UK Acorn Finance (Mortgages)

Jim Shannon Excerpts

Tuesday 11th November 2014 Westminster Hall

[Mr Llwyd]

Yes, they did, and I want to say a brief word about that towards the conclusion of my remarks. At least 44 cases were reported to the Avon and Somerset police, who unfortunately, took very little interest in what was going on—the chief executive of Avon and Somerset police is an ex-partner of Burges Salmon, by the way, so that is another interesting piece of information. Peter Williams was at one time a partner in Burges Salmon, as was John Smith, the chief executive of Avon and Somerset police, who was appointed in 2009. Avon and Somerset police describe themselves on their website as long-standing clients of Burges Salmon. That article also appears on Burges Salmon’s website.

All known complaints to the police and those handling this matter remain unanswered, and I have to ask why. Interestingly enough, they said that they could not find any criminal behaviour, but a detective constable, Niki White, of Avon and Somerset police came up to attend the repossession hearing in the Williamses’ case. Why exactly I do not know. On the one hand she was pretending to give some succour or comfort to the Williamses that the police were doing something, but on the other hand a letter from the manager of the financial investigation and economic crime section of the police to the solicitors acting on behalf of the perpetrators says:

“In your letter dated 16^th August 2013, you have questioned DC White’s attendance at Court on the 7^th August 2013. Her attendance on that day was to ensure that the Court understood the extent of the Police involvement and were not misled into believing that a criminal investigation was already underway.”

That was despite the police at the same time telling the right hon. Member for North Somerset (Dr Fox) that an investigation was under way and that it was an in-depth investigation. But interestingly, a couple of months after that letter, they say that

“we have been in discussion with other regulatory agencies. The purpose of this was to look at whether there are…other opportunities to address the situation or to influence regulation of this kind of activity in the future.”

They say that unfortunately they have not been able to progress it further. So they have concerns both on the criminal side, it seems to me, and, as the hon. Member for Kilmarnock and Loudoun (Cathy Jamieson) says, on the regulatory side, which I am sure we all share.

However, Avon and Somerset police have consistently blamed the Serious Fraud Office for not opening an investigation. That is ironic, because the police themselves have refused to open an investigation, although they have said to at least one Member of Parliament that they have done so. They have also tried to block Dyfed Powys police in Wales from investigating. I believe that something is amiss in Avon and Somerset police. As I have said, John Smith, the chief executive, is now writing to complainants and making decisions, but not mentioning the fact that he used to be a partner in one of the firms that is, or should be, in the firing line.

Let me say a word about Mr Desmond Phillips. Again, this touches on the important point that the hon. Lady made about regulation. In 1975, at the age of 22, Mr Phillips was made bankrupt. In 1976, he was convicted of theft at Shepton Mallet magistrates court. In 1987, his timber and haulage business collapsed, leaving creditors with a loss of £300,000. In 1991, Phillips’s company brokering endowment policies collapsed. Many customers were farmers. Insurance companies claimed that they were owed £300,000 on commissions that had been paid out on policies that failed to materialise or were subsequently cancelled.

In 1992, Phillips underwent his second bankruptcy, owing £170,000. That was discharged in the late 1990s. In 1994, the BBC Radio 4 programme “Face the Facts” was the first programme on Phillips. In 2008, there was a judgment against Phillips at the High Court in Manchester for £250,000 and costs. That was subsequently paid, I believe. In 2010, there was an individual voluntary agreement in respect of all his debts. In 2011, Acorn subsidiary UK Country Capital collapsed, owing £17.3 million to Barclays bank. On 16 April 2014, “Face the Facts” described him as “The Country Rogue”.

Two bankruptcies, one IVA and 14 county court judgments have been recorded against Mr Phillips and, believe it or not, a couple of years ago his licence to lend was renewed by the regulatory authority. That is quite incredible. I have documentation with me to show that Clive Maxwell, chief executive of the Office of Fair Trading, said that he was a fit and proper person to be lending money. I find that utterly incredible and I am sure that the Minister, in due course, will want to consider that aspect. In fact, Phillips’s licence was renewed in May 2012, so that was after most of the bad things that had happened and certainly after what had happened in the case of the Williamses.

I have said that I cannot understand why Avon and Somerset police have not researched this matter properly. I have myself dealt with the Serious Fraud Office and the Attorney-General and have met His Honour Judge Geoffrey Rivlin, the senior adviser to the fraud office. I was told by the fraud office that it deals only with very large frauds. In my instance, it is for £1.5 million, but if we multiply that by anything between 30 and 50 constituents or Members of Parliament, it is a massive fraud. No one can deny that.

I have said that there is a dossier of 44 cases that alleges similar conduct in them all. An especially incriminating document was prepared by Mr Levy, a barrister who specialises in this area. It is entitled “Appointments under flawed security”. He questions why Acorn has persistently used the LPA receiver Mr Burd. The only possible explanation is that Lloyds bank was comfortable with the methods used, because it was lending on to Acorn, as we know, and it was turning a blind eye to all that was happening, in breach of any fiduciary understanding that I have ever come across anyway.

In case anyone thinks that I am just a conspiracy theorist, the following Members of Parliament, to my certain knowledge—I am sure that there plenty of others—are also involved in trying to deal with the matter: my hon. Friend the Member for Carmarthen East and Dinefwr, the hon. Members for Vale of Clwyd (Chris Ruane), for Brecon and Radnorshire, for North Cornwall (Dan Rogerson), for Brigg and Goole (Andrew Percy), for North East Somerset (Jacob Rees-Mogg), for Pendle (Andrew Stephenson), for Penrith and The Border (Rory Stewart) and for Thirsk and Malton (Miss McIntosh), the right hon. Members for South East Cambridgeshire (Sir James Paice) and for Preseli Pembrokeshire (Stephen Crabb), the hon. Members for Caerphilly (Wayne David), for Wantage (Mr Vaizey), for Folkestone and Hythe (Damian Collins), for North Devon (Sir Nick Harvey) and for Selby and Ainsty (Nigel Adams), the right hon. Member for Bexhill and Battle (Gregory Barker) and the hon. Member for Somerton and Frome (Mr Heath). There is also a Member of the other place who is actively involved in trying to assist people whom he knows.

As I said, I have been in contact with Avon and Somerset police, North Wales police, the Attorney-General, the Serious Fraud Office, the regulators and His Honour Judge Geoffrey Rivlin, the chief adviser to the SFO. So far, very little has been achieved, and it is to my huge regret that that should be so.

The conclusion that I draw from this terribly unhappy affair is that even if the modus operandi of UK Acorn and the allied companies is not fraudulent—I believe that it is—they of course have been in flagrant breach of their fiduciary duties to the borrowers. What that means may be obvious, but I will explain it. There is a fiduciary duty on a lender to ensure that the borrower can sustain the payments under the mortgage; otherwise, it is a straightforward taking of his property. That is an obvious point, but in this case there have been instances in which there has been overvaluation of properties in order to make an advance that would not be sustainable on the business case. That is clear in virtually every case that I am aware of. I think there are elements that are criminal, and I hope that we will be able to shine a light on this behaviour, but even if I am wrong, there have been serious, repeated and consistent breaches of fiduciary duty.

