Levelling-up Agenda

Jim Shannon Excerpts

Wednesday 15th September 2021 Westminster Hall

[Dan Jarvis (Barnsley Central) (Lab)]

I beg to move,

That this House has considered the Government’s Levelling-up agenda.

It is a pleasure to serve under your chairship, Mr Robertson. I am grateful to see Members and the Minister here today. I would completely understand it if the Minister wants to keep her phone on. I am sure we all wish her well with the reshuffle. We will see what the next hour or so brings.

I declare an interest: I am a metro Mayor. I have always supported the Prime Minister’s intention to level up the country, but it is outrageous that the UK has the worst regional inequality of any comparable developed nation. The gap is stark, from life expectancy to income, from unemployment to education, from productivity to health, and covid is making it worse. That is not a small thing. It is an injustice—a stain on our country—and tackling it should be a matter of raging and persistent urgency, not some optional extra in the national political agenda. I continue to want to work with the Government to do that, but as the Minister knows well, it is not words that count but action.

To be fair, it is not that the Government have done nothing. I acknowledge the help that we have had through the transforming cities fund and the getting building fund, among others. There have been some welcome policy shifts too, such as devolving adult education, reforming the Green Book and creating the UK Infrastructure Bank, but tackling deep-rooted inequality requires a special sort of intervention. It demands scope, endurance, resources, a national strategy and local leadership.

So far, the Government have fallen well short. First, transformative ambition needs transformative resources. Instead, we have old money relabelled as new and distributed with more concern for politics than progress. The flagship levelling-up fund, worth £1.3 billion a year on average, replaces a local growth fund that was worth 14% more, and half its budget this year is taken from the towns fund. Even worse, the levelling-up fund puts the Chancellor’s Richmondshire constituency, ranked 251 out of 317 in England’s deprivation index, in a higher category of need than my constituency of Barnsley, which is ranked 38. That is no one-off. A third of English areas due to get funds are not in the top third of the most deprived regions.

Likewise, the shared prosperity fund is supposed to match the historical EU support that it is designed to replace, but EU funds were due to increase sharply this year, so many areas, including my own, will miss out. I ask the Minister: will the Government compensate us for that? Almost a third of the English areas selected to receive money under the SPF’s precursor programme, the community renewal fund, are not among the most deprived local areas. Almost all of them are entirely represented by Conservative MPs. Meanwhile, of the 45 places receiving a share of the towns fund spending, 39 are represented by Conservative MPs. The Public Accounts Committee found that the fund’s earlier selection process was not impartial.

We are starting to see a pattern develop, and it gets worse when we consider that these politicised, fragmented and inadequate funds also come against a major backdrop of cuts elsewhere. As we saw in the Chamber this afternoon, the Government are intent on ending the £20 uplift in universal credit, cutting income for 5.5 million families by more than £1,000 a year and taking billions out of the economies of more deprived areas. That of course follows the £15 billion of cuts to local government in the past decade, which has fallen hardest on the poorest areas.

The Government trumpet their spending through the national infrastructure strategy, but it is unclear how much will go to deprived areas and when it will arrive. What we do know is that the Government are wobbling in their commitment to two of the biggest projects in the north: HS2’s eastern leg and Northern Powerhouse Rail. For them to be postponed or scaled back would make any claim of concern for levelling up utterly risible. I ask the Minister to assure us today of the Government’s commitment to those two huge projects.

When the debate concludes, I will hit “send” on South Yorkshire’s bid for £660 million of city region sustainable transport settlement funding. If the Government want to end the long-standing bias in transport investment towards more affluent areas, I hope that they will back that bid in full, and those of other relatively deprived areas such as mine.

It is not just how much money and where it goes that matters; it is how it is spent. It is alarming that the Select Committee on Business, Energy and Industrial Strategy described levelling-up policy and funding as

“lacking in any overall coherent strategic purpose”

with little clarity about who is responsible, how progress will be measured or, indeed, what the objectives are.

[Jim Shannon (Strangford) (DUP)]

I congratulate the hon. Gentleman on bringing this forward. The Government’s policy of levelling up is to benefit all the United Kingdom of Great Britain and Northern Ireland. Unfortunately, we do not see that coming our way in Northern Ireland. We believe that, if it is a levelling-up agenda, we should benefit as well. Does the hon. Gentleman agree that there should be projects across the whole of the United Kingdom of Great Britain and Northern Ireland, to benefit us all, whether they are specific projects, or businesses that can qualify for projects that are happening elsewhere in the United Kingdom?

[Mr Laurence Robertson (in the Chair)]

Order. Interventions need to be shorter. Mr Jarvis.

--- Later in debate ---

[Jonathan Gullis (Stoke-on-Trent North) (Con)]

It is a pleasure to serve under your chairmanship for the second time today, Mr Robertson, and I congratulate the hon. Member for Barnsley Central (Dan Jarvis) on securing this important debate. I will read out some statistics, because for too long, sadly, Stoke-on-Trent was talked about in a negative light by my predecessors, so I will talk about how great Stoke-on-Trent actually is and what it has been doing under not only a Conservative Government but a Conservative-led city council, led by the fantastic Councillor Abi Brown.

Stoke-on-Trent was ranked first for jobs growth in 2020. Between 2015 and 2018 it saw wages increase by 11.7%, with a 3.9% annual increase. In 2019-20 we built over 1,000 new homes, of which 97% were built on brownfield land. We are the eighth fastest growing economy in England, which includes London. We have created over 8,000 jobs in the last five years. We have the Ceramic Valley enterprise zone, which is one of the most successful enterprise zones in the UK. I am delighted that Tunstall Arrow phase 2 is effectively already under way and bookings are being made. The city council has done a fantastic thing by carrying on the business rates relief, using its own finances to encourage more businesses to come to the area. There is a fantastic story here for Stoke-on-Trent.

I am very sorry to get into the petty party politics, as some people might accuse us of, but I do so because when the Labour party lost Stoke-on-Trent North, Kidsgrove and Talke, it was because it spent too long talking the area down and never talked it up. It spent too long telling people how poor they were and how deprived they were, but never offering a solution to the problem. In fact, Labour’s legacy in Stoke-on-Trent was to build a hospital—the Royal Stoke University Hospital—with a disastrous private finance initiative debt, which means £20 million a year is being stolen from the frontline to pay that debt. Labour built a hospital with 200 fewer beds than the old hospital, which is even more insane.

We saw jobs and ceramics enterprises being shipped off to China, which means I am very grateful still to have Churchill China, Steelite International and Burleigh Pottery in my constituency. They are still doing well, but sadly that industry dying meant that towns such as Burslem and Tunstall, two of the five original towns of Stoke-on-Trent, are now in a much worse state. Those places were forgotten, because for 70 years they had Labour Members of Parliament.

I am the first ever Conservative Member of Parliament for my constituency. What has happened over time, as we have seen that transition from Labour to the Conservatives, is that things are now happening. By the way, that does not mean that I do not acknowledge that there are challenges in Stoke-on-Trent. As I say, the mother town of Burslem has one of the highest number of closed shops anywhere in the United Kingdom. The town used to thrive off Royal Doulton and many other Pot Bank factories, but now that is simply not the case. I am trying to find a future for that town. I was delighted to have spent my summer handing out a survey asking residents for their views—over 300 responses have come in—and I am working with the city council to create a vision, perhaps for an arts and creative culture that will link in with Middleport Pottery.

In Tunstall, the high street is predominantly privately owned. I know that because I rent my constituency office on that high street—it is in an old shop. The top end of the high street is falling into disrepair, but I am delighted that the city council is working with me to hold private landlords to account for allowing their shops to fall into disrepair.

However, to offer the Minister more evidence of levelling up, it is the Conservative-led Stoke-on-Trent City Council that has invested £4 million into Longton town hall, in the constituency of my hon. Friend the Member for Stoke-on-Trent South (Jack Brereton), and it is spending over £4 million on Tunstall town hall in my constituency of Stoke-on-Trent North, Kidsgrove and Talke. That will see council offices, a police post, a children’s centre and much more bringing this heritage building back to life, which will bring more footfall to the town centre and hopefully see it rejuvenate.

There is so much more opportunity. I fell in love with the city back in 2018, when I first started campaigning there, because I saw what others did not, which is a people who were desperate for change but just needed someone to go and fight for them. I am absolutely delighted to be their champion, as I have said many times.

I know that we have just heard some hon. Members talk about the town deal fund. I am a member of Kidsgrove’s town deal board. It is important to remember that these towns got this money before I was even elected as a Member of Parliament, but it was a Conservative Government who decided that the town of Kidsgrove, which is linked with Talke and Newchapel, would benefit from a town deal fund that, in total and including the advance town deal payment, came to £17.6 million. I can tell Members that when I go out door-knocking in Kidsgrove, the people there cannot believe what that money has done.

We have invested £2.75 million in Kidsgrove sports centre, which means that this facility will reopen in spring 2022. Rather than building a new one at higher expense to the taxpayer, the existing one will be refurbished and reopened. Why is that so important, Mr Robertson? In 2017, the then Labour-run Newcastle-under-Lyme Borough Council was offered the sports centre for £1, and it said no. There was a fantastic, community-run campaign led by Mark Clews, Dave Rigby, Ray Williams and Councillor Gill Burnett, who was a Labour councillor but has since become a Conservative over the decision on the sports centre. They got the borough council behind it, and they certainly got me behind it. Ultimately, we will see that facility reopened, which means swimming and a gym will return to Kidsgrove, which has one of the highest childhood obesity rates in the country.

