Lloyds, HBOS and the Cranston Review

Jim Shannon Excerpts

Tuesday 4th February 2020 Westminster Hall

[Jim Shannon (Strangford) (DUP)]

I apologise for not being on time, Mr Hollobone; I had a short-notice meeting with the Under-Secretary of State for Northern Ireland, the hon. Member for Worcester (Mr Walker) on Northern Ireland issues, and we had to go to meet him. I talk very fast, Mr Hollobone, as you know, but in the next few minutes I am going to get more words to the minute than any other person ever got, if that is possible. I hope I do not talk so fast that Hansard cannot follow it—I will certainly do my best.

On 18 December 2018, 13 months ago, we gathered here in Westminster Hall for a debate on the same subject of Lloyds HBOS, some nine years after the matter was first raised in the House in June 2009 by Sir James Paice MP. My substantive support for a proper and independent review of the Griggs HBOS bank-led remediation scheme is a matter of record in that debate. Less well-known is what has happened since, so let me put some of that on the record from my perspective today.

I begin by drawing the House’s attention to a few paragraphs of an excellent article that I read, by Helen Cahill in The Mail on Sunday on 25 January. Helen wrote:

“Sources said Horta-Osorio, who has been at the helm of Britain's biggest retail bank since 2011, is keen to salvage his reputation before departing as chief executive.

He has also halted three legal battles with victims in an effort to repair relations between the bank and its small business customers.

Victims have been fighting for fair compensation for more than a decade. Nikki Turner, director of victims’ group SME Alliance, said: ‘We have struggled with this for years. We hope this will encourage other chief executives to be more hands-on. How do you know what’s going on in the bank, if you don’t know about it personally?’”

Then, in what in my view will prove to be a seminal article, for Reuters last Wednesday, under a section entitled:

“Chief executives at a conduct crossroads”,

Rachel Wolcott wrote:

“Bank chief executives face a choice in 2020. They could take actions to resolve fairly disputes and claims stemming from past misconduct. That then would set the tone for how such problems are solved in future and reinforce cultural transformation messaging.”

There are a lot of things that can be done.

“Alternatively, they could continue approaches that resulted in unfair customer redress schemes, customer claims being wrongly denied, and vulnerable customers hauled through the courts.”

The article quotes Ruth Steinholtz as saying:

“They can’t have it both ways.”

They think they can, but they cannot. Ruth Steinholtz is further quoted as saying:

“They say they want to increase trust, but they can’t do that if they don't take responsibility for their actions and admit they got it wrong. I do think there has to be some sympathy for the reason they have difficulty admitting getting it wrong, which is they get slammed by the regulators every time they do”—

but if it is wrong, it is wrong and they should say that.

The article continues:

“The Cranston Review, which saw Lloyds Banking Group’s handling of HBOS Reading victims criticised, may have been a catalyst for that very change in approach required to take Lloyds’ cultural transformation work forward. Lloyds has invested in efforts to improve culture, making key hires and revamping its purpose, values and behaviour statement. Recent decisions by Antonio Horta-Osorio, chief executive to increase HBOS Reading fraud victims’ compensation, pre-empting further unflattering investigation results expected in the Dobbs Review, was deemed as a step in the right direction.”

It is, and it should be seen as such. The article goes on to say:

“If this approach continues to influence Lloyds’ engagement with mortgage prisoners, cases that come through the Business Banking Resolution Scheme (BBRS), PPI claimants and yet to be uncovered conduct problems, its chances of achieving meaningful cultural improvements may increase.

Barclays, RBS, Virgin Money and other UK banks have not made public any change in attitude towards legacy conduct issues, however.”

It is disappointing that they have not.

“Banks, via UK Finance, contested the eligibility criteria for the BBRS, which is aimed at putting SME mistreatment in the past.”

Regrettably,

“Most banks have made few meaningful actions to help mortgage prisoners or customers whose loans were sold to debt collectors and vulture funds.”

That includes Lloyds as one of the culprits.

“David Duffy, chief executive at Virgin Money Holdings, in contrast to Lloyds’ recent approach, has rebuffed the FCA’s Bailey’s specific requests to ‘deal with’ some of its most troublesome and longstanding SME customer disputes.”

Mr Duffy is noticeably where his Lloyds CEO counterpart was a few weeks ago, pre-Cranston, and in my view he needs to move his position to remove the shackles strangling this bank.

The Minister will be well aware of the case of John Guidi, the CYBG, now Virgin Money, hunger striker, and his recent correspondence, now publicised on Twitter and elsewhere, detailing the implications of both his case and many others. It is insightful to read the Reuters article by Lindsey Rogerson on 24 January, headlined:

“Outgoing FCA chief advocates for bank victims inclusion in new resolution scheme”.

That is good news.

The article addressed Andrew Bailey’s public and private view on both Mr Guidi’s case—I have probably pronounced his name wrong there—and those of the other victims of banks that are not yet participating in the BBRS, such as Zurich Dunbar. I ask the Minister, in his concluding remarks, to respond by giving his view and that of Government on the following observation by Mr Guidi:

“Meanwhile, the Vulture funds appear to be untouchable by the law yet they use their distorted version of law for their own benefit to destroy the honest and hardworking, tax paying SMEs and individual people of this country and leave them destitute as a burden on the state while they themselves pay no taxes in the UK, Ireland or anywhere else.”

I turn now to an instance that I witnessed, together with our voluntary adviser, Brian Little at Westminster for Banking, who has assisted with auditing and whistleblowing since that December 2018 debate. I was approached by Lloyds Banking Group’s public affairs director, Mr Benedict Brogan, who asked to speak with us about the content of various parts of my speech, which Brian and I were very willing to do. Our first meeting took place immediately on the resumption of Parliament after Christmas 2018.

A number of matters were discussed, including—specifically relevant to the debate—the importance of a meaningful and competent review of the Griggs scheme, together with the crucial involvement of victims’ representatives in the recently announced dispute resolution scheme, now called the Business Banking Resolution Service. From our experience in Northern Ireland, we believe that all the people cannot really move on until the victims’ aspects are properly considered and a closure and reconciliation process undertaken, as the hon. Member for Thirsk and Malton (Kevin Hollinrake) mentioned; I only caught the tail end of his speech, but I have spoken to him about this. He and I both requested this debate, and I am pleased that we got it.

As a result, over the next couple of months, Mr Brogan engaged with other banks, and centrally Mr Horta-Osório suggested that Nikki Turner of the SME Alliance be invited to join the independent steering group, or ISG. Bearing in mind that Paul and Nikki Turner had been the subject of 22 applications for eviction by Lloyds, and that the Lloyds CEO was subjected to calls for his resignation in Parliament in that December debate, this was an enormous ask, and impossible in many people’s eyes; in effect, a few of us were thought of as mad. We understand that, when António was approached on the subject, after several seconds of reflection and following his interview by CNBC in Davos in January 2019, he looked up and said words to the effect that “it was the only way forward”, and so it is.

Shortly afterwards, on 12 March 2019, Nikki and the SME Alliance released to the press that they had been invited and were joining the ISG of the DRS. That press release also referenced Mr Ian Lightbody from the CYBG Remediation Support Group. Unfortunately, the DRS chairman, Mr Lewis Shand Smith, did not follow Ian’s involvement through, despite another small business representative board member from Make UK being unable to attend. That was, and remains, a huge disappointment to Financial Conduct Authority CEO Andrew Bailey, the SME Alliance and the all-party parliamentary group on fair business banking.

Despite the time pressures across many fronts on Andrew Bailey, who is soon to be Governor of the Bank of England, we witnessed his personally taking charge of the interviews for the chair of that review with an unwavering commitment to the values and intent of that process, which we welcomed. After a couple of challenges in securing other candidates, Sir Ross Cranston was selected. He has proven to be exactly what was required—independent, evidence-led, competent, fair and robust. I put on the record our thanks and gratitude to both Andrew Bailey and Sir Ross Cranston for their work on this in 2019. I must also add thanks to the Lloyds CEO, Mr António Horta-Osório, who devoted some of his time to overseeing not only the HBOS aspect of this but the treatment of other victims, such as victims of Lloyds business support unit. I wrote to António to thank him personally on Monday 20 January.

