Ukraine

Debate between Gareth Thomas and James Heappey

Friday 25th February 2022 Commons Chamber

[James Heappey]

The hon. Gentleman is absolutely right, and may those protests grow, may they flourish and may their voice be impossible to ignore.

[Gareth Thomas (Harrow West) (Lab/Co-op)]

I very much welcome the Minister’s remarks and those of the shadow Defence Secretary, my right hon. Friend the Member for Wentworth and Dearne (John Healey). The Minister has rightly made much of the need to maintain the unity of the western alliance, but can I ask him what efforts have been made to reach out beyond that alliance, in particular to China, to try to discourage China from offering any active or indeed implicit support for what Putin has done?

[James Heappey]

First, the work of Her Majesty’s Government and NATO Governments to reach out beyond the Euro-Atlantic to the rest of the world has been going on at pace, and a number of countries have already joined European and north Atlantic countries in imposing sanctions of their own. The hon. Member is absolutely right that this is a moment of real decision for China. If China wants to be a world leader, it needs to show that it stands for a rules-based international system. Her Majesty’s Government will encourage it to take a stand to do so, and I think there is an opportunity this evening in New York for China to show that that is where it stands. If it does not, it will have set out its stall all too clearly, but let us hope that it can be persuaded otherwise.

Local Government Finance

Debate between Gareth Thomas and James Heappey

Wednesday 22nd February 2017 Commons Chamber

[Mr Thomas]

I encourage the right hon. Lady, for whom I normally have a lot of respect, not to make such partisan and, I suspect, inaccurate points, but to look at a booklet published by the LGA Labour group that gives 100 examples of the way in which Labour councils have innovated during the past few years. She may want to encourage some Conservative councillors whom she knows to follow such examples.

The Secretary of State sent a letter to all his Conservative colleagues claiming that the concerns raised about business rates by businesses and hospitals were based, apparently, on a

“relentless campaign of distortions and half-truths”.

Leaving aside the question of whether it was right to release the figures just to Members of his own party, the irony is that, as was quickly exposed, the actual bills businesses will receive are likely to be 7% higher than the figures he produced. I gently suggest that the Secretary of State is in danger of getting a reputation for being sloppy in his use of figures.

Ministers have known about the business rates revaluation for a long time. Indeed, when announcing the delay, the right hon. Member for Brentwood and Ongar (Sir Eric Pickles) explained that it was to prevent “unexpected hikes” in business rates. Why did the current group of Ministers not think to analyse its consequences a little earlier? How can it possibly be fair that the overall business rates bill for Amazon, which has avoided paying much in corporation tax despite making huge profits, has gone down while family-run businesses that have existed on local high streets for decades face huge rises in their business rates bills? To accuse, as the Secretary of State effectively did, the Federation of Small Businesses, the CBI and the British Retail Consortium of “distortions and half-truths” in their campaigning is a disgrace. He should apologise to them.

[James Heappey]

While the hon. Gentleman is discussing the revaluation of business rates, will he welcome the Government’s measures in recent years to provide small business rates relief, and its indefinite extension, which has been so advantageous to many of the small businesses he claims the Government will have harmed?

[Mr Thomas]

I certainly welcome small business rates relief. We will have to wait and see whether Ministers will raid the pot that some businesses were hoping to benefit from, in terms of that rates relief, to fund support to other businesses that will see even bigger increases than they were expecting in their business rates bills.

--- Later in debate ---

[Mr Thomas]

My hon. Friend makes a very good point. The default position for Conservative Members, whenever an issue is raised about the funding gap for social care and a number of other services, is to blame local authorities. The evidence of Simon Stevens and others rightly rebuts that point.

[James Heappey]

Conservative Members actually blame Labour Front Benchers for so shamelessly rigging the system in favour of Labour-controlled cities during their time in government. I am sure that the shadow Minister will therefore welcome the review announced today to make sure that the future funding formula for local government is much fairer to both urban and rural areas.

