UK Sovereign Wealth Fund

Jim Shannon Excerpts

Wednesday 14th December 2016 Westminster Hall

[Jim Shannon (Strangford) (DUP)]

It is always nice to be called to speak, Mr Owen. I congratulate the hon. Member for Weston-super-Mare (John Penrose) on setting the scene on a subject that has to be discussed and given some thought in this House. Those of us here, and those who unfortunately have not been able to make it, will have ideas about how to do this. This is the first stage of a discussion that we should, perhaps, have had many years ago. At least we are starting the process; let us start it with this discussion. I look forward to the shadow Minister’s contribution, other Members’ contributions and, in particular, the Minister’s response on how to take this forward.

We are considering the proposals put on paper by the hon. Member for Weston-super-Mare in his report, “The Great Rebalancing: A sovereign wealth fund to make the UK’s economy the strongest in the G20”. That is a very grand title, but it encapsulates his thoughts on the subject—and, perhaps, our thoughts as well. An enormous level of thought and groundwork went into these proposals. I congratulate the hon. Gentleman on the paper, which we read—not just the background notes—back home, and it gave us food for thought. I am astonished that he found the time to do so much work on it. Anyone who takes the time to read the background notes will understand the time that he has put into writing this paper, which is worthy of discussion in the House, and in Westminster Hall today.

I was raised to save for a rainy day, as many in my generation were—and that is not just because I am an Ulster Scot and we think that every pound is a prisoner. I was taught to save for a rainy day at an early age by my mother and father, and it has not done me any harm over the years. I am now married, of course, and the money is never my own anymore; it belongs to her, but that is by the bye. I do not wish to dumb down in any way the hard work of the hon. Gentleman, but to me this is like the Government saving for a rainy day, as I said to him when discussing the debate beforehand. The hon. Member for Ross, Skye and Lochaber (Ian Blackford), who spoke before me, is a strong advocate for the WASPI—Women Against State Pension Inequality—women and their pensions, and I am glad he is here. Before I came in, I thought, “What if we had had this fund 20 years ago? We would have been able to look after the WASPI women and make sure their pensions were covered.” We did not, but at least we have chance to look at this issue now.

[Ian Blackford]

As always, the hon. Gentleman makes a number of pertinent remarks. There is a view that we do not have the resources to pay the appropriate pensions to people, but we should keep an eye on the Government Actuary’s Department, which has argued—I am keen that people should not get away from this—that the national insurance fund will be in surplus to the tune of about £30 billion by 2016-17. The resources are there to give the women what they are due, and over the next 20 or 30 years, pensions will remain affordable.

[Jim Shannon]

I thank the hon. Gentleman for those figures. I was not aware of them, but if that money is available, perhaps we are in a position to start the fund today with some of those resources.

I am sure that, like me, many hon. Members, including the hon. Gentleman, will know of 63-year-old women in their constituency who still have to work as their pension is unavailable. Those women are wishing that in the 1980s, at the time of the North sea oil find, which we have heard many comments about, the Government had decided to invest in a rainy day fund, which could have helped the pension pot. For that reason, the sovereign wealth fund must be considered seriously by the Government. That is why this matter is worthy of debate.

This issue is not cut and dried, by any means. There is talk of the Government’s shale fund being similar to this plan, as the hon. Member for Weston-super-Mare mentioned, but this is not the day to debate the pluses and minuses of fracking. A lot of hard work would need to be carried out before the fund saw any profit, but many people are already making claims about the potential for shale oil, if that comes through—and I suspect that, at some time, it will. We must think about what can be done for the future benefit of all people in the UK. Today’s austerity is a reality for us all. We have to be honest in this House about moneys and finances.

[David Simpson (Upper Bann) (DUP)]

I apologise for my late arrival, Mr Owen; I had another meeting. Does my hon. Friend agree that we have to look forward, when it comes to these funds? Oil prices, fracking and all the rest have been referred to, but we have to debate the issue as a whole, including wind turbines and all of that. Green energy could be as much as 40% more expensive, and we have to look at all of it. If we are going to put money in, we have to get the price correct.

[Jim Shannon]

I thank my hon. Friend and colleague for his intervention. As always, it is good to have his businesslike approach; he looks at the real issues critically and focuses on the situation that we are in. We need to look at the issue more widely and at some things that will cost more. That is part of the debate for the future.

We all know that the deficit needs to be cut, as the hon. Member for Weston-super-Mare openly acknowledged, yet it is incumbent on us all to look at the long term; in this House, we have to be visionary, and this debate gives us chance to do so, and to look at how we can secure a better future, using our resources for future generations.

I respectfully point out that, like many people, I have opposed the severity of Government cuts. I have met people in my office who have come for help and thought that they were deserving of benefits, but those have become harder and harder to get. I am sometimes overwhelmed by the cases I come across. It is very hard as an elected representative, no matter which party Members belong to and whatever their views, not to become perturbed and emotional about those cases. When I see people who should be on benefits, whose medical conditions are being made 10 times worse because there is no alternative than to work, I think, “No, we cannot sustain the cuts.” I stand by that belief. I stand by the fact that our front-line medical staff and emergency services need investment to sustain services. I stand by the belief that we need an Army that is capable of dealing with international commitments. All those things need to be in place.

Achieving all that and still cutting the deficit is incredibly hard to imagine, yet it can and must be done. Looking at the situation and saying that we need to invest in our future with a portion of the money is even more difficult, and that is why we are having this debate. Perhaps the national insurance contributions that the hon. Member for Ross, Skye and Lochaber referred to can kick-start the fund.

We expect people to budget with their money at home in exactly the same way. People must pay for a secure home with a mortgage, which should be paid off in some 30 years of work. People must pay their tax and national insurance to ensure healthcare and future security. On top of that, we ask people to pay into a compulsory private pension fund set up by their employer, and they must then live off the returns from that money. That is what we all must do in this place: we must keep all the balls in the air, as we expect our constituents to, while living a normal life. We must pay our mortgage—the deficit—at a rate that enables us to meet the rest of our obligations. Many young couples out there would love a 15-year mortgage, but it is not possible to pay that and live daily. As my mother says, “You cut your cloth to suit your needs.” We must pay off what we can afford to, and continue to spend money on what we must not neglect.

The hon. Member for Weston-super-Mare said in his paper on the sovereign wealth fund:

“We can and should start doing this immediately, because it is the only kind of Government spending which can justifiably be paid for with long term debt. It will inevitably mean a slightly longer wait to eliminate the Government deficit and achieve a balanced budget, but should earn a good financial return through higher economic growth nonetheless.”

I agree, and we should consider that. It is a difficult, but not impossible, task. We are elected to take difficult decisions in this House and to ensure that they are the right ones. That is why this debate is so helpful.

At the very least, the proposals merit full Government scrutiny and consideration. A committee should be set up to do this work and to see how the Government can invest now to help future generations. I think of Katie and Mia, my wee granddaughters—most of us probably have grandchildren—and I would give them the world, if only it were mine to give them. We would all do that for our children and grandchildren. We have an obligation to the generations ahead to do the right thing, to make the tough choices now and to secure a better future for them than seems to be on the horizon. The work needs to be done, and the hon. Gentleman has started it with this debate. We now need seriously to consider in this place how to do that. The Minister will lead on this issue, so there is no pressure on him whatever. We look to him genuinely and seriously for guidance on how best we can fulfil our obligations as MPs, and—I do not mean to sound like Trump—on how to make sure that we keep Great Britain great.

Shale Wealth Fund

Jim Shannon Excerpts

Monday 21st November 2016 Commons Chamber

[Caroline Flint]

The hon. Gentleman makes a good point. From what I understand of the places where shale gas could be recovered, it is an open question as to how much could be received in revenue. There may be difficulties in getting the gas out of the ground: it might be under the ground, but we might not be able to recover it all. It is an open question. At the moment, it is too early to know just how much could be gained. Now is the time to think about the principles for such a fund and about how we can ensure that it is not frittered away across Government on different schemes so that, at the end of the day, we cannot really see the power of good that it has provided for the nation.

As I said, the Norwegian wealth fund was quite amazing in how it was put together. First, the Norwegian Government said that they could draw down only 4% of the fund each year to spend, but March this year was the first time that they drew down 4%, and that is despite the fact that the fund was worth $890 billion. Secondly, they invested for the long term. The oil fund is Norway’s pension fund. We do not know exactly how much the shale wealth fund will generate, but it is forecast to generate £1 billion over 25 years, which is a considerable sum to put to good use, and it may be more.

To create a defined wealth fund is a start. The Government’s intention is that it should be a fund that is clearly separate from the general revenue pot. A further lesson would be to follow the Norway example and use the fund for a specific purpose. I am talking about one that everyone could see the point of—a big picture idea, with an impact that can be clearly seen.

Norway looked forward to a day when it no longer depended on oil. We could look forward to a day when we are not dependent on fossil fuels by reducing our long-term energy use. Energy efficiency in this country is at a crossroads, as existing programmes end or decline. As shadow Energy Secretary, I raised serious concerns about the coalition Government’s flagship proposal, the green deal. We were sceptical about how it would work. It lasted two years before it was scrapped.

I am a member of the Public Accounts Committee and we recently revisited the coalition Government’s household efficiency schemes. The Department of Energy and Climate Change’s financial model depended on large numbers of households taking out a green deal loan. The Government projected around 3.5 million green deals, yet a tiny 14,000 households signed up. That was bad policy making and, sadly, it wasted taxpayers’ money.

[Jim Shannon (Strangford) (DUP)]

The Prime Minister has indicated that 10% of tax revenue could be used for communities, which could amount to up to £10 million per eligible community. Does the right hon. Lady think that new infrastructure, skills training and long-term job opportunity could benefit each and every community?

[Caroline Flint]

Absolutely. The great thing about energy efficiency is that it has a multiplier effect. It not only makes our homes warmer and reduces bills, but creates jobs and encourages innovation, too. Although it will be a national fund, the delivery should be at a local level, and the leadership should be held regionally within our communities across the UK.

