Budget Resolutions

Emma Hardy Excerpts

Monday 16th March 2020 Commons Chamber

[Emma Hardy (Kingston upon Hull West and Hessle) (Lab)]

This is not the speech I expected to give when we heard the Budget, but events have overtaken us. Although I am sure that our country will survive, I am concerned that without more urgent action from the Government, the state that it is in when we have overcome the virus might make it a place where none of us wish to be.

The Government need to clearly understand that there will be a price. They will pay, but the choice is how they will pay. Will they pay upfront and enable people, including the self-employed, to have the statutory sick pay they need? Will they look at universal basic income? Will they ensure that everybody has enough money to live? Will they pay to support all local businesses adequately—small, medium and large—to stop our economy collapsing? Or, alternatively, will they pay at the end, when the economy has collapsed and our country is on its knees, so that when we recover from the virus we cannot get back on our feet? There will be a price and a payment to be made. The Government should consider making that payment now to support our economy and individuals, rather than paying the price at the end.

We need to think about the long term. If we are to adjust to life under coronavirus, we need to look at many different things, such as providing free internet for people in this country, especially the children who are expected to do their school work at home—how can they do that if they do not have equipment to work on or access to free wi-fi? We need to look at feeding children through free school meals programmes. We need to look at giving mental health support to adults who are self-isolating for three or four months. The Government could run a national advertising campaign on TV and radio to signpost adults to the mental health support that is out there. A Facebook coronavirus support group that has gained nearly 5,000 members in just a few hours asks whether the Government could introduce restrictions on the number of items that people buy from supermarkets. We should stop bulk-buying, introduce fairness for everybody and make things equal. We should give the vulnerable and elderly time to shop on their own at the beginning of the day.

There are many people who want to support the community, and that is to be championed; it is something that each and every one of us can feel proud of. However, I sound a slight note of caution. It would be very useful if the Government looked at introducing urgent Disclosure and Barring Service checks on volunteers, so that we can safeguard our most vulnerable people. There could be a way of co-ordinating national volunteers and introducing a very light check on some of these people—for example, those offering to collect money from the elderly and do their shopping.

The Government could also look at supporting and propping up charities such as Samaritans, to make sure that people have the support that they need. We could use Government resources to advertise those charities to everybody in the community through a national campaign.

There should be emergency food supplies for food banks. The food banks have run out of money. Where do people go when they have no food? The food bank. Where do they go when the food bank has no food? Nowhere. The Government could look at providing emergency food parcels to the food banks, so that the homeless on our streets are not just left there to die with nothing. At the moment, the cupboards are well and truly empty.

The self-employed need a lot more support. A taxi driver said to me, “Where am I going to get my business from if everybody’s at home, and no one is going to the pubs or restaurants? What happens to me?” A driving instructor also contacted me. No one will be leaving the house; they will not be looking to him for lessons. Where is the support for those people? They have worked all their life, and may indeed have voted Conservative at the last election. They are looking to the Government and feeling let down. They have been told all along, “Work hard and try hard, and you will do well.” Now their business is being ripped out from beneath them by a Government who are not listening to their cries for support.

What is our purpose in being here? I see mine as being to leave the world in a better state than it was when I arrived here. This is a once-in-a-generation test, and we are being judged—as a country, as individuals, and as a Parliament. I urge the Government to make the right choices, because our country is counting on us, and we cannot fail it.

Apprenticeship Levy

Emma Hardy Excerpts

Tuesday 11th February 2020 Westminster Hall

[Emma Hardy (Kingston upon Hull West and Hessle) (Lab)]

It is a genuine pleasure to sum up on behalf of the Opposition, and I thank the hon. Member for Gloucester (Richard Graham) for securing the debate. He gave a thoughtful and considered overview of concerns about apprenticeships. I was particularly interested in his points about the concerns of small and medium-sized enterprises and that businesses paid the levy before many of the standards had been developed and they were able to use their money efficiently.

My hon. Friend the Member for Merthyr Tydfil and Rhymney (Gerald Jones) made a clear and convincing argument about why policing needs to be funded effectively in Wales. I hope the Minister will address those specific concerns about the apprenticeship levy in in Wales.

