Oral Answers to Questions

Debbie Abrahams Excerpts

Tuesday 2nd July 2019 Commons Chamber

The Chancellor of the Exchequer was asked—

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

1. What discussions he has had with the Secretary of State for Work and Pensions on the adequacy of social security spending in tackling poverty throughout the UK.

[The Chief Secretary to the Treasury (Elizabeth Truss)]

Thanks to our welfare reforms, we have been able to get more people into work, we have the lowest unemployment rate since 1974 and more than 667,000 fewer children are living in workless households than in 2010.

[Debbie Abrahams]

Some £30 billion of support to working-age people has been cut from the social security budget, and there is more still to come. Eight out of nine disabled people will not benefit from the measures introduced in last autumn’s Budget and over 4 million are living in poverty. In the Chancellor’s last few weeks in post, what will he do to right this wrong?

[Elizabeth Truss]

I do not agree with the hon. Lady’s analysis. The fact is that income inequality is lower now than it was in 2010 and absolute poverty after housing costs is at a historic low for children.

Discrimination in Football

Debbie Abrahams Excerpts

Thursday 11th April 2019 Commons Chamber

[Mims Davies]

The hon. Gentleman makes an important point. At the racism summit I held, there were people outside football holding football to account for not being diverse and welcoming enough. They know the problem. It is time to change who is at the top, because that changes everything.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

Racism and discrimination in football and other sports reflects society as a whole. Does the Minister agree that we need to be demanding more not only of our football and other sporting institutions, but of our leaders in the public and private sectors—and, dare I say it, in politics?

[Mims Davies]

We all have a hugely important role to play. I absolutely agree with the hon. Lady. We want sport, politics and our whole country to be open, tolerant, diverse and equal. We all have a role in making that happen.

Oral Answers to Questions

Debbie Abrahams Excerpts

Tuesday 9th April 2019 Commons Chamber

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

In the spring statement, my right hon. Friend the Chancellor launched a review of our infrastructure financing, which includes that question on whether the UK would benefit from institutional arrangements. We have also made significant funds available to ensure that there is no shortfall for businesses that rely on the EIB.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

T4.   Last month’s Office for National Statistics figures show that life expectancy for the poorest has fallen whereas for the rich, it has increased. Analysis into the key drivers of that, including Public Health England’s investigations, shows that it is the result of cumulative tax and social security changes. I therefore ask the Chancellor, once again, what will he do about that, and particularly, will he stop immediately the benefit freeze that has such a devastating effect on people’s lives?

[Elizabeth Truss]

As I have said, we are moving on from the benefits freeze. We are in a position now where real wages are growing and benefits will increase in line with inflation from 2020. However, the best route out of poverty and to helping people is ensuring that children get a good education and that more jobs are available in our economy.

Spring Statement

Debbie Abrahams Excerpts

Wednesday 13th March 2019 Commons Chamber

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

Four babies in 1,000 will not reach their first birthday as a result of this Government’s austerity policies. If the Government are so keen on tackling burning injustices, why will they not end the freeze and end it now?

[Mr Hammond]

I am sorry—I did not hear which freeze the hon. Lady asked about.

[Debbie Abrahams]

The benefits freeze.

[Mr Hammond]

I have answered the question. The benefits freeze will end at the end of the forthcoming year.

Bus Services: Greater Manchester

Debbie Abrahams Excerpts

Monday 4th March 2019 Commons Chamber

[Jim McMahon]

I thank my hon. Friend for her intervention. I congratulate her on the work that she does in supporting constituents for whom this is a real issue. Middleton and Heywood have First Bus as the main operator as we do in Oldham, with the main depot being based in Oldham for north-east Manchester. It runs the lion’s share of the routes, so there is no competition that would mean that the standard was raised. I appreciate that point being made.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

Is my hon. Friend and neighbour concerned, as I am, about the reliability of bus services? That is a constant cause of concern not just in casework but among my staff, one of whom had to wait over an hour for a bus tonight and was yet again late. Is my hon. Friend also concerned about the decrease in the use of bus services? There has been a decrease of 25 million journeys in the space of five years in Greater Manchester.

