Finance Bill (Fourth sitting)

Graham Stuart Excerpts

Committee Debate: 4th sitting: House of Commons
Thursday 19th October 2017 Public Bill Committees

[Peter Dowd (Bootle) (Lab)]

As ever, it is a pleasure to work under your stewardship, Mr Walker, and your perfect pronunciation of the word “schedule”.

I would like to deal with the Government’s overall intention behind this group of clauses and schedules reforming non-domiciled status. Under the measures being introduced through the Bill, an individual who has been resident in the UK for 15 out of the last 20 years will be considered UK-domiciled for the purposes of income tax, capital gains tax and inheritance tax. From appearances, one might think that overall the Government are finally doing away with non-dom status, but that is far from fact.

The changes in the measures are superficial—one could even say artificial—and designed to give the impression that the Government are seriously clamping down on tax avoidance. Why else would an exemption be built into the measures for offshore trusts? Another question is: why else would the Government have given a grace period for those non-doms affected to get an offshore trust if they do not have one already? Another question begging for an answer is: why else would the Government have actively signposted the changes for non-doms, which has set hares running? It seems to me that those are things that the architect of the measures would do if they were of a mind to completely undermine the measures’ effectiveness. They close one loophole and—hey presto!—create another. Put a new coat of paint on it and no one will notice—job done.

I of course accept that some people will be caught by the changes, but I imagine that it will be the few—and “few” is the operative word—who cannot afford the financial advice fees and legal fees to set up an offshore trust. Once again, we are talking about low-hanging fruit. In my opinion and that of some of my colleagues, this is indicative of the Government’s tax policy. They are doing this rather than tackling tax avoidance undertaken by wealthy individuals who are—I will mix my rodent analogies here—squirrelling their money away in offshore trusts, or large multinational corporations that play cat and mouse with Her Majesty’s Revenue and Customs, with, in this situation, HMRC being the mouse and the one that rarely roars to boot. It is happening daily: certain people are not paying their fair share, and the Government are instead attempting to squeeze further taxes out of everyone else. That is no doubt motivated in part by the dwindling resources of HMRC, whose staff levels have been cut by 17% since 2010. The shame that HMRC does not have the resources to clamp down on the use of offshore trusts is part of the motivation behind these measures, but I am not convinced that the Government have the inclination to do so, either.

The delayed timetabling of the measures will also have an impact on their effectiveness. They were first proposed in the summer Budget 2015, they were consulted on in late 2016, and they were meant to be debated and come into effect in March 2017. Of course, we had an unnecessary snap election, whose mother was hubris and whose father turned out to be pyrrhic. As Plutarch noted—it is always worthwhile getting in a quote from Plutarch:

“If we are victorious in one more battle with the Romans, we shall be utterly ruined.”

I ask Government Members opposite to bear that in mind when the next election comes.

[Graham Stuart (Beverley and Holderness) (Con)]

And in Latin?

[Peter Dowd]

I actually was going to bring that, but the Chair has difficulty enough pronouncing English to check me on my Latin.

Added to that, we had a zombie Parliament throughout the summer, with the Minister announcing that the measures would not be brought back until September. In total, that means that the best-advised non-doms will have had two years’ advance notice, while even those with little to no advice would have had seven months to prepare, even without the Government’s grace period. That is why the Opposition are proposing that, at the very least, the Government conduct—the Minister will not be surprised to hear this—a review to assess the impact of leaving in the exemption for offshore trusts on the effectiveness of the measures.

Our opposition to these measures is well noted. I raised concerns over them on Second Reading of the Finance Act 2017. We raised them further in private discussions with the Government, to no avail, as well as during the Ways and Means resolutions debate and on Second Reading of the Bill, so our view is fairly well laid out. What we want is genuinely not unrealistic or far removed from the observations of most members of the public, which is, in short, the removal of the exemption for offshore trusts from these clauses and schedules. It is simply lubricious—I was thinking of another word—to introduce measures abolishing non-dom status while at the same time creating further loopholes. I would have used “disingenuous”, but no doubt you would have ruled me out of order, Mr Walker.

I ask the Minister once more, as I have at every stage of the Bill, to remove the exemption for offshore trusts. If the Government are truly committed to abolishing non-dom status and not just paying lip service to it, the Minister should have no problem doing so.

Ways and Means

Graham Stuart Excerpts

Ways and Means resolution: House of Commons
Wednesday 6th September 2017 Commons Chamber

[Peter Dowd]

I remind the hon. Gentleman that businesses are coming to Labour because of the mess that the Conservative party is making of Brexit.

[Graham Stuart (Beverley and Holderness) (Con)]

Name them.

[Peter Dowd]

I can name them.

None of the measures before the House address the growing black hole in the public finances, which is the direct result of the Government’s mismanagement and economic incompetence. As things stand, there is a £3 billion black hole in the public finances, made up of the Chancellor’s U-turn on the proposed increases to class 4 national insurance contributions for the self-employed on low and middle incomes; the unlawful employment tribunal fees the Government have been forced to repay; and, yes, the £1 billion bung to the Democratic Unionist party to buy its silence and compliance. Nor do the Government acknowledge the added cost to the taxpayer of delaying the implementation date for “Making Tax Digital”, which they were warned was problematic by all and sundry.

Make no mistake: this is no ordinary Finance Bill we are talking about. If passed, a number of its measures will create a charter championing tax avoidance and leaving billions of pounds of tax uncollected. Using smokescreens and false titles, the Treasury has hidden to the unsuspecting eye giant loopholes for offshore trusts in complicated tax measures. While claiming to end non-domicile status, the Chancellor is at the same time encouraging people to bend the rules and siphon off money overseas into tax haven trusts. He has excluded from one of the Bill’s key deeming measures non-doms who have inherited their status. The Government are on the side of tax dodgers, not taxpayers.

There is nothing in the measures before the House that will address the resource crisis that HMRC is facing as the Government plan to cut £83 million from its budget, along with the debacle that is its 10-year modernisation programme.

Draft Public Service Pensions Revaluation (Prices) Order 2016

Graham Stuart Excerpts

Wednesday 2nd March 2016 General Committees

[Greg Hands]

That is not uniformly the case. I will go on to explain the three schemes that are affected: the local government pension scheme, many of whose members have been high earners in their careers; the civil service pension scheme; and the judiciary pension scheme. Although there are low-paid workers in some of those schemes, I do not accept that they are uniformly lower-paid workers; indeed, there will be some fairly high-paid workers in those schemes.

