Non-Domestic Rating (Multipliers and Private Schools) Bill

Jim McMahon Excerpts

2nd reading
Monday 25th November 2024 Commons Chamber

[The Minister for Local Government and English Devolution (Jim McMahon)]

I thank all hon. Members who have contributed to this enthusiastic and impassioned debate. Whether they were speaking from the Government or the Opposition Benches, their speeches were genuinely rooted in the communities that people live in and that we represent. In a way, it has brought out the best of Parliament, but we could not quite avoid the party politics and the rewriting of history from the Conservative party.

Shall we really take lessons on saving the high street from the Conservatives, who oversaw mass bank closures and the decimation of retail on the high street, with 6,000 pubs closing in local communities? They are now the farmers’ friends, but when they were in government they oversaw the closure of 7,000 agricultural businesses. Where were they when the energy market and labour supply challenges were decimating farmers? They were nowhere to be seen. Now, though, they come riding on the horse—[Interruption.] Would the shadow Minister like to intervene? Come in, please.

[David Simmonds]

Because he was here for it, as I was, the Minister will recall the last Government’s massive intervention in the energy market to keep our lights on in this country. Will he tell the House whether the Government will keep the small business rates relief? Will he answer that question?

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[Jim McMahon]

I can answer this question: it is the impact that matters. Whatever Opposition Members say as the farmers’ friends, the truth is different: 7,000 businesses closed on their watch. That is what the evidence says.

Let me move on to the reasoned amendment. This Government are fully committed to protecting and supporting our valuable high streets. The fact is that retail, hospitality and leisure rates relief was due to end in its entirety by the end of March 2025, which would have meant a cliff edge for businesses. At the Budget, we stepped in to prevent that by extending the relief further this year by 40%, with a cash cap of £110,000. We have also frozen the small business rates multiplier for 2025-26. Taken together with the small business rates relief scheme, that means that more than 1 million properties will be protected from any inflationary increases next year. That is 1 million properties protected by this Government.

[Mike Wood (Kingswinford and South Staffordshire) (Con)]

By the Minister’s logic, are we to assume that support on business rates for hospitality and retail is to end in April 2026?

[Jim McMahon]

That really was not worth giving way for. I have literally just said that 1 million properties will be supported against inflationary increases next year. The 40% will continue, with a cap of £110,000. That is exactly what this Bill is intended to do. If the hon. Gentleman supports it, he can join the Government in the Aye Lobby and vote for it.

We know from businesses that the current scheme of discretionary relief does not provide the certainty needed. That is why the Bill will enable a permanent tax cut for retail, hospitality and leisure businesses from 2026-27 through new lower multipliers, ending the year-by-year uncertainty that the previous Government hardwired into the system. That is doing what businesses have been calling for. That rebalancing—from out of town to in town, from online to on street—is exactly what people have called for in communities and in business, and Opposition Members know it. Their frustration is that they did not do it in the 14 years that they had in office. It is down to us to take the steps that are needed in government now, and we are happy to do so.

The reasoned amendment raises concerns about the impact on schools in the state sector. I can assure the House that protecting and improving state education is at the forefront of the Government’s mind. In fact, we estimate that only 2,900 more pupils will enter the state sector as a result of the removal of the business rates relief for private schools. Let us be clear about what that means in reality: that goes down to about 300 a year. In any given year across England, 60,000 pupils will move between schools; this is 300. We need to keep that in context, because we have heard a lot of scaremongering about the transfer, but that is what the evidence says. That evidence is placed in the House of Commons Library, in case Members want to take time after this debate to go and look. There might even be enough time to find the documents before the vote if they want to bring themselves up to speed.

Importantly, this is about providing much-needed investment in the state school sector. Just how many parents say, “We need specialist support for SEND, because the mainstream provision is not adequate”? How many parents—by their own admission, among Opposition Members—choose to pay for private education because they do not have faith in mainstream provision? Despite what Opposition Members have said about the glory years of the past 14 years, the truth that parents and pupils on the ground feel is very different, and they know it. We have to repair mainstream provision so that parents and pupils can go with confidence to their local school, knowing that they will get the support that they need—support for all pupils, not just some.

Several hon. Members have mentioned the impact on faith schools. I want to offer some comfort. Of course we value and understand parental choice, but based on the evidence submitted through the HMT consultation, as well as the analysis undertaken by the Department for Education on removing the charitable rate relief, it is not apparent that private faith schools will be affected by this measure any more than non-faith schools. There is no evidence of disadvantage.

[Iqbal Mohamed]

Will the Minister give way?

[Jim McMahon]

I want to make progress in the time that I have, and to wind up within the 10 minutes.

The key point is that all children of compulsory school age are entitled to a state-funded school place if they need one, and all schools—and they know this—are required to follow the requirements of the Equality Act 2010 relating to British values and to promote an environment that encourages respect and tolerance towards families of all faiths and none.

A number of Members have rightly mentioned SEND provision—it has been a significant part of the debate, for understandable reasons. We have ensured on the face of the Bill that private schools that are charities and “wholly or mainly” provide education for pupils with education, health and care plans remain eligible for business rates charitable rate relief. Furthermore, private schools that benefit from existing rate exemptions for properties that are wholly used for the training or welfare of disabled people will continue to do so. Taken together, we believe those policies mean that most private special educational needs schools will not be affected by these measures at all.

We recognise that some pupils with special educational needs and disabilities will be in private schools, but without local authority funding in place, as it is judged that their child’s needs can be provided for within the state sector. Of course, parents will still be free to choose whether to be in the state sector or to remain in the private sector—that is a very important point to make. Local authorities aim to process all education, health and care plan applications in time for the start of the next school year, but in special cases, the local authority is able to prepay one term’s fees if the process is not complete. Likewise, some private schools will forgo the first term’s fees for pupils who are expected to receive their education, health and care plan in the future.

Turning to high streets, the Government are wholly committed to rejuvenating our high streets. We want to support the businesses and communities that make our town centres successful. That is why through this Bill, the Government intend to introduce permanently lower rates for retail, hospitality and leisure from 2026-27, in order to protect the high street. That tax cut will be fully funded and sustained through a higher tax on the most expensive properties—the 1% of properties that have a rateable value of £500,000 or more. The new tax rates will be set out in next year’s Budget to factor in the business rate revaluation outcomes and the broader economic and fiscal context at that time.

We were clear in our manifesto that we would look at the business rates system and support our high streets, and we meant it. We know that our high streets and town centres are the beating heart of our communities, but over the past 14 years, they have struggled to keep their heads above water. Think about all those household names that have gone to the wall—that are a thing of the past, not the future. Think about all the banks and pubs that have closed, and about the shutters that have come down on shop premises that were once the lifeblood of where people live. The previous Government had 14 years to get this right, but they oversaw the decline and decimation of our high streets. People feel that in their hearts, because town centres are more than just a place to do business; they are a place for a community to come together. That is something the Tories never understood when they were in government, but it is something that this Government absolutely understand.

With the leave of the House, I thank all hon. Members who have contributed to this important debate. This Bill is the first step on the road to transforming the business rates system. The measures within it will provide certainty and support to our vibrant high streets, enabling the delivery of a permanent tax cut that is sustainable and that finally levels the playing field between the high street and online. The Bill will also help break down barriers to opportunity, supporting all parents to achieve their aspirations for their children. We need to bear in mind, of course, that the vast majority of children in this country—over 90%—are in state schools. This investment will see them given the support that they need and deserve, and that, frankly, they have waited a long time for. I commend the Bill to the House.

Question put, That the amendment be made.

The House proceeded to a Division.

[Madam Deputy Speaker (Caroline Nokes)]

Because of a problem with the Division bells in Portcullis House, I am going to allow an additional minute for this Division.

Oral Answers to Questions

Jim McMahon Excerpts

Tuesday 7th May 2024 Commons Chamber

[Laura Trott]

I am, if the hon. Gentleman would just like to listen. The national living wage is up by 9.8% this year, which helps with exactly the type of costs that he is talking about.

[Jim McMahon (Oldham West and Royton) (Lab/Co-op)]

2. What assessment he has made of the contribution of the co-operative sector to the economy.

[The Economic Secretary to the Treasury (Bim Afolami)]

The Government acknowledge the vital contribution that co-operatives make to the economy. The “Co-operative and Mutual Economy 2023” report found that co-operatives generated a combined annual turnover of £41 billion, a 3.7% increase from 2022 levels.

[Jim McMahon]

As the Minister outlines, co-operatives are worth £41 billion to the UK economy; moreover, they are, on average, 10% more productive than other businesses, twice as likely to survive the first five years of trading, and have higher rates of investment than other private businesses. What more can the Government do to encourage more co-operatives to thrive? Does he believe, as I do, that the creation of co-operative development agencies in every region has to be part of that?

