Wagner Group: Sanctions Regime

David Lammy Excerpts

Wednesday 25th January 2023 Commons Chamber

[Mr David Lammy (Tottenham) (Lab)]

(Urgent Question): To ask the Secretary of State for Foreign, Commonwealth and Development Affairs if he will make a statement on reports that the UK Government assisted Wagner Group head Yevgeny Prigozhin in circumventing the UK sanctions regime.

[The Exchequer Secretary to the Treasury (James Cartlidge)]

The war in Ukraine, as we all agree, is a barbaric, illegal incursion into a sovereign nation by another. It has resulted in tens of thousands of deaths, mass displacement and an ongoing humanitarian catastrophe.

We will always stand up for our friends and allies, and we are proud to have led the world’s response, in partnership with our allies, in supporting Ukraine in its fight against Putin’s aggression. We will deliver tanks to roll back any Russian advance, we continue providing aid to help Ukrainians as they defend their homeland, and we have unveiled the most stringent sanctions on any country at any time in our history. We want to use economic sanctions to starve Putin’s war machine and put direct pressure on every individual involved in the decision to go to war and continue to make war on Ukraine.

In response to the question that has been asked today, I should say that it is a long-standing custom that the Government do not comment publicly on individual cases. It would not be appropriate to break that custom, even in a case as serious as this one, in which there is obviously public interest. However, I want to outline the general approach taken to date by the Treasury’s Office of Financial Sanctions Implementation in cases in which persons designated under sanctions seek licences for legal fees, and how that has been followed, and the strong constitutional reasons for that.

Within the sanctions regime broadly, because everyone has a right to legal representation, it is possible for frozen assets to be used to pay for that legal representation. OFSI grants licences to allow sanctioned people to cover their own legal fees, provided that the costs are reasonable. To be absolutely clear, decisions on the issuance of licences for legal fees are largely taken by OFSI officials in line with standard practice. The principles and guidance for assessing these applications are long-standing and have been published for a number of years. Applications are assessed solely on a costs basis.

As the UK is a country with checks and balances, it is right that the relevant court, rather than the Government, should decide the outcome of a case on the substantive merits. However, I can confirm that in the light of recent cases, and related to this question, the Treasury is now considering whether this approach is the right one and whether changes can be made without the Treasury assuming unacceptable legal risk, while ensuring that we adhere to the rule of law. In advance of that, I know that the entire House shares the same goal: to support Ukraine and see all those behind the invasion punished for their complicity. The Government will continue to take a hard line on all those responsible.

[Mr Lammy]

I think the whole House will be shocked at the evasiveness that we have just seen from the Minister, given the seriousness of this case.

For years, the Labour party has been calling for the Government to clean up the London laundromat effectively and stop London homes being used as bitcoins for kleptocrats. For months, the Opposition have stood shoulder to shoulder with the Foreign Office in co-ordinating sanctions against Putin and his inner circle. But yesterday we found out that the Treasury, which was then under the leadership of the current Prime Minister, issued special licences that allowed Yevgeny Prigozhin to circumvent sanctions issued before Putin’s illegal invasion of Ukraine.

The Government appear to have granted a waiver for a warlord that enabled him to launch a legal attack on a British journalist. This is a perfect example of a SLAPP—a strategic lawsuit against public participation, designed to silence critics through financial intimidation.

Prigozhin is one of the most dangerous and notorious members of Putin’s inner circle. The Wagner Group, which he leads, is responsible for appalling atrocities in Ukraine and around the world. If the now Prime Minister’s Treasury had any hand in alleviating pressure on Prigozhin, I am sure every hon. Member would agree that that would be absolutely unconscionable. I ask the Minister to answer these questions for the benefit of the whole House. Did a Minister authorise the granting of a licence or exemption to Prigozhin? When did Ministers become aware of this incident and what actions have they taken? Will the Minister commit today to an independent investigation of this controversy? Will he commit to urgently review the law regarding SLAPP suits so that oligarchs and warmongers cannot bully and harass journalists and critics? When will the Government introduce restrictions on the provision of legal services to Russia, as the European Union already has?

[James Cartlidge]

I am grateful to the right hon. Gentleman: he takes us back to when I stood opposite him in our Ministry of Justice days.

I am not being evasive: I am standing in front of the House of Commons to answer the question. The right hon. Gentleman mentioned the Prime Minister, and he is right that my right hon. Friend was Chancellor of the Exchequer at the time. I shall explain the process. I am not going to comment on the individual case, but without prejudice to it and talking about the general situation that pertains to how OFSI considers such cases, there is a delegated framework whereby decisions on legal fees for persons designated under all the sanctions regimes are routinely taken by senior civil servants. I want to be clear on that. We are not aware of any case of legal fee decisions under any of the sanctions regimes being taken by a Minister. I want to be clear with the House on that.

The point about SLAPPs is really important. I was at the Ministry of Justice when it was a live issue. It was first raised in a Backbench Business Committee debate by my right hon. Friend the Member for Haltemprice and Howden (Mr Davis), in conjunction with the right hon. Member for Birmingham, Hodge Hill (Liam Byrne), and I responded to that debate for the Ministry of Justice. Let me set out what we are doing. We have been clear as a Government that SLAPPs represent a clear abuse of the legal system, as they rely on threatening tactics to silence free speech advocates who act in the public interest. That is why it is often called lawfare. We ran a call for evidence on strategic lawsuits against public participation and libel reform from March to May 2022 in light of reports that Russia and its allies might be funding litigation against free speech in the UK. We published our response to the call for evidence on 20 July 2022, having closely analysed 120 responses from media, legal and civil society professionals, and we are committed to tackling SLAPPs.

I can confirm that targeted anti-SLAPP reforms will include a statutory definition of SLAPPs, an early dismissal process and costs protection for SLAPPs cases. The Government have committed to primary legislation to make those reforms a reality as soon as parliamentary time allows.

ONS Decisions: Student Loans

David Lammy Excerpts

Tuesday 18th December 2018 Commons Chamber

[Elizabeth Truss]

My right hon. Friend is correct; that was done under a previous Labour Government. In fact, that Government also introduced tuition fees, which I supported at the time and continue to support. I probably have more in common with some of the last Labour Government than many Members on the Labour Front Bench today. In those days, the Treasury marked its own homework. We have moved on. We now have the independent OBR, which makes decisions about forecasts, and that is the right approach. We are listening to this accounting advice and will take it on board. It will not affect decisions about how we conduct the Augar review or about student finance.

[Mr David Lammy (Tottenham) (Lab)]

I am grateful to the Chief Secretary for indicating that this will have no impact on students, but she has conceded that it will have a fiscal impact. Our young people at the moment are worried about the cost of living, the broader economy and the prospect of getting jobs. They would like to see maintenance grants. Can she put in the Library, when she is aware of it, what the fiscal impact will be on young people and their parents?