Yes, Rachel Wolcott is right: bank chief executives are at a conduct crossroads in 2020. How true that is. This is the year that their actions, including active support for the BBRS, will communicate to their staff, the victims and the public at large whether cultures are really changing.

My final point relates to a victims’ conference I attended and spoke at on 17 September last year in London, where I heard Brian Little tell a story to victims that got everyone’s attention. It is on YouTube; most things seem to be nowadays. Back in 2011, Brian was a constituent of mine, and he still is. He had a mental breakdown for some 17 months, during which time I, as a new MP, and with my parliamentary aide, assisted in keeping his whistleblowing case alive during his diagnosis and recovery.

During that time, we met the now-Lord Andrew Tyrie, in his role as Chairman of the Treasury Committee, in relation to independent reports and assessors. By coincidence, António was the subject of stories on the front page of The Daily Telegraph on 4 May 2011. While only just in the CEO role, António had taken the brave step away from the UK Finance position on PPI and stated that Lloyds must address the compensation issue. Back then, that was perhaps £5 billion to £10 billion across the banks; it is now more than £50 billion, but it was the right thing to do. Brian’s story was about cover-ups in reports; the court eventually found that he had made 12 protected disclosures.

On Saturday, I read an article in The Times in which Katherine Griffiths wrote that António was now the longest-serving CEO in the FTSE 100, and that the search for his successor is imminent. Whether accurate or not, I ask through this House that Mr Horta-Osório continues what a number of us have witnessed in the last few months: personal involvement and oversight of the Cranston compensation review and active support for the BBRS, and perhaps even the involvement in a closure and reconciliation process at Lloyds, which we would be more than happy to discuss with him prior to any departure or retirement.

I am conscious of the time, so I will scoot forward to near the end of my speech. In relation to third-party debt, can I ask that the Minister takes similar action immediately? Most of this will not be about individual cases, but I am concerned that the BBRS will not be ready in time to hear the case of Nigel Henderson, as he is terminally ill. While the Minister consistently states that he is unable to address individual cases, which I understand, I should think that he would wish to publicly endorse the emergency cases policy of the BBRS that James Hurley reflected in his recent article in The Times, in which he wrote:

“Bosses of the service have been asked to prioritise cases where business owners are terminally ill and where there are imminent repossession or bankruptcy issues.”

It is morally right to do that, so why should we not?

An open letter to the Prime Minister last Wednesday from the Banking Victims for a Future groups stated:

“The objective is to have Banks put things right, redress customers, where they should be redressed, and continue to reinforce our work that Banks really need to earn people’s trust. Without this redress through a credible Business Banking Resolution Service (BBRS) followed by an appropriate closure and reconciliation process, within each bank, for the last 20 years we will not help this nation and its people, through many small businesses, PROSPER in a post-Brexit United Kingdom.”

Everybody will want that, whether they are in favour of Brexit or not.

I will conclude with this comment from UK Mortgage Prisoners:

“We do not want to be left behind within our Prime Minister’s hope for our nation. We didn’t deserve this and should not continue to suffer. We insist that our ‘People’s Government’ provide a solution and reflect it in the chancellor’s budget speech on 11th March 2020, to the nation”.

I look forward to hearing the Minister’s response to my two key points and to whether he endorses these aspirations of the Prime Minister. I thank you, Mr Hollobone, and hon. Members for enduring my speaking at 60 words to the second, or thereabouts.

--- Later in debate ---

[John Glen]

My hon. Friend makes a powerful point, which goes to the core of this matter. The Cranston review points to the fact that we now have a higher bar of expectations in terms of how these redress schemes should be operated in a transparent way. He has spoken in this debate and previously about the distress that has been caused to his constituents, and many other Members have also made points during this debate.

The wider banking industry has a responsibility to reflect on the review’s findings and act accordingly, so I welcome the banking industry’s commitment to creating a new scheme to address unresolved historic complaints from small and medium-sized enterprises that have not been through a formal independent process, and to address future complaints made by slightly larger SMEs that are just outside the remit of the Financial Ombudsman Service.

[Jim Shannon]

Will the Minister give way?

[John Glen]

I will in a moment.

The aforementioned Business Banking Resolution Service opened to expressions of interest last November, ahead of its full launch later this year. Meanwhile, the expansion of the FOS last April means that over 99% of all SMEs now have access to fair, free and fast dispute resolution.

The hon. Member for Strangford (Jim Shannon) asked me to give way; I am happy to do so, but I want to refer to the points that he made. He referred to the eligibility of the BBRS. It is not for me to determine the eligibility of the BBRS, but his points about the prioritisation of cases will have been heard very clearly by those who have set up that service, and I urge the BBRS to reflect on his contribution to this debate.

The BBRS and the expansion of the FOS build on several initiatives that the Government have introduced, including the senior managers certification regime, which will hold key individuals at banks to account for the decisions that they make, including decisions that could impact on their SME customers. The industry has also made changes. For example, all major lenders are signatories of the standards of lending practice, ensuring that banks treat their customers in a fair and reasonable way. I hope that these steps, together with the work carried out this year to address historic SME disputes, will bring unresolved disputes to a close and prevent the same circumstances from occurring again.

I will conclude by saying that over the past year Sir Ross has taken considerable time to discuss sensitive and often distressing matters with customers; he has had 49 meetings with 62 customers, alongside his adopting a detailed and forensic approach to the cases he has reviewed, so I thank him for his efforts.

I welcome the commitment of Lloyds to implementing the recommendations of the Cranston review, and I will follow progress closely. I note the points made by the hon. Member for Glasgow Central (Alison Thewliss) and others, and I will reflect on them carefully.

The establishment of the Business Banking Resolution Service provides a further means of redress, and I look forward to seeing it bring closure to many long-running disputes. I am confident that we can continue to build on the good work that industry, small business representatives, regulators and Government have begun to rebuild trust, so that small businesses can access the finance they need to prosper and grow.

Netflix: Tax Affairs

Jim Shannon Excerpts

Monday 3rd February 2020 Commons Chamber

[Dame Margaret Hodge (Barking) (Lab)]

Thank you for selecting the debate, Mr Speaker, and I give my heartfelt thanks to George Turner and the investigative think-tank, Tax Watch, for providing me with so much information.

For many years, global digital companies have been avoiding tax. I have spent the last decade campaigning for more corporate transparency and arguing for stronger action at both the national and international level to stamp out this abuse. Indeed, the Minister, when he was a member of the Treasury Committee, was extremely helpful in exposing some of the unacceptable tax behaviour in one of our major banks—HSBC—and he effectively held the bank’s chief executive to account. In the light of his previous interest and commitment to ensuring that everybody acts responsibly and pays their fair share of tax, I hope that he will respond positively to the suggestions I am making tonight. These suggestions will go some way to tackling the shocking example of corporate tax avoidance that we have uncovered.

I have secured this Adjournment debate because until now one major tax avoider has remained under the radar: Netflix. Netflix demands our attention for a number of reasons. Not only does it deliberately dodge its corporation tax bills, but it, in fact, receives moneys from the public coffers through the high-end television tax relief.

[Jim Shannon (Strangford) (DUP)]

This is a very important issue and I thank the right hon. Lady for securing the Adjournment debate. Bearing in mind that last year Netflix UK subscribers paid some £700 million, does she not agree that the fact that it uses loopholes to avoid tax is simply disgraceful? Government really must close these loopholes and ensure that big business has to pay a reasonable rate of tax.

[Dame Margaret Hodge]

I entirely support the hon. Member on that.

Netflix takes out of the public purse more than it contributes in corporation tax. While Her Majesty’s Revenue and Customs fails to collect money from it in corporation tax, the US Government is extracting tax from the same profits that it earns here and then hides in unknown tax havens.

Special Educational Needs and Disability Funding

Jim Shannon Excerpts

Wednesday 29th January 2020 Westminster Hall

[Jim Shannon (Strangford) (DUP)]

I thank the hon. Member for Twickenham (Munira Wilson) for bringing the issue to the fore. It is replicated across the United Kingdom of Great Britain and Northern Ireland. There will not be any region where it is not an issue. Regions including my own fail on this, and improvement is absolutely necessary.