One bad scheme such as the green deal does not mean that we should give up. With the green deal gone, and the energy company obligation soon to exist solely to tackle fuel poverty, we need to be asking serious questions about how to move forward on energy efficiency. We know, because the Competition and Markets Authority told us, that 70% of bill payers are paying over the odds for their energy and even if the latest Ofgem measures are introduced, they will reduce bills for only a few. It is very likely that, even by 2020, we will still be talking about energy bills that are as high, if not higher, than they were in 2010. I am sure the Minister would agree that the cheapest energy is the energy that we do not use. A shale wealth fund could provide an opportunity to enhance a large-scale retrofit of the UK’s housing stock, protecting households from future energy price rises. The fund should not be the only programme for energy efficiency, but it would provide a new means beyond passporting the cost to the general bill payer.

For a moment, let us consider the future if we do not make energy efficiency a priority. Quite rightly, the UK has ambitious and legally binding emissions targets, and we shall have to meet those targets, with 80% of the UK built environment still existing in 2050. The UK building stock is a long way from the low-energy housing stock that the UK will need, and the challenge is still huge. The Government’s own figures for 2015 show that, overall, their largest energy efficiency scheme, ECO, installed one or more measures in around 5% of homes. Some 320,000 homes had cavity wall insulation installed, 230,000 had new loft insulation, and 50,000 had solid wall insulation fitted. Yet of the 620,000 green deal assessments, 89% of those homes were rated as D, E, F or G. There is a long, long way to go.

There is a huge job that needs to be done, and for whatever reason—poorly directed funding or lack of profitability—the hard-to-treat properties have been substantially ignored. Many of the easiest measures have been undertaken first. Now Britain needs to finish the job. An energy efficiency dedicated shale wealth fund could be a hugely positive step, and I am not alone in suggesting this. Neil Marshall, chief executive of the National Insulation Association, commented:

“There are still some 5 million cavity walls, 7 million solid walls and 7 million lofts that need insulating and therefore we welcome this proposal. Insulating these homes will combat fuel poverty and climate change as well as reducing energy bills and creating jobs.”

The association rightly identifies the fact that many homes have yet to be adequately insulated, including 95% of homes with solid walls.

Finance Bill

Jim Shannon Excerpts

Tuesday 6th September 2016 Commons Chamber

[Mark Durkan (Foyle) (SDLP)]

I have a couple of questions about Government new clause 9, which relates specifically to Northern Ireland and the tax treatment of supplementary welfare payments that might be made there, but before I come on to that I want to acknowledge some of the other amendments before us.

The hon. Members for Stalybridge and Hyde (Jonathan Reynolds) and for Wolverhampton South West (Rob Marris) spoke persuasively about amendment 141. The question that arises is: why would the Government and Parliament not do what is proposed in that amendment?

Similarly, on new clause 19, which was tabled by the hon. Member for Ilford North (Wes Streeting), it is hugely important that this Parliament is in the business of making sure that there is transparency in our debates. Yesterday, the emphasis was on making sure that there was transparency in the tax affairs of companies. We as a Parliament should insist that we show full transparency in our intent on tax policy and taxation measures.

New clause 19 would take us back to having transparency on the anticipated impact of taxation on families and households of different incomes. There would also be an analysis later in the year of what the impact of particular tax policies and the cumulative impact of various tax policies had been. Surely that is what we should all be in the business of doing when we go through the complicated and confusing exercise of having the various stages of Budget debates here. One thing we all value is knowing what the impact of what we are talking about will be.

I was in this House when a Labour Government adopted a misguided Budget measure in respect of the 10p tax band. A number of Labour Members raised the alarm and said that there would be an adverse impact on people of low income. The Government briefed heavily that that was nonsense and people were marched through the Lobbies. Similarly, we had the recent experience of the proposed changes to working tax credit. People were celebrating the changes and thought they were wonderful, having believed the Chancellor’s spin. Thankfully, not only Opposition Members but Conservative Members raised real and practical concerns about what the impact would be.

Why would it be wrong to follow new clause 19 and ensure that in all our Budget deliberations in future there is an effort to have a properly appraised impact assessment for taxation measures? That would allow us to answer not the question that is usually asked immediately after a Budget, which is what credit particular MPs or Ministers should get for what measures—that is not really what a Budget is about—but that of who gets the benefit in terms of fairness, social equity and the efficiency of economic impact that that induces. For those reasons, I fully support new clause 19.

Similarly, many hon. Members have made the case for new clause 15. Many of them have made the straightforward point that it would be almost perverse for the Government to refuse a new clause that would preclude an increase in VAT on the installation of energy-saving materials. I know the Government will say that it is otiose because they have no intention of increasing it, but over the past few years, we have experienced the Government adopting a series of perverse measures that have confounded the underlying policy commitments in respect of the green economy, renewables and energy efficiency. Given that the Government have introduced so many measures that have had a perverse effect on that sector and an adverse impact on households, it makes sense to have the belt and braces of new clause 15. I cannot see what is wrong with that.

I also note in passing—and at the risk of another voice-activated intervention—that when the right hon. Member for Wokingham (John Redwood) sought to contradict the Financial Secretary’s earlier comments, he cited what he thought was a point of clarity in the Brexit Secretary’s performance yesterday. He is the first Member to have offered me any point of clarity from that performance, which I thought demonstrated the new Secretary of State’s wish to be the first Minister to fulfil the new Government policy on environmental sensitivity, given that he treated us to more than two hours of cosmetics without a single microbead of substance.

The lead measure in this group, new clause 9, refers specifically to Northern Ireland. It deals with the ability there will be for the Northern Ireland Assembly to make additional supplementary payments as mitigation measures to offset some of the impact of the welfare reform measures now being imposed by direct rule from this House, courtesy of the so-called “Fresh Start” agreement. My party expressed our misgivings about and opposition to that overall arrangement, with regard to direct rule powers and the imposition of the effects of welfare reform legislation on Northern Ireland. However, we have long canvassed for mitigation and supplementary payments, and established that case with the Department for Work and Pensions early in 2012.

The one concern people will have about new clause 9 is with the language used. Although in the new clause the Government clearly provide for the Treasury to ensure that

“no liability to income tax arises on supplementary welfare payments of a specified description”

they also allow the Treasury to make regulations to

“impose a charge to income tax under Part 10 of ITEPA 2003 on payments of a specified description”.

The power is there to make sure that the Treasury does not activate a tax liability on supplementary payments that have been discussed and voted through by the Assembly but there also seems to be a power to subject some of those payments to tax.

I wonder why the Treasury feels the need to have that reserve power to impose a tax liability on such payments. We should remember that those payments will be made out of the Executive’s own resources in the devolved budget, because they come out of the departmental expenditure limit for the Assembly. The payments will not come under annually managed expenditure.

Why is that power there? Many people will be concerned that the Treasury will attempt to insinuate itself into any debate among Executive or Assembly parties about what measures they should adopt in mitigation of welfare reform by saying that it may subject some of those measures to a tax clawback. That is clear from subsection (3) of the new clause, and also from looking at subsection (4), which will permit the Treasury’s regulations to

“make…different provision for different cases…incidental or supplementary provision”

or “consequential provision”. That differential raises the question of why we want to reserve the power to impose tax on measures that the Executive or Assembly seek to bring forward and why the Treasury should be able to do so differently on a case-by-case basis, as that will give rise to arguments about inequity and capricious performance. The suspicion is that the Treasury sought to answer the stand-off on welfare reform in the Northern Ireland Assembly. The Assembly would not discharge the karaoke legislation it was being asked to pass in relation to welfare reform. The Treasury intervened by saying, “If you don’t pass it, we will effectively tax your devolved budget to the tune of what we estimate you would be overspending on welfare.” The Treasury insinuated itself into what should have been a debate for the devolved Assembly.

The danger is that now, even in the area of the mitigating powers—the supplementary payments the Assembly will be able to offer, as provided for in the “Fresh Start” agreement—the Treasury could, in the language of the new clause, insinuate itself in the choices and consideration undertaken by the Executive and Assembly. The Treasury’s past form shows that it has not resisted the temptation to insinuate itself. I therefore want assurance from the Financial Secretary that this language will not be there to give the Treasury the right to interfere in the choices that may be made by Ministers and Committees in the Assembly in respect of the supplementary payments they would be allowed to bring forward.

[Jim Shannon (Strangford) (DUP)]

I commend all hon. Members who have made very valuable contributions, in particular the hon. Member for Enfield, Southgate (Mr Burrowes). He is no longer in his place, but I would like to speak to his presentation on new clause 3. He set out clearly where we stand.

I want to put on record again the consistent support of the Democratic Unionist party for the provision of the transferable allowance for married couples. I remember the hon. Member for Congleton (Fiona Bruce) and I taking some verbal attacks in this Chamber—mostly from the Opposition Benches, I have to say—for our stance on this issue, but we persevered and the Government persevered. I thank the Government for bringing in the provision in their previous term. I had hoped there would have been some indication that the Government could support new clause 3. I understand, after talking to the hon. Member for Enfield, Southgate, that he will not press it to a Division. If that is the case, we have to abide by that.

The sadness for me is that the Government have, until today, chosen to invest the lion’s share of their resources in their other income tax policy of raising the personal allowance. It is undoubtedly true that that policy helps poorer families, but it is very badly targeted. If I may say so in a respectful way, it seems to be targeted at those who can well afford it, as against those who cannot. I have to put on record that I have some concerns about that. The Institute for Fiscal Studies has demonstrated that 75% of the benefit—and now, as the allowance is being raised from £10,000 to £12,500, even more than 75% of the benefit—goes to those in the top half of the income distribution. That is what the available statistics and charts indicate and I have to say they are very stark. They indicate an imbalance in the system that, as the hon. Gentleman clearly stated, is a concern.