[Elizabeth Truss]

The fiscal impact of the accounting decision—that is what this is; it does not alter the amount of cash going out the door—will come to light at future Budgets, and all these decisions will be taken in the round. As I have said, the Augar review is being conducted independently of that. It is about what is right for students. Of course we look at issues such as cost of living. Other aspects affect cost of living, including housing, and we are building more new homes to make housing more affordable across the board.

Draft Markets in Financial Instruments (Amendment) (EU Exit) Regulations 2018

David Lammy Excerpts

Monday 17th December 2018 General Committees

[John Glen]

In a no-deal situation, there will be a variety of scenarios with respect to the nature of our relationship with the EU; the calibration of our long-term competitive regime for financial services would depend on the calibration of that relationship, and legislation would be brought forward in the light of that.

I will make progress. To be clear, the intention in granting these temporary powers is to enable the FCA to operate the transparency regime in the UK from exit day and beyond, and to maintain existing outcomes, as far as that is reasonably possible. The 2018 Act does not empower the Government to make non-deficiency-related policy changes to EU legislation. If the Treasury is satisfied that the FCA is ready to undertake its transparency functions, the four-year transitional period may be ended earlier by the Treasury by the issue of a direction that must be laid before both Houses and published.

Some longer-term flexibility will also be given to the FCA to reflect the fact that it may not have access to pan-EU trading data after exit, and therefore may need to use reliable trading data from other countries when calculating certain transparency thresholds.

[Mr David Lammy (Tottenham) (Lab)]

Given the extensive nature of the measure, could the Minister outline what further resources he has made available to the FCA to deal with this? Is there some sort of impact assessment of the FCA’s capability?

[John Glen]

We have been working closely with the FCA for several months since the SI was published on 5 October. The FCA has discretion to increase its levy if it needs additional resources. That is not something it has communicated to us up to this point, but we have an active, ongoing weekly dialogue. That is a matter for it to bring forward in due course if necessary.

The report of the Secondary Legislation Scrutiny Committee, Sub-Committee B, which was published on 1 November, focused primarily on the transparency regime. It mentioned the adequacy of resourcing for the FCA to carry out its new responsibilities—an issue that has already been raised. The Treasury has been working closely with the FCA to deliver the programme of legislation. It is clearly important that the regulators be adequately resourced to deal with the impact of the UK’s withdrawal from the EU. I reiterate that I have full confidence that the FCA has the expertise required to run an effective transparency regime in the UK, irrespective of the outcome of the negotiations with the EU.

The FCA will also publish a statement of policy about how the temporary powers will be used before exit day. That statement of policy and any subsequent changes to it will come into effect only if the Treasury does not raise an objection to it on specified grounds. The Treasury may object to an FCA statement if it would potentially prejudice an international agreement that the UK hoped to reach, or if the Treasury believes that it may lead to a breach in international obligations. In a no-deal scenario, it is important that the Treasury is able to manage negotiations with international partners effectively. This objection mechanism is a sensible way of ensuring that.

Parliament will, of course, be able to scrutinise and question Treasury Ministers and the FCA further on their approach to the temporary powers—for example, through the Select Committee system—as Parliament does now. The SLSC report also noted that it would have been helpful if the FCA’s policy statement on the use of these powers had been made available to the House before this debate. That has not been possible, given the time the FCA needs to consider the drafting of such a statement. However, the FCA has provided assurance that a statement of policy will be ready at least four weeks before exit if the UK leaves the EU without a deal.

I turn to the other issues in this instrument. Currently, certain regulatory functions under MiFID II are carried out by EU authorities—principally, the European Commission and the European Securities and Markets Authority. The Commission and ESMA will, naturally, have no mandate to carry out these functions once the UK leaves the EU. Therefore, this instrument transfers the functions of the Commission to the Treasury and ESMA’s functions to the FCA and the Bank of England. It also transfers responsibility for making binding technical standards that specify the detailed regulations that firms must abide by from ESMA to the FCA, the Bank of England or the Prudential Regulation Authority. That is consistent with the approach set out in the Financial Regulators’ Powers (Technical Standards etc.) (Amendment etc.) (EU Exit) Regulations 2018, which were debated in this House on 10 October 2018.

This instrument also deletes provisions in retained EU law that would become redundant when the UK leaves the EU, such as requirements regarding automatic recognition of an action by an EU body, and other references to EU bodies and EU member states. In line with the Government’s overall approach, this instrument removes obligations on UK authorities to co-operate and share information with European economic area authorities, although this does not preclude UK authorities from co-operating and sharing information with EEA authorities on a discretionary basis.

Another important set of revisions concerns the treatment of third-country regimes. Under MiFID II, certain elements of a third country’s regulatory and supervisory regime may be deemed by the European Commission to be equivalent to the requirements of MiFID. For example, under MiFID II, trading in certain instruments must take place on recognised markets. If a third country is deemed equivalent for that purpose, MiFID II allows trading to take place on those third-country markets. To ensure that the MiFID II equivalence regimes can continue to operate effectively in the UK after exit, the Treasury will take on the European Commission’s function of making equivalence decisions for third country regimes. Existing Commission equivalence decisions are also incorporated into UK law so they will continue to apply to those third countries.

Windrush: 70th Anniversary

David Lammy Excerpts

Thursday 14th June 2018 Commons Chamber

[Mr David Lammy (Tottenham) (Lab)]

For, I hope, very obvious reasons, I am grateful for the opportunity to participate in the debate. In so doing, I think of my parents, who are no longer with us, of my brothers and sisters, and of so many aunts and uncles. I think of the life that we all lived in Dongola Road, Tottenham, in the 1970s and 1980s. I mention Dongola Road because at the top of the road lived another family, briefly. It was the family of our former colleague Paul Boateng. As I summon up those memories, I am so grateful to my hon. Friend the Member for Dulwich and West Norwood (Helen Hayes)—my dear friend—for initiating the debate, and for giving Parliament a moment to reflect on a most exceptional generation.

Today I want to remember the contributions of the 492 West Indian immigrants who arrived at Tilbury docks on 21 June 1948, and the 524,000 Commonwealth-born people who followed them until 1971. My own father arrived in 1956, from Guyana, and my mother arrived in the late 1960s. It is important to remember, when we think of those families arriving here, that when they arrived they were very young. My father was only 24, and he was actually at the older end of the scale among those who were on the boats. He produced my older brother just two years later, in 1958. I reflect, now, on what it means to become a parent in one’s mid-20s, in a new and strange country, juggling work, schools and health visitors: all those new things. In paying tribute to these people, we should reflect on how challenging that must have been at times. I hope that we also think about the first-generation immigrants who still come to our country, of how they manage to get by, and of the circumstances in which we support them.