Children are simply falling through the cracks as budgets are stretched beyond belief. Special needs services clearly do not have the resourcing needed to make the difference. In the previous Parliament, the Northern Ireland Affairs Committee made it its business to carry out a study on education and health. The education study mirrored all the issues that have been referred to. One of the main findings was that Northern Ireland has faced the highest school spending cuts per pupil in the UK over the past decade—11% in real terms, compared with 8% in England, 6% in Wales and 2% in Scotland. The money set aside per pupil in Northern Ireland, at £5,500, is less than in Wales, where it is £5,800; England, where it is £6,000; and Scotland, where it is £6,600.

Today I had the opportunity to meet some people from Disability Action. They were people at secondary school or in further education. The issues for them are clear. Transport to school is important, as well as the assessment that other Members have referred to, which can take four to six weeks. In Northern Ireland it can take from four to six months, so we are worse off. Even then, there is no guarantee of getting the cash that is needed.

We have had a failure in the Assembly for the past three years. It is important now to move on. There is a Minister in place in the Assembly, who happens to be my colleague. We need sustained, enhanced funding UK-wide, for all schools, and particularly for children with special needs. I know that the Minister is here to respond on her portfolio and not on Northern Ireland, but we want to have some input on Northern Ireland in this process, and to discuss where we are.

I pay tribute to every teacher who gives up even more of their home life to consider the child who is not statemented but needs extra help, and to every classroom assistant who makes the difference for that child. I also pay tribute to every volunteer who takes training in Campaigners or the Girls Brigade and Boys Brigade, to learn how better to connect and deal with the special needs child who needs to know, as we do in those organisations, the Bible story that Jesus loves them and they have a place within every youth organisation. It is important that there is funding so that the people we charge with the education of our vulnerable and needy children can have the tools that they desperately need to enable them to achieve what they know they can, given the chance, which is that children can fulfil their potential.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Education (Michelle Donelan)]

I congratulate the hon. Member for Twickenham (Munira Wilson) on securing today’s really important debate. I know that she has been working particularly hard to highlight the concerns of some of her constituents regarding SEND provision and funding. I put on the record the fact that I share her concerns, and stress that the Government are taking action and will continue to do so. Our ambition is for every child, no matter what challenges they face, to have access to a world-class education that sets them up for life, enabling them to reach their full potential. We need to ensure that that is happening across the entire UK.

Funding has been raised by several Members, and is extremely important. It is part of our commitment to level up across the country, but I also stress that the issue is about so much more than just funding, as my hon. Friend the Member for Carshalton and Wallington (Elliot Colburn) mentioned. We should accept that there are large amounts of money in the SEN system, but it is important that that money is spent efficiently and effectively to really raise outcomes for these children, and to ensure that the system is child focused. We also recognise the value of the role that mainstream education plays in providing a wonderful education for children with specific challenges, as my hon. Friend the Member for Totnes (Anthony Mangnall) referenced.

We are undertaking a cross-Government review of our SEND provision, and we must ensure that every penny that we spend helps to achieve better outcomes, so that parents and teachers have confidence in the system to deliver for these children. The review will look at how the SEND system has evolved since major reforms were introduced in 2014, and will consider how the system can be made to work better for all families, ensuring that the quality of provision and the support available to children and young people is sustainable in future.

The review will also look at the supply and delivery of support at the moment. The hon. Members for Croydon North (Steve Reed) and for Barnsley East (Stephanie Peacock) touched on supply, which is a particular concern of mine, and of the Government. We want to ensure that support in different local areas is consistent and joined up across health, care and education services, and that high-quality health and education support is available across the country. We must ensure that all funds are spent efficiently and effectively, so that children’s needs are adequately catered for. My hon. Friend the Member for Chichester (Gillian Keegan) mentioned that the EHCP process is too burdensome and long, and that people can struggle throughout it. That will also form part of the review.

[Siobhain McDonagh in the Chair]

The SEND review will look at how the future system for supporting children and young people should operate, and later this year we are planning to begin a review of the formula that calculates funding allocations for individual local authorities. The hon. Member for Twickenham called for a strategy, but it is really important that we hear what the review has to say before we make our long-term plans, because they must be evidence based, and focused on delivering for these children and young people. I recognise this is not a sufficient answer for those areas that are struggling now to provide the support that parents expect and their children need.

We are, however, consulting on changes that would reduce the adverse impacts of carrying forward cumulative deficits, which the hon. Member for Twickenham mentioned, and will be responding to that consultation very shortly. We recognise the urgency of doing so, and have been developing a response in conjunction with the Ministry of Housing, Communities and Local Government and with the Treasury. I can assure the hon. Lady that we will publish that response shortly, and I am more than happy to meet her in the forthcoming days.

[Jim Shannon]

One delicate and important issue is that of children with complex health needs, who do not have just one single health need but maybe three or four, which then impact on their education. Is the Minister prepared to set some funding and resources aside to deal with those children with complex health needs related to education, as well?

[Michelle Donelan]

The review is encompassing the EHCPs, and is going to look at exactly those challenges in the system, including the point that was raised by my hon. Friend the Member for Cheltenham (Alex Chalk), who said that we should look at the threshold. That is something that we will look at, and it will address whether we are giving enough support to those children who have complex and compounded problems. We will also examine the £6,000 contribution that mainstream schools have to put in; that issue was raised by a number of Members, and I know from my own constituency that it can be a challenge for school provision.

The SEND review is looking at how future systems for supporting children and young people should operate, but it is important to recognise that it is not a sufficient answer for those areas that are struggling now, as I have pointed out. I am more than happy to meet any hon. Member who has a challenge locally and go through this with them.

School Meals: Hull

Jim Shannon Excerpts

Wednesday 22nd January 2020 Commons Chamber

[Dame Diana Johnson]

Yes, absolutely. What I have been trying to say in my speech is that there is a link between education and public health, and that at the moment it is clear that they are completely separate. I am trying to bring them together to work collaboratively. I am also grateful for being reminded that, because the previous business went down early, we have until 7 o’clock to debate this issue. I notice that the hon. Member for Strangford (Jim Shannon) is in his place, and I know that he usually intervenes in Adjournment debates, so I would be happy to give way to him as well.

[Jim Shannon (Strangford) (DUP)]

First, I congratulate the hon. Member for Kingston upon Hull North (Dame Diana Johnson) on bringing this debate forward. This issue is appropriate to her own area, but it is one that probably applies across all our constituencies. She has referred to subsidy and the provision of school meals. The importance of that for me and my constituency is also very real, because if we did not have that subsidy and help for those families, some of those young children would never have a solid meal in their day. Does she feel, as I do, that when it comes to making provision for those who are at the bottom of the poverty level and who need our help to get at least one square meal a day, the Government need to respond in a very positive way?

[Dame Diana Johnson]

I am grateful for that intervention, and I absolutely agree with the hon. Gentleman. We have a new Government in place, and I think that they want to deal with some of the long-standing issues in this country around the working poor and how those children can be best served in our schools when it comes to access to hot healthy school food. What Hull was trying to do, from a local authority perspective, was to have those progressive policies that have perhaps been lacking at national level for some time. I am not going to detain the House for much longer. I just have a few more questions, unless the hon. Member for Brigg and Goole (Andrew Percy) would like me to give way to him.

--- Later in debate ---

[Michelle Donelan]

Yes, indeed. We have committed to increase that amount in line with inflation, but we constantly keep it under review.

I want to take this opportunity to set out the critical role that the Department plays in providing healthy, nutritious food for children, which I know Members are passionate about. This is delivered through a range of programmes, many of which are targeted specifically at the most disadvantaged children. This is part of our strong commitment to promoting social mobility and ensuring equality of opportunity for every child.

[Jim Shannon]

That was a programme on TV last week that specifically talked about food for children in schools. It indicated that there was not an all-round policy across the whole of the United Kingdom whereby all the food had to be nutritious, did not lead to obesity and contained the right numbers of carbohydrates and so on. In other words, we are talking about the sort of food that children need to develop their bodies and minds. The programme indicated that children can get those types of foods in certain areas of the mainland UK but not in all schools. I welcome what the Minister has said about what is going to happen, but how can we make sure that all schools provide the same nutritious food, for the development of the child, both in mind and body?

