Oral Answers to Questions

Danny Kruger Excerpts
Tuesday 6th February 2024

(1 month, 3 weeks ago)

Commons Chamber
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Gareth Davies Portrait Gareth Davies
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This Government are committed to levelling up by boosting growth, raising living standards and spreading opportunity throughout the country in several different ways. The hon. Gentleman talks about giving more power to local areas, and he will know that the Cambridgeshire and Peterborough Combined Authority is getting a £97 million devolution deal. He will also know that Cambridge received some £14 million as part of the shared prosperity fund to spend on local projects. I reject his assertion; the people of Cambridge are benefiting from this Government.

Danny Kruger Portrait Danny Kruger (Devizes) (Con)
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The way to reduce regional inequality is to ensure that growth happens everywhere across the country. One way to do that is to support small and medium-sized enterprises and community enterprises, which are particularly located in under-served regions. I commend the Government for the recovery loan scheme, which has been a lifeline to many small businesses and community enterprises. Can the Minister tell us whether that scheme is likely to be renewed? Hundreds of millions of pounds of private investment is waiting on the Government to make a decision.

Draft Postal Packets (Miscellaneous Amendments) Regulations 2023

Danny Kruger Excerpts
Monday 17th July 2023

(8 months, 2 weeks ago)

General Committees
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None Portrait The Chair
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Mr Wilson, your point has been noted by the Chair and will be fed back to Mr Speaker, and the Government Whips are listening. You refer to me. When it comes to this position of Chair and whoever sits in the Chair, the House convention, “Erskine May” and the rules and procedures of this House are greater than one individual, however flawed or not flawed the person who sits here, so this is not a matter for me. Whoever sits in the Chair is rightly guided and protected, as Members are, by those who have gone before us.

Danny Kruger Portrait Danny Kruger (Devizes) (Con)
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On a point of order, Mr Pritchard. First, may I say how well I think you are doing in this very difficult position? I just want to try to take some of the heat out of this. Although I agree fully with what my colleagues have so far said and their points of order, the fact is that a mistake has been made on the part of the Whips Office. I do not understand entirely the procedure by which this happened. Nevertheless, what clearly happened is that by accident—[Interruption.]

None Portrait The Chair
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Order. Will Members please listen? For the first Division, it will be 15 minutes and thereafter 10 minutes. Be aware that as soon as the Minister and shadow Minister are here, we can proceed, so if colleagues want to come and contribute through points of order or through the substantive debate, they should please come back as quickly as possible—[Interruption.] After all of the votes, of course. We are expecting nine.

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Danny Kruger Portrait Danny Kruger
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On a point of order, Mr Pritchard. I apologise for not being back as fast as everybody else. The point I was trying to make before we broke is that it is a great shame that this situation has arisen, and I regret the hard words that have been passed.

Although I agree with the sentiment of my right hon. and hon. Friends that, in a sense, there has been an irregularity in the attempt to withdraw names from the Committee, I understand what the Government are doing. Fundamentally, a mistake was made on the part of the Whips—let us be frank about this—in appointing to the Committee a series of people who, on record, have voted against the Windsor framework, which we are implementing today. I understand that the Whips wanted to change the plan, and I have great respect for my right hon. and hon. Friends who have been appointed to the Committee today, but I do not think it is fair for them to be asked to fulfil the duties of the Committee at such late notice.

My simple suggestion is that, given the mistake that has been made by the Whips on our side and the frankly bad blood that is now in evidence across the Committee Room, it is not appropriate to try to continue. On your part, Mr Pritchard, and on the part of the Front Benchers, surely it should be recognised that the Committee has to be reconstituted, no doubt with Members who are more amenable to the Government than some of us, and to continue on another occasion.

None Portrait The Chair
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I am grateful for that point of order. I remind the hon. Gentleman of my comments earlier about Mr Speaker’s ruling. It is not a one-off. Colleagues may not like it, but Mr Speaker has made his ruling.

As I set out just before the hon. Gentleman joined the Committee again, Standing Order No. 118(5) requires that the Committee debate the motion

“That the committee has considered”

the draft regulations. The Clerk read out the title earlier; I have already called the Minister, and the motion is already in progress. As I said earlier, colleagues, who have clearly been moved to make points of order with such strength, will have other opportunities to raise their concerns with the Government on the Floor of the House about the procedural events, shall we say, of the past few hours.

Silicon Valley Bank

Danny Kruger Excerpts
Monday 13th March 2023

(1 year ago)

Commons Chamber
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Andrew Griffith Portrait Andrew Griffith
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With the greatest of respect to the hon. Lady, the issue here was a subsidiary of a US bank, and I will not be commenting on US policy, interest rates or anything else from this Dispatch Box. The important fact is that we were able to restore the bank to viability and, over a small number of hours and days, to find a successful buyer. We did that because of the strength of the UK regulatory system, and because of the conviction of this Prime Minister and this Chancellor that this is a critical sector, and one of the ways that we will continue to grow the UK economy.

