Energy (Oil and Gas) Profits

Darren Jones Excerpts

Tuesday 5th July 2022 Commons Chamber

[The Financial Secretary to the Treasury (Lucy Frazer)]

I beg to move,

That provision may be made for, and in connection with, imposing a charge on ring fence profits of companies (within the meaning of Part 8 of the Corporation Tax Act 2010).

This Bill deals with the taxation of extraordinary profits in the oil and gas sector, but it is important to remember that its effect is to allow us to focus on supporting families up and down the country at this difficult economic time. The Bill will help us to raise revenues and support families while continuing to encourage investment in North sea oil and gas.

[Darren Jones (Bristol North West) (Lab)]

I wonder whether the Treasury has made any assessment yet of how much money will be raised by this windfall tax, given the debt that will need to be taken on as a result of the tax cut for those drilling for fossil fuels. Is there an estimate of how much the Minister intends to raise by these means?

[Lucy Frazer]

The estimate of the amount that the measure will raise is £5 billion over the course of the first year. I start by highlighting the context for our introducing the Bill. The oil and gas sector is making extraordinary profits. Those profits are not the result of recent changes to risk-taking, innovation or efficiencies; they are the result of surging global commodity prices, driven in part by Russia’s war. The profits are over and above what analysts and businesses in the sector could have expected to earn. Indeed, since early last year, oil prices have nearly doubled and gas prices have more than doubled. The Bill is being introduced at a time when many of our constituents are struggling with the cost of living, and at a time when we have said that the Government will support the most vulnerable and the least well off in getting the support that they need.

I would like to touch on how the Bill ensures that we tax extraordinary profits fairly while incentivising investment. To do that, we are introducing the energy profits levy, a new 25% surcharge on the extraordinary profits that the oil and gas sector is making. At the same time, the new 80% investment allowance will mean that businesses will, overall, get a 91p tax saving for every £1 they invest. This provides them with an additional immediate incentive to invest. That nearly doubles the tax relief available and means that the more investment a firm makes, the less they will pay. As set out in the energy security strategy, the north will still be a foundation of our energy security, so it is right that we continue to encourage investment in oil and gas. The Government expect the energy profits levy, with the investment allowance, to lead to an overall increase in investment.

I want to make clear what the investment allowance will apply to. First, the allowance will be calculated in the same way as the investment allowance for the existing supplementary charge. Therefore, if capital or operating expenditure qualifies for the supplementary charge allowance, it will qualify for the energy profits levy allowance, but unlike the supplementary charge, it will be available to companies at the point of investment. This makes it both more immediate and more generous. As the levy is targeted at the extraordinary profits from oil and gas upstream activities, it makes sense that any relief for investment must also be related to oil and gas upstream activities. Such spending can be used to decarbonise oil and gas production—for example, through electrification—so any capital expenditure on electrification, as long as it relates to specific oil activities within the ringfence, will qualify for the allowance. Examples of activity that may be carried out for specific oil activities include expenditure on plant and machinery such as generators, which includes wind turbines, transformers and wiring.

We have also been listening closely to feedback from industry. We published draft legislation for the Bill on 21 June to seek technical feedback. Two weeks ago, the former Chancellor met industry stakeholders in Aberdeen to discuss the levy—not just to communicate the aims of the levy and how it will fund vital support for families, but to ensure that the levy works as the Government intended. That is why I can confirm that the Government are making a change to the legislation. I confirm that tax repayments that oil and gas companies received for petroleum revenue tax related to losses generated by decommissioning expenditure will not be taxed under the levy. Since wider decommissioning expenditure is also left out of account for the levy, that change is consistent and fair. We are very grateful for the engagement that we have had with industry on the matter. When the Bill is published, this will be made clear. To reassure the House, with this change, the Government still expect the levy to raise about £5 billion over the next year.

Finally, let me turn to how long the levy will be in place. It will take effect from 26 May this year and it will be phased out when oil and gas prices return to historically more normal levels. A sunset clause will also be written into the legislation so that, by the end of 2025, the levy will automatically cease to be in place. The energy profits levy is temporary, with a set lifespan that raises about £5 billion revenue over the next year, so that we can help families with the cost of living in the shape of significant, targeted support to millions of the most vulnerable.

Delivery of Public Services

Darren Jones Excerpts

Tuesday 28th June 2022 Commons Chamber

[Darren Jones (Bristol North West) (Lab)]

We pay taxes for the Government to run our public services, and many of my constituents are asking: what is the point? From driving licences, to passports, to immigration decisions, to dental appointments, to ambulances, to GP and hospital appointments, backlog Britain is a daily reality for so many people across the country. If Ministers were running these public services as private companies, they would all be bankrupt—and what is their response? It is to charge us more by putting up our taxes while cutting the number of frontline civil service staff providing those services. How Ministers can think that cutting staff and putting up the cost is the answer to backlog Britain, I do not know.

Ministers have said, and will continue to say, that they must take these measures—putting up taxes and cutting staff—because of the economic situation. But after 12 years of Conservative economic mismanagement, they have only themselves to blame. After 12 years of economic mismanagement, the national public debt has increased by billions, from only 60% of national wealth in 2010 when Labour left office, to 80% before covid struck, to now being nearly 100%—all under the Conservatives’ watch. After 12 years of economic mismanagement and repeated tax rises, tax revenue is projected to hit 35% of national wealth by 2025-26, which is the highest sustained level of taxation since the second world war. After 12 years of economic mismanagement, our economy has gone from flatlining to declining. Britain is becoming less competitive, less productive and less wealthy thanks to the Conservatives’ economic mismanagement.

Now more than ever, with the cost of living crisis affecting so many, the public want to know that their taxes are being spent well. Yet this Government’s disregard for public services is self-evident. Many of my constituents in Bristol North West have written to me over the past few months about the problems they have experienced at the Passport Office, which is just one example of a service in the reality of backlog Britain. All of them are desperate after weeks and months of delay. One was left waiting for nearly six months for their passport to be renewed, with their long-planned holiday in jeopardy and their formal complaints left unanswered. Another had their passport lost by the Passport Office for months, with the result that they were unable to travel to visit a sick relative. A third, also with their passport inexplicably lost, was unable to attend a relative’s funeral despite weeks and weeks of chasing.

I say to the public that they should keep a close eye on this lot in government, because rather than outlining how the Government will fix the problems, the Prime Minister’s response to backlogs at the Passport Office was to threaten the service with privatisation. Year after year, cut after cut, I worry that our schools and hospitals could suffer the same fate. We are an ageing population, and the British people will need to rely on our national health service and social care more in the future, yet right now our health service is struggling to cope.

A constituent recently wrote to me to share their experiences of needing an ambulance during an emergency. They reported that they had to wait for as long as 12 hours for an ambulance to arrive after first calling 999. They explained how they now worry about dying alone in the future. Another explained that they were forced to wait for two months, rather than the expected two weeks, for an urgent cancer referral to specialists. If we want Britain to be competitive in this globalised world, our young and working people need to receive the best education and healthcare available. However, because the Conservatives have left the economy smaller, poorer and more indebted, we will have less money to pay for those public services. Bit by bit, those who can afford to use private services, whether dentists, GPs, care homes or private tutors, will have no choice but to do so—many already do.