[Fiona Bruce]

There is another imbalance in the system. I do not know whether the hon. Gentleman is aware that the married couple’s allowance, which provides support to married couples where at least one spouse was born before April 1935, is worth £8,355 a year. Should we not also be looking at providing for those families with young children who are in the lowest socioeconomic bracket and supporting them similarly?

[Jim Shannon]

I could not agree more and I would like to make a comment on that later. New clause 3 clearly outlines the importance of that, but unfortunately we do not have the opportunity to support it today. I am sure the Minister, who knows I respect her greatly, will be able to respond to some of our concerns.

The IFS has demonstrated that, in contrast to the personal allowance, the transferable allowance results in 70% of the benefit going to those in the bottom half of the income distribution. The problem is that so far this has received only symbolic recognition. That has had two effects. First, the fundamental marriage accessibility challenge has not really been addressed, which is a massive issue given the impact on life chances of being brought up in a married home compared with a non-married home. Secondly, the very limited symbolic recognition has translated into low take-up. Given the distributional impact of the two tax policies and the impact of the transferable allowance on life chances, I have to say that if the Government are to have one symbolic policy and one substantive policy, they have got it the wrong way around. I say that with great respect. It would have been wiser to focus investment on the transferable allowance rather than redistribute billions to those in the top half of the income scale by raising personal allowances. I believe that we urgently need to change that. If the allowance cannot be made generally available to basic rate married couples, it should be focused, as the hon. Member for Congleton said, on families with children under five.

--- Later in debate ---

[Fiona Bruce]

Is the hon. Gentleman aware that the highest levels of marriage breakdown occur when children are aged between nought and three? We are looking to support marriage at just that moment of greatest strain.

[Jim Shannon]

As always, the hon. Lady is wise in her interventions. I thank her for what she said, which underlines other important issues. If we can help at that critical time when the pressure is on, I believe that this House should do so. I hope that the Minister will do so, too, in her response.

The impact of the allowance on low-income households also needs to be addressed, as new clause 3 proposes. I hope we can do that at the right time. The new clause refers finally to

“ways in which the allowance could be changed to target low-income families with young children.”

Those points clearly illustrate for me what is necessary in this Bill, although the provisions may not be as hard and fast as I would like them to be.

Let me conclude; I am conscious of the time. In the longer term, there is a pressing need to adopt a more balanced approach to the resourcing of raising the personal allowance and increasing the transferable allowance. I fully support the transferable allowance and I would have hoped that the Government could commit themselves to it. Speaking as someone committed to progressive tax policy which targets those in the lower half of the income distribution scales rather than those in the top half, if the proposal means less money going to the personal allowance, in my judgment and, I believe, in the judgment of many in this House, that would be no bad thing.

[Rebecca Long Bailey]

I wish to speak to new clauses 15 and 19, and amendments 141 and 180 to 182, which were tabled in my name and those of my hon. Friends. I shall also touch on a few of the other amendments and new clauses in the group, which has turned into a bit of a rag-bag of issues.

New clause 15 relates to VAT on energy-saving materials. The new clause would prohibit the making of any order that would have the effect of raising the rate of VAT on the installation of energy-saving materials or any individual category thereof. In short, it would prevent the Government from implementing their planned hike in VAT through secondary legislation.

For hon. Members who might have forgotten the background, let me briefly recap how our ability to debate this amendment today came about. Amid the fallout from the so-called “ultra-shambles” Budget, the Government were forced to become the first in history, so far as I am aware, to accept an Opposition amendment to their Budget. It was designed to block the Government’s planned 300% increase in VAT on solar panels and energy-saving materials—essentially a green energy tax hike. The solar tax alone would add £1,000 to the cost of a household solar energy installation, punishing those who are trying to do the right thing and do their bit to halt climate change. It would also put at risk thousands of jobs in an industry that is already expected to experience up to 18,700 job losses, as was conceded by the former Energy Secretary, and this tax raid would have caused even more damage. For those reasons, we tabled an amendment to the Budget to enable the Chancellor to use the Finance Bill to maintain the current rate of VAT on green energy and home insulation.

The Government initially claimed that a European Court ruling prevented them from stopping the tax hike, although it was apparent that they had failed to negotiate at European level to protect the renewables industry. None the less, the industry made very clear that there was room, even within the ruling, to avoid the drastic measures that they were planning to impose. When that led to a significant number of Conservative Members adding their weight to calls from Opposition Members, it appeared that the Government would be defeated on the issue. Ministers initially backed down, claiming that what we were proposing had been their position all along, only to avoid making such a commitment when pressed during Treasury questions and, just a few weeks later, during questions to the Secretary of State for the now abolished Department of Energy and Climate Change.

That is not surprising, given the Government’s abysmal failure to provide any kind of certainty for the renewable energy sector in the United Kingdom. Over the past six years, they have consistently undermined support by, for instance, cutting the feed-in tariff by 64%, scrapping tax relief for clean energy projects, and removing subsidies for new onshore wind farms. The £1 billion for investment in carbon capture and storage has also been scrapped. At the same time, safeguards to reduce the environmental risks posed by fracking have been stripped away, and fracking under national parks has been given the go-ahead. The executive director of Greenpeace UK put it succinctly recently, saying:

“A tax hike on solar panels was just the latest addition to a litany of poor decisions”.

He also said that the Government should accept that they had

“a reverse Midas touch on energy investment”.

This would be an opportune time for the new Chancellor and his team to signal a change of direction by accepting our new clause, but I fear that, given the abolition of the Department of Energy and Climate Change, the Conservative party’s husky-hugging days are long gone. I am pleased, however, that the Government have finally seen fit to publish the report by the Committee on Climate Change on the compatibility of UK onshore petroleum with meeting the UK’s carbon budgets. I can see now why they sat on it for four months.

The report states:

“Our assessment is…that onshore petroleum extraction on a significant scale is not compatible with UK climate targets”.

That, it says, will remain the case unless three key tests are met: first,

“Well development, production and decommissioning emissions must be strictly limited”;

secondly,

“gas consumption must remain in line with carbon budgets requirements”;

and thirdly, the report specifies the importance of

“Accommodating shale gas production emissions within carbon budgets.”

Does the Minister agree, therefore, that tighter safeguards in fracking—for which Labour consistently called during the passage of the Bill that became the Energy Act 2016 —are now absolutely necessary?

I digress. Let me conclude my remarks about new clause 15. Opposition Members want to ensure that the original solar tax U-turn is guaranteed in statute in the Finance Bill, to prevent a second U-turn. That would give the renewable energy market the certainty that it needs and deserves, and would, we hope, send a signal that the new Administration are prepared to look again at the future of the industry in a green economy. If we are to take seriously the intention of the new Ministers to rethink these fundamental issues, now is the time for them to show it.

New clause 19 was tabled by my hon. Friend the Member for Ilford North (Wes Streeting). As my hon. Friend explained so articulately, it would require the Government to review the impact of the measures in the Bill on households at different levels of income. It would also require the Chancellor to review the impact of Government fiscal measures on households at different levels of income at least once in each financial year. It is an excellent new clause, and it has the full support of the Labour Front Bench.

As I pressed on the Government earlier today in the capital gains tax debate and yesterday on corporation tax, this Bill has unfairness at its very core. The reduction in CGT alone amounts to a tax giveaway to 200,000 people—just 0.3% of the population—of around £3,000 a year on average. Clearly this Government conduct no distributional analysis of the measures they introduce, or if they do the results are so bad that they do not publish them. This amendment would force the Government to publish such analysis, and therefore I am pleased to have heard the Minister’s earlier comments; it seems that the Government are seriously considering this matter and I hope she takes it forward.

Amendments 180 to 182 specify that the chair and tax director of the OTS would be appointed and terminated only with the consent of the Treasury Committee, in line with what happens with the Office for Budget Responsibility. A similar Labour amendment, which would have had the same effect, was debated in the Public Bill Committee, but we did not divide the Committee on it. During the course of that debate I made the point that while Labour supports establishing the OTS on a statutory footing, we feel its independence is of the utmost importance. As I am sure the Minister is aware, Labour has placed on record our concerns about the OTS potentially being used for political purposes, and ensuring that the chair and tax director is accountable to the Treasury Committee seems a sensible approach to safeguarding its impartiality. Again, I am pleased to hear today that the Minister seems to be taking our opinions and those expressed in the House today seriously.

Amendment 141 would introduce a de minimis tax exemption for residual cash balances remaining in a share incentive plan when they are donated to charity, with an upper cap of £10. This seems like an extremely sensible suggestion, and the Labour Front Bench is supportive of the amendment. I congratulate my hon. Friend the Member for Stalybridge and Hyde (Jonathan Reynolds) on tabling it and explaining it so articulately.

I shall say a few quick words on new clause 8 in the name of the hon. Members for Kirkcaldy and Cowdenbeath (Roger Mullin), for Aberdeen North (Kirsty Blackman) and for Coatbridge, Chryston and Bellshill (Philip Boswell). This new clause would require a review of how the changes to the tax on dividend income will affect directors of microbusinesses. There are some concerns, as we have heard today, that the changes to dividend taxation will have a detrimental effect on the owners of microbusinesses. Jason Kitcat, who has become quite famous today, has done some detailed analysis which shows that the dividend tax changes included in clause 5 and schedule 1 are somewhat regressive in nature. For instance, Crunch analysis shows that a limited company director paying themselves through dividends would be paying £1,528 more a year when their pre-tax profits are £48,000, whereas a director with £78,000 in pre-tax profits would only be paying £1,343 more in tax.

The Federation of Small Businesses has also stated that these measures have caused substantial disquiet among its members. This is especially acute for members on modest incomes who, unlike their employed counterparts, will now see a rise in their tax liabilities. This is very worrying and indeed makes the case for distributional analysis, referred to in relation to new clause 19, even more important. A review of the impact of these measures therefore seems quite sensible at this stage and we will support the SNP if it divides the House on this issue.

