Community Debt Advice Services

John Healey Excerpts

Wednesday 1st December 2021 Westminster Hall

[Emma Hardy]

As I mentioned at the start, my right hon. Friend has been with me from the beginning, looking at this issue and campaigning on it. She is absolutely right. I accept that some people might want to access more virtual appointments and information on a website, but it cannot come at the expense of the face-to-face component. We cannot lose that face-to-face part.

MaPS is changing the way funding is provided. Although, it is increasing the money for debt advice—I want to acknowledge that, and it is set to increase to £77 million in April 2022—the bulk of that funding is moving to call centres and online services. At a meeting on 17 November, the MaPS chief executive and commissioning team told We Are Debt Advisers, which is a group representing debt advisers, that 20% of the £77 million had been allocated to face-to-face appointments. That amounts to £15.4 million. They also said that regional providers currently spend 56% of their existing £33 million on delivering this way, which is £18.5 million. By their own admission, this is a cut of just over £3 million to face-to-face services. That is made worse by the replacement of the grant system with contracting, which in its current form will exclude many smaller providers active in the sector from being able to bid for contracts at all.

[John Healey (Wentworth and Dearne) (Lab)]

I am grateful to my hon. Friend for all her work on this issue. She makes a powerful point about the shift in priority, and therefore funding, from face-to-face debt advice to online and telephone advice. In South Yorkshire, there are currently 28 funded face-to-face debt advisers, but that will go down to seven. Pre pandemic, in Rotherham alone, the number of new face-to-face debt inquiries each year was 2,200. In the context that she has set out of rising prices, bills and taxes, she might question Ministers whether, if the Treasury or MaPS have evidence to suggest that the demand for face-to-face debt advice will go down, not up, and to justify these cuts, they will publish that, and then we will all be better informed and more confident about the future.

[Emma Hardy]

I thank my right hon. Friend, who has been campaigning on this issue from the very beginning. He is absolutely right: all the forecasts—all of them—show that demand for debt advice will only increase. We know that. We also know that cases can be complex and that it can sometimes be the first time that people have got into debt. So the idea that we would cut face-to-face advice at this time seems incomprehensible.

Under the new tender, MaPS will instead have three national contracts. Its staff met me—I credit them for that—and said that these will be a mix of face-to-face, digital and phone services, with one each for the north, the midlands and the south of England, and a separate arrangement for a national call centre. However, three regional contracts, instead of nine smaller ones, as it was before, means that small, local providers that currently rely on MaPS funding for the bulk of their income face having to drop face-to-face services or close entirely. Many already know that they are not included in tender bids because they do not have the size or resources to compete individually for these tenders. Sylvia Simpson, chair of the Leeds Debt Advice Network, described the impact as “catastrophic”, with three out of four local MaPS-funded debt agencies no longer able to provide debt advice after 31 March. There are serious doubts about the rationale for the decision to restructure funding. Where is the evidence to support it and its timing? Does MaPS have confidence in the outcome itself?

Debt advisers tell me that there has been no proper consultation. In the face of the national outcry from debt advice organisations, charities and trade unions, MaPS issued a two-week call for evidence concerning the impact of the covid-19 pandemic on access to debt advice. That concluded on 29 October, but the procurement exercise for the new contracts had already taken place. The consultation will not influence a procurement process that has already gone on, so what was its purpose? It is clear that the procurement exercise expected bidders to focus on digital and telephone-based services rather than face-to-face services, despite MaPS’ own evidence showing that demand for face-to-face services was almost double supply.

A 2019 MaPS assessment of the need for debt advice said:

“Face-to-face is the channel with the smallest gap between demand and supply at the national level. Nevertheless, the levels of unmet demand are high, with demand being over two times higher than supply. It is also the channel with the biggest variation in unmet demand between countries and regions. Face-to-face unmet demand is particularly high in London, where existing supply of face-to-face debt advice could meet only just over a fifth of current demand.”