I have spoken before in this House about the breadth of problems my constituents have encountered in trying to access NHS dental services, which, in my view, have largely been privatised already by the back door. Constituents tell me that waiting times are getting worse and worse, and that the Government fail to intervene. Next, I am sure that the Conservatives will encourage those who can afford it to go private, leaving underfunded public services for those who cannot. Before long, our public services will be changed forever, with only those families able to afford to pay for the best from the private sector able to get the support they deserve.

[Alex Sobel (Leeds North West) (Lab/Co-op)]

My hon. Friend is making an excellent speech, including on privatisation, but there is another point, which is that the poorest in our society pay the most for services. They pay the most for banking services, and they pay the most for energy through prepaid meters and other things. We have a further widening, not just of incomes, but of costs to the poorest in society, pushing them further and further away from being able to live decent lives above the breadline. Is that not a broader effect of what is going on?

[Darren Jones]

My hon. Friend is right, and it is for the Government to do something about it. What is the point of having a Government or paying taxes if the Government stand by and say, “Oh well, this is just something that we cannot really affect”? Inequality is growing and it is now impossible for people to make themselves wealthy in our country without inheriting wealth. These issues are getting worse and worse, and the Conservative Government think it should just be left to the market and that the Government have no role to play.

In the backlog Britain that exists in reality today, whether that is passport services or elsewhere, Ministers sit by. They blame anyone else they can think of and threaten public services without taking any responsibility for their role as Ministers of the Crown. It is their job to fix these issues. Why are they not doing so? Until I see the Conservatives get a grip of the economy—[Interruption.] The Chief Secretary to the Treasury and the Minister for Security and Borders are chuntering, but they are welcome to intervene.

[James Daly]

Does the hon. Gentleman make the same points to the Welsh Government regarding their appalling NHS waiting times?

[Darren Jones]

I am a Member for Bristol, but I point out that the Conservative and Unionist party ought to take some responsibility from here about what is happening across the country and the Union. Once again, however, its Members deflect responsibility and distract the public from the real cause of our problems, which is 12 years of Conservative economic mismanagement.

The facts may be uncomfortable, and Ministers may chunter, but they come from the Office for Budget Responsibility and the national statistician. Ministers have no answer to that evidence of the Government’s economic mismanagement of the last 12 years—they merely deflect and blame others. Until I see a Government who are ready to get a grip of the economy, with a plan to make Britain stronger, more successful and more sustainable, with the energy to not just survive until the next vote of no confidence, but invest in and modernise our public services, I have little hope that we will move away from the Conservative legacy of the high-tax, low-growth backlog Britain that we live in today.

[Paul Holmes (Eastleigh) (Con)]

I rise to speak against the motion in the name of the Leader of the Opposition. I feel a sense of déjà vu, because I spoke in an Opposition debate last week on a similar motion. Once again, Opposition Members criticise and talk Britain down, but offer nothing constructive to deal with the problems that the country faces, having been impacted by the unprecedented pandemic and a global economic situation. They are also transparent in not attacking their own politicians who have power in this country, who face and acknowledge the same problem that we are talking about.

I maintain that it is only because of our actions since 2010 when the Conservatives took power that we could spend the money that we needed to insulate ourselves and our public services from the pandemic. We had to do that because Labour bankrupted the country in 2010, and our responsible approach from 2010 to 2018 allowed us to protect the services that we needed to protect and spend the money on them and vulnerable people throughout the pandemic.

The hon. Member for Bristol North West (Darren Jones) talked about this country’s indebtedness. I agree that this country is in a large amount of debt, but I remind him that in his constituency, people were kept in employment and businesses were kept in business because of the furlough scheme that the Government created. Does he think that should not have gone ahead?

[Darren Jones]

As I said in my speech, the national debt level had reached 80% of national wealth before the pandemic. How did that happen?

[Paul Holmes]

It happened partly because we were investing in services. The hon. Gentleman said in his speech that the Government were woefully in debt. I take it, then, that he did not back the action that we had to take during the unprecedented pandemic and global situation to protect his constituents and the businesses in his constituency. The people out there will take what they need to from his speech.

The action that I have outlined led us to have 7.5% of economic growth in 2021, which was the largest increase in economic growth anywhere in the G7. That has now stalled, but that is because of the global situation in which we find ourselves. Let us remember that if the Opposition had been in charge, we would have come out of the pandemic more slowly, because they wanted to keep us in lockdown. We would have had a slower vaccine rollout—this Government spent the money necessary to get the vaccines onboard—and lower economic growth. Opposition Members now have the cheek to absent themselves from acknowledging the pandemic and the global situation. Once again, they present a vision full of hindsight that is lacking in any reality whatsoever.

--- Later in debate ---

[The Minister for Security and Borders (Damian Hinds)]

The Government absolutely recognise the difficulties that families across the country are facing. It is a concerning time, and that is why we are taking concerted and wide-ranging action, the details of which I will come on to highlight, to ensure that people and businesses get the support that they need.

Countries around the world are seeing slowing growth and higher inflation, and I am afraid the UK is simply not immune. This month’s OECD economic outlook says:

“The world is paying a heavy price for Russia’s war in Ukraine. It is a humanitarian disaster, killing thousands and forcing millions from their homes. The war has also triggered a cost-of-living crisis, affecting people worldwide. When coupled with China’s zero-COVID policy, the war has set the global economy on a course of slower growth and rising inflation”.

Our priority is ensuring people get the support and help they need, continuing our responsible economic management and helping people to stay in jobs.

It is important to note what has happened in the labour market. Economists had projected that unemployment would peak during covid at somewhere close to 12%. In the event, it peaked at 5.2% and is now down below 4%. The unemployment rate is now close to historic lows, and youth unemployment is at near record lows, at nearly half the rate during the same period of 2010. Redundancies are at the lowest level since records began in the mid-1990s. Total real wages are 3% above pre-pandemic levels.

We must never forget that by far the most important thing for living standards, for fighting poverty and for the dignity of families throughout the country is having a job, and it was the decisive action of this Government that kept so many people in jobs through the pandemic. The furlough scheme and the self-employment income support scheme, which together went to an estimated 14.7 million people, helped to protect jobs, businesses and livelihoods. Some £100 billion of loans and grants were made available to support businesses of all sizes. And now, as we find ourselves in another global phenomenon, the Government are rightly stepping up once again.

We understand just how hard the rising cost of living is for families across the UK, and we are taking significant steps to ease these pressures. Central to that effort is the £37 billion to help households, especially those most in need, with the cost of living. We know that the best approach to managing pressures in the long term is helping people into work, supporting them to increase their income and helping them to keep more of what they earn, hence the reforms to universal credit and the taper rate, the increased national living wage and the higher national insurance thresholds.

This has been an important debate, with good contributions from both sides of the House, and I thank everyone who has contributed. I thank the Opposition spokespeople, the right hon. Members for Wolverhampton South East (Mr McFadden) and for Dundee East (Stewart Hosie) and the hon. Member for Aberavon (Stephen Kinnock), and I thank the hon. Members for Bristol North West (Darren Jones), for Stirling (Alyn Smith), for Birmingham, Hall Green (Tahir Ali), for Reading East (Matt Rodda), for Coatbridge, Chryston and Bellshill (Steven Bonnar), for Ellesmere Port and Neston (Justin Madders) and for Motherwell and Wishaw (Marion Fellows).

I also thank my Conservative colleagues. My hon. Friend the Member for Bexhill and Battle (Huw Merriman), with his Treasury Committee background, spoke with great authority and knowledge. He acknowledged some of the changes we have made to help the travel trade, to which I will return in a moment, and he reminded us of the lesson of history on wage price spirals and the ultimate importance of driving productivity to make sustainable rises in real wages.