Returning to my point, scheme members want to be treated fairly and consistently, and the order we are debating today delivers that. There should also be certainty for schemes themselves. Not choosing September’s CPI figure would create uncertainty for schemes. If a consistent measure of CPI was not used, schemes would find it difficult to determine what the correct measure of prices revaluation should be, both when assessing the cost of the scheme and when setting employer contribution rates.

It would not be unusual for a scheme actuary to place an uncertainty figure in the valuation if we decided not to use the standard September figure, particularly if it was considered that there was doubt about whether a consistent prices metric would be used. That would have the potential to put upward pressure on employer contribution rates, and affect the amount of money that employers have available to employ staff.

Furthermore, choosing a correct and stable measure of prices ensures fairness across schemes. That is a crucial detail. It would be unfair for those schemes that chose faster revaluation, instead of a better revaluation rate, to benefit from both fast accrual and a more generous revaluation metric than the one that they decided upon. That goes back to my point about the balance in each of the schemes that was arrived at after consultation and negotiations with the relevant trade unions.

[Graham Stuart (Beverley and Holderness) (Con)]

Does my right hon. Friend agree that those who are tempted to suggest that we should give flexibility to the Government so that we can have a more generous position in this year should bear in mind that overall it would be unwise to trust Government to choose between various measures? Ultimately, we would expect their choice to be at the expense of the people, rather than that of the Treasury. Therefore, I applaud him for suggesting that we have total consistency and accept that consistency will apply even if the September figure goes peculiarly upward in future.

[Greg Hands]

Although I cannot go down the same road as my hon. Friend does about trusting the Government, I can say that his point about consistency is right. If there is any sense that the Government were able to move around between different months, according to political whim or motivation, that would introduce a huge amount of uncertainty into the schemes and open up the Government to lobbying. It would also probably open up all of us to being lobbied to choose one month or another. That might end up coming at the cost of the general taxpayer as well as creating instability in the scheme. Consistency is extremely important.

That leads me to the third area: certainty for taxpayers. To depart from what was agreed would also be unfair on the taxpayer. It is possible to argue that revaluing by 0% does not cost much, and that would be right. It would not cost that much, for now. But what about the future? If in the far future there were to be significant deflation, the cost of not revaluing negatively could be far greater. It is unfair in principle that members should be able to benefit only from the upside of inflation, while being shielded from the downside.

To illustrate my argument, I can share with Members a quote from page 72 of the report from the independent review of public service pensions undertaken by Lord Hutton:

“If there is no mechanism for reducing pensions in payment to maintain their real value then there is asymmetric sharing of risk between members and government, since government bears the risk of high inflation and members benefit from periods of deflation”.

Furthermore, many other taxpayers are in defined contribution schemes. The value of defined contribution schemes, of course, goes up and down based on the prevailing economic circumstances at that time and the valuation of bonds, stocks and whatever else might be put into that scheme. Members of the public who are not lucky enough to be in one of the highly valuable public service pension schemes for our highly valued public sector workers, but who face uncertainty from their own defined contribution schemes, should not be expected to subsidise public servants in this way from a potential negative revaluation drawn on by deflation. the arguments for continuing to use existing Government policy on the preferred measure of inflation for this order are clear and compelling.

I want to move on briefly to the effect the measure has on particular workers, perhaps answering some of the points raised by the hon. Member for Walsall North. The only schemes which will actually be negatively revalued directly under the terms of the Public Service Pensions Act 2013 are those for the civil service, local government and the judiciary. However, you will be interested to know, Mr Bailey, that as the ministerial pension scheme relies on the provisions of this revaluation order, a Minister’s career average pension pot will also be negatively revalued. I am not looking for sympathy for myself and the Treasury Whip, but it is worth pointing out that there are knock-on effects beyond this immediate order.

I now return to the main question about the three pension schemes. To give a worked-out example, a local government worker who earns £21,000 a year will earn around £530 of pension this year. That pension pot will be revalued by minus 0.1%, which means a reduction in the nominal value of that pension pot of less than 50p. Even with a comparable pension pot from the previous year—remember that the local government pension scheme was introduced a year early—the total reduction would be less than £1. A civil servant earning £26,000 a year will earn around £600 of pension this year. That pension pot will be revalued by minus 0.1%, which means a reduction in the pension pot of around 60p. So this is not an attack on public sector pensions or on lower paid public sector workers, nor should it be portrayed as one.

In conclusion, the Public Service Pensions Revaluation (Prices) Order 2016 is an important aspect of the move towards more sustainable and fairer pension schemes for public service workers and for taxpayers. As Lord Hutton has said, these recommendations provide a balanced deal. It will ensure that public service workers continue to have good pensions and that taxpayers can have confidence that the costs are controlled. Revaluing in line with scheme agreements that have already been made is an important part of the deal and I look forward to the debate.

Tax Avoidance and Multinational Companies

Graham Stuart Excerpts

Wednesday 3rd February 2016 Commons Chamber

[John McDonnell]

I am going to press on, because time is short.

I have written to the Competition Commissioner to request a formal investigation of this deal. There was a visible flicker of life from the Chancellor a few days ago. In the pages of Monday’s Financial Times he let it be known that he might, after all, favour country-by-country reporting for multinational corporations. Tax experts and campaigners and I have long argued that this is a vital step towards transparency, and therefore towards fair collection. By revealing in their accounts in which tax jurisdiction their revenues were earned, a proper rate of tax can be applied to multinational companies. If the Chancellor now supports country-by-country reporting, I welcome that. However, the impression was given that even without international agreement the Government would act. Is this the case, or was it just a publicity stunt that has now been dropped?

My hon. Friend the Member for Leeds West (Rachel Reeves) referred to Bermuda. On the “Andrew Marr Show” on Sunday a senior Google representative revealed that the company has £30 billion of profits resting in Bermuda, a British overseas territory. This is in order to avoid US tax rates. We now know that the Chancellor has been lobbying the EU and instructing his MPs to vote against anti-avoidance measures against Bermuda. It is a disgrace.

It was also revealed last week that Government Ministers have met Google 25 times over the past 18 months. I note that the Prime Minister himself has spoken at Google’s conference not once, but twice. If Ministers are to meet anyone, my advice is that they go and meet the trade union representatives of HMRC staff. With almost half the workforce having been laid off, and with offices having been closed across the country, it is widely known that morale is at rock-bottom, especially with the loss of highly experienced and expert staff. [Interruption.] Madam Deputy Speaker, a reference has just been made to declaring an interest. I have no interest to declare. I think that was a reference to the Public and Commercial Services Union and part of its trade union group. It does not fund the Labour party or my constituency. There is no interest to be declared.