[Michelle Donelan]

That is extremely important. National food standards are already in place and schools have to adhere to them; they ensure that food is high quality, healthy and nutritious, and that it is lower in fat and salt. I want personally to look at that issue, to ensure that that is happening across the country. We are going further on this, as our forthcoming update on standards has been produced by the Department and Public Health England, to ensure that we are making the meals as nutritious as possible. Alongside that, our healthy school rating system celebrates schools’ efforts to support children in this regard, so we are almost incentivising schools, as well as enforcing this.

We remain committed to ensuring that the most disadvantaged children receive a healthy lunch at school. As I stated, last year about 1.3million disadvantaged children benefited from this important provision. Included in that number were around 10,000 pupils in the city of Kingston upon Hull. The universal infant free school meals programme, introduced in 2014, has proved successful, and a further 1.4 million infant pupils have received free nutritious meals at lunch time.

We know that free school meal take-up is high, but we want to make sure that as many eligible pupils take up and claim free school meals as possible, so we tried to make it as simple as possible by introducing an eligibility checking system, whereby the local authority and school can easily identify those who are eligible. We have also set up model registration forms to make it as easy as possible for parents, and we have provided more guidance at jobcentres for those who are eligible.

In addition to school meals—it is not just about the lunch time offering; it is also about breakfast, which has been mentioned in this debate—the Government continue to support the expansion of school breakfast clubs, and we are investing up to £35 million to kick-start or improve existing clubs in schools, with a clear aim for them to become fully sustainable over the long term. We recently announced that the programme has been extended for an additional year until March 2021. Breakfast clubs ensure that children start the day with a nutritious breakfast—I am a strong believer that breakfast is the most important meal of the day. The hon. Member for Kingston upon Hull North will no doubt be aware that there are already a number of successful breakfast clubs in her constituency.

Our work goes beyond the school gates. The Government’s holiday activities and food programme supports disadvantaged children to access healthy food and enriching activities over the school holidays, which is vital. In 2019, we invested £9 million in local holiday activity and food co-ordinators in 11 authorities throughout the UK. They were responsible for funding and overseeing free holiday clubs so that disadvantaged children in those areas could benefit from high-quality provision during the school holidays. Before Christmas, we launched a grant fund for a further £9 million in 2020.

National Productivity

Jim Shannon Excerpts

Wednesday 22nd January 2020 Westminster Hall

[Jim Shannon (Strangford) (DUP)]

It is nice to be involved in a debate anywhere in the House, but especially in Westminster Hall. I thank the hon. Member for Barnsley Central (Dan Jarvis) for setting the scene. As he does so often, he spoke in a cool and calm voice, giving all the detail and evidence that backs up the case. He does it well, and it is a pleasure to be involved with him. I see the Minister in his place. I think this is the second time he has responded in Westminster Hall, and we look forward to his comments.

As the hon. Member for Barnsley Central said—it was one of his first sentences—this debate is all about how we help all the regions in the UK to benefit from national productivity. Productivity is certainly an intricate subject, with many facets. As always, I am very thankful to the Library for the briefing note it prepared, which clearly makes the point that while we are up on productivity from this time last year, the overall increase is not satisfactory. The hon. Gentleman talked about ensuring that we improve productivity in areas or regions where it could be better. Productivity rose by 0.4% in the third quarter of 2019 compared with the previous quarter, but it was only 0.1 percentage points higher than a year ago, so the rise is not as significant or as positive as we would like it to be. The slight pick-up in productivity growth should not obscure the continued weakness in the overall trend. We welcome any increase—we have clearly seen an increase, and it is important we recognise that as a positive facet—but at the same time we have to recognise that it is a bit slow.

[Mr Gregory Campbell (East Londonderry) (DUP)]

Does my hon. Friend agree that one of the reasons, if not the central reason, for the decline in productivity has been the past three years of uncertainty about Brexit, and that now that that is—hopefully—departing fast over the ridgeline, productivity will improve in all the regions, but particularly in Northern Ireland, the north of England and Scotland?

[Jim Shannon]

My hon. Friend is absolutely right. The debate should not be centred just on England, but on all the United Kingdom of Great Britain and Northern Ireland and how we can all grow. Historically, UK labour productivity has grown by around 2% a year, but since the 2008-09 recession it has stagnated. To be clear, I am a Brexiteer and I look forward to the possibilities of Brexit and leaving on 31 January. Even though we in Northern Ireland have not got the deal that we wanted, we must be pragmatic and look forward to where the possibilities are. Labour productivity in quarter 3 in 2019 was only 2.4% above what it was more than 11 years ago in Q4. That was the pre-recession peak.

We could play the blame game and blame an ageing population. We could continue to blame the banks for the banking crisis. Some will blame Brexit. People always look for someone to blame—that is the nature of life—but in this case we want to be more positive. We could more accurately blame the behaviour in this place and the refusal to honour the vote of the people, point to the uncertainty that the trading partners have been displaying and point to the new leadership regimes in trading partners, but doing that is now pointless; we have to look positively towards the future, where we are and what we are trying to achieve. With that in mind, there are the possibilities after Brexit for trade deals with many parts of the world, and the Minister might give us some detail of that.

There are many possibilities and positives that we should be looking at to see how we can all gain. We in Northern Ireland want to participate in that gain, as my hon. Friend the Member for East Londonderry (Mr Campbell) said. We want to see what is coming our way, so that everyone in the United Kingdom of Great Britain and Northern Ireland benefits. We must look at how we can increase productivity throughout the United Kingdom and how we can realise those possibilities and new markets.

I put on record my thanks for the hard work of my hon. Friend the Member for Belfast East (Gavin Robinson) and others who played a huge part in securing the future of Harland and Wolff, and indeed the successful sale of Bombardier, or Shorts, as we would all know it and so affectionately still call it in our part of the country. Both those businesses were in doubt not because of the quality of the service or what they manufacture, but because of the uncertainty in the market at that time. It was hard work that secured those businesses, so I put on record my thanks to my hon. Friend for all that he did in relation to that.

At that time, the Government stepped into that gap to help my hon. Friend because the Northern Ireland Assembly was not functioning, but the Northern Ireland Assembly is now functioning. We welcome it being back in place and offer the Minister for the Department for the Economy, Diane Dodds, all the best. Has the Minister had the opportunity yet to speak to the Minister in the Northern Ireland Assembly? If not, when will that happen? It is important that we communicate regionally about where we want to be and how we can benefit each other. More of that needs to be done, and the start of that is ensuring that as much Government business as possible is carried out by British-owned, British-supplied and British-staffed factories.

My constituency of Strangford, like yours, Mr Paisley, has a burgeoning agrifood sector. Manufacturers are not just looking within the United Kingdom to sell their produce. Sales go down south, as far as the middle east and out to the States as well. The businesses involved include Willowbrook Foods, Mash Direct and Rich Sauces. Along with Pritchitts and Lakeland Dairies. Probably 1,600 jobs depend on those factories, and then there are all the farmers that feed into those companies as well. We have a thriving pharmaceutical sector, with Eakin in Ballystockart outside Comber leading the way. It wants new opportunities in markets across the seas. We need a close working relationship between Ministers here and those in the Northern Ireland Assembly.

Light engineering is prominent in North Antrim and elsewhere. Cooke Bros is a small company that does magnificent work through its engineering firm. Again, such companies need help from the Northern Ireland Assembly as well as from central Government here. Bus orders should no longer be fulfilled in Europe because of EU regulations, but by our own Wrightbus. I put on the record our thanks to you, Mr Paisley, for your hard work and endeavours in that respect. We all note the reasons why that firm was helped from going under: by finding a new buyer, retaining some of the jobs and having a really good base for the future. Wrightbus has a global reputation for high quality and reasonable prices. It should win on the level playing field. Such companies from our own areas have done very well, and we want to see how they go in future.

As I said in this Chamber yesterday, I agree with the industrial strategy. Now is the time to invest in ourselves. We want to be more productive and we want to compete globally, so we need help to make sure we can do that. We can be proactive and positive. When it comes to promoting ourselves on the world stage, we should do it under the flag of Great Britain, the Union flag, because that is our flag—that flag of our country collectively. I know the Department does do that and it is really proactive, but I want to make sure we can build upon it. We must show that we have belief in ourselves. We have to encourage employers to take on employees in their 50s. We have those who perhaps need help in that age bracket, so we should try to help. With the increased pension age, people will be in work longer. We must encourage businesses to look at skills and not simply age. By the same token, we must also ensure that we raise generations of skilled workers with a good work ethic and a healthy work-life balance. We have a very good skilled workforce in Northern Ireland, as we have in other parts of the United Kingdom. Again, how do we build on that?