We are also seeing the upgrading of the town centre with the new indoor town centre hub, which will hopefully have a new GP surgery in the middle, as well as a post office, and will link in with the job centre based in Kidsgrove. This will hopefully bring a bit of a coffee culture to the town centre. That will also be linked with Kidsgrove railway station. I give credit here to my predecessor’s predecessor, Joan Walley, who secured £5.5 million from the Access for All fund for the station, which now has a new footbridge. I decided that we should use the town deal board money to upgrade the ticket office, which will have a community café and more space for the volunteers, who do a fantastic job of looking after the station. There will also be 200 car parking spaces and a bus terminal, after the bridge was strengthened, meaning we will have a better integrated transport system. There will also be one hour’s free parking for people to do the three-minute walk to the town centre.

We are going to unlock the Chatterley Valley West employment site with over £2 million of investment, which could bring up to 2,000 jobs to the local area. It baffles me that the Labour councillors in Talke & Butt Lane—the ward where I live—moan that this money has been spent about 200 feet outside the Kidsgrove parish area. They are moaning that we have invested more than £2 million in a strategic employment site that will bring 2,000 jobs to the area. Again, in Stoke-on-Trent North, Kidsgrove and Talke, Labour is showing that it is far more interested in seeing money not spent in our local area, and not championing the local cause.

We have built one of the UK’s leading pump tracks at Newchapel recreation ground, which has had visitors from Worcester and Scotland, while BMX riders such as Kyle Evans, a former Team GB European champion, have used the facility. For £100,000, it has created a buzz in Kidsgrove, giving young people access to more facilities. When I was elected, I was told that there was nothing for young people to do. Now the sports centre is coming back and there is a new pump track.

Finally, we have worked with the King’s Church of England Academy, which now has FIFA-standard 3G AstroTurf pitches. The schoolchildren can use that facility during the day and the school can open it up to the community during the evenings and weekends, bringing revenue to the school to invest in the community.

This is what a town deal has done for my area, and I am proud to be part of it. I will benefit from the fact that the swimming pool exists—as a Kidsgrove parish resident, my daughter, who is just over a year old, will be able to learn to swim in her local swimming facility. Every pound invested by the community into that sports centre is going straight back into it, because the community group that ran the campaign are taking over the day-to-day running of that fabulous facility.

Not only have the Government done all of that, but they have delivered on the second largest announcement of civil service job moves of any Department, after Darlington. I know that the Home Secretary looks forward to spending her time up there on occasion. However, she might not be aware that, under the Places for Growth programme, 550 jobs are coming to Stoke-on-Trent via the Home Office. A new innovation centre will provide jobs at all career stages, including apprenticeships to help Stokies get into great civil service careers. Initially, there will be 50 caseworker roles, with a further 200 jobs at an asylum co-ordination hub, and that will expand to about 560 jobs by 2025. In addition to the caseworker roles, the centre will include operational, IT, policy and corporate functions, and will offer exciting career paths to local people. There will also be a number of senior civil service roles in Stoke-on-Trent, meaning that the people there will have a voice in Government. If anyone wants to understand why the people of Stoke-on-Trent voted overwhelmingly to leave—by 73%, in my constituency—it is because they thought that if London did not care about them, then Brussels would not have a bloody clue about their local area. That is why we are finally seeing a big change there.

What can the Government continue to do? The shopping list has not ended unfortunately, Minister. Stoke has had an appetiser and a bit of a main course, but we are still hungry for more, and dessert will come in the form of the levelling-up fund bid that we have submitted. We are lucky to be rated as a grade 1 priority area. We thank the Government for listening to our calls and understanding the deprivation.

[Jim Shannon]

It is hard not to be enthused by the hon. Gentleman’s energy. I congratulate him and his colleague, the hon. Member for Stoke-on-Trent Central (Jo Gideon), who is no longer present but was here for the previous debate. Does he agree that it is very important to have a partnership and relationship between the MP and the local council, and that it is part of the success story that he refers to?

[Jonathan Gullis]

I am very grateful to the hon. Gentleman, who I love taking an intervention from—it is a parliamentary privilege. He is right: the relationship between the local council and the local MP is so important, because if we end up butting heads nothing will happen. That is not benefiting the people who have elected us to serve them.

I take the fact that those votes will end. I do not sit here arrogantly; they were lent votes, and if I do not deliver, I will be sacked. Every single one of my constituents is a Lord Sugar, so they will hire me or fire me. I take that responsibility absolutely seriously. I say on every doorstep that I do. That is why I do not stop banging on about my local area. That is why the Minister must be bored to death of hearing about Stoke-on-Trent from me and my hon. Friends the Members for Stoke-on-Trent Central (Jo Gideon) and for Stoke-on-Trent South—the Stoke mafia, as we have come to be known in the Tea Room. We will keep fighting for our local area. Councillor Abi Brown is a tour de force—a young, dynamic, forward-thinking council leader paving the way, and now having a major role in the Local Government Association as well.

Let us go over the levelling-up fund bid, which for me is a litmus test of the Government’s commitment. It is a £73.5 million bid. Some £3.5 million will go into Tunstall, which will turn an old library and swimming baths back into a mixed-use facility, including flats, a multi-purpose exhibition space and a café. It will turn one of the largest city centre regeneration areas in the west midlands into a thriving hotel, flat accommodation and hopefully indoor arena that will specialise in e-sports. There is so much potential in those fantastic bids, which are in with the Treasury. I know that the Minister wants to make my Christmas. One way that she can achieve that is by ensuring that we deliver on those bids. We have bid for the transport elements as well.

We have also bid on the Stoke-to-Leek line through the Restoring your Railway fund. It is a fantastic bid, with four constituency MPs bidding for it jointly. It will unlock people being able to commute around north Staffordshire, meaning that we finally have better transport. I hope that, alongside rail, we will get some Bus Back Better opportunities, because 30% of the people of Stoke-on-Trent do not have access to a car, and the current bus service is not good enough.

Health and Social Care Levy Bill

Jim Shannon Excerpts

2nd reading
Tuesday 14th September 2021 Commons Chamber

[Jim Shannon (Strangford) (DUP)]

Thank you for calling me to speak, Mr Deputy Speaker. Like many others, I am put in a difficult position by the Bill. I believe that there must be big changes to create an influx into the NHS for the reform that we are desperate for, but I have seen too many broken families who have lost a loved one who was waiting for mental health support, who could have been saved if their cancer diagnosis had come in time, or who are awaiting support to make their child’s educational journey positive, not a hellish nightmare without the support that they need.

I am torn, because I see the need for reform. I see mentally and physically exhausted staff at the end of themselves, trying to meet their obligations in the NHS, and desperate trusts putting up advertisements for off-duty staff to come in because of dangerously understaffed wards. All those things tell me that there is need for reform, but I do not and cannot support this method. I cannot support the middle class and the small businessman bearing the brunt of the cost again. I cannot wrap my mind around the concept that someone earning £15,000 a year will have the same amount taken away in national insurance contributions as someone on £150,000 a year.

I make it clear that I am not a socialist; there is nothing wrong with being a socialist, but I am a capitalist. I believe that the system that we have is important. I understand that big business must have big results to support the big workforce, but I believe that when raising money, the easiest way is not always best.

We must ensure that we do not continue to squeeze the middle class. The Government have not been able to assure me or my colleagues that their proposal is the best way or that it is better than a graduated system whereby those on huge wages paid an extra amount that they would not overly notice, instead of families on the brink having to sacrifice and struggle each day.

I speak to constituents who are earning too much for support but not enough to live comfortably. They are the group who will be most affected, but the burden could and should be more judiciously shared. For those middle-class families, for the small businesswoman employing 11 staff and for the pensioner who has been taxed for their entire life, I do not think that the proposed method is the best one, and I do not feel that I can support it.

From the refusal to lift the child benefit threshold above £50,000, which is preventing families from taking a pay rise for fear of losing the monthly child benefit payment that pays for necessities for their children, to the situation facing pensioners who thought that they had set aside enough to last, only to deal with an increase in the cost of living along with a raid of the pension in their savings account, life is uncomfortable for those who have worked hard and who believed that they would retire in peace. Those people are all willing to make a contribution to the NHS, but is it fair that they should feel the brunt alone? I feel that that is what is happening; it is not right and I cannot support it.

I have one more small comment to make, which is about the £420 million that will be allocated to Northern Ireland through the Barnett formula. Whatever process the moneys come through, I would like to see them ring-fenced, because as Departments bid for funding, there is every possibility that the money will be deflected from doing good to simply being abused. In Northern Ireland, it could be used for the machinations of other parties, while teenagers suffer from eating disorders and while child and adolescent mental health services teams cannot prevent children from hurting or abusing themselves. I have watched as the Northern Ireland Office has been strong-armed into funding endless legacy investigations to the tune of Sinn Féin, which wishes to rewrite history.

I have not heard that the Bill will prevent the misappropriation of central funding, so I cannot support it. That goes against the grain for me, because I believe in the principle of reform. I would welcome reform if a different method of raising funding were put forward, but I simply cannot agree with the Government’s method. I ask them, even at this late stage, to revisit the methodology and allow us all to support our NHS, as people want to, without further squeezing the middle class. That cannot happen.