[Bim Afolami]

I thank the hon. Gentleman for his point. I note his long-held interest in the co-operative sector, and the work that he does on it. So, what are the Government doing? They are doing two things specifically. First, they recently took the further step of backing the Co-operatives, Mutuals and Friendly Societies Act 2023; they also commissioned the Law Commission to review the Co-operative and Community Benefit Societies Act 2014 to make sure that co-operatives can do as much as possible to benefit the wider economy.

Oral Answers to Questions

Jim McMahon Excerpts

Tuesday 14th November 2023 Commons Chamber

[Jim McMahon (Oldham West and Royton) (Lab/Co-op)]

The Labour party and the Co-operative party have set out a shared ambition for more community-owned energy. That is not new: in Denmark, 52% of wind energy is community owned, and in Germany half of all onshore wind is community owned. Will the Government do far more to join that ambition of community-owned energy here in Britain?

[Gareth Davies]

We have ambitious plans for energy generation and our energy security. We want to bring communities with us, and we look at all options as we do so.

Oral Answers to Questions

Jim McMahon Excerpts

Tuesday 11th February 2020 Commons Chamber

[Sajid Javid]

This is something that I have discussed with regulators. My hon. Friend is right in his general point about challenger banks and the risks that they may or may not represent. It is right that we take a fresh look at this because having more competition in the banking sector is a good thing, especially for SMEs.

[Jim McMahon (Oldham West and Royton) (Lab/Co-op)]

12. What recent assessment his Department has made of the contribution to the public purse of tax paid by co-operative and mutual businesses.

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

I recognise the positive impact that co-operatives and mutuals have across all sectors of the economy, including retail, agriculture and financial services. No assessment has been made of the amount of tax paid by co-operative and mutual businesses, but I note that the report last year from the all-party group for mutuals found that mutuals generate over £130 billion to benefit the wider economy each year.

[Jim McMahon]

It is a matter of fact that the three largest co-ops in this country pay more tax than Facebook, Amazon and Caffé Nero combined, so not only are they creating jobs but; they are also paying fairly into the Exchequer. Will the Minister meet me and representatives from the co-op and mutuals sector to discuss that part of the economy and make sure that Britain can thrive in an inclusive way?

[John Glen]

Yes, I will. There are 7,000 co-ops across the United Kingdom, employing nearly a quarter of a million people. I have had numerous meetings over the past two years with representatives of co-ops and mutuals, and we had a mutuals workshop last July. I am very happy to meet the hon. Gentleman to discuss the recent Manchester mutuals report and to see what we can do together.

Co-operative and Mutual Businesses

Jim McMahon Excerpts

Thursday 27th June 2019 Commons Chamber

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

What a pleasure it is to contribute to this debate. I congratulate the previous speakers, who have all, in their own particular ways, not only articulated the benefit of co-operatives, mutuals and so on, but played a part in promoting them during their careers. I think my hon. Friend the Member for Huddersfield (Mr Sheerman) is possibly one of the few people, certainly in the Commons Chamber, whose longevity and experience exceeds even that of my own.

I joined the Co-operative party well over 40 years ago. I spent 18 years as a political organiser in the party: first, trying to combat the process of Thatcherism and privatisation; but secondly, I have to say, trying to convince those within my own political party—the Labour party, which is the sister of the Co-operative party—of the benefits of co-operation and mutuality. It is not a fight that has had just one front.

I joined the co-operative movement all those years ago because I saw it as some sort of middle way. It was different from state ownership, which I felt lacked buy-in from both employees and consumers, and which, while it still had a role in our economy, did not satisfy all the values and aspirations that I felt were incorporated within the Labour movement. On the other side was the shareholder proprietary model, under which it seemed to me the benefits of consumers’ purchasing power and employees’ skills were inappropriately spread, with the shareholders getting a far greater benefit from that combination of organisations. Co-operatives, mutuals and employee share ownership companies were, in their own different ways and in their own different sectors, incorporating those values, and locking in the benefit of employees’ skills and consumers’ purchasing power, in a way that reinforced the quality of the businesses they were engaged in.

It is worth reflecting for a few moments on the sheer longevity of some of the businesses involved. As we all know, the co-operative movement started in Rochdale in the 1840s. Even though there is now a much reduced number of co-operative societies—the largest being the Co-operative Group—they all have histories of well over 100 years, with some in excess of 150 years. Building societies similarly started in the middle and later part of the 19th century, and although there has been a process of amalgamation and in some cases privatisation, they are still a huge player in the financial services market. They may be much changed from their origins, but they still incorporate the basic community-based values that we have discussed.

John Lewis is an employee share ownership company that started in the second half of the 19th century. It started giving its employees shares in the 1920s and is still going strong today. When I look at companies being founded nowadays, I wonder how many will still exist in the next 150 or 200 years. The fact that the basic model of co-operation, mutuality and employee share ownership has survived all the social changes and economic vicissitudes over the last 150 to 200 years is a testament to its resilience, adaptability and relevance in the current economy.

Having said all that, there is a recognition that despite the success of some of the major companies in the sector, and the proliferation within the movement of a whole range of co-operatives, we are still not living up to the potential that the model has in our economy. Ironically, the co-operative and mutual sector plays a far greater part in economies such as those of the United States and Germany, which are by no means considered socialist economies. It is reasonable to look at why that is the case and why we have underperformed in our development of this area.

Previous speakers have highlighted some of the barriers that have existed. The raising of finance is a crucial one, although I will not repeat the lucid exposition of that problem by my hon. Friend the Member for Harrow West (Gareth Thomas). Ironically, the economic rationale for the privatisation of the building societies in the 1980s was their inability to raise capital to expand, so we had that process and we know where it ended up. One cannot help but think that if Governments of that time had looked at providing the financial mechanism by which the building societies could have raised more money, that rationale would have been destroyed. I am not saying that human greed would not still have prevailed in some cases, but it would have been far more difficult to prosecute the case for it.

On company law, the submission by Co-operatives UK and the New Economics Foundation has made it clear that one of the obstacles is an outdated industrial and provident society legal framework. There seems to be a disparity between the way the Government approach this—which is basically not to do much about it, notwithstanding the efforts of my hon. Friend through his private Member’s Bill—and the way in which company law legislation is continually looked at and revised. If it is appropriate for that to be done for the corporate, private sector, why is it not appropriate for the co-operative sector?

Partly as a result of all this, lack of understanding is a big barrier. Ironically, co-ops, building societies and organisations like John Lewis have strong brand identities and public faith in them, yet the public do not really understand what makes those companies different from others, and how, if they wished themselves to organise within a co-operative, they might go about it. We have had a huge proliferation in the number of people going self-employed. Many of those people might well feel that if they knew more about co-operation, they would be better at working with like-minded people in a co-operative structure to deploy their skills even more effectively.

The New Economics Foundation has pointed out that there are some 120,000 family businesses with owners of an age that means that they are likely to retire. Of course, those businesses may go to management buy-outs or be passed on to younger members of the family, and so on. But there should be an opportunity for management to understand and get support for a potential co-operative model in the event of a buy-out post the retirement of the existing owners. The report by the New Economics Foundation points out that if only 5% of the businesses where owners retired went on to co-operative management, that would double the number of such companies. That is a staggering statistic.

Local economic partnerships and other bodies set up to promote business in different areas seem to be either unaware or under-aware of the potential that co-operatives will offer to businesses in their area. This comes back to thinking about a co-operative development agency that would provide a centre for advice and contacts for access to finance, and would be proactive in looking for co-operative opportunities. I am encouraged that the Mayors in Manchester, Aberdeen and South Yorkshire are now considering having co-op commissioners with a brief to look at ways in which they can work with their local regeneration agencies to regenerate under co-operative models.

[Jim McMahon (Oldham West and Royton) (Lab/Co-op)]

I congratulate my hon. Friend on outlining the benefits of co-operatives. The Mayor of Greater Manchester has identified that about 160,000 residents of Greater Manchester are members of co-operatives. He says that that offers a huge opportunity, beyond just having a commissioner in place, and has now launched a call for evidence for the people who co-produce whatever model is developed there. That is a good example of working together.

[Mr Bailey]

I thank my hon. Friend for that example, which underlines the point I am making. Given that these local government structures, and the policies that they are adopting, are in their infancy, it demonstrates the potential that might be available in those areas for other local government structures to actively promote co-operation.

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[Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)]

Like many people, my first interaction with the co-operative movement was going to the local Co-op store with my gran when she was doing her weekly shopping. At the end of the walk around the supermarket, the shop assistant would put the things through the till and say, “What’s your divvy number?” and she would say, “207619”. That was her getting her slice of the dividend back. I did not really understand what that was about until I was a bit older, when she explained to me that every Christmas, she got back her dividend from how much she shopped in the Co-op.