On 31 January, we will turn to a fresh page in the history of this great nation of the United Kingdom of Great Britain and Northern Ireland. We need to take the opportunity to make better decisions, encourage better behaviour and simply do better by our own constituents. We must start productivity reform by being productive in this place and giving better than we have given thus far.

--- Later in debate ---

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

It is a pleasure to see you in the Chair, Mr Paisley. I thank my hon. Friend the Member for Barnsley Central (Dan Jarvis) for securing the debate. He made an excellent contribution, as did the hon. Member for Strangford (Jim Shannon) and my hon. Friends the Members for Islwyn (Chris Evans) and for Wirral South (Alison McGovern). I genuinely enjoyed listening to them. I say that every time I close a debate, but it was true today, because if I had my way, we would be talking about this subject every day of the week.

All hon. Members have correctly said that the No. 1 objective of any Government must be to ensure that the country’s economy works to provide the maximum prosperity and living standards for all parts of the country and all our constituents. That is what we all want, which means that we should celebrate what we do well as a country and the optimism that the Government are asking us to embrace. It also means, however, that we must be honest about what is not working well and what needs to get better, and then discuss what the solutions might be. In the UK, productivity is clearly one of those significant problems.

As my hon. Friend the Member for Barnsley Central said, according to the figures from the House of Commons Library, UK labour productivity has historically grown by about 2% a year, but it has stagnated since the recession in 2008-09. The level of labour productivity in the third quarter of last year was only marginally above what it was 11 years earlier, in 2007. We might look at the impact of Brexit and the uncertainty that was mentioned earlier, but we must acknowledge that the problem is more deep-seated.

It is normal to expect a recession of the depth and severity that the financial crisis brought about to have an impact on productivity, but we would expect that to last only for a certain amount of time. The fact that we are still only just recovering to pre-crisis levels is a deeply worrying indicator and does not reflect well on how the Government have handled the recovery. Overall, UK productivity is still 16% below the average for the rest of the G7 countries. As hon. Members have said, that matters a great deal. In a highly competitive global environment, we are not match-fit. We are about to voluntarily increase our barriers to trade—at least in the short term—with our major trading partner, the European Union, as Brexit occurs, so if we do not improve productivity, we face a challenging future.

There are many reasons for that underperformance. Something so persistently bad must be deep-rooted, and many hon. Members have put forward accurate analyses and persuasive arguments about what they want to be addressed. My hon. Friend the Member for Barnsley Central talked about skills and devolution, and I agree entirely. My hon. Friend the Member for Islwyn talked about capital investment and monetary policy, which was spot on. I particularly agreed with the contribution of my hon. Friend the Member for Wirral South about gender disparity and the need to look at issues such as childcare alongside capital infrastructure projects.

I will talk about three additional areas where we need decisive action: transport, automation and business support. I acknowledge, however, that there is a counter-argument to what I will say. Some people will put the UK’s poor productivity down to our higher employment rate. In other words, some might say that, by definition, having more economically active people than France, for example, comes at the expense of higher productivity—so a country could feasibly have a smaller but more productive workforce that exists alongside significant unemployment.

We cannot be satisfied by that explanation. In 2018, the employment rate among people of working age was the highest ever in this country, as we have often heard from Ministers in Treasury debates. But in 2018 the employment rate was also the highest ever in Canada, Germany, Australia and 22 other OECD countries. The truth is that the Government have been incredibly fortunate to be in office at a time when technology has driven up employment rates in all developed countries. We should therefore be in no doubt that we have serious work to do.

On transport, I will shamelessly talk about my own constituency. Every hon. Member present has a sound grasp of north-west geography, but for people who are not aware, Stalybridge, Hyde, Mossley and Dukinfield sit about 10 miles east of Manchester city centre. My constituency’s other border is where Derbyshire begins. It should take about 15 minutes to get from Stalybridge train station to Manchester city centre, but that can happen only if the train turns up. Every single day—today is no different—I get up, turn on Twitter, and see my constituents telling me, rightly, that they are not getting the service they deserve. If I say, “Brexit is coming. We’ve all got to roll up our sleeves and improve this nation’s productivity,” they will reasonably suggest that the first thing to do to achieve that might be to give them a train service that gets them to work on time.

The problem is about much more than underperformance by the franchisee, although that is evident too. It is an endemic problem of inadequate infrastructure outside the south-east of England. Not that long ago, my constituency was full of big firms such as ICI, Christy, which produces towels, and Total Petrochemicals—real industrial giants—that employed the vast majority of local people.

[Jim Shannon]

On that point, there were people on the news this morning who were unable to get a train on time. One lady, who started a new job in Manchester in the new year, had been late to work every day since—not because of her, but because the trains were late. If there is going to be connectivity and dependability on the train service, that service must ensure that the trains are on time and that the number of trains can grow, so that people are not saying, as they were this morning, “If the train doesn’t go on time, I’m going to go by car.”

[Jonathan Reynolds]

I could not agree more. I am delighted to hear about new jobs being created in Manchester, but not that people are struggling to get to them.

My point about the state of infrastructure, and not just the short or medium-term performance of the franchise operators, is that, not that long ago, people said that modern communications technology would make place less relevant to economic development, that we would all be able to work from home, that it would improve productivity, and that we would see the benefits of that. My hon. Friend the Member for Barnsley Central made the point, however, that place is as crucial as ever, because cities have generated the jobs of the future, particularly in the knowledge industries and in services. Our transport system is only now trying to catch up.

If we cannot give people an adequate journey over 10 miles, we have no chance of linking up the north, the midlands or South Yorkshire more comprehensively. From Stalybridge and Hyde, people should be able to go to work by public transport in not just Manchester, but Leeds, Liverpool, Sheffield and, of course, Barnsley. That is why I have always championed transport projects in my constituency, such as electrifying the Huddersfield rail line, which the Government are still prevaricating about and telling us might be partly possible; the Mottram-Tintwistle bypass, which would make it easier to get to Barnsley; and the extension of successful transport networks, such as the Metrolink tram network. That is also why we need schemes such as HS2 and Northern Powerhouse Rail. I say to the Minister that those two projects are complementary, not in competition. They will require major transport investment, but it will be worth it.

Secondly, I want to talk about automation. Many people fear the rise of automation and worry that it will destroy jobs and create huge and painful upheaval. I understand those concerns; I grew up in the north-east in the 1980s, which was a time of tremendous upheaval. We did not deal with those changes well, but, in the right hands and with the right leadership, automation makes the country more productive and more prosperous, not less. The problem in the UK is that we have not enough automation, rather than too much. The International Federation of Robotics notes that, in 2018, there were 71 robot units in the UK for every 10,000 manufacturing employees. The comparative figure in Japan was 303, in Germany, 309, and in South Korea, 631. We need more ambition with technology, not less. It is amazing that, until very recently, one 10th of all the fax machines in the world were in use in the NHS. I would like to see the Government lead on a managed automation plan as part of their industrial strategy, to drive up the use of new technology, and alongside that, have a technology displacement fund to support workers with the skills and training they would need if they faced displacement through new technology.

I also want to talk about business support, because as well as the things the Government need to do to improve productivity, decisions that individual firms make clearly have a big impact, based on the leadership and training they possess. The previous Chancellor, Philip Hammond, used to mention that a lot. There is some excellent work already happening. Many Members will be familiar with Be the Business, the business-led organisation that works with peers to improve and benchmark productivity performance. I am impressed with its work, but I wonder whether it could be taken further. Could Be the Business be the basis for a new social partnership or standing organisation to further expand on that work?