Health and Social Care Levy

Jim Shannon Excerpts

1st reading
Wednesday 8th September 2021 Commons Chamber

[Jim Shannon (Strangford) (DUP)]

We are all aware that the NHS is the pride of the UK, and we are similarly aware that there is a grim possibility that it may become our biggest loss. I am therefore very much focused on health issues. That loss would be because of historical underfunding as well as the unseen pressures that covid has placed on every facet of the NHS, from dentists, physios and surgeons to waiting lists, assessments and operations.

I will not take the path of some others and seek to score political points because that is not what I am about. I am will think of the constituent who, at the age of 53, came to my office almost immobilised having waited four years for a hip replacement. I will think of the parents desperate to get respite for their disabled children. I will think of the mums watching their daughters—and increasingly their sons—who are killing themselves with eating disorders and cannot get the help that is needed. I do not want to score points, but I do want to get it right.

There are rightful questions about who will bear the brunt of what is undoubtedly a necessary evil. My real fear is that for small businesses who in recent years have taken on the burden of paying statutory sick pay to staff, increased wages under the minimum wage and are paying more to ship their products to Northern Ireland due to the disgraceful Northern Ireland protocol, what seems like a small increase may put them off hiring that new staff member. That is a real concern, and when that is weighed along with fact that big businesses with their expensive accountants can find a loophole to prevent them from paying what they can well afford, it seems that the middle class will again be the ones feeling the squeeze. I therefore share the concerns of my right hon. Friend the Member for East Antrim (Sammy Wilson), who highlighted the unfair nature of this blanket tax.

Whatever method is used to raise money—I need this to be heard clearly—this money cannot be diverted by way of the Barnett consequential to any other Department, as moneys have been in the past. We need to reform our health and social care or we will lose the NHS, but, in Northern Ireland, the funding make-up means that funding cannot be ring-fenced. As my right hon. Friend said:

“Northern Ireland will benefit by about £420 million per year by this increase in National Insurance but there is no indication that the Executive”—

the Northern Ireland Executive—

“will be required to spend it on the purpose for which it was raised since the Government cannot ringfence money”.

Before the debate, I spoke to the Minister for Care to seek assurances, and she will seek those assurances from the Treasury. Since the relevant Minister is not here at the moment, I put these questions to the acting Ministers on the Front Bench. Can that money for Northern Ireland be ring-fenced? Will all future moneys that come to Northern Ireland for this purpose also be ring-fenced? That is what we need to know. We cannot have a system whereby—as has happened on multiple occasions—this salvation funding for the NHS is used for putting, for instance, an Irish language or Ulster Scots sign up on a street. How do we ensure that the money goes on reform and is not used by others to promote their political goals and aspirations?

We undoubtedly need to take the bull by the horns and swallow the pill for the increase. However, we will never be forgiven if in five years’ time we are still in the same position. What guarantees do we have that the sacrifice of every single employed person, every single pensioner and every single business owner will bring about the necessary change and not be lost in the ether of politics at Stormont? Many are willing to make the sacrifice for care—not anything else—and we need binding legislation in place for us to believe that any guarantee given will not be waylaid by political machinations.

The future of the NHS is worth the change to legislation. Let us get it done. I want to see something happen from which we can all benefit across the whole United Kingdom, and I need that to happen for us in Northern Ireland.

National Insurance Contributions Bill

Jim Shannon Excerpts

3rd reading
Monday 6th September 2021 Commons Chamber

[The Financial Secretary to the Treasury (Jesse Norman)]

I am sorry that the hon. Member for Ealing North (James Murray) was not able to revisit his greatest hits from Committee or other previous stages of the Bill, but unfortunately he is required to speak to the new clauses and amendments before us, which is what I will do.

The Scottish National party has tabled new clauses that would create a new zero rate of secondary class 1 NICs for employers classed as “green manufacturing companies”, including those that produce wind turbines and electric vehicles. As the House will know, the Government take support for the green economy extremely seriously. For example, since 2013 the Government have provided £150 million per annum to the Aerospace Technology Institute—investment match-funded by industry—including £84.6 million of investment to develop zero-emission flights and further support for other potential zero-emission aircraft concepts.

In addition, the Government are to spend nearly £500 million in the next four years to support the UK’s electric vehicle manufacturing industry as part of our commitment to provide up to £1 billion for the development and mass production of electric vehicle batteries and the associated supply chains. The funding is available UK-wide and will boost investment in the UK’s strong manufacturing base.

Of course, the Government have also stated their ambition to deploy 40 GW of offshore wind capacity by 2030, alongside a commitment to invest £160 million in ports and manufacturing infrastructure. The goal of that investment will be to encourage up to £20 billion of much-needed private investment in coastal areas and to support up to 60,000 green manufacturing jobs by 2030. The Government’s commitment to support green manufacturing is therefore quite clear.

Unfortunately, new clause 1 would introduce a major change to the tax system of a magnitude that would require the careful consideration of costs and benefits and, in fact, goes far beyond what should be included via amendment in a Bill such as this one. The design of a sector-focused tax relief is not straightforward and would add complexity to the tax system. By contrast, there has been no consultation on, costing of or impact assessment made in relation to the measure proposed in new clause 1. For those reasons, I urge the House to reject it.

On new clause 3, covid-19 has proven to be the biggest health and economic threat faced by the UK in decades. Key workers, including NHS staff and social care workers, have done extraordinary things, as the House recognises, to keep the public safe in the continuing fight against the virus. For their part, the Government hugely value and appreciate such important contributions to the covid-19 response. However, as I will explain, the Government do not believe that the new clause is appropriate or necessary. Under long-standing rules, any payments made in connection with an employment incur income tax and national insurance contributions. Such payments also count as income for the purposes of calculating entitlement to certain benefits.

[Jim Shannon (Strangford) (DUP)]

In Northern Ireland, we have done something just a wee bit different. It is a £500 bonus, and if the 20% of tax and the national insurance at 12% are added in, that means that the Northern Ireland Executive is paying £735 per individual. Is the Minister aware of that, and would he replicate it in the rest of the UK?

[Jesse Norman]

I think the hon. Gentleman knows that the £500 payment has been offered across devolved Administrations. It is important that he has made that point, and I recognise it, but that does not really affect the point at issue in relation to the new clause, which is about the £500 payments that the Scottish Government are making to health and social care workers, which they are using to function as a top-up to wages. We therefore consider that these payments are taxable as earnings under the normal rules.

--- Later in debate ---

[Jim Shannon (Strangford) (DUP)]

First, I put on record my thanks to the Minister and the Government for bringing forward the Bill. It is good to see the finished article. On behalf of my party, and given where we stand and what we want to put forward, may I say that we were very happy to support the Government tonight.

I will make a couple of very quick comments. The Minister and I had an exchange earlier about new clause 3, but I was dismayed and shocked to hear from a Marie Curie nurse that her covid thanks package was subject to tax and national insurance. The central office was administering that in Scotland. In Northern Ireland, we understood that the bonus was an income, yet the Northern Ireland Executive made the decision to make payments of up to £735 an individual. That meant that those who qualify for the full award, which many do, pay tax at 20% and national insurance at 12% and still receive approximately £500 in their pay packet at the end of the month. We very clearly made that decision, and I think the Government have recognised that, because it is a recognition that these public service staff deserve a substantial boost and need it.

I very much welcome the Minister’s comments about freeports. I know that the final decision lies with the Northern Ireland Assembly, and he has referred to that already. I very much look forward to us in Northern Ireland playing our part and taking advantage of what the Government have brought forward here tonight.

The right hon. Member for Hemel Hempstead (Sir Mike Penning) was right in his intervention that the first 12 months for any veteran are really important, because that is the time they need support most. I am therefore very pleased to see that measure. I also welcome the Minister’s decision to ensure that there is no ambiguity with regard to the Northern Ireland aspect of the Bill, as amendment 3 replaces a reference to the Social Security Contributions and Benefits Act 1992 with a reference to that Act and the Social Security Contributions and Benefits (Northern Ireland) Act 1992.

As I highlighted in my previous contribution on the Bill, it seems that we have to remind Europe almost daily in this House that Northern Ireland is an integral part of the UK. It is determined to treat us as a third nation when it suits for duty free and taxation, but not when it does not suit for representation and European healthcare. If I may, Mr Deputy Speaker, I put on record that this week, my party leader, my right hon. Friend the Member for Lagan Valley (Sir Jeffrey M. Donaldson) will be making a major statement on this issue. I hope that the Government will take note of what we are doing and what we are saying, because it has some effect on the future and where we are in relation to the Northern Ireland protocol.

I believe that the capacity is here to work together for all of the United Kingdom of Great Britain and Northern Ireland. It is always my hope that we do that, and I hope that that is what the Minister has put forward today will do. I look forward to working with the Minister through the Northern Ireland Assembly if that is possible and if it is still in place. We will wait to see what happens.

Question put and agreed to.

Bill accordingly read the Third time and passed.

Rural Banking Services

Jim Shannon Excerpts

Tuesday 20th July 2021 Westminster Hall

[Fay Jones (Brecon and Radnorshire) (Con)]

I beg to move,

That his House has considered rural banking services.

It is a pleasure to serve under your chairmanship this morning, Mr Gray. I am grateful to other Members for attending the debate. It is hot outside but there is no reason it should be hot in here. This does not need to be a divisive debate and I hope we can talk about the positives and the negatives of the issue.