Today, of course, I also want to think about the thousands of nurses who came to Britain before 1971, to form the backbone of our national health service—women like my aunts, whom I watched working late nights and early shifts with incredible pride and dignity; women who toiled for all Britain’s sick and injured. I think of the thousands of transport workers who were recruited directly from Bridgetown and Kingston, and who for 70 years worked as bus and train drivers, and cleaners and wardens, in Britain’s stations and on Britain’s streets. And in thinking of those transport workers, I think of my own mother, who did her own stint at London Underground, and of many occasions meeting her at Camden Town tube station, where she was based. I think of course also of Lord Bill Morris, elected general secretary of the Transport and General Workers Union, the first black general secretary of a trade union in Britain, who found his home in the movement after arriving in 1954—a British trade unionist for all British workers. And I think of great writers who have shaped our nation: people such as Andrea Levy and Zadie Smith, who have given us such moving insights into British life. And I am not sure that I would be able to be a politician were it not for the tremendous work of the scholarly Stuart Hall and CLR James, defining leaders in British political thought, but also the work of those who have been a little more of the street and the frontline: I think of my predecessor Bernie Grant and Linton Kwesi Johnson, whose language and tone always chimed with me.

Today I think of the descendants of the Windrush generation, whose parents and grandparents were told that there was no space under the British flag for them and that there was “no black in the Union Jack.” We tend when we celebrate to look at the positive, and nothing is more positive than Jessica Ennis, Daley Thompson, Linford Christie, Kelly Holmes or Colin Jackson draped in the Union Jack. And as I say that, of course our hearts are with Sterling, Smalling and Danny Rose, who will step out on Monday in the 2018 World cup sporting white, red and the three lions on their shirts.

But while reflecting on this great contribution there must also be a moment to think about the uncomfortable truths—the tough and the hard times—and to think about the struggles of those communities. As I stand here as the Member for Tottenham in London, I want also, as has already been touched upon, to think about communities in St Paul’s in Bristol, Chapeltown in Leeds, Handsworth in Birmingham and Moss Side in Manchester, and historical black communities in Tiger Bay in Cardiff and of course in Liverpool. These people formed the fabric of British society and today we remember them and thank them.

But we also remember the troubles that led up to the Notting Hill riots, the Brixton riot and the Tottenham riots, in which PC Keith Blakelock lost his life. We think also of the great injustices that lie behind parts of the pain and the stain on this country: the stain of the murder of Stephen Lawrence and those young people who lost their lives in the New Cross house fire.

Those on board HMT Windrush were invited here as a result of a Britain crippled by war: a Britain facing chronic shortages of staff; a Britain with a dream of healthcare for all but no way of making that happen. It was a Britain whose hospitals were barely functioning, whose trains were barely running, whose streets were reeling from the destruction and devastation of German aeroplanes that bombed this country, a Britain in desperate need.

Britain called, and they came. It is important to recognise why they came to the mother country, as they called it. They came because they wanted to take part in building Britain’s future, but they also came because there was little future left for them in the Caribbean. Like in Britain after the second world war, the homes of those on board the Windrush and the many boats that came after it had also been destroyed by a foreign power—a foreign power had left much of the Caribbean in a sorry state. Unlike in Britain, however, the siege of those countries had lasted for 300 years. Three centuries of colonial rule had stripped the Caribbean of much of its wealth and resources, and left behind an unsustainable plantation economy. Under the British, the French, the Dutch, the Spanish and the Portuguese, the Caribbean region and Latin America and south America had become little more than a warehouse from which to extract profit.

In 1948, the societies that had once been made up of slaves and their owners were instead made up of rich planters and landless, low-wage labourers. People in the Caribbean had been emancipated from slavery in 1834, but they had achieved their emancipation in name only. Ten years before HMT Windrush arrived on British shores, labourers in Barbados were earning the equivalent of just £3.50 a day. Half the workforce worked in manufacturing and agriculture. Many were employed on sugar plantations and forced to work for extremely low wages. They worked in unbearable conditions, their children were suffering from malnutrition and they faced an influx of disease.

In Jamaica, searing unemployment ravaged society. Britain had closed sugar plantations in favour of cheaper labour elsewhere, and the consequences were devastating. Labour riots were commonplace as people became increasingly frustrated by the destitution that they faced. In Guyana, society was reeling from the Ruimveldt riots in the earlier part of the 20th century. Again, much of the economy was crippled, and people were working in bauxite mines and on sugar or rice plantations for very poor wages and in very poor conditions. People were rioting as a consequence. We cannot forget that Britain’s development was grounded in the underdevelopment of the Commonwealth. Britain’s industrial revolution relied on the deindustrialisation of India, and its profits were built on the exploitation of Caribbean plantations and on the backs of Egyptian cotton farmers and Barbadian sugar producers.

We cannot forget that those on board the Windrush came to Britain filled with the promise of the British motherland, yet this was the same Britain that had promised away all their riches and resources. It was the same Britain that has never faced justice for the crime of slavery, and that stole 12 million people from their homes in the dead of night and carted them like cattle across the ocean and into slavery. This had never before been seen in the world. Britain was still paying off its debts to slave owners in 2015, but it has never paid reparations to those who are the descendants of slaves.

This is the same Britain that, sadly, has recently failed the Windrush generation. It had failed them previously, and it has failed them again today. Many of the Windrush generation have once again been made destitute by the British state. They have had their rights stripped from them, and they have been thrust into despair and desperation. The injustices that the victims face today have a long history, and it is a history that Britain must never forget. I do not say that to evoke guilt. This is not really about guilt. If you do not know where you are from, you do not know where you are going. If you just teach your young people the very best bits of history and do not examine the tougher bits, as the modern nations of Germany and Japan have had to do, you will make the same mistakes over and over.

I am so proud to be a parliamentarian in this great nation, and it is the privilege of my life to speak in this Chamber, but I worry that the “great” in Great Britain is too often predicated on an inability to examine the truths of parts of Britain’s past. The heart of that past is colonial, and as we think about the Windrush generation we do not just think about the fact that they landed in 1948; we think about the umbilical cord between Britain and these people, because they were brought from Africa. The surname I have is not the surname of my ancestors; neither is Diane Abbott’s and neither is Dawn Butler’s. Those surnames were given to us by our slave masters. The language that we speak is a language we learned, because our ancestors lost their language and their culture. That is at the heart of the Caribbean tradition. It is an area of tremendous hybridity. In the Caribbean—I might say the same of Latin America—there is a meeting of the world’s people that is best explained by the carnival of Trinidad or the reggae of Jamaica. That is the area that I know.

Many of the Windrush generation have once again been left destitute in recent times. The injustices that the victims face today have a history that we must remember. The story began in the 1700s and today, most painfully, we have been forced back across the Atlantic by the British Government in unlawful deportations justified by the “hostile environment.” That environment told Windrush citizens that they have no right to the British public services to which so many of them had dedicated their lives and to which their ancestors had contributed. The nurses who toiled in our hospitals, the train drivers, and the other public sector workers upon whom Britain relied were told that their contributions were null and void, and that they should leave this country immediately. Seventy years on, the Government thanked the Windrush generation for their service to this country by throwing them into detention centres and deporting them.