I am delighted that the right hon. Member for Harlow (Robert Halfon) is back as Chair of the Select Committee on Education. I pay tribute to him for the work he has done. His protégés are here in this Chamber. He is passionate about apprenticeships, and the Education Committee has been committed to using them as a tool for social mobility. He made many interesting points. I hope the Committee will delve into the concerns about the apprenticeship levy and investigate them further.

The hon. Member for Strangford (Jim Shannon) made an important point about the diversity of skills and equality of access to apprenticeship opportunities. He also made an interesting point about SMEs. Northern Ireland does not have many large industries, so how can companies there benefit most effectively from the levy? Will the Minister comment on regional differences and how they impact on the levy’s effectiveness?

The right hon. Member for East Hampshire (Damian Hinds) was marking his own homework by commenting on the apprenticeship levy, but he made some excellent points. I agree that the levy should not be seen as a tax. Using the levy as a way of dealing with the free rider problem is an excellent incentive. I also agree that we need to examine the flexibility. Given that it has been running for three years, it is time for a general review of the apprenticeship levy. I echo his calls for review and reform.

The hon. Member for Henley (John Howell) spoke passionately about social mobility, which many Members have addressed, and about the importance of engineering apprenticeships and how the levy has been used in a more imaginative way in his constituency. I wish all the apprentices well on their route forward. The hon. Member for Stoke-on-Trent Central (Jo Gideon) paid credit to the fantastic Staffordshire University, which sounds like it deserves a visit from our Front Benchers.

If they are done well, apprenticeships can provide employees with the skills, knowledge and behaviours required to survive in today’s workplace. They create new pathways for employment and can be a lightning rod for social mobility, but data from the Office of National Statistics show that our country currently has a huge productivity gap—productivity is 30% higher in France and 35% higher in Germany. The widening gap cannot be ignored as we stand as an independent nation and try to obtain the easy post-Brexit deals promised by the Government.

Given that the Government’s own skills adviser, Alison Wolf, who is hugely respected across the sector, stated to the Education Committee in June 2016 that she “suspected” the decision to make the levy applicable only to large businesses with £3 billion of staff costs was

“one of the things that was decided the night before”,

it is fair to say that the Government’s rushed implementation of the apprenticeship levy has resulted in unforeseen consequences and perverse incentives.

Although I agree that the 2017 reforms have started a national conversation on apprenticeships, and I agree with the hon. Member for Glasgow North West (Carol Monaghan) that we should look at prestige and whether we would want our children to follow that pathway—I would definitely encourage my girls to go forward with a degree apprenticeship model—we have to recognise that the overall number of apprentices has dropped since the levy was introduced. Some 509,000 apprentices started a programme in 2015-16, and only 393,000 started in 2018-19—a drop of 23%.

The levy has been overspent and the funds have been rationed for smaller employers. The fall in the number of SME apprenticeships is about 171,000—down an estimated 49% since the levy was introduced. Many colleges ran out of funds for new starts in SMEs, and by the end of 2019 they were not able to meet the demands, particularly in construction and engineering, which are the industries that the apprenticeship levy was meant to support. The Association of Employment and Learning Providers estimates that there are about 30,000 to 40,000 unfilled apprenticeships in SMEs due to the lack of funding.

A recent newspaper report states that the Secretary of State has said that this issue could be solved by moving to the Digital Apprenticeship Service. However, it makes no difference what system is used if there is not enough money in it to start with. The hon. Member for Gloucester commented on passing on part of the levy funds, but SMEs and large businesses have found it overly bureaucratic, complicated and difficult to find a partner to match up with. If the Minister wants to pursue that avenue, we need to consider simplifying the process and making it run a lot more smoothly. The change in the number of apprentices—and the level at which they start, which I will come on to—has been disastrous for some sectors, particularly the care sector. Many care homes are SMEs, and the sector is low margin and low wage. They have been hit really hard by the difficulties in finding apprentices to work there.

Young people have been affected more than anyone else. The number of those starting on level 2 and level 3 apprenticeships, which are predominantly provided by SMEs, has fallen by about 20%. That will not help social mobility. We are not giving our young people the access required to climb the ladder of opportunity. They cannot even get on the first rung.