I hope this is one of many debates we will have on this subject in this Parliament, but I want to sound a word of warning. We are told the Government want to ban the word “Brexit” in an attempt to present it as being done, but, in reality, so many of the debates in this Parliament will be related to our exit from the European Union. The impact of future trade deals, in particular, will require serious debate about which sectors will be prioritised and which will be severely disrupted. The announcements we have had so far suggest there will be no substantive deal covering services of any kind, especially financial services, and that, on goods, the just-in-time supply chains that the automotive and aerospace manufacturers depend on will be significantly disrupted. Those sectors are where productivity is currently strongest. For instance, the Nissan car factory in Sunderland has a claim to being the most efficient in the world. If all of us here today are in agreement that national productivity must be improved, we must also make sure we do not lose the good sectors that we have.

We should work to improve the UK’s productivity where we can, but we should not take poor decisions that would make our productivity and therefore our prosperity and the living standards of our constituents much worse. I look forward to what the Minister has to tell us about the Government’s plans in this area.

Growth Strategy

Jim Shannon Excerpts

Tuesday 21st January 2020 Westminster Hall

[Jim Shannon (Strangford) (DUP)]

I congratulate the right hon. Member for Wokingham (John Redwood) on securing the debate. It is always good to speak in Westminster Hall and it is good to be back at the start of a new season, so to speak.

We have all heard and been a part of predictions about the growth of this country in a post-Brexit world, and we are quickly approaching the date at which things stop being theory and become a reality. Back in November ’17, the Government announced their investment for growth strategy. To be fair, Government strategy on the economy has been strong and positive and has brought results, as we must acknowledge, but the press release stated:

“With the aim of making the UK the world’s most innovative nation by 2030, the government has committed to investing a further £725 million over the next 3 years in the Industrial Strategy Challenge Fund (ISCF) to respond to some of the greatest global challenges and the opportunities faced by the UK”—

the United Kingdom of Great Britain and Northern Ireland. It goes on:

“This will include £170 million to transform our construction sector and help create affordable places to live and work that are safer, healthier and use less energy, and up to £210 million to improve early diagnosis of illnesses and develop precision medicine for patients across the UK.”

In my constituency the construction sector is important to providing jobs and some of the money needed to boost the economy. We are now two years into the Government’s strategy, which is an interesting stage to look at growth over the past two years and to acknowledge it. In the interests of fairness, I must say that there were always impediments to high levels of growth—they stemmed from indecision and the near collapse of faith in our ability in this House over the past two years. The previous Parliament must collectively acknowledge that the to-ing and fro-ing and almost toxic atmosphere in this place was not conducive to presenting to the world that we were in an ideal place to be invested in and worked with. The House has been a hot place over the past two years, unlike this Hall today, where it is almost Baltic, Mr Hollobone. We might have our meetings outside—it might be warmer. I believe it was warmer when I walked here this morning at seven o’clock.

Conservative policy has been positive. It has reduced unemployment and created jobs—definitely in Northern Ireland. I am very pleased to know that we are back in business in the Northern Ireland Assembly and that the Department of Enterprise, Trade and Industry will have that task again. Our levels of employment are similar to those in the south-east of England, which is very positive.

Such a long period of stagnation is unprecedented for the working poor, whose average real weekly earnings are no higher than they were before 2008 and 2009. We saw a large rise in food bank use as well, which has been very apparent in my constituency, where unemployment is much lower than it was when I first came to this House. But the policy has worked. In 2019 wage growth picked up and inflation came down. As a result, real average wages are growing at a healthier rate again, and we must welcome and encourage that.

However, when people do not have the money to spend locally, the local businesses know it and feel it. This is not for debate now, but there is pressure on the high street and in rural country towns such as Newtownards, which is central to my constituency, where we have seen shop vacancies come up that were not there three or four years ago. I have spoken to the Minister, who came over last year, and we have some ideas about how to go forward.

Where do we go from here? I know that the Minister will agree with the five foundations of economic growth, and will endorse, support and encourage them. The first is ideas—research, development and innovation, which are critical to a manufacturing strategy and a strategy for growth across the United Kingdom. Partnerships that enable the growth of research and development include the medical innovations of Queen’s University, with new drugs that can address diseases such as diabetes, cancer and strokes.

The second foundation is people—that is, skills and education. We cannot innovate without training people to a sufficient level of skill. The third is infrastructure. Not one week goes by in this House in which do we not ask a question about broadband, which is almost the key to all other potential jobs. In my constituency, small and medium-sized businesses and people who work from home need access to broadband. Infrastructure also includes energy and transport.

The fourth foundation is the business environment, and support for specific sectors and SMEs. The fifth foundation is places, and local industrial strategies. In Northern Ireland, councils now have more responsibility for creating some jobs, and we want to ensure that they can continue to do that.

As the old adage goes, we have to spend money to make money. We need to regard the new Parliament as a time to invest in our industries, and to show the world that the turmoil is over and that the time to invest is now. Northern Ireland is known globally as a capital of cyber-security, with many international firms basing their teams there due to our competitive rates, good connectivity and, importantly, staffing pool of highly trained young people and admin staff. That is down to a specific strategy and policy. We have marketed ourselves well in that industry.

We have so much more to offer, as does the United Kingdom of Great Britain and Northern Ireland as a whole. Although the foundations are ideas, people, infrastructure, business environment and places, we must ensure that our cornerstone is the absolute assurance that this country is on the rise once more. I always say that we are better together, with all four regions working as one. Confidence will come across to the world only when we have it in ourselves and in our abilities. That must start here and now with investment, and sizeable investment at that.

HMRC Tax Office: Cumbernauld

Jim Shannon Excerpts

Tuesday 14th January 2020 Commons Chamber

[Jim Shannon (Strangford) (DUP)]

rose—

[Mr Speaker]

Order. An hon. Member cannot just walk in and intervene after the debate has started. I am very sympathetic to Mr Shannon, as he well knows, but we have to try to stick to the rules of the House.

--- Later in debate ---

[Jesse Norman]

Of course, in any relocation there will be people who disagree with it, and that is to be anticipated. As the hon. Gentleman will know, HMRC has an elaborate and established process—I will come to it—of working with staff and seeking to support them in making the transition to a different working environment. The point I was making was that they can expect a significant improvement in the quality of the space that they are working and thriving in, and this should be beneficial for them and for the Revenue if they are allowed to do that. Of course HMRC will in turn benefit from bringing different skills and specialities together, and form a more connected and more technology-enabled environment.

[Jim Shannon]

Will the Minister give way?

[Jesse Norman]

No, I will not. The hon. Gentleman has absolutely no basis for coming in late to this debate in order to ask a question; I am a great fan of his and I have answered questions of his on many previous occasions, but I regard this as a discourtesy to the House. I am happy to take any further interventions that other Members may make.

Special Educational Needs and Disabilities (Suffolk)

Jim Shannon Excerpts

Tuesday 5th November 2019 Commons Chamber

[Sandy Martin (Ipswich) (Lab)]

May I, Mr Speaker, add my congratulations to those already given in respect of your elevation, both metaphorically and physically, to the speakership?

Suffolk has a greater than average number of special educational needs and disability assessment cases going to tribunal; poor communication between providers and with parents; a lack of specialist placements; an inadequate resource in the Norfolk and Suffolk NHS Foundation Trust, which is supposed to provide mental health services; insufficient respite services; a growing gap between the provision described in education, health and care plans and what is actually provided; an acute shortage of autistic spectrum disorder provision; and an overall lack of staff and funding to address these issues, either in mainstream education or in specialist provision.

Since the revisit from Ofsted in January this year, and its report in February, little seems to have been done to hold Suffolk to any action plan that might deal with the failings identified. There has been no increase in monitoring since the failed revisit and no appreciable changes in senior management. Mental health services—or the lack of them—continue to cause distress to young people and their parents, and young people are harming themselves or falling into greater mental health need while they wait for support that does not come.

[Jim Shannon (Strangford) (DUP)]

First, may I, too, publicly congratulate you, Mr Speaker, on your election as the Speaker of the House? It was a great pleasure to watch that.

The hon. Gentleman is absolutely right that this issue is critical, not only for him and his constituents but for me and mine, and the Minister has responsibility for it. The time allocated for direct contact time with educational psychologists is just 15 hours a year for pupils at one primary in Northern Ireland. For children dealing with anxiety and other social issues, that is simply not enough. Does the hon. Gentleman agree that the provision of support and early intervention in respect of social anxiety issues can positively impact lifelong mental health, and reduce the need for further intervention in high schools at a greater cost? In other words: do it now, do it early.