I put to the Government the following points. I know that the Minister is in the Treasury, not the Home Office, but will she please pass some of this information on to her colleagues in the Home Office? I am sure that she will. I ask the Avon and Somerset police to come clean as to why they are not properly investigating or, alternatively, to say that they will now investigate thoroughly these very, very serious complaints. They are complaints that have ruined the lives of, to my knowledge, 44 or 45 families. I am sure that Members of Parliament will know of many other people who were affected, and there will be others who have not complained. There is even a woman who has completely lost her mind and is in prison as a direct result of the situation. I could name her, but I do not want to embarrass her. She is contact with me, and she is still in prison.

There are others who have lost absolutely everything. They have the shirt on their back, and that is about it. In the meantime, Desmond Phillips is still lending money recklessly and making huge amounts of money against the assets of innocent people whom he has duped. I would ask also that the Avon and Somerset police fully assist the Serious Fraud Office to undertake its work. I believe that we are talking about a massive fraud, in which the SFO, if it has any purpose at all, should be involved. I have been trying to persuade Sir David Green to get involved, and I do not know whether the problem is one of resource, or what it is. To my way of thinking, if we send the SFO one file that shows underhand behaviour, the SFO should consider it. We have sent 36 files to the SFO, all of which show similar, if not identical, MOs, which suggests to me that something is really amiss.

[Jim Shannon (Strangford) (DUP)]

I apologise for not being here at the start of the debate. I had some constituents to see and I could not get down in time. I know of a number of families who had difficulties financially and who were referred to UK Acorn Finance Ltd for help. The company took advantage of their circumstances. Does the right hon. Gentleman now feel that it is time for Government to regulate the company? The regulation of loan companies is in the news today, and that company must be regulated as well.

[Mr Llwyd]

Absolutely, and the hon. Member for Kilmarnock and Loudoun made that point earlier. The hon. Member for Strangford (Jim Shannon) made that point well, and I am sure that the Minister heard it. I did not know that the hon. Gentleman also had constituents who were affected, but the case is evidently familiar to even more Members than the large number whose names I read out. I am sure that the Minister will have listened carefully to what the hon. Gentleman had to say.

There is a need, in my view, immediately to withdraw Mr Phillips’s licence to work in the financial industry and, crucially, to consider whether the regulatory authorities have done their job well, or at all. There is an obvious rhetorical answer to that question. I would also like to see the investigation and urgent consideration of serious and deep breaches of fiduciary duty. I believe that we owe it to our constituents, many of whom have lost everything they had—their income, their livelihood, their homes, their heirlooms, their livestock and the roof above their heads. My constituents Mr and Mrs Williams believed, perhaps naively, that Phillips and UK Acorn Finance Ltd were on their side. They were clearly wrong, and they have paid an extremely heavy price. To deny them redress is wrong and, in my view, totally unacceptable.

Oral Answers to Questions

Jim Shannon Excerpts

Thursday 3rd July 2014 Commons Chamber

[Sajid Javid]

My hon. Friend makes a good point, and I agree with him. He may be interested to know that the Government will today lay the draft regulations for converting civil partnerships to marriage. The Government previously said that the cost of conversion would be calculated on a cost recovery basis, and that is correct. We had indicated about £100, but I am happy to say that, in almost all cases, the cost will be £45. It would be unfair to charge couples who were in civil partnerships before same sex marriage was available, so I am pleased to announce that my right hon. Friend the Home Secretary has agreed to waive the conversion fee for one year from 10 December.

[Jim Shannon (Strangford) (DUP)]

Tourism is important to my constituency of Strangford. It definitely brings jobs and opportunities, as promoted by the Northern Ireland Tourist Board. Will the Minister consider joint tourism promotions with the Northern Ireland Tourist Board so that we can benefit from tourism throughout the United Kingdom of Great Britain and Northern Ireland?

[Mrs Grant]

I will consider all good ideas and sensible suggestions to promote tourism in this country, and I am happy to have a chat with the hon. Gentleman. As he knows, VisitBritain and VisitEngland do a good job in promoting the regions and the nations.

Consumer Rights Bill

Jim Shannon Excerpts

Monday 16th June 2014 Commons Chamber

[Stella Creasy]

It is fascinating finally to come to the end of consideration of the Bill in this Chamber.

[Jim Shannon (Strangford) (DUP)]

On a point of order, Madam Deputy Speaker. I stand to be corrected, but I thought that those who wanted to speak on Third Reading did so before the shadow spokesperson. Am I wrong?

[Madam Deputy Speaker (Dame Dawn Primarolo)]

You are wrong, yes. The Minister opens Third Reading, and the Opposition Front Bencher responds; we then hear from other participants. If we have enough time, and it is relevant to do so, we then hear the wind-ups. Do not worry—I will not forget you.

--- Later in debate ---

[Jim Shannon (Strangford) (DUP)]

It is always a pleasure to follow the hon. Member for Congleton (Fiona Bruce), who is passionate about the subject she has just addressed. I hope the shadow Minister, the hon. Member for Walthamstow (Stella Creasy), will not be disappointed with my contribution. I want to put on record some important issues.

The Minister has outlined very well the issues that the Bill tries to address, but I and other Members still have concerns. I am particularly concerned about the issue of debt advice. There are many debt organisations in my constituency. Citizens Advice, Debt Advice NI and Christians Against Poverty are just three groups that give advice—they do not lend money—on the problems people face when they borrow money and build up debts that they are unable to pay.

The Consumer Rights Bill should be just that—legislation that protects consumers. Does the Bill do so entirely? Some of us feel that it might have done more, and we would be much more relaxed about it if it had done more.

The regulation of loan companies, which Members have referred to, is a very complex matter. We are all aware of the story about a lady who borrowed a couple of thousand pounds from a loan company, which developed into a six-figure sum over a number of transactions. She found herself in a very difficult position, and she then had her house repossessed. That may be an extreme example, but it illustrates our concerns.

I very much welcome the Government’s commitment on the territorial extent and application of the Bill. I want to comment on part 3, which does not extend the Sunday Trading Act 1994 to Scotland and Northern Ireland, for example. The decision in relation to that will clearly lie with the Northern Ireland Assembly. I must say that that is good news for the people of Northern Ireland who attend church, but have to work on Sundays or might potentially have to do so. Any decision will lie with the Assembly, which is good news.

I wholeheartedly concur with the concerns expressed by the hon. Member for Congleton about the controversial technological changes referred to in new clause 31 in relation to three-parent children. I am concerned that there was no opportunity to debate that on the Floor of the House, because I certainly wanted to speak about it, as did other hon. Members. I suggest that it seems very dangerous to go ahead with such a change, as has been indicated, without any consensus of support or a majority in its favour. I must put on the record that I am very concerned about the numbers of ladies who have such worries. Some 558 people responded by saying that they did not want the change. Thank you for giving me the opportunity to make that comment, Madam Deputy Speaker.