[Jim McMahon]

Over the past decade, we have seen 32 million fewer bus journeys a year as a result of poor services. I congratulate my hon. Friend and neighbour on the work that she does in fighting for access to rural services, where many people feel isolated. When the bus does not turn up on time when it is needed, particularly in the winter when it is dark, as at the moment, it can be very difficult for local people. She campaigns on that with real effect, and I congratulate her.

--- Later in debate ---

[Ms Ghani]

The hon. Gentleman makes a valid point about the statutory instrument tomorrow, but funding for buses, especially for Manchester, is particularly high compared with other parts of the country. It does very well for buses through different types of funding across the Government. For example, I sign off on budgets for low-emission buses. Manchester is always very good at putting together fantastic bids and securing funding, including, I believe, a section of the £2.5 billion transforming cities fund, which will again provide an opportunity to support buses and tackle congestion, thus bringing communities together.

The hon. Gentleman talked a lot about how services can improve, especially when more information is available on routes and ticketing, and accuracy and transparency on fares. That is why the open data part of the Bus Services Act is absolutely key. We know that passengers want to have good information and clarity not only about when they can get their bus but on how much their ticket is going to be. The bus open data powers in the 2017 Act will go further than the partnership provisions requiring all bus operators of local services in England to open up route and timetable, fares and tickets and real time information for passengers from 2020. Those improvements aim to remove uncertainty in bus journeys, improve journey planning and help passengers to secure best value tickets.

The hon. Gentleman touched on accessibility. We recently launched the inclusive transport strategy, which looked at how we can further reinforce the accessibility that buses have and remind drivers in particular which parts of the bus are available for wheelchair users. That work will continue.

I will touch on air quality because the hon. Gentleman raised that valid point. The environment is absolutely key for our constituents and buses across the UK are cleaner than ever, with 15% of the fleet now operating using low-emission technology. The ultra-low-emission bus scheme was announced in March 2018, making £48 million available for local authorities and operators. He will be pleased to be reminded that bus operators operating in Manchester and the Greater Manchester Combined Authority received £14.76 million, which will fund 70 electric buses and support infrastructure.

[Debbie Abrahams]

The Minister said that 15% of buses are low-emission buses. What timescale are we looking for to get to 100% of buses being low emission?

[Ms Ghani]

The Department is doing what it can through the money that it is making available—for example, the £48 million that I mentioned—and the assumption is that that will help not only to retrofit buses but to encourage bus operating companies to invest in their infrastructure. We know that one reason why people will jump on a bus is that they realise that it is a cleaner way to manage the environment.

I fear that I may be running out of time. We have to accept that there is no single solution that will work everywhere. I am confident that our commitment to local transport and the powers in the Bus Services Act will help to drive up bus numbers, as we would like to see across the country, but we must remember that buses are managed by local politicians, local authorities and bus operators. Only they can deliver better services by working together. I look forward to working with the hon. Member for Oldham West and Royton and anybody else who is passionate about buses to do what we can to improve bus numbers up and down the country.

Question put and agreed to.

Leaving the EU: Economic Impact of Proposed Deal

Debbie Abrahams Excerpts

Wednesday 20th February 2019 Commons Chamber

[Mel Stride]

I will not be drawn into the Scottish National party again, but I thank my hon. Friend for his question. He is absolutely right—fundamentally, the way in which we manage the economy is one of the most important things that we do as a Government, which is why we have record levels of employment and the lowest level of unemployment since 1975. It is why we have halved youth unemployment since 2010, reduced the debt and have reduced the deficit by 80%, and it is why the economy is moving in the right direction.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

As many of my hon. Friends have said, all credible economic analysis shows that a no-deal Brexit would be disastrous for the economy. The draft withdrawal agreement would be only slightly less disastrous for the economy. Given that the report published by the Resolution Foundation today predicts an increase in child poverty of 6% by 2023—that is equivalent to an additional 1 million children living in poverty since 2016—what are the Minister’s estimates of the additional effect on child poverty of no deal or the draft withdrawal agreement?