I want to cover both the availability of cash and the importance of banking infrastructure in rural areas. There is no doubt that the pandemic has forced businesses to adapt and accelerated a wider move towards digital payments. That is to be welcomed and I thank businesses across the country that have bent over backwards and adapted their systems to ensure that they can provide a service to isolated or elderly customers. However, I am concerned that this has implications for some members of society, particularly older and vulnerable people, who are much more likely to use cash. Lower income households and those without internet access are likely to be the most affected.

During the pandemic, cash use has declined, often in constituencies with higher levels of deprivation. In my constituency, cash withdrawals dropped by 55% in the first six months of the pandemic and in areas such as mine, where our broadband and mobile coverage is poor, cash is extremely important for rural businesses and individuals. I am grateful that the Government are listening on this and are proactive, as I know the Minister will outline later, and we have already made some good steps in that direction.

In 2019, the “Access to Cash Review” report highlighted the need for different Government bodies and regulatory authorities to work together to protect access to cash. That was then followed with a commitment from the Chancellor in his Budget to legislate to protect access to cash. In April 2021, the Government accepted an amendment to the Bill that became the Financial Services Act 2021, which would allow consumers to withdraw cashback from more retailers without having to make a purchase. We have a real-life example of that amendment working well in my constituency.

I have been working with the community access to cash group in Hay-on-Wye, which is a group of volunteers who have gathered together to focus on the problem of cash availability. I do not know if you know my constituency, Mr Gray, but Hay-on-Wye is a beautiful town and has a wonderful culture of striking out on its own. In fact, in 1973, Richard Booth, who appointed himself the king of Hay, declared Hay an independent kingdom, so we did not need to go through the Brexit referendum—it really was that easy.

As a result, Hay-on-Wye has a culture of fixing its own problems. I want to commend the group of volunteers who have been organising this. They got together after the final bank left the town in 2018. At the same time, the post office has been going through some turbulent times after the postmaster, Mr Steve Like, stepped down from the business. I want to thank Steve and his family, who have owned the post office in Hay-on-Wye for more than 60 years. It was the end of an era when he stepped down in June.

With those two pressures in mind, a group of volunteers led by Josh Green got together to tackle the issue of cash availability. As well as creating a scheme where customers from different banks can speak to a representative from their bank in the parish hall one day a month, they have got together a large group of businesses that are now offering cashback after the Government stepped forward with the change to the Financial Services Act 2021. I want to celebrate what those volunteers have done. It is a meaningful difference and proves just how important cash is.

[Jim Shannon (Strangford) (DUP)]

I congratulate the hon. Member for Brecon and Radnorshire (Fay Jones) on bringing forward this debate. My constituency of Strangford is similar to her own. We have had a number of bank closures and the latest one is Barclays in Newtownards, just 30 minutes away from Portavogie and Cloughey in my constituency. They are closed and the options are away. I agree with the hon. Lady that there is an important parallel between banking and broadband services. More time needs to be committed to improving internet services in rural communities to ensure that constituents can use online banking efficiently, in addition to doing it in person. It doesn’t suit everyone, but it will suit a whole lot of people. The option needs to be there, perhaps as an opportunity for banks and broadband to work together.

[Fay Jones]

I agree with the hon. Member. I hope the Minister will cover that in his summing up. As a beautiful constituency, we have one of the lowest broadband availability rates in the entire country, so those are twin-track problems that we need to fix at the same time.

Northern Ireland Protocol

Jim Shannon Excerpts

Thursday 15th July 2021 Commons Chamber

[Jim Shannon (Strangford) (DUP)]

I congratulate the hon. Member for Harwich and North Essex (Sir Bernard Jenkin) on setting the scene and on all right hon. and hon. Members on their incredibly important, vital and very detailed contributions.

Where do I start? How do I condense my thoughts into the short time that has been allotted to me? What fresh words do I use to elaborate on the terrible deal that has been made for Northern Ireland that I have not used on the 21 other times I have raised this issue in the House in the last number of months? What can I say to ensure that the intelligent and respected Members grasp what we as a party have warned about and argued against since the inception of the Northern Ireland protocol?

Because the title of the debate is “Northern Ireland Protocol”, I will give some examples of the issues that have affected my businesses. Small businesses have been unable to order stock from the mainland and unable to source pet supplies, and they are paying additional fees to the companies that will send the goods to Northern Ireland. A local discount shop owner told me that every order has an additional £30 administration cost. That does not sound like much, but, as his profit margin on a £1 good is 15p, he must sell an additional £200 of goods to pay for the Northern Ireland protocol fee.

Ask any importer and they will say that the increase in container costs from China, which range from $2,800 to $14,700, has seen prices increase to cover the difference to ship goods from 55p to 75p. That is difficult for businesses as it is. They try to absorb costs if possible, but Northern Ireland businesses are under additional pressure due to the insidious protocol. While big stores such as Tesco and Asda have used their exemption to continue to supply pet food and treats, smaller high street businesses have lost another income stream.

Does that feel like the best of both worlds? It does not to Cotters in Newtownards and so many other decent businessmen that have survived covid, only to fall victim possibly to the outworkings of what was proposed to be a paper exercise only. That is what we were told. Seven months in, businesses are in a worse position, not a better one. So, too, is the constituent who went to order a knee support on Amazon Prime day, only to be told that, as they live outside the recognised zone, the supplier would not send it to them. My hon. Friend the Member for North Antrim (Ian Paisley) gave an example of that earlier. My constituent must therefore purchase knee supports that cost an extra £9 due to their postcode. It does not feel like a better position for them, does it?

We think next of those who want to enjoy a staycation on the beautiful shores of Strangford, or of course anywhere in Northern Ireland. This guy is from across the water. He would come to my constituency regularly with his dog. His words sum up perfectly what the Northern Ireland protocol has done. He says:

“I write to you as a UK citizen who enjoys holidaying in Northern Ireland with my pet dog. This year, despite moves by the Northern Ireland Minister Edwin Poots to withhold checks at ferry ports until October, it would seem that I still must be in possession of certificates for rabies and tapeworm, which haven’t been recorded in the United Kingdom since 1922 at a total cost in excess of £200. Therefore I am not prepared to obtain these and I am unable to get a definitive answer to my question, namely, ‘Can I travel with my dog without the said certificates?’…This really will do much harm to Northern Ireland tourism.”

It does not feel better to him. Nor, indeed, does it feel better to my local economy, where he would have come on holiday. It would have benefited from his bed nights and spend in local shops and restaurants.

It does not feel better to the Unionist who has felt the abandonment—I say that respectfully—of the Government like at no other time in living memory. It is a harder pill to swallow when we have a Government who proudly state their belief in this United Kingdom. That is not a reflection on those who have spoken, because they are committed to the Union. Unfortunately, it has to start at a higher level.

I have not got time to give all the examples, but there are many others from businesses in clothes, food, farm machinery, cars, steel and engineering as well as nurseries and farmers. There are even individuals who used to order products but now cannot, or find the cost to be prohibitive. It is a difficult position for people when their own Government are a party to severing ties that affect not simply their business and income but their constitutional position. That causes those loyal to the Queen and Crown to ask why they cling to that when their loyalty is not reciprocated. The sacrifice of Ulster to the slavish demands of Europe engaged in petty warfare is clearly an acceptable sacrifice to make.

This is absolutely not the best of both worlds—unless that world is the eradication of the Union. For those who cherish the Union and honour the blood shed to stand against terrorism, and for the democratic right of the people of Ulster to determine their nationality, this is not the best of any world whatsoever. I have deliberately not referenced bangers from Bangor, although I could, because people in my constituency work for the company in Bangor that produces sausages. They are also on the frontline. I stand by the phrase “we are better off out”, but the preface of this is that we are better out together, and that is what I want to see—we are a package deal.

I am asking Government once more to put into action their phrase, “stronger together” and, for that to happen, to trigger article 16. Save the day in this Chamber and they will have the support of the Unionist community. Stop the European nonsense, allow Northern Ireland her rightful standing as an integral part of the United Kingdom of Great Britain and Northern Ireland once more, and give us the same rights in Northern Ireland as the rest of the United Kingdom—parity and equal rights for all.

--- Later in debate ---

[Mr Harper]

My right hon. Friend puts it very well. There are serious risks here, which is why we need to address the perfectly reasonable concerns that many people have in Northern Ireland.

It would be helpful if the Minister could indicate when the Government will set out their thinking—obviously, there is not long to go before the recess—and whether that will be announced in such a way as to give us the chance to question Ministers. The right hon. Member for Lagan Valley (Sir Jeffrey M. Donaldson), who leads the Democratic Unionist party, set out its checklist for how it is going to test any proposals that the Governments bring forward. It would be helpful to know—I do not expect the Minister and the United Kingdom Government to completely agree with the right hon. Gentleman—

[Jim Shannon]

Why not?

[Mr Harper]

Well, they may. My request was going to be for the Minister to set out which of the tests that the right hon. Member for Lagan Valley set out the Government agree with and which they perhaps do not. Listening to his objectives, I do not think that that list can have come as an enormous surprise, so it would be helpful to get a bit of a steer about the extent to which there is some commonality.

My final point is that, very clearly, as several of my hon. and right hon. Friends have said, there was envisaged in the protocol and the political declaration the idea that the protocol was not a permanent solution but a temporary solution. Certainly, both sides—the British Government and the EU—said that they would take seriously alternative arrangements that could be put in place to enable businesses in Northern Ireland to have unfettered access to the Great Britain market, but just as importantly, to enable businesses in Great Britain to trade freely with Northern Ireland, for the benefit of both Northern Ireland businesses and consumers in Northern Ireland.