The Bill has addressed many of the issues about which we have concerns, such as the right to the repair or replacement of goods. I commend the hon. Member for Foyle (Mark Durkan) on the good work that he has done on the Bill. He fought very valiantly and got the changes that he had hoped for in relation to electrical goods. I am tremendously pleased to see in the Bill what he and many other hon. Members wanted it to include.

If the Minister cannot respond on this point tonight, perhaps she will come back to me at some time, but I do not yet see powers for people who take out holiday insurance and need consumer protection—for example, those who, having booked a flight, find that they have to cancel it, whether for health or whatever reason—but cannot get a reimbursement. I had hoped that the Bill might give those people more protection, but I am not sure that it yet does so.

I welcome many of the things in the Bill, as well as some of the things in it about which we are not entirely happy. None the less, I congratulate all hon. Members on their contributions to the Bill, and on their ability to bring to the Floor of the House provisions that can make a change.

Oral Answers to Questions

Jim Shannon Excerpts

Thursday 1st May 2014 Commons Chamber

[Sajid Javid]

I thank my hon. Friend for the question, and for the contribution his family made to the great war—as did, obviously, many other families, but especially, as he highlighted, people of ethnic minority backgrounds. He has made an important point, and I will certainly look at that.

[Jim Shannon (Strangford) (DUP)]

The Commonwealth contribution to the first world war was significant. In particular, one in 10 people who served came from undivided India. In Northern Ireland we have a very large Indian community. What discussions has the Minister had with the bodies responsible in Northern Ireland to ensure that the community’s significant contribution is commemorated?

[Sajid Javid]

The hon. Gentleman raises an important point. He will know that more than 70,000 soldiers from the Indian army made the ultimate sacrifice on behalf of Britain in the great war. With respect to Northern Ireland, I have not had any discussions so far in my new role, but I will certainly raise the matter at the earliest opportunity.

Finance (No. 2) Bill

Jim Shannon Excerpts

Wednesday 9th April 2014 Commons Chamber

[Jim Shannon (Strangford) (DUP)]

In the past, both here and in Westminster Hall, I have spoken frequently about issues such as child poverty, food poverty, benefits for single parents, social exclusion and other social problems. On this occasion, I want to express my support, and that of my party, for the married couple’s transferable tax allowance. We gave a manifesto commitment to support it in our Parliament, and we are pleased to be able to support it today as well.

I respect the opinions of Labour Members, and I do not wish to be divisive. I want always to be respectful to Members whose opinions may differ from mine. However, I have a hard-held opinion about this particular issue. I want to help everyone, but I think it is time that married couples had an opportunity to see some benefit from legislative change. Those who support the recognition of marriage in the tax system have waited a long time for the Government to introduce this policy. I expected it to be introduced a long time ago, in view of the Prime Minister’s enthusiasm for what was a headline manifesto commitment, but I am very pleased that, at long last, it is being introduced now.

We have heard some excellent speeches from Members on both sides of the House. I particularly commend the way in which the hon. Members for East Worthing and Shoreham (Tim Loughton) and for Peterborough (Mr Jackson) set the scene. I recall a debate in the House about two years ago to which the hon. Member for Congleton (Fiona Bruce) and I contributed. That was one of my early introductions to the cut and thrust of politics here. Most of the Members surrounding me opposed what I was saying, but I held fast to my opinion, and I am very pleased to be able to express it again today.

Let me begin by highlighting some of the powerful public policy benefits of marriage. I shall then explain why I consider clause 11 to be an appropriate public policy response, albeit rather modest—I should have liked to see more.

[Alison Seabeck]

As always, the hon. Gentleman is talking a great deal of common sense. Marriage is indeed something to which most people aspire. Let us be honest: it is a great institution. However—I think he was starting to make this point just now—the Bill is neither one thing nor another. It does not really achieve what most Government Members want, and it certainly does not deal with the concerns of Opposition Members. I should welcome his views on that.

--- Later in debate ---

[Jim Shannon]

As ever, the hon. Lady has made a very sensible intervention.

It is not the financial aspect of the clause that will be the convincing factor for those who wish to proceed with it. Personally, I see it as a recognition of those who are in a marital relationship, which is why I support it. Marriage is unquestionably a source of great benefit to adults, to children and to our communities in general: as others have said, there are extensive research findings to demonstrate that. Given the shortage of time, I shall highlight just some of the benefits of marriage to adult health, on the basis of evidence and statistics.

As has already been said today, the health gain from marriage may be equal to the benefit of giving up smoking. Of special interest to me, given the challenges presented by our ageing population, is the fact that marriage significantly limits hospital use. Those living with a spouse are less likely than others to enter an institution after the age of 60, because that person will be able to look after them and help them. For children, growing up with married parents is associated with better physical health in adulthood and increased longevity. There is a direct link between family breakdown—particularly separation from a biological parent—and future offending. I have not made those things up: they are facts, based on information that we have received.

Some Members have argued that marriage in itself is irrelevant, and that all the positive associations with it are driven by other factors, principally income. I must say that I find that argument particularly unconvincing. When one set of couples have thoughtfully embraced the cost of making an exclusive, lifelong commitment before the world, “forsaking all others, so help me God”—a commitment that is sealed in law—and another have just decided to move in together and see how it goes, is it any wonder that the first set of couples are likely to be, on average, more stable? That is not a reflection on those who cohabit, but it is a reflection of the statistics showing the commitment that we all make in a marital relationship.

Moreover, as others have noted, the Millennium Cohort Study has blown out of the water the idea that it all boils down to money. According to the study, the poorest 20% of married couples are more stable than all but the richest 20% of cohabiting couples. Finance is clearly not the motivator. However, recognition of the marital relationship by the Government through the transferrable tax allowance strikes me as a constructive way forward.

On 25 July this year, the hon. Members for Darlington (Jenny Chapman)—who has now left the Chamber—and for Blaenau Gwent (Nick Smith) will enter the happy union of marriage here in the House of Commons. Let me take this opportunity to wish them well, as others have already. It is good to know that marriage is alive and well in the House.

My concern is not with trying to persuade people to marry, but the evidence suggests that people who want to marry are not doing so because it is not an accessible option. As the Secretary of State for Work and Pensions said in his marriage week speech in 2011,

“When asked about their aspirations, young people are very clear: three quarters of those under 35 who are currently in cohabiting relationships want to get married, and some 90% of young people aspire to marriage”.

Those are very clear statistics. The Secretary of State continued:

“So perhaps the question we should be asking ourselves is this: if people from the youngest age aspire to make such a commitment in their lives, what stops them doing so?

Government cannot and should not try to lecture people or push them on this matter, but it is quite legitimate to ensure people have the opportunity to achieve their aspirations.”