Those victims have still not seen justice, and the Government’s response to the crisis continues to be inadequate. Why is there still no hardship fund for the Windrush victims? Why are innocent British citizens who have been made homeless and jobless by the Home Office being forced to wait months for compensation? People have been pushed into rent arrears and debt by the Home Office, but they still have no financial support. Why are they still being punished for the failures of the British state? Why have 32 of the 63 Windrush citizens unlawfully deported as a result of the Government’s hostile environment policy been refused their right to return to Britain? Why has the Home Secretary decreed that they should be exiled abroad instead of facing British justice in British courts as British citizens?

Why has my constituent Oliver Hutchinson, who arrived from Jamaica in 1970, still not seen justice? He is a citizen by right, but for all of his life he has lived in fear of immigration enforcement and has been unable to get a job, access benefits or even have a stable home. He was arrested recently at a routine appointment with the Home Office on a bench warrant that was 20 years old.

Why has the Windrush taskforce, which has been specially appointed to support victims of the scandal, delayed its response time? Why are hundreds of victims who have contacted the taskforce regarding their citizenship still waiting for an appointment at the Home Office?

Above all, today I think of the victims of this crisis, victims who are still facing desperate uncertainty, and the Government’s subsequent response. I think of Oliver Hutchinson; of Balvin Marshall, a British citizen made homeless and jobless by the hostile environment; of Rosario Wilson, whose grandfather arrived in Britain in the 1950s and who has spent thousands of pounds trying to prove his citizenship; and of my 27 constituents with ongoing cases and the thousands of other Commonwealth-born Britons who live in fear and uncertainty.

I say to the Secretary of State, who has said of those Windrush citizens with criminal records who have been sent back to the Caribbean that he has no intention of bringing them back, that that is unacceptable. It is unacceptable because they are British citizens first. This country has had no such debate on the deportation of criminals. This country stopped deporting criminals to parts of the Australian Commonwealth in 1868. How can it be that, with no debate and no discussion, it has been deemed acceptable once again to deport British citizens, even if they have a criminal record, back to the Commonwealth?

Can I say how badly this has gone down in the broader Commonwealth and how sad and embarrassing it was that we had this discussion and this debate during the Commonwealth Heads of Government meeting? This is not what the Commonwealth expects of the mother country. It has been a very painful episode indeed.

As we commemorate this epic contribution and we think of the joys and the heroes, I thank God for people like Trevor McDonald and Moira Stuart entering my household on Dongola Road and lifting the spirits of my family and my cousins over so many weeks, months and years. As we think about all those great sons and daughters of this great region, let us also think of what further contribution we can give to these people, people who—I hope my right hon. Friend the Member for Hackney North and Stoke Newington (Ms Abbott) will allow me to say this—in some ways contain a little fragility because of that slave history.

There was no reparation for those slaves, and the Caribbean nations have been united in wanting to put the issue of reparations back on the table at the United Nations as they think of their futures. Why do they do that? It is because, as they celebrate so many years since independence—Guyana celebrated 52 years of independence just a few weeks ago—and they look forward to the future, they think about the economies they inherited and they think about all they have achieved but, frankly, there is a sense in which they were abandoned. It is important that this country hears and listen to those calls for support, particularly against a backdrop of the Government making it clear that they wish to enter into trade negotiations with those countries once again. Let us consider: what do reparations look like for those Caribbean nations? How do we make that work? What dialogue do we as a country need to have with those people?

Can we also think about our heritage in this country? In the last few years we have seen the birth of the Black Cultural Archives, based in south London; the International Slavery Museum in Liverpool; and organisations such as the Stephen Lawrence Centre and the Bernie Grant Arts Centre. Many of these organisations are struggling today. Frankly, they are struggling for a handout from the Department for Digital, Culture, Media and Sport. What they should have got was a proper endowment, from which they could derive interest, that bought them security so that they could continue to make a contribution to this country. As we think about those landing cards that were destroyed, let us redouble our efforts on behalf of organisations such as the Black Cultural Archives.

Finally, let me say that we are having this debate against probably the most depressing backdrop possible, having seen the murder of 78 young lives here in the city of London. May I say most gently that there is something that connects these murders at this time with the sorts of crime that we see also in African-American societies and, sadly, in parts of the Caribbean, particularly in Trinidad and in Jamaica. That story is a story of dislocation. It is the story of a lack of fatherhood and role models, and it is a story that begins with those plantations. If you take a black man and you say to him that you can move him across the country to another plantation and strip him from his family, so that he does not own himself or his relationship with his wife or with his children, you create a phenomenon that is very real in those communities: the phenomenon of the babymother, where it is not my wife or my husband, but my babymother or my babyfather. That legacy lives on in our communities. It is a community that has been way too accustomed to violence. This is the dislocation of not seeing those role models in front of you and never hearing your history, and this is about how that affects generations years and years later. We are a community of tremendous resilience, but we cannot all be resilient. So in thinking also of that more painful legacy, let us think about the renewed support that this country needs to give.

--- Later in debate ---

[Peter Grant]

I am grateful to the hon. Lady for correcting me on that point.

Earlier speakers have mentioned some individuals who made an incalculable contribution to making London what it is, to making England what it is and to making the islands of Britain what they are. I want to mention someone who, in some ways, has nothing to do with Windrush, but whose story illustrates something quite important. His name was Andrew Watson. He was born in Guyana of a Glasgow father and a Guyanese mother. His father was almost certainly an administrator on a plantation, but probably not a slave owner, although I cannot be too sure. His mother had certainly been a domestic servant at best, and she may well have been a slave. Andrew came over to the UK with his dad—we think it was after his mother died or when she became too ill to look after them. As his dad was very wealthy and well connected, Andrew had a privileged upbringing. It was the kind of privileged upbringing that very, very few Caribbean people living in the United Kingdom at that time could ever have dreamt of.

Andrew was also an exceptionally talented footballer. In 1881, he won an international cap for Scotland. He was the first black person ever to play for Scotland. I wish that we could have him back now. He played only three games for Scotland, and the results were Scotland 6, England 1; Scotland 5, Wales 1; and Scotland 6, England 1. If only we could have him back now. The reason why he stopped playing was that, for employment purposes, he had to move down to London, and the rule was that if a player did not live in Scotland, they could not play for Scotland and if they had played for one country, they could not play for another.

Andrew was the first black player to win a major trophy in any area of Great Britain. He was in London for part of his career. He was the first black player ever to appear in what we now know as the FA cup. Ninety-three years after Andrew Watson, the second black player turned out to play for Scotland. I remember him—I remember watching Paul Wilson of Celtic on the telly when I was a teenager. I was surprised to hear that Paul Wilson was the second black player to play for Scotland, because I only saw the colour of his jersey; I did not notice what colour he was.