We cannot allow the Government to go on like this. Trust and confidence in our tax system is being undermined. Every pound in tax avoided by these large corporations is a pound taken from the pockets of honest taxpayers. It is also a pound not spent on our schools, our NHS and our police. We need a real tax reform agenda, based on the principle of complete openness and transparency. First, that means, as a start, the publication of the details of this deal in full, so that we and our constituents can judge whether it is fair enough. Secondly, we need real country-by-country reporting of a company’s activities, and not just a secret exchange of information between tax authorities, but full publication so that we can all judge.

[Graham Stuart (Beverley and Holderness) (Con)]

The shadow Chancellor said that he would set out his ideas, and I had hoped that he would talk about a more revolutionary change to the methods of taxation. With the massed ranks of corporate lawyers put up against national tax jurisdictions, it is an uneven battle, so perhaps we need some more radical thinking altogether.

[John McDonnell]

The hon. Gentleman has taken an interest in this matter over many years and has regularly been in debates with me in this Chamber. I fully agree that we need a more radical approach.

Let me complete the recommendations briefly, because I think that they will open up a much wider debate. Thirdly, we need an end to mates’ rates and sweetheart deals with major corporations. Tax law should be applied fairly whatever the size of the company. Fourthly, we need full transparency in the relationship between Ministers and companies, so I want to see publication of all the minutes of all such meetings. Fifthly, we need firmer action to curb the tax avoidance industry, so action should be taken against the advisers when the tax avoidance schemes they designed are found to be unlawful by tax tribunals and courts. The same advisers advise Her Majesty’s Treasury and help write our tax laws. That is unhealthy and unacceptable.

Financial Conduct Authority

Graham Stuart Excerpts

Monday 1st February 2016 Commons Chamber

[Mark Garnier]

I am regretting using the footballing analogy. I am not actually a huge football fan myself.

We have to look across the piece. The FCA has undoubtedly got it completely wrong in many cases—on interest rate hedging products and other things—and it is right that Parliament holds it to account, including through bodies such as the Treasury Select Committee, as a member of which I have a different point of view. I do not share the frustrations of those needing these debates or trying to get appointments upheld by the regulator; I can go along and get stuck in, along with other Committee members. That is the right way to do it.

It is also important to consider the successes. The FCA has managed to bring substantial fines for foreign exchange and LIBOR rigging. It even managed to bring a case through the Serious Fraud Office that sadly resulted in no convictions last week, when six foreign exchangers, who allegedly tried to fiddle the fixings, were acquitted. None the less, to get it to court was quite a success. The FCA has taken over responsibility for consumer credit and debt management from the Office of Fair Trading. It has protected consumers by banning retail sales of contingent convertibles—a technical thing to do with the resolution of failing banks.

Last February, the regulator published a paper aimed at providing help for firms that wanted to look after vulnerable consumers. On encouraging competition in the banking industry, the regulator, along with the PRA, created a challenger bank unit in January to help challenger bank entrants by providing the best regulation and thereby encouraging competition in the banking market. It has also provided an innovation hub, specifically aimed at the “fin tech” area, to help new entrants into the financial services sector to navigate the authorisation process. The regulator is, therefore, trying to do a number of things, and we need to be careful not to throw the baby out with the bathwater.

People worry about several issues. There is a big question about whether the Government are interfering with the regulator. Have they been interfering directly and explicitly? Are they taking it easy on the banks? I suspect that the cancellation of the thematic review might be a red herring. Most banks, given the 8% increase on their corporation tax rate, would argue that the Government are not being lenient on them. The Government are levying a bank levy that will help to repay taxpayers for all the money used to bail out the banks.

The reverse burden of proof has been reversed, but the implementation of ring fencing by 2019 will come at a fantastic cost to the banks of several billion pounds, in order to make sure that when the next financial crisis hits—there will definitely be another one—the collapsing banks do not take down other banks with them.

[Graham Stuart (Beverley and Holderness) (Con)]

My hon. Friend is making a strong case for the role of the FCA in terms of systemic, high-level regulation, but does he think it is fit for purpose in protecting consumers, entrepreneurs and individuals who, from that high level, might not look so important?

[Mark Garnier]

That is obviously the whole point of the debate. The answer, overall, is yes, but I think the regulator gets it wrong on occasions, which is why we have the Treasury Committee and debates such as this—to hold its feet to the fire on specific issues, such as those raised by my hon. Friend the Member for Aberconwy.

It is important to remember that this is a conduct regulator for a global business. It is worth bearing it in mind that 2.2 million people work in the industry. It represents about 12% of our GDP and generates about £65 billion a year in tax receipts. This industry is a global industry, and we should be careful about criticising it so vehemently by agreeing on a motion of no confidence. What message would it send to the rest of the world about our ability to regulate the huge amounts of international capital—running into trillions of pounds—that comes and finds a safe haven here in the UK with a regulator it can trust? If we say that the regulator is not fit for purpose, it will send a profound message to a significant part of our economy.

We need to cast an eye to the new chief executive. Andrew Bailey, who is coming from the PRA, has been in front of the Treasury Committee and the Banking Commission many times. I for one have found no reason not to think him an extraordinarily pragmatic, intelligent and wise regulator. Time will tell, and we will have to see how he gets on at the FCA, but it is important that he starts his career at the FCA with our good will, not with the feeling that the FCA is a problem to deal with.

Finally, I want to confront the big question about the possible interference of the Treasury. No matter how many times I ask people—either explicitly or by trying to get them drunk—I can find no evidence of any interference from the Treasury in the work of the regulator. There is possibly an implied interference, however, and one solution could be to give the Treasury Committee a power of veto over the hiring of the next chief executive.

--- Later in debate ---

[Craig Tracey (North Warwickshire) (Con)]

I am grateful to you, Mr Deputy Speaker, for the opportunity to speak in the debate. I congratulate my hon. Friend the Member for Aberconwy (Guto Bebb) on securing the debate.

I declare an interest: before coming here, following in the footsteps of my parents who ran their own insurance and financial advice business for 45 years, I ran my own regulated insurance brokerage for nearly 20 years. It is fair to say that I have seen first hand the evolution and revolution of the industry over quite a sustained period of time. I fear I might be one of the only Members tonight to stand in support of a particular sector of the industry.

I could talk about many issues, but I want to use my experience and understanding of this area to focus on the impact of regulation on the insurance industry, specifically the insurance broking sector. There is an understanding of the need for, and acceptance of, fair regulation by the insurance industry as a whole, but at the forefront of any such measures should always be the principle to protect the consumer not just from financial risk, but from professional negligence. To achieve that, a regulator should work in partnership with the profession to understand the service it provides and then to create an effective model that targets the key concerns. That regulatory solution should be delivered in a cost-effective and proportionate way that does not unjustly burden businesses of differing sizes and incomes.