I am also concerned—this has been echoed by other Members— about the apprenticisation of existing training courses. Chief executive officers have reduced or replaced other training so that they can use the levy. The right hon. Member for Harlow alluded to today’s report in the TES that since 2017 more than £104 million of apprenticeship levy money has been spent on putting senior managers through masters degrees and apprenticeship programmes. David Hughes of the Association of Colleges said:

“This is draining a fixed pot of money dedicated to apprenticeships.”

I support degree apprenticeships and masters apprenticeships, and I support retraining the workforce, but there always needs to be a balance. At the moment it appears that the system is designed to help existing employees who already have higher-level qualifications—sometimes degree and management qualifications—at the expense of 16 to 18-year-olds who are just beginning their careers and need to start at the lower levels. Does the Minister agree with Amanda Spielman of Ofsted, who says there need to be more reforms to the levy to ensure that it is used effectively? I would not want to limit businesses’ freedom and flexibility to use the levy in a way they see fit, but it seems that its design creates perverse incentives for it to be used it at the top end of the levels rather than at the bottom.

As we face our post-Brexit future, we need to look at level 2 starts. I have found some quite scary figures. If we continue on our current trajectory, by 2024 there will be more than 4 million too few people to take up the high-skilled jobs available. There will be 2 million too many with intermediate skills, and more than 6 million too many who are low skilled. Rather than waiting another year or so for the apprenticeship levy review, we need to do it immediately in order to avoid ending up with a problem by 2024, when so many people will be unable to access quality work.

I will make a few comments about social mobility. Before the introduction of the levy, the most deprived 20% of the population accounted for more than 21% of apprenticeship starts at level 4 and above. By 2018 the figure had dropped to 16.4%. With the current levy design, people from more deprived backgrounds are less likely to be able to access higher-level apprenticeships. I wonder whether that is because we have pulled away level 2 and 3 access points, which would previously have enabled them to move up to level 4.

I will now give a list of recommendations, which I am sure the Minister will jot down enthusiastically. We should consider providing guaranteed funding for 16 to 18 year-olds who want to do apprenticeships, be they levy funded or non-levy funded, and they should be treated in the same way as 16 to 18 year-olds who attend college and continue into sixth form. Their apprenticeship should be funded, and I would like to know how we are going to resolve that.

The Treasury should increase the overall spending in schools to match inflation. SMEs should be involved in the standard designs and funded under the current levy system, and the Government should commit to a ring-fenced and guaranteed non-levy budget of at least £1.5 billion, and to separate segregated funding approaches between levy and non-levy employers. Apprenticeships need to be more flexible so that they are able to adapt. We need to consider a three-year cycle of standards reform, and that should involve businesses as well.

I have huge respect for the Minister, with whom I served on the Education Committee, but I believe the Government could show their commitment to FE and skills by appointing a separate FE and skills Minister.

Motorhomes and Vehicle Excise Duty

Emma Hardy Excerpts

Tuesday 21st January 2020 Westminster Hall

[Ruth Jones (Newport West) (Lab)]

I beg to move,

That this House has considered motorhomes and vehicle excise duty.

It is a pleasure to serve under your chairmanship today, Sir David. It is good to see you in the Chair for this debate, because I know that this is an issue that you have raised at the highest levels of Government and that you take it very seriously indeed. As you cannot contribute to the debate this afternoon, I will speak for both of us in saying that this issue is serious and real, and that we will keep raising it until the Government take the necessary action. We are not prepared to let the motorhome industry collapse because of Government miscalculation.

I thank the National Caravan Council for bringing this matter to the attention of Parliament, and I am very grateful to have secured this important debate today. The impact of vehicle excise duty on motorhomes and campervans is a niche topic but an important one. The industry and many motorhome users are calling for motorhomes to be removed from the car vehicle excise duty regime, and for motorhomes to be taxed as private light goods vehicles or private heavy goods vehicles, until they can be added to the forthcoming graduated vehicle excise duty regime for commercial vans, from which they are originally derived.

The calls for action are more obvious than many may think. After all, a motorhome is not a car, as motorhomes are designed to perform a function other than general transport of people or goods. They are derived from the chassis of a heavy commercial vehicle, such as a van or a truck, and they have large engines, so motorhomes should not be taxed as cars, when they are clearly not built to be cars or used as such.