Danny Kruger Portrait Danny Kruger (Devizes) (Con)
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I pay tribute to the exemplary orchestration of all the different stakeholders and decision makers that the Minister led over the weekend. It is helpful to distinguish between decisions taken by the American Government and by ours in respect of this bank. The American taxpayer is guaranteeing the deposits of SVB account holders there; in our case, another bank has bought them and the taxpayer is safe. I pay tribute to the Government for that. I appreciate that the Minister cannot comment on American policy, but in the hypothetical instance of another bank in the UK failing, or another sector getting into trouble, will he give an indication of his thinking on whether the taxpayer would ever need to step in? Will he guarantee that that will not happen?

Andrew Griffith Portrait Andrew Griffith
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I am not going to offer my hon. Friend that guarantee, as that would not be prudent or the right thing to do. I can guarantee that this Government will do everything possible to reconcile the needs of protecting customers, protecting financial stability and protecting the taxpayer. It is of great note that we were able to do that in this transaction, and if such an issue were ever unfortunately to reoccur, all our energy would be devoted to precisely the same ends.

Digital Pound

Danny Kruger Excerpts
Tuesday 7th February 2023

(1 year, 1 month ago)

Commons Chamber
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Danny Kruger Portrait Danny Kruger (Devizes) (Con)
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I have two concerns. The first is on privacy, which other Members have mentioned. The proposal is that the Bank of England can become your bank. The Minister says the currency will be private but not anonymous, but the reality is that in certain circumstances it could be neither. It should be possible for authorities to observe the transactions of any citizen if they have cause to do so. Will he confirm that? My second anxiety is on the implications for cash. Will the money used through this new digital mechanism require cash to be withdrawn from circulation in exact proportion? If not, his proposal to print new money will be a sort of cryptocurrency quantitative easing with inflationary implications. If cash will be withdrawn in proportion as the digital pound is issued, we are talking about the end of cash are we not? Progressively, the digital coin will replace the use of cash.

Andrew Griffith Portrait Andrew Griffith
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I accept that the Command Paper has just been published, but when my hon. Friend has the opportunity, he will be able to look at the detail of the operation of such a scheme, which will reveal that there will be platform intermediaries. People will not have a bank account directly with the Bank of England, except in very narrow circumstances. I understand the concerns, and it is right that we debate the balance between freedoms and our duty to protect citizens from fraud and other things that this House, from time to time, will decide justify the piercing of that veil of privacy.

I want to reassure my hon. Friend on cash. By design, this proposal will not replace cash. From a monetary policy perspective—although that is something, as with all these questions, that Members may respond to during the consultation—it is envisaged that it certainly will not increase money supply, and the one-for-one nature I talked about earlier is important in that regard. To be clear to my hon. Friend, the arbiter of that decision will be individual citizens making the choice as to how they wish to use their money—how they wish to spend it and how they wish to store it.

Caroline Lucas Portrait Caroline Lucas
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This Bill should be a once-in-a-generation opportunity to ensure a rapid, stable, co-ordinated and just transition to a low-carbon economy, to advance financial inclusion and to protect consumers, investors, banks, asset managers and other financial institutions against the catastrophic financial risks associated with climate and nature breakdown. Sadly, I believe that it fails to deliver on all those counts, and many others too.

I have signed a number of new clauses with the aim of improving the Bill, on matters such as free access to cash and better regulation of buy now, pay later credit. I also strongly support the new clauses tabled by the hon. Member for Sheffield, Hallam (Olivia Blake). However, I want to use my speaking time to focus on three new clauses in my name.

New clause 25 goes to the heart of what the Bill is about. It seeks to reposition the objectives of the regulator so that they are consistent with the future that we are facing. It would change the strategic objective so that it is no longer simply about ensuring that the relevant markets function well, but about ensuring that they deliver long-term economic resilience and prosperity. It would also create two new operational objectives. The first is a climate objective to facilitate the meeting of targets set out in the Climate Change Act 2008 and the 1.5°C temperature rise limit of the Paris agreement. The second is a nature objective, to facilitate alignment with the Government’s commitment to halting and reversing biodiversity loss by 2030.

Those changes matter on a great many levels. Most obviously, as the United Nations Secretary-General warned just last month:

“We are in the fight of our lives and we are losing…And our planet is fast approaching tipping points that will make climate chaos irreversible.

We are on a highway to climate hell with our foot on the accelerator.”

We therefore need to deploy every tool at our disposal to the task of creating an economy that reflects this new reality. There is no greater moral imperative, or indeed any greater financial imperative.

The Bank of England’s first climate stress test was published in May. It sought to understand how climate change would affect banks’ business models, and whether they held enough capital to cover climate-related risks. The results were clear: banks need to take climate action immediately, or face a hit to annual profits of up to 15%. If the net zero transition is delayed by a decade and global temperatures reach 1.8°, by 2050 banks will face losses of £225 billion. However, the banks are not alone in being exposed to huge climate risks. Investors, consumers, anyone with a pension, asset managers, savers, mortgage holders and other financial institutions are all threatened.

The Bill should provide an opportunity to meet those challenges and lay the foundations for a secure and stable future-facing economy, but I believe that without my new clauses, it simply does not do that. Leading financial institutions agree, including Aviva Investors, Phoenix, Hargreaves Lansdown and BUPA Insurance. They raised concerns with the Bill Committee, saying that

“the proposed regulatory principle will not provide a sufficiently strong legal basis for regulators to promote a thriving net zero financial sector. It certainly won’t encourage the regulators to ensure that the UK becomes the world’s leading green financial centre.”