Unfortunately, it has not been my experience, or that of many representatives of the insurance industry I regularly speak with, that that is currently the case with the FCA. General insurance brokers contribute 1% of GDP to the UK economy, arranging 54% of all general insurance and 78% of all commercial insurance business. In 2013, the British Insurance Brokers’ Association commissioned research, carried out by London Economics, which found that the UK broking market is the most expensive on the planet in terms of the direct cost of regulation. The UK’s cost is double that of its next global competitor, Singapore, and more than four times the cost of other major European markets with which it is supposed to be on a level playing field. Our regulators’ approach to gold-plating has seen the UK become the butt of European jokes, with the recently retired European Commission head of insurance referring to UK gold-plating by the FCA as “Sauce Anglaise”.

The FCA recently increased the minimum fee for the A19 general insurance intermediary fee block by 8.4%, with the largest UK brokers privately indicating that they pay “comfortably” over £1 million a year in fees to the regulator. Worryingly, in its response to BIBA following the rise, the FCA indicated that, if the increase had been in line with the annual funding requirement, the rise could have been even greater—46% over four years.

The FCA recently divulged the breakdown of the A19 fee block, which showed that £16.4 million, or 56.9%, of that block is used for “supervision”. However, 75% of BIBA members are small firms with fewer than 10 members of staff and would not be subject to regular visits or in-depth inspections. Therefore, the proportion of the fee block that is used for supervision appears distorted and suggests that UK insurance brokers are paying for supervision of other, non-insurance broker entities. Furthermore, £1.8 million, or 6.3%, is used to pay for “markets”, principally the UK Listing Authority. That is not an area of regulation that general insurance brokers would face, which further suggests they are cross-subsidising others’ regulation.

In addition to the direct cost of regulation, there are also substantial indirect costs, which include the need to employ either in-house staff or consultants to ensure that the numerous regulations, thematic reviews, market studies, consultation papers and ad hoc requests for information are managed.

[Graham Stuart]

I wonder whether there has been a reduction in small companies. Heavy regulation often favours larger organisations, so it cuts out the entrepreneurial and small business in a market town in my constituency above a shop, while it favours the large companies, which then gouge the public for higher fees. Does my hon. Friend agree?

[Craig Tracey]

My hon. Friend is absolutely right, and that was indeed my experience. I was coming on to say how many firms have disappeared since regulation was introduced. To put it into context, in my final years as a broker, 80% of my time was spent working on compliance rather than being productive in my business. That was a small brokerage providing a valuable high street presence to people who needed access to somebody they knew and trusted. A clear case can be made that firms that abide by the rules should not be the ones that pay for the misbehaviours and increased regulation caused by other firms.

Another area that requires review is the Financial Services Compensation Scheme, which provides the compensation fund of last resort for customers of authorised financial services firms and rightly protects consumers of companies that have ceased trading. Currently, insurance brokers are included in the same funding pot as credit intermediaries that mis-sold payment protection insurance cover, several of which have failed, resulting in claims on the FSCS. That has led to an increase in the levy that insurance brokers face. Indeed, insurance brokers contribute 72% of that particular funding pot, but have made only 2% of the claims made upon it—a gross distortion that the industry feels is both unfair and difficult to budget for owing to its volatile and unpredictable nature. I appreciate that the FCA is currently reviewing the funding structure of the FSCS, but ask the Minister to look into how that can be fair, equitable and manageable to the broking sector.

It would be prudent to note at this point that insurance brokers do not pose the same risks as banks or insurers, owing to the fact they do not hold client money and generally have risk-transfer agreements in place. With better understanding and a working relationship with the profession, especially with small firms, I believe the FCA would conclude that the insurance broking sector is low risk and would be compelled to regulate it as such, leaving its own resources free to pursue those financial services that pose the greatest threats to consumers and the UK economy.

To conclude, the insurance industry as a whole is a vital part of our economy, which is rightly proud of its long-standing tradition of being the best in the world, but the current regulatory system is potentially putting that in jeopardy. I do not believe it to be a coincidence that the number of brokers registered with the FCA fell by 32% between 2006 and 2014. The knock-on effect of that is the great danger of limiting the choice of our consumers—the very consumers whom the Financial Services Authority set out to protect—at a time when access to good, independent financial advice is needed more than ever.

As I have said, the insurance industry is not afraid of fair and proportionate regulation, and I appreciate that the FCA has moved a long way from its predecessor, but there is so much more that it can do to achieve its purpose while still promoting a thriving insurance industry. It can do that by concentrating its resources effectively on protecting the consumer and enhancing the reputation of the industry both at home and overseas, while also securing the long-term crucial and positive impact of the broking sector on the United Kingdom economy.

Connaught Income Fund

Graham Stuart Excerpts

Tuesday 12th January 2016 Commons Chamber

[Guto Bebb]

The hon. Gentleman makes an important point that I will come on to. Indeed, the need for information as to why that decision was taken is something I will be asking the Minister to comment on.

[Graham Stuart (Beverley and Holderness) (Con)]

I, too, congratulate my hon. Friend on championing this issue. I have been contacted by constituents. They want to know why the FCA is taking so long conducting its inquiry and when they are going to get information about what is going on within it. They want to be confident that the inquiry is being properly conducted and to see a resolution of this unpleasant and long-running saga.

[Guto Bebb]

My hon. Friend has summarised my speech in a pithy intervention.

It is important to highlight that when the transfer of operator happened, the subsequent information memorandum issued by Blue Gate was virtually identical to the original information memorandum issued by Capita, and for a further 10 months, more or less, investors’ funds going into Connaught were still managed by Capita IRG Trustees Ltd, which handled investors’ money while Blue Gate waited to receive authority from the FSA to handle client funds.

The whole issue becomes even more concerning because in January 2011 a whistleblower—none other than the chief executive of Tiuta, George Patellis—contacted the FSA to make a principle 11 notification in relation to the misuse of fund moneys by Tiuta. In March 2011 George Patellis met Ian Conway from the FSA to highlight evidence of mismanagement and the fraudulent use of investor funds. He provided ample evidence to support his claims.

Welfare Reform and Work Bill

Graham Stuart Excerpts

Tuesday 27th October 2015 Commons Chamber

[Debbie Abrahams]

I am not going to give way anymore, as I am conscious of the time.

These cuts are punitive and wrong. They fly in the face of the Conservative party’s pledge to protect disabled people’s benefits. With this cut to ESA WRAG support, without putting in place anything to replace it, the Government are condemning more disabled people and their families to live in poverty. I predict that more tragedies will happen. I will be pushing our proposals to a vote and urge all Members to do the right thing by supporting the removal of clauses 13 and 14 from the Bill.