Finally, Government new clause 9 relates to the tax treatment of supplementary welfare payments in Northern Ireland. The Low Incomes Tax Reform Group has outlined some technical points for clarification on which I hope the Minister can shed some light: in essence, which payments will be taxable? The Budget said:

“Where the Northern Ireland Executive intends to top-up UK-wide benefits from within its block grant as it implements welfare reform, the Government will exempt from tax the top-up payments to non-taxable benefits.”

The implication, confirmed in the explanatory notes to the amendment, is that top-ups to taxable benefits will be taxable as well. However, if we take the payments to mitigate the impact of time-limiting contribution-based employment support allowance it seems that two situations are possible. One is that the person’s contribution-based ESA ends and they claim, or are already getting, income-related ESA. If the income-related ESA awarded is less than the person would have received through contribution-based ESA, they will receive a welfare supplementary payment to cover the difference. The second possibility is that their contribution-based ESA ends but they do not get income-related ESA, in which case the WSP will equal the full amount of the lost contribution-based ESA.

Private Finance 2/Private Finance Initiative

Jim Shannon Excerpts

Monday 5th September 2016 Commons Chamber

[Stella Creasy (Walthamstow) (Lab/Co-op)]

Most MPs can show in their constituencies where there are rotting floors, outdated buildings and potholes. Some may even have made a website about it, but the truth is that this is no laughing matter. We know that our schools in this country are falling apart, and that investment in our education buildings is 18% lower in 2014 than it was in 2009. Britain is now ranked 24th by the World Economic Forum for the quality of its infrastructure, down from 19th in 2006, and we cannot see this getting any better. Indeed, spending on infrastructure has nose-dived since Brexit.

Whatever some may say about fixing these problems, all of it has to be paid for, and Governments of all persuasions, including the previous Labour Government as well as the current Government, have used private finance to build. It is the equivalent of getting a mortgage or even remortgaging our home to pay for a new roof or an extension. Crucially in these deficit-denying times, it is seductive not only because it spreads payments for new schools, hospitals and stations and their management over decades or more, but because it keeps them off the books.

[Jim Shannon (Strangford) (DUP)]

According to a report of 2014, in Northern Ireland there were some 39 PFI projects with a staggering total cost of £7.3 billion for the maintenance and so forth. Does the hon. Lady agree that any further PFI must be an absolute last resort and indeed should only be permissible in cases of extreme need?

[Stella Creasy]

I hope to convince the hon. Gentleman that there may be many alternatives to PFI, because the question for us is: at what cost have we engaged in this borrowing? We now pay £10 billion a year in PFI repayments, equating to £3,400 for every man, woman and child in Britain. These projects are worth £57 billion, but we are committed to paying back £232 billion by 2050.

It is clear that PFI has addressed some of the project management issues we had in the public sector that made it so bad at building. As the National Audit Office highlights, it has dramatically cut late delivery of projects and overspending on buildings, but as the Treasury Committee points out, it is “sub-optimal value for money”.

One hospital was charged £52,000 to demolish a £750 shelter for smokers, and a school had to pay £302 for a plug socket to be replaced, five times the cost of the equipment it wanted to plug into it. In my constituency of Walthamstow, we have seen first-hand the damage done. My local hospital, Whipps Cross, is part of the Barts health foundation, which has the largest UK PFI deal, at £1.1 billion. By 2049 the amount paid back will be £7 billion. Last year alone the trust shelled out £148 million, equivalent to the salaries of 6,000 nurses, of which half was the interest paid on the loan. Its deficit of £90 million has led managers to downgrade nursing posts. It is little wonder the Care Quality Commission placed my local hospital into special measures as the quality of care declined.

The Minister will, I have no doubt, say his Government have reviewed PFI and made cuts to the costs, renegotiating to buy fewer lightbulbs and to do less cleaning, saving us a whole £1.6 billion out of about £220 billion, but as the NAO has pointed out, no one has really considered whether private finance itself is value for money.

Tonight I want to ask three simple questions: whether the terms of PFI—the rates we pay to borrow this way—are the best we as taxpayers can get to build schools and hospitals; whether even now we can save money on the costly deals that have been signed by Governments of all persuasions, and which are draining our public services of much-needed money; and above all whether the Government are doing enough to secure the competition for our business as taxpayers.

Of course it is hard to answer those questions without the data on what we are paying. I know that the Government do not have those data, because I have asked. I tried asking all the hospitals around the country what rate they were paying, because on 8 February this year Treasury Ministers told me that they do not hold those data centrally. Most NHS trusts refused to disclose the information, claiming that it was commercially sensitive, but those that did were very revealing. Their data showed that, in December 1994 under John Major’s Government, two PFIs in Durham—one for the Dryburn district hospital and one for the Bishop Auckland general hospital—had rates of return of 15% and 18% respectively. In comparison, the 10-year gilt rate was just over 8% at the time. In December 2002, the Crosshouse maternity hospital in Kilmarnock was rated at 16%, while a month later Edmonton acute services were rated at 14%. The gilt rate was 4.6% at that time. In March 2010, the Leeds Wellbeing Centre offered a return of 14% and the Liverpool University hospital redevelopment offered 11%. The long-term gilt rate was then 4.2%.

Some people will argue that we cannot make a direct comparison with gilt rates, so let me flag up the fact that equity returns on the stock market have averaged between 5% and 6% per annum over the past 30 years. It is therefore clear that PFI investors got a great rate, and that was no accident. Critically, research from Edinburgh University shows that these rates do not vary as other premiums do in our financial markets, and that they stay well above the cost of other forms of funding. So public bodies might know full well that the premiums are high, but if that is the return that the market expects for managing the projects and there is no alternative, there is not much they can do without the Government’s help.

I should also point out that those are the rates for when the contracts were signed. As we now know, much profit has been made by selling the debts on. The South London Healthcare NHS Trust, which collapsed, had two large PFI contracts, one of which was offering investors annual returns of 71%. Most PFI contracts were let on an expectation of an already high rate of return of 15% to 17%, but refinancing has seen some returns to investors rise to over 70%.

In 2007, a new standard contract clause was created to allow authorities to request this financial information in order to track the returns that investors were creating. However, there is little evidence that the clause has been used or even that the Government have promoted it, so it is hard for us to see just how much taxpayers’ money is being recycled into higher payments for investment funds rather than into infrastructure for the UK. Again, no central database exists.

We might not know what we are paying, but we do know who we are paying, and it is often the same companies, with 45% of projects funded by the same people. Firms such as Dalmore Capital, Semperian, Kajima, Innisfree and Barclays crop up time and again, and they often invest together too. This dominance by a small group of companies matters because this Government are continuing to use their services in their proposed replacement for PFI, known as PF2. PF2 separates out the service element—the building management—from the capital, which involves the building of the project. So far, so good. Those lightbulbs might be replaced after all, if their cost is not connected to the cost of building the schools.

However, PF2 is supposed to attract more long-term investors by increasing the requirement for equity—the most expensive bit of the deal—potentially making it even more expensive to the public purse than PFI. It also expects us as taxpayers to take on more—not enough to be in charge of the project, but more to cover the cost. So it is not that different from PFI. It is still about us borrowing money from private companies to build things, at rates that are not transparent or competitive with the alternative sources of finance that we could raise.

Are there better ways to borrow to build? Certainly the calculations used by the Government in the Green Book to compare the cost of these deals with public spending have not made that question easier to answer. They set the value of public sector borrowing at 3.5% real and 6 % nominal since 2003, despite the cost of public borrowing being well below that for over a decade. The Treasury Select Committee has suggested that the Government review the Green Book, but it is not clear that the Government have heard that message. Will the Minister tell us whether PF2 is using the same calculations as PFI, at the very time when the cost of borrowing to the public sector is even lower? The Green Book also includes the shadow price of tax—the money that private companies will pay in tax in the UK as a result of getting this business. That money is set against the cost of borrowing from those companies to decide whether the deal is better than using public money to fund a project.

The lack of information about such projects means that the Government are simply unable to verify whether the tax presumptions are accurate. The NAO suggests not. The companies themselves continue to be sited overseas. Innisfree and Palio Partners are sited in Guernsey, and Semperian is registered in Jersey. PF2 will do nothing to tackle that or to stop the resale of shares in such deals, which make more money by taking advantage of the fact that Governments do not default. What does the Minister make of the bosses of the Sandwell and West Birmingham Hospitals NHS Trust, who admitted that they could not stop Carillion, investors in the PF2 for the Midland Metropolitan hospital, from selling on its equity investment to generate the kind of profits that we saw under PFI?

At a time when huge spending cuts are being threatened and when the NHS faces a financial shortfall of £20 billion by 2020 alone, to continue to pay inflated rates to rich investors is to continue to ignore the problems. A quarter of single-tier and county councils now spend the equivalent of 10% of their revenue on debt servicing. The answer to the first question is no; private deals are not always a good deal. We therefore need to answer a second question: if we cannot get out of them, can we renegotiate? Can we consolidate to reduce the repayments and put the savings back into front-line services? To date, sadly only Northumbria NHS Trust has done that and only at great expense to the council and with minimal savings. Imagine the savings that could have been achieved had the Government negotiated a group of the contracts with these companies at the same time. The savings in interest could be paying down debt or paying nurses and teachers properly.

We then face our final question: why are we borrowing only from these companies? Why are more companies not competing for our business as taxpayers? In the past few years, this Government have been making it harder for local government to pay down its debts. The Public Works Loan Board could use the Government’s financial strength as a borrower to secure much lower rates and then pass them on to public bodies. Instead, they changed the early repayment terms in 2007. In 2010, changes were made to loans to make it harder, not easier, for local councils to borrow efficiently.

If that does not excite Ministers, perhaps they will support an alternative in the shape of the new municipal bond agency created by local councils. The agency seeks to lend at margins of between 0.6% and 1% over the underlying Government funding rate. Currently, if a council wants to borrow money for 30 years from the Public Works Loan Board, it will charge just over 2%. In contrast to the complexity of PFI or PF2, municipal bonds are simple and transparent. Bonds are issued to the market to raise funds and local government lending is at a fixed rate.