[Mel Stride]

Absolute poverty is at a record low. The Government have an enviable record of helping those who require work to get into work, and I have outlined at length our success in that area. We have made sure that work pays with the benefit system and our roll-out of universal credit. Underpinning the hon. Lady’s question is a denial of the result of the 2016 referendum. The country made a decision to leave, and on that basis the decision has to be whether we have a sensible deal, as we have negotiated, or whether perhaps we end up with no deal, which I think the vast majority of Members in the House would not want to happen.

Communities: Charities and Volunteers

Debbie Abrahams Excerpts

Wednesday 13th February 2019 Commons Chamber

[Mims Davies]

I thank my hon. Friend for referring to something that is happening in his community and may be a worry. The Charity Commission plays an important role in giving us comfort in that respect. It is an independent registrar, and it is the regulator of charities. The Government have recognised the demand for its services by granting it an extra £5 million a year to help our charities to be at their best. If my hon. Friend has any concerns about that specific case, I shall be happy to meet him.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

The Minister has rightly paid tribute to the hundreds of thousands of volunteers—long may they continue, and I pay tribute to the volunteers in my own constituency—but does she think it right that voluntary organisations, including charities such as the Trussell Trust and other food banks, are in effect replacing statutory services, although they are not equipped in the same way as a statutory service?

[Mims Davies]

rose—

Oral Answers to Questions

Debbie Abrahams Excerpts

Tuesday 29th January 2019 Commons Chamber

[Mel Stride]

This country will achieve a range of additional flexibilities when we are outside the European Union. We will, of course, assess them all in due course, taking into account the fiscal costs of some of the measures that my hon. Friend has raised.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

20.   The CBI and many others have warned that leaving the EU with no deal will exacerbate existing regional economic inequalities. The north-west alone is predicted to lose £20 billion a year in a no-deal scenario. That will, of course, impact jobs, not least the 350,000 that are linked to EU exports, 14,000 of which are in my constituency of Oldham East and Saddleworth. So will the Chancellor and the Government as a whole once and for all rule out a no-deal Brexit scenario, which would harm the country as a whole and particularly my constituents and the north?

[Mel Stride]

The simple reality of the situation that Parliament finds itself in is that, in the event that we do not conclude a deal successfully with the European Union, this country may well leave without a deal. I urge the hon. Lady, in order to address the concerns that she has rightly raised in this House, to get behind the deal.

Finance (No. 3) Bill

Debbie Abrahams Excerpts

3rd reading: House of Commons & Report stage: House of Commons
Tuesday 8th January 2019 Commons Chamber

[Vicky Ford]

Perhaps this should be better drafted on the amendment paper, because the Opposition’s explanatory statement clearly refers to the “impact of clause 5”.

I agree that one should always take impacts into consideration, but I strongly believe that the issue raised by the hon. Gentleman of needing to address poverty is best addressed by allowing this Bill to go forward today, especially the elements that involve raising the level at which people start to pay tax, so that they can keep more money in their own pockets. That is fundamental to building a fairer economy, to having a lower gap between those on the highest incomes and those on the lowest incomes, and to encouraging more people in this country to take up the work opportunities available to them under this Conservative Government, with the continuing growth of the economy.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

It gives me great pleasure to speak to new clause 5, which is in my name and those of colleagues. As I have previously stated, I declare an interest as chair of the all-party group on health in all policies, and as a fellow of the Faculty of Public Health, following 20 or so years of national and international work in this field.

Under new clause 5, the Chancellor

“must review the public health and poverty effects of the provisions of this Act and lay a report of that review before the House of Commons within six months of the passing of this Act…A review…must consider…the effects of the provisions of this Act on the levels of relative and absolute poverty in the UK”.

There has been a lot of talk about absolute poverty levels, and we would of course welcome any reductions in absolute poverty levels. Those are the most severe levels of poverty, when people are unable to meet basic physiological needs, such as for food, water and shelter. However, relative poverty is a really important measure that we must reflect on, so I want to stress that the review would look at both relative and absolute poverty in the UK. I also want the review to assess

“the effects of the provisions of this Act on life expectancy and healthy life expectancy in the UK, and…the implications for the public finances of the public health effects of the provisions of this Act.”