New clause 4 requires that the Government undertake a full independent review of their sanctions regime by 31 March 2016. It is with considerable regret that, after the Work and Pensions Committee’s report earlier this year, which also recommended an independent review of benefit conditionality and sanctions, the Government have failed to recognise the real concerns about their new sanctions regime, either in response to what was said in the Bill Committee or to that report.

I have been campaigning for an independent review of sanctions for nearly two years, and in that time constituents have come to me with their stories about how they have been sanctioned. One constituent was told while he was undergoing the work capability assessment that he was having a heart attack and should go to hospital, yet two weeks later he received a letter to say that he had been sanctioned. People up and down the country have also got in touch with their stories of how they have been sanctioned, for example, for being a few minutes late for an appointment with an adviser or work coach. Increasingly, people are being sanctioned unreasonably, for example, because they had attended their mother’s funeral, been hospitalised or gone to a job interview—this is absurd.

There was another category of reasons for being sanctioned. I still have the email from a constituent who had received a letter saying he had been sanctioned for non-attendance at a meeting with his adviser at the jobcentre, even though he had evidence that he had been there. The penny dropped when another constituent, who had worked in jobcentres across Greater Manchester for 20 years, came to me to tell me that as part of the new sanctions regime introduced at the end of 2012, the DWP had targets for sanctions. As he described it, claimants were being deliberately set up to fail, whether they had done anything wrong or not.

The Work and Pensions Committee also became concerned while conducting an inquiry in 2013 on “The role of Jobcentre Plus in the reformed welfare system”. At that stage, it recommended the following:

“DWP should launch a second, broader, independent review of conditionality and sanctions, to include investigation of whether the process is being applied appropriately, fairly, proportionately and in accordance with the rules, across the Jobcentre network.”

[Graham Stuart (Beverley and Holderness) (Con)]

I am concerned about the issue the hon. Lady raised about targets for sanctions, as this is a serious allegation to make and it is a serious issue. It is possible to meet people from all sorts of walks of life who through their profession may have some professional insight, but their word alone is not enough to suggest that something is true—one does need verification from elsewhere. Can she substantiate her point? What did she find out that would make us believe it is true?

[Debbie Abrahams]

The hon. Gentleman makes my point for me: that is why we need the independent review. There was enough evidence to leave real concerns about this matter. The Select Committee thought that the Minister had agreed to a review, but as paragraph 100 of the report states, unfortunately he reneged on that promise. In addition to these serious ethical issues, there were, and still are, concerns about a number of people affected, particularly in the case of ESA claimants, and about the meteoric rise in the use of sanctions.

--- Later in debate ---

[Debbie Abrahams]

My hon. Friend makes a valid point. The Select Committee reported on the fact that there are targets for off-flow, which means getting people off the books. Those in themselves are targets. [Interruption.]

[Graham Stuart]

That has nothing to do with sanctions.

[Debbie Abrahams]

Well, I will move on to that shortly and show exactly why we believe that is happening.

In addition to those serious ethical issues, we have also seen a meteoric rise in the use of sanctions. ESA sanctions increased from 60,363 between June 2010 and October 2012 to 245,679 between November 2012 and March 2015, which corresponds with the introduction of the new sanctions regime. As I have said, people on ESA are disabled or have serious health conditions.

The new sanctions regime is also particularly punitive. People are without financial support not just for a week or two, because the minimum sanction is now four weeks. Subsequent misdemeanours can mean up to three years of sanctions, whereas previously the maximum was six months. That has particularly affected young people, disabled people and lone parents. In addition, during 2013-14 it became clear that although no other benefits, such as housing benefit, were meant to be affected, in some cases housing benefit was automatically being stopped. The obvious implication is that families will be getting into debt as a result.

The fact that since January 2014, on average, nearly half of ESA sanctions have been overturned on appeal surely confirms that there are issues with sanctions policy and practice. The Work and Pensions Committee published its report in March this year, revealing even greater concerns about the inappropriate use of sanctions, their ineffectiveness in getting people into work and the impact on the health and wellbeing of claimants.

The Select Committee received evidence that sanctions were being driven by targets to get claimants off-flow in a way that distorted the JSA claimant count. A team from Oxford analysed data from 376 local authority areas and found that 43% of JSA sanctioned claimants left JSA and that 80% did so for reasons other than employment. In July, the Social Security Advisory Committee also raised concerns about the effectiveness of the sanctions regime in getting people into good quality jobs, and called for better evidence to underpin sanctions policy.

--- Later in debate ---

[Debbie Abrahams]

Absolutely.

Similarly, there are concerns about the impact of the benefit cap on disabled people, who already face extra costs associated with their disability, as I mentioned earlier. It is estimated that 150,000 adults and 395,000 children will be affected by the reduction in the cap. We believe that, in conjunction with the freeze in local housing allowance, cuts in social housing rents and a lack of affordable homes, the lower cap also risks exacerbating the housing crisis. The Government’s own impact assessment concedes that rent arrears, evictions and homelessness will increase as a result of the lower cap. We believe that further reductions in the benefit cap in London and elsewhere risk pushing tens of thousands of children, families and disabled people into poverty. We are the sixth wealthiest country in the world. It is not right that the Government are seeking to secure the recovery on the backs of the working poor, their children and disabled people. I hope they will think again.

[Graham Stuart]

I, too, would like to congratulate the hon. Member for Oldham East and Saddleworth (Debbie Abrahams) on her new position.

I want to speak narrowly to new clause 3, tabled by the hon. Member for Sheffield Central (Paul Blomfield). The new clause would amend the regulations that currently mean that a claimant who is moved from the old disability living allowance system to the new personal independence payment award must wait 28 days after a decision before receiving the new benefit. Those regulations allow a claimant who is moving to a lower award to adjust to their new financial circumstances by receiving the old award for a period of time, which is extremely welcome.

The unintended consequence of the regulations, however, has been that some of the most disabled and vulnerable people in our society, including those who are terminally ill, are being forced to wait almost a month, and sometimes longer, to receive the extra money they need to meet the costs resulting from their illness. That situation most commonly affects individuals who have become entitled to additional money through PIP because their diagnosis has become terminal.

I am grateful to Macmillan Cancer Care for the work that it has done in this area. Let us imagine a cancer patient, who is already receiving some support under the old DLA system because of their illness, and who receives a terminal diagnosis. They inform the Department for Work and Pensions about this, and the Department makes a decision about their eligibility for additional financial support as a result of their terminal diagnosis. I am pleased to say that that decision should be made within six days—a target timescale that was introduced precisely in recognition of the fact that those who are terminally ill are in particular need of timely assistance.