MaPS does not seem to have evidence that the need for face-to-face services will fall. On 29 November, in reply to a letter sent on 16 November from the Chair of the Treasury Committee, the right hon. Member for Central Devon (Mel Stride), MaPS provided figures showing that, for the last pre-pandemic year, 2019-20, face-to-face services accounted for 34% of its consultations. That fell by only 3 percentage points, to 31%, in 2020-21, despite the fact, let us not forget, that this was during a global pandemic that involved lockdowns, compulsory mask wearing, the adoption of social distancing and people being afraid to leave their homes. Despite all that, the demand for face-to-face debt advice fell by only three percentage points. In its letter to the Treasury Committee, MaPS notes that its most recent modelling of future demand is from autumn 2020 which, as we will remember all too well, was just before another national lockdown and before the pandemic’s third wave brutally hit, killing thousands of people in our country. That is when the modelling was done. MaPS does not say whether the modelling includes the impact of the pandemic, but I think we can assume it probably did not.

On the importance of face-to-face appointments, MaPS said that the forecast

“did not make distinctions between case complexity or channel of provision.”

If someone has a simple debt inquiry, they would probably google it and look on a website, or they might phone someone up and check. If their case is extremely complex—I refer to my earlier points on domestic abuse, mental health and such concerns—accessing a website is not going to be suitable. MaPS needs to be looking at complex cases and how it provides support.

In other words, the modelling does not tell MaPS how much demand for face-to-face appointments to expect, and the contract does not give it control over how much can be provided. MaPS claims that changes will increase accessibility to advice in those difficult-to-reach places, but those changes could mean the opportunity for face-to-face advice would no longer exist in some areas of the country. I accept—I was discussing this point with the Minister earlier—that some areas could end up with more access to advice, but that is at the expense of other areas.

In the letter, MaPS mentions an equalities and vulnerability impact assessment. That has not been made available and I hope the Minister is able to use his influence to say to MaPS that it should be published. At the moment, MaPS is saying to me, “We do not know, because we are still commissioning. We are not sure how much will be face to face; we are not sure how much will be on the phone or remote. We haven’t made any decisions.” If that is true and it does not know where it is going to end up, how can it have done an equalities and vulnerability impact assessment? When MaPS has made up its mind about what it wants, I assume another impact assessment will be needed. I hope that one is made public.

I hope I have explained clearly why face-to-face advice is the only way of supporting a significant proportion of people in debt, and why a reduction in capacity and coverage will fail some of the most vulnerable in our society. I hope that MaPS does more to reach out more effectively to practitioners with a lifetime of experience and knowledge in the field. Debt advice groups such as AdviceUK believe that MaPS’ vision for debt advice is deeply flawed, does not meet the needs of the diverse communities across England and does not enable the provision of flexible, in-depth and sustainable debt advice services.

MaPS cannot explain why it has made the funding allocations it has done or what impact they will have on people with complex needs. Of course, the pandemic has been a huge disrupter. Its effects are still being played out and the future remains hard to predict, but we do know that there will be an increase in the number of families in debt. We know that we are only beginning to see the devastating impact of the cost of living crisis. I hope the Minister is able to use all the influence he has—accepting, of course, that MaPS is a separate organisation and that this is a commercial contract—to call on MaPS to place an immediate hold on the procurement of new debt advice contracts, pending a thorough and effective consultation into the likely demand for face-to-face services in the near future; and to insist that there should be no loss of debt adviser jobs and an increase in funding for community-based face-to-face services. Consultation with frontline advisers through their trade union should also be essential for all future decisions affecting jobs and service delivery.

I finish by reminding the Minister of my earlier comment: more than 100,000 people attempt suicide each year because of debt. The services these organisations provide can literally be life-saving. Having the right debt advice is too important to get wrong.

Small Breweries Relief

John Healey Excerpts

Monday 9th November 2020 Commons Chamber

[Grahame Morris (Easington) (Lab)]

I congratulate and thank the right hon. Member for Dwyfor Meirionnydd (Liz Saville Roberts). With a name like “Morris”, I should really be able to speak Welsh, and I am fifth generation Welsh. We are discussing a really important subject and I am pleased to have the opportunity to make a few brief points in this debate which, unexpectedly, is a little longer than originally planned.