[Ian Swales]

The hon. Gentleman is making a powerful speech, and I think that we have a unanimous view about the importance of marriage. Does he feel that the Government are communicating the details of the policy clearly enough for the young people about whom he is talking to understand whether it affects them or not? Many of them—for example, couples earning the minimum wage—will not be affected by it.

[Jim Shannon]

I cannot comment on the technical figures—no doubt the Minister will say something about them when he sums up the debate—but I understand the point that the hon. Gentleman has made. The Government clearly have much to do. Indeed, we all have much to do in putting forward our views, but let us hope that those who have an opportunity to enter into a marital relationship will be able to benefit financially as well.

Although 90% of young people aspire to marry, marriage rates are at an all-time low, while cohabitation rates are rising. The reason why that matters can be expressed in many ways, but I shall do so by employing language that the Treasury understands. The cost of family breakdown has risen to some £44 billion per annum, and crucially, according to the Centre for Social Justice, of every £7 spent on family breakdown amongst young families, £1 is spent on divorce, £4 is spent on unmarried dual-registered parents who separate, and £2 is spent on sole registered parents.

In this context it is absolutely imperative that the state does not place any unnecessary obstacles in the way of those who wish to marry, yet that is exactly what we do on many occasions. Since 2000 we have had a tax system that is very much in the minority internationally, as the hon. Member for Peterborough said. Just over a fifth of people in the OECD area live in countries that do not recognise marriage or have some kind of couple allowance. The vast majority of those people live in just two countries: the UK and Mexico. Research by Pearson and Binder published by the public policy charity CARE demonstrates that in this context the tax burden on a one-earner married couple with two children on average wage has been consistently much higher in this country than across the OECD on average. In 2012, the latest year for which there are comparable data, the tax burden on a UK one-earner married couple on average wage was 45% greater than the OECD average, up from 42% in 2011. Moreover this burden was a staggering 80.4% of that placed on a single person on the same wage while the comparable OECD figure was just 55%. Figures sometimes blind us to the issues, but these figures illustrate the issue of fairness and balance and show what the Government are trying to achieve through the legislative change before us.

In this context is it any wonder that rather than opting for marriage, couples are opting for other arrangements? Clause 11 will begin to put this right, but this is only a very limited, partially transferable allowance that, far from creating a level playing field, let alone a little nudge to opt for marriage, will instead only erode the incentive not to marry. Clause 11 is thus a hugely important first step; it is a foundation upon which we must build.

On 10 April 2010, when announcing the detail of the Conservative transferable allowance policy, which was then worth 11.6% of the personal allowance, the Prime Minister was clearly bothered that the package was not more generous. He indicated his wish to see more and, speaking on “Sky News”, he blamed the current fiscal constraints and said:

“Of course I want to go further and I am sure that over a Parliament we would be able to go further but this is a good first step.”

I believe this is a good first step. I am on record in my constituency as asking for this. I have done articles for my provincial press, supporting this option of the married transferable allowance. I believe today we have a chance to move towards that, and I hope this House will decide very positively and clearly on this.

It is clear that all we are going to get in this Parliament is a 10% transferable allowance. Many people will be watching to see the Prime Minister make good his commitment to go further in the next Parliament. Perhaps the Minister can confirm in his response in what ways the Government are committed to doing more in the next parliamentary term to introduce a fully transferable allowance. That must be the No. 1 income tax priority for the next Parliament.

[Mr Burrowes]

I very much welcome clause 11 and not the amendment in the name of the Opposition.

Before coming here I had an interview with children who are taking part in the BBC “Newsround” consideration of Prime Minister’s questions. I did not have an opportunity to ask them about the transferable allowance, but as they grow into adulthood I suspect they will look back on the proceedings here and think it rather odd that we are trying to put down dividing lines and divide along party lines on the basic issue of marriage being recognised in the tax system. They will think it rather odd that people are trying to pit one family relationship against another, when this is a very simple and moderate measure that is recognised across the world.

Finance (No.2) Bill

Jim Shannon Excerpts

Tuesday 8th April 2014 Commons Chamber

Very much connected to that point is the recent ASDA-mumsnet survey which reveals that seven out of 10 stay-at-home mums consistently say going back to work simply would not make financial sense because the hefty child care costs would leave them worse off, and 52% rely on household salaries for child care and 35% rely on their family for child care. In this context it is still disappointing, if not surprising, that the Institute for Public Policy Research recently published a report showing that the UK’s maternal employment rates are far lower than those of our OECD competitor countries.

[Jim Shannon (Strangford) (DUP)]

Does the hon. Lady agree that for many people with children if they did not have their grandparents or their aunties, the cost of child care would be too great for them to return to work? Does she feel that while the Government have made some concessions on child care, they have not given enough of an incentive for those people not to need to depend on their grandparents and aunts in order to be able to continue to work?

[Catherine McKinnell]

The hon. Gentleman raises an important point. There is a heroic army of grandparents out there providing that much-needed support within families to ensure that those really struggling with the cost of living crisis can still be in work, but unfortunately some people do not have that luxury. There are an awful lot of people who cannot rely on that support and who find the current cost of child care too prohibitive to go to work or find that, despite working all hours, they cannot put food on the table.

Transparency and Public Trust in Business

Jim Shannon Excerpts

Tuesday 8th April 2014 Commons Chamber

[Lisa Nandy (Wigan) (Lab)]

Six years after the peak of the global financial crisis there should surely no longer be disagreement among any of us that businesses are bound by the same ethical and social responsibilities that bind us all. As the financial crash showed, business transparency is absolutely essential to society. The lack of it in the financial sector in recent years continues to have huge repercussions for people in my town of Wigan, in the UK, and across the world.

We saw in the recent horsemeat scandal that lack of transparency can have major implications for consumers in the UK, but it can have even greater implications for the lives of people across the world, as in the horrific loss of life in Bangladesh with the collapse of the Rana Plaza complex. As business has become increasingly complex, it is very hard for consumers to know, first, whether they can trust the product they are buying, and secondly, whether the business they are supporting is operating ethically. Little wonder, then, that there is increasing public appetite for action. I was surprised to hear recently that the Edelman Trust Barometer found that the public want greater regulation of business by a margin of 4:1.

But it is not just the public who want action; companies and business leaders are also behind the call for higher business standards. The Minister will be aware of the B Team, an alliance of thinkers and business leaders, including Richard Branson and Paul Polman, the chief executive of Unilever, who are calling for a plan B that, in their words, puts

“people and planet alongside profit”.

At the World Economic Forum in Davos, they called for companies to implement the highest standards in their core operations and across their supply chains, including greater transparency as a matter of course and as good business practice.