[Jo Churchill (Bury St Edmunds) (Con)]

I, too, have seen the Minister to push this point, to ensure that the vulnerable—particularly the terminally ill—do not fall through the cracks as they transition from the DLA to PIP. I thank the Minister for listening, and I look forward to receiving confirmation of how we are going to ensure speedy payments and minimum waits for that group, as I have been assured will happen, so that those people can get their funds in advance. All these things help, and it is not right that they should have to wait. I am grateful for being listened to.

[Graham Stuart]

I am grateful to my hon. Friend for her intervention, in which she has succinctly made my entire speech for me. She sets an example to all of us in how to convey an argument as briefly as possible.

If a decision is made within six days—which is a good thing—why must an individual then wait 28 days to receive the additional financial support that it has already been decided they should get? That financial support could help them meet the costs of the sudden onset of daily living needs or mobility needs that can accompany a terminal diagnosis. There are examples of people missing out on, in some cases, hundreds of pounds. People miss out not only on the additional money through PIP, but on other financial support such as free car tax, premiums in means-tested benefits and other passported benefits, because eligibility for those benefits kicks in only when the additional PIP starts to be paid. It cannot be right that an individual who has a life expectancy of less than six months is being forced to wait a minimum of 28 days—perhaps one sixth of their life expectancy—for vital financial support on which they depend.

At the heart of this Government’s welfare reform programme is a commitment to protecting the most vulnerable people in our society. The context of today’s debate, given the tough financial decisions that are having to be made, is one of a transformation in the work opportunities, employment chances and life chances of so many people across our society, so that they can try to escape the labyrinthine mess that was left behind by the former Labour Prime Minister and Chancellor. That is what we are trying to do—create a society in which everyone, including the disabled, can be looked after properly. That is why I believe it is entirely in the spirit of these reforms to amend the current regulations so that anyone who transfers from DLA to PIP due to a terminal diagnosis is paid the additional support promptly and does not have to wait 28 days. It is not a large group, but it is a group of some of the most disabled and vulnerable individuals in our society.

[Jo Churchill]

rose—

[Graham Stuart]

My hon. Friend wants to give whatever remains of the argument in my speech, and I give way to her again.

[Jo Churchill]

I thank my hon. Friend. During the conversations to which I referred, I received confirmation that no one would lose those four weeks’ money, and that following the decision to award PIP new claimants would have their claim backdated, so I look forward to confirmation of such positive news.

[Graham Stuart]

My hon. Friend really does keep stealing my punches, because I too have met the Under-Secretary of State for Disabled People, and he was most sympathetic in listening to these arguments. There are technical issues that are going to be dealt with, but I will return to that.

The positive impact of such a change on the individuals who are currently affected by the rule would be immense. It would that ensure people could afford the support they need in the final few months of their lives. In Committee, the Government suggested that changing the regulation could mean that a case manager would not have sufficient time to consider the case. I do not follow that argument, because the 28-day rule applies once a decision has already been made, so it should not have an impact on the time taken to decide on a case.

Having spoken to the Minister, I know that he is listening to the concerns raised by my hon. Friend the Member for Bury St Edmunds (Jo Churchill), myself and others across the House, and I hope we will get a positive response so that terminally ill people who are to see an increase in their financial support can receive it as soon as possible.

[Richard Graham]

Surely the point my hon. Friend raises and the Government’s response on some of these issues—which are sensitive, as other hon. Members have rightly said—indicate that the Government do care about this category of our constituents and are reacting and making changes that will help them, and totally give the lie to some of the irresponsible comments from the Opposition Front Benchers.

[Graham Stuart]

I would hesitate to give advice to any Member as to how they should conduct themselves, but this is an emotive area and these decisions affect vulnerable people. A balance has to be struck between fiscal responsibility, looking after the most vulnerable and changing the incentives so that we get people aligned with the best opportunity in the long term as well as the short term. These are sensitive issues, and I agree with my hon. Friend about the hon. Member for Oldham East and Saddleworth referring to the Government demonising the disabled and the poor in a way that she did not substantiate at all. One mention in an autumn statement two or three years ago of the fact that some people abused the system is not an effort to demonise the poor and disabled, and suggesting that undermines the other arguments—and there are strong arguments to be made in this area and questions that need to be asked about the Government’s programme.

The decisions being made are not easy, and they will not all be right, but trying to smear the whole Government Front-Bench team loses people rather than wins them over. I do not think the hon. Lady needs to do that in order to make a powerful case and have a strong hearing outside this place; if what she says looks like partisan point scoring and personal vilification, it will undermine the arguments she is trying to pursue and champion.

I am delighted that the Minister is listening. I hope and expect—as I know all my hon. Friends and Opposition Members do—that we will find a solution to this technical challenge and make sure it is delivered as quickly as possible, so that the terminally ill get the money they are due as quickly as possible.

[Dr Eilidh Whiteford]

I shall speak to the amendments in this group in my name and the names of my party colleagues, namely new clauses 9, 10, 11 and 12, amendments 35 to 48, 56, 20 and 57 to 65, and new clause 7, on which I will open my remarks.

New clause 7, along with amendments 35 to 48, is intended to amend the parts of the Bill relating to the benefit cap. Amendments 35, 36 and 37 would maintain the cap at its current rate, while amendments 38 to 48 would mitigate the differential impact of the Government’s proposals on specific groups of claimants by exempting from the benefit cap bereavement allowance, carer’s allowance, child benefit, child tax credit, guardian’s allowance, maternity allowance, severe disablement allowance and widowed parent’s allowance.

The bottom line, and the key point to be made today, is that many of the provisions in this part of the Bill are entirely arbitrary and have no robust evidence to support them. By proposing an arbitrary benefits cap, the Government fail to acknowledge the underlying drivers of benefits increases. They fail to acknowledge, for example, how soaring private sector rents in parts of the UK with astronomical house prices and chronic under-supply of affordable housing push up the cost of housing benefit—money that usually goes straight into the pockets of private landlords, often without even passing through the hands of tenants. But I recognise that that is not the only driver, and in the absence of proper analysis, setting the benefits cap at an arbitrary level is possibly the worst example of policy making on the back of a fag packet that I have seen in this place for quite some time. Although I support the Labour amendment that would force the Secretary of State to review the impact of the lower cap more regularly, I would prefer to see this very weak piece of policy making removed completely from the Bill.

--- Later in debate ---

[Helen Whately]

It was pointed out in Committee that people who receive benefits also pay tax. I do not think we should try to parcel people up in different tribes or groups. This is about getting the right thing for the country, trying to help everybody make the most of their opportunities and making work pay.