Moreover, as it stands, nothing in the Bill acknowledges the crucial role of nature, although the Economic Secretary himself recognised in Committee that we could not achieve our climate goals without recognising and acknowledging that vital role.

New clause 25 would go further and remove the proposed competitiveness and growth operational objective for the FCA. The financial impacts of pursuing a climate-busting competitiveness and “growth at all costs” approach over climate action is clear. For example, it is estimated that the UK will lose 10% of GDP by 2050 if we do not tackle climate change, and that Europe will see a 30% rise in defaults on corporate loans to the most exposed companies. No wonder the Treasury Committee advised against a primary focus on competitiveness, warning that it could lead to weakening standards and a reduction in the UK’s financial resilience, and could undermine the reputation of the UK’s finance sector.

It is worth recalling that Parliament itself deliberately removed competitiveness from the mandate of the financial regulator just a decade ago, learning the lessons from the regulatory failure leading up to the global financial crisis of 2007-08, which saw millions lose their savings, homes, businesses and jobs. With so much at stake, I can think of no good reason why the Government is making such a reckless move, and no good reason why it could not instead support a focus on the creation of a wellbeing economy designed to foster long-term economic resilience and prosperity.

I have also tabled new clause 21, which mandates the introduction of a one-for-one capital requirement for the financing of new fossil fuels. In other words, for each pound that finances fossil fuels, financial institutions should have a pound of their own funds held liable for potential losses. It is a principle that is used elsewhere. In June 2021, for example, the Basel Committee on Banking Supervision—the global standard setter for the regulation of banks—recommended its application to some cryptocurrencies’ exposures. At present, however, the Government are not seizing these opportunities.

Even with no fossil fuel expansion, by 2025 global emissions from existing projects will be 22% too high to stay below 1.5° and 66% too high by 2030—all while the scientific reality makes it clear that fossil fuels assets are uneconomic and financially uncompetitive in a 1.5° or 2° world. Fossil fuel financing increasingly threatens economic stability. It increases the physical risks of climate change, thereby leaving the financial system exposed to significant losses from balance sheets and from environmental damage to the wider economy. That is why these amendments are so important and that is why we should get fossil fuels out of our financial sector now.

Danny Kruger Portrait Danny Kruger (Devizes) (Con)
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I am going to speak briefly to new clause 7 on access to cash, and to new clause 27 on access to banking services. I very much support the Bill and completely commend what the Government are trying to do. It is a source of great pride that they are bringing financial regulation home as one of the great benefits of Brexit. I applaud what they are doing and appreciate all the engagement that Ministers have had with colleagues on the new clauses that I am speaking to.

I understand that there is an intention not to push new clause 27 to a vote, and I intend to abstain on new clause 7 if there is a Division on it, because I look forward to the policy statement that the Government have promised. I support the principle behind both the new clauses. As Members have mentioned, we seem to be moving inevitably towards a cashless society, and we can all see the personal convenience of that. Like the royal family, I personally do not carry cash around. It is only embarrassing when I am in church and the platter comes around. That is pretty much the only occasion when I feel the need for it, but that is not the case for everyone.

For anyone using a digital payments system, the operator of the platform has potentially immense control over their life, in principle and in practice. That is why what PayPal did to the Free Speech Union and others a few months ago is so important. Yes, we can acknowledge that that event was an outlier. It was a rare and slightly inexplicable event and, yes, it was quickly corrected in some of the cases of the accounts that were closed, but the fact is that it happened. It was a straw in the wind, and the fact that individuals and organisations with heterodox political opinions found themselves unable to operate economically because of the decision of a private company acting entirely on its own initiative, possibly under pressure from external campaigns, is a troubling development. So it is vital that we send the strongest regulatory, and also cultural and political, signal to these private payment platforms that the opinions of their customers are none of their business.

Nor are private opinions any business of the state, and this is why the question of access to cash is about more than the important issue of protecting the vulnerable, although I agree with the points that have been made on that. It is also about liberty. Just now, behind the scenes, the Government and the Bank of England are developing plans for their own central bank digital currency. Again, we can see the practical appeal, but the threat is that the Government will have oversight of the economic activity of private citizens, which is something that no Government of this country have ever had in our history. It is therefore vital that the debate on a central bank digital currency has liberty front and centre. We can all say warm words about the importance of safeguards and freedoms, but the fact is that if the emergency is bad enough and the powers are available, those powers could well be used.

We saw this happening around the world, and to some degree in our own country, during the covid crisis. We have only to look at what the Canadian Government did to block access to the bank accounts of truckers protesting against the covid policy there to see what can be done in a modern liberal western country. It would be a shame if we took back control of financial regulation from the EU only to empower private payment platforms, or indeed our own central bank, in that way. Cash services and banking services are part of the infrastructure of our communities. They are also part of the infrastructure of liberty.

Wera Hobhouse Portrait Wera Hobhouse (Bath) (LD)
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I rise to speak in support of new clauses 34 and 35. Both are tabled in my name and deal with the rules and duties of pension schemes and investments.