Yesterday, the Government announced their new 10-year plan for the NHS. In his statement to the House, the Health Secretary talked about the importance of reducing health inequalities—absolutely, I could not agree more—and how we need to reduce the demands on health services. I do hope that the Government will take new clause 5 seriously as an opportunity to ensure that their policies actually meet the objectives they have set out, because it will help to do exactly that.

As important as the 10-year NHS plan is to improve our nation’s health, overwhelming evidence shows that the most important thing we can do is to reduce the poverty and inequality that too many of our citizens face today. The most effective way to do that is to focus upstream by assessing policies, as they are developed, for their effects on poverty, inequality and, ultimately, the health of our citizens. That was why I tabled the new clause.

As the UN special rapporteur on extreme poverty and human rights said recently, the cuts and reforms introduced in the past few years have brought about misery and torn at the social fabric of our country. There are 14 million people living in relative poverty in the UK, 8 million of whom are working. That is the highest level ever—I advise those who may not be familiar with the most recent data to refer to the Joseph Rowntree Foundation report published last month. Two thirds of the 4 million children living in poverty are from working households. How are young people who are living in extreme poverty and who are hungry going to excel at school?

What about disabled people? They are twice as likely to live in poverty as non-disabled people, because of the costs associated with their disability. As we heard from Labour’s Front-Bench spokesman, policies on not just taxation but public spending and particularly social security are having a devastating impact on disabled people, and that includes universal credit. More than 4 million disabled people are living in poverty today. They are increasingly isolated and confined to their homes, and I am afraid that the situation is going to get worse, because we have had no real confirmation from the Government of how they will protect disabled people in relation to universal credit.

As analysis from the Institute for Fiscal Studies and others has shown, the lowest income decile has lost proportionately more income than any other group since 2015 as a consequence of personal taxation and social security changes. Last autumn’s Budget had only marginal impacts on the household income of the poorest, while reducing the number of higher rate taxpayers by 300,000. The Government’s regressive measures have done nothing to reduce the gap between the rich and poor.

Last week’s Fat Cat Friday heralded the fact that top executives now earn 133 times more than their average worker; it was 47 times more in 1998. In the first three days of January, FTSE 100 bosses earned what an average full-time worker will earn in a year. That is the unequal society that this Government have allowed to run rampant.

When cuts to household incomes are combined with the cuts to public spending and services, the impact is even more dramatic. We have seen disproportionate cuts in Government funding to towns and cities across the north. The effects of all this on life expectancy are now being seen, with gains made over decades falling away. Life expectancy has been stalling since 2011 and is now flatlining, particularly in older age groups, for older women and in deprived areas.

The regional differences in how long people live reflect the socioeconomic inequalities across the country. People may be aware of these figures, because I mentioned them when I spoke in November, but life expectancy for men in the Windsor and Maidenhead local authority, which covers the Prime Minister’s constituency, stands at 81.6 years, while in my Oldham and Saddleworth constituency, it is 77 years.

Even within those areas there are differences in how long people will live. In Windsor and Maidenhead, the life expectancy gap is 5.8 years for men and 4.8 years for women, while in my constituency there is an 11.4-year difference for men and a 10.7-year difference for women. We should really concentrate on those figures. Those health inequalities are reflected across the country.

Inequalities in life expectancy are mirrored by inequalities in healthy life expectancy—how long somebody can be expected to live in good health. Healthy life expectancy at birth across local authority areas varies by 21.5 years for women and 15.8 years for men. In addition, according to the Office for National Statistics, women’s healthy life expectancy at birth decreased by three months between 2009 and 2011. How have the Government responded? They have actually increased the state pension age: people are living shorter lives, and living shorter lives in good health, but we are increasing the time they will be expected to work.

The gains Labour made in reducing health inequalities are now being reversed. The recent Royal College of Paediatrics and Child Health report showed that infant mortality has started to increase for the first time in 100 years. Four in 1,000 babies will not reach their first birthday in the UK, compared with 2.8 in the EU. Those are the unacceptable consequences of austerity.

Last month’s report by Public Health England investigating these inequalities in life expectancy confirmed what many of us have been saying: austerity has wrought misery and poverty, and has ultimately brought an early death for too many. If the Prime Minister is committed to tackling burning injustices and ending austerity, she needs to commit to her policies being independently assessed for their effects on poverty, inequality and public health, as my new clause outlines.