Even if one accepts—and I am not sure that I do—that those arrangements could not have been put in place several years ago when we left the European Union, saying that they can never be put in place and that, as technology and business procedures develop, we cannot develop our arrangements, seems unreasonable. Both the EU and the British Government should, working together, be able to take those forward. I look forward very much to listening, in the not-too-distant future, to the Minister’s response to what has been an excellent debate on both sides of the House.

Financial Conduct Authority and Blackmore Bond plc

Jim Shannon Excerpts

Wednesday 30th June 2021 Commons Chamber

[Peter Grant]

For the second time in a few days, the hon. Gentleman has managed to read my notes a couple of paragraphs ahead of me. I am going to come on to that.

My concerns cover not just the Financial Conduct Authority but other regulators, such as Companies House, the Insolvency Service, the Financial Reporting Council and the professional bodies that regulate the audit of limited companies. Of those, only the FCA falls directly under the remit of the Treasury, so that is what I will focus on tonight, but I will continue to apply for debates so that the part played by other regulators can be examined.

[Jim Shannon (Strangford) (DUP)]

Will the hon. Gentleman give way?

[Peter Grant]

I think the sky would fall down if I did not give way to the hon. Gentleman.

[Jim Shannon]

I am sure the sky will not fall down, but I appreciate the hon. Gentleman’s giving way.

Does the hon. Gentleman agree that financial devastations such as the Blackmore Bond scandal have the potential to be avoided if there is proper scrutiny by regulatory authorities, which the hon. Member for Thirsk and Malton (Kevin Hollinrake) referred to? Does he also acknowledge that, often, that work starts with us in this House making legislative change?

[Peter Grant]

The hon. Gentleman is absolutely correct. Ultimately, the regulator is us. If we highlight deficiencies in the system, we must try to get them put right. That is partly why I was so keen to secure this debate.

As the hon. Member for Thirsk and Malton (Kevin Hollinrake) mentioned, in March 2017, the Financial Conduct Authority received information from a very reliable, experienced financial services professional that a company called Amyma Ltd was using high-pressure sales techniques to target individuals to persuade them to invest in Blackmore Bond. The source, a Mr Paul Carlier, described in detail what he had seen and heard, and explained exactly why he was convinced that it was illegal. He made a point of sending his concerns directly to the then chief executive of the Financial Conduct Authority, among others. As a mark of gratitude, the FCA wrote back and said that it was aware of the situation and it was being passed on to the appropriate department.

It was the end of 2019 before there was any obvious sign that the FCA had done anything. To be fair to it, when it acted, it did not hold back. It banned outright the sale of mini-bonds to the kinds of investors whom Blackmore Bond had been deliberately targeting. If the FCA had done that earlier, it could have prevented up to £26 million of the losses eventually suffered by Blackmore’s victims.

The FCA has said that the sale of these kinds of investments was an unregulated activity, that Blackmore Bond plc was not registered or approved by the FCA for any regulated activity, and therefore that the whole thing was beyond its scope. That is just not good enough. What the FCA is effectively saying is that it had the legal power to ban the sale of these mini-bonds absolutely but could do nothing to stop one rogue company selling them to one particularly targeted group of vulnerable investors. I simply do not buy that.

While the sale of these high-risk bonds to investors who wanted low-risk investments was allowed to carry on in an unregulated free-for-all, the promotion of those same bonds is a regulated activity. The FCA’s website says that all adverts and promotions for financial services or products

“must be fair, clear and not misleading”.

Blackmore Bond’s promotional materials failed all those tests—something I will return to soon. Again, it took the FCA far too long to do anything, and when it did something, it did not do enough.

The FCA will claim that at some point during 2019, it was able to get Amyma’s website taken down. It seemed less keen to be reminded that in August 2019 Paul Carlier had to tell the FCA that the website was back up again. It may be just coincidental that a few weeks after Blackmore Bond went into administration, the director and sole shareholder of Amyma placed that company into voluntary liquidation, having first reduced the company’s assets from £316,000 to nil in the space of 18 months, meaning that the creditors of Amyma, including Her Majesty’s Revenue and Customs, would not see a penny of the £188,000 they were owed. It appears that Blackmore Bond really can pick its professional and business advisers very carefully.

Coming back to the promotional materials, though, under section 21 of the Financial Services and Markets Act 2000, any financial promotion must either be issued by an FCA-authorised company or have its contents approved by such a company. There are exemptions, but I have no indication whatever that any of those exemptions comes close to applying to Blackmore Bond. So if Blackmore Bond issued financial promotions that had not been approved by an FCA-registered firm, that was an offence under the Financial Services and Markets Act and the FCA should have been dealing with it.

The company issued its mini-bonds in six ways. For each one it issued an “information memorandum”, which appears, as far as I can tell, to have been approved by an FCA-registered firm. But that was not the only marketing it did. My constituent, who has probably lost £40,000, provided me with a copy of a separate document that he received. It is dated 3 October 2016—the same date as the information memorandum for the first series of mini-bonds. The FCA has confirmed to me that it meets its definition of a financial promotion. It was therefore an offence that it was circulated without being approved by an authorised firm, and there is nothing in this document to suggest that it was ever approved by an authorised firm. The FCA is not convinced about that. Its view is that it “cannot categorically say” whether the document was or was not lawful when it was circulated. But if that is the case, surely, knowing what it knows now about the operation of Blackmore Bond, if it “cannot categorically say” that it was not a criminal offence to send it out to potential investors, it should be investigating it.

Then we come on to the requirement for this and any other financial promotion to be fair, clear and not misleading. I am aware of the time, so I can only give a few examples of statements in the document that are either blatantly false or extremely misleading. On page 5 it tells bondholders that their money will be backed by “100% asset-backed security”. Not true; it was never the intention that the bondholders would even be guaranteed first call on all the assets, never mind that there was never a time, after the first series of bonds was issued, when Blackmore Bond plc ever held enough assets to repay the value of the bonds it had sold.

On page 4 it says:

“Blackmore Bond is part of The Blackmore Group”—

that bit is correct—

“a multi-channel investment group with a proven track record.”

The Blackmore Group was only incorporated in February 2016; it cannot possibly have had a proven track record by October 2016. It certainly could not have realised the £22 million in profits and property development that is claimed in the same document.

On page 4 we are told that

“The Blackmore Group”

has

“assets under management of £25 million”.

So how come The Blackmore Group’s accounts for 2016, signed by the directors, tell us that the total value of their assets was £390,000, and that after allowing for creditors and other liabilities, the total value of the Blackmore Group at 2016 was £2,281? How can that have created assets under management of £25 million?

Finally, on page 18, the directors promised:

“There are no fees or charges”—

completely untrue. Page 24 of the information memorandum devotes over half a page to explaining why the company will have to pay fees. They say that they will pay fees essentially for the marketing of bonds and for investor relations, and that those fees will not exceed 20% of total bond value. They then entered into an agreement with Surge Financial Services Ltd—a company well known to those who have an interest in financial misdealings—that they would pay it exactly 20% of the total bond value.

What the directors forgot to mention in any promotional literature was that they were also going to pay themselves a management fee. During 2017, the directors of Blackmore Bond plc chose to pay £1.4 million of management fees to the Blackmore Group Ltd, of which they again were the sole shareholders, the sole directors and the sole beneficiaries. Why did they choose to conceal that information from this document, and from the information memorandum that was sent out to persuade people to buy their bonds? Effectively, the directors were making sure that their cut was cleaned out of Blackmore Bond plc’s accounts as soon as—sometimes before—it hit the bank account, so that whatever happened to that company, their money would be saved and the poor investors would be left with nothing.

Blackmore Group does not of course have to publish a profit and loss account, and even the very sketchy financial statements it does publish are not audited, so it is anyone’s guess what Mr McCreesh and Mr Nunn did with that £1.4 million, and that, as I say, was only up to December 2017.

During my investigations into this affair, I received a copy of a chain of emails between one bondholder and Patrick McCreesh, who, as I say, with Phillip Nunn, owns and runs the entire operation. The bondholder is not a constituent of mine. He was happy for me to quote at length from his emails. He is happy for me to give his full name, but I have chosen not to identify him entirely, but his name is John—and it genuinely is John.

John’s investment was with another Blackmore company, Blackmore Estates Ltd. The bond was due to be repaid in January 2020, but by March 2019 John had got worried, because he had not heard anything from Blackmore Estates for a while, and he wanted to know what had happened to his money. Patrick McCreesh advised him that Blackmore Estates was now part of Blackmore Bond plc, and set out to persuade him not to claim back the investment he was legally entitled to in January 2020, but to reinvest it in Blackmore Bond plc.

There were numerous email exchanges, but by 16 August John was really getting worried because his online account with Blackmore did not seem to show anything. There was no indication whether he had any money left at all. He then wrote:

“Patrick, I have entrusted you with my military retirement fund, my only savings. Unlike others I cannot afford to live without this money. You have had my investment since 2015 and I am yet to receive a single penny back. If things are going downhill why would you call me personally and persuade me to re-invest only a few months ago?”

That referred to a telephone conversation they had in about April 2019.

Three times further to that between August 2019 and January 2020 John reminded Patrick McCreesh in the most poignant terms that this was all he had. It was a pension he had got by serving with distinction in Her Majesty’s forces. Patrick McCreesh knew that John could not afford to lose the money, yet he deliberately set out to entice him to leave the money with McCreesh, and not to take back the money he was entitled to, but to put it into a company that by the summer of 2019 Patrick McCreesh and Phillip Nunn knew had no future. They had not published audited accounts for some time, but they had prepared draft accounts that showed that, in the first two years of its existence, one third of the bondholders’ entire money had disappeared. By July 2019, Nunn and McCreesh knew the business was dying. McCreesh still went out and deliberately targeted this poor gentleman to fleece him of what McCreesh knew was all he had.

