is not physically possible to collect gift aid information, is valuable.

[Clive Lewis]

We will probably abstain, but may I pick up the point the hon. Gentleman is making? It is easy to assume that all charities are charitable in their nature and how they operate, but clearly there are some with the potential not to do what they say on the tin. According to the Lloyds Bank Foundation,

“the proliferation of larger public service contracts meant that new types of charity had emerged, which had little interest in meeting local community need, but were instead ‘driven by market share’ and ‘prepared to slash costs to win contracts, with little regard to service quality.’”

We also know that there can be fraud and that charities can be used as a front for it. Our position is simply that there needs to be transparency.

[Patrick Grady]

That is very helpful. I do not necessarily disagree with any of it, but I would be concerned about standing in the way of a relatively minor uplift that would be beneficial, taking into account inflation and the increasing frequency and popularity of contactless donations. I totally agree with the points on transparency and on the need for that kind of scrutiny to continue. On that basis, I will not oppose this measure.

I want to respond to one other point that the Minister made. He said that not all small charities—legitimate local charities—necessarily take all this up. Perhaps there is a job for some us as constituency Members to encourage smaller community organisations that do not realise that this opportunity is available to them.

On at least one note of consensus, I notice that paragraph 8.1 of the explanatory memorandum states:

“This instrument does not relate to withdrawal from the European Union.”

I am sure that we all look forward to the day when we see that more frequently in explanatory notes.

Equitable Life

Clive Lewis Excerpts

Thursday 31st January 2019 Commons Chamber

[Clive Lewis (Norwich South) (Lab)]

I thank the hon. Member for Harrow East (Bob Blackman) for securing this debate, which has been thoughtful and considered. Both he and my hon. Friend the Member for Leeds North East (Fabian Hamilton) have persisted to ensure that this important issue remains high on the political agenda over the years. They have worked tirelessly and they should be commended by this House.

The hon. Member for Harrow East set out the situation clearly, and it is a very unsettling picture. Hon. Members have spoken of the debt of honour and of the erosion of trust in this House that we face for failing to rectify this injustice. My hon. Friend the Member for Stretford and Urmston (Kate Green) said that she herself has been affected by the collapse of Equitable Life, highlighting the sheer scale of the impact this issue has had across the country. My hon. Friend the Member for Lincoln (Karen Lee) explained how it has affected people across a wide swathe of society—nurses, doctors, teachers and civil servants. Hon. Members have spoken of the despair and distress that this failure and collapse has caused to so many of our constituents. My hon. Friend the Member for Leeds North East described it as one of the greatest financial scandals of the modern age. I hope that the Minister has heard the clear and unambiguous views of many Members from across the Chamber.

As has been set out, this issue stretches all the way back to 2000, when Equitable Life Assurance Society closed to new business and was forced to acknowledge that it could not deliver for its policyholders, leaving up to 1 million people out of pocket through no fault of their own. Following the society’s collapse, the Government of the day set up the independent Penrose inquiry, which raised serious questions about the practices that had been happening at Equitable Life. This decade of mismanagement, combined with maladministration, was a major contributor to the society’s collapse. As we have heard, the Penrose inquiry was followed by an ombudsman report in 2008 that found that this mismanagement had corresponded with

“a decade of regulatory failure”.

This included an inadequate response to the chief executive’s appointment; inadequacy of advice by the Government Actuary’s Department; and poor transparency on the part of other Departments, including the Treasury.

In 2009, the Government apologised and appointed an independent adviser, Sir John Chadwick, to provide guidance on how to determine and resolve various technical issues. During this time, both the European Parliament and the Public Administration Committee had published sympathetic independent reports. It is worth noting that in 2010, the Conservative party manifesto, as many Members have mentioned, included a commitment to making

“fair and transparent payments to Equitable Life policy holders”.

All this culminated in a payment worth £1.5 billion in compensation to policyholders. As we have heard, the Equitable Members Action Group campaigners remain unsatisfied with this response, arguing that their losses amounted to more than £4 billion. This leaves a significant disparity in the losses faced and compensation awarded that so far has not been adequately explained or addressed by the Government. Instead, the Chadwick report of July 2010 concluded that relative loss should be defined as “those who have suffered financial loss”, but pointed out that the ombudsman recognised that losses in policy values were only partly due to maladministration, and that the backdrop to cuts in policy values was a sharp fall in world stock markets that all life insurance companies were forced to respond to. Similarly, the report argued that compensation should be assessed on the cost of maladministration as opposed to the size of investor losses.

However, we are politicians, and we can revisit decisions and choices. The Minister has been asked to consider carefully whether the Government should make different decisions or choices today, with the benefit of hindsight. After all, regardless of how fault is distributed among the institutions involved, these policyholders have found themselves significantly out of pocket, through no wrongdoing of their own.

Many Members from across the House, including colleagues from the shadow Front Bench, as well as the leader of the Labour party, have met the campaign to listen to its concerns and the full details of the case. I would therefore like to ask the Minister whether he has met the campaign, and whether he might consider doing so in the days following this debate, to hear its case directly.

Given that the Government have accepted that there were regulatory failures and offered some compensation already, they may be open to further discussions, to respond to the clear dissatisfaction that so many policyholders feel about how this matter was resolved. I hope the Minister will give a clearer sense of the Government’s willingness to look again at this matter.

My hon. Friend the Member for North Tyneside (Mary Glindon) raised the important matter of policyholders’ data. The campaign is anxious that the necessary data is retained, to ensure that policyholders can be identified were there to be a change in Government policy. The campaign has hoped for reassurance from the Minister, and perhaps we will have that today.

Lastly, while I have discussed the position of Equitable Life policyholders throughout my speech, there is also the question of the regulatory environment now. We have to ensure that lessons have been learned, so that such an awful case can never happen again. The regulatory frameworks that operate in this country must be continually stress-tested and reviewed. Regulatory organisations need the appropriate resources to ensure that proper regulation occurs. We have to consider that 100 or 150 people are looking at 200 insurance companies. What protections have the Government put in place to guarantee that similar regulatory failures cannot happen again? That seems an important consideration, not only to reflect on the past and seek justice for those affected, but to ensure that we do not repeat the same mistakes.

I hope the Minister will be able to offer a satisfactory answer to the questions I have raised. Clearly a serious injustice was faced by policyholders at Equitable Life, which has been the source of much discussion, inquiry and debate over many years, yet those affected do not feel that this has been resolved adequately. The Government have looked at this matter before, and I hope they will resolve to look at it again and begin a full and proper process of consultation with the campaign. Ultimately, people’s savings are in question, lost through no fault or wrongdoing of their own but a combination of factors outside their control. I look forward to the Minister’s response.