The Government could make pensions funds more likely to invest in partnerships with Government by being more transparent about the deals and the returns to be made. The current Pensions Infrastructure Platform has led to such companies buying old PFI debt, but that can change. The Manchester and London local government pension funds have recently acted together to invest in windfarms and biomass, so there is clearly a market. With Government support, that could be the basis for a UK sovereign wealth fund—the people’s money used for the people’s projects. The sad truth, however, is that no such innovations are coming from this House or the Treasury, so why are we throwing good money after bad trying to make private finance initiatives work? With a Prime Minister who has pledged to put infrastructure investment at the heart of post-Brexit economy, Britain cannot afford to keep making expensive mistakes.

I have five simple questions for the Minister. First, will he commit to publishing the rates at which public agencies are borrowing so we can have greater transparency of the costs incurred to the taxpayer and so that we can check whether, as many fear, PF2 will be more expensive than PFI? When will the Government publish the equity returns data, promised since last year, on the PF2 deals? Secondly, is the minister not perturbed by the relationships between a small group of institutional investors in these deals and the lack of competition for taxpayers’ business? If so, will he ask the Competition and Markets Authority, which acts on the behalf of consumers—as taxpayers, we are consumers—to review the sector and explore whether barriers to new entrants exist? Thirdly, will the Government help public bodies saddled with PFI and PF2 contracts to renegotiate debts and get the costs down to save money for front-line services? Fourthly, will the Government rewrite the Green Book to reflect the real costs and benefits of public borrowing versus private borrowing? Fifthly, what does he make of the new Eurostat rules published in March that consider the equity stakes that the Government intend us to take out under PF2 to be direct financing, meaning that they should be on the books? Does that not undermine the point of PF2 in the first place?

Finally, how will the Minister stop money simply going overseas into tax havens and into higher profits for private companies, not public services for the people? As things stand, 46 schools, and many more hospitals, will be built using £700 million of that PF2 control total, at a time when borrowing is at an exceptionally low cost for government. Do not take my word for that. Instead, take the word of Leo Quinn, the chief executive of Balfour Beatty, who recently said that “money is effectively free”. There is no excuse not to act, to tackle the costs of existing PFI contracts and the lack of competition for our business as taxpayers, so that we can really get value for money and so that instead of injecting our cash into profits for private companies overseas, we can inject our money into the kind of projects that will get Britain’s economy and Britain’s people back into business.

Summer Adjournment

Jim Shannon Excerpts

Thursday 21st July 2016 Commons Chamber

[Jim Shannon (Strangford) (DUP)]

I welcome the Deputy Leader of the House to his new position and wish him well for the times ahead. We look forward to working with him and speaking to him on many issues.

I am going to bring something completely different to the House on this occasion. I want to speak about some of the history of Northern Ireland and, in particular, the Loyal Orders, and one of those especially. Those not associated with the Loyal Orders will immediately think of the Orange Order, and as it is the largest fraternal Protestant association in the world, that is understandable. However, there is more to the Loyal Orders than meets the eye. We have other associations, some linked to and some not linked to the Orange Order. The Loyal Order that I wish to speak about in order to enlighten Members and anyone watching about its illustrious and too often unknown history is the Apprentice Boys of Derry, of which I am a member and have been for 39 years. I am also a member of the Orange Order and of the Royal Black Preceptory.

The Apprentice Boys of Derry is not linked to the Orange Order. However, membership overlaps, as indeed it does in my case. The Apprentice Boys of Derry has a membership of some 10,000 in Northern Ireland, Scotland, the Republic of Ireland, England and Canada, with supporters and affiliates in many other Commonwealth countries. The institution seeks to commemorate and celebrate the siege of Derry, recognised as the longest siege in British military history. It goes back to the Glorious Revolution. It is called the Glorious Revolution because, as many people know, it was a rather bloodless revolution. In that revolution James II was ousted from power by Parliament in 1688, and Parliament subsequently offered the English throne to James’s daughter Mary and her husband, William of Orange. In Scotland, the then ruling body, the Privy Council, asked William to assume responsibility for the Government in January 1688, and in March that year King William and Mary assumed the throne.

The different situation across the Irish sea is what ultimately led to the siege of Derry, the creation of the Apprentice Boys of Derry and the famous battle of the Boyne. In November 1688, there were two garrisons in Ulster that were not loyal to James. They were Enniskillen and, of course, Londonderry. I listened with interest to the hon. Member for Stirling (Steven Paterson), who referred to the gillies. He said they were small in stature, but when the Earl of Antrim was trying to recruit some soldiers, he went to Scotland because he wanted men who were six feet-plus. He managed to get a force from Scotland, the Scottish Highlander Redshanks, who set off for Derry. On their way they made sure to strike fear into the hearts and minds of the resistance by being merciless to any opposition.

On 7 December 1688, as the King’s forces approached the city of Derry, they were met not with the welcome that they expected, but with shots and cries of “No surrender”. The Brave Thirteen, the 13 apprentice boys, as they were, are one of the central pillars of symbolism and significance within the institution to this day. In April 1689 hope arrived, in the form of reinforcements from England led by Colonel Cunningham, a native of the maiden city. The governor of that city, Lieutenant Colonel Robert Lundy, called a meeting with his most loyal supporters to discuss the surrender of the city. News of the meeting spread, however, and the citizens were furious. Lundy had to flee the city in disguise with his supporters. The impact of Lundy’s betrayal is that Unionists and loyalists across Ulster and in Scotland to this day refer to a perceived traitor as a “Lundy”. His name went down in history for the wrong reason.

On 18 April the Jacobite army reached the city, expecting the inhabitants to be overwhelmed by the presence of the king and to admit them to the city. James repeated his attempt to enter the city three times, but on each occasion he was refused with cries again of “No surrender” and with many shots. Hamilton’s forces on behalf of King James rounded up hundreds of Protestants from nearby villages, proclaiming “Let your fellow Protestants in or let them die.” The act horrified King James himself, because he had given no instruction for that to happen and in no way approved.

On 28 July two armed merchant ships, the Mountjoy and the Phoenix, sailed towards a boom protected by HMS Dartmouth. The Mountjoy rammed and breached the boom and the ships moved in and relieved the city. After 105 days the siege was over, with some 8,000 of the 30,000 inhabitants dead. The Mountjoy, like those who oversaw the siege, has become iconic in the remembrance of the siege in the Apprentice Boys and in wider loyalist and Unionist circles. Today, the siege is commemorated by the Apprentice Boys of Derry, named after the Brave Thirteen.

We have in Londonderry a week-long Maiden City festival, which culminates in a parade around the city by members of the Apprentice Boys of Derry. Our colours are crimson red, commemorating the blood of the 8,000 who died in those battles. The institution is now widely commended for how it conducts parades, which have been peaceful and successful over the years. The parade this year will be on the second Saturday of August, which is 13 August.

What is good about the parade is not just the history, but the fact that this is the one place in Northern Ireland—well, there are lots of places in Northern Ireland—where there was contention before, and now there is not. The agreement to parade in the city of Londonderry is a catalyst for other parts of the Province to have a loyalist parade in a mainly nationalist city and to have the tolerance that is needed to make that happen. If Members want an example of how things can happen in Northern Ireland, that is the example I would give, and that is why I wanted to speak about it today.

The parade has become a tourist attraction for many people. People from Northern Ireland, from the Republic and from across the world come to watch the historical enactment that takes place on that day, and I would like to commend the Apprentice Boys of Derry for all they have done to make that happen.

In conclusion, Madam Deputy Speaker, I would like to thank you, the other Deputy Speakers and the Speaker of the House for your kindness to all right hon. and hon. Members in giving us a chance to participate in debates in this Chamber. I would also like to thank the Backbench Business Committee, which also makes it possible for us to come here and speak in debates. I am told I have a season ticket for the Backbench Business Committee, and whether I have or not, I am very pleased to participate in the debates in this Chamber and in Westminster Hall. I thank the House staff for all their kindness to us, and I thank the Hansard staff, who have told me they can now understand my accent and my writing, and they do not need any more help with what it should say. I thank the people of Strangford for giving me the privilege of representing them in the wonderful political and democratic institution we have here in the House of Commons. It is a pleasure to be here, it is a pleasure to represent Strangford and it is a pleasure to have so many friends in this Chamber.

Centenary of the Battle of the Somme

Jim Shannon Excerpts

Wednesday 29th June 2016 Commons Chamber

[Jim Shannon (Strangford) (DUP)]

It is a pleasure to contribute on this issue. As the hon. Member for South West Wiltshire (Dr Murrison) clearly outlined in his introduction, in the Province of Ulster or Northern Ireland as it is now, we remember with great pride the courage of our forefathers at the Battle of the Somme. I would also like to thank the hon. Gentleman for the overseeing work that he has done for the whole of the United Kingdom in the commemorations for the first world war.

My right hon. Friend the Member for Lagan Valley (Sir Jeffrey M. Donaldson) is not in his place, but it is only fair to put on record on behalf of the MPs and the people of Northern Ireland our recognition of the energy, drive and leadership of my right hon. Friend as the chairman of the Northern Ireland First World War Centenary Committee. Many events taking place today are happening because of his leadership. He would always say that it was due to those around him, but the fact of the matter is that he is the Michael O’Neill of this first world war commemorative committee.

It would be remiss of me not to mention the hon. Member for Beckenham (Bob Stewart). I want to put it on the record that he spoke most gallantly. We in Northern Ireland want to thank him very much for his courage, his leadership and heroics. He will not take it lightly, but we mean it. I thank him for all he did in uniform for Northern Ireland and for helping to make it a better place today. I thank him so much for that, which is something I have always wanted to say publicly in this Chamber; it is only right that we should do so.