As I say, I have pages and pages from the email exchanges between John and Patrick McCreesh in relation to, as I said earlier, whether the conduct was criminal, civilly unlawful or simply despicable. I am happy to share the remnants of my speech with anyone who wants to look at it. It makes it perfectly clear of the behaviour certainly of one of those two directors that to describe it as despicable would be excessively charitable to Mr McCreesh, and I have no indication that Mr Nunn would have been any better.

John will not ever get his military pension back, and there are 3,000 other Johns out there. They were all taken in by two individuals with a track record of dodgy financial dealing, but who are still free to go and set themselves up as directors of a different company and start all over again. That will not be by selling or mis-selling mini-bonds to people like John, because that is now illegal, but they will find another way. Until the Financial Conduct Authority and other regulators scare them out of the way, there will be another generation of Johns, and in 50 years from now or 100 years from now, our successors will be in the successor to this Parliament bemoaning the fact that billions of pounds have been taken out of the pockets of hard-working people and used to fund a luxury lifestyle for charlatans, crooks and conmen.

The Financial Conduct Authority was not the most culpable party in this. Nunn and McCreesh were, and they have to be called to account somehow. The Financial Conduct Authority was not the only regulator that failed because it did not have the powers, failed because it did not use the powers or possibly failed because it did not have the resources to deal with the amount of financial misdealing that is going on just now. But one way or another, for the sake of the next generation of Johns, the Financial Conduct Authority and the other regulators have to get their act together, and they have to do it quickly.

UK’s Financial Services Industry

Jim Shannon Excerpts

Monday 21st June 2021 Commons Chamber

[Bim Afolami (Hitchin and Harpenden) (Con)]

It is a pleasure to speak with you in the Chair, Madam Deputy Speaker, as always.

I am delighted to speak about the UK’s greatest success story and one of our most vibrant and innovative sectors, financial services. I am proud to champion it in Parliament through my role as chair of the all-party parliamentary group on financial markets and services. I speak as a former corporate lawyer at Freshfields Bruckhaus Deringer, and Simpson Thacher & Bartlett. I have also worked in strategy and restructuring at HSBC, so I have experience in the sector. I would like to use this debate to set out my vision for the future path of our financial services sector at a very critical time, to ensure that it delivers benefits to constituents and businesses across our great country.

As the Minister I know appreciates, it is difficult to overstate the importance of financial services to the UK economy. It accounts for almost 7% of the UK’s total economic output. The sector employs over 1 million people, two thirds of whom work outside of London, contrary to what many believe, providing benefits that extend well beyond the historic walls of the City square mile, to bustling financial hubs such as Edinburgh, Belfast, Cardiff and Leeds. Financial services are also a major contributor to the Exchequer, accounting for more than £1 in every £20 of total UK tax receipts, which go to support our public finances and important services such as the NHS. At the same time as having that domestic focus, the UK leads the world as an internationally competitive financial centre. Financial services are an advert for global Britain, attracting international investment.

[Jim Shannon (Strangford) (DUP)]

Does the hon. Member agree that the potential of Brexit to allow for the regulation of our financial services has not yet been realised and that there is more to do in legislating appropriately to ensure a balance, so that growth and the regulation of practice and outcome go hand in hand? We can do better; the potential is there.

[Bim Afolami]

I thank the hon. Gentleman for his intervention. Indeed, he is right, and I will comment later on ways in which we can use our new freedoms to improve the output of the financial services sector.

Some say that we should not speak too much about financial services, lest it upset certain people in the country or is alienating in some way. I suppose that is a hangover from the financial crisis, but I completely reject that view. We are at a new moment now. We have a fantastic financial services industry; it is world leading, and we need to be proud of it. Indeed, in the face of the unprecedented economic uncertainty created by the pandemic, our financial services industry stood up to the challenge. The financial system remained resilient and responded to customers’ needs, demonstrating the central role that it plays in facilitating and protecting our economy.

When corporates were strapped for cash, there was no liquidity failure in the banking system. Instead, bank lending surged. Working in partnership with the Government, the Treasury and the Bank of England, the sector was able to provide a comprehensive package of support, which included facilitating over £75 billion in emergency finance to 1.6 million businesses. I am pleased to announce to the House that more than £100 million of that support went to my constituency of Hitchin and Harpenden to support more than 2,400 fantastic local businesses through covid and the lockdown. That was on top of an array of forbearance measures for personal customers, including 2.75 million mortgage payment deferrals, 1.8 million credit card and loan payment holidays, and 27 million interest-free overdrafts to customers. In short, our financial system did its job. When there was a crisis, it provided a safety net for the constituents and businesses of Members on both sides of the House.

However, now we need to look forward and build back better from coronavirus. Our financial services industry is at a crossroads. Brexit and the return of rule-making powers to the UK for the first time in decades has created a unique chance, as the hon. Member for Strangford (Jim Shannon) remarked, to refit our financial services sector in a way that is better suited to our domestic needs and even more internationally competitive. Parliament, Government, regulators and the industry now have the opportunity to ask fresh questions about what the future of financial services in the UK should look like and how we should fine-tune the rules that govern the sector to provide the right conditions for it to thrive.

At the same time, the UK faces huge international competition. Across the Atlantic, New York is cementing itself as a leading international financial centre. In Asia, financial hubs are catching up with us fast, whether it be Hong Kong, Singapore or other cities. The ambitions of our European friends and neighbours to create onshore financial centres within the European Union bloc at the expense of London—let us not kid ourselves about that—is becoming increasingly apparent. If we are to continue to reap the benefits from this world-leading sector based here in the UK, it is crucial that we get our regulatory changes right in the next period, ensuring that the UK remains an attractive location for both domestic and international firms in the years to come.

Let me now turn to the steps on how we can achieve this. I am glad to say that the Government are wasting no time in realising their ambition to strengthen the UK’s position as a global financial hub. The Prime Minister met financial services leaders on this precise issue only a few weeks ago. Central to the Government’s ambition is the landmark Financial Services Act 2021, on which I spoke in this House and served in the Committee, as the Minister will remember. I once again commend him and his team for their hard work in achieving this vital piece of legislation, which already puts down much of the groundwork on which we can build. Alongside that, I commend the findings from the Government-commissioned reviews from Lord Hill and Ron Kalifa on, respectively, listings and FinTech. I appreciate the work the Government are doing to implement their recommendations without hesitation. I have been checking on this. When one engages with what the Government are actually doing, it is clear that they are more than exceeding expectations in really looking at these reviews to see what can be done as quickly as possible.

In the longer term, the Treasury is undertaking a wide-ranging review of the future regulatory framework for financial services. It is important to be clear that this is not—I repeat, not—a regulatory race to the bottom, as many would suggest. The Chancellor rightly stated, when setting out his vision for the sector in this House, that the UK will maintain the highest, most effective global standards as we look to shape the future of the industry. Indeed, there is no future of the industry with poor-quality, bargain-basement regulation; the future of the industry is high-quality, high global standards. However, we should take the opportunity to fine-tune this regulation, where it benefits the UK, to make it simpler and more responsive to the industry. The future framework should also be more proportionate, particularly to mid-tier providers—I have them in my own constituency in certain areas—that are currently saddled with disproportionate regulatory costs compared with many larger financial institutions that have armies of lawyers and accountants and various other people to help to deal with that regulation. Frankly, Brexit makes sense if we can take the opportunities available to us to do things better and more flexibly in areas where we have a real advantage. Financial services is one of the key areas in which we can do this.

As our powers are returned from the European Union, we must strengthen the political accountability to which regulators will be subject given their enhanced responsibilities. We have given them enormous power to make rules that have a huge impact on the livelihoods of literally millions of people. That power needs to be properly scrutinised and checked by Parliament and indeed this House. However, this House is not currently best equipped to carry out this role in terms of our structures. Scrutiny of the sector currently lies with the Treasury Committee, but its remit is incredibly broad in dealing with everything that the Treasury deals with. Therefore, having sustained and detailed oversight of technical regulations and aspects of financial services is going to be difficult. I encourage the Minister to consider the conclusions of the recent report by the all-party parliamentary group on financial markets and services. Ah, there it is—he has it in his hand; he has read it, which is good. It calls for a new specialist Joint Committee of both Houses to be established with a specific remit for overseeing not the Treasury, which already has the Treasury Committee, but our regulators and the financial services sector in particular. That would ensure that Parliament could take a central role in helping guide and scrutinise regulators while balancing the needs of the sector with the wider public policy aims that we all know.

Looking abroad, we need to promote international trade in financial services. As we review our framework, we need to understand that the Government’s work on trade agreements is vital but, frankly, whether it be within this House, outside this House or in the press or the media, too rarely do people think of trade as including services. I urge the Government to ensure that we apply the same level of focus in our trade agreements on services as we do on any goods. The Government must prioritise financial services in their trade deals and their emerging trade agenda more broadly and be explicit about their key importance to our country. In economic terms, the opportunities for financial services with our international trade are huge.