[Mr Thomas]

I admire the hon. Gentleman’s chutzpah, if nothing else. On the subject of mates’ rates, I shall deal with Surrey County Council in a moment.

Just last month, the Secretary of State once again told the House:

“In the last spending review, the Government allocated an additional £3.5 billion a year by 2020 to adult social care.”—[Official Report, 16 January 2017; Vol. 619, c. 664.]

That was based on £1.5 billion from the back-loaded better care fund and £2 billion from the social care precept, but when we look at those figures closely, we see that the £2 billion was simply rounded up from the Department’s estimate that £1.8 billion would be raised from the precept. The Government had casually added an extra £200 million. That assumption was based on every council’s raising the precept by the full amount, but we already know that not all councils will do so.

When we look even more closely at the detail, we see that it also builds in the assumption that an additional 1.45 million households will be paying council tax. Ministers seem to have disowned the ambition of the previous Housing Minister—the current Minister for Policing and the Fire Service—to build a million new homes by 2020, so I have no idea where the Government plucked that 1.45 million figure from. Perhaps the right hon. Member for Welwyn Hatfield (Grant Shapps) would be tempted to call this another case of “spinning the numbers”. The truth is that the additional funding that the Government claim to be putting into social care is far from guaranteed, and, in any event, unless they find genuinely new money, there will still be a very significant funding gap by 2020.

Now let us come to Surrey County Council and the sorry saga of the abandoned 15% council tax referendum. Shortly after the announcement, David Hodge, the council’s leader, revealed that he had already made cuts worth £450 million and explained that he would have to take an axe to services if the extra £60 million that the 15% council tax hike would have raised was not agreed.

One reason why Surrey’s announcement was so striking is that it has been able to increase spending on adult social care by over 34% since 2010-11, whereas some councils have had to decrease it by up to 32% in the same period. In fact, only two of the 152 social care-providing local authorities have been able to increase their spending on social care more than Surrey. If Surrey says that it cannot cope with demand for social care, which council can?

In the most deprived areas of the country, social care spending fell by £65 per person as councils were hit particularly hard by Government funding cuts, but rose by £28 per person in the least deprived areas. The social care precept will only further entrench that inequality. Blackpool, the most deprived unitary authority area in the country, faces a 31% reduction in spending power between 2011 and 2019, whereas Wokingham, the least deprived area, faces only a 4% fall in the same period.

Perhaps Ministers will finally take the opportunity today to enlighten us on what discussions took place between their Department and Surrey County Council, but from the outside it looks like policy making on the hoof: Ministers, embarrassed by one of their own, exposing the fallacy of their argument. They seem to have settled on opening up the business rates retention pilot scheme, but why was Surrey given special access, whereas other local authorities have not been told how they can apply until now?

Local Government Finance Bill

Debate between Gareth Thomas and James Heappey

2nd reading: House of Commons & Carry-over motion: House of Commons & Money resolution: House of Commons & Programme motion: House of Commons & Ways and Means resolution: House of Commons
Monday 23rd January 2017 Commons Chamber

[Mr Gareth Thomas (Harrow West) (Lab/Co-op)]

The people of England should have more power to shape their own destiny without having to wait for the say-so of Ministers. However, the Bill is just one part of a mix of new law, funding reviews and detailed regulations, and only when all are publicly available will we know whether Ministers have merely devolved responsibility for more badly funded local services, or if serious opportunities for local initiatives are genuinely being created.

The Conservative party has too often had a hostile attitude in practice to the idea of local people being given the power to govern themselves properly. Opposition Members well remember the attacks of the late Margaret Thatcher on local councils, the introduction of the poll tax, the abolition of London local government and the nationalisation of business rates. Notwithstanding recent deals on extending local powers in some areas, local council services have been one of the hardest hit areas of Government funding in every Budget since 2010.

[James Heappey]

While we are reminiscing, does the shadow Minister remember that the Labour party made harsh cuts to rural councils during its time in office, which was the cause of many of the problems with the imbalance of funding that we now face?