I did not think about it much until I reached my teenage years and went to university, where I remember other people talking about it. That number has always stuck with me. I grew up in a relatively poor household, and the Co-op basically funded our Christmas, because my grandmother used the dividend she accrued throughout the year to buy the nice things we had at Christmas that we did not have for the rest of the year. I am sure I am not the only person who has memories of enjoyable Christmases because of the dividend points that their families received through Co-op shopping. That is not something we should dismiss.

There have been a lot of excellent contributions—including from my fellow west midlands Co-op MP, my hon. Friend the Member for West Bromwich West (Mr Bailey)—about the huge opportunities in the co-operative movement to contribute to our economy and the greater good of the United Kingdom. We should also focus on the small co-ops and the little interactions of co-operative goodness that improve the everyday lives of individuals in our communities.

Labour has made a commitment to “at least” double the size of the co-operative sector—my hon. Friend the Member for Stalybridge and Hyde (Jonathan Reynolds) on the shadow Front Bench will realise that doubling it is not the end point in itself. Our aspiration in government is to at least double it and then go even further with growth of the co-operative and mutual sector in our economy, and I am sure that, having heard the many great contributions today, the Economic Secretary to the Treasury will seek to replicate that.

There are so many great examples. Much like the one described by the hon. Member for Stafford (Jeremy Lefroy), there is a wonderful building society in Stoke-on-Trent called Hanley Economic, which was formed in 1854 and originally called the Staffordshire Potteries Economic Permanent Benefit building society. Its purpose was to enable people who worked in the pottery industry to own a home, get on the housing ladder, have savings and manage their money better. It still exists today. Much like the Stafford Railway building society, it provides affordable, low-cost, sustainable and secure financial products for a number of people in north Staffordshire who ordinarily may be viewed by high street banks as being a bit too much of a risk. Because they can access suitable finance, they are able to make a better life for themselves. By building societies’ own admission, they are not going to change the world or overturn the economic hegemony of our current banking system, but they are making a difference to my constituents every day through the way that they operate and their business model, which is sustainable, ethical and fundamentally about trying to improve individuals’ lives.

That is where I want to add my contribution. I agree with pretty much everything that has been said by Members on both sides of the House about the opportunities if we were to properly unleash the co-operative movement and harness its economic potential. There are other things that we can do with the co-operative model. Someone—I think it was my hon. Friend the Member for Oldham West and Royton (Jim McMahon), but I do not want to attribute it to him, in case it was not—once talked about drainpipe devolution and the idea that if a decision is made in Westminster and Whitehall by half a dozen people, and then that decision is devolved to half a dozen people in Greater Manchester, the west midlands or north Staffordshire and called devolution for the purpose of devolution, we have not really devolved anything; we have just moved the decision makers to another office. We can harness the co-operative and mutual benefit by expanding the number of people who make the decisions in the first place.

[Jim McMahon]

rose—

[Gareth Snell]

Perhaps my hon. Friend wants to correct me.

[Jim McMahon]

My hon. Friend is right. During the EU referendum, people were talking about feeling powerless and wanting to take back control and have more say over their lives. We need to look at public services, and the Co-operative Councils’ Innovation Network is leading on that.

[Gareth Snell]

I thank my hon. Friend for his intervention, because he takes me neatly to my next point, which is about learning from good practice on a smaller scale that directly benefits our economy. The Co-operative Councils’ Innovation Network, of which he and I were both members when we were council leaders, demonstrates overwhelmingly what can be done if we put a small amount of investment into local projects. Tudor Evans, who leads the council in the constituency of my hon. Friend the Member for Plymouth, Sutton and Devonport (Luke Pollard), and Sharon Taylor in Stevenage are just a few examples of people who are pushing this agenda nationally.

If we put a small amount of investment into a group of people who want to change the way that their town works, we can get huge dividends back. If we move away from a simple contractual relationship for a new business towards profit share for rental purposes or an equity share in lieu of rent, we can suddenly start to sustain our high streets better. We can see empty units revitalised by businesses that can think about long-term business planning, rather than short-term business planning to meet next month’s rent and rates bill. We end up with a greater economic benefit to the local community.

If the Government thought about how they could help local authorities to do the sort of work that the Co-operative Councils’ Innovation Network is doing across the country, they would see an increase in potential tax take, because there would be more thriving small businesses. What do we know about thriving small businesses? We know that the people they employ spend their money in the neighbouring shops, and we have a circular economy, whereby one or two different thought processes about how we include more people in decision making in a community leads to economic benefits for not only the Treasury but local communities. That should surely be looked at by this Government or the next Government or as part of Labour’s commitment to at least double the co-operative sector.

The mutualisation argument extends to not only high streets but things such as public services for buses and trains. There is an argument for utilities to be mutualised, because these are things that we all use. If we mutualise and say that the people who use those services should have a stake in the control of them, those services can be driven to a higher quality and standard. There can be financial dividends for the users, but there can also be improvements in standards of delivery, because the people using the services are in control of how they are used. That is a fundamentally simple model that is not being exploited sufficiently by a number of Government bodies at the moment.

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[Anna Turley]

I completely concur with my hon. Friend. We see a lot of passion and commitment for the co-operative sector and its values and principles in Wales, and we should be doing everything we can to allow people the freedom to develop those ideals with a supportive and co-operative approach from the Government.

I pay tribute to my hon. Friend the Member for West Bromwich West (Mr Bailey) who has worked with Ministers to try to persuade them of the need to lift unfair and unnecessary regulatory burdens on small and medium sized co-ops—we heard a great deal of detail about that today. Such burdens should not exist in the first place, and we should endeavour to remove them. One aspect of the co-operative growth agenda that comes up repeatedly within the Co-operative party and the co-operative movement is the need for access to capital, which many other types of businesses can access in a routine way, while co-operatives cannot.

Of course there is a difference in the way the co-operative business model operates, but I encourage the Minister to listen carefully to ideas for new capital instruments as they come forward. In some countries around the world we can see that new capital instruments have been put in place relatively easily, and they are both attractive and maintain the integrity of the co-operative model. For example, I recommend that the Minister look at the developments in Australia, which is leading the way on this issue.

A second aspect of assisting the co-operative sector to grow and develop concerns the development of co-operatives themselves. We often look at small and medium-sized business development and support, and regional and local infrastructures are in place to facilitate that activity. The amount and type of bank lending is often scrutinised, which helps, and specialist support is available for entrepreneurs. It is evident, however, that such support is focused on just one type of private business. There are great co-operative development professionals around the country, but sadly there are not enough, and nor is the infrastructure in place to focus on how to grow more co-operatives around the country. It is clear that we would benefit from a more rigorous and systematic approach to co-operative development.

The wider benefit of co-operatives and mutuals to our economy is clear, and new co-operatives are more likely to last into their second and third years than private small businesses. Too often, those giving professional business advice know too little about the co-operative model, and as a first point of call for advice and mentoring they are highly unlikely to suggest a co-operative approach. All that needs to change.

One route to achieving that, which has already been mentioned today, is through a co-operative development agency for England. Such an agency could be a starting point for advice or grants, and advise Governments on the type of public policy that would help to create an enabling environment for co-operatives. I hope the Minister will take that idea from this debate and work with the co-operative movement to ascertain the best shape and form for such an organisation.

[Jim McMahon]

I congratulate my hon. Friend on her appointment as chair of the Co-operative party; she is a fantastic choice. Is this not a win-win for Government? For a small amount of investment and energy, they could double the size of the sector. She will be aware that the Co-operative Group, the Nationwide Building Society and Co-operatives UK have recently revised up the figure for the value of co-operatives to the UK economy to £60 billion. Imagine what even a small amount of growth could do to the UK’s GDP.

[Anna Turley]

My hon. Friend is absolutely right. I pay tribute to his great history in the co-operative movement and everything he did while leader of the council. We have talked a lot about the social and values-based argument, but there is a huge economic driver here. My hon. Friend the Member for Stoke-on-Trent Central (Gareth Snell) mentioned the importance of keeping money in local economies, which is of huge benefit to them. We continually see it drain away, particularly in smaller towns, and co-operative economies could play a role in keeping money in local economies. There is a very important economic argument here for the Government.

Another issue I would like to raise with the Minister, which I hope he will look into further, is the shared prosperity fund. Co-operative organisations, including Co-operatives UK, Locality and the Plunkett Foundation, have a campaign called “Communities in Charge”, which calls for a shared prosperity fund to include targeted funding to ensure it is made available for people and in places that need it most; for local people to be able to scrutinise spending decisions through citizens’ panels; and for at least 25% to be controlled by local communities to spend on local priorities. This is a really welcome campaign and I hope the Minister will endeavour to look more closely at it.