There is good reason for this. Business needs to command the support of the public, of investors and of shareholders in order to survive and to grow. However, public trust is low. Last year, an Ipsos MORI poll found that only 34% of the people questioned trusted business leaders to tell the truth. We need to see this in context; I would hate to think what they had to say about politicians. Research by Goldman Sachs and KPMG has shown that companies that have implemented responsible business practices such as transparency throughout their operations often lead on stock market performance and attract a wider and more loyal investor base from investors who are increasingly looking at these issues and want to invest in companies that have a long-term, not a short-term, outlook.

There are many examples of business leading the way in this field. As chairperson of the all-party parliamentary group on corporate responsibility, I have been pleased to meet and work with many such business leaders over the past four years. However, the Government need to play their part too, because, as many of these business leaders have told me, operating transparently is not always easy. They do so in the glare of public attention, they sometimes get it wrong, and it is incredibly complicated. Companies are often involved in extremely complex supply chains. That was brought home to me and to the wider public after the Rana Plaza disaster, where some of the multinational companies involved did not even realise at first that they had been contracting from suppliers who were based in the complex. It was only after campaigners and the media got involved that they realised they had been doing so.

Some companies are making efforts to operate to the highest ethical standards in terms of human rights and the environment—and to be open about it—but their problem is that they are in competition with businesses that do not do that. Many such businesses are based in the UK and listed on the London stock exchange, but they face no penalties whatsoever for breaching the standards the Government say they want them to meet. Like so many others, I believe it is time that the playing field was tilted in favour of those that are operating to high ethical standards, not against them.

[Jim Shannon (Strangford) (DUP)]

I asked the hon. Lady beforehand for permission to intervene on her. Does she agree that greater transparency of who owns and controls companies is necessary and that, in addition to addressing the issues she has mentioned, any new measures must address tax evasion, money laundering and the financing of terror?

[Lisa Nandy]

That is absolutely right. This goes to the heart of public trust in business, which is about transparency and a commitment to tackling such issues.

The business and human rights action plan was published jointly last September by the Foreign Office and the Department for Business, Innovation and Skills. The UK was one of the first countries to breathe life into the United Nations’ guiding principles on business and human rights. I am proud of that and congratulate Ministers for taking a lead on it. “Good Business” sets out the standards it expects companies to uphold, but so far it does nothing to demand those standards of them. We have had a decade of voluntary corporate social responsibility. Given the experience of the past year and previously—when John Ruggie set out the guiding principles, which were unanimously endorsed by the UN—it is time for the Government to take a more proactive approach.

First, I have been deeply concerned by reports from non-governmental organisations and others that companies have been given conflicting messages by different parts of Government. Although the Foreign Office has consistently warned about the dangers for UK-based companies in knowingly or unknowingly breaching human rights overseas, it appears from anecdotal evidence that BIS has been acting in direct conflict with the commitments made in the action plan.

I want to draw the Minister’s attention to one concrete example where there is evidence of that happening. The Kiobel case was brought by a group of Nigerian activists who claimed that Shell had helped the Nigerian military to systematically torture and kill environmentalists in the 1990s. The cases against Shell were filed under the US alien tort statute, which applies extraterritorially, so it enables non-US plaintiffs to bring claims against foreign companies in the US courts for acts that occur in a third country. Shell challenged that use of the alien tort statute and the UK Government intervened to support the company’s position. The court then ruled in Shell’s favour, which limits the ability of communities in developing countries to challenge corporate malpractice in the US courts in future. The Government’s intervention ran contrary to the commitment made by the Prime Minister to implement the UN guiding principles on business and human rights, which were unanimously endorsed by Governments in 2011.

Will the Minister give an assurance that her Department is completely committed to upholding the principles in the action plan, without qualification, and that it will commit to the same openness in its dealings with business as the Government say they want to see from business itself? In particular, will she ensure that businesses receiving export credit support or development partnership funding have to show that they are meeting the standards of the UN guiding principles?

Secondly, the entire action plan is predicated on the principle of transparency—none of it can be monitored or enforced without it. Nowhere is that more true than in one of the central pillars of John Ruggie’s principles, namely the access to remedy. Without transparency, people whose lives and communities have been destroyed have no effective way of getting justice. As we saw with the South African miners who took a case against Cape plc, companies will often seek to cover the impact of their actions, creating enormous difficulties for communities and their lawyers in gaining the evidence they need to put before the courts.

I must tell the Minister that without transparency requirements, there is no way to prevent such injustices. I recently met representatives of the Afro-Colombian Community Council of Opoca in Colombia. After an 11-year struggle to acquire a collective land title, it was finally granted the right to 73,000 hectares of collective land titles in September 2011, which affected about 17,500 people. They had an 11-year struggle only to discover that a mining concession, covering approximately 55,000 hectares of their ancestral territory, had been granted to AngloGold Ashanti, which is a company registered on the British stock exchange. A proactive duty on companies to disclose information would prevent such harm, while a greater commitment to transparency and—crucially—penalties for those who do not comply is the only way to enable people to access justice.

Finally, I want to tell the Minister:

“To no one will we sell, to no one deny or delay right or justice.”

That principle in Magna Carta has formed the basis of law, liberty and rights in this country for centuries. In this area at least, we are falling well short. Will the Minister commit to improving transparency and access to justice for communities harmed by the actions of British businesses abroad? At present, I and many other hon. Members in the Chamber are approached by so many people who have such a different story to tell. This is an issue of morality, good business and consumer confidence, but above all of national reputation. We should promote not the worst but the best of British business to the world. I look forward to the Minister’s response.

Finance (No. 2) Bill

Jim Shannon Excerpts

Tuesday 1st April 2014 Commons Chamber

[Jim Shannon (Strangford) (DUP)]

I am pleased to be called to make a small contribution to the debate, Madam Deputy Speaker. I wish to be respectful to all parties and individuals in my speech, and I want to speak about the reasoned amendment. It refers to the cost of living crisis, and no one who represents a constituency in this Chamber can ignore the cost of living. Yes, things are better. I acknowledge that and it is good that they are better. It is good that unemployment is down and that there are opportunities, but the money is just not in the pockets of the people I see on the high streets of the towns that I represent. The cost of living is still an issue that we need to address and I want to be respectful in that regard.

The amendment also refers to tackling rising energy bills. I know that the Government have given a commitment to doing that through the Budget and the debate over the past couple of days has tried to address that, too.

Today at Lambeth house, the all-party group on hunger and food poverty launched an inquiry to address poverty in the United Kingdom of Great Britain and Northern Ireland and to take into consideration other parts of Europe where food banks are part of life. I see food banks as a positive, not a negative, as they bring communities together and energise people’s focus on those who are less well off, and people are very kind. Those are the benefits, but the all-party group will focus on poverty as well.

The hon. Member for North Durham (Mr Jones) mentioned young people and work. If there were ever an issue to which hon. Members should draw attention, it is the young people we represent in our constituencies. We want to see them getting courses at their local colleges and employment opportunities at the end of them. In his response, will the Minister gives some indication of the specific provision in this Budget to help young people to get job opportunities?