My hon. Friend the Member for Eastleigh (Paul Holmes), in a very perceptive speech, noted the repetition we sometimes hear from Opposition Members, who do not always match it by voting with us to support investment in our key public services. He rightly said that every Member should acknowledge the problems we face and should work together on the issues, and I strongly agree.

My hon. Friend the Member for Bury North (James Daly), in a similar vein, pointed out some of the issues facing both the Welsh Government and the Westminster Government, including on the national health service.

My hon. Friend the Member for Southend West (Anna Firth) spoke of the great success of the vaccine programme. She rightly spoke with great respect of national health service clinicians and staff in her constituency, and she covered some of the innovation they are driving in Southend.

My hon. Friend the Member for Peterborough (Paul Bristow) spoke of the importance of employment, and I echo and wholeheartedly agree with what he said about the hard work of staff at Her Majesty’s Passport Office, particularly in his constituency.

Let me turn to some issues that came up a number of times, starting with passports. We discussed the subject of passports across these Dispatch Boxes during an Opposition day debate two weeks ago. On that occasion, hon. Members may recall my acknowledging that although 98.5% of UK passport applications are being processed in 10 weeks, some of our constituents have clearly not received the level of service that they rightly expect. It is incumbent on us to do everything we can to address that.

To give some background, in a normal year before covid, some 7 million people would apply for a passport. During the period of covid, that number came right down. The projection is that 9.5 million people will apply for a passport this year, which is an unprecedented rate of year-on-year growth. The hard-working staff in HM Passport Office really have stepped up to the plate. In March, April and May, around 3 million applications were processed. I acknowledge, absolutely, that there have been difficulties with specific cases. The hon. Member for Motherwell and Wishaw spoke with compassion about a particularly compelling case. If she comes to me after the debate, I will make sure that she is put in touch with a Minister to discuss that further.

When I spoke about this two weeks ago, I said that on the most recent reporting, 650 additional staff had been added to HM Passport Office since April 2021. That figure, on the most recent statistics, is now up to 850, with the recruitment of a further 350 staff in train. Suppliers and contractors have also increased their resourcing and we have added a further service desk and added capability on couriering. The service has continued to improve, and more passport applications are being processed now than ever before.

[Darren Jones]

Will the Minister confirm whether civil service cuts will apply to the Passport Office after that period of recruitment?

[Damian Hinds]

It would be quite wrong for Ministers to stand at the Dispatch Box and give analyses of and running commentaries on what is a sensible and important exercise to go through—[Interruption.] Well, it is. We have just been through two enormous events—leaving the European Union and the coronavirus pandemic—which have involved all manner of changes in how the civil service operates, some of which are temporary, whereas some are more sustained. Meanwhile, there have been opportunities, as there always are, to look afresh at how we do things. It is right for Government to do that on behalf of our taxpayers and all our electors, to whom we have a duty to spend taxpayers’ money as efficiently and effectively as we can.

Let me turn to airports, which a number of colleagues spoke about, and particularly my hon. Friend the Member for Bexhill and Battle. There has been a sharp increase in passenger demand after a very suppressed period. That has put considerable pressure on the aviation sector, resulting in some passengers experiencing unacceptable delays and, in some instances, airlines cancelling flights. As Members on both sides of the House have noted, we have seen some of these effects in other countries, including members of the European Union.

A number of operational challenges have contributed to the situation, including staff shortages, crew availability and issues relating, in some cases, to covid restrictions still being in place in other countries. Although the private sector—the aviation industry—is responsible for resourcing airports and airlines, we rightly work with that important sector, which supports a lot of jobs and prosperity, sustains business travel, brings tourists to this country and generates a lot of export earnings. We have worked with the sector to support it in a number of ways.

On 29 April, we laid a statutory instrument to make use of our new Brexit powers to allow Ministers greater flexibility over regulation. That allowed for temporary changes to permit certain training to be undertaken while background checks are completed, helping to speed up recruitment but without a change in security assurance. Having listened carefully to the industry, we were also able to agree that HMRC employment history letters could be used for a time as a suitable form of reference check, with safeguards, to reduce the time that recruiting takes.

On the inbound side, which is an area of Home Office responsibility, Border Force is working to a projection that demand will go back to pre-pandemic levels and is staffing accordingly. Our collective focus must be on ensuring that people can get away for business travel, to help to create prosperity, and for their well-earned summer breaks, on time and as hassle-free as possible.

On driving licences, let me first say that if the right hon. Member for Dundee East comes to me with the case that he mentioned of the community mental health nurse in his constituency, I will make sure that a conversation takes place with the appropriate Minister. More than seven in 10 people apply online for driving licences; there are no delays in those applications. The Driver and Vehicle Licensing Agency is also back to normal times for vehicle registrations and non-medical driving licence paper applications. The remaining area in which more improvement is needed is applications from those with a medical condition. As colleagues may know, that part of the operation was hit by industrial action, but it is anticipated that it, too, will be back to normal timings by September. In the meantime, the DVLA continues to recruit more staff and utilise overtime to reduce medical application delays, and has opened further customer service centres in Swansea and Birmingham.

On the national health service, it is true that following the disruption of covid, the elective waiting list has grown in England, in Wales and across the United Kingdom, as it has grown in other countries. I place on record my enormous appreciation, gratitude and admiration for everybody who works in our national health service: their contribution throughout the pandemic has been absolutely exceptional. GP appointment numbers have now recovered to pre-pandemic levels; as of April, there were 1.26 million GP appointments per average working day. The Government plan to spend more than £8 billion to support the NHS to provide the elective care that was delayed by the pandemic. With the additional £1 billion that we announced for the second half of 2021-22, that could fund the equivalent of approximately 9 million more checks, scans and procedures.

There is no doubt that these are difficult times. Covid-19 was a major, indeed unprecedented, time in global history. The war in Ukraine is devastating for the people of Ukraine, and the economic shockwaves are felt far beyond, too. As Ministers, we are here to be held to account for the Government’s response, quite rightly, but I must say to the Opposition that they cannot just will away these huge global challenges with wishful thinking and fantasy economics.

Calmly and determinedly, this Government are stepping up to face these challenges head on. We do not underestimate the scale or complexity of them. We will not waver. We will weather these storms. With the fortitude of the British people, the creativity and belief of British business and the innovation of British entrepreneurs, we will emerge stronger than ever. The British people know that dedicated public servants are working flat out for them. They can be assured that they have a Government who are taking the difficult decisions and who are on their side.

Question put and agreed to.

Resolved,

That this House notes that UK economic growth is forecast to grind to a halt next year, with only Russia worse in the OECD; further notes that GDP has fallen in recent months while inflation has risen to 9.1 per cent and that food prices, petrol costs and bills in general are soaring for millions across the country; believes that the Government is leaving Britain with backlogs such as long waits for passports, driving licences, GP and hospital appointments, court dates, and at airports; and calls on the Government to set out a new approach to the economy that will end 12 years of slow growth and high taxation under successive Conservative governments.

North Sea Oil and Gas Producers: Investment Allowances

Darren Jones Excerpts

Monday 6th June 2022 Commons Chamber

[Lucy Frazer]

The hon. Member will know, because I have said it this afternoon, that according to our estimate we will be receiving £5 billion from the oil and gas sector. Given that he mentioned insulation, he may be interested to learn that the Government have committed £3 billion over this Parliament to installing energy-efficiency measures in up to 500,000 homes, saving low-income households hundreds of pounds a year on their bills.