In conclusion, I would like to make a point about the type of campaigning, work and activity that co-operatives add to our communities. It is in their DNA to go further than any other business type to add to, rather than take away from, the communities they serve. Their operation and their model lead them to lead campaigns on loneliness, modern slavery, food justice, fair tax, employee safety and community safety—to name just a few. Some of those areas have been championed by one of the largest consumer co-ops in the world, the Co-operative Group, which, I note, recently won the title of co-operative of the year. That is the difference co-operatives make and the wider benefit they bring. It is an inspiration for all of us here who want more. The smaller co-operatives fighting to compete in non-traditional sectors, co-operatives aimed at disrupting exploitative markets, and our larger co-operatives serving members and their communities so well are all part of the fantastic co-operative difference that we are proud to support today.

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[Dr Drew]

Exactly. That is partly the problem of the movement, because it is not overt enough. It does not broadcast the fact that they are mutuals and co-operatives. On farming, the changes that are going to come will, to some extent, demand upscaling. Some of us may worry about that, but the reality is that with the change in the funding mechanism there will be a drive towards larger units. The only alternative to that is some form of greater co-operation among those who practise farming at the moment. We want more people to come on to the land and particularly younger people, because the average age is 59. It will hardly be a burgeoning, growth-inspired movement without younger people coming in to do the exciting things that we all know could happen to provide more of our own food.

I hope we will look at how co-operatives are not only built into the Agriculture Bill, but given encouragement. All the pressure is on selling smaller units, whether that is what is happening to the county farms estate, where they are being gradually cut away one by one—some of us worry about that—or the fact that when land comes up for sale, the big guys come in and buy it.

[Jim McMahon]

I congratulate my hon. Friend on all his work on the Agriculture Bill and everything around that. Does he agree that with the increased awareness of climate change and environmental impact, food miles are becoming more of an issue in people’s consciousness, and that the more we can grow and produce here, the better it will be for the climate and the country?

[Dr Drew]

Of course. It is really important that we provide food as locally as we can, and many people want to do that, including through the Landworkers’ Alliance and all sorts of innovative schemes. The loss of the bank was sad for many of us, but the saddest day for me was when we lost the co-operative farm estate. We lost Stoughton and Down Ampney, which were model farms that showed the way and how co-operation can work. This was the nation’s biggest farmer for generations. Sadly, all that was lost, although it has gone to the Wellcome Trust, which is welcome in its own way. However, we ought to be encouraging co-operation and seeing it as a solution to many of the problems.

I hope that the Government are listening and are further prepared to change the Agriculture Bill to make it even friendlier to co-operatives, so that different farmers can find a way of staying in the marketplace, and that may encourage younger people, who, I am sure, will be keen to be co-operators.

[Luke Pollard (Plymouth, Sutton and Devonport) (Lab/Co-op)]

It is a pleasure to follow my fellow south-west MP, fellow co-operator and fellow shadow Department for Environment, Food and Rural Affairs Minister, my hon. Friend the Member for Stroud (Dr Drew). As we have heard from hon. Members on both sides of the Chamber, there is a real energy and dynamism around co-operatives and the values that they stand for. We need to grasp the opportunity to stop just talking about co-operatives and mutuals as a worthy activity that happens on the periphery of our economy; we should have it as a mainstream alternative and option in nearly every single area of public and private organisation. That is what we need to look at much more and I am really glad that so many Opposition Co-operative MPs, in particular, have spoken so passionately about the opportunities that lie ahead. That is what I want to talk about today, because the time for co-operatives is now, and we must seize the nettle.

Before that, I echo the praise and thanks to my hon. Friend the Member for Harrow West (Gareth Thomas) for serving for so long as chair of our Co-operative party—he would have got less time for murder. He has done a very good job. I also put on record my thanks to the outgoing general secretary of the Co-operative party. Claire McCarthy has served our party and movement incredibly well. We all wish her well for the next stage of her career and wish the best of luck to all the contenders who are being interviewed to replace her. As a Labour and Co-operative MP, I am very proud to have stood on a manifesto that pledged at least to double the size of the co-operative sector. As Plymouth’s voice in this debate, I will tell the House a bit about what Plymouth is aiming to do, because we have a Labour and Co-operative-run city council that has pledged to double the size of the co-operative economy in our city by 2025. The Minister will know many of these things well, as a former Conservative candidate for a Plymouth seat, and I know that he will welcome and pay special attention to my remarks.

Doubling the size of the co-operative economy is a worthy ambition of our times. To achieve that, we need not only to accelerate community wealth-building initiatives, reviewing procurement and providing support to grow the capacity of co-operatives to engage in procurement exercises, but to focus on economic development policies. For folks that are really passionate about co-operative politics, it is sometimes frustrating that co-operative politics tend to be put just in “procurement”—if only we procured differently, we could grow our economy. Yes, that is right—we should and we must—but we must also not neglect the importance of co-operative economic development policies. That is really where Plymouth City Council has led the way.

In Plymouth City Council’s strategy, “Doing it Ourselves”, which was published recently, the ambition to double the size of our co-operative economy has been laid out. We want to grow from the 23 co-ops that we have in our city to 50 co-ops; from a turnover of £18.6 million to £40 million; from 9,500 members to 20,000; and from 226 employees to 500. That is a really good ambition and I want every single Member in this House to challenge their own councils—whether Labour, Labour and Co-operative, or of the blue team persuasion—by saying, “What are you doing at a local level to encourage the economic development, growth and starting up of new co-operatives?” Plymouth is rightly very proud of its focus on the wellbeing economy, community-owned infrastructure, worker-owned tech and creative industries, public-facing and cultural hubs and municipal co-operation, but that is not Devon-specific. It can work in every part of the country, and that is what many of things that I want to discuss relate to. Before I continue, I should say that I am a very proud member of the co-operatives that I am speaking about today. I hope that other hon. Members will consider joining them after they hear what I say.

I will first mention a co-operative that I have spoken about in the House before: the Plymouth Energy Community. It was set up in 2013 to provide radical and green solutions to fuel poverty, which affects 13.4% of the people who live in Plymouth. Since it started, it has done amazing things. In 2014, it invited members of the public to buy a stake in that co-operative. As my hon. Friend the Member for Stoke-on-Trent Central (Gareth Snell) said, crowdfunding is really important. At the time, we had the lowest buy-in level—£50—of any crowdfunding co-operative in the country. That was nearly £450 lower than any other at the time, and it made co-operative ownership and innovative projects available to more and more people.

Having raised more than £600,000 and received a £500,000 loan from Plymouth City Council, Plymouth Energy Community provided solar panels to 21 schools and community buildings. It has gone further, adding 15 primary schools to that list, and we now have new solar panels on the roof of our Olympic-quality sports centre—the Life Centre. It has also opened its first solar farm at Ernesettle, which is incredibly exciting. It has also become a real champion for insulation and energy efficiency, particularly helping communities on low incomes—not only in Devonport, in the patch that I represent, but in St Budeaux and Ham in the north of the city—to reduce the energy costs of their homes by investing in infrastructure and upgrades. It is very proud of that and it should be.

I spoke to the Plymouth Energy Community during the “The Time is Now” demonstration on Lambeth Bridge yesterday. As well as being an organisation that has excited people to invest in infrastructure, it is exciting people to get involved in the fight against climate change, and rightly so.

Plymouth is not just about solar panels on primary schools; it is also about how we use co-operatives to challenge the big evils of our time, one of which is hunger among our schoolchildren. That is where CATERed, the co-operative owned jointly by Plymouth City Council and 67 of our primary schools, has been pioneering. It has pooled all the school catering contracts for the entire city. That includes all the different types of school, as Plymouth has one of every school that every Government since 1945 have ever thought of; diversity of provision is not our problem in Plymouth, although a lack of funding is. CATERed now provides wholesome, healthy food all year round, including over the summer. To its great credit, instead of providing meals for kids who cannot afford to feed themselves properly over the summer from empty school buildings, it does so from parks, reducing the stigma for families who really struggle for food.

[Jim McMahon]

I congratulate Plymouth on the work that it is doing. It is genuinely leading the way on many of these issues and the council is fantastic. Is my hon. Friend not highlighting what makes co-operatives special? Not only are they an enterprise and profitable, but they are a movement that people take part in and feel really connected to.

[Luke Pollard]

Absolutely. There is the opportunity to engage more people in that energy and dynamism. As a response to what we have seen with Brexit and in a globalised world, where we can call anyone around the world from our phones but very few of us know our neighbours in depth, as we once used to, we need to build community cohesion, and doing that in an environment that supports business growth, enterprise and innovation through co-operatives has to be part of the solution.

I also want to talk for a moment about Nudge Community Builders, which is one of Plymouth’s newest co-operatives and, again, I am very proud to be a member of it. From the Minister’s time in Plymouth, he may know about Union Street, a famed drinking haunt that used to have pubs from one end to the other. When the fleet came in after its manoeuvres, it used to be seen having a few cheeky beers. We are now down to one pub on Union Street. Unfortunately, Union Street echoes Stonehouse’s story of poverty and deprivation.