Reducing the gap between rich and poor benefits not just those who are lifted out of poverty. As the International Monetary Fund’s report five years ago showed, if we increase inequality, we reduce growth, and if we reduce inequality, we increase growth. Trickle-down economics has been shown not to work. As evidence from totemic reports such as “The Spirit Level” shows, society as a whole benefits from decreased inequality, with increases in life expectancy, educational attainment, social mobility, trust between communities and much more. Fairer, more equal societies benefit everyone. Inequalities are not inevitable; they are socially reproduced. They are about political choice, and they can be changed.

[Several hon. Members rose—]

--- Later in debate ---

[Kevin Foster]

New clause 1 says what it says: it asks the Chancellor to produce a review of the impact of provisions and to lay a report of that review before the House. It does not require anything to be done. It does not set out a detailed list of policy changes and how they would be paid for. I do not really see where the hon. Lady is coming from. Members can generally debate all matters that are put before the House, what they believe their impact will be and whether they will make a difference.

I have to say—my Scottish colleagues like to raise this point—that in some areas, for example the Scottish education system, it would be interesting to look at how help is being provided to children so that they have a route out of poverty. In the past, the Scottish education system was one of the highest rated in the world, but I think the Scottish National party has now pulled Scotland out of the global rankings—not because it is going up them, it is safe to say. We can certainly have reviews both ways, and it will be interesting to hear whether comments from SNP Members reflect the impact that aspects of Scotland’s domestic policy, for which it has been responsible for most of the past decade, have had on some of the statistics they wish to complain about.

I welcome the fact that the Bill again increases the earnings that someone can receive before becoming an income tax payer.

[Debbie Abrahams]

Will the hon. Gentleman give way?

[Kevin Foster]

In a moment—I did not intervene on the hon. Lady.

Again, those with the lowest incomes will be able to keep more of what they earn. The days when earning £6,500 was considered enough for someone to start paying tax have disappeared. We were actually able to bring forward the increase in tax-free earnings for millions of people. That is a positive measure, which really makes work pay and helps the lowest earners the most.

[Debbie Abrahams]

What will be the effects of the Government’s increase in the personal allowance on the life expectancy of citizens of this country?

[Kevin Foster]

Any policy that encourages people to be in work and keep more of what they earn, and allows them to save, will help improve their overall health. One of the things that most improves someone’s life outcomes is being in employment. [Interruption.] It is bizarre to be heckled for saying that.

[Kevin Foster]

As always, my hon. Friend makes a well argued and succinct point. He demonstrates the positive difference that Government policies are making for his constituents and the UK as a whole. It must be said that that difference is being made by a whole package of policies, not just by the Bill. I know that a range of measures will help tackle the health inequalities in my patch, including intervention, better services, better urgent care, ensuring that we realise the benefits of technology in primary care, dealing with things such as rising obesity, ensuring that people have proper diets and continuing the welcome decrease in the smoking rate. It is bizarre that those who can least afford to smoke end up being impacted most by it, worsening already poor health inequalities.

The Bill is welcome. I do not think either new clause brings much to the debate, other than highlighting that people want reviews and statistics. With a genuine review, we think about our policy conclusions at the end, yet we hear Opposition Members say, “We want a review—but by the way, here are all our conclusions about the policies we believe should be adopted, even though we can’t really outline how we would pay for them, other than with a massive borrowing splurge that would need to be paid for by a future generation.”

It is welcome that, as has been pointed out, the number of people in absolute poverty is at a record low —1 million fewer people overall and 300,000 fewer children are in absolute poverty. [Interruption.] We hear a groan, but those are the statistics—the sorts of statistics the Opposition seek through their new clauses. The number of children living in workless homes has fallen to its lowest since records began. Being in work makes a positive difference to people’s lives.

[Debbie Abrahams]

rose—

[Kevin Foster]

If the hon. Lady wishes to argue with that, I am only too happy to give way.

[Debbie Abrahams]

No, I would like to ask the hon. Gentleman whether he believes in policy-based evidence or evidence-based policy. He seems to be talking about policy-based evidence. His argument is absolutely facile. He has no evidence to support it. It is absolutely ridiculous.