This Bill could be a unique opportunity to develop the green economy we need by providing the finance required to support our net zero transition. Unfortunately, this Government might again miss the boat. The Bank of England recently warned that UK banks and insurers will end up shouldering nearly £340 billion-worth of climate-related losses by 2050. Such losses will be unrecoverable, so it is cheaper to save the planet than to destroy it.

The World Bank suggests that up to 216 million people could be forced to move within their countries by 2050, but immediate climate action could reduce that by up to 80%. Limiting global warming to 1.5°C instead of 2°C could result in around 42 million fewer people being exposed to extreme heatwaves. We have pensions to provide adequate quality of life after retirement. How absurd it would be if the climate catastrophe meant that there was little quality of life left.

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Andrew Griffith Portrait Andrew Griffith
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He does indeed understand that. We are addressing legal challenges to data sharing in the Economic Crime and Corporate Transparency Bill, which will introduce provisions to protect firms from civil liability. As was discussed earlier, it is important to regulate the online world, which my colleagues in the Department for Digital, Culture, Media and Sport are doing in the Online Safety Bill.

Danny Kruger Portrait Danny Kruger
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Will the Minister give way?

Andrew Griffith Portrait Andrew Griffith
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I will not give way to my hon. Friend this time.

To conclude, financial and related professional services play a crucial role, as we have heard from many speakers. They contribute nearly £100 billion in taxes and, as my right hon. Friend the Member for Chelmsford reminded us, that pays for more than the cost of the salaries of every nurse in this country. The Government have an ambitious programme for an open, outward, sustainable, technologically advanced and internationally competitive sector that will unleash the most opportunities not just for those who work in it, but for communities across the United Kingdom.

Co-operatives, Mutuals and Friendly Societies Bill (First sitting)

Danny Kruger Excerpts
Mark Hendrick Portrait Sir Mark Hendrick
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Good morning, Mr Mundell. It is a pleasure to serve under your chairmanship. I am grateful to you and to Committee members for joining me to look at the detail of the Bill.

Co-operatives, mutual insurers and friendly societies have an important part to play in the biodiversity of our economy. These businesses share their origins in self-help movements that are relevant to the economic and social challenges faced by people today, and they need a business environment that facilitates their activity. I have therefore introduced a Bill to make long overdue changes to the legislation that governs co-operatives and mutuals and to create a more modern and supportive business environment for them to operate in.

Members on both sides of the House agreed on Second Reading that a strong network of co-operative and mutual businesses can play an important role in a diverse and modern economy. Co-operatives and mutuals represent a serious contribution to the UK economy, accounting for more than £133.5 billion of income annually.

The Bill will ensure that Government policy understands and supports the difference of mutual businesses. It will also create legislation that permits co-operatives, mutuals and friendly societies to undertake their business purpose of serving their members’ needs in the best way possible. Crucially, it will give co-operatives and mutuals the opportunity to opt into a framework providing greater safeguards for their assets and more protection against demutualisation.

The Bill does that by proposing simple voluntary legislation that would give every mutual the right to choose a constitution—either at the point of establishment or thereafter, with an appropriate level of member approval—that preserves legacy assets for the purpose for which they were intended. As witnessed in 2021 with Liverpool Victoria, or LV=, mutuals remain a target for asset-stripping demutualisers attracted by legacy assets built up over generations. That is unfortunately incentivised by the legislation governing mutuals and remains a real and present threat to the mutual sector.

The Bill is about giving mutuals the option to maintain mutual capital for the purpose for which it is intended. Legacy assets have been built up over generations of membership and often constitute a significant part of the working capital of the business. Current members typically have not contributed to that capital base, but have enjoyed the benefits of previous years of successful trading. The Bill disincentivises the raiding of legacy assets through legislation. Voluntary legislation will ensure that legacy assets are preserved for the purpose for which they were intended.

The Bill empowers mutual members to decide what should happen to assets on a solvent dissolution. It would match the best legislation that exists in many countries. The Bill achieves that by introducing a voluntary power to enable a mutual to choose a constitutional change so that its legacy assets would be non-distributable; to detail precisely the destination of any capital surplus on a solvent winding-up; to outline the procedures necessary to include such provisions in a mutual’s rules; and to insert a statutory provision for the relevant rules to be unalterable.

The Bill defines the capital surplus as the amount remaining after deducting a mutual’s total liabilities from its total assets, including repayment of members’ capital. The Bill introduces new provisions to maintain the destination of the capital surplus. It ensures that, where a mutual’s rules make the capital surplus non-distributable, any resolution to convert into, amalgamate with or transfer engagements to a company shall also include a provision to transfer the capital surplus, as provided by the rules, in the event of a solvent winding-up.

Danny Kruger Portrait Danny Kruger (Devizes) (Con)
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May I say how much I appreciate the Bill? I am pleased that the Government are supporting it. Does the hon. Member agree that the value of the asset lock he proposes for mutual funds will enable places that have suffered from deindustrialisation and globalisation to have a base of capital with which to build the local economy, and that what he is doing very much supports the wider levelling-up agenda?

Mark Hendrick Portrait Sir Mark Hendrick
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Yes, I totally agree. The Bill is consistent with the levelling-up agenda. It is meant to ensure that the assets remain in place for the purposes for which the asset base was originally intended.