The fantastic team at Nudge Community Builders have used a community share scheme to take over the Clipper Inn, once one of Plymouth’s most notorious drinking haunts—I would never have been found there in my youth—and have turned it into a real hub of community regeneration. The Clipper now provides low-cost space for people to demonstrate their products, bring creative arts to the market and grow their business. For example, the No Whey! co-operative, which provides incredible gluten-free, healthy food, has taken up residence at the Clipper and, having grown and grown as a business, is doing incredible things. That regeneration was crowdfunded by £204,750 from 151 investors in just 67 days, thanks to multiplier effects. Wendy, Hannah and the rest of the Nudge team have done something incredibly special. Again, that is not specific to Plymouth; it is a great example of what can be done everywhere.

In the true spirit of the Rochdale pioneers, Plymouth is going above and beyond. Plymouth City Council is the shareholder of the South West Mutual bank—it does not just talk about financial inclusion and what happens after the decline of high street banks; it is opening its own bank to serve the four counties of the far south-west. Plymouth is leading the way in that respect.

There is a co-operative renaissance happening in our towns and cities, which is sometimes lost on policy makers in London. I therefore encourage the Minister to send his officials to Plymouth, and to other cities and towns across the country that are really leading in this respect. We often host Government officials who come to see Plymouth’s co-operative story, and more are welcome, because that success story needs to be told.

That story is also a temporary one for local government. When Labour recently lost control of Plymouth City Council, we lost our status as a co-operative council. It is a matter of great regret—the hon. Member for Wycombe (Mr Baker) spoke about this—that some of the same values and passions have not always been felt by the Conservative councillors who replaced the Labour ones. I am very glad that the Labour council is back, under the incredible leadership of Councillor Tudor Evans, who, alongside Councillor Chris Penberthy, is driving forward the innovative co-operative agenda.

The opportunities to double our co-operative economy at least also work for fishing, and there are around 1,000 fishing jobs in Plymouth—my hon. Friend the Member for Stroud spoke about agriculture, which is his passion, so let me speak for a moment about fishing. We already have an incredible co-operative success story in our local fishing industry, but we must now seize the opportunity to double the number of jobs that come from increased processing and catching, and from sharing opportunities and innovation, especially in tackling ghost gear and plastic pollution.

That is where I think the Minister has an opportunity to spread the narrative that doubling the size of the co-operative economy does not just mean creating another Co-op group; it means giving the tools, skills, funding and support to innovators right across our country to do interesting and innovative things alongside our communities, to innovate and change. That is certainly happening in Plymouth.

We have a real opportunity to mainstream co-operative values. I do not want my time as a Member of Parliament to be defined by an annual debate on co-operatives in which well-meaning Members on both sides of the House express their hopes and dreams about what the future could look like. I want us to put this into every single debate, whether about mutual social care provision or new mutual models for the future ownership of our public utilities, because the time for mutuals and co-operatives is now. I encourage the Minister to grasp this opportunity with both hands, because although Opposition Members share a lot of familiarity and common cause with co-operative values, I believe that he can find Conservative values in that co-operative spirit as well, so that, whoever is in government or in charge of our local councils, we can really drive that co-operative agenda forward. I encourage Members on both sides of the House, and local councils and communities, to grasp this incredible opportunity ahead of us.

--- Later in debate ---

[Jim Shannon]

I thank my honourable colleague for that intervention. I am sure that the Minister is listening and hope that he will take on board that suggestion, which could be very helpful. I wholeheartedly support that suggestion. This is not the Minister’s responsibility, but I have had discussions with other Ministers about help with high street rates.

It should be borne in mind that credit unions are for their members. The members invest their money to lend their money. It is a fantastic opportunity, and a fantastic example of how lending should be looked upon. The big banks should note that example. It should not be all about dividends for shareholders; it should be about the customers—those who are involved.

The Northern Ireland movement is massive in comparison with its counterparts in Great Britain. Statistics collated by the Bank of England in each quarter show the scale of credit unions in Northern Ireland in comparison with that of their counterparts in the rest of the United Kingdom. Of the 437 registered credit unions in the UK, 145 are located in Northern Ireland. A third of all adult credit union members in the UK are in Northern Ireland, and four in 10 juvenile members are from Northern Ireland. We are encouraging our young people to open accounts early—although, to be fair, that will probably be done by their parents or, perhaps, by their grandparents, who open accounts for them to start them off. It is good to encourage young people to be part of a bank, to save money, and thereby to see the benefits of credit unions. As I have said, it is a fantastic opportunity. If Members have not had an opportunity to investigate or gain knowledge of what is happening in Northern Ireland, I suggest that they should.

[Jim McMahon]

I had the pleasure of being in Belfast over the weekend for a Co-operative party event organised by Tony McMullen, a fantastic advocate for co-operatives. The party has published a manifesto for co-operatives in Northern Ireland. Perhaps the hon. Gentleman will read it and convey to the UK Government what we might take from Northern Ireland’s leadership in this regard.

[Jim Shannon]

I should be more than happy to do that. I read in the paper that the hon. Gentleman was the guest speaker at that event.

Our credit unions are clearly punching well above their weight, as so often happens in Northern Ireland. This is yet another example of what we do well there. I know from experience in virtually every corner of my constituency how vital credit unions are in helping some of the most marginalised in our society to save their money and borrow at very competitive rates. As was pointed out by the hon. Member for Harrow West, they have often filled the gap left by bank closures. They filled that gap when banks closed in Newtownards, and they filled it by opening a brand-new office in Kircubbin on the Ards peninsula—where there had previously been a branch of the Danske Bank—to supplement the branch in Portaferry.

Credit unions fill the gap on many occasions, and have a great interest in the community. A recent article in the Financial Times recognised the role that they play in our community beyond simply lending money and providing facilities for saving, explaining how they can and do help to squeeze out loan sharks, who cause a great many problems in Northern Ireland. They lend money and then take exorbitant interest rates from the backs of people. They are a scourge on society, including my Strangford constituency. They prey on the most vulnerable among us, and have ruined countless lives. I want to place on record my thanks to the credit unions throughout the United Kingdom of Great Britain and Northern Ireland whose service is helping many to break away from the grip of criminal moneylenders.

Despite the apparent strength of loan sharks, however, there are still significant opportunities in credit unions in Northern Ireland. Again, I agree with the motion: we must look to Her Majesty’s Government to work with the credit union movement, and the co-operative and mutual sector as a whole, to fulfil that untapped potential. More can be done with a little help. We have heard two suggestions in interventions, and other ideas are being presented.

The regulation of Northern Ireland’s credit unions moved from Stormont to the Financial Conduct Authority in 2016. I ask the Minister to engage with the credit unions in Northern Ireland—and, indeed, throughout the United Kingdom—and to help them to, in turn, work with the FCA to help them to grow further, and, furthermore, to help us to deal with problems such as financial exclusion.

Let me say in conclusion—and I realise, Madam Deputy Speaker, when I hear that cough I must take note of it—that there is an increasing desire across our nation for a different growth model for our economy. The hon. Member for Stroud referred to an alternative. We need a good alternative that can be successful, and this is the one: one in which the interests of workers and people are not overlooked, but rather are to the fore; one in which there is a greater sense of partnership between all the actors in our economy. Co-operatives and mutuals are already an incredibly important part of our economy, and they can be greater still. Northern Ireland is an example of their importance. I join Members in all parts of the House in recognising their existing contribution, and calling on the Government—and the Minister in particular—to work with the sector and help it to grow even more and benefit more people.

Financial Exclusion: Access to Cash

Jim McMahon Excerpts

Tuesday 21st May 2019 Westminster Hall

[Seema Malhotra]

The hon. Gentleman puts on the record an important and well-made point, which I will address later.

[Jim McMahon (Oldham West and Royton) (Lab/Co-op)]

I, too, congratulate my hon. Friend on securing the debate. Does she agree that when banks, such as the Yorkshire Bank in Royton, close with an agreement to relocate a cash machine in a convenience store, the agreement must be that it will remain free to use? In Royton, just a year into that agreement, a charge has been introduced.

[Seema Malhotra]

My hon. Friend makes an important point about the situation in his constituency, and that is why regulation is increasingly important. In future, the issue will be maintaining not just access to cash but free access to cash.

There has been a renewed focus on the issue of the last bank standing in a community. As Sian Williams of Toynbee Hall pointed out, however, when we get to that point, it is often too late. There is an urgent need to join up, particularly in areas that are more likely to be left behind. Financial institutions have not tended to talk to one another, so towns and communities have been left with piecemeal and inaccessible financial services.

The change has not been orderly. In the RSA’s excellent report published earlier this year, “Cashing Out: The hidden costs and consequences of moving to a cashless society”, the situation is described as a “disorderly dash from cash” with

“a misalignment of incentives between individual banking institutions seeking to shed their costly physical infrastructure…and the needs of…thousands of communities that remain reliant”

on what, for them, are essential financial services. The report finds that substantial numbers of people rely wholly on cash and that access to bank branches is about not just the older generation but the younger generation, small and medium-sized enterprises and increasing numbers of self-employed people, who all have an important stake in the debate.