[Kevin Foster]

For policy-based evidence, we need only look to those who continue to argue that the Leader of the Opposition and the shadow Chancellor should be leading this country, despite the increasing evidence of what their economic policies would do to this nation. Anyone who takes a trip to Caracas will see the outcome there, and still some argue that we should bring those policies to this country. [Interruption.] It is lovely to be heckled all the way through my speech. I sometimes do it myself.

It is somewhat strange for the Government to be accused of not basing their policies on evidence by a party that crashed the UK economy eight years ago, and to continue to hear the excuse that the financial crash merely happened because of bankers in the United States, despite it being a former Labour Prime Minister who, just before the problem with the banks, predicted that a golden era for the City of London was about to start and set up the regulatory system that so badly failed to prevent this country from being exposed to the financial risks and shockwaves. It is somewhat strange to get that lecture on evidence, when there is plenty of evidence of what went wrong a decade ago, when we were left needing to make savings that Labour was planning to make anyway.

--- Later in debate ---

[Helen Whately (Faversham and Mid Kent) (Con)]

It is a pleasure to follow the hon. Member for Gedling (Vernon Coaker). In fact, I agree with some of the sentiments that he has expressed. The level of poverty is still unacceptable, and that makes me unhappy. I am also unhappy about the level of inequality across the country and in my own constituency, but I want to support a Government who are doing something about it, not just through words but through actually taking steps to make these things better.

I have enormous respect for the hon. Member for Oldham East and Saddleworth (Debbie Abrahams), who introduced her new clause 1 earlier. It proposes a review of the impact of clause 5 on child poverty and equality—that is, the impact of raising the level of the personal allowance after which people start paying tax. She also spoke to new clause 5, which proposes a review of the public health and poverty impact of the whole Act. It is enormously tempting to say yes, we should do this. All of us in this Chamber care enormously about poverty and inequality levels. I have a background in healthcare, and I feel very strongly about reducing health inequalities. I am also conscious of the different life expectancies within my own constituency, which are substantial, but we must be careful not to be lured into a sense that reviewing a specific part of an Act will give us an accurate picture of all that is being done and of its impact on, for example, reducing health inequalities.

[Debbie Abrahams]

I want to reciprocate by expressing my respect for the hon. Lady and for the work that she does in this place on mental health. I have huge experience in this area. I spent more than 20 years working on health inequalities and specifically on the assessment of policies to ensure that we get them right. That is part of the reason that I came into Parliament, and I know that this can be done. As my hon. Friend the Member for Gedling (Vernon Coaker) said, if we are all so committed to reducing poverty and inequality, let us assess our policies before they are implemented, to ensure that they do just that.

--- Later in debate ---

The crux of the argument against new clauses 1 and 5 is that the figures that are being asked for by way of review are either difficult to establish and disproportionately expensive to corral together, or do not lend themselves—even if we did manage to get them—to any meaningful form of analysis. That is the context in which we should consider new clauses 1 and 5. If I may, I will turn now to their specifics.

[Debbie Abrahams]

I do not know whether the Minister is aware of this, but the European Commission does this sort of analysis every year on its programme of policies, so it is not that this cannot be done. Its work covers not just quantitative but qualitative data, which relates to the points my hon. Friend the Member for Gedling (Vernon Coaker) made. There needs to be more than what the Government are doing—they do not know what the impacts of their policies will be.

[Mel Stride]

I think I have been misunderstood, and I apologise to the hon. Lady if I was not clear enough. I am certainly not saying that data does not matter—quite the opposite. What I am saying is that we need to have the right kind of data for the exercise to be meaningful and worth while.

New clause 1 would require the Chancellor to report on the impact of changes to the personal allowance and the higher rate threshold on households of different levels of income, on child poverty, on equality and on those individuals with protected characteristics. New clause 5 would require the Chancellor to report on the Bill’s effect on child poverty, life expectancy and public health.

Let me first address the question of the Treasury’s compliance with its public sector equality duty, as referenced in new clause 1(2)(c). Equality and fairness continue to lie right at the heart of the Government’s agenda, and we take our compliance with this duty deeply seriously while deciding policy. That means that Government decisions are explicitly informed by the evidence available of the implications of those decisions for those sharing protected characteristics. I have no hesitation in saying that the Treasury complies with the public sector equality duty.