So I am pleased to have the opportunity to raise this issue today and it is good that the Exchequer Secretary to the Treasury, the hon. Member for Middlesbrough South and East Cleveland (Mr Clarke), is here to listen to the arguments, understand the concerns and—hopefully—update the House on what measures the Treasury will take to ensure that this anomaly can be addressed and solved at the earliest opportunity that the Government can find.

To be clear, I am calling for a fair approach when it comes to the taxation of motorhomes and campervans. This is a cross-party call for action, both politically and geographically.

[Emma Hardy (Kingston upon Hull West and Hessle) (Lab)]

In my area, Swift Caravans has already announced redundancies and I am aware that other companies are currently consulting on making more people redundant. There is huge cross-party support on this issue, as shown by the event that we held in October, the joint letter that we sent to the Minister and the event that we will hold in February. Given that cross-party support and the impact on the industry, does my hon. Friend agree that the Government need to take action now?

[Ruth Jones]

Obviously I agree, and I thank my hon. Friend for intervening to make a powerful point. Yes, there is cross-party support, and she has highlighted both what has been done so far and what we will do in the future. I know that many right hon. and hon. Members who could not be here in Westminster Hall today also support this call for action.

The vehicle excise duty payable for new-generation motorhomes and campervans first registered after 1 September 2019 increased from £265 per year, going up to £2,135 in the first year; it will then be £465 a year for the next five years. That is a huge increase in costs for those people who choose to buy a motorhome and who enjoy using it, and I hope that the Government will reflect on the impact of this massive rise.

The increase in the level of taxation has been applied to all motorhome vehicles, including those fitted with new-generation greener and more energy-efficient engines. If the Government are serious about their climate change targets, why are they not treating light commercial vehicles as cars for the purposes of taxation? Instead of generating an additional £28 million—approximately—from the relatively small number of new-generation motorhomes, they could generate almost £700 million from vans alone.

Let me be clear that that projected £28 million will be raised only if motorhomes continue to sell at rates similar to those in the past. However, I have been informed by the industry that, as my hon. Friend the Member for Kingston upon Hull West and Hessle (Emma Hardy) has already mentioned, registration rates are declining rapidly because of this tax.

--- Later in debate ---

[Mr Clarke]

I will of course be happy to take such interventions if colleagues wish to make them. I may regret saying that in a moment, but I will take the chance for now.

As I was saying a moment ago, we recognise the importance of this sector for our tourism economy and that it supports thousands of skilled jobs right across the United Kingdom and, indeed, in certain clusters. Yorkshire is obviously one of those.

To recap the situation, the Government use the vehicle excise duty system to encourage the take-up of vehicles with low CO₂ emissions to help meet our legally binding climate change targets. The new VED regulations were introduced in September to aid that, as motorhomes with higher emissions are liable to higher rates of VED than those with lower emissions. After all, transport is the largest sector for UK greenhouse gas emissions, accounting for some 27% of the total. Road transport makes up more than 90% of that.

[Emma Hardy]

Does the Minister not accept that the Government are taxing new motorhomes, which have a greener engine, at a higher rate, while allowing older motorhomes, which have a dirtier engine, to continue on the lower rate? It is completely illogical.

--- Later in debate ---

[Mr Clarke]

Indeed. The NCC is a passionate champion for its sector, and I look forward to further conversations.

[Emma Hardy]

I thank the Minister for giving way again; he is being very generous. Is it not right to say that when the tax was devised, he did not meet with the motorhome or campervan industries to talk about how it would affect them specifically?

[Mr Clarke]

To the hon. Lady’s point, I was not the responsible Minister at that point. In fact, I think I was not even a Member of Parliament at that point. I genuinely cannot speak to whether those conversations were held, but we are now engaged in dialogue. I have met with representatives of the industry since being appointed. Anyone who is present for today’s debate can see the strength of feeling that exists across the House.

The structure of reformed VED is designed to encourage drivers to make the lower emissions choices that we all want to see. However, the high rate reduces significantly in subsequent years, which means that the VED liabilities in year one are not reflective of the total VED liabilities for a vehicle over its lifetime. The VED charge also remains a relatively small proportion of the purchase cost—these are, after all, expensive vehicles—typically between 1% and 5%. It is therefore a comparatively small charge, albeit that marginal costs obviously add up.