I have certainly had difficult conversations on the doorsteps in my constituency, because the majority of employees in Faversham and Mid Kent are paid less than £20,000 per annum. At its current level the benefits cap has been working. More than 16,000 capped households have moved into work, and households subject to the cap are 41% more likely to get into work. We know that work is the best way out of poverty and I believe that everyone in this House wants to see people move out of poverty. We should make the benefits cap work harder. That is what this is about.

[Graham Stuart]

It is shocking that Opposition Members find themselves unable to talk about the jobs miracle of the past five years. We have created more jobs in this country than the rest of Europe combined. That is the dignity that people want. What we did not need was people who were on 16 hours a week and disincentivised from taking on any extra work because they would lose out if they did so. That is the mess that Labour left behind and we are disentangling it so that we can create a fairer society for everybody.

[Helen Whately]

I thank my hon. Friend for making his point so forcefully.

I will move on to the proposed amendments to clause 13. The Bill Committee heard evidence of the damage that a long period or a life on welfare can do to people. Our witnesses talked about people who had been out of work for a long time having their confidence destroyed, and about how they begin to feel that they are not capable of changing their lives. We were also told that 61% of people in the work-related activity group want to work, yet only 1% come off that benefit each month. I am sure that many of us know of people who find it difficult to get into work for all sorts of reasons, such as mental health problems, and need extra help to do so. The current system is not working well enough. Not only does clause 13 remove financial disincentives, but, critically, and hand in hand with that, the Government have committed new funding to help that group of people into work, which is a response to what they really want.

National Insurance Contributions (Rate Ceilings) Bill

Graham Stuart Excerpts

Tuesday 15th September 2015 Commons Chamber

[Kelvin Hopkins]

That would certainly be one way of dealing with it, but I think that not cutting tax credits, which are coming up for debate this afternoon, would be a much more important way of helping people on low incomes. We should certainly do that.

[Graham Stuart (Beverley and Holderness) (Con)]

The hon. Gentleman, as ever, is gracious in giving way. He suggests that the Labour Government were not responsible. Surely, bankers are driven by the incentives in the global markets he described to make money and the job of Government is to regulate those markets so that they benefit the public and do not poison the public well. On that fundamental duty, including the dismantling of the previous Bank of England supervision regime, the Labour Government failed.

[Kelvin Hopkins]

I have to agree with the hon. Gentleman, but the great deregulation occurred in 1979 with the abandonment of exchange controls. During the period of the New Labour Government, I was one of those who called constantly for reregulation rather than deregulation. I was out of step with my colleagues at the time, but I think we have now learnt a lesson and believe in more regulation. I certainly look forward to a more regulated economic world in the future, and if we have another crisis, I believe that regulation will come back.

I ought to get on to the question of national insurance contributions, as those comments were by way of a preamble to my speech. The suggestion has come from the Conservative Benches that we should abandon national insurance contributions and merge them with the tax system. That has been discussed over some time and I have flirted with the idea myself, but I have come down against it. I believe that although there should be a threshold so that people on very low incomes do not pay national insurance contributions, they reinforce the sense of all of us paying into a system and having a sense of entitlement to what the system can do for us when we are in need.

Tying us all into a system on a relatively equal basis for at least part of the income revenues is important. We pay national insurance contributions and we therefore have a right to pensions, the health service and so on. There is clearly not enough and much more has to be paid out of other forms of taxation. I prefer the more progressive forms of taxation, income tax being the most important, and I regret that income tax rates at the higher end have been cut pretty savagely since 1979. I remember the 1988 Budget, when Nigel Lawson cut the top rate from 60% to 40%. I had lunch in the City shortly afterwards with a number of City people, and they were amazed by it. They had watched the Budget on television and asked, “Why has he done this? We don’t need the money.” That is what people in the City were saying about the cut in the top rate of tax. I have no doubt that there are some people in the world who are so greedy that they want even more money, despite having millions already, but most people think that having a high rate of tax for the very highest earners is a good and progressive thing.

[Graham Stuart]

The hon. Gentleman must have seen the figures. Every time the higher rate of tax was cut, the amount paid by the richest, in both absolute and relative terms, went up. The truth is that Governments receive more money when they impose fair taxation and less when they follow the policy that he is advocating.

[Kelvin Hopkins]

I thank the hon. Gentleman for that intervention, but the fact is that successive Governments have failed to ensure that the rich pay their taxes properly. We have a tax gap of £120 billion a year. The fact that fewer people might fiddle their finances is not an argument for reducing the top rate of tax. We ought to have a proper regime for enforcing tax payment by those who get away with it: the corporates and the billionaires who manage to avoid and evade tax on a massive scale. If we collected only a third of what is fiddled every year, we would have another £40 billion a year to spend. I think that we have failed on that because all Governments have opted for a light touch on the rich. That is the truth.

European Union (Finance) Bill

Graham Stuart Excerpts

Thursday 11th June 2015 Commons Chamber

[Alison McGovern (Wirral South) (Lab)]

It is an absolute pleasure to speak for the first time under your chairship, Madam Deputy Speaker. I know that I will enjoy doing so and it is great to see you in your place.

This afternoon, we have heard no fewer than eight maiden speeches. All have been brilliant and eloquent, and each Member has given a great exposition of their constituency. It is no surprise that they should have been so brilliant, and let me say why. I say this to the hon. Members for East Lothian (George Kerevan), for Tonbridge and Malling (Tom Tugendhat), for South Ribble (Seema Kennedy), for Glenrothes (Peter Grant), for Corby (Tom Pursglove), for Richmond (Yorks) (Rishi Sunak) and for Bath (Ben Howlett), and my hon. Friend the Member for Ealing Central and Acton (Dr Huq): it is no surprise that each one of them has made a fantastic first speech in this House because they chose to make their first contribution in a debate on European affairs, as I did five years ago, so welcome to the club, folks! They all did absolutely brilliantly, especially my hon. Friend the Member for Ealing Central and Acton. It is good to see that we are welcoming another fellow DJ to this place. I know that she will add great things to our debates.

Several Members mentioned their diverse backgrounds, and how proud they were to represent their home towns. The hon. Member for Bath made that point particularly well. He said that Members in this House come from all parts of the world and have diverse family backgrounds. Our country is at its best when it appreciates its wide history and shows its tolerance, which is one of the finest of British values, and I support everything that he said on that point.

On the Bill at hand, this debate has highlighted many important issues, which will undoubtedly be discussed over the next few months as we continue to debate Europe. As my hon. Friend the Member for Worsley and Eccles South (Barbara Keeley) has already stated, we will not oppose this Bill.