I also want to highlight the issue of unemployment and those over 50. Those who lose their jobs at the age of 50-plus find it very hard to get back into employment. Although they might have opportunities for courses, re-employment and retraining, the critical factor will be job opportunities. Perhaps the Minister could also consider that.

The Government have clearly made a commitment on child care costs. That will enable people to work. The Chancellor has stated his commitment—the Economic Secretary to the Treasury did so again on TV last night —to create 1 million more jobs. That is good news, if the commitment can be delivered in reality.

Housing supply is an issue in my constituency. One of the biggest issues is the need for affordable rental accommodation. Although housing is a devolved matter in Northern Ireland, it is still a critical issue and I look forward to seeing some changes in that regard.

I commend the Government for their pension changes. The hon. Member for North East Somerset (Jacob Rees-Mogg) mentioned corporation tax. Although there is a commitment on air passenger duty, it is not enough and does not address the considerable difficulties we have in Northern Ireland because of the land border that people can drive across. Air passenger duty in the Republic is 0% and tourism VAT is at 9% whereas it is 20% in Northern Ireland. Those are critical factors that affect the Northern Ireland economy. We also have the highest fuel costs in the United Kingdom, and we would have been happier to have seen a specific scheme for Northern Ireland on that. Those are key issues.

I want to put on the record my disagreement with the Opposition’s view on the marriage tax allowance. I am glad that there is a married tax allowance for the third of married couples who are at present disadvantaged and who will, through clause 11, be better off. It is a Government commitment and it is good news. It is also a Democratic Unionist party commitment. We are pleased to see the married tax allowance coming through for married couples because it is an issue that we have supported. It is a pledge in our manifesto. We support married couples and we have sought provision for them through the Treasury. It is good news to see that delivered through clause 11.

May I put on record my strong support for the provision in the Budget of transferrable allowances for married couples? This has been a long time coming and is very welcome. It is a shame that at exactly the same time the Chancellor should announce a provision that discriminates against one-earner couples. A Government committed to fixing broken Britain should value those families where the decision is made to sacrifice a second salary so that one parent can remain at home to invest in the children. Sadly, the Chancellor’s child care announcement offers them no support at all and leaves them feeling like second-class citizens. There is provision for those on higher incomes and there is provision for those on lower incomes, but those who are often referred to as the squeezed middle do not receive the child care provision that they should have. It is also vital for the provision to be widened, especially with the news that the child care provisions are to remain available to the very rich, so transferrable measures also pertain for higher rate taxpayers.

Since 2000, we have been very unusual in having a tax system that does not recognise family responsibility in any way. All manner of injustices have followed from this fiscal individualism, such as the fact that the tax burden on one-earner married couples on an average wage with two children is 45% greater than the OECD average—up from 42% last year. To really see the problem we have with individualism, we have to consider this burden as a proportion of that placed on a single person on the same wage. In the UK, such a family pays more than 80% of what a single person on the same wage pays while the OECD average is just 55%. Such individualism will not fix broken Britain.

That Chancellor has today taken an important step in re-inserting recognition of family responsibility into the tax system. We welcome that and we are pleased that it has happened. This is a seminal development, and one on which we must now build for the future.

Safety of Electrical Appliances

Jim Shannon Excerpts

Monday 24th March 2014 Commons Chamber

[Mike Wood (Batley and Spen) (Lab)]

I hope, Mr Speaker, that you will consider that, on the first day of United Kingdom home safety week, it is appropriate that I raise the concerns of my constituent Martin Squires, who on 6 January 2012 did what hundreds of thousands of families in this country will undoubtedly be doing this very evening—he went to bed having first programmed the dishwasher sited in his kitchen. The dishwasher caught fire, and Martin believes that it is only by chance that he and his young family were not burned to death as a result.

That is bad enough, but in his attempt to come to terms with what happened to him and his family and to get to the bottom of its causes, Mr Squires has since become much more concerned with the safety of all those of us using white goods. I think it is true to say that he feels extremely let down both by the manufacturers and by the recall system for faulty and dangerous goods. In his own words,

“I purchased a product in good faith with hard earned money from a reputable company, which with hindsight was a potential death trap that they planted in my family home. As each month goes by I feel angrier with Hotpoint and the UK recall system. Hotpoint knew they had a problem with this product before my fire and whilst they started to contact customers in October 2012 they did not make the problem public until April 2013.”

He has found the system for recalling faulty products to be piecemeal, inflexible and designed, in essence, more to secure the profits of the producers than to protect the public. In fact, we know that the system is entirely in the hands of the manufacturers who produce the faulty and potentially lethal goods in the first place.

The Electrical Safety Council, which, as one might imagine, has done an enormous amount of work in this area, suggests that Mr Squires’ experience is far from unique, with such appliances causing over 17,000 domestic fires and 40 to 45 deaths in this country each year. Yet over 1 million appliances that are known to be faulty may remain in use in UK homes as we speak, every one of which has the potential to start life-threatening fires, as in my constituent’s case, or to emit gas, poisoning people as they sleep, as happened to Richard Smith and Kevin Branton, two young men who, as reported to this House in a recent debate and as shown in the Official Report of 11 March 2014, died in their sleep when a Beko cooker gave off carbon monoxide. This is a serious situation which it might be felt the Government of the day would want to play a part in mitigating. Perhaps I may come back to what I think the Government could and should do to improve matters.

First, I would like to look at the recall system that is supposed to operate when a safety risk to customers is discovered. It appears, at best, to be extremely flawed. The onus is on the manufacturer who produced the faulty product to initiate and organise the process, which, on average, leaves 80% of these defective and dangerous goods unreturned or unrepaired. Underfunded local trading standards services are responsible for enforcement and even have powers to order recall, but they rarely use them. Such other sanctions as there are appear to be derisory. Why is that the case when 1 million recalled goods are still in use in customers’ homes, and when 17,000 fires and up to 45 deaths a year result from that fact?

[Jim Shannon (Strangford) (DUP)]

I thank the hon. Gentleman for bringing this important matter to the Chamber for our consideration. I have sought his permission to intervene. In Northern Ireland, a new scheme has been brought in by the Department of Enterprise, Trade and Investment to retrain electricians periodically to make them aware of new regulations and the safety of electrical appliances so that they can use their expertise to advise their customers. If that scheme has not been introduced on the UK mainland, does the hon. Gentleman think that it should be?

[Mike Wood]

The situation is so bad that any scheme that could make a positive contribution and improve it would be welcome. I am grateful for that information, because I did not know about that scheme.

Things appear to be much better in product areas as varied as motor vehicles and food. I cannot speak for the Minister, but I understand that the Government say that the difference is due largely to the lack of traceability in electrical goods, as opposed to motor vehicles. Apparently, neither the manufacturer nor the retailer has sufficient information about the vast mass of people who purchase white goods. How, then, can we have a customer safety system that depends on exactly that knowledge? If traceability is the key to stopping fires and deaths, a quite different system must be introduced.