[Darren Jones (Bristol North West) (Lab)]

Clearly any additional tax cuts for the oil and gas sector should have been targeted at renewable energy generation rather than further drilling for fossil fuels. The Minister will know that the Government intend to introduce a climate compatibility checkpoint to ensure that all future decisions are in line with our climate change commitments. Can she confirm that if there is an overlap with the ongoing tax break for investment in fossil fuel drilling, it will be checked against the compatibility checkpoint?

[Lucy Frazer]

As the hon. Gentleman will know, a consultation is ongoing, and the Government will be responding to it in due course. I am sure that he will read the report of our response with some interest.

Spending Review 2020 and OBR Forecast

Darren Jones Excerpts

Wednesday 25th November 2020 Commons Chamber

[Rishi Sunak]

My hon. Friend makes an excellent point and it is a topic that she knows very well. I hope that she was heartened to hear what I said earlier about £500 million of the increase of £3 billion for the NHS this year being specifically targeted on mental health to address all the things she said. She is right about the difference they will make for many people in our country.

[Darren Jones (Bristol North West) (Lab)]

Over 4 million children are in poverty in the UK. Under successive Conservative Chancellors, Sure Start centres have closed, child trust funds have been slashed, nurseries today are on the brink of collapse and the number of children falling into poverty increases month after month. It is an unnecessary national tragedy, so why, especially at these difficult times, could the Chancellor not today commit to eradicating child poverty in his economic statement?

[Rishi Sunak]

On the last numbers, there are 100,000 fewer children in absolute poverty than in 2010 and 750,000 fewer children living in workless households than in 2010. The hon. Gentleman asked about nurseries and early years. He will be pleased to know that an above-inflation increase in the hourly rate for nursery providers is contained in the spending review.

Additional Covid-19 Restrictions: Fair Economic Support

Darren Jones Excerpts

Wednesday 21st October 2020 Commons Chamber

[Darren Jones (Bristol North West) (Lab)]

Madam Deputy Speaker,

“even if it feels like there is no hope, I am telling you that there is, and that the overwhelming might of the British state will be placed at your service.”

Those were the words of the Chancellor of the Exchequer only two weeks ago—words that, when reflected in this Government’s actions, show themselves to be vacuous, hollow and plainly empty. Today, millions of people, sitting at home seeing a failing test and trace system and infection rates quickly increasing, are deeply worried. They are worried that, instead of the overwhelming might of the British state being placed at their service as Ministers promised them, they, like the people of Greater Manchester, will instead be on the receiving end of the chaos and incompetence of the Conservative party.

That is why, today, we in the Labour party are calling for a one nation deal that sets out clearly for all how support for businesses and workers will be applied in local lockdowns—a one nation deal that is voted for by this Parliament and that is clear for all of us to see. That is not a big ask and neither is our ask later this afternoon to extend free school meals to the poorest kids in our country. Ministers know that on both those issues their actions today have long-term consequences.

Surely, the Government have learned the lessons from their own failures? The Conservatives’ response to the last recession, to cut investment and to cut public services, not only made our economic recovery longer and slower, but undermined the resilience of our nation to respond to the crisis we now face. Surely, the Government listen to the likes of the World Bank and look to other countries around the world for support, where there is a clear call to invest now to protect our country, our people and our way of life for the future? And, surely, the Government must understand that they are obliged to engage with and listen to regional mayors—regional mayors that they created—as the voice of their communities, when they are being told that people’s livelihoods and the future of their regional economies are on the line?

The Government’s handling of the pandemic is clearly out of control, and they need to get a grip soon. The pragmatic suggestions put forward today by the Labour party provide a way forward. We know that businesses, from advanced manufacturing and food production to the vital everyday businesses on our high streets, are at an increasing loss: despondent at the chaos of the Government’s handling of local lockdowns, frustrated by the Government’s recklessness in their handling of Brexit, and now deeply concerned about the future direction of our country, when, because of the chaos and the incompetence, vitally important decisions keep going unmade.

Lastly, I say with respect to colleagues on the Government Benches that events such as these are the events that people remember. People throughout the country will be asking themselves. “Are the Government, is my Member of Parliament, on my side—yes or no?” I hope that Members will keep that question in their minds when they vote this evening.

Protection of Jobs and Businesses

Darren Jones Excerpts

Wednesday 9th September 2020 Commons Chamber

[Steve Barclay]

The German scheme sits within a very different landscape. It is not actually administered by the Government. It is a long-standing scheme; it has not been set up as a response to covid specifically. I just gave some illustrations of where the UK’s furlough measures stand internationally. This needs to be seen as part of the wider package of support that the Government have set out. Again, the UK package as a whole stands comprehensively as one of the best international schemes on offer.

[Darren Jones (Bristol North West) (Lab)]

Will the right hon. Gentleman give way?

[Steve Barclay]

I will not, because I am conscious that a lot of Members want to speak in the debate.

It is important to note that providing such a comprehensive and decisive economic response has, in common with every advanced economy in the world, dramatically increased public borrowing and debt. In the short run, that has been the right strategy, so that we can protect jobs and incomes, support businesses and drive the recovery. Indeed, the OBR has said that if we had not provided the financial support, the situation would have been far worse. But over the medium term, it is clearly not sustainable to continue borrowing at these levels. Yes, clearly, interest rates right now are at historic lows, which means our cost of borrowing is cheap, but with the Government debt exceeding the size of the UK economy for the first time in more than 50 years, even small changes in interest rates would have a very big impact on our public finances.

Thankfully, we were in a strong fiscal position coming into this crisis, which allowed us to act quickly to support jobs and businesses, but having seen two supposedly once-in-a-generation economic events in just 10 years, we are reminded once again that we cannot know what is around the corner. We will need to return to a position of strong and sustainable public finances.

Let me make one further point this afternoon. While we have made great strides in tackling coronavirus, it may continue to be necessary to take targeted local action to keep the virus under control. We know the impact these local measures have on people and businesses. Since 1 September, we have been trialling support for individuals in Blackburn with Darwen, Pendle and Oldham. Eligible individuals who test positive with the virus will receive £130 for their 10-day period of self-isolation, with higher payments of up to £182 for members of the household or other contacts who need to self-isolate.

Today, I can announce further new measures to support businesses. The Government will provide direct cash grants to businesses that have been ordered to close.

Closed businesses with a rateable value of £51,000 or less will receive a cash grant of £1,000 for each three-week period they are closed. For closed businesses with a rateable value higher than £51,000, the grants will be £1,500. The grants will cover each additional three-week period, so if a small business is closed for six weeks, it will receive £2,000. This new support will give closed businesses a lifeline through the difficult but temporary experience of lockdown—an important next step in our economic plan to protect jobs and businesses against coronavirus. I am grateful for everything my right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy has done to develop this scheme, and he will bring forward further details shortly.

Let me close with one final observation. In the first phase of our economic response to coronavirus, we supported people, businesses and public services, with support totalling £190 billion. In the second phase, our plan for jobs is protecting, supporting and creating jobs, and as we enter the third phase our economic policy will be driven not just by responding to the immediate crisis, but by ensuring that we level up, spread opportunity, tackle climate change and make sure our response to the pandemic is not just about recovery but renewal. I commend the amendment to the House.