It is tempting to lapse into puns and humour, but this is a serious business. As you know, Mr Deputy Speaker, I love beer, me—I love Indian pale ale, I love the ruby reds, I love a craft lager. I love all beers. Tonight we are talking not about the mass production of the big six brewers; we are talking about small breweries of which there are 90 in Wales, and 2,500 across the country, including Castle Eden Brewery—I must mention my one brewery, or they would never forgive me, and it produces what is probably among the finest beer in the world.

[John Healey (Wentworth and Dearne) (Lab)]

What’s it called?

[Grahame Morris]

Castle Eden ale. I highly recommend it.

As the right hon. Lady indicated, we are talking about the important issue of whether the Government, intentionally or unintentionally, are introducing anti-competitive practices. It has been suggested, perhaps not without foundation, that the large breweries have the ear of Ministers. Let us be in no doubt: the abolition of small breweries relief will be the death knell for many small brewers across the country, including in Wales and the whole United Kingdom.

As has rightly been pointed out, the introduction of small breweries relief led to a renaissance in British brewing. Those reforms should go towards strengthening the small, independent and craft brewers that we are so proud of, and that tourists and indigenous people on these islands love in equal measure. I hope that the Government will not make any changes to breweries that produce below 5,000 hectolitres, as to do so would threaten our craft beer industry, and local jobs in constituencies such as mine. Even worse, consumers such as me would ultimately lose out, with less variety and choice of beer. We should celebrate the diversity of brewers and different beers and tastes, and we should not do anything that will jeopardise that.

I worry that the decision to convert small breweries relief from a percentage to a cash basis threatens the long-term value of that rate, if it does not keep pace with the main rate. We get lost in numbers. What does 5,000 hectolitres mean? That is 3,000 old brewers barrels. My brewery, Castle Eden Brewery, produces just over 3,000 barrels, or 5,000 hectolitres. Compare that not with one of the big six or big four that produce millions of hectolitres, but with Camerons Brewery in Hartlepool, which is a producer of fine beer and produces 1 million hectolitres. It is impossible for a small brewery to compete with the economies of scale that a large brewery can bring to bear. Unless careful thought is given to it, the taper above 5,000 hectolitres will effectively bring an end to this prized and valued sector.

I promised to be brief, so I have just a couple of questions for the Minister, having listened to several debates and questions on the issue. Does she accept that cutting the threshold will lead to small breweries paying more duty? Does she understand that that will result in some small breweries closing? We must remember that the premise of the relief was that it would be revenue-neutral. How will she judge the success of the policy: by the number of UK small breweries, by the number of people employed by the industry, or by the reduction in market share of the big four that dominate? I would very much like to know what the Treasury’s objections are and how it will measure success.

Budget Resolutions

John Healey Excerpts

Thursday 23rd November 2017 Commons Chamber

[John Healey (Wentworth and Dearne) (Lab)]

The Chancellor said today in the media that the economy is fundamentally strong, but he said in the Budget statement yesterday that the economy is weakening and getting worse. That is the hard truth that confronts and challenges all of us.

This has been a serious debate, with 31 speakers, after a Budget that confirmed that these are serious times for the country. We have had growth downgraded to below 2% each year for the next five years, for the first time in recent history; productivity downgraded by 0.6% a year for the next four years, which the Office for Budget Responsibility rightly calls a “remarkable period of weakness”; business investment downgraded and subdued for the next four years; and earnings downgraded, with the Resolution Foundation showing that pay is now not set to recover to pre-global financial crisis levels until 2025—17 wasted years.

My hon. Friend the Member for West Bromwich West (Mr Bailey) was right: the big story yesterday was the OBR’s damning judgment on the economy and the Budget. My hon. Friend the Member for Ilford North (Wes Streeting), one of Labour’s strongest, clearest voices on the economy, said the same.