Let me set out the detail of the clauses and the amendments. Amendment 1 addresses an inconsistency in the legal text in clause 1(2)(a), which results from trying to capture the varied range of entities that make up the mutuals sector. As I said, there are co-operatives, mutuals and friendly societies—different types of organisation and company. In its current form, the Bill proposes an asset lock for a purpose that is for the objects of a mutual entity. The purpose of a co-operative is often seen as one that is for the benefit of its members. It could be argued that demutualisation, which involves distributing surplus funds to members, is for the benefit of members. However, given that the Bill aims to reduce incentives for demutualisation, the amendment is needed to close that loophole; otherwise, the ultimate purpose of the Bill risks being defeated. The amendment also ensures that the Bill is sufficiently broad that it is future-proofed and works for the wider mutuals sector.

The other two amendments are technical changes to ensure that the long title reflects the current contents of the Bill—namely, that the purpose of the Bill is to permit the capital surplus of mutual entities to be non-distributable. They leave out the words from “Make provision” to “to permit” and the words “; to amend the Friendly Societies Act 1992”.

I would like to express some disappointment that the overall ambition of my original Bill is not included in this version. In addition to allowing co-operatives, mutuals and friendly societies to safeguard their legacy assets to disincentivise demutualisers, the Bill’s initial proposals addressed some other issues: co-operatives needing the ability to issue perpetual capital to fund investment and growth—that would have meant a new type of share—and mutual insurers and friendly societies needing to be able to issue mutuals’ deferred shares to fund investment and growth without suffering disproportionate tax penalties. I discussed that issue in some detail with Ministers—both the current Minister and the former Minister, the hon. Member for North East Bedfordshire, who is on this Committee. The initial proposals also dealt with friendly societies needing an updated legal framework to facilitate their contribution as modern businesses working to help level up and promote economic prosperity. Friendly societies have not seen their legislation updated for quite some time; that is long overdue.

The Bill does not cover the whole scope of what I wanted it to achieve, but I am extremely pleased that the Government are backing a key aspect of my proposals concerning mutual assets. They have also given assurances that they plan to conduct a wider review of key legislation underpinning the co-operatives, mutuals and friendly societies sector with some firm proposals, instructing the Law Commission to conduct a review as part of that process. That is major progress and a step forward for the sector.

Co-operatives, Mutuals and Friendly Societies Bill

Danny Kruger Excerpts
Friday 28th October 2022

(1 year, 5 months ago)

Commons Chamber
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Danny Kruger Portrait Danny Kruger (Devizes) (Con)
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I am delighted to have the opportunity to speak on this important Bill. I congratulate the hon. Member for Preston (Sir Mark Hendrick), who is, as he said, a member of the Co-operative party. I wish I could be a member of the Co-operative party; I do not see why that should be confined to Labour Members. I would love there to be a Conservative and Co-operative Member, because the Conservative and co-operative tradition is very good and honourable.

The hon. Gentleman mentioned Rochdale, and I have visited the home of the Pioneers. He talked about the existence of predatory mill owners in the 19th century—the sort of capitalists who gave capitalism a bad name and have become caricatures. There was another tradition, of course, of a different sort of mill owner and capitalist, which was the Tory tradition that recognised that labour and capital were not equal in their relations and that labour did need some protections. Part of that was the tradition of the Earl of Shaftesbury and other reformers who legislated to protect workers against outrageous working conditions, but it was also Conservatives who legalised trade unions, mutuals, friendly societies and co-operatives. Disraeli’s Government did that, because they recognised the importance, which my hon. Friend the Member for North East Bedfordshire (Richard Fuller) just mentioned, of enabling people to co-operate, to come together and to bargain together.

Both Labour and the Conservatives have a common heritage in this space, and a common enemy, the Liberal party, which in the 19th century was the party opposing factory reform and the legalisation of trade unions. They do not seem to be here today to discuss this important Bill.

However, I am afraid to say that it is also our two parties, Labour and the Conservatives, who are between them responsible for the sad decline in the 20th century of the co-op and mutual movements. One reason was the creation of the welfare state, which crowded out and effectively abolished many of the friendly societies and mutuals that had provided welfare and mutual support to working people, and I am afraid the other was my party, which in the 1980s and 1990s was responsible for the great demutualisation of building societies. I regret that.

There was a very interesting interview with Maurice Saatchi today in The Times, in which he reflects on what he thinks Margaret Thatcher would think of what has become of her great drive for competition in the finance sector and across industry, with the development of cartels in place of competition. This debate on this important Bill is an opportunity to remind ourselves of a different Conservative tradition, where we support these other forms of capital and enterprise.

Social enterprises are part of this, and community-owned businesses play a crucial role in our society. I put on record my appreciation for the social enterprise movement in this country, supported in its development, in many cases, by mutuals and friendly societies. Social enterprises and community-owned businesses are responsible for job creation in areas of deprivation, the jobs last and they provide the crucial spirit of enterprise and innovation that our left-behind areas need. There is an important role for social enterprise.