Further provisions in new clauses 1 and 5 call for the publication of different forms of analysis for clause 5 and for the whole Bill in turn. The Government have been, and continue to be, transparent—more transparent than any other. Changes to the tax system are always accompanied by a tax information and impact note, and each Budget is accompanied by detailed distributional analysis.

TIINs, in particular, are relevant to the questions discussed today. These notes provide Parliament and taxpayers with information on the expected effects of changes to the tax system, and form a vital part of the Government’s commitment to transparency and accountability around tax decisions. In the context of clause 5, for example, the TIIN already sets out the impact on groups of taxpayers according to their age, gender and income tax band, and this data is readily available to HMRC through tax returns.

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

Debbie Abrahams Excerpts

Monday 17th December 2018 General Committees

[The Economic Secretary to the Treasury (John Glen)]

I beg to move,

That the Committee has considered the draft Markets in Financial Instruments (Amendment) (EU Exit) Regulations 2018.

May I say what a pleasure it is to serve under your chairmanship, Mr Sharma? The Treasury has been undertaking a programme of legislation to ensure that if the UK leaves the EU without a deal or an implementation period, there continues to be a functioning legislative and regulatory regime for financial services in the UK. The Treasury is laying before Parliament statutory instruments under the European Union (Withdrawal) Act 2018 to deliver that, and several of them have already been debated in this place, and in the House of Lords. The SI being debated today is part of that programme. It was debated in the House of Lords on 28 November.

The regulations address legal deficiencies in the EU markets in financial instruments regulation and its accompanying directive; in the UK legislation implementing the directive; in other related domestic financial services legislation; and in EU delegated regulations. I will refer to those collectively as MiFID II. The instrument is extremely important for the financial services sector, as without it, essential components of financial services legislation would become inoperable, should the UK leave the EU without a deal. The approach taken in the legislation aligns with that of other SIs being laid before Parliament under the European Union (Withdrawal) Act 2018: it provides continuity by maintaining existing legislation at the point of exit, but amending deficiencies where necessary and introducing transitional provisions to ensure that it works effectively in a no-deal context.

MiFID II is a significant set of EU legislation that regulates the buying, selling and organised trading of shares, bonds and more complex financial instruments. It governs the practices of investment firms, exchanges and portfolio managers among others, and came into effect across the EU on 3 January 2018. One feature of MiFID II is that it requires buyers and sellers on financial markets to disclose data, such as price and volume information for their trades, to bring transparency to the process of price formation in financial markets.

Exemptions from those requirements are available in several cases, and formulae are used to calculate whether a trade may fall under an exemption. They are generally specified by reference to a proportion of pan-EU trading data. However, in a no-deal scenario, the UK may no longer have access to the pan-EU data that the European Securities and Markets Authority uses to calculate the appropriate thresholds. Calculating those thresholds at a UK-only level may create different thresholds in the UK and the EU. That may create opportunities for regulatory arbitrage and market disruption.

The instrument therefore grants the Financial Conduct Authority new flexibilities and a set of temporary powers, which will last for a period of up to a maximum of four years from exit day, to address certain operational difficulties that the FCA may face after exit. The powers will allow the FCA some controlled flexibility over how the MiFID II transparency regime is operated. The FCA’s temporary powers are required because the FCA will not be immediately ready on exit day to operate the transparency regime independently. One challenge facing the FCA is that it does not at present collect all the data that it will require to operate the transparency system on exit day. The FCA will need time to build appropriate IT systems to collect the data required to operate the transparency regime.

The FCA will also need to consider market movements in the immediate aftermath of the UK’s exit from the EU before it can estimate an equilibrium on which to base certain adjustments to the UK’s transparency regime. Accordingly, the FCA’s powers will include the ability to freeze certain pre-exit-day transparency calibrations, so that they have continued binding effect on exit day and for a period thereafter, until such time as the FCA can collect and produce its own data.