As the diktat of home rule loomed, Ulstermen and women organised their resistance. From 1910, the leadership of the Ulster Unionist Council had been persuading the Dubliner, Edward Carson, to become their leader. In 1911, he wrote to James Craig that in return for his leadership he wanted to satisfy himself that the people really meant to resist:

“I am not for a game of bluff and, unless men are prepared to make great sacrifices which they clearly understand, the talk of resistance is useless.”

Under the leadership of famous Lord Carson among many others, Ulster stood up and backed up her defiance with a willingness to fight. Up to half a million signed the Ulster covenant, signalling their intent to resist home rule by all means necessary, and over 100,000 signed up to join the Ulster Volunteers, should such means of resistance become necessary.

From where I am from in Strangford, I can see the Helen’s Tower where the 36th (Ulster) Division trained. It is always good to remember that. Just three weeks ago, the Orange institution of which I am proud to be a member in the fourth district of Newtownards paraded on the same route that the men marched down after their training at Helen’s Tower before they went off to Newtownards to catch the train to go to fight in the first world war and the Battle of the Somme. Wearing a different hat as a mayor back in 1991 and ’92, I had the opportunity to visit the Somme, and I will always remember the youth of those who died so clearly for a cause, as they did.

At a rally in the Ulster Hall, Fred Crawford, who had been keen on obtaining arms to challenge home rule from the mid-1890s, stated:

“I predict that Home Rule will never be killed until we show any British Government which brings it forward that we will resist to the death, even with arms if necessary”.

But soon, a foe beyond our shores would raise its head. This is pertinent to last week when the Ulster boys were making all the noise at the Euros; 100 years ago, our boys were sent off to France. Without fear, reservation or doubt and with no uncertainty in their conviction, our boys went off to fight for King, country and empire. Their presence alone turned heads before a shot was even fired.

In July 1915, the division moved to Seaford on the Sussex coast of England. This was the first time that many of the men had been outside their native land. Lord Kitchener inspected the division there on 27 July 1915, and later remarked to Carson:

“Your Division of Ulstermen is the finest I have yet seen.”

Off to France our 36th Ulster Division went—and in the finest spirit and as finely trained as they could be.

In March 1916, the sector of the front held by the Ulster Division was extended to cover an area south of the river called Thiepval wood. This wood, the name of which would become indelibly linked to the Province of Ulster, served as a base until the commencement of the Battle of the Somme on 1 July 1916. Thiepval comprised an area of some 100 acres of deciduous forest and was criss-crossed with deep communication trenches leading to the front line. Dugouts were excavated from the chalky earth and provided some shelter from the German artillery.

Food stores and ammunition dumps were also constructed in the wood, and it was near one of those dumps, on the morning of 1 July, that Rifleman William McFadzean, of the 14th Royal Irish Rifles (Young Citizen Volunteers), won immortal fame when he was awarded a posthumous Victoria Cross for an act of courageous self-sacrifice. Last Saturday, in my constituency, we unveiled a new commemoration garden and a new monument to the 36th (Ulster) Division, 100 years after the event, and we mentioned the four VCs that were won by members of that division.

Thiepval wood housed the four battalions of 109th Brigade. The River Ancre divided the 108th Brigade, with two battalions in the wood and two in the village of Hamel. Divisional headquarters were at Aveluy Wood, which also housed the 107th Brigade.

On 1 July 1916, as the morning mists cleared away, the assault waves of 130,000 British infantry called their rolls and checked their arms and ammunition. Each man was in “fighting order”, and given the extra burden of shovels, grenades, a Stokes mortar bomb, wire cutters, a gas mask, a prepared charge of explosives for cutting gaps in wire and other obstacles, many of them were carrying up to 90 lb. At 7.30 am, zero hour, the artillery barrage lifted off the first German line and moved on to the second. That was the first employment of the so-called rolling barrage. Steel-helmeted and with bayonets fixed, the infantry left their trenches and advanced. A senior officer wrote to The Times of the Ulster Division:

“It was done as if it was a parade movement on the barrack square”.

They were closely packed in rigid lines, the military doctrine of the day being that they should swarm on to the enemy trenches as soon as their own artillery had lifted, but that stiff formation prevented the use of cover and inhibited initiative. Thousands of Ulstermen reportedly dumped supplies so that they could be as fast and as agile as possible.

From 1915 until 1918, the 36th Division was commanded by Major-General Oliver Nugent, a general of distinction. The 36th was one of the few divisions to make significant gains on the first day on the Somme. It attacked between the Ancre and Thiepval against a position known as the Schwaben redoubt. We are told that the leading battalions of the division

“had been ordered out from the wood just before 7.30am and laid down near the German trenches ...At zero hour…blew the ‘Advance’.”

It is said that many of those Ulstermen wore their orange sashes when they went over the top. The pipes were skirling—the Ulstermen loved the pipes, as we still do—and they advanced out of their trenches full of energy, courage and conviction. They

“rushed the German front line ...By a combination of sensible tactics and Ulster dash, the prize that eluded so many, the capture of a long section of the German front line, had been accomplished.”

At first, south of the Ancre, everything went well, and the108th and 109th Brigades moved over the German trenches with few casualties. Scarcely were they across, however, when the German batteries opened a barrage on “no man’s land”.

[Bob Stewart]

Thank you, Mr Speaker, for allowing me to intervene on my good friend. I seem to recall that an officer rallied the troops with the very appropriate battle cry for the moment, “No surrender”.

[Jim Shannon]

The hon. Gentleman has said it for me. I thank him for the benefit of his knowledge, as always.

Simultaneously, the resolute German machine-gunners, who had remained safe from our bombardment, sprang up from their shelters, pulling up their guns and heavy ammunition boxes, and raked our men from the flanks and the rear, thinning the waves of soldiers. Many officers fell, and the men went on alone.

The Ulster Division’s position was now a vulnerable salient in the German line, a few hundred yards wide and raked by German fire. At dusk, a powerful counter-attack by fresh German troops drove our men, almost weaponless, back to the second German line, which they held all the next day until they were relieved at night by the troops of the 49th Division. They withdrew, having suffered horrendous casualties. The Innsikillings lost more men than any British regiment had ever lost in a single day. Of the 15th Battalion Royal Irish Rifles, only 70 men answered a roll call on that night of 1 July. The total number of British casualties on that first day was 60,000. Many homes were affected in my constituency, in Ards and Comber, in the borough of Ards and North Down, and there are many memorials there to lost loved ones and to the injured. Families lost brothers, sons, fathers and uncles. Some families lost two of their members, and some lost three. The losses were horrendous.

Through no fault of their own, the blinding success that the Ulstermen had achieved had not been exploited, but the Battle of the Somme had inflicted on the Germans a wound from which they never fully recovered. I love this statement by Captain Wilfred Spender of the Ulster Division's HQ staff, which was quoted earlier by my right hon. Friend the Member for Lagan Valley. It was reported in the press after the battle The captain said:

“I am not an Ulsterman but yesterday, the 1st. July, as I followed their amazing attack, I felt that I would rather be an Ulsterman than anything else in the world.”

He further stated:

“The Ulster Division has lost more than half the men who attacked and, in doing so, has sacrificed itself for the Empire which has treated them none too well. The much derided Ulster Volunteer Force has won a name which equals any in history. Their devotion, which no doubt has helped the advance elsewhere, deserved the gratitude of the British Empire. It is due to the memory of these brave fellows that their beloved Province shall be fairly treated.”

In serving King and empire, the men of the Ulster Volunteers had in their incredible bravery in the 36th secured Ulster’s place within the United Kingdom. Let us never forget their sacrifice and let us live with the same vigour and valour that they did show.

[Several hon. Members rose—]

Oral Answers to Questions

Jim Shannon Excerpts

Thursday 9th June 2016 Commons Chamber

[Mr Evennett]

My hon. Friend has been a tremendous champion for his constituency over many years. Thanks to the Chancellor, we have the £40 million Discover England fund to incentivise the development of world-class itineraries. I hope that my hon. Friend’s area and others like it will be looking to make applications to see that we get tourists to their parts of the world.

[Jim Shannon (Strangford) (DUP)]

I thank the Minister for his response so far. We have an increasing number of tourists visiting Northern Ireland, not just because Liam Neeson is voicing the tourism adverts or because we have the Titanic, the SS Nomadic and the Giant’s Causeway, but because more people are holidaying at home. What can the Minister do to ensure that all the regions of the United Kingdom of Great Britain and Northern Ireland work together so that we can all take advantage of the tourism attractions in each of them?

[Mr Evennett]

I know the fantastic opportunities that there are for tourist visitors to go to Northern Ireland and see what is on offer. We are trying to encourage people to have holidays at home—staycations—but we are also working with the devolved authorities to try to promote tourism, along with VisitEngland, Discover Northern Ireland, VisitScotland, Visit Wales and VisitBritain, so that we have a joined-up approach that shows the fantastic offer we have in our four countries of the United Kingdom.

--- Later in debate ---

[Tom Brake]

I agree entirely with the hon. Lady’s point. She will, I hope, be pleased to hear that on 5 July the Advisory Committee will discuss this very subject. I hope the Committee will be able to provide her with a clear action plan that will help to address her concerns.

[Jim Shannon (Strangford) (DUP)]

It is vital that we embrace diversity at all levels to ensure that history is remembered correctly. We have portraits and statues of Queen Victoria in the House of Lords. Does the Commission agree that Members and visitors, particularly the latter, are astounded by the architecture, colours and sheer splendour of the Palace, and that there is unlikely to be anyone who leaves feeling negative or even discriminated against?

[Tom Brake]

I am happy to agree with that comment.

Battle of Jutland Centenary

Jim Shannon Excerpts

Wednesday 25th May 2016 Commons Chamber

[Jim Shannon (Strangford) (DUP)]

I thank the hon. Lady for bringing the matter to the House for consideration. HMS Caroline, which has been undergoing restoration while docked in Belfast harbour, saw action at the battle of Jutland. The strong links and bonds between our great nations are exemplified by our shared history and experiences. Given the number of approaching centenaries, does she agree that now is an opportune moment to ensure that we link all our common experiences and see Britishness come roaring back?