In my view, we need a third-party organisation with which people can register when they buy white goods. That would overcome the reticence of customers in giving their personal information to manufacturers or retailers, no doubt for fear that the data will be used or abused to bombard them with advertising and for other commercial purposes. Will the Government consider such a development? Will they consider a much more radical model that takes the process of recall out of the hands of the manufacturers altogether, so that it can be undertaken entirely in the interests of the consumer and their safety, rather than in the commercial interests of the producers?

I point the Minister to the American system, where the Consumer Product Safety Commission does just what I have suggested. As far as one can tell, it produces much better results for the consumer and their safety than we manage. I am not known for advocating the wonders of American practice generally, but our system is failing UK consumers and they have a right to expect better. In our system, commercial interest is allowed to determine how, at what pace, by what means and, indeed, if at all a manufacturer meets its responsibilities to recall defective products.

The trading standards service in my area reported to me at least one recent example of a manufacturer refusing to issue a recall notice at all, even though the trading standards service and the local fire service considered that it should. Neither of those agencies, whether individually or collectively, had the ability to force the company to act. The Chief Fire Officers Association says that it is

“very concerned about the number of faulty products in people’s homes.”

There is little wonder in that if the situation nationally is the same as the situation in my area of west Yorkshire, where the number of house fires is decreasing, in large part due to the professionalism, expertise and work of the fire service, but the number of fires caused by electrical goods remains stubbornly high. Chief fire officers have also said that they believe the recall system to be “unsuccessful and inadequate”.

The situation is that tens of thousands of dangerous and defective goods are left in people’s homes, causing 17,000 fires and up to 45 deaths a year. The responsibility for those goods obviously rests with the manufacturers, the importers and the retailers. The system to reduce the threat and protect the public safety is diffuse, unclear and too open to conflicts of interest.

I have some questions for the Minister about what the Government might do in the face of this threat to the public. First, will the Government ensure more traceability for electrical goods and consider a third-party agency to overcome the customer reluctance to provide details at point of sale? Secondly, will they investigate systems such as that in the US, where the onus for recall is essentially out of the hands of manufacturers? Thirdly, will they greatly increase the penalties, which are currently derisory—fines of £5,000 for multinational companies—given that the lives of my constituents and many others have been put at risk? Fourthly, will they start to collate data—it is ludicrous to me that they should need to start to do this—from, for instance, the 200 or so trading standards services and the fire services about the full extent of the dangers posed by these electrical products? Fifthly, will the Government listen more to people such as my constituent Martin Squires? He has had enormous difficulty in getting anybody to listen to the dangers that his family were put in and the lessons that he thinks should be learned. He wants the interests of consumers to be considered, not just those of producers, so that people’s lives are put less at risk.

Finally, to be helpful to the Minister, perhaps I might suggest that she introduce some of those suggestions as amendments to the Consumer Rights Bill which is making progress through the House.

--- Later in debate ---

[Jim Shannon]

Will the Minister say something about the role of the electrical contractors who supply the appliances and have to conform to the law?

[Jenny Willott]

In the case of appliances that are manufactured in the UK, the responsibility lies with either the manufacturer or the trader. In the case of appliances that are imported, the importer is liable for ensuring that they are in compliance with British law. All products that are sold in the UK must conform to British safety regulations. Traders are then responsible for ensuring that the goods that they sell to consumers are appropriate and safe, and comply with those regulations. It is clear that consumers will be protected by a number of different pieces of legislation so that they cannot fall into any gaps.

We are working with the Association of Manufacturers of Domestic Electrical Appliances on an industry initiative to encourage consumers to register their appliances, because the number of people who respond to recalls is extremely low. If more people register their appliances and ensure that the details are up to date, the recalls will be more effective. The leading appliance manufacturers—there is a great deal of money behind many of the big manufacturers—are trying to encourage product registration, and have committed themselves to using the power of their marketing programmes to show consumers why it is worth registering their domestic appliances.

I hope that that will debunk some of the myths identified by the hon. Member for Strangford. Many people think that they will end up on some junk mail list and be sent a load of stuff that they do not want after handing over their contact details, and do not complete the warranty forms because they do not understand why the information needs to be held. It was quite illuminating during the Committee stage of the Consumer Rights Bill to hear a number of Members say “I had no idea that that was why we were asked to fill in those cards.” If we can make people understand why it is important to provide the information, more of them will do so, and recalls will become much more effective. We are working with the manufacturers and also with trading standards and the fire service, and with consumer groups, too, because they have a very important role to play in helping consumers understand why this is important and worth doing.

This is a very important area. Although 21 deaths is quite a low number, every one of them is a tragedy and it is still far too many. As the hon. Member for Batley and Spen highlighted, as well as those tragic deaths there are also injuries and significant damage to property. We want to try to reduce that as much as possible.

I believe that the legislative framework is right, and we are working very closely with enforcers, consumer groups, the fire service, manufacturers and retailers to try to ensure we share best practice, tighten up enforcement to make sure that is effective, and in the long run make corrective action, including recalls, more effective, so that we can reduce the number of tragedies and consumers are properly protected under the law.

Question put and agreed to.

Budget Resolutions and Economic Situation

Jim Shannon Excerpts

Wednesday 19th March 2014 Commons Chamber

[David Mowat]

I support that, and I just reiterate the words the Chancellor used: those who have the worst values in our society are being used to fund those who have the best values in our society. That just about sums it up.

[Jim Shannon (Strangford) (DUP)]

rose—

[David Mowat]

I have given way twice already, so I am sorry but I am not going to do so now.

I wish to say a little about the carbon price floor, because I was delighted that the Chancellor has acted on it. The action makes no difference to our commitments on the overall carbon reduction profile that this country has made, but it makes a great difference to the potential carbon leakage we are facing in our great energy-intensive industries, particularly in the north-west and north-east. Some 900,000 people work in energy-intensive industries in our country, and I sometimes think they are forgotten in our dialogue about energy prices. It is worth understanding that what the Chancellor has done is remove the straitjacket on costs, which would have put a great deal of those jobs at risk. For example, we have already lost primary aluminium smelting in this country—it has moved out of the UK—and we are losing marginal chemicals capacity from this country. I am surprised that a number of Opposition Members are not more exercised about this issue in general, given that they represent parts of the north-east, where there is heavy chemical manufacturing, and there are a lot of energy-intensive industries and a lot of jobs, because we cannot rebalance our economy back towards manufacturing if we have differentially high energy prices in this country. We just will not be able to do that—it will not happen.

This issue is not just about what is happening in the United States on shale gas and shale prices; it is also about what is happening on mainland Europe. It is an inconvenient truth—to use a known phrase—in this whole issue of carbonisation that we produce not only considerably less carbon per head than the EU average, but less carbon per capita. We produce 30% less carbon per head and carbon per capita than Germany, yet Germany is pursuing a policy of building unabated coal power stations at scale. We are being left behind in all that, and what the Chancellor has done on the framework is absolutely spot on and will make a difference to those 900,000 jobs. I predict that we will be revisiting this issue at the next Budget and certainly into the next Parliament, because there is a great deal of unfinished business in this area.