--- Later in debate ---

[Darren Jones (Bristol North West) (Lab)]

My simple request of Ministers today is that they summon the confidence to target support where it is needed most. The Chief Secretary said today to the House that he would not do that because a number of questions need answering. I may be old-fashioned—I hope he listens, as he leaves the Chamber—but I am sure it is for Ministers to answer the questions, not to sit back and wait for others to do their homework for them. If the Chief Secretary is not willing to provide sector-specific support, perhaps he could set out at the Dispatch Box why he is not willing to do that, as opposed to posing questions to Members in this House and deflecting from the call to arms.

Supporting the industrial foundations needed for our recovery and our future growth is right not just in terms of industrial policy, but in terms of spending taxpayers’ money.

The Government are understandably borrowing significant amounts of money, but they must spend every pound prudently. Wasting a few billion here and a few billion there is not acceptable when there are so many jobs and businesses on the line.

Ministers today might refer to HMRC reports that an estimated £3.5 billion has been fraudulently claimed from the furlough scheme, but that is the obvious pitfall of an open-to-all scheme. Bespoke packages of support to strategically important sectors would be negotiated directly with those businesses, with the due diligence and obligations that come with that. I hope that Ministers, too, will have the sophistication to differentiate support for the strategically important sectors—important for the foundations of our economy and our future growth—and the vast number of jobs in the broader economy that fish around them. If strategically important sectors cannot reopen or get back to work, the knock-on effect for bus drivers, security guards, coffee shops and the like, as well as the hospitality, creative and tourism sectors that rely on workers having money to spend, is clearly significant.

I have confidence that the Government are able to meet those challenges. In addition to sector-specific support, including for sectors that will take longer to reopen, that means two things. First, we need to ensure that we have an adequate test and trace system that gives employers, workers and unions the confidence to return to the workplace. It is not working; getting it right is crucial to retaining jobs in the economy. Secondly, we need the Chancellor to bring forward a fiscal investment in people, as well as a fiscal investment in infrastructure, with proper redundancy support services attached to skills and training opportunities in every part of the country.

British businesses are up for that challenge, from bringing forward R&D projects and decarbonising to pulling together in the national interest. This pandemic has shown the powerful partnership that can be formed between Government, businesses, workers and unions during times of crisis. We should try to hold on to that collective endeavour as we seek to recover and build the British economy, but that requires Ministers to step up to that challenge, to answer the questions that are being posed of them, and to take the necessary action to protect jobs and businesses across the whole of the country.

Economic Update

Darren Jones Excerpts

Wednesday 8th July 2020 Commons Chamber

[Rishi Sunak]

I am very grateful to my hon. Friend for those comments, and he is absolutely right about how I have approached this. As I have said, for me, it is a question not just of economics but of values, and we demonstrate those through the actions we take and the people that we prioritise. He is also right to highlight the importance of sustainability in our public finances, which he knows I passionately care about and have spoken about repeatedly from these Benches. He can rest assured that as we come to the autumn, we will set our public finances on a path back to sustainability.

[Darren Jones (Bristol North West) (Lab)]

The Chancellor failed today to set out sector-specific help for British manufacturers. In doing so, he is gambling with an important industry and making the UK less competitive compared with countries such as Germany, France and the United States. Perhaps the Chancellor can set out for the House today what it is that he has against British workers making British aeroplanes, British cars and British steel?

[Rishi Sunak]

I am not entirely sure about the tone of the hon. Member’s question. The support schemes we have put in place have benefited equally all sectors and all workers in every region and part of our United Kingdom. Manufacturing companies have been large users of the furlough scheme and are very grateful for it. They are now in the process of bringing those workers back and adding shifts, and they are grateful also for the flexibility that that scheme provides. What they are more interested in when I speak to them are our ambitious commitments, such as our plans to double research and development investment. We will be working closely with the private sector to do that, helping create the innovations that will drive growth, productivity and employment tomorrow.

Draft Import of and Trade in Animals and Animal products (Amendment etc.) (EU Exit) Regulations 2019 Draft Trade in Animals and Related Products (Amendment) (EU Exit) Regulations 2019

Darren Jones Excerpts

Tuesday 19th February 2019 General Committees

[Dr Drew]

I am delighted to serve under your chairmanship again, Mr Sharma. I am also happy that this Committee Room is more suited to the number of Members here than Committee Room 14, where we met the other day. We will be in the Chamber tomorrow. This is one of three days when I will be taking part in the great scrutiny of statutory instruments.

I will put my usual caveat in place: this is not the way to pass legislation—we are doing things in a great hurry. As the Minister himself says, we are expected to scrutinise the legislation. We could go through it page by page; I am sure that the civil servants have done a wonderful job of cutting and pasting the European regulations, but we will know exactly what we will end up with only after we leave in March, or whenever. It is important that the Opposition do their best to find out what the Government are doing, why they are doing it and whether they are doing it in the right way. That, however, is problematic, given the background: we are trying to keep on top of so many SIs that are coming our way.

I will begin with a couple of general points before I ask a number of questions of the Minister, including about the point made by my neighbour, the hon. Member for The Cotswolds. I have argued that for each of the SIs there should have been regulatory impact assessments, because these do have an impact on business and communities, but we have had none—so we do not know what the cost implications are. If the Minister does not answer the hon. Gentleman’s question, I will try to.

We need to keep our finger on the pulse. There will be implications: we are not just taking across a series of regulations in the form of an SI, but we have to make changes and employ people to undertake them. That will cost something. Someone is going to pay; if it is not the Government, it will have to be the people on whom those changes are imposed.

[Darren Jones (Bristol North West) (Lab)]

I thank my hon. Friend and neighbour in the south-west for giving way. Does he agree that we need to understand the implications for our constituents? Many of us receive correspondence asking whether the regulations will prevent the import of lesser-quality animal products from countries such as the United States as part of a trade deal and whether constituents have to do anything to make sure that their pet passports continue to apply so they do not get stuck at the border. The regulations do not give us clear answers about any of that.

[Dr Drew]

That is helpful. My hon. Friend puts his finger on something important. To some, this is a very dry subject—about semen, ova and embryos—but we are also discussing pet passports; some of us, in our previous incarnations, had a bit to do with getting those introduced. With the best will in the world, that issue will not necessarily be plain sailing if and when we leave the EU. Most people who take their pets abroad go somewhere in the EU and it will be problematic, to put it mildly, if they want to move there for work or study. They may find additional difficulties with the pet passport situation.

I want to make four general points. The regulations clearly have a lot to do with post-Brexit agreements and trade relations. We have to do what we can to make sure that there are no unnecessary barriers, otherwise trade will suffer, whatever one’s views on what trade there should be and with whom. As a backdrop, there is the key issue of animal welfare. It would be a tragedy if the high standards that we have introduced were threatened in any way, and it would be economic madness if we allowed things like rabies to come in because we did not have enough people to check as a result of having a different process for allowing animals with such diseases to come in. It is frightening to think what diseases might be coming our way, as I said in a previous statutory instrument Committee, so we have to be on our guard.

If we have different standards, it is not just the immediate impact that we need to consider. There will be a longer-term impact on our ability to work with other countries, because they will react against us if we have lower standards, which will have a huge impact on the agricultural sector. One of the questions I want to ask the Minister stems from the debate, which was quite testy, I think it is fair to say, with the Secretary of State about where we are today—this is from the National Farmers Union conference—with regard to the UK becoming a third country in relation to the EU. How are those negotiations going? It appears that they are stuck in transit, as I gather that the Secretary of State did not have the easiest time answering questions at the NFU. One of the key concerns was when we would be able to say that that relationship was properly embedded.