Also in pride of place, I am pleased to see my hon. Friend the Member for Bury North (James Daly). His role in saving Bury Football Club from liquidation in recent years is commendable, and that happened because of the efforts of people in Bury to form a new co-operative structure to take over the ownership of that football club that enabled it to be saved—as well as the role of the Government, of course, in providing capital for that and subsequently in the creation of the community ownership fund, inspired by what happened to Bury FC, which businesses in my constituency and across the country have benefited from.

I must briefly mention the role of mutual finance: there is a tremendous new bank being developed called Avon Mutual, serving the west of England. It is a modern, 21st-century mutual bank. I also place on record my delight that my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake)—he is not here today; presumably he is taking up a role in his new office—has been appointed to the Business Department. He is a great champion of the mutual tradition—[Interruption.] There he is. I thought I was praising him behind his back, but he is here to listen. I am very pleased that he has that role, because he is a tremendous champion of the importance of regional banks in supporting local economies, and I hope that is something he will take up in his new role.

I welcome the Bill, particularly the role it will play in creating an asset lock for mutuals. That is a crucial point, and an important lesson for those of us who believe in capitalism and the importance of free enterprise: not all capital is fungible. It is not appropriate to allow all capital to be blown to the four winds at the whim of speculators and investors. It is important sometimes to lock capital in the places where it belongs, for the benefit of the people it was invested for.

Oral Answers to Questions

Danny Kruger Excerpts
Tuesday 1st February 2022

(2 years, 1 month ago)

Commons Chamber
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Tom Randall Portrait Tom Randall (Gedling) (Con)
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11. What assessment he has made of the progress of the kickstart scheme.

Danny Kruger Portrait Danny Kruger (Devizes) (Con)
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16. What assessment he has made of the progress of the kickstart scheme.

Simon Clarke Portrait The Chief Secretary to the Treasury (Mr Simon Clarke)
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We know that young people have been disproportionately affected by the pandemic. I am delighted that, to date, more than 122,000 kickstart jobs have been started by young people across Great Britain, including in the constituency of my hon. Friend the Member for Gedling (Tom Randall). Youth unemployment fell by 11.1% in the three months to November 2021 and is lower than it was prior to the pandemic, and in December there were half a million more employees aged under 25 than in December 2020.

Simon Clarke Portrait Mr Clarke
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I completely agree with my hon. Friend. Kickstart is delivering valuable jobs and work experience to young jobseekers at risk of long-term unemployment. Although kickstart closed to new applications on 17 December, we are genuinely delighted at the response from employers. As I noted, more than 122,000 kickstart jobs have been started so far, and we expect more between now and the end of March. Employers should continue to engage with Department for Work and Pensions jobcentres and support the new way to work campaign to get more people into work.

Danny Kruger Portrait Danny Kruger
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In my constituency, 130 new jobs for young people have been created. A group of young people started this week at Ball Aerocan in my constituency. The company is very pleased with the scheme and the young people it found but said it took a little while to get through the system. What can the Government do to encourage businesses to make use of the scheme before it ends in March?

Simon Clarke Portrait Mr Clarke
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My hon. Friend is absolutely right that we want to encourage maximum uptake. Kickstart is only one part of the comprehensive package of support available to young people and, following the closure of this scheme, young jobseekers will still be able to benefit from the DWP’s wider youth offer, while work coaches across the country are working to support young people into jobs.

Household Energy Bills: VAT

Danny Kruger Excerpts
Tuesday 11th January 2022

(2 years, 2 months ago)

Commons Chamber
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Danny Kruger Portrait Danny Kruger (Devizes) (Con)
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Real pressures on the cost of living are obviously coming down the track. I recognise that, and I also note the work that the Government have done and are doing to address it. It is worth noting in passing the contributions made by Treasury Ministers in the last year: reducing the universal credit taper rate and putting £1,000 in the budgets of 2 million low-income families, increasing the national living wage by more than 6.5%, freezing fuel duty for the 12th year in a row, and introducing the housing support fund for lower-income families. However, more clearly needs to be done. The debate has been helpful in identifying some of the options that are open to the Government, including the possibility of a cut in VAT on energy. I note that the Chancellor is considering that option among many others. However, it is worth observing that a cut in VAT on household fuel would disproportionately benefit those with larger homes. I think it is right for the Government to consider it as part of a suite of possible interventions and measures to support families during the current energy price spike.

There is one option that I have not heard mentioned today, although according to news reports last year it was probably being considered then. I refer to the policy of what is called a carbon fee and dividend. The fundamental challenge that we face, given our net zero commitments, is to reduce carbon emissions without hurting low-income families and the economy more generally. One way of doing that is to ensure that as we tax carbon emissions—as we bear down on carbon using fiscal levers—the income that is generated for the Treasury is reallocated directly to families, and to low-income families in particular, in the form of a carbon dividend or climate income, as it is sometimes called. Other countries have been experimenting with this. I accept that it is quite a statist solution and one that might not come naturally to Conservative Members, but I think it is worth considering the option of enabling the income from carbon taxation to go directly to low-income families.