[Mrs Drummond]

Absolutely. HMS Caroline has just received a large sum of Heritage Lottery Fund money for its restoration and the site is opening next week.

In battle, the confusion and strain must have been immense as ships manoeuvred at high speed as they shot shattering broadsides and received hammering hits from enemy guns. Below deck, the men would have been working in extreme heat in the boiler rooms or in the gun turrets with a sense of helplessness at influencing all that was going on around them. A single hit to a ship’s magazine could blow both ship and crew to pieces. One such tragedy sunk HMS Invincible in 90 seconds with the loss of more than 1,000 lives.

Commonwealth War Graves Commission

Jim Shannon Excerpts

Tuesday 10th May 2016 Westminster Hall

[Jim Shannon (Strangford) (DUP)]

I congratulate the right hon. Member for Broadland (Mr Simpson) on his graphic and detailed presentation of the case, which we appreciate. The Commonwealth War Graves Commission is as relevant now as it was when it was founded, which is testimony to the hard work and determination of those involved.

Neither a soldier nor a politician, the commission’s founder, Sir Fabian Ware, was, at 45, too old to fight, but he became the commander of a mobile unit of that fabulous organisation, the British Red Cross. Saddened by the sheer number of casualties, he felt driven to find a way to ensure that the final resting places of the dead would not be lost forever. His vision chimed with the times and has continued to this day. Under his dynamic leadership, his unit began recording and caring for all the graves it could find, and by 1915 its work was officially recognised by the War Office and incorporated into the British Army as the Graves Registration Commission. That work continues today, and Sir Fabian Ware’s vision is now a reality. The initial aim of ensuring that the final resting places of the dead would not be lost forever has been successful.

As others have said, the Commonwealth War Graves Commission does a staggering amount of work, and it has some 23,000 memorials and cemeteries in 154 countries, making it a truly global organisation. In my constituency of Strangford, we have between 60 and 70 graves that are looked after by the commission. I went around the graves with one of the commission’s officers to see its work. A young British Army soldier who died in the 1916 uprising is buried in Greyabbey, and another young soldier from the first world war, Pritchards, was lying in an unattended grave. The commission will look after graves, but it needs the permission of the families. We need to ensure that Ware’s vision can continue to be fulfilled and that war graves are maintained and looked after from Strangford to South Georgia. From the Menin Gate and the Thiepval memorial to the India Gate in Delhi and the Helles memorial in Turkey, the commission tends some of the most iconic architectural structures in the world. From tiny cemeteries containing just a handful of graves to the Tyne Cot cemetery in Belgium, where there are 11,000 burials, the commission ensures that the memory of all those who perished is preserved with the utmost respect.

The commission cares for the cemeteries as a whole, so conservation and reconstruction can, and often does, involve teams from different disciplines. It is not just a matter of tending graves; it is much, much more than that—horticulture, headstone carving and manufacture, and the architectural maintenance teams. They are people with skills, love, affection and commitment to their job. The cemeteries are the sum of their individual parts, and teamwork at all levels helps to maintain their overall appearance.

Even the most durable materials require maintenance, especially when they are used in constructions that are nearly 100 years old. Climate change, pollution and vandalism all take their toll. The background information mentions deliberate vandalism in places such as Libya, Iraq and Beirut, and the commission has made it its business to reinstate those graveyards, as the right hon. Member for Broadland said. Structural renovation projects can involve anything from reroofing buildings to drainage systems. Headstones, memorials and sculptures are kept in good order by a regular cycle of maintenance—a lot of good work is done. To ensure that the quality of materials and the craftsmanship remain a priority, the commission employs specialist masons and runs its own workshops, in which many of the replacement headstones are made.

Barry Edwards, the commission’s architect, was asked to construct a brand-new cemetery at Fromelles to take the remains of 250 Australian and British servicemen who lost their lives at the battle of Fromelles in July 1916. It is amazing to think that, a century on, the commission is still making a difference in the proper remembrance of those who lost their lives in the first world war.

With gardeners and horticultural experts working in 154 countries, the commission has an enviable track record of innovation and expertise. More than half of the 1,750 acres of ground under the commission’s control is given over to fine horticulture, making maintenance a year-round task for its 900 gardeners. That might mean bringing seeds from Nepal to use in Gurkha cemeteries, or bringing maples from Canada for Dieppe. Even in horticulture, the commission goes the extra mile to ensure that each nation’s war dead are remembered properly.

Today, the work continues to the highest standard with the restoration of the Thiepval memorial. I have seen the memorial and remember it well. It is a fitting tribute to the fallen of the Somme. I could not conclude my speech without mentioning the Somme, which means so much to Ulster men and women because of their ancestors’ sacrifice. It is always good to remember that the 36th (Ulster) Division fought alongside the 10th and 16th (Irish) Divisions, when it was the United Kingdom of Great Britain and Ireland. The battle of the Somme resonates. Many streets and many Orange lodges across the Province are named after the battle. The banner of my lodge depicts the battle of the Somme too. This year, the battle’s centenary will be commemorated across Northern Ireland, and people from all community backgrounds in the Province have connections to the battle. As a Unionist of Ulster, I find it hard to think of something more deeply embedded in our psyche as a people than the Somme, which is seen by many as the people’s blood sacrifice in the pursuit of our self-determination.

The final stage of repointing on the Thiepval memorial has been done, and pointing work has started on the natural stone. The new coping stones and stone garlands are being repointed with a specific mortar that is close to the colour of the stone. The memorial is now equipped with a new distribution board for all the new electrical installation, and work continues on the top roof. It has been waterproofed to ensure that it is watertight.

On 15 March, the new flags flew again on top of the memorial. To mark the occasion, Lieutenant Colonel Kian Murphy, representing both France and the UK, rendered the military salute. The next step is placing the British and French crowns on top of the flag poles and cleaning the memorial from top to bottom. It will not be long before we see the final result. We commend the Commonwealth War Graves Commission for all that it has done for its workers and staff, and for commemorating battles of many years ago, particularly the battle of the Somme.

Fixed Odds Betting Terminals

Jim Shannon Excerpts

Tuesday 26th April 2016 Westminster Hall

[Jim Shannon (Strangford) (DUP)]

I beg to move,

That this House has considered fixed-odds betting terminals.

Fixed odds betting terminals are a big issue, and a big crowd of hon. and right. hon Members are here to speak about them. There is a lot of concern in the House about the issue. There are probably some hon. Members here today—perhaps not so many—who will not be speaking with the same level of concern as me, but Opposition Members intend to take the issue further in their speeches today.

Fixed odds betting terminals are touch-screen roulette machines found in betting shops across the whole United Kingdom. Gamblers can play casino-style games with a maximum stake of £100, which can be wagered every 20 seconds. That is a possible total of £300 a minute. We have more than 35,000 fixed odds betting terminals in the United Kingdom’s bookmakers. FOBTs are disproportionately found in the poorer parts of the United Kingdom and generate some £1.7 billion of revenue for bookmakers. Campaigners have labelled the machines the crack cocaine of gambling, and that is what they are. The issue is of great importance.

Bookmakers have a powerful lobby and powerful friends. They have kept arguing that we need more evidence, despite the obvious case for regulation, in order to protect their huge profits made at the expense of the vulnerable. We are here to speak for the vulnerable, for legislative change and for better protection.

[Fiona Bruce (Congleton) (Con)]

The hon. Gentleman is bringing forward the debate with his characteristic compassion. Does he agree that it is a matter of social justice that we address this issue? Those affected are not just those who are addicted, but their families, and in particular their children. It is primarily for them that many of us are here today.

[Jim Shannon]

As always, I thank the hon. Lady for her intervention—she is an hon. Friend, too. She speaks with heart and compassion, and she speaks for me as much as everyone else here.

Our Prime Minister told Parliament more than 12 months ago that FOBTs are a serious issue, and that he would act as soon as there was more evidence. Since then, two tragic cases of suicide have been linked to the machines, and there are numerous reports of the terrible impact they are having on the most vulnerable, but the Government are yet to act. The Minister is here to respond to the debate, and we look forward to hearing the ideas that he will put forward in response to what we have to say. There is no place for £100-a-spin games on the high street in bookmakers that have little or no supervision. There is a simple answer to protect the vulnerable, as the hon. Lady said, and that is to reduce the stake.

[Mark Tami (Alyn and Deeside) (Lab)]

While a lot of us have worries about what is going on in betting shops, does the hon. Gentleman agree that we do not know enough about the people who gamble at home on their phones and on the internet? There is no control over that at all, and they are being equally affected.

[Jim Shannon]

The hon. Gentleman is absolutely right. We have many concerns. Today’s debate is fixed primarily on the fixed odds betting terminals, but I accept that control is needed elsewhere.

The lack of regulation of FOBTs has meant that they have clustered in areas of high social deprivation. They can prey on the young and vulnerable. There is strong evidence that the high stakes on FOBTs in the low-supervision environment of a bookmaker have led to increased problem gambling. Recent Responsible Gambling Trust research on FOBTs showed that 37% of players exhibited signs of problematic gambling. At stakes of more than £13.40 a spin, that rose to 80% of players exhibiting problem gambling behaviour. One third of problem gamblers calling the national problem gambling helpline cited FOBTs as their issue. Let us be clear that the debate is about fixed odds betting terminals and the blight they cause on society.

[Lady Hermon (North Down) (Ind)]

There is evidence that the terminals have been used for money laundering. Will the hon. Gentleman reflect on the involvement of paramilitary organisations in money laundering through the terminals in Northern Ireland?

[Jim Shannon]

The hon. Lady is absolutely right. There is evidence of that, and I will give examples shortly. I am sure others will, too. Whenever there is misuse and a dirty laundering system, that has to be addressed.