I wish to pick up on some of the points made today about the implications and impact of the Budget. A number of colleagues on both sides of the House spoke about the fact that the Government had raised expectations of lifting the public sector pay cap but then, after seven years of falling income for public servants, dashed those expectations. My hon. Friend the Member for Reading East (Matt Rodda) made that point, and my hon. Friend the Member for Lincoln (Ms Lee) spoke powerfully about the reality of work on the wards in Lincoln hospital. I enjoyed the comment of the hon. Member for Glasgow South West (Chris Stephens) about the Chancellor having a matt finish and a Budget that was more of the same. He also spoke about the need for a pay rise for public service workers, as did my hon. Friend the Member for Clwyd South (Susan Elan Jones), who said that the current situation does a grave disservice to public servants such as Mrs Davies who give their life to working for others. The hon. Members for Aberdeen North (Kirsty Blackman) and for Glasgow Central (Alison Thewliss), who are no longer in their places, made the same point.

The right hon. Member for Sevenoaks (Sir Michael Fallon) made a series of important points about the longer-term structural changes that are needed beyond the Budget to encourage savings, to spread the benefits of quantitative easing more widely and to reform business rates, which, as the hon. Member for Stafford (Jeremy Lefroy) said, too often still bear down too heavily on small and medium-sized firms.

My hon. Friend the Member for Blaenau Gwent (Nick Smith) talked about the problems that steelworkers in the British Steel pension fund face, with a lack of clear information or a clear guarantee for the future. I hope the Government will respond to that.

Good luck to the hon. Member for Taunton Deane (Rebecca Pow) in her bid to get traditional cider makers recognised by the Chancellor. Having been the Minister responsible for excise duties at one point, I am right behind her on that. Actually, cider duty was frozen for the first time when I was the Exchequer Secretary, and it made a big difference to cider makers in the south-west, as they will confirm.

A number of hon. Members—including my hon. Friend the Member for Huddersfield (Mr Sheerman), who is not in his place—made important points about how there was so little for the north of England, and how the greatest gaps are between the regions of this country. My hon. Friend the Member for Bradford South (Judith Cummins) spoke about the problems and pressures faced by Bradford Council. The hon. Member for Cleethorpes (Martin Vickers) quite rightly said that national housing and other policies are too often skewed towards the concerns of London. My hon. Friend the Member for Plymouth, Sutton and Devonport (Luke Pollard) was right to ask why the far south-west was ignored in this Budget when it came to investment, the NHS and the armed forces.

The hon. Member for Stirling (Stephen Kerr) claimed that the Budget was good for Scotland, but in the end it will be the Scottish people who decide that. The hon. Member for Strangford (Jim Shannon) was quite right to argue that people in Northern Ireland need a functioning Northern Ireland Assembly to make the best of what he sees in the Budget, and to push for what is not in it. Finally, my hon. Friend the Member for Kingston upon Hull West and Hessle (Emma Hardy) made a powerful speech to back a powerful campaign against the use of mesh, and I really hope that the Government were listening carefully.

Much of the debate was about what is in the Budget and what is happening to the economy. The real question for us all, though, is: why? Why are Britain’s real wage growth, productivity levels and economic growth prospects so much worse than those of other major countries? The OBR is clear that by far the biggest contribution to the major downgrade of growth prospects is the huge reduction in productivity, equivalent to 3% of our national economic output over the next five years. My hon. Friend the Member for Huddersfield said that that is a long-run problem, and, to be fair, all Governments have grappled with it.

During the period that I spent in the Treasury, we tried to support the five drivers of productivity by encouraging enterprise, raising skills, improving competition, funding R&D, science and innovation, and boosting investment. The Government have been in power for seven years, and it is clear that many of the problems have got a great deal worse during that time.

It is also clear that George Osborne got it wrong. What he thought was clever politics trumped sound economics. He cut too far, he choked off the recovery and he undermined our economic foundations. On enterprise, he scrapped the regional development agencies, which supported competitiveness, business and skills in all parts of the country. On skills, he cut training and education budgets by 14% in real terms, according to the IFS; that was an unprecedented cut. On competition, he did nothing to deal with the industries—including house building, energy and water—that are dominated by a few big providers.