Finally, let me make a point that I think must be made in every speech from the Government Benches. It is very wrong and very regrettable that the Opposition are using the opportunity of a debate on this important matter to propose taking over the Order Paper. I was a spectator in the last Parliament, but I saw very clearly during that terrible time a paralysed Parliament, a Government unable to govern, and the public looking on in bewilderment as their representatives serially failed them and betrayed the promises that they had made in their manifestos—

Nigel Evans Portrait Mr Deputy Speaker (Mr Nigel Evans)
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Order. We must leave it there.

Dormant Assets Bill [Lords]

Danny Kruger Excerpts
Rachael Maskell Portrait Rachael Maskell (York Central) (Lab/Co-op)
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In 2008, Labour set out a new principle in the House: to put dormant assets from bank and building society accounts to work, first by trying to reunite owners with their accounts but then, when connections failed to materialise, by moving assets to address social and environmental good causes. Labour’s vision has since released nearly £8 million to infrastructure bodies which, in turn, have multiplied the investment and expanded the work of civil society. I continue to argue that the pounds spent by civil society organisations stretch much further than those spent elsewhere in the economy.

This is a success to celebrate, but the last two years have been tough. As the sector's campaign slogan in response to the pandemic says, charities have been “#NeverMoreNeeded”. Demand went up and funding down as shops were shut and fundraising dried up. That is why this legislation is really “never more needed”, but it also furthers Labour’s ambition to introduce other assets into the reclaim fund, now that the principle has been established and the scheme has proved successful.

The three-year review should have taken place a decade ago, and the legislation before us today should have already released millions of pounds. If it had, the sector might have survived the last two years more securely rather than ending up where it is today. Today we are urging the Government to press on while also ensuring that the Bill is in good shape.

Charities have been tested throughout the last decade as the state failed to give the sector the back-up that it needed. Charities and Labour have shared values and a shared sense of purpose. We want to do all we can to transform our society, and that is why we value charities so highly. Bursting with dedication and expertise, civil society really is the heartbeat of all our communities.

Danny Kruger Portrait Danny Kruger (Devizes) (Con)
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Does the hon. Lady acknowledge that the Government put more than £150 million into the charity sector last year, and does she think that that was welcome, not enough or too much?

Rachael Maskell Portrait Rachael Maskell
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As I was going on to say, that money reached only 14,000 charities out of 169,000. As we see demand spiralling, we are seeing charities struggling. The Government could have been far more generous, as they have been to many other sectors during the pandemic.

Every organisation has had to reinvent itself, digging deeper into its reserves, borrowing where possible, and appealing to the ever-generous public for help. We saw charities and mutual aid groups spring up in every corner of every community. Where the state stopped, charities took their service ever more deeply into our communities. That is why this legislation really matters, and why Labour will support its passage through the Commons today. It arrives in a better state thanks to the extensive work undertaken in the other place, and I particularly thank Lord Bassam of Brighton for his skilful handling of it, to help it to reflect the priorities of civil society.

In looking at the detail of the Bill, we are pleased to see that the principles that Labour set out in 2008 remain, including that of reuniting assets with their owners through extensive tracing processes and ensuring that the owner will always be able to claim the value of their asset in full if they seek to do so. The principle of this being a voluntary scheme will remain, whereby participants can opt in, and I encourage everyone to do so. When dormant assets have been through thorough tracing processes, the asset then transfers to the reclaim fund, which is responsible for any reclaim that might occur, moving surplus into the hands of identified organisations. Labour is most grateful to Big Society Capital, Access, the Youth Futures Foundation and Fair4All Finance for the way in which they have multiplied the value of these assets and invested them wisely to help people in our communities. Likewise, we are grateful to organisations in the devolved countries.

Part 1 of the Bill expands the opportunity for the inclusion of other financial dormant assets. The consultations to get to this point have been thorough, and each new product carries its own racing mechanisms and timescales to reduce risk. We welcome the inclusion of all the named assets, but I want to press the Minister further on pension schemes. While there is some inclusion, I know that he is making the case that until the pensions dashboard has been thoroughly tested, he is reluctant to expand in this area. I appreciate that there has been significant delay in the introduction of the dashboard, which has caused the Government significant embarrassment. This delay is denying good causes the assets that they want to put to work.

Perhaps the Minister could set out a timeline for further widening the scheme to these kinds of products. It would be good to hear from him what other assets he is considering for later inclusion, whether they are direct cash or non-cash assets. Charities cannot wait to benefit, and nor can the public. The powerful testimonies from current beneficiaries demand that the Government seek to expand. I know that the Second Reading of the Bill in the other place raised many helpful suggestions as to how that could happen. Wherever funds can be identified, Labour wants to see them put to work for social and environmental good causes.

Part 2 of the Bill focuses on a number of themes, the first of which is the reclaim fund. Moving it under the auspices of the Treasury is a positive move, placing it independently but with lines into the Treasury. However, it is Labour’s consideration that, 13 years since the scheme’s passage through this place, it should be reviewed. Each reclaim product should be assessed separately according to the levels of real risk to the reclaim fund. If data from the first phase is observed, the scheme could be more generous in its support to beneficiaries. The sector agrees with that. A regular review would also help to identify any risk in the scheme. The Government will now be responsible for underwriting any deficit that might occur with a loan to the scheme, but it is far better to avoid such risk in the first place. My broader question is therefore: is the balance right?