It is a sobering thought that Andrew Watson did not experience any kind of racism. People noticed that he wore a different colour of boots to the rest of the team—in those days players had to buy their own boots, and his dad bought him a different colour from the rest of the team—but he does not appear to have suffered from any kind of racism at all from the press, from supporters or from his colleagues. Paul Wilson experienced racism when he first turned out for Scotland, and experienced it regularly when he played for Celtic, as indeed did the first generation of black players to play anywhere in the United Kingdom.

[Mr Lammy]

I hesitate to interrupt the hon. Gentleman. I am hugely appreciative of the fact that he has put on the record the link between Scotland and the Caribbean region. I took a DNA test not so long ago and it turns out that I, too, am a Scot. I am very well aware of my connections to the Blair family, and so potentially a former Prime Minister, and also to the Laing family, and so potentially a Madam Deputy Speaker.

[Peter Grant]

I knew there was something special about the right hon. Gentleman that I just could not put my finger on; all is now revealed. He might well find that he has more Scots blood in him than I have, because the more I look back at my ancestry the more I discover that a lot of it is actually from Ireland—Northern Ireland, rather than the Republic.

I am of immigrant descent. We all are. My ancestors may have come to mainland UK a few years before the ancestors of some hon. Members, but we are all immigrants. There is nobody left in the UK who can claim to be 100% indigenous English, Welsh, Scots or Irish. We would do well to remember that, because the question is not about who is an immigrant, it is just about how long we have been an immigrant for.

Paradise Papers

David Lammy Excerpts

Monday 6th November 2017 Commons Chamber

[Mel Stride]

My hon. Friend is absolutely right. We seek to move forward on the basis of unity with our overseas partners. That is why we have played such a full role with the OECD.

[Mr David Lammy (Tottenham) (Lab)]

Like me, two thirds of British taxpayers are taxed at source through PAYE. They just cannot understand why anyone would want to put money into a small island like Bermuda, the Cayman Islands or Jersey. The Minister says that there are legitimate reasons for doing so. Will he educate me: what are the legitimate reasons?

[Mel Stride]

As the right hon. Gentleman knows, there are many reasons why individuals use trusts. It may be that I want a trust for my children and I do not want it to be known publicly exactly how that trust will operate, for reasons of confidentiality. People may use overseas trusts because they are looking at dollar-denominated trading and need a jurisdiction in which that occurs. There is a whole variety of reasons. The idea that every time the word “trust” is mentioned it suggests something grubby or illegal is plain wrong.

Article 50: Parliamentary Approval

David Lammy Excerpts

Monday 11th July 2016 Commons Chamber

[John Penrose]

My right hon. Friend makes a very important point: it is essential for the health of democracy, as much as for the future direction of this country, that voters understand and believe that we here hold their opinions in high regard and feel morally bound to deliver on them. If we ignore their democratically expressed consent, we will face a much bigger problem than at present, because that would undermine the very foundations of the democratic consent that underpins this place. I cannot think of a more dangerous route for us to go down.

[Mr David Lammy (Tottenham) (Lab)]

Is not the situation a bit more than ticklish? This is the biggest constitutional change for our country for half a century. Last week, Chilcot criticised the legal processes that led to the Iraq war, criticised the way in which prerogative power worked in the run-up to that war and, most importantly, criticised the fact that there was not a sufficient plan for after the invasion had been completed. On that basis, is the Minister really saying that we should not come back to Parliament so that individual Members can reach a view on whether we should trigger article 50?

[John Penrose]

I would draw a distinction in my reply between “whether” and “how”. We have been very clear, as has my right hon. Friend the Member for Maidenhead, that the destination is not in doubt: Brexit means Brexit, as I have said several times already. How we get there, however, is a matter for discussion. It is a matter for my right hon. Friend to lay out and I am sure that, once she is behind the door of No. 10, she will do so. At that stage, I hope that the right hon. Gentleman will have more detail about how those discussions and announcements might be made.

Bank Branch Closures

David Lammy Excerpts

Thursday 30th June 2016 Commons Chamber

[James Heappey (Wells) (Con)]

I join the hon. Member for City of Chester (Christian Matheson) in thanking the Backbench Business Committee for awarding us the debate. As he says, people should not mistake the sparsity of Members in the Chamber for a lack of enthusiasm for this cause. Many of my colleagues have told me just how significant it is to their constituencies, and it is just a shame that, for Members on both sides of the House, there are some distractions at the moment.

The issue of bank branch closures is gathering pace. There were 222 in 2013 and 681 last year, and given that there have already been 333 this year, it appears that the pace will quicken still further. The issue was drawn to my attention in my constituency by the fact that there are too many empty buildings on our high streets which used to be banks. There have been closures in, for instance, Wells, Shepton Mallet, Burnham-on-Sea and, most recently, Glastonbury. I pointed out during Prime Minister’s Question Time some months ago that there was still a chance of saving at least one of Glastonbury’s banks, but all four of them went in one year, and three within 14 weeks. Today’s debate is timely, because the following week there were 200,000 people in fields not far outside Glastonbury. The idea that the town does not have a single bank must seem quite remarkable to all Members.

The Last Bank Standing campaigners in Glastonbury have fought their corner in a formidable fashion. You will be entertained to learn, Mr Speaker, that when Lloyds closed, it marked the closure by putting a mock-up of a black horse in a coffin, feet up, and marching it out of the town in a funeral procession for banking. I am not sure that those in the bank’s PR department were particularly enthused by that. The sad reality is, however, that no matter how hard the campaign group worked to save those banks, their work was ultimately to no avail.

Having just embarrassed Lloyds, I will now praise NatWest, which saw an opportunity to take a mobile bank into the town occasionally. That service is very welcome and many people value it, but it is there for only an hour or two a week. The community is now, very creditably, considering the options for a credit union or community bank, but the hurdles are significant. It is extraordinarily difficult for a community to establish something that is not just a credit union for the purpose of saving, but a bank with functionality.

I do not think that it should have been possible for a town the size of Glastonbury, with such a vibrant economy, to lose all its banks. That suggests to me that the access to banking protocols that were agreed during the last months of the last Government are simply not doing the job that they were intended to do. I shall return to that point later, but one of the challenges posed by the protocols is the requirement for community impact statements to be produced, and in those statements the usage of the banks is hotly contested. The banks say one thing, and campaigners say another. When the Federation of Small Businesses surveyed businesses in the Glastonbury area that were using local banks, 750 of them responded. Glastonbury contains only about 10,000 people, but it serves a much wider hinterland. How extraordinary it is that 750 businesses should reply to a survey entitled “Glastonbury Bank Closures”! That tells us just what an important issue this is.