On funding for R&D and science, spending on R&D has simply flatlined; it has been well below the OECD average in the last seven years. Finally, on investment, the Government—they were supported by the Secretary of State for Communities and Local Government when he was in the Treasury—halved public sector investment as a percentage of GDP in the first years of the Parliament after 2010; it fell from 3.4% of GDP in 2009-10 to 1.7% in 2015. The hon. Member for Faversham and Mid Kent (Helen Whately) talked, in a rather gushing speech, about how the Government were investing for the future. But the Budget pushes up the level of public sector investment by only 0.1% over the whole Parliament.

We are seeing the legacy of the decisions made in 2010, with the country paying the price and the current Chancellor playing catch-up. What is needed is a deep and big change—a proper national living wage, rising to £10 an hour; a national investment bank that will back businesses right across the country; and a long-term investment plan, especially for housing.

Let me finish with some comments on housing. I pay tribute to my hon. Friends the Members for Brentford and Isleworth (Ruth Cadbury), for Brighton, Kemptown (Lloyd Russell-Moyle) and for Vale of Clwyd (Chris Ruane), and to the hon. Member for North Devon (Peter Heaton-Jones). I am sorry that I have not been able to deal with the other points on housing.

The serious problem underpinning everything in the Government’s strategy was made very clear by the hon. Member for Isle of Wight (Mr Seely). We have never built the homes this country needs because we have slashed Government capital investment in homes and outsourced responsibility for building the new homes we need to the big developers. That is the fundamental flaw in the Government’s strategy. It has been the fundamental flaw for seven years, and it is the fundamental flaw of this Budget.

If we are to build not just the number of new homes we need to fix this country’s housing crisis, but the range of new homes we need to deal with seven years of housing failure on all fronts, we must do more to bring public sector investment, effort and action alongside the private sector. The Budget confirmed that this is a Government without a plan to fix the housing crisis.

Oral Answers to Questions

John Healey Excerpts

Tuesday 19th July 2016 Commons Chamber

[Mr Gauke]

This is one of those rare occasions when the Chief Secretary can be like the man from Del Monte and say yes.

[John Healey (Wentworth and Dearne) (Lab)]

The northern powerhouse plans in south Yorkshire are at risk. In the 1980s, our economic regeneration was kick-started by funding from Europe and it still supports small businesses, training and apprenticeships, so may I give the Chief Secretary another chance? Will he guarantee that the £174 million that has been pledged to south Yorkshire under the current programme will be paid in full?

[Mr Gauke]

The right hon. Gentleman will understand, as a former Treasury Minister, that there is a need for consistency. My answer remains that we will make an announcement soon. We recognise the point that he is making and the desire to remove uncertainty, but I am not in a position to make an announcement this morning.

Budget Resolutions and Economic Situation

John Healey Excerpts

Monday 21st March 2016 Commons Chamber

[John Healey (Wentworth and Dearne) (Lab)]

Indefensible, deeply unfair, distinctly political—my words for the Budget but also the words of the recently departed Secretary of State for Work and Pensions. It is Labour’s judgment of the Budget, but it is also the judgment of many fair-minded Government MPs and, most importantly, of the British people, the large majority of whom, when polled over the weekend, said the Government had got their priorities wrong.

If this is a political crisis, it is one of the Chancellor’s own making. It was the same failure of political judgment that led him to slash working tax credits, before being forced to backtrack, and the same failure of political judgment that led the ex-Secretary of State to say:

“It…looks like…it doesn’t matter because they don’t vote for us”.

The IFS and the Resolution Foundation both say that this is a starkly regressive Budget, with the rich getting the most and the poor getting the least. We saw a tycoon tax cut of over £3 billion benefiting the very richest; an income tax cut of £2 billion benefiting the better-off; and alongside that, a cut in disability benefits worth over £4 billion. Well, that was Wednesday; and today, five days later, we have heard from the Secretary of State for Work and Pensions that there will be no more welfare cuts. The Chancellor’s long-term economic plan—his long-term fiscal plan—therefore lasted just five days, and if we take the new Secretary of State for Work and Pensions at face value, the Chancellor of the Exchequer still has a £4.4 billion shortfall to meet his deficit plans.