Before I address the matter of where the money is spent, I also want to raise the question of the next stage of the Bill. After such detailed consultation over many years, we need to ensure that there is no further significant delay in preparing and instituting secondary legislation. Labour wants to see this process commence on the heels of this legislation, for it to be thorough and allow sufficient time for response and for it then to be expedited through secondary legislation.

I am most grateful for the addition of clause 29 to this legislation. It was added on Report in the other place and it highlights a deficiency in the distribution of the reclaim fund. That is impeding civil society from thriving across many communities and impeding the social levelling-up agenda. Imagine doing a jigsaw and finding one piece missing: it mars the whole picture. The reconstruction of civil society is the same. All the schemes need to be in place, but the exemption of the community wealth fund has meant that whole swathes of communities have been robbed of the opportunity to build the very partnerships that could tackle the deepest of challenges.

In my own constituency, we have a thriving and growing voluntary sector under the superb leadership of York CVS. However, we have areas of real deep entrenched deprivation. Tang Hall Big Local, a local trust, has now developed micro-level infrastructure to start tackling social injustice in the Tang Hall area. It is utterly amazing to see the multi-agency approach and the multiple offers, alongside community engagement—225 such areas have been mapped out.

Imagine areas where there is no thriving CVS or a well-developed civil society sector, on which the new integrated care systems in the Health and Care Bill depend. Imagine this loss in the most deprived and challenged areas, as they often are. The amazing things that charities do just would not happen; the vital partnerships and social infrastructure would not be built. This is at the core of what the community wealth fund does. It empowers communities to develop the partnerships needed to transform themselves. Its inclusion will mean greater equality, which is surely what levelling up is all about.

That is why the inclusion of the community wealth fund in the Bill to build social infrastructure is so vital. The principles of the Bill and the 2008 Act are too broad to provide such a framework without clause 29, and the principle needs to be framed in primary legislation. Without it the funds could go elsewhere and will not meet the ambition that I trust the Government share with Labour.

The Government do not need further pilots, as there are 150 projects at various stages of development. Those projects have been evaluated and will continue to prove their value. When it comes to the civil society sector, the Government always seem to have the knack of overcomplicating things and missing the opportunity it presents. If they really wanted to build back better, they would have poured investment into community wealth funds and seized this moment to bring about social transformation. That is why Labour has pushed so hard so see it included in the Bill, and the Lords supported it. I trust for the sake of its impact that the Government will not lose the opportunity to reaffirm the principle of a community wealth fund in primary legislation to complete that picture.

In closing, I put on the record my thanks to the thousands of organisations that have shown their support for taking the reclaim fund forward, and to the participants in the dormant assets scheme to date for their co-operation and engagement. Across our communities, staff and volunteers are building civil society, fighting inequality and injustice, and supporting people with every need. Their contribution is outstanding and their support is utterly amazing. It gives us all such pride to reflect on all they do. Putting money to good work for them to multiply its benefits has always been a principle that Labour has advanced, and we will again throughout the passage of this Bill.

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Danny Kruger Portrait Danny Kruger (Devizes) (Con)
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The whole programme of dormant assets and the social investment that it has mobilised has been a great success story. I pay tribute to Sir Harvey McGrath, the outgoing chairman of Big Society Capital, and to his team; and also to Nick Hurd, formerly of this place, who chairs the Access foundation, his colleague Seb Elsworth, and others there. They have done an absolutely tremendous job. Mobilising £8 billion of private money for £800 million of dormant assets is not bad.

I recognise the points made by my hon. Friend the Member for Grantham and Stamford (Gareth Davies). The fact is that some programmes do fail. The whole point of investment is that they do not always work. We have to keep an eye on the overall returns that funds like this generate. However, there are some tremendous success stories, including in social outcome contracts. I declare an interest regarding the one I founded—the West London Zone for Children and Young People, which has leveraged public money through social outcome contracts very successfully, bringing in significant private investment and delivering great outcomes for young people.

I recognise that, as the hon. Member for Bethnal Green and Bow (Rushanara Ali) said, it is not appropriate for us, as MPs or Ministers, to be dictating the objects for these sorts of funds. Nevertheless, I hope she will not mind if I make some suggestions of the sorts of projects that would be useful for this. My hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) is absolutely right that there is a massive gap in our finance sector in this country where we need small regional banks lending particularly to family businesses. That is absolutely crucial. If this money could support that, I would absolutely welcome it.

Then there is the opportunity for investment in personal debt projects. I particularly reference the suggestion by Fair4All Finance of creating a jubilee debt fund to tackle problem debt. We could do that. Community foundations and existing charities can and should be used as objects for significant capital injections. They distribute money very effectively to small local charities and causes.

Finally, there is the idea of a community wealth fund mentioned by the hon. Member for York Central (Rachael Maskell). I absolutely agree with her suggestion. I pay tribute to Matt Leach and Margaret Bolton of Local Trust, who seem to have got those on both sides of this House pretty much in their pocket when it comes to lobbying for this brilliant idea, which I endorse too. A community wealth fund could do all the things that we are describing to get money to all these projects, whether commercial, charitable or social enterprise. That is the sort of economy we need— a mixed economy that includes all these different and great innovations.

None Portrait Several hon. Members rose—
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