There is also the challenge of rurality. There are transport links in areas such as mine that do not allow people to travel freely from one town to another to do their banking when the bank on their high street has closed, and the people whom that disadvantages most are the most vulnerable and the isolated in our society.

[Mr David Lammy (Tottenham) (Lab)]

The hon. Gentleman has just made an excellent point, but may I ask him this? Given the iconic status of Glastonbury, and given the problems that clearly existed before the last branch closed, did the bank bother to consult him before making its decision, or was he presented with a fait accompli?

[James Heappey]

To be fair to the banks, they did write to notify me of their decision, and the more noise I made in the media, the more willing they were to meet me here to discuss it. However, the right hon. Gentleman would be right to suggest—and I would agree—that it was not exactly a process whereby the local Member of Parliament was encouraged, as a representative of the community, to take soundings on what was actually of value to that community. It was more about assuaging my fears and trying to persuade me that various steps were being taken in mitigation.

I was talking about the vulnerable and the isolated. There are certain things that draw the elderly, in particular, out of their homes over the course of a week, such as going into town to do their banking and to visit the market and the library. When banks are removed from towns and people are told, “We will teach you to be better at using a computer”, that is all well and good, but it does not alter the fact that, for some, that journey into town will have been their interaction with the outside world for that week.

Moreover, digital exclusion is a real problem, in two respects. First, there is the issue of competence. There are people who are just not very good at handling their affairs over the internet. There are people who have been doing things in the same way for a lifetime, and who do not trust the process of putting their financial affairs in the hands of electrons on a screen. They want to give their money to a person over a counter, and see it locked away in the drawer and on its way to the bank’s vaults.

Then there is connectivity. I know this is not a rural-urban issue and I know that the Government’s broadband roll-out programme is making great advances in areas like mine, but the reality is that these banks are closing more quickly than the broadband network is being improved and so even those who are willing and able to do their banking online are not always able to do so.

--- Later in debate ---

[Mr David Lammy (Tottenham) (Lab)]

I congratulate my hon. Friend the Member for City of Chester (Christian Matheson) and the hon. Member for Wells (James Heappey) on securing this important debate and echo the concerns that have been raised. Looking at the evidence, it appears that the Government lack the political will to hold the banks’ feet to the fire. What happened when a review into banking culture was announced? It was quietly shelved a few months later. What happened when branches were closing down at a rate of almost two a day in rural communities and deprived areas across the UK, affecting local businesses, the elderly and the disabled? Very little indeed. And what is happening when banks renege on their promise to retain the last bank in town, meaning that 1,500 communities have lost all their banks? Absolutely nothing.

It does not strike me as fair that ordinary people are paying the price for the failure and mistakes of banking executives. Those ordinary people have been good to the banks. They have loyally paid in their savings month after month. They have taken out their mortgages with their bank. In the cases of Lloyds, Halifax, RBS and NatWest, they have bailed them out after the banks got themselves into trouble during the financial crisis. The banks have got themselves into trouble time and again, lurching from one scandal to the next, by aiding and abetting clients who want to avoid paying their taxes, fixing the LIBOR rate, money laundering, mis-selling PPI—the list goes on. Barclays, HSBC, Lloyds and RBS have been hit with fines of more than £55 billion since 2010, and that figure is set to rise to £75 billion by the end of next year, but who takes the hit? Their customers, whose views and needs are completely disregarded by the banks’ management teams.

It is not as though there is no evidence to tell the banks that their customers value their local branches and want them to remain. Research from the Competition and Markets Authority in April 2015 found that 63% of current account customers felt that having a convenient local branch was either “essential” or “very important”. Research conducted for TSB in June found that 69% of people believed it was important to have a bank branch close to where they lived. Just because more people are repaying small debts to friends or carrying out basic money management online or by using an app on their phone, that does not mean that branches are becoming redundant—far from it. The Social Market Foundation has found that, when it comes to big financial decisions such as taking out a loan or a mortgage, or seeking financial planning advice, the majority of consumers still use bank branches. In these troubled economic times, ordinary folk want to be able to go into their branch and get good advice so that they can properly plan their finances, but in towns, villages and cities across the country, that is soon going to be nigh on impossible. That is why this debate is so important.

Banks are disproportionately shutting up shop in lower income areas. Indeed, 90% of the 600 branch closures between April 2015 and April 2016 took place in areas where the median household income is below the average of £27,600 a year. Move Your Money has told me that, far from responding to demand pressures, the major UK banks are simply closing branches in poorer areas and opening or retaining them in more affluent ones. We are seeing the creation of a dual financial system in all but name, with one section for the wealthy and the middle classes, and another for those on low incomes.

The University of Nottingham has found that the least affluent third of the population has borne the brunt of two thirds of the total closures since 1995. Indeed, the rate of closures experienced in traditional manufacturing and inner-city areas is 3.5 times higher than in areas defined by academic researchers as middle England—mainly suburbs and small towns. It is therefore a cruel twist of fate that those who are most likely to be adversely affected by branch closures are the people living in those areas in which most closures are happening. Do we really want this country to become like some areas of the United States where those who are already deprived and poor are bereft of quality financial services and left to flounder? Again, that is why this debate is so important.

I know the situation to be true because earlier this year HSBC decided to close its branch on Tottenham High Road after almost 100 years. That followed the closure of a branch of Barclays the year before. In just two weeks’ time, that HSBC will close its doors for the last time. My constituents have been told to travel to Southgate if they want to access a branch, but the journey takes at least 45 minutes by bus. What is the impact of that closure on the elderly? What is the impact on the disabled, the vulnerable and local traders who rely on such branches? I am appalled that HSBC’s management did not feel it appropriate, or even a matter of common courtesy, to consult the local Member of Parliament, the local authority, councillors or the community before making that decision.

The situation is an outrage because my constituency is a target regeneration area for the Government and the Mayor. The Treasury has underwritten regeneration in Tottenham to the tune of £500 million. We have Spurs—the best premiership football club—building a new stadium in the constituency, yet the bank did not think that it was worth picking up the phone and calling the local authority leader or the local MP to say, “We are thinking about this. What do you think? What will the High Road look like in the months and years ahead?”

[Mims Davies (Eastleigh) (Con)]

The right hon. Gentleman is making an important speech about the value of banks to our communities. Barclays and HSBC have contacted me about closures in Hamble and Hedge End respectively. In my experience, there is no point hearing from them because they have already made up their mind. The situation is difficult and disappointing for my elderly, vulnerable and, perhaps, non-internet-savvy residents.

[Mr Lammy]

The hon. Lady makes an excellent point; that is also my experience.

I am talking about consultation with democratically elected people. Banks certainly ought to speak to the local authority leader before making a decision to say, “We’re thinking about it. What do you think the impact might be?” All of us, as professionals and Members of Parliament, are used to having private, confidential conversations every day of the week. We are sometimes able to say, in private, “Have you thought about this or that?” We can talk about the future economic context of a community of which the bank may not be aware. But there was none of that; I was presented with a fait accompli. Frankly, HSBC was patronising.