Before I leave the field of energy, may I say in passing that the infrastructure plan is very welcome? Two big parts of the national infrastructure plan are Hinkley Point C and Wylfa—together they make up about a quarter of it. They are both vital to our country and our economy. Both are currently under EU state aid investigation, which is holding up the projects. I have heard Ministers saying that they are confident that they will have that agreed, and I very much hope that is the case, because it would be a great paradox if those low-carbon projects, which are essential to our energy security and to our decarbonisation efforts, are held up within the EU at the same time as our EU partners are building unabated coal power stations at scale in countries such as Holland, Germany and Belgium.

I want to move on now to tax avoidance and tax evasion. The Red Book shows incremental revenue of £2 billion over the next two years from the anti-abuse legislation that we introduced. I very much welcome the Chancellor reducing the level of corporate avoidance of stamp duty from £2 million to £500,000. The closure of that tax loophole has brought in hundreds of millions of pounds. It is an example, as I said at the start of my remarks, of why income equality is so much better now than it was under the previous Government.

I also welcome the up-front taxation of tax schemes, which means that if people get involved in controversial schemes, they will not be saving tax and cash flow as they wait to go to tribunal. Her Majesty’s Revenue and Customs is also able to act more quickly than it has hitherto been able to do.

There were four tests today, and the Chancellor has passed them and any reasonable expectation of this Budget. I am happy to support it.

--- Later in debate ---

[Ms Margaret Ritchie (South Down) (SDLP)]

Following convention I shall refer to the hon. Member for Rochford and Southend East (James Duddridge) and say I agree with some of what he said, but I disagree with the vast proportion of his speech because it deals with the general principles of the Chancellor’s Budget.

From the Chancellor’s speech one would think that everything was rosy with the economy, but that is not the case. Many people, including those in Northern Ireland, are experiencing a very different reality—a reality that the current Government are almost completely out of touch with. Families are faced with rising food bills, sky-rocketing energy costs and stagnant wages. This is pushing more and more people into personal debt and we could be faced with a personal credit crisis as people over-extend credit cards and use payday loan companies to cover rising bills. The Governor of the Bank of England, Mark Carney, warned just yesterday that excessive borrowing was again posing a grave danger to the economy.

The employment figures announced today do not tell the full story, with a vast proportion of these new jobs coming from self-employment, temporary positions and zero-hours contracts. Many of these jobs are unstable and reflect not a true recovery, but a permanent low-wage economy. The figures are not geographically consistent. According to the Department of Enterprise, Trade and Investment in Northern Ireland, the local employment rate of 72% is the lowest of any region, and unemployment remains stubbornly high at 7.5%, compared with the UK average of 7.2%.

This is to say nothing of the tragedy of joblessness faced by our young people. Youth unemployment stands at nearly a million in the UK and more than 20,000 in Northern Ireland. About one in four of our young people cannot find a job, which will have a devastating impact on our economy and on their own lives in the coming years. Many have emigrated and many more face emigration. PricewaterhouseCoopers has said that this will cost the Northern Ireland economy £l billion by 2016. The Chancellor said nothing new today that makes me think he grasps the scale of the problem or is seeking the necessary remedies.

[Jim Shannon]

The Government have made concessions on the transferable tax allowance and on child care provision, but they have omitted to make any allowance for single-earner families where one of the parents goes to work and they forgo a second salary so that they can invest in the life of their children. There is provision for those at the higher level of taxation and provision for those at the lower level of taxation in respect of child care, but for those in between there is none. Does the hon. Lady agree that there is a shortfall in the Government’s child care provision for that section of the community?

[Ms Ritchie]

Yes, I agree. The Government need to make provision for that section of the population.

With respect to welfare, the supposed recovery is not a balanced one, as this Government continue to attack the most vulnerable and worst-off while giving handouts to those at the top. This political sleight of hand, blaming the poorest in society for the economic woes caused by the banking collapse, which has been repeated by the Chancellor in Budget after Budget, is deeply cynical and should not go unchallenged. The Government’s divisive rhetoric and continued draconian approach to welfare reform is of great concern. The current roll-out of universal credit is unravelling at an alarming rate, yet we are expected to accept even more of this misery for the worst-off in society. We have valid concerns about these measures in Northern Ireland, yet the British Government and the Department for Work and Pensions continue to try to force this issue through with threats and grandstanding.

Today, we hear of further attacks on the most vulnerable, with the introduction of a cap on welfare spending. I have great fears that this proposed cap will be used in an entirely pernicious manner, with little consideration given to need. As always with the Budget, the devil will be in the detail, and I will be fully pursuing this in subsequent weeks. In particular, concerns have been raised as to exactly what benefits will and will not be included in such a cap. I have since been informed that benefits such as disability living allowance, carer’s allowance and bereavement benefits—the very benefits that affect some of the most vulnerable in our society—will be impacted upon.

Although some elements of the Budget are to be welcomed, I have a concern in respect of one sector. The tourism sector is absolutely vital for our economy in Northern Ireland. The measure announced in relation to air passenger duty is extremely limited and will do nothing to lower the excessive rate of duty on flights within the UK and to Europe—such flights form the vast majority of those to and from Northern Ireland. We are still faced with the highest rates of APD and VAT on tourism products in the EU. Almost every EU state has some form of reduction in VAT for the tourism industry, and just last month I held a debate asking for the Treasury to consider introducing a similar scheme in the UK, which would provide an instant boost for the tourism industry and our tourism sector in Northern Ireland. It was notable during that debate that MPs from across the House supported my proposal, including many of the Chancellor’s own Back Benchers. The lack of movement on either of those issues was a glaring omission from today’s Budget.

We see Ireland as an island tourist market, but businesses in the north face a 20% rate of VAT, whereas the Irish Government have taken the sensible step of keeping their rate at 9% for tourism products. Regrettably, the only border for tourists moving between the south and the north is an economic one, brought about by the decisions of the UK Treasury. I ask the Chancellor again to take a hard look at a cut in the rate of VAT for tourism products, which would become budget-neutral after the first year, according to Professor Blake, who used the Treasury’s own economic model.

[Jim Shannon]

Will the hon. Lady give way?

[Ms Ritchie]

I am sorry, but I cannot give way again, as I am conscious that other Members wish to speak.

We are also seeking clarification on the aggregates credit levy scheme. I have had much correspondence with the Chancellor and Treasury Ministers on that issue, and I understand that we may be nearing a positive conclusion with the European Commission. So it would be helpful if we could get clarification on that issue, and on the whole area of the Barnett consequentials for flood defences, because I represent a coastal constituency whose coast has been undermined by the impact of climate change.

This was a political Budget from a political Chancellor, and it comes at the cost of the real economy. It will give little comfort to people who will continue to face low wages and high costs.