This year, the Access to Cash Review’s significant report found that 17% of Brits say that they would not cope without cash. As has been said, they are the most vulnerable people, such as the disabled, the poorest and the elderly, who are unlikely to be early adopters of contactless technology. Figures from the Financial Inclusion Commission suggest that they are also more likely to be among the approximately 700,000 people in the UK who want a bank account but, for various reasons, cannot open one.

There are significant regional, area-based and income-based disparities. More than 15% of people with an income under £10,000 rely completely on cash, in contrast with only 2.5% of those in the highest income bracket. People who have less access to cash are already subject to a poverty premium; they have been left behind by contactless and digital payment technologies and cannot shop around to get the best deals.

There are also difficulties for disabled people. Eleanor Southwood’s evidence to the Treasury Committee recounted how people who are blind or partially sighted can struggle to use a taxi driver’s touch screen PIN pad, and then often need to give away their PIN. It is important to think about the role of assistive technology in this space. As chair of the all-party parliamentary group for assistive technology, I understand the potentially transformative impact of accessible technology and why it needs to be part of the debate about how financial services move forward.

The gaps in broadband provision, including in rural communities, can make access to cashless payments more difficult. Indeed, broadband notspots are not confined to rural areas; an estimated 1,000 households in my constituency do not have access to decent-speed broadband. Hounslow Council’s work to help to end notspots is a key part of the jigsaw, which will take years to deal with.

The question is how we are going to respond to the drivers of such changes, including new technologies, lifestyles and uneven economic progress, and the consequences of the increasing cost of our nation’s wholesale cash infrastructure, alongside the need for better financial education and financial inclusion. I thank the hon. Member for Solihull (Julian Knight) for being here and for his work on the all-party parliamentary group on financial education for young people.

I will say a few words about supporting the cash infrastructure. We know that The Telegraph reported last year that there were about 123 cash deserts—postcode areas that do not have a single ATM in their geographical coverage—and there are more than that now. A further 116 areas have just a single ATM, 36 of which are fee-paying ATMs. The Association of Convenience Stores also highlights how convenience retailers and ATMs enable financial inclusion, but they are also under threat from high business rates bills and cuts to interchange fees.

In addition, research by the University of Bristol on the distribution of ATMs in that city has found that the provision of cash is almost opposite to the geographical need for it. Lower-income communities are poorly served by current cash infrastructure. ATMs are changing from free to fee-charging, with deprived areas disproportionately hit. Of the 16 ATMs in Bristol that changed from free to fee-charging between October 2018 and March 2019, 11 were located in deprived areas.

Oral Answers to Questions

Jim McMahon Excerpts

Tuesday 9th April 2019 Commons Chamber

[John Glen]

My hon. Friend makes a very fair point. That is why the Chancellor announced at the spring statement that we will require company audit committees to review payment practices and report on them in their annual accounts. This is part of a range of measures that the Government will be setting out shortly when we make a full response after the call for evidence.

[Jim McMahon (Oldham West and Royton) (Lab/Co-op)]

The Government know full well that some deep-rooted corruption is taking place within major banking institutions when it comes to commercial lending. At the moment, there is nowhere near the type of protection needed to help cover our small businesses in such an eventuality. Will the Government take action now—eventually—to give small businesses that support?

[John Glen]

We have taken direct action so that small businesses can get a direct and quick response by expanding the authority of the Financial Ombudsman Service and having a retrospective review through the dispute resolution mechanism. What businesses up and down the country want is quick action to deal with disputes that are unresolved.

Spring Statement

Jim McMahon Excerpts

Wednesday 13th March 2019 Commons Chamber

[Mr Hammond]

I have heard of the campaign. We settled the issue a number of years ago. [Hon. Members: “What?”] Yes, we have. We were dealing with a very difficult set of challenges but did what we had to do. I know the campaign continues, but I have no further announcements to make.

[Jim McMahon (Oldham West and Royton) (Lab/Co-op)]

The Government will know that, since they walked away from local councils, frontline services such as adult social care and children’s safeguarding have been massively underfunded, adding more and more pressure on low-income families and council tax. When will he eventually give proper funding for children’s services and adult social care?

[Mr Hammond]

At the risk of being repetitive: we will have a spending review later this year. The question of local government funding and how business rates retention interacts with other funding structures will be looked at, but in the meantime we have increased funding for local government by £1.3 billion, meaning that local government has a real-terms spending increase available this year. Labour Front Benchers voted against it.

Bus Services: Greater Manchester

Jim McMahon Excerpts

Monday 4th March 2019 Commons Chamber

[Jim McMahon (Oldham West and Royton) (Lab/Co-op)]

I would first like to place on the record an interest, as a family member works for Transport for Greater Manchester, although not in the buses division. I bring to the House an important matter for debate and one that is as old as public transport itself: our bus services. I will speak about the impact of bus service reductions in Greater Manchester, the opportunities that arise through bus franchising and the need to bring about a new settlement for bus users in our city region.

For context, Greater Manchester’s bus services go back nearly 200 years to the original horse-drawn buses, but SELNEC—South East Lancashire North East Cheshire—brought together council transport departments from Manchester and its surrounding districts. In 1974, it became the Greater Manchester Passenger Transport Executive. In 1986, the bus operation was transferred to GM Buses, with its iconic orange and brown livery, which serviced communities across the city region and beyond until its employee buy-out in 1993, when it split services between the north and south of Greater Manchester. That was an important moment for the routes, services, pricing and quality of services we see today.

As a child growing up off Queens Road in Cheetham Hill, in the shadow of the imposing Queens Road bus depot, I would look at it as I walked to school each day, or to the Irish centre across the road, and the orange and brown livery was as powerful to me as the Coca-Cola or Heinz brands are to the whole population. It is a little-known fact—I am not sure that I should be saying this—that as a child playing on my pedal bike, I was so preoccupied with the plastic bottle that I had positioned against a rear wheel of the bike to try to make a motor engine noise that, as I went out on to Queens Road, I did not notice the passing vehicle and was struck by a bus driver. I am forever grateful that he was driving his car to work, and not his bus, at the time. I broke my collarbone and learned an important lesson about road safety. The local museum of transport housed in the depot would provide a staple visit. I made sure that each of my sons made their mandatory visit, whether they liked it or not, to take a photograph in the seat of a bus and a tram.

But it is not the past that occupies my time or my postbag today, but the state of public transport in Greater Manchester. By 1996, GM Buses South had been sold to Stagecoach and GM Buses North had been sold to First Bus, both of which are still operating from the depots that they inherited, basically splitting Greater Manchester in half. Rather than creating active competition, that created two, in my view, private sector monopolies with differential pricing and ticketing, and entirely different approaches to routes. Today, 82% of bus mileage in Greater Manchester is commercially operated and accounts for 90% of passenger journeys. Stagecoach operates the majority of routes in the south and First Bus operates the vast majority in the north, with very little mutual competition.

This was explored by the Competition Commission in a two-year investigation that found that nationally there were high levels of market concentration and a number of barriers to entry for new competitors—not least, the cost of establishing a depot, buying buses and creating routes. Its report found that head-to-head competition was uncommon and that the costs to passengers through the lack of competition was between £115 million and £305 million a year nationally.

The experience of many bus users is that bus services are being run for the benefit of the operators rather than bus users. Let us remember that when we say bus users, we are talking about those who need accessible, affordable and reliable transport to get to work, school or college within a system that is, at the moment, complex, expensive and too often not fit for purpose.

[Liz McInnes (Heywood and Middleton) (Lab)]

My hon. Friend is making an excellent speech. In my constituency, we are extremely reliant on the bus services. We have only two railway stations that serve only a part of the constituency. Complaints about bus services are a constant in my constituency emails. I am very grateful to him for raising these really important issues, which mean a lot to my constituents.

[Jim McMahon]

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

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

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

[Jim McMahon]

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

[Liz McInnes]

It is really important that we remember the role of bus services in addressing social isolation. A constituent came to see me about the cutting of a bus service, which meant she was unable to go out in the afternoons to shop and visit friends and family. She was an elderly lady. I wrote to the Minister for loneliness about it, who wrote back to me and said, “This is a matter for the Department for Transport.” Does my hon. Friend agree that there needs to be more joined-up working between Departments?

--- Later in debate ---

[Jim McMahon]

That is a really important point. By and large, someone living within 5 miles of Manchester city centre on a main road will probably get a reasonable bus service, and there will be quite a lot of competition for it. But for someone who lives off a main road, on an estate, the chances are that their route has been cut or cancelled completely. For many people—particularly those who live on estates on steep gradients—that can mean that they are completely cut off from access to good bus services and do not leave the house. People have experienced that in Royton and parts of Chadderton where bus services have been taken away. I thank my hon. Friend for her intervention.