When I was a 16-year-old with what felt like very little prospects way back in the mid-1980s, I got a little job over the summer holidays in that local HSBC branch—it was then Midland Bank. I feel personally affronted that the bank where I saw my first prospects, and where I had put on a suit and thought that I might have serious job one day, is to be shut down without HSBC even thinking of consulting me. It meant a lot in the local community that I used to work in the bank, but HSBC was not interested. That is what big banking has come to in this country after all that we have paid in. I am frankly appalled by HSBC’s behaviour.

Given that the Government talk about being a friend of small business and the high street, it is important that they think carefully about this issue. In June 2014, research by YouGov for the British Bankers Association found that over 50% of people see a branch as important, with that figure rising to 68% for SME customers. The impact of branch closures goes far beyond local businesses having nowhere to go to get credit or to do their banking. The consequences are grave for the whole high street.

Local retailers are hit hard by the fact that customers go elsewhere when they do not have easy access to cash, which is still the preference for many, despite the rise of chip and pin and contactless payments. Cash still accounts for 46% of high street sales, with that figure rising to 75% in newsagents and convenience stores. On average, local ATMs inject some £16 per withdrawal directly into nearby stores, which amounts to £36 billion a year. More than a third of total high-street spending is contingent on the ready availability of cashpoints.

I was told by HSBC that one reason why it was closing my local branch was footfall on the high street. I pointed to the fact, which it had seemed not to realise, that we had had riots just a few years before and that we had found wonderful businesses that wanted to support the high street, not desert it, as it made its way back from the riots. Given that this bank was meant to be one of our national institutions, citing footfall as its reason was deeply painful to my constituents.

In tough times, people remember who their friends are. The banks should think carefully about their customer base and how their customers feel when banks desert a community that has already been through the mill and is trying to build its way back. I think of parts of this country that not so long ago had floods, for example. It takes a long time for a high street, a village or a town to get over a flood. Are the banks going to blame lack of footfall and say, “Things were a bit depressed for a few months so we just couldn’t stand by you. We’re disappearing”? Customers have stood by them, so it is about time that they grew some, as my mum would say, and stood by the community.

[Mr Gareth Thomas]

Can I tempt my right hon. Friend to agree that perhaps part of the solution would be more action by regulators and the Government to encourage different kinds of banks to emerge—banks that are profit-making, but not necessarily profit-maximising? Many banks, including those he has listed, will always face pressure from shareholders, in their management’s view, to reduce costs. Bank branch closures are always likely to be among the options available, so perhaps a different kind of bank is necessary.

[Mr Lammy]

My hon. Friend is right. The House will recall the hugely important role that building societies played in local communities 20 years ago. We destroyed that important relationship as they all merged and became banks, and now we are left where we are. That local proximity and that different structure were lost and now we have to reinvent it. I hope that the hon. Member for Wells is part of that reinvention. The Government should think carefully about whether we need a review of such new structures. If we do, the man to do it is my hon. Friend the Member for Harrow West (Mr Thomas), who knows a lot about mutualisation and co-operatives. We need that back on our high street.

The access to banking protocol is undergoing independent review by Professor Russel Griggs—I am sure that the Minister will refer to it. In response to my written questions last month, the Government revealed their belief that

“banks should act in the best interests of their customers and continue to serve the needs of the consumer as well as the wider economy”,

and that

“it is imperative that the banks live up to the spirit, as well as the letter, of the commitments in the protocol.”

However, the Government also revealed that they have not

“assessed the impact of the protocol or banks’ compliance with their commitments in the protocol”.

Perhaps the Government have not bothered to assess the protocol because they know that it is irrelevant. It cannot and does not aim to alter any decision and, as such, pays mere lip service to the idea of access to banking. The protocol states that after a bank has decided to close a branch, it will engage with local stakeholders in order to understand the impact on the community, businesses and consumers. What is the point of a consultation after the decision has been made? That is not a consultation in the proper sense of the word—it is a notification of the closure. May we change the wording from “consultation” to “notification”? Once the horse has bolted, it does not make a blind bit of difference how customers or local businesses will be affected, so surely it would make sense to have a proper, full and open consultation process in place when the bank is considering the future of a branch, before serving notice on the local community in question.

Another problem with the protocol is that there is no firm definition of adequate replacement services; it is left up to the bank to assess and even define those. Leaving the elderly and disabled with no choice but to take a 90-minute bus trip is not an adequate replacement service by any stretch of the imagination. It is clear that when banks make their decisions, they do not take into account the public interest or the likely damage that a closure will cause. I cannot see how the access to banking protocol is anything other than a woolly and inadequate attempt to protect the bank’s name.

The Government have not assessed banks’ compliance with the commitments in the protocol, I assume because their conclusion would be that there is no mechanism in place to police whether banks have fulfilled the commitments that they made in relation to closing down a branch. If a bank says that it is closing a branch but will work out an arrangement with the post office so that customers can bank there, or will move its ATM so that customers can still use it, are those promises worth anything if there is no way to enforce them? The access to banking protocol is merely being used as a Trojan horse on both sides. Banks can claim they have followed the protocol, no matter how meaningless it is, and that therefore their hands are clean and they do not need to do any more.

On that basis, it really is time the Government got a grip of this quiet scandal and tragedy that is taking place across our country and really hurting a lot of local communities. I commend my hon. Friend the Member for City of Chester for bringing this debate to the House.

Enterprise Bill [Lords]

David Lammy Excerpts

Wednesday 9th March 2016 Commons Chamber

[Mr Burrowes]

Yes, that is true. We should not tar all large retailers with the same brush. I think Tesco has also expressed concern. Some of them have no doubt got a commercial interest—they may have more convenience stores on high streets than other large retailers—but they share the concern that the Government’s devolutionary approach is not so practical for larger businesses, given that there are issues in relation to distribution centres and dealing with waste recycling. This will make things more complicated for them. In essence, the Bill is about cutting down on red tape and about deregulation, but this would mean a move in the opposite direction for such businesses.

[Mr David Lammy (Tottenham) (Lab)]

rose—

[Mr Burrowes]

When I get into my speech, I will come on to the protections for shop workers, but before I do that, I give way to my near neighbour.

[Mr Lammy]

As my constituency neighbour, the hon. Gentleman will remember walking down high streets such as mine and through parts of Enfield town after the riots back in 2011. Not one local shopkeeper whose shop had been ransacked said that devolving power in such a way—allowing big retailers to open for even longer on Sundays—would help their business. Such businesses are struggling anyway, and this sort of action will only make that worse.

Is the hon. Gentleman concerned about the definition of “tourist”? Can he explain what a tourist is? Am I a tourist when I go to Enfield, Southgate to shop?