The Bill, although short, will give effect to the new financing system of the European Union, which equates to a net contribution from the UK of £9.8 billion for the year 2015-16. We will seek to improve the Bill in a number of ways. First, we need to review the EU budget. At the moment, 6% of the EU budget is spent on administration costs, and we need to ascertain whether that money is being spent efficiently and effectively. If it is not, we need to consider what we can do to change it. We have a collective interest in ensuring that European resources are used efficiently. Indeed, there are so many areas in which we have a collective interest with our European friends and neighbours. We will seek agreement from the Council of Ministers to undertake a review of budget priorities, waste and inefficiency within the EU budget.

There also needs to be an improved process for agreeing the EU budget. My hon. Friend the Member for Worsley and Eccles South has already highlighted the convoluted process that we go through and some of the difficulties. To increase transparency and accountability, it is vital that this House expresses its opinion on the budget, and we should seek to meet budget representatives in advance of EU budget negotiations. I urge the Government to consider what more they can do on that front.

We also need to revisit how the budget is set and how we spend the money. To set a different ceiling on spending commitments and payments seems odd, and we ask for the process to be reviewed to ensure that the gap is manageable.

I am sure that Members would not feel too insulted if I suggested that the EU budget can be difficult to understand. It involves complicated decision-making processes. Set out over a seven-year cycle, it covers everything from spending on research and innovation to public health and even pensions for staff, but it is precisely because of its wide scope that it needs such careful attention.

We have heard Government Members wax lyrical about their achievements on reducing the UK’s contribution to Europe. Labour welcomes the fact that the UK has achieved that real-term cut in spending limits, and I remind the House that we played an important role in pushing for that cut.

We called for a real-term cut in spending in 2010, and pushed for a better deal for Britons in the following years, but a reduction in spending is just one part of the reforms that we need. The budget also needs to be more focused. We need to concentrate on areas that will enhance economic growth across the EU. I was struck by the comments made by my hon. Friend the Member for Worsley and Eccles South about the level of unemployment in parts of Europe. We need to improve productivity, support the creation of new jobs, and, ultimately, enhance living standards within our Union.

[Graham Stuart (Beverley and Holderness) (Con)]

The hon. Lady is being characteristically generous in paying tribute to the Prime Minister for securing that reduction in the budget. Given that the Labour party is now indulging in various changes of opinion, not least on Europe, does she recognise that the way so much was given away in the mid-2000s by the previous Labour Government was a great mistake, and will she pledge that no future Labour Government would ever do such a thing in that way?

[Alison McGovern]

I thank the hon. Gentleman for that intervention and for his kind words. Given the comment I just made about when I chose to make my first speech at this place, I can assure him that I have never changed my mind about Europe. I shall say more about that.

Spending on research, innovation, infrastructure, education and training, and enterprise development is very important and can help us better to promote the European Union as a facilitator of growth within the UK. Of course we recognise that we must also finance all aspects of the EU, but I would question whether continuing to spend so much of our money on areas like the common agricultural policy demonstrates the right priorities. It accounted for 40% of EU expenditure in 2013 yet contributed just over 1% to total EU economic output.

--- Later in debate ---

[Alison McGovern]

I have no fear of the views of the British people and I only endeavour to listen to them.

Seven out of ten of the UK’s largest export markets are in EU countries, amounting to 42% of the UK’s total exports or £122 billion every year. Some of those exports are made in my constituency, and I see the vital importance of the European market to the whole of the UK and to my constituents no less than to anyone else’s. Of all the investment spending in the UK over the past 20 years, 21% has come from foreign direct investment, and we should not underestimate the importance of that. We have access to 500 million customers in the single market, and in my role as shadow City Minister. I must raise the point that in my opinion the financial services sector benefits enormously from remaining within the EU.

[Graham Stuart]

rose—

[Alison McGovern]

I will give way, because I am feeling generous.

[Graham Stuart]

The hon. Lady is being very generous. A lot of the debate on this in the past has been a bit overdone, as though there would be no trade between the EU and the UK if we were to leave. What assessment has the hon. Lady made of what the impact would be? I am sure that there would be costs, but perhaps we need to avoid exaggerating or suggesting that somehow all trade would cease or that there would be massive walls put up when there will not. What is her assessment of the likely impact on trade if we did depart?

[Alison McGovern]

I am not always this generous, so the hon. Gentleman should perhaps make the most of it. I have looked my constituents in the eye, especially those who work at General Motors in Ellesmere Port, and I have seen in them a dedication to make things in this country to be sold abroad for the good of our economy. Their dedication in working so hard for our country deserves our commitment to ensuring that our borders are open to our biggest customers. When they sell their cars to Europe, that is good for our country and I think that my job is to stand by their side.

We must work hard to make the EU better for everybody, and the Bill presents us with an opportunity to do that. The multiannual financial framework has already been agreed by the European Council. We should use this process to strengthen budgetary procedures for the future and enhance political and public understanding of how the EU budget works, and we should re-prioritise how EU money is spent so that it works for the benefit of each and every person in Europe, not just for a wealthy few. I look forward to strengthening the Bill as it moves through the House.

Oral Answers to Questions

Graham Stuart Excerpts

Tuesday 10th March 2015 Commons Chamber

[Andrea Leadsom]

As I think the hon. Gentleman will know, we will agree to devolution for Northern Ireland if it is sustainable, and if it is felt by all sides to be a sustainable proposition.

[Mr Graham Stuart (Beverley and Holderness) (Con)]

12. What assessment he has made of recent trends in the level of youth employment.

[The Economic Secretary to the Treasury (Andrea Leadsom)]

This Government have taken decisive action to boost youth employment. We have been a Government who are very much on the side of young people, and the results are clear: youth employment is increasing, up by 110,000 over the past year, and the number of young people claiming jobseeker’s allowance is at its lowest level since the 1970s.

[Mr Stuart]

Youth unemployment in my constituency is down by 53% since 2010. In the city of Hull, it is down by 54%. Does my hon. Friend recognise the opportunity that has been created by the growth in apprenticeships under this Government? Does she agree with the Education Committee that it would be “a mistake” for level 2 apprenticeships to be abolished for young people, as the Labour party proposes? Does she agree, on this occasion, with the TUC, which says it would be “a grave injustice”, or with the Association of Employment and Learning Providers, which says that, on apprenticeships, Labour has “got it all wrong”?

[Andrea Leadsom]

My hon. Friend is right. Under this Government we have seen over 2 million new apprenticeships, and level 2 apprenticeships are absolutely vital in giving young people a chance. Young people have shared in the success of our long-term economic plan, with the UK now having the fourth highest youth employment rate in the EU and the second highest in the G7. Very importantly, young people’s wages are also on the rise, with the latest data showing that the earnings of 18 to 21-year-olds who work full time have increased by 6% over the past three years.