[Sandy Martin]

The hon. Gentleman is absolutely correct; he has put his finger right on the main point.

Two days ago, in response to the news that I had secured this debate, I received an email from a distressed parent. She says:

“My son has been out of school for 3 years in December. He was signed off by our consultant paediatrician as medically unfit for mainstream school. He has an Education & Health Care Plan. He has all the paperwork to state he has autism with a pathological demand avoidance profile but he cannot sit through the formal assessment as it runs for too long and he finds it too difficult to cope in the situation.

I have contacted the local authority so many times with regard to providing my son with an education; I have put in formal complaints and yet he still has no education.

I applied to the tribunal last December as the Local Authority insisted in his Education Health Care Plan that mainstream schooling was suitable for him, but they simultaneously refused to name a school he could go to.

The tribunal have made numerous orders ordering the Local Authority to name a school for my son but these have all been ignored.

We went to the tribunal last Tuesday, 29th October, at which the Judge told the Local Authority that they need to name a school on his education and health care plan and that the tribunal had to be adjourned until 13th December because of this, adding more of a delay to my son getting an education. He is now 12 years old.

My son is still without an education and we are in limbo.

My son deserves the correct education but he has been thoroughly let down by the education system. The strain of fighting the system tires you out but you still have to keep going. It should not be like this—every child has the right to an education. We keep being told that it is not the label that counts, but the child’s needs. Well we know our son needs an education but we cannot access any support for him to get that education because he doesn’t seem to have the right label.”

I had already secured this debate when that message was sent to me. The reason why I applied for the debate was that parent after parent has written to me, emailed me, met with me at my surgeries, and invited me to visit their child’s school or visit the school that their child would be going to if they had enough support in place, or the school that would be ideal for the child, but which has no more capacity.

Cross-border Trade and Accounting

Jim Shannon Excerpts

Wednesday 30th October 2019 Commons Chamber

[Luke Graham]

I hope it is whisky; we will be here for a while.

Accountants can help us with some of our biggest social and environmental challenges. In the current context, with Brexit on the horizon, I thought this debate would be useful, and later in my speech I shall come to the issues relating to trade between Northern Ireland and Great Britain.

Let me give a little background on accounting systems—the non-accountants in the room can tune in now, because this is the exciting bit. Accounting has come a long way since it was established centuries ago: we had the evolution of double-entry bookkeeping from the original ledgers; we then had some base computing in the 19th century, and then more into the 20th century; and we now have the far more advanced accounting systems that we use today. During my previous life, before I entered the House, I was lucky enough to use a range of different systems, on which I shall touch in just a minute.

One of the Government’s greatest advances in the use of accounting systems to help on the domestic front was the Making Tax Digital scheme. Unfortunately, like many others, I was greatly upset by the fact that the Government had to defer some of their plans to make tax digital because of the advent of Brexit and the consumption of Government time by Brexit preparations. Making tax digital and using accounting systems, whether for small or large businesses, is important because it makes us more efficient and more productive, and it can lead to better decision making for companies right across the United Kingdom. That is vital.

Whether someone is a single trader in Portsmouth, working for the global manager in Edinburgh, or working for a large multinational in London, accounting systems can really give them the transparency of data that they need. They are also environmentally friendly, because as accounting systems develop, we are able to move away from paper receipts and invoices and towards electronic records, which makes interactions between individual companies, customers and suppliers far easier, more efficient and more effective. As a result, the real benefit will be for the entire country, because not only will companies grow, but it will contribute to our productivity and thus our GDP.

Another important point is that as companies are developing, intangibles and intangible assets are becoming more and more important in their valuation. In fact, just a few years ago it was recognised that around 80% of the value of the S&P 500 is in intangible assets rather than tangible assets. That is why the development of accounting systems is so important: we need to be able not only to capture the value of our physical assets, and use the traditional accounting fair-value methods to make sure that those assets are held at the right value, but to look at new methods of valuing intangibles, because the intangibles of brands and, to a certain extent, intellectual property, along with other new technological advancements, mean that it is increasingly the case that less and less of companies’ value is being captured on our stock exchanges, and that obviously has an impact on the prices that are traded and the returns that can be made by companies and customers throughout the country.

As I said earlier, a number of systems have come into the accounting sphere that can help smaller businesses to improve and be more effective. One of them is Xero and another is QuickBooks, and there is also Oracle for large companies. I should say, for the sake of fairness, that plenty of other accounting systems are available. The point of these systems is to make sure that, from the base transaction and from the base-level accounts receivable and accounts payable systems, right the way up to the highest-level strategic decision making, managers and users of the information have the correct information —the one source of truth—and that there is consistency in the data right the way through the organisation. That is for the benefit not just of the actual company, but of HMRC and our Government. The better the records we receive, the more accurate the accounts are and the more accurately we can calculate the tax take for those companies as well. Obviously, it is always a good thing that not only should taxes be low, but companies and individuals pay the taxes that they do indeed owe.

In the current context, as we move between accounting systems, I would like to apply some of this to the discussions that we have been having on Northern Ireland. The reason why I take this leap—some might see it that way—is that many of the accounting systems that are imported now are connected to HMRC to help companies and individuals file their tax returns. They are also connected to HMRC for the purpose of VAT filing. As we know with Northern Ireland, VAT and customs have been a key issue in the new withdrawal agreement, and I will explore that a little bit more—hopefully with help from my colleague from Northern Ireland.

[Jim Shannon (Strangford) (DUP)]

I thank the hon. Gentleman for bringing this matter forward. It is a very important initiative. It is just a pity that it is coming at this time, given where we are. Does he understand that these systems, which create a digital border in Northern Ireland and, indeed, in the Republic of Ireland, have been in place since the peace walls came down? That is a fair while ago. Such an approach is, and can be, both sensible and prudent for the region and could be something that happens elsewhere.

[Luke Graham]

I thank my hon. Friend for his intervention. He is quite right. There is a number of those accounting systems, but there is also a number of other systems and structures in place in Northern Ireland. I have to be honest about this. Although I have engaged with some of his colleagues on this over the past two years, many Members in this House and the broader public are still ignorant of the matter. It would, I think, be to the benefit of the House if some of these issues were explored in greater detail and in greater depth, so that Members can make more educated decisions, especially when we are working on such controversial issues as withdrawal from the EU, and as we start mapping out our future trading relationship with Europe. As he will recognise, this will also be important when we have new free trade agreements with other countries around the world—whether they are the rollover agreements that are coming across from the EU or, indeed, new trade agreements such as those with the United States of America. I will touch on that matter in just a moment.

Exploitation of Missing Looked-after Children

Jim Shannon Excerpts

Wednesday 23rd October 2019 Westminster Hall

[Jim Shannon (Strangford) (DUP)]

I congratulate the hon. Member for Stockport (Ann Coffey) on securing the debate. I had probably expected that there would be more hon. Members present to discuss this issue, because it is certainly of some importance to me and my constituency, and to many other hon. Members. Perhaps other things have been prioritised, and they therefore cannot be here. It is very nice to see the Minister in her place, and I look forward to her response. She is having quite a busy introduction to all these matters in the House—in two Adjournment debates that I attended, and now in Westminster Hall. I am very grateful for the opportunity to take part in this debate.

I pay tribute to the hon. Lady for securing the debate. She can be rightly proud of her long record of campaigning for the protection of vulnerable children and young people, which we appreciate. Throughout her time in Parliament, she has been a true champion of the rights of young people at risk and in danger. Today’s debate, which she introduced, is further evidence of that.

I refer to the website of the National Society for the Prevention of Cruelty to Children—an excellent charity—which provides a useful summation of who exactly is defined as a looked-after child:

“A child who has been in the care of their local authority for more than 24 hours is known as a looked after child.”

I thank the Library for the information that it has brought forward. I looked at some of the headlines included in the briefing. Headlines sometimes catch the eye, because that is their purpose. One of the headlines from The Children’s Society was, “Parliamentary inquiry into the scandal of ‘sent away’ children”. The Children’s Commissioner’s headline was, “The same mistakes that led to child sexual exploitation are being repeated with gangs”. The hon. Lady referred to that. Ofsted’s headline was, “Criminal exploitation and ‘county lines’: learn from past mistakes, report finds”. The National Youth Advocacy Service had “Parliamentary report calls for end to ‘national scandal’ of children missing from care”. They are not just sent away; they are missing from care. “BBC News” did a report called, “Care crisis: Sent-away children are ‘easy victims’”. The Guardian referred to the “Surge in vulnerable children linked to the UK drug gangs”.