[Mr Burrowes]

The issue about tourists is not for me. I will leave my right hon. Friend the Member for Meriden (Mrs Spelman) to make such a case in relation to her amendment 19.

I want to turn to the substance of the issue, which is first of all about process. This is a controversial matter. No one who has been around for a while and who has listened to people’s concerns will deny that it is controversial. That is plainly the case given that it divides opinions so much in this House.

--- Later in debate ---

[Mr Speaker]

Order. We have just under 50 minutes and many people wish to contribute. If everyone speaks for four minutes, we could have another 10 or so contributors. I ask Members to consider each other.

[Mr Lammy]

I was very pleased to add my name to the amendment proposed by the hon. Member for Enfield, Southgate (Mr Burrowes). I did so because although I recognise that none of us wants excessive regulation for our communities and that people should have the freedom to shop at convenient times for them, I think that the settlement reached by this House in 1994 was the right one, and I do not see the demand across this country to change that arrangement.

My primary concerns are twofold. First, there is the protection of family life. Some 75% of parents in this country feel that work impinges on their family life. Many of us have been abroad—in Spain, Portugal or France, for example—and we found real restrictions when it came to finding things open on a Sunday. We have been out at lunch time and found that the shops are on siesta. Why is it that in this country, this Government think we should put the free market above everything else? It is conservative to protect the family, and the family is worth protecting.

Tax Credits

David Lammy Excerpts

Thursday 29th October 2015 Commons Chamber

[Jenny Chapman]

No, I do not. That is a pertinent point. I know that we will be challenged to find the money that is needed to reverse the change. We could find it through changes to pension tax relief or, very quickly, by reversing the changes to inheritance tax that we opposed and to which we remain opposed.

I want to illustrate the points that I have made in the limited time I have left. We have had quite a high-level discussion so far, but this debate is about real people. It is rare to find a constituent who is willing for their name and personal information—particularly on a financial issue—to be shared in the House of Commons, but I had no difficulty finding people in Darlington who were willing to share their names and details, and to become the poster people for this campaign because they are so angry about what the Government are trying to do to them.

Becky in my constituency lives on Red Hall estate and earns around £16,500 a year. She is a single parent, and her son is eight years old. She stands to lose £1,951 in tax credits per year. She told me that she is already struggling and has difficulty paying for essentials such as heating and electricity. Her salary will not change when the minimum wage increases, and she will not benefit from changes to childcare because her son is eight years old. I can tell the Minister that an eight-year-old is no cheaper to support than a four-year-old.

[Mr David Lammy (Tottenham) (Lab)]

Amen!

[Jenny Chapman]

Becky has already had to cut out extras. She can no longer buy herself clothes, and the reduction in income will have to come from money that she spends on food or heating her home. She said:

“The Government told us that working was the way forwards out of poverty, yet these changes will put myself and my son into poverty.”

Her very real choice will be between heating and feeding her son. Many people will also have to choose between working and not working, and that is what concerns me most. I want everybody who can work in my constituency to get out and get a job because that is good for them, and good for their kids. People should never be better off on benefits than they are in work, yet that will be the effect of this change.

[Mr Lammy]

My hon. Friend’s speech follows in the tradition of Eleanor Rathbone who was one of the earliest female MPs in this House from 1929, and campaigned for family allowances. Some of the anger that my hon. Friend is conveying via her constituents is because in this country successive Governments have topped up incomes, understanding the position of poor people and children. Churchill extended the system of family allowances. My hon. Friend is making a fantastic speech, but, on her last point, does she also accept that people will take one, two or three jobs, and that we will have latchkey kids raising themselves?

Tax Credits

David Lammy Excerpts

Tuesday 20th October 2015 Commons Chamber

[Mr Clarke]

I will give way in a moment, but I want to make some progress. I do not want to speak for long, as lots of Members want to speak. Let me just finish my outline, then I will start to give way.

When tax credits were introduced, the then Government were confined by their election promise to stick to the spending and tax programme that they had inherited, because of the deficit. I seem to recall—I have not looked this up—that they therefore introduced them by means of a device that treated them not as public expenditure but as a tax change. Indeed, I seem to recall being assured on the Floor of the House by the then Chancellor of the Exchequer, when I expressed my disbelief, that they constituted negative expenditure.

That is why the payments became the responsibility of the Treasury and were described as tax credits. The Treasury is—or was—very good at collecting money from people who do not want to pay it, but with great respect to my old Department, which I greatly admire, it was not particularly suited to handing out benefits to people on low incomes with any degree of reliability or accuracy. I still get constituency cases relating to tax credits, because the system is based on forecasting someone’s income based on the previous year, but lots of people do not notify precisely all the changes in their arrangements. Ever since the system started, one feature of it has been that perfectly ordinary working people get demands to repay thousands of pounds that have been paid to them in error. I think that the level of error has come down, but at one point it was staggering, with a very high proportion of claimants being given bills by the Treasury that they could not afford to pay.

These measures were usually introduced on the eve of an election, so that even more members of a grateful public could receive yet more money on top of their pay. More importantly, it rapidly became clear that a lot of this money was subsidising employers, who found that they could hold down incomes. This was happening at a time when the economy was coming out of a recession, and they could therefore hire all the staff they needed, with the taxpayer subsidising their pay.

Given the objectives that we are all agreed on, and that it is quite obvious that we need welfare reform—although Labour Members are unable to think of any at the moment—I cannot think of a more obvious target for such reform than the tax credit system. I approve of the Government’s choice in that regard. Of course, electoral bribes are always difficult to reverse, but I shall explain in a moment why this is a good time to make substantial progress towards getting rid of this dreadful mistake, which the last Labour Government should never have introduced.

[Mr David Lammy (Tottenham) (Lab)]

The right hon. and learned Gentleman makes an important point about the nature of the benefit and the difficulties some people experience in paying it back a year later. Does he accept, however, that the system of family credit was introduced by Margaret Thatcher, and that Eleanor Rathbone fought for family allowances back in 1929? There has broadly been a cross-party consensus that the welfare state has to deal with those on low incomes, particularly those who are working.

[Mr Clarke]

Of course the Government have a duty to look after those of all kinds who are below subsistence income—that is what we have the welfare state for. I used to support family allowances with some vigour, because in those days we had persuaded the then Government to pay it to the mother, and a high proportion of women—there probably are still some in this position—did not know what their husbands earned and it was right to pay a benefit for the children directly to them; it was a kind of social reform. I did agree with the current Government that the time had come to end it for higher-rate taxpayers—again, it was a general subsidy. Various attempts were made to do a negative income tax, but we never succeeded in finding one—I tried over the years, talking with Chancellors and also when I was Chancellor. What has been introduced—tax credit—was a Clinton invention, altered by the Labour Government, and it has never worked properly, for the reasons I have given.