Promoting international trade is also about ensuring that we attract the best international talent to the UK. The new global talent visa and the new Office for Talent will be very important steps in helping achieve that ambition. I commend the Government on bringing them into force. It is also worth saying that, on the international agenda, our emerging partnership with Switzerland is very promising. I ask the Minister for his reflections on how that partnership could help really strengthen our financial services sector and, indeed, our industry.

One key area in which the UK risks falling behind its international competition is getting the right levels of taxation for the banking sector. At present, the UK’s banking industry is burdened with a number of sector-specific taxes such as the bank levy and irrevocable VAT that are not dependent on profits and represent a fixed cost to firms each year. Indeed, almost half of total tax receipts are made up of such sector-specific payments, taking the UK’s taxation rate for banks well above financial centres such as New York and Frankfurt. I therefore agree with the Government’s view that the planned increase in the main corporation tax rate to 25% would make the UK’s bank taxation system uncompetitive. To help address that, I support the Chancellor in his Budget announcement of a review to the bank surcharge, which is an additional 8% charge that banks pay on their profits that dates from the aftermath of the financial crisis. It is my view that the time has come to get rid of that surcharge. This is not about giving tax cuts to bankers: it is about the UK remaining a competitive place for firms to do business so that the public can continue to benefit from the success of the sector in this country.

I have already mentioned Ron Kalifa’s FinTech review. Without repeating all its requirements or recommendations, I bring the Minister’s attention to four key things about how we navigate the new world in which we find ourselves, the world of FinTech and how the Government should address them. First, in relation to policy and regulation, we need dynamic leadership that protects consumers yet nurtures FinTech activity and encourages competition. Secondly, on skills, we need to ensure that FinTech has a sufficient supply of domestic and international talent and the means to train and upskill our current and future workforce. My personal view is that we need to retrain and upskill adults in support of UK FinTech by ensuring access to short courses from high-quality providers at low cost. We should support the establishment of new coding schools all over the country, with two-year courses and admission on aptitude, raw ability and potential only. Such a measure could be a real benefit. Indeed, we need investment in FinTech. We need to help complete the funding ladder from start-ups right the way through to the initial public offering. Indeed, we also need national connectivity. We should not just accept where FinTechs are in the UK, whether it be in London or anywhere else. We need to strengthen their connections across all four nations.

For domestic customers, saving and investing should be simplified. At a time when the complexities and choices facing consumers are ever more complex, we need to make it all much easier for people. It is currently vastly easier to spend online today than it is to save and invest for tomorrow. We need to help harness technology to drive investment.

Turning this picture round will require thinking about financial services regulation, and it is good to see a number of regulatory barriers to financial services customer journeys under scrutiny. The Financial Conduct Authority’s support for an open finance agenda is a key example of that, and more opportunities will become available to UK policy makers as we build our regulatory framework. In turn, that will enable us to bring the UK’s regulatory agenda closer to the saving and investment needs of UK citizens. For that to work, trust will be key. Existing brands such as Fidelity are already working hard in that space.

I have considered a number of topics in this speech, but I will draw my remarks to a close. To echo the Chancellor’s words, financial services are a jewel in the crown of the UK economy. The sector is one of the engines of Britain’s economic prosperity, and it should be put front and centre of any future trade deals, and in our regulatory changes. My specific questions to the Minister are these. First, will he update the House on the Treasury’s plans for the 8% surcharge and whether it can be scrapped? Secondly, will he provide an update on implementing the recommendations from the Hill and Kalifa reviews? Thirdly, what is the Government’s emerging view on how Parliament should scrutinise the regulators that implement so many financial services rules? Finally, what opportunities does the Minister see with our trade agenda, and in particular our deepening relationship with Switzerland?

As we look to build back better from the pandemic and level up every corner of the UK, we have a once-in-a-generation opportunity to restructure the way our financial services sector works. We must take that opportunity and help to set Britain’s financial services sector up for a new global future.

Levelling-up Agenda

Jim Shannon Excerpts

Tuesday 15th June 2021 Westminster Hall

[Jim Shannon (Strangford) (DUP)]

It is a pleasure to speak in this debate, Sir Edward, and to follow the hon. Member for North East Derbyshire (Lee Rowley).

I am wholeheartedly behind the Prime Minister in his calls for us to level up, and indeed the action behind those calls in the form of funding. I was grateful to hear that each region will receive a share of the funding to strengthen and enhance areas of excellence. In Northern Ireland, it not just a matter of what we could spend the money on; we have so many areas that are on the cusp of the next level. As the hon. Member for North East Derbyshire alluded to, it is not just about the money; it is about how the money can help us build on what we have. That is what I will speak about.

We are widely considered to be Europe’s cyber-security capital. We could easily take that to a global level if we invested more fully in our infrastructure and connectivity, and increased the number of tech placements and learning courses. We have the skills and a pool of available people, so we want to build on that. With more levelling up, we could take it to the next stage.

The film industry has taken off with the success of “Game of Thrones” and “Line of Duty”, which featured Strangford lough in my constituency. It was always a challenge for me to find which part of Strangford lough it was on, but it was good to be able to put the two together. Anything from TV series to major film releases, based in any period of history or in the modern day, can be produced in Northern Ireland. Where better to find built-up cities, beautiful countryside and ocean views—we have it all. I say that unashamedly, and investment will certainly bring about dividends as we attract more global companies to our shores.

The agrifood sector is doing well and creating jobs, and the investment has been great. We have the highest standard of products. I look to Lakeland Dairies, Mash Direct and Rich Sauces, to name but a few global entities that are well-grounded and employing local people in large numbers to supply to China and America, as well as Europe. We have the product; we need the marketing and the support to see what level we can get to. Again, it is about levelling up what we have.

We have not even scratched the surface in exploring the tourism potential we have, from spa breaks to second holidays, from walking groups to cruise ship stop-offs, from water sports to mountain hikes, from high-end boutiques to antique treasure troves. We have much to offer. With a bit of levelling up, our borders will not be able to contain the volume of visitors flocking to our shores. With levelling up, we can build on what we have. We need to level up our connectivity and disengage from Tourism Ireland. We need an entity concerned only with promoting what we have to offer in Northern Ireland. I challenge anyone who has come to Northern Ireland to say that it was not more than they expected.

We must also give local councils the ability to get funding to host more global events, such as the golf opens and other sporting events. Northern Ireland is also awash with culture—we have such a tale to tell and we need to attract investment to match that. Again, we must level up.

In the short time allocated me, I have indicated three diverse areas in which we are ripe to level up, and yet the funding allocated cannot carry out all the work. The infrastructure work required is immense and our connectivity requirements are huge, but so too will be the reward. I therefore ask the Minister, whom I greatly respect, and the Government to deliver our share of the funding. If they do so, everyone in Northern Ireland will benefit, operating at the top level at which we are designed to operate. We are already levelling up; we need that extra bit to level up and do even more.

National Insurance Contributions Bill

Jim Shannon Excerpts

2nd reading
Monday 14th June 2021 Commons Chamber

[Fay Jones (Brecon and Radnorshire) (Con)]

I am not used to being called so early in the batting order, Madam Deputy Speaker. I am very grateful.

I made my maiden speech on a small but mighty Bill, and this is another. I very much welcome the contents of the Bill. These small but meaningful changes will make a real difference to many of my constituents.

There are two elements of the Bill on which I would like to focus. The first is what it would do for freeports. I was elected in 2019 on a manifesto that promised to create up to 10 freeports around the UK. They are a cornerstone of the Government’s levelling-up agenda, which recognises that talent is spread evenly across the country but opportunity is not. As someone who represents an often-forgotten part of the world, I am determined to see that agenda through.

We know that a freeport is an area within a country’s geographic border but outside its customs area, but there is no one model for freeports. That is their strength: they can be implemented in a number of ways.

[Jim Shannon (Strangford) (DUP)]

Does the hon. Lady share my interest in and my demand for having a freeport in Northern Ireland too? I understand that this legislation does not necessarily help that happen, but does she support us in our calls to have a freeport in Northern Ireland?

[Fay Jones]

As a Member of the Northern Ireland Affairs Committee, I certainly welcome that suggestion. I was greatly reassured by the Minister’s reference to that in his opening speech, and I hope that further details will come forward as soon as possible.

Freeports can be implemented in a number of ways. For example, manufacturing businesses operating in a freeport can benefit from tariff inversion, whereby tariffs from a finished products are lower than those on its component parts. Further tax and non-tax incentives, such as lower rates for corporation or even employment tax, which we are discussing this afternoon, as well as simplified customs processes can also be offered.

Although a freeport is a fairly new buzzword in our political discourse, it is important to remember that this is not a new idea. The UK used to operate a number of freeports. In fact, prior to the creation of the Welsh Assembly, now the Senedd, a freeport even operated in Cardiff.

Back in 2016, the then up-and-coming Member for Richmond (Yorks) (Rishi Sunak), now my right hon. Friend the Chancellor of the Exchequer, argued that freeports could turbocharge the UK’s post-Brexit economy. Free of the customs union and state aid rules, he argued that tens of thousands of jobs could be created with a successful freeports programme. He was right then, and he is right now.

In 2018, my hon. Friend the Member for Middlesbrough South and East Cleveland (Mr Clarke) highlighted in a Westminster Hall debate just how positive a freeport in the UK could be. He cited the example of the Jebel Ali Free Zone in the United Arab Emirates and explained how it has transformed Dubai. It now hosts 7,000 global companies, employs 145,000 people and accounts for around 40% of the UAE’s total direct foreign investment. That is a dramatic example, but there is no reason to believe that freeports in the UK cannot be just as successful as those around the world, perhaps even more so given our strong links with the United States, Europe and the Commonwealth.