The BBC, again, referred to, “Teens in care ‘abandoned to crime gangs’”. The Howard League for Penal Reform has produced a report entitled “Criminalising children, the Department for Education and county lines exploitation.” The Times published an article with the headline, “Gangs circle as children ‘dumped’ on seaside”. All those headlines catch the eye and tell an unfortunate story about the issue we are debating.

Looked-after children are also referred to as “children in care,” a term that many children and young people prefer. Each part of the United Kingdom has a slightly different definition of looked-after children and follows its own legislation, policy and guidance. In general, however, looked-after children are living with foster parents, in a residential children’s home, or in residential settings such as schools and secure units. The Minister was at the earlier debate—I am trying to remember the constituency of the hon. Member who secured an Adjournment debate on this issue. He described what was happening in his constituency in the east of England; again, the hon. Lady has reinforced that with her personal input into this debate.

I was talking to the Scottish National party spokesperson before the debate. Scotland often leads the way on many things—I mean that very sincerely. Scotland’s definition of looked-after children also includes children under a supervision requirement order. This means that many looked-after children in Scotland are still living at home, but with regular contact from social services.

There are a variety of reasons why children and young people enter care. The child’s parents might have agreed to it—for example, if they are too unwell to look after their child, or if their child has a disability and needs respite care. Sometimes the pressures of life on families lead them to do something that they did not want to do but that they have to do because they are unable to cope. The child could be an unaccompanied asylum seeker, with no responsible adult to care for them. Children’s services might have intervened because they felt the child was at significant risk of harm. If this is the case, the child is usually the subject of a court-made legal order.

A child stops being looked after when they are adopted, return home or turn 18. However, the law is clear that local authorities in all the nations of the UK—all four of us together—are required to support children leaving care at 18 until they are at least 21; there is a responsibility beyond the age of 18. This may involve their continuing to live with their foster family.

Most children in care say that their experiences are good and that it was the right choice for them. It is good to hear those stories, because sometimes we focus on all the bad things. That is the nature of our job—people do not always come to tell us how good things are, but they certainly come to tell us when things are not right. That is the nature of what we do: we respond to complaints and concerns, and try to do our best to help.

I believe more needs to be done to ensure that all looked-after children are healthy and safe, have the same opportunities as their peers, and can move successfully into adulthood. What a responsibility we have for that child—to mould them and help them to be a better person as they move towards adulthood. It is so important that we do that as a society, and also through our duties as elected representatives of our constituents. We should also look to the Government for a positive response.

When the system works well, it allows young people to build stable lives and go on to become fully integrated and constructive members of society. When it fails, it can have a devastating impact from which people can never recover. That is the reality. The scale of the problems of criminal and sexual exploitation of looked-after children is frightening. A recent survey by Barnardo’s, which is a wonderful charity, showed that one third of the children who are sexually exploited in England are looked after. The finding, taken from a survey of 498 children helped in one day by the charity’s 20 specialist sexual exploitation services, also revealed marked geographical variations—I think the hon. Lady referred to that in her introduction.

More than three quarters, or 76%, of victims in the north-west were looked-after children. Given that figure, it is not hard to see why the hon. Lady was so determined to use Westminster Hall to highlight the sheer scale of the problem. Some 42% were in care in London, eastern and south-east England, whereas the figure was 39% in the south-west. Those figures are horrendous. Overall, Barnardo’s found that 29% were looked after. Shockingly, 16% had a disability and 5% had a statement of special educational needs.

Working towards the goals of protecting vulnerable young people from all kinds of exploitation is serious and important work. Sadly, our recent history is littered with examples of local authority and statutory agency failure, and it is our responsibility as legislators to ensure that our country has the most robust child protection frameworks. The Minister can confirm that there is a legal duty for children’s homes and foster carers to report a missing looked-after child to the police. I want to see how that can be done better, to ensure that we can deliver on it. Perhaps the Minister can confirm what financial support is available for that. I understand that some of the figures indicate that some councils and areas that have responsibility are feeling the pinch. I know the Government have committed some moneys to it, but I want to check that it is going forward.

The hon. Member for Rotherham (Sarah Champion) is not present, but I pay tribute to her in her absence. As we all know, she has been an absolute stalwart in standing up in spite of great personal provocation and threat to herself. She has been an absolute champion—Sarah Champion is aptly named—of her constituency. I pay tribute to her—I thought she might have been here, but obviously other things have taken place and she cannot be here—for all she has done to highlight exploitation and for taking a marvellous, courageous stand. Well done to her. The Rotherham child sexual exploitation scandal consisted of organised sexual abuse between the late 1980s and 2010 on an unimaginable scale. Some of those stories made me cringe and feel unwell emotionally and physically. The abject and total failure of the local authorities to act on reports of abuse throughout that period led to it being described as the biggest child protection scandal in UK history.

Many factors combined to produce the scandal: indifference towards the victims, a culture of ignoring complaints and a fear of being viewed as politically incorrect, as the papers highlighted on more than one occasion. Whatever the motivations, the results were devastating. It is incumbent on us all to ensure that there are no more Rotherhams or Rochdales—no more of any of it.

Criminal exploitation continues to be a massive issue for each and every one of us. The hon. Member for Stockport referred to it in her introduction, and I want to speak about it. Criminal exploitation in the UK involves children and vulnerable adults who have been coerced into crime, such as ATM theft, pickpocketing, bag snatching, counterfeit DVD selling, cannabis cultivation, metal theft, benefit fraud, sham marriages and forced begging. The most common types of criminal exploitation are cannabis cultivation and petty street crime.

The criminal exploitation is serious: 71% of the police forces that submitted evidence to the inquiry believed that placing children and young people out of area increases their vulnerability to becoming sexually and criminally exploited. Looked-after children and young people are at significant risk of being groomed for exploitation, due both to the experiences and situations that led to their becoming looked after in the first place, and to factors associated with being in care. It is clear from the evidence that when placement moves take place, new protective factors are often not built around the young people in their new areas. The hon. Lady referred to that in her introduction and gave three or four examples, including of a person who walked 10 miles to meet their mum, and of others who had been exploited in their own areas.

I was deeply moved by the information about sexual exploitation, because it shows how unscrupulous people are. There are many unscrupulous people in the world who see individuals not as people—they do not have compassion for them—but as commodities. The hon. Lady referred to a couple of examples of young girls who found themselves in that situation. Child sexual exploitation means to

“manipulate or deceive a child or young person under the age of 18 into sexual activity (a) in exchange for something the victim needs or wants, and/or (b) for the financial advantage or increased status”.

All those things are pure, unadulterated exploitation.

The involvement of children in the movement and sale of drugs in the context of county lines has been receiving more professional and media attention recently. Of the 90% of looked-after children who go missing from care, 60% are suspected victims of trafficking. As a Northern Ireland MP and the Member for Strangford, I am very pleased that it was Stormont—when we had a functioning Northern Ireland Assembly—that led the way in tackling human trafficking and exploitation with groundbreaking legislation in 2015 that specifically targets those who would exploit other human beings for sexual purposes, enforced servitude or criminal activities.

When it comes to the protection of children, especially those who are looked after, we need a redoubling of efforts and a multifaceted approach. The first step is education. We must educate our children to know what to look for in order to prevent them from falling victim. Sometimes a teacher looking at a young child in the front row will see things that no one else sees. Schools, youth groups and carers all have a valuable role to play, but they must have resources—I look to the Minister when I say this—that are child-appropriate, help to address the issue and are easy to understand. The statistics show that there is a major problem with looked-after children; the hon. Lady said that very clearly.

Secondly, the police, local authorities and statutory agencies need to be fearless in the pursuit of those who would engage in such criminal activity and behaviour. There can be no hiding place for those committing criminal activities and engaging in criminal behaviour. We all have a responsibility to play our part in ensuring that this wicked activity—this evil activity—is stamped out.