More than half the UK population plays the national lottery, and they lost £7.2 billion last year. That compares with the less than 4% of the population who play FOBTs, who lost £1.6 billion. The unemployed are twice as likely to play the machines as someone in work. The demographic that bookmakers target with FOBTs are also the least likely to have access to bank accounts, debit cards and credit, and thus have restricted access to remote gambling sites. Bookmakers and the gambling associations are clearly targeting those who are vulnerable to start with, but who are perhaps in some difficulties with money, too.

Bookmakers are using the cover of account-based play, which was instigated by the Government, to provide cash top-up cards that facilitate access to their online sites; the hon. Member for Alyn and Deeside (Mark Tami) mentioned such sites in his intervention. The gambling lobby says that we need more evidence, but it is clear that the evidence is out there. It is comprehensive, and it consistently lines up on the right side of the argument: we need to protect the vulnerable and enact regulation. I hope that, arising from this debate, we will have a chance to enact regulation that will filter out from this House to the whole United Kingdom, including Scotland and Northern Ireland.

FOBTs are useful for money laundering, as the hon. Member for North Down (Lady Hermon) said. The machines have a few filters, but the money launderers know them and work within the limits. Supervision is low and closed circuit television is poor, so it is a safe way to money launder. Low-level drug dealers clean cash in case they are pulled over by the police. Generally, they are younger lads with smaller amounts of cash. In one West Yorkshire case, the police uncovered £18,000 of FOBT tickets being held by one drug dealer. The machines are used for underworld criminal activities by those whose thoughts are nothing but criminal and outside the law.

Using the proceeds of crime to fund a gambling addiction, or cleaning the cash obtained from a crime, is common. The most common use of FOBTs since they landed on the high street is for getting rid of dyed notes obtained during robberies on armoured vans, cash machines and so on. The notes are sprayed with an irremovable dye that is an immediate alert as to their origins. They are therefore not exchangeable. However, they are still identified as legitimate currency by note accepters on gaming machines. The machine with the highest cash transaction capability and ticket pay-out facility would be the preferred option for laundering, and that is the fixed odds betting terminal.

The bookies and the suppliers adapted the software controlling ticket pay-outs to identify where less than 40% of the cash put in is wagered—that is where people either put cash in a FOBT and then print a ticket straight out, or stake a minimal amount of the total cash inserted—so that staff are alerted when people cash those tickets. Launderers have adapted to that by using minimal-risk wagering. The bookies are now making it easier for criminals by allowing them to put cash winnings on to a pre-paid credit card. They are not just hiding the cash, but making it electronic. Never ever think that the criminals and evildoers have not got ideas as to how to get around the law, how to work it to their advantage and how to launder some of that dirty money.

Following on from weaknesses in money laundering policies at Ladbrokes in 2013, Paddy Power was recently the subject of a high-profile money laundering investigation. That investigation resulted in the Gambling Commission reprimanding Paddy Power and imposing a £280,000 penalty; there were also serious failures in social responsibility. The Government are considering including betting shops in the European Union’s fourth money laundering directive. That would require the identification of customers transacting over £1,500 in a 24-hour period. The bookmakers are lobbying to be excluded from that, despite recommendations that they should be included first being made in 2001 in the Budd report.

The lack of FOBT regulation is a huge issue that cannot be ignored, and I am keen to ensure that the debate highlights it. Gambling the world over has evolved into a consistent structure, with the hardest gambling reserved to highly regulated venues such as casinos, where customers go with the knowledge and expectation of experiencing a harder gambling environment. Casinos have very high levels of player supervision and therefore protection. Players tend to be occasional visitors, and the casinos tend to be viewed as a destination leisure venue with more than just gambling on offer.

The Gambling Act 1968 put in place a regulatory permit for gambling. This set out that high-stakes gambling should take place in highly regulated and highly supervised environments such as casinos, and low-supervision environments should have lower stakes and require lower levels of supervision. Those principles were reaffirmed in the Gambling Act 2005 by Sir Alan Budd. Other countries follow this model. The UK is alone in offering very-high-stakes gambling of £100 on Britain’s high streets in the low-supervision, easily accessible environment of a bookmaker. Little or no monitoring and little or no supervision means vulnerable people can be taken advantage of. The regulation of fixed odds betting terminals is out of kilter with the principles of gambling regulation. They offer very-high-stakes gambling in an unregulated environment.

The only material restriction is that bookmakers are allowed four fixed odds betting terminal machines per shop. The result of this is that bookmakers have opened multiple betting shop branches in close proximity. That is a concern. When we look at the streets of the United Kingdom of Great Britain and Northern Ireland, we sometimes wonder whether we are in a gambler’s paradise—if there is such a place—because betting shops seem to be prevalent everywhere.

The bookmaker Paddy Power has focused its branches in areas with high immigrant populations. We have seen a 43% increase nationally in the number of betting shops located in town centres.

[Mr David Nuttall (Bury North) (Con)]

On the number of machines allowed in each shop, is the hon. Gentleman arguing for fewer in each shop, or for more in a smaller number of shops?

[Jim Shannon]

I seek a lesser number in the shops, and fewer shops as well. We agree on many things, but we do not agree on this topic. The opinion that I express will win: ComRes did a survey of MPs seeking their opinion, and of the MPs who responded, seven out of 10 want FOBTs regulated. They want a reduction in the number of machines and shops. It was quite clear. If a private Member’s Bill is brought before the House—some in this Chamber are of a mind to do that—we can tackle the problem.

[Patricia Gibson (North Ayrshire and Arran) (SNP)]

Does the hon. Gentleman agree that reducing the maximum stake to £2, which is opposed by betting shops, would be a good way forward?

[Jim Shannon]

I thank the hon. Lady for that; it is one of my concluding points. I know that other Members are of the same opinion. Yes, the maximum stake should be lowered; then we could manage the issue, so that people are not deprived.

The regulation of FOBTs is out of kilter, as I have said. The only material restriction is the four machines per shop. We have seen an increase nationally in the number of betting shops in town centres, and last year the Government stepped in and imposed a £50 staking threshold on fixed odds betting terminals, above which players are required to identify themselves to staff or sign up for a loyalty card. The objective of this measure is to help players stay in control. I suggest that that has not happened. The measure is non-evidence-based and the Department for Culture, Media and Sport failed to quantify what impact it would have on players other than the £17 million reduction—1%—in bookmaker revenue from the machines. Secondary research based on the British gambling prevalence survey 2010 estimates that up to 40% of B2 revenue comes from at-risk and pathologically addicted players—higher than all other combined gambling activities—so the Government predicted very little impact. There is also evidence that bookmakers are using the player registration as a mechanism to market FOBTs further.

An evaluation of the DCMS assessment of the £50 measure so far, carried out by Landman Economics, highlighted issues with the quality of the data provided by the bookmakers; it also noted that DCMS could not assess changes in staking, mentioned the absence of a pilot scheme so that the measure could be evaluated better, and noted that the evaluation omitted key questions that it is important to consider when looking at the success or failure of the £50 regulations. For example, the question why fixed odds betting terminal machine players might wish to remain anonymous is not discussed. Despite the Government measure, players are still able to stake up to £100 per spin, and it appears that bookmakers are using the change as an opportunity to further market products to vulnerable gamblers. Even £50 is still materially out of kilter in the normal gambling world.

[Kevin Foster (Torbay) (Con)]

I congratulate the hon. Gentleman on securing this important debate. Does he agree that the issue is also about making sure that players can make a genuinely informed choice? If a sign was required to be displayed that said, “A machine of this type made on average £825 a week in profit for its owners in 2012”, would people be inclined to gamble on it? In short, it would be a bet not worth having.

[Jim Shannon]

Absolutely. I thank the hon. Gentleman for his wise words.

I am conscious that many people want to speak, Sir Alan. I gave you an undertaking that I would not speak for too long, but I want to set the scene, and then I will give other Members an opportunity to participate.

The Government must take urgent action to regulate fixed odds betting terminals and reduce the stake that can be gambled from £100. The hon. Member for North Ayrshire and Arran (Patricia Gibson) referred to £2; I think that many in this House would be happy with that. This is the only way effectively to tackle the growing problems that these machines are inflicting on our communities and on those who can least afford it. The Minister responsible for gambling has said that the Government want to reduce the stake for FOBTs, so let us hear what the reduction will be. A substantially lower stake would bring fixed odds betting terminals into line with machines in other low-supervision environments such as adult gaming centres and bingo halls.

The Gambling Commission has said that if staking levels were being set now, it would advise against the £100 stake on a precautionary basis. The previous Government said that a lower stake would bring adequate public protection. The Government should take this opportunity to control the gaming machines and the stakes and reduce significantly the numbers of shops and machines on the high street. The evidence is out there and is clear: the bookies are in the wrong. They are on the wrong side of the argument, and it is our job to put it right.

I want to say one quick thing in relation to Scotland, as hon. Members from Scotland are here. The Bill in Scotland gives some control to the Scottish Parliament, but if we were to bring forward a private Member’s Bill in this House to legislate for change, this debate today would be the first stage in that process. If that happens, that will filter its way out to Scotland and to Northern Ireland as well. We in this House today have the opportunity at least to start the first stage of that process. I believe that many in this House—seven out of 10 MPs—wish for that to happen.

[Several hon. Members rose—]

--- Later in debate ---

[Jim Shannon]

I thank the Minister, the shadow Minister and right hon. and hon. Members for their significant contributions. A significant proportion—higher than for any other product—of users of fixed odds betting terminals are problematic gamblers, and that has come out of this debate. Fixed odds betting terminals are the crack cocaine of gambling. They are totally addictive, destroy lives and focus on the vulnerable. What must we do? We must reduce the number of machines from four per shop to one, and we must reduce the maximum stake from £100 to £2. We must remove the table game content from fixed odds betting terminals, because the pace of the games is faster than in real casinos. We must reduce the spend frequency from 20 seconds to 60. Those are some of the things we can do.

I welcome the new all-party group on fixed odds betting terminals, and I thank hon. Members for their contributions. The Minister can be sure that Members here will return to look for change through legislation.

Motion lapsed (Standing Order No. 10(6)).