Finally—this point is not to be ignored—this has a huge impact on science, innovation and research, because many materials that come in are used by our research laboratories in tandem with our colleagues in the EU. Clearly, that may not necessarily continue, but we have to look at ways in which we can try to make that as seamless as possible. I suppose that that is an example of frictionless trade.

On the draft Trade in Animals and Related Products (Amendment) (EU Exit) Regulations 2019, the pet passport is something of which we should be very proud. It took a long time to put it in place. It would be useful to know exactly how the Government intend to make sure that the measure passes into practical operation as seamlessly as possible. A lot depends on what relationship we have with the EU, but as page two of the explanatory memorandum identifies, various highly pathogenic avian influenza strains and Nipah disease in cats and dogs are ever present, and we need to understand how, when pets move around, the passport can be used to make sure that there is proper control and enforcement. It will be useful to know what the Government are doing in relation to that.

That came up in the Lords, which asked for the affirmative procedure. Originally, this was to be dealt with under the negative procedure, but the Lords thought that the issue was important and needed the affirmative procedure route. Following the intervention by the hon. Member for The Cotswolds, I have touched on the need for a regulatory impact assessment—that theme always arises in relation to these SIs.

I have some questions for the Minister. He may not be able to answer them all, but he can write to me later. The NFU’s main concern is about shipments from other parts of the world—the example it gives is south American beef arriving in Rotterdam that is found to be not fit for human consumption—and what involvement the UK will have in such a decision. At the moment, that is a pan-European decision, but it cannot be for us if we are not in the EU. Do we put officers alongside those in Rotterdam or must we have our own checks this side of the border?

Food safety and harmonisation have a lot to do with who we sign free trade deals with. Some of us have grave concerns about signing one with the US, for the reasons we know about—chlorinated chicken, antibiotics and the rest of it—but it would be useful to know how many additional staff the Government intend to employ to guarantee that food safety will not be sacrificed. That links to the issue of antimicrobial resistance. Last week, I went to an interesting drop-in about the impact on human beings of AMR; I am sure that other Members went as well. I raised the point that the issue also affects animals. How do the regulations relate to AMR? At the very least, we should be doing more; if nothing else, we should be investing in science and technology to make sure that we are ahead of the game.

NOAH, or the National Office of Animal Health—an organisation well known to the Minister—has asked about animals and derivative products used in biomedical and veterinary research. How can we continue with existing research—again, that is pan-European? That is crucial to continuity in the life sciences sector. What analysis have the Government done about what happens after March—what needs to be rethought and what can carry on, hopefully, seamlessly?

The supply of animals and animal-derived products cannot in any way be delayed, because that would invalidate their use in science and have huge animal welfare implications. Although NOAH welcomes both sets of regulations, we come back to the crucial issue, which I have raised in previous SIs: where are we in relation to the TRACES database? So far, the Government have not been able to answer that. Are they looking for special dispensation? Are they willing to pay to be part of the database or will they have to investigate setting up their own one? Previously, the Government have said that they are putting money into setting up their own IT system, but with the best will in the world that will not happen before the end of March, when we might have a no-deal scenario.

My last point, about the Balai directive, which we have signed up to as part of our commitment to the convention on international trade in endangered species, has been raised by various organisations. At the moment, we sign up as a member of the EU. What contingencies do the Government have in place to make sure that we do not just drop out but continue with our clear statement of intent on the directive?

Many of these points have been reiterated in the material I received from the European Animal Research Association, which really stresses how important the import of animals and animal materials are to the life sciences sector. Its worry is that no deal will not only add to the time it takes to get the materials in, because of the additional checks that would almost certainly have to be done, but increase transport costs. What analysis have the Government made of potential additional transport costs resulting from the greater time taken because of more checks on what will no longer be an open border? The association clearly stresses its worry about a no-deal scenario and what the Government intend to do about that

The main concern of the British Veterinary Association is about who will do some of the checking. We have a shortage of vets. We will need more vets. Where will they come from? What level of skills will they have? The BVA wants a guarantee that the role of the veterinary professional will remain key to the whole process of trade. It would therefore be useful to know how that will continue at a level at least equal to now, although one would always hope that animal welfare requirements could be improved.

A very specific question to the Minister is on the tripartite agreement between the UK, France and the Republic of Ireland that allows the relaxation of procedures required under Council directive 2009/156/EC. It largely relates to the free movement of horses. My hon. Friend the Member for Bassetlaw (John Mann) was rather concerned, as a devout Brexiteer, about whether racehorses will be racing at Aintree in the grand national if anything gets in the way. Do the Government intend to carry on with that tripartite agreement?

I am sorry that I have asked a number of questions, but they are important and are about seamless trade. The trade is out of sight, and most of us do not know what goes on. When I made a trip to Heathrow when I was a member of the Select Committee on Environment, Food and Rural Affairs, I was shocked by the things that came through illegally. We went to look at the illegal trade in baboons, monkeys and so on—it was quite frightening—and who brought that in. That is one extreme of the trade, and it is illegal. There will clearly be continuity in regulation, one would imagine.

The regulations are about the legal aspects of what animals and animal products are allowed in, and it would be useful to know how the Government are approaching research and how we work on a pan-European basis. We are approaching the end of February and the particular date that we all dread for one reason or another. It is important that we know what contingencies the Government have in place, and that goes wider than the two SIs that have been put together—I do not demur from that.

There are some detailed undercurrents that we as the Opposition need to know about. The wider agricultural sector certainly needs to know, because it is its stock in trade. It needs to know with some certainty what the impact will be. We dread crashing out, but even if we have a deal or perhaps a realignment of our relationship with the EU, what are the long-term implications? The Government have to be very clear on that. As I go through these different SIs, I am not sure whether we have clarity or more confusion. Perhaps it will all come right on the day.

Social Media and Screen Use: Young People’s Health

Darren Jones Excerpts

Thursday 7th February 2019 Commons Chamber

[Norman Lamb]

I thank my hon. Friend for that contribution, and I would support her campaign. I also agree about the importance of designing ethics into the way that algorithms operate. Indeed, this week our Committee took evidence from the head of the Centre for Data Ethics and Innovation, and there is an important discussion to be had. Although there are rapid developments on the ground with the Government using algorithms in all sorts of different ways, we do not fully understand how to ensure an ethical framework that protects people from bias and can be built into the data used by algorithms. If such bias become embedded into the algorithms there are very dangerous potential outcomes, and my hon. Friend is correct to say that we need to get this right.

[Darren Jones (Bristol North West) (Lab)]

May I join the right hon. Gentleman in congratulating our Committee Clerks on helping us with this extensive and high-quality report? Does he agree that in traditional regulated sectors, the idea that a regulator should be able to see data to assess harm on behalf of consumers and take action in an appropriate way is perfectly normal? Not just our report but that by the chief medical officer, reports that we are expecting from the Government, and announcements made yesterday by my hon. Friend the Member for West Bromwich East (Tom Watson) and by others, indicate that this is merely an incremental change as we adjust to the new online world. This is something that should be welcomed, and positively and proactively taken forward by the Government without many hurdles.