I warmly welcome clause 1 of the Bill, which introduces a new zero-rate national insurance contribution for employers taking on employees in a freeport. The Government have already outlined the 10 areas of the UK where freeports will be created. Eight sites in England have been successful, and the Government have committed to creating one in Wales. I understand that the First Minister of Wales has expressed reservations and an unwillingness to work with the UK Government on a Welsh freeport, so may I urge the Minister, my close neighbour and friend across the border, who knows Wales extremely well, to press full steam ahead and work with his colleague the Secretary of State for Wales in setting up a Welsh freeport.

A rising tide lifts all boats—to continue with the maritime theme—and a freeport in Wales will create jobs and growth in all parts of Wales. That is especially important for me in mid-Wales, because, throughout the recent Senedd election, constituents told me that all they want is for their kids to have a future in Brecon and Radnorshire. They want them not to leave at 18 to go to university, only to come back 30 years later when they can afford to buy a home. They want them to have good jobs when they leave education. This is not part of the Welsh Government’s current plan for Mid Wales. We are forgotten about, but I am determined that that will not be the case. My constituents are determined that we will not be ignored and will not stand still.

The other clause that I want to focus on is clause 6, which makes a small but important change for our military community—employers who hire an armed forces veteran immediately after they leave the forces will be able to claim a new zero-rate national insurance contribution. Employers will be able to claim the relief from April ‘22, and transitional arrangements will allow a retrospective claim for the 2021-22 tax year. This is extremely close to my heart, and I declare an interest in that my partner is a serving member of the armed forces.

Brecon is a proud garrison town and, like the Minister, we have a number of military sites and personnel of whom we are very proud. The barracks and the infantry battle school, Sennybridge training area, are important military assets and I am fiercely proud of them. Although my campaign to save Brecon barracks from closure is a persistent thorn in the side of the Ministry of Defence, our support for veterans must go beyond maintaining high-quality sites and shiny silverware in the mess. We must look at a suite of policy instruments and make swift but sweeping changes to improve things for veterans once they leave active service.

The changes outlined in the Bill could save an employer, who employs a veteran, up to £5,500. This makes a veteran even more attractive to an employer, and the Minister should be commended for pursuing this, especially as we remember that our veterans are getting younger. The House of Commons Library estimates that the percentage of veterans of working age is projected to increase from 37% at the moment to 44% in 2028.

I am particularly pleased that the Bill covers veterans right across the United Kingdom equally. All four nations need to be comprehensive in the way that we look after our veterans. Wales is currently the only part of the United Kingdom not to have a dedicated veterans commissioner—someone on the side of veterans who can challenge local authorities and health boards to ensure that veterans can access the services that they need. Earlier this year, I called on the UK Government to address this imbalance and create a veterans commissioner for Wales, and I am extremely grateful to both the Secretary of State for Wales and the former Minister for veterans’ affairs, my hon. Friend the Member for Plymouth, Moor View (Johnny Mercer), for the work that led to the announcement on St David’s Day that they were actively considering creating such a post, but this needs to be done in co-operation with the Welsh Government, so that the postholder has oversight to challenge Welsh health and education services. May I take this opportunity to urge both sides to come together and create this role so that Welsh veterans can benefit from the protection that their colleagues have in England?

I am grateful for the opportunity to speak on this small, but important Bill and wish it swift passage through the House.

--- Later in debate ---

[Jim Shannon (Strangford) (DUP)]

Thank you, Madam Deputy Speaker. When you are in the Chair, I always seem to get called earlier. I am not sure why that is, but thank you very much.

It is a pleasure to speak in this debate. I add my support for the Government proposals. A lot of hours have gone into them, so I will make some comments about them.

Broadly, the national insurance contributions that are raised in a year look after the benefits that are used in that year. They are therefore very important. We deal with an enormous number of people every day in our offices who have benefits issues, and we know that our contributions and everybody’s contributions make a difference. I have stated numerous times in this House over recent months that now is the time to ensure that the investments we have made through the furlough scheme and the coronavirus grants system to secure business pays off by having businesses repay their debt through tax and national insurance over many years of success.

The end must be clear: sustainable and expanding small and medium businesses. In my constituency and, I believe, in many other constituencies, small and medium businesses contribute to everyday life through employment and by creating the prosperity we wish to see. I want to see them encouraged on every possible occasion.

The Bill is one cog in that mechanism of growth, regrowth and enhanced growth. I welcome that the Government are completely committed to that. My attention was immediately drawn to a few components of the Bill. Of course, time prevents me from delving into them all, but I first highlight the proposed new zero rate of secondary class 1 national insurance contributions for employers who hire an armed forces veteran during their first year of civilian employment after leaving the armed forces. Employers will be able to claim relief on the earnings of an eligible employee up to the NICs upper secondary threshold from April 2022, and transitional arrangements will allow retrospective claims for the 2021-22 tax year. Like everyone, I really welcome that. I am pleased as punch to see it in the Bill. There is a clear commitment to our veterans, and here is one way of showing it.

I say gently to the Minister that many veterans are missed by the charities. I know some of them in Northern Ireland, and I deal with them regularly in my constituency. They seem to fall under the radar of the charitable organisations. I want to ensure that when the Treasury works to make the proposal happen, there is clear help, co-operation and co-ordination with the veterans’ charities, because they identify the people and then this system can help those people get the jobs. It is therefore logical to me that they work together. If they work together closely, they can bring the real benefit that I wish to see.

This is a fantastic step, and I thank the Minister and the Government for it. It is welcome that we will remember veterans in actions, not simply in prose. I congratulate the Government on proposing these steps to make it more attractive for a business to put its faith in a serving soldier, who may well be acclimatising to civilian life and the different burdens it entails. I have regularly met soldiers who come out of the forces after 20 or 25 years, or even fewer, and who find civilian life extremely difficult. Two weeks ago, I went to a horse charity, People for Horses, where June Burgess helps people who have served in the military or in the police or prison service in Northern Ireland to deal with their post-traumatic stress disorder through contact with horses. I believe that we can do the same thing here in a really important way.

The point that this provision flags up for this humble man is the fact that the Government have managed to extend it to the whole of the United Kingdom of Great Britain and Northern Ireland, and rightly so. I am truly grateful for that, because every regiment in our armed forces is made up of men and women from every corner of this great United Kingdom. That is right and proper, yet it does highlight that other armed forces promises do not similarly extend to each part of the UK. The ungenerous might highlight that such failings have perhaps made President Macron think it acceptable to comment that Northern Ireland is not part of this great nation; wow, does he need a lesson in geography. A mixed message may be seen by those who wish to push their own narrative, but I commend the Prime Minister and the Foreign Secretary for making it clear to President Macron that Northern Ireland is an integral part of the United Kingdom of Great Britain and Northern Ireland. For that reason, I again wish my Government to make abundantly clear the absolutely bedrock foundation that, in every aspect of life, without a successful border poll the six counties of Northern Ireland were, are and will be British.

This legislation regarding troops is for every serviceman and woman, regardless of their accent. Whether we have my very broad Northern Ireland accent, the Scots accent of my colleague on my right, the hon. Member for East Lothian (Kenny MacAskill), or a Welsh accent, we are all going to qualify for this, which is good.

We also welcome the Minister’s commitment to freeports. From reading the Library notes and listening to the Minister beforehand, it is clear that the commitment is not only to freeports here in the mainland but to freeports in Northern Ireland as well. That is really good news and I welcome it. There is some work for the Northern Ireland Assembly to do; there seems to be work for the Northern Ireland Assembly to do every day, and that is the way it should be. In this case it has clear job to do, and I want to make sure that that happens and that we all gain advantage.

I also noted that some of the correspondence on freeports in the notes referred to ensuring the incentives are not exploited for tax avoidance purposes. The Government have taken on the task of making those who pay tax accountable in their own country, as they should be, and I want to make sure of that and therefore ask the Minister to comment on it in summing up. Some correspondents pointed out that freeports had gained a negative reputation for enabling tax evasion through the storage of high-value goods, but the Government have proposed the creation of a tax site within any UK freeport to support and facilitate a robust system of monitoring and ensure that the available reliefs are claimed legitimately. I therefore think the Government have addressed this, but want to make sure that it is on the record. I also ask the Minister to indicate what discussions the Government have had with the Northern Ireland Assembly to ensure that the freeports issue continues to move forward for Northern Ireland.

I welcome as well the move to address tax avoidance in the form of a provision to allow changes to the disclosure of tax avoidance schemes regime as it applies to national insurance contribution avoidance schemes. I am informed that these changes also mirror amendments to the disclosure of tax avoidance schemes regime as it applies to other tax avoidance schemes made by provisions included in the Finance Act 2021.

When I speak to the ordinary businessman in the street—the self-employed trader, or the employer of five members of staff in a small shop—they talk about the fact that they cannot afford to hire a high-flying accountant who can find and use loopholes, and they watch on with increasing frustration as the big companies that could afford to pay any contributions get away with not paying. I believe that the Government are again setting the marker for those companies by ensuring they are accountable; they should pay tax in their own country and make sure that they pay the right amount as well.

Our businesses need a level playing field and help, and it is my hope that this Bill will enable those avoiding and evading tax to be brought into line. It is my hope that this Bill helps to ensure that those who can pay should pay and do pay. If we make that happen, we will be going in the right direction. If we all do the right thing—us here and those outside—we will all benefit.