The current system unfortunately sees Greater Manchester in a clean air crisis, with pollution causing around 1,200 premature deaths a year. That is across all transport, not just buses, but it is important that we try to get people on to sustainable, environmentally-friendly transport, not just to get to work and college but to save lives.

[Jim Shannon (Strangford) (DUP)]

I thank the hon. Gentleman for giving way. As I said to him before the debate, Translink has spent a substantial amount of money on new buses in my constituency. Those buses are environmentally friendly, but they are also disabled-friendly. It is so important that we give the opportunity of rural and urban bus travel to people who are not able to access normal buses. Does he see that as one of the things that the Government should pursue in his constituency?

[Jim McMahon]

Madam Deputy Speaker, I cannot tell you how reassuring it is in these crazy parliamentary times to have an intervention from the hon. Member for Strangford (Jim Shannon); it gives a lot comfort. That is a really important point. Disabled people find it difficult to leave the house, and they have to contend with not only buses but, when they get off the bus, the shops, department stores and supermarkets that are not accessible. What we can do as a public service is ensure that public transport is accessible, to connect them as much as possible with our towns, city centres and villages. I appreciate that intervention.

As I have said before, we cannot address the clean air crisis if we do not address the bus crisis. Over the past 10 years, we have lost 32 million bus journeys every year in Greater Manchester. That is a staggering number of journeys being diverted. I should say, out of balance, that that is partly because there has been significant investment in our tram system, so some people will choose to use the tram rather than the bus network, but that still does not account for the 32 million. We have seen a significant shift, and too many people rely on their private cars to get to work because bus services just are not good enough.

As a result of commercial decisions or because bus subsidies have been cut due to local councils having their budgets cut—of course, subsidised routes are funded by council tax through the transport levy, so if the council budget is cut, transport naturally gets cut, too—many communities have seen routes reduced or cancelled completely, cutting off entire communities. Many older and vulnerable people are now isolated. At the same time, we have seen the cost of travel increase. Ticket fares have increased by over 55% above the rate of inflation in the same period. How can it be right that we are losing 32 million bus journeys a year, but the cost has increased by 55% over the rate of inflation? People are paying from both sides—through increased subsidies to operators and through poor services, and they are then charged on top of that. I pay credit to the Better Buses for Greater Manchester campaign, which provided that data.

Given the north-south divide in Greater Manchester, it is more expensive generally to travel across the city. If someone needs to make a bus journey that requires more than one operator, they have to use what is called a system one ticket, which is a multi-operator bus ticket. That costs £5.80 a day or £19 for a weekly ticket, often for people who are on the minimum wage and struggling to get by. We should compare that to what we pay for bus travel in London. Someone who needs to use multi-modal transport—say, the bus and the tram—will pay £9 a day or £38 a week. If we compare that with the same ticket in London, where someone wants to use a bus and the tube, they will pay £21.20. It is £38 in Greater Manchester, but £21.20 in London, so weekly tickets are more expensive—179% more expensive—in Greater Manchester than in London. Quite literally, passengers in Greater Manchester are being taken for a ride.

[Liz McInnes]

Oh dear.

[Jim McMahon]

Well, I had to say it. Give me some credit, please.

In 2014, the devolution agreement was reached with Greater Manchester leaders. At the time, I was the leader of Oldham Council, and we agreed to bring forward plans to franchise bus services in Greater Manchester. This would allow greater power over routes, frequency, operating hours, fares and standards. There has been a great deal of concern that the big operators, such as Stagecoach and First Bus, would seek any legal challenge to prevent bus franchising from happening, and there is little doubt that that has in part accounted for some of the delay we have seen.

Funding has already been spent by the Greater Manchester combined authority and the Mayor: £6 million to date, with a further £3.5 million to come and followed by another £2.25 million for bus reform towards 2020, totalling £11.25 million. Incidentally, that is dwarfed by the profit Stagecoach made last year alone, when it had a £17.7 million profit margin for the year. That may account for some of the nervousness we have seen: when making that much in profit, it provides a decent fighting fund if it has to take legal action to protect that profit. However, it is a bad deal for taxpayers and bus users.

Greater Manchester must now recognise that with every week, month and year that passes, it is the millions of people in our city region who will be paying the price of delay. That brings me to explore the willingness to do it Greater Manchester’s way. There is a reason why Greater Manchester secured the largest devolution settlement outside London and why Greater Manchester has attracted attention. It took things seriously; it made the evidence-based case; and it built partnerships and long-standing relationships to get things done. It is just not good enough that passengers and decision makers in Greater Manchester seem to be held to ransom by bus operators, which have taken hundreds of millions of pounds from routes, while routes have been lost and, year on year, the taxpayer subsidy is passed on. Unless a more balanced settlement is reached, that just is not a good deal, but it requires energy and determination to form a different vision.

While we wait for franchising to seek powers, we must use this time to secure any possible passenger advantage. It will come as no surprise that First Manchester was heading for difficulties because, after it secured an operating margin of 17.3% or £18 million in 2010, it lost ground with losses in 2016 and 2017 amounting to £11 million. When it became common knowledge that First Manchester was seeking buyers for its four depots in Greater Manchester, including in Oldham, together with its fleet of 500 buses and 2,000 employees, it was a once-in-a-generation opportunity to bring some order and sustainability to bus services covering some of the poorest communities in Greater Manchester. I took the opportunity to raise this in my letter to the Mayor of Greater Manchester on 6 February, and I still urge that action be taken.

A difference seems to arise from the Bus Services Act 2017 in relation to whether the restriction in the Act on setting up a new company means there is also a restriction on buying an existing operation. I am conscious of the time, so I will jump ahead in my speech. I sought the advice of the Library, and I was referred to a companies law specialist. They said that

“it is clear that acquiring an existing company does not constitute the formation of a new company and so, as I would understand it sits outside the restriction in the Bus Services Act”.

They also said:

“It is my considered opinion that buying an existing company does not constitute forming a company.”

Even if conflicting legal advice was received focusing on the letter of the law as outlined in the Companies Act 2016, rather than the implied spirit of the Bus Services Act, there would be other options. We must make sure that we do not miss opportunities. For instance, there is the opportunity to have other municipal bus operators expand into Greater Manchester, such as those in Warrington, Reading, and Nottingham, which are performing well. If that is not considered to be an option, we could look at the formation of mutuals or co-operatives to make sure that passengers are part of the shareholding, or we could look at Manchester airport buying the service as a going concern and holding it ahead of bus franchising. There are plenty of options around. Fortune favours the brave, and it is important that we see determination.

Unfortunately, we have learned that the Queens Road depot, together with its 163 buses, has been sold to Go-Ahead for £11.2 million, separating it from the three remaining depots, including Oldham. While I accept that the new operator will work with other operators through the OneBus partnership it is my belief that carving up the north of Greater Manchester with a range of new operators buying the depots individually will make franchising harder, not easier. It is hugely disappointing, to put it mildly, that we have not capitalised on an opportunity that rarely presents itself.

Greater Manchester has done a great deal to ensure that there is investment in public transport. For instance, it has spent £90 million on bus priority measures and £130 million on bus stations, with an additional £29 million to support clean buses. It is important that operators play the game. I had an unfortunate exchange with Stagecoach Manchester on Twitter, as it was criticising the Mayor and the Greater Manchester combined authority for introducing new powers to reduce air pollution, as though that was not a reasonable thing to do, and it was not taking into account the £29 million clean bus fund invested by Greater Manchester. There was more than just a stick—there was also a significant carrot.

Public transport is key to giving people across Greater Manchester access to jobs, including constituents such as mine in Chadderton, Oldham and Royton who seek employment at key employment sites such as Trafford Park and Manchester airport, but who are denied that option because buses simply do not run to meet shift patterns, or are unaffordable and complicated, which disadvantages people trying to hold down more than one job, or who have with caring responsibilities and for whom time is precious.

This matters—all public transport users across Greater Manchester care about it, as 76% of all journeys using public transport are by bus. We must grasp this opportunity. Two and a half million people in Greater Manchester deserve better, but it requires courage. Remember, faint heart never won fair maiden, and it certainly does not get the buses to run on time either.

[The Parliamentary Under-Secretary of State for Transport (Ms Nusrat Ghani)]

I thank the hon. Member for Oldham West and Royton (Jim McMahon) for bringing this important issue to the House, and I welcome the opportunity to debate it and to collaborate on how we can continue to support and promote buses. I was particularly touched by the throwback images and his first impression of a bus. We all had those back in the day.

Buses play a hugely important role in our transport system. As we heard, they connect our communities to the workplace and to vital public services. They support our economy, they help to tackle congestion and they have an important contribution to make in reducing emissions—I hope to come on to that. I share the hon. Gentleman’s concerns about bus passenger numbers, which vary across the country, but we must not forget that there are over 4.4 billion bus journeys a year and buses remain the most popular form of public transport.