[Norman Lamb]

I echo the hon. Gentleman’s comments about the amazing support that we get from an impressive and able team, and I very much agree that data must be available to regulators and researchers so that we gain a much greater understanding of where the risks are and which children are most at risk of harm. By improving our understanding in that way, we are much more likely to protect children from harm.

Cashless Transactions

Darren Jones Excerpts

Tuesday 22nd January 2019 Westminster Hall

[Matt Warman]

The hon. Gentleman is currently right, but we will all be better off if we hasten the transition, so that people do not have to rely on cash and all of our constituents can use more secure and efficient digital means, whether they live in rural areas such as my constituency and his, or in big cities.

[Darren Jones (Bristol North West) (Lab)]

I declare my interest in this issue. Does the hon. Gentleman agree that the increasing amount of online fraudware—for example, one of my constituents was defrauded of £40,000 by telephone fraud using her online banking—and the use of crypto-assets for online cashless transactions means that we need more regulation from the Government, so that consumers can trust the system to enforce the rules? Do we not need to give police more powers to tackle those who use cashless transactions for criminal purposes?

[Matt Warman]

I completely agree. Much of this is about trust. It is true, as I said, that 46% of people do not trust a cashless society, whether that involves crypto-currencies—although I suspect most of those 46% are not wholly familiar with every detail of that—or simply contactless cards. Part of this is about regulation; much of it is about trust.

It is worth examining in a small amount of detail why people want to continue to use cash. About 20% say it makes them feel more in control, 16% say it helps them with budgeting, and 3% want to hide their guilty pleasures—perhaps we had best not dwell on those. Some 5% do not trust online transactions at all, and 3% just do not trust the banks. That is a real issue if this trend is to be mitigated for vulnerable groups where needed and if the broader society is to take advantage of cashless transactions.

Countries such as Sweden already have twice the level of cashless transactions as we have in the UK, and their authorities have taken conscious action to slow down the pace of cashless-ising, to ensure that vulnerable groups are not left behind. It is also reported that 4,000 people in Sweden have had chips inserted under their skin, so that they do not even have to use cards—I am not sure that I would go quite that far, although I know the Minister might want to consider it as a personal experiment.

We are at risk of ending up with two cultures: those who embrace a wholly digital way of living, and those who do not. There has been an 8.5% decline in the use of ATMs in London, but just a 2% decline in Northern Ireland and a 2.9% decline in my area of the east midlands. There are very different views on what is important for people and on the pace of change.

It is instructive to look at what people use cash for. Figures from the LINK report show that just 13% of people pay their rent in cash—disproportionately those on lower incomes. Some 85% said that they use cash to pay for taxis, which is a particularly instructive example. That is obviously a nationwide figure rather than a conversation about London taxis, on which we could perhaps spend many hours. Taxis are a particularly interesting example because the giving of cash to a driver makes them more vulnerable to theft and to being a target for crime. It also means that they are responsible for ensuring that they have change, so they have to carry a float even before they have taken any cash. It is of course true to say that it would be naive in today’s society to get into a cab outside London and expect the driver to take a card transaction. This is a complex landscape.

Some four out of five people say that they pay their gardener—if they have one—in cash. I am sure that neither the Minister nor I wish to cast aspersions on gardeners, but there is a suspicion that there are parts of the economy where cash is used to avoid the taxation that I know he is very eager to collect at every possible opportunity. There are a whole host of reasons to promote cashless transactions, whether it is ensuring that people are at less risk of the crime that goes with cash or that businesses are at less risk of the increasingly expensive costs of handling cash.

[Matt Warman]

I agree. In a sense, I make the same point that I made before, which is that currently there are a large number of exceptions and it would actually be in the interests of the many seasonal, low-paid and often zero-hours contract workers in my constituency to be paid digitally, because they would be less at risk of crime and the businesses that they work for would have less of the handling costs associated with cash. We are already at the point where the declining ATM network that those people rely on is struggling to make a viable business case to those who use it with such diminishing enthusiasm.

[Darren Jones]

The case study of First Bus in Bristol—I would not speak accurately on behalf of my constituents if I said it was a cheap network—demonstrates that the use of digital payments has allowed a reduction in the cost of tickets because cash is no longer handled on the bus network. Does the hon. Gentleman recognise that that must be a positive for consumers, whether or not they use cash?

[Matt Warman]

I agree. That is an example of where digital payments are in the interests of both the business and the consumer—not simply in terms of convenience, but, in the case the hon. Gentleman mentioned, in terms of the viability of the bus route. Companies such as Square have tried to encourage marketplaces to embrace digital technology in such a way that businesses that often operate at the very limit of viability are able to find new and innovative ways of changing their business models slightly. Of course, it is no good for a business to accept cards only when people wish to show up and pay in cash. The London bus network experienced some controversy when it moved to using a card-only payment mechanism, and I suspect that the hon. Gentleman may have experienced the same in his constituency.

As the hon. Member for Strangford said, it comes back to ensuring that a one-size-fits-all force is not exerted either by Government or by business, but that a number of things are done to encourage businesses to understand that there are huge advantages, and to encourage consumers to understand that there are very limited opportunities for fraud when it comes to contactless cards or, indeed, chip and pin. We should be careful not to stoke those sorts of fears unnecessarily.

There are costs associated with handling cash and there are associated costs for consumers—socioeconomic risks for those who are often most reliant on cash but would benefit most from digital payments, for example. We therefore need to ask the Minister for a number of things from the perspective of Government. The first would be to consider whether action should be taken to encourage shops and businesses to go cashless and whether there should be a safety net to ban them from becoming entirely cashless, as has happened in some states in America. I would argue that in most circumstances, a retailer of any kind is perfectly entitled to make that decision for itself. We should not sleepwalk into a cashless society, however; we should understand the risks and the benefits.

With that in mind, my single largest request to the Minister is not that we try to invent some system in which, as someone proposed, a business rates scheme encourages cashless-ising in town centres, to encourage businesses to become more viable and eliminate costs to which they might be sentimentally attached, but simply to build on the success that Britain has already shown both in FinTech and in technology more generally. That means putting the governmental shoulder to the wheel and recognising that ultimately, the cost of taking cash is already very close—if not over the line—to outweighing the benefits. We are certainly already at the point where many businesses looking at that in detail would think very hard about whether taking cash was in their interests at all. Clearly, the moment when far more businesses go over that line is fast approaching.

We need to do two things. The first is to consider much more carefully the impact that eliminating cash can have on vulnerable groups in certain circumstances. Then, we must say what we can do to help those groups to embrace a cashless economy with much greater enthusiasm. Some of that means reassuring people about their concerns on the risks of fraud, while another part means defining—as the hon. Member for Strangford mentioned—what can always be paid in cash, at least for a long time into the future.

Would the Minister consider setting out a roadmap for the future proportion of cash in the economy, to reassure us that it has been entirely considered and that its impact has been thought through? If I had my way, I would set a target for the elimination of cash from the economy, in much the same way that—in an ideal world—I would think carefully about when cheques might be eliminated entirely from the economy. I appreciate that setting any type of target in that regard is probably down to the market as much as it is to Government, but whether or not there is a target, the trajectory is ultimately very clear: there will be less and less cash in the economy and that will mean certain things for vulnerable groups. Our job as politicians is to provide some leadership and tell people and businesses that it is economically advantageous for there to be less cash in the economy, however sentimental some people might feel about where we are in today’s society.