The FCA will also have temporary powers to suspend certain transparency provisions during the transitional period. For instance, it will have the power to stop the dark trading of shares, to ensure that such dark trading does not unduly harm price formation in UK markets. To be clear, the intention in granting the temporary powers is to enable the FCA to operate the transparency regime in the UK from exit day and beyond.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

I am sorry, but I have not read the regulations, so the Minister may be able to help me. Do they also provide the FCA with the additional skills and resources it will need to undertake that rigorous and important role?

[John Glen]

The hon. Lady is absolutely right to draw attention to the significant resources that will be required. The FCA has been in conversation with my officials in the Treasury, and we are reassured that it is in a position to do the work, and that it can do so under the provisions of the levy that it has.

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[Debbie Abrahams]

I extend my earlier question to the capability in the Treasury. Are there sufficient skills and resources in the Treasury to undertake its new and additional roles?

[John Glen]

Absolutely. I can confirm that those skills exist. New equivalence decisions issued by the Treasury will be laid before Parliament and will be scrutinisable.

To provide as much certainty to business as possible, the Government have introduced a temporary permissions regime, as set out in the EEA Passport Rights (Amendment, etc., and Transitional Provisions) (EU Exit) Regulations 2018, which were made on 6 November. That will enable relevant EEA firms operating in the UK through a passport to continue their activities in the UK for a limited period after exit day, and will allow them to apply for UK authorisation, or transfer business to a UK entity, as necessary.

This instrument makes special provisions for EEA firms that intend to operate in the UK under the temporary permissions regime by ensuring that they will not be deemed in breach of the UK’s MiFID II rules if they can demonstrate that they comply with corresponding provisions in the EU’s MiFID II rules. This is necessary because, in the absence of such provisions, legal conflicts could arise that may impede the activities of firms operating under the temporary permissions regime in the UK in certain areas, and that may require them to comply with duplicative regulations.

This provision will apply only to certain provisions of MiFID II during the temporary permissions regime, and only where the EEA MiFID II requirement has equivalent effect to the UK MiFID II requirement. This instrument will also put in place transitional arrangements for data reporting service providers, which are entities that report details of transactions to regulators and publish information under the transparency regime.

Finally, under the transaction reporting regime in MiFID II, investment firms are required to submit a report to their national regulatory authorities following the execution of a trade. Those transaction reports are used by regulators to detect and prevent market abuse. UK branches of EEA firms do not send reports to the FCA, but rather send them to their home regulator, which can then share them between EU regulators. As we will no longer be part of that system, the draft regulations will require UK branches of EEA firms to report to the FCA, in the same way that UK branches of non-EEA firms are required to do. In addition, this instrument provides that firms must continue to report on trades in financial instruments admitted to trading, or traded, on trading venues in the UK and in the EU. That will maintain the existing scope for the monitoring of markets by the FCA and will minimise disruption and adjustment costs for firms.

The Treasury has been working closely with the FCA, the Bank of England and industry bodies—representing large and small firms—in the drafting of these regulations. The Treasury published the instrument in draft, along with an explanatory policy note, on 5 October 2018 to maximise transparency to Parliament, industry and the public, ahead of laying it before Parliament. Regulators and industry bodies have generally been supportive of the provisions in this SI.

To conclude, the Government believe that it is necessary to ensure that MiFID II continues to function appropriately if the UK leaves the EU without a deal or an implementation period. I hope that colleagues will join me in supporting the draft regulations. I commend them to the Committee.

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[Debbie Abrahams]

It is a pleasure to serve under your chairmanship, Mr Sharma. I will keep my comments brief. I want to put on the record my dismay and despair at where we are. Without having had a meaningful vote on the Floor of the House, we now have to discuss so much legislation—

[The Chair]

Order. Will the hon. Lady kindly link her comments to the SI?

[Debbie Abrahams]

I will indeed. I am making a broader point about why we are here in Committee in the first place, and that is important. This is one of the most undemocratic Governments we have had in my lifetime. To back up the points made by my hon. Friend the Member for Stalybridge and Hyde and the hon. Member for Glasgow Central, the expectation that we will go through an SI with this much detail in half an hour to an hour is completely intolerable. I reiterate that this is so undemocratic. I know that the Minister, who served on the Work and Pensions Committee, is an honourable man. However, the Government really need to look at themselves in the mirror.