Bank Branch Closures

Debate between Gareth Thomas and James Heappey

Thursday 30th June 2016 Commons Chamber

[James Heappey]

I am grateful to the hon. Gentleman for his intervention. While of course the Treasury will have an interest in the provision of banking, DCMS will have an interest in the provision of broadband, and the Department for Communities and Local Government and perhaps the Department for Environment, Food and Rural Affairs might concern themselves with the overall impact on the viability of communities in both rural areas and towns.

I am also concerned about the capacity of the post office network to pick up the slack. They are offered again and again as the route out of a bank closure, yet too often there are reasons why the Post Office cannot do more, and I will come to that shortly.

Finally, there is the availability of free-to-use ATMs in our town centres. Replacing an ATM outside a bank with something we need to pay a few pounds to use is not fair on the community that then finds itself needing to access its cash at that expense.

[Mr Gareth Thomas]

In the United States, when banks take significant deposits from particular communities, they are required by regulators to demonstrate that they are offering significant financial services to those communities in return. Does the hon. Gentleman think that such a requirement might have meant that his Glastonbury constituents might have had some confidence that the banks were at least going to help a credit union or community bank to get up and running, to offer an alternative service if those banks were still determined to leave?

[James Heappey]

The hon. Gentleman steals my thunder, because I had indeed read Congress’s Community Reinvestment Act and I think there are some very interesting things in it. For the benefit of Members who might not be familiar with it, it does exactly as the hon. Gentleman suggests: it is a safety net that means that those getting a banking licence in the United States can of course bank in all the affluent areas, but they are also required to offer equal access to banking in less affluent areas, and there are ways to make sure that that is happening, which the Government may wish to consider.

The hon. Member for City of Chester (Christian Matheson) picked up on the very worrying Reuters research reported by Andrew MacAskill and Lawrence White. I hope that the Treasury is aware of it. That 90% of closures are in areas where the median household income is below the national average is deeply suspicious and I am sure cannot be just a coincidence. It concerns me enormously that the two banks that have closed the most branches since 2008 are those that benefited the most from the bail-out by the hard-working taxpayers whom they have subsequently turned their backs on. As a good Conservative, I do not propose to advocate interference with the business plans of those banks, but I do think it is important to make sure that they are not focusing their branch network on the areas where they can make the most cash, when the nation collectively bailed them out not so long ago.

Worse still, as those bank branches close—we are now down to fewer than 9,000 branches on UK high streets—payday lenders are opening branches at an alarming rate. I draw no connection with the fact that payday lenders are targeting high streets where the conventional banks have gone. However, if the Reuters research is correct and the banks are closing at a quicker rate in less well-off areas and the payday lenders, as we know, are targeting the very same areas, it bothers me enormously that on those high streets there is no access to proper conventional banking products but plenty of access to payday lenders. I am not sure that that is socially just and it must be a concern for us all.

The impact on small businesses is significant. Representatives of the Federation of Small Businesses met with me at the Royal Bath & West Show, having heard that this debate today had been granted, and were falling over themselves to say that they would be able to provide me with information. They have been hugely helpful. The reality is that the bank branch network is most valuable to small businesses. Yes, we must worry about the vulnerable and the isolated, but they are a relatively small number of those who need to access banking. It is the small business community that has no other choice. Small businesses rely on cash, and sometimes they have no other staff.

Glastonbury is a great example of a high street where there are lots of small shops. If you are in the market for all sorts of crystals or joss sticks and everything else, Glastonbury is the place. There are dozens and dozens of tiny shops that have only one person working in them at a time. So when the moment comes in the afternoon to clear out the till from that day’s takings and leave just the float for the next day, the shop must close. A year ago, the person would run round the corner, do their banking and then be back in the shop about 15 minutes later, and that was all the custom they lost. Now, unless they are fortunate to bank with one of the banks with which the Post Office has agreed full functionality, they must get in their car, or on the bus, and travel a few miles away and potentially be closed for an hour. It is unworkable. The travel is simply not an option for them and digitisation will not change that. People going into small shops such as these, where they are buying knick-knacks—I am sure Hansard will enjoy that term—for relatively small amounts of money, will invariably pay in cash.