It is interesting to know—this is why we are all here and championing buses—that passenger satisfaction remains consistently high, with 88% of passengers satisfied overall with their bus journey. I cannot think of any other public service that rates so highly. We should take a moment to thank bus drivers, who are key to good journeys, and good bus companies that operate a good service. The benefits of a reliable and innovative bus service are clear: greater productivity and communities that are connected, rather than apart. That is why the Government remain committed to improving bus services and expenditure on buses.

Each year, my Department provides about £250 million in direct revenue support for bus services in England via the BSOG—the bus service operators grant—scheme. Of that, about £43 million is paid directly to councils outside London to support buses that are not commercially viable but considered socially necessary. The rest goes to commercial bus operators. Without that support, fares would increase and marginal services would disappear. Government funding supports the approximately £1 billion spent by local authorities on concessionary bus passes every year. The Government have committed to protecting the national bus travel concession, so that about 10 million people get the support that they need to travel off-peak anywhere in England.

The hon. Gentleman raised the issue of younger travellers. The Government recognise that young people’s travel and the level of fares is a complex area. There is no statutory obligation to provide a discounted travel price to young people, but many commercial and publicly funded reductions are available. I was particularly pleased to see Transport for Greater Manchester introduce its Opportunity Pass, giving all 16 to 18-year-olds free bus travel. Since 2010, the Government have invested over £450 million in bus-related local authority transport schemes, including £32.5 million in the Manchester Cross City bus scheme, to deliver a range of bus infrastructure and congestion management measures. That was no doubt welcome in the hon. Gentleman’s constituency.

To support buses today and to help them into the future, the Government delivered the Bus Services Act 2017, which contains a range of options for how to improve local bus services in England. In addition to franchising, there are new and improved options to allow local transport authorities to enter into partnership with their local bus operators to improve services for passengers. Partnership working between local authorities and their bus operators achieves the best results. It is not always about funding. Bus passenger numbers are up 50% in Bristol, 36% in South Gloucestershire and 31% in Reading. In York, the city council and operators launched a customer charter setting out the standard of service passengers can expect, and have committed to a range of measures to encourage bus use. Those are just a few examples of how effective partnerships can work.

Partnerships may not be the best solution in all areas. The 2017 Act also gives local authorities the potential to use new powers to franchise bus services in their areas. Like the system in London, franchising will enable authorities to specify the services that passengers want and deliver an integrated network of services. Mayoral combined authorities such as Greater Manchester are provided with automatic access to franchising powers, reflecting the clear, centralised decision-making responsibility for transport they hold. All the powers needed for Greater Manchester to franchise its bus network are already in place. However, the Greater Manchester Mayor felt he needed additional powers to fully consider bus franchising for Greater Manchester. Buses fall under many Departments, so the order that will be debated in the House tomorrow to give the Mayor the additional powers he has requested is being managed by the Ministry of Housing, Communities and Local Government.

[Jim McMahon]

Just for the record, the additional powers the Mayor of Greater Manchester will receive through the statutory instrument tomorrow relate to precepting powers to pass the charge on. The Government have not provided the funding required to deliver bus franchising in Greater Manchester, so it now has to go on the council tax payers of Greater Manchester.

Communities: Charities and Volunteers

Jim McMahon Excerpts

Wednesday 13th February 2019 Commons Chamber

[Jim McMahon (Oldham West and Royton) (Lab/Co-op)]

This has been an inspiring debate. The world is a cynical place at the moment, and all the Brexit debates highlight just how divided this House can be, but when we talk about the fabric of our communities and what makes them the places they are, there is a real glow from MPs.

I pay tribute to all Members who have spoken today, and in particular my hon. Friend the Member for Barnsley East (Stephanie Peacock), who talked about the great work in her constituency to support people with dementia, as well as the human cost of austerity and cuts, with children going hungry. My hon. Friend the Member for Makerfield (Yvonne Fovargue) is a champion for Citizens Advice, and her expertise in that field really adds value to this place.

My hon. Friend the Member for Clwyd South (Susan Elan Jones), as chair of the APPG on charities and volunteering, lives and breathes the charity sector and goes above and beyond; she shows that every day in this place. My hon. Friend the Member for Colne Valley (Thelma Walker) talked about the real price of austerity, how the cuts feel on the ground and how desperate it is that so many people are turning to food banks as a direct result of austerity and deliberate choices that the Government have made. My hon. Friend the Member for Bethnal Green and Bow (Rushanara Ali) has been a champion of volunteering for a long time, going up and down the country and building a network of volunteers with real commitment.

My hon. Friend the Member for Coatbridge, Chryston and Bellshill (Hugh Gaffney) talked about austerity and the direct impact of cuts on charities. It is not just that charities are picking up the pieces after public sector cuts. Charities themselves have faced cuts, and on top of that, when they are contracted by the Government, they are told that they cannot speak out on the issues that affect them and the reason they exist. He made that case passionately. My hon. Friend the Member for Warrington South (Faisal Rashid) talked about the importance of charities in Warrington and how they are part of the fabric of that community.

The backdrop of this debate cannot be ignored, and it has been mentioned a number of times. The charities that do this fantastic work, that go above and beyond, that we all take inspiration from, that we all visit and that we all thank today are, by and large, picking up the pieces where the Government have decided that they are not responsible, walked away, taken the money and left communities to sink or swim.

Many examples have been given today, including food bank activity; the work that communities are doing to self-organise and respond to crime and antisocial behaviour in their area; people taking on the local library because the council money has been taken away, and to keep it open, they have to self-organise; and community volunteers on estates who are stepping up because they recognise that young people do not have the facilities they used to have to keep them out of trouble and give them a positive focus and hope.

We hear all these stories, and they are inspiring, but this is about transferral of responsibility. I remember a former Prime Minister, who I think is in a shed somewhere writing his memoirs, talking about the big society and this big idea of an emboldened civil society where charities are supported. The truth is that charities have just about kept their head above water. In the way that councils, the police service and the fire service have seen cuts, charities have also seen severe cuts.

In my town, we used to have an area-based grant, which was directed to areas of high deprivation, to support the community infrastructure that was so important. When the coalition Government came into power in 2010, they cancelled that with less than a year’s notice. The staff of community groups and charities that were set up to provide that support were just thrown on the scrapheap, as though the work they did in the community did not matter.

Given that it is customary for MPs to mention charities in their area, I want to pay tribute to the fantastic work of a range of charities in mine. There is a danger, when we do this, that we please a handful and really annoy a long list of people who we do not have time to mention. I want to mention Dr Kershaw’s hospice. Whichever community someone comes from in Oldham, they will be connected to that hospice at a time when they are at their most desperate, feeling pain that they never thought they would have to go through and not being sure how to cope when it hits. The hospice has given people who are nearing the end of their life the support, courage and confidence to get through that very painful time, and it is genuinely part of the community.

Like many places, however, we have community groups that, if we are honest, we would wish did not exist. I wish that Oldham did not need a food bank, and I wish it was not a thriving food bank, but it is. I wish that the Andy’s Man Club did not have to support people who feel suicidal, but it does. There are lots of other examples.

I could not help but notice that quite a big chunk of money was announced earlier, and we had a taste of some of the areas that are likely to receive some of the funding. Given the Members who have contributed here today and the work they have highlighted in their communities, I just hope that the funding, when the list is finally published, is fairly distributed by geography. I hope that it absolutely targets areas of need and deprivation, takes into account that some areas have been hit harder by public service reductions than others and really supports places where there is genuine working together across institutions.

This is not about good Government or bad Government, with charities over here and the community over there. When this works well, in the way we have heard about today, it is because everyone comes together. When a council works well, it is the community; when a charity works well, it is the community; and when a next-door neighbour checks up on an elderly relative—collects the post and does all the things we have talked about—that is the community. The fabric of our community is under great strain at the moment, and it really requires us to make sure that we begin to reinvest in it.

The Prime Minister made a promise that austerity was over, recognising that the pain had been very deep, knowing that it was a big factor in the referendum result and wanting to address that. Unfortunately, she was undermined by her Chancellor who had the opportunity in the autumn statement genuinely to end austerity and decided, “Well, to hell with it. Let’s just carry on.” They must have been quite enjoying the journey that they were taking. I would say that most people in this Chamber, if they are honest, are looking at their own local authorities, regardless of political complexion and geography—whether rural or urban, north or south—and wondering how on earth that council will be able to survive over the next couple of years.

Why is council funding so important? Because the council, which is democratically elected and of the community—people themselves elect who they want to be their voice in their town or city—comes together and brings people together, and it is often the first port of call. We cannot have thriving civil society if we have underfunded and starved local government; we cannot have thriving local government if we have not got thriving civil society; and none of that works if we have not got decent people. Whatever our view today, we should all be very proud of the country we live in. We are a mixed, diverse, vibrant country full of wonderful people who, every day, do amazing things.