I will leave that gentle request there, rather than demand anything more of the Minister, but I would say that the direction of travel is clear: cash was king, but it is now coming towards the end of its reign.

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

It is a pleasure to serve under your chairmanship, Mr Gray, and to respond to the debate secured by my hon. Friend the Member for Boston and Skegness (Matt Warman). I thank him for his suggestion that I get a chip implanted in my arm—I have only just started paying with my Apple watch, so that might be some way off. I will suggest it to the Chancellor as something that he might like to do.

As my hon. Friend laid out, all the evidence suggests that people are increasingly turning to digital payment methods. In 2017, debit cards overtook cash as the most frequently used payment method in the UK. The Government support digital payments, which, as we have heard in the debate, can offer consumers and businesses convenient, tailored and flexible ways of purchasing goods and services. Increasingly, they can also offer additional services, such as ways to help budget, keep a record of transactions and manage financial affairs, which can play an important role for those who, traditionally, would be considered more vulnerable and harder to serve.

As my hon. Friend also mentioned, the public support and trust our historic currency in cash and notes—perhaps to a surprising extent. We have seen that over the course of the past 12 months, with campaigns to save the penny and for a Brexit coin, and the Royal Mint sees it every day with the demand for collector’s coins, both on its website and at its south Wales shop. The pace of technological change has never been faster, and it will never seem so slow again as it continues to accelerate. Like my hon. Friend, we want the UK to be at the forefront of technological change, to embrace the opportunities and, as we have heard from the tenor of the debate, to ensure that that change works for as many people in society as possible. That includes taking a lead in supporting the Competition and Markets Authority’s open banking initiative, which aims to make it cheaper and easier for innovative new firms to provide financial products.

Building on that, the Government have tried to lead on FinTech with our FinTech sector strategy, which was published last year and sets out our plans for ensuring that the UK remains the best place in the world to start and grow a FinTech firm. Nearly 100,000 people in the UK now work in the FinTech sector; almost none of those jobs existed just 10 years ago. The UK genuinely is a market leader in this field. We have already heard examples of those firms, which are transforming the financial services sector. TransferWise, which set up in London eight years ago, is another. It now serves more than 4 million customers and transfers more than £3 billion of funds every month.

The wider payments industry is also embracing new technology. For example, as a result of legislation brought in by this Government, UK banks and building societies have been able to introduce cheque imaging. That innovation offers people the additional option of paying in a cheque through their smartphone rather than having to go to a bank. That benefits people who are harder to serve, such as those my hon. Friend mentioned—people in rural areas and those with limited mobility.

As my hon. Friend said, digital payment technologies offer considerable opportunities for everyone, including vulnerable people. Ensuring that the UK leads in this area offers opportunities for new FinTech businesses and jobs, and exports, which I just mentioned. It also provides extra flexibility and convenience for businesses and consumers, such as those who travel by bus or taxi in London or, as we heard, by bus in Bristol. If we get the technology right and ensure it is sufficiently competitive, it may provide lower transaction costs for consumers and small businesses. As we heard, it also offers us the opportunity to lower the tax gap, which would mean lower taxes for all the rest of us who pay our fair share of taxes, and there will be public safety benefits if we can ensure correct enforcement and increased public trust. A number of shops and music festivals have suggested they may go cash free to reduce criminality.

[Darren Jones]

I referred to my constituent who was defrauded via an online method. She contacted the police, Action Fraud and the bank, but no one was able to help her and she lost her money. Will the Minister set out what his Department is doing with the Home Office to ensure that the police are properly equipped and resourced to tackle these issues?

[Robert Jenrick]

We work closely with the Home Office on economic crime. In fact, last week the Chancellor and the Home Secretary launched a new taskforce on economic crimes, which will include cyber-security and digital payments. Of course, we work across the full range of financial institutions and authorities to ensure that they take this issue seriously. The Government’s cyber-security strategy, in which we have invested almost £2 billion, is designed to increase capability and awareness among financial institutions and police forces across the country. Police forces need to take this issue very seriously as crime changes.

It is also worth mentioning the societal benefits of developments in other parts of the world, particularly in Africa and the developing world, where organisations and companies that have taken the lead on mobile payment services, such as M-Pesa, have been truly transformational in opening up new opportunities for entrepreneurship and person-to-person payments. We have seen that happen in those parts of the world, and we want it to happen in this country, too.

We heard about some of the challenges associated with the increase in digital payments and the falling use of cash. It is worth noting that cash payments fell from 61% of all payments in 2007 to 34% in 2017. However, 34% is still a significant proportion, and about 2.7 million people in the UK remain entirely reliant on cash. We must ensure that those who rely on cash are not excluded as digital payments become more prevalent. We can of course play a role in guiding them to see some of the benefits and opportunities of digital payments. My hon. Friend the Member for Boston and Skegness mentioned examples of people for whom digital payments may be very useful indeed, such as those on lower incomes and migrant workers.

We launched a call for evidence last year to better understand the role of cash and digital payments in the new economy, to explore questions such as how we can maintain access to cash for those who need it, and to better understand the trajectory of cash use. We concluded that although we are probably heading towards a cashless society, we should seek to facilitate and encourage that. Cash—our coins and notes—will be with us for a long time to come, so its continued availability in all parts of the country for all groups needs to be planned carefully by the Government, financial institutions such as the Royal Mint and the Bank of England, and the payments industry.

We are working closely with the industry, which recognises the challenges. Last year, LINK, the UK’s ATM network, announced an independent review of access to cash, chaired by Natalie Ceeney, in response to some of the concerns and criticisms raised over the course of 2018 about the decline in the number of ATMs, particularly in rural areas. It is true that there are probably too many ATMs in some of our urban areas, but there is real concern about the number of ATMs in smaller market towns, on the smaller high streets of larger cities such as Bristol, and particularly in villages. The review is exploring the risks of leaving people behind as we increasingly utilise digital payments. As we heard, its interim report found that many consumers still value having cash.

The wholesale cash industry is also considering the infrastructure required to continue to service cash use as it declines. That will be a serious challenge in the years to come, and we want to be prepared for it. How can we ensure that every shop, restaurant, post office and community in every part of the country, including rural areas, continues to be able to obtain the cash it needs? How can that business model be either profitable or supported by the rest of the economy? In addition, the payments industry is progressing initiatives such as Request to Pay, which can help increase and promote financial inclusion. The Request to Pay service aims to give payers more control over outgoing payments and to help people avoid the cliff edges that can be created by irregular incomes or unexpected bills.

The rise in digital payments has been remarkable. It is not unique to this country; it is happening in all parts of the world, including in perhaps unexpected places such as Africa and the developing world. Contactless payments in this country grew by 99% in 2017, and we expect that trajectory to continue. We welcome proposals to enable the UK to embrace that change. There are no simple solutions, but we look at international examples, such as Singapore, Hong Kong and other parts of the world that are particularly engaged with this question. Hon. Members from across the House with proposals and ideas are very welcome to come to see me or other Treasury Ministers as we consider how we can continue to engage with this issue and drive the sector forward.

We need to consider the impact of the increasingly digital world on society and our economy and find ways to overcome the challenges it presents. Cash use remains important, with more than one third of payments in the UK made in cash. However, like my hon. Friend the Member for Boston and Skegness, we want to guide the economy and the public through the undoubted and probably irreversible journey to a cashless society, and we want to ensure that the UK is at the forefront of new technology while protecting the most vulnerable in our society.

Question put and agreed to.