The Competition and Markets Authority has also done some research, and has found branch convenience to be the second most important factor when choosing a bank. Some 84% of respondents classed bank branches as important to their business. Further research by McKinsey found that one third of small and medium-sized enterprises use bank branches at least once a week, and 52% of respondents to the FSB rural banking survey said that they communicate with their bank in branch and three quarters said that if they still had a branch they would prefer to be doing their communication there, face to face. It is important to state that what they are concerned about is not just their ability to bank in cash; they are also concerned about that relationship—their ability to informally access advice from someone in a branch who understands the business climate in their area. That is being taken away from them. They want something that is tailored, trusted and freely available from somebody they know and who lives and works amongst them, rather than somebody on the end of a phone in a call centre located who knows where.

The basic backing that is required for business is coming; this process is not entirely without mitigation. There is greater online functionality—the ability to pay in a cheque by taking photographs of it on your smartphone and so forth is all great. The arrival of smart ATMs that will be able to process cash deposits is also very welcome. G4S—who we remember from the Olympics—now says it will drive around and collect people’s cash from them and return cash to them; businesses can make their own minds up about that. But the reality is that whatever G4S may or may not do and however brilliant smart ATMs may be, their roll-out is not happening before these branches close and, as a result, communities are being left with a gap.

As I have said, the post office network is the alternative. The Post Office is enthusiastic about the opportunity, of course, as it is a significant opportunity for it as a business, but the banks cannot have it both ways. If post offices are going to be offered up as the alternative when a bank branch closes, the bank must be willing to surrender full functionality to the Post Office so that businesses and private users are able to access the full suite of banking services. As I understand it, the banks are offering up post offices as an alternative in their community impact statements, only to say subsequently that they will not give up those functions to the Post Office because they are worried that it will steal their business. I believe that if they are worried about losing out to the competition in that town, they should stay in the town. If they have made the decision to leave, they should accept that they need to surrender some of the functionality so that their customers will have the mitigation that the banks have promised in their community impact statements.

Some anomalies have been identified. It is rumoured that there are issues over the limit on the amount of cash that the post offices are willing and able to deal with. That limit clearly needs to be removed. If someone with a small business has a monster day of trading, they need to be able to go round the corner and pay in the full amount that is in their till rather than having to sleep uneasily that night through worry that a great day’s take is still in the shop. There is also an issue over paying-in slips, which we must surely be able to get over. The banks need to sit down with the Post Office to ensure that post offices are fully able to deliver the banking the businesses need, not just the bits that the banks will allow them to deliver.

The Government obviously also have a part to play in this. The Post Office’s arrangement with the Government is up for review in 2018, and I know that the Minister will speak forcefully in that renegotiation to stand up for the needs of the banking community, given how important post offices are becoming to communities around the country for the purposes of doing their banking.

My asks to the Government also include, first, that the access to banking protocols review should be thorough and candid. Community impact statements are too debatable, as I have said. The transport data that are used in them are too often inaccurate, as are the data on the number of people using a branch. Banks say that regular users number a couple of dozen, but campaigners standing outside the branch counting people in and out say that there are many thousands. The catchment areas are shrunk right down almost to the postcode in which the branch is situated, yet the reality is that they serve a rural hinterland that is much larger. [Interruption.] I will be about one minute, Mr Deputy Speaker, if you will indulge me. The connectivity issue is also often not fully understood in the impact statements.

When I spoke to Messrs MacAskill and White from Reuters, they told me that it was extraordinarily difficult to access the data on what had closed and where since 2008. If their research is right, this is happening disproportionately in poorer areas, but I am sure that the banks will want to make it clear that that is not the case by publishing their data in full. I am sure that the Government will be keen to check the data and we in this House will also be keen to know that that is not the case. This is a simple matter of fairness. People value their access to a bank. There are many reasons why the access to banking protocols need to be strengthened, and I am sure that the Treasury will take note of this debate today.