While we are on policy confusion and fiscal chaos, the Secretary of State for Communities and Local Government, who opened this debate, told the House that none of the costs of the business rates cuts would come out of local government funding. All will be compensated for in full by section 31 grants. He tried to tell the House that line 15 on page 84 of the Red Book explained that, but it details the cuts to business rates, not the source of the compensation, and there is no other reference in the Red Book. That leaves the Chancellor of the Exchequer with a further, fresh fiscal shortfall of £6.7 billion over five years, or it means that the Secretary of State will have to find that money from savings in his own budget.

The Chancellor may have caused a political crisis for the Conservative party, but much more serious are the fiscal and economic problems he is causing for the country. These were laid bare in the Budget—downgraded growth, downgraded pay, downgraded productivity, and the Chancellor’s new fiscal mandate broken already, as the OBR confirmed that the debt-to-GDP ratio is rising, saying that there is only a 50:50 chance that he will hit his deficit target. Never mind omnishambles: this is the ultra-shambles Budget. It really comes to something when No. 10 Downing Street briefs over the weekend to play up the Conservative party’s splits on Europe because its splits on fiscal and social policy are even more damaging.

I do feel for the 27 hon. Members on both sides of the Chamber who have spoken, being limited first to five minutes, then to four and finally three minutes. To be quite honest, the loyalists were out in force on the Government Benches, although I would like to have heard more from the hon. Member for Hazel Grove (William Wragg) about his belief that local education authorities have an important role and how they have not been, as he said, all bad. I would like to have heard more from the hon. Member for Milton Keynes South (Iain Stewart) about the National Infrastructure Commission, a good idea—a Labour idea—that I am glad to see the Government are putting into practice.

I would like to have heard more from the hon. Member for Blackpool North and Cleveleys (Paul Maynard), who said, quite rightly, that we have to be ultra-careful not to write off those who cannot work. As he said, there is no hierarchy of human value. I would also like to have heard more from the hon. Member for North West Norfolk (Sir Henry Bellingham) about his deep opposition to mayors, imposed by the Chancellor as a condition of all devolution deals.

On our side of the Chamber, the House should have heard more from my hon. Friend the Member for Jarrow (Mr Hepburn). The Budget has fallen apart like the Chancellor’s reputation, he told us—quite right. I would like to have heard more from my hon. Friend the Member for Bury South (Mr Lewis), who warned the Chancellor about the flawed devolution deal for Greater Manchester, especially when it comes to skills, school improvement, social care and council funding; or from my hon. Friend the Member for Batley and Spen (Jo Cox). As she said, without the funding commitment to make them work, infrastructure announcements were actually re-announcements—quite right.

My hon. Friend the Member for Copeland (Mr Reed), who is no longer in his place, made an important point about how the Chancellor is unable to make his sums add up in this Budget. He is failing my hon. Friend’s constituents; he is failing the country. My right hon. Friend the Member for Birmingham, Hodge Hill (Liam Byrne) reinforced that, saying that this is a Budget that is failing the young generation and this is a Chancellor who is failing Britain’s youngest city, Birmingham.

My hon. Friend the Member for Halton (Derek Twigg) was quite right when he talked about the Chancellor’s creative accounting. My hon. Friend the Member for Harrow West (Mr Thomas) said that the Chancellor is making the challenges facing the public services in this country much more difficult to meet, and he was right. My hon. Friend the Member for Southampton, Test (Dr Whitehead) described this Budget as continuing the punishment of local government that we have seen over the last five years. My hon. Friend the Member for Washington and Sunderland West (Mrs Hodgson) rightly said that when all schools are being forced to become academies, the House should be deeply concerned about pupils with special educational needs.

My hon. Friend the Member for Dulwich and West Norwood (Helen Hayes) was dead right about the Chancellor’s failure to meet his own targets, and also about his failure on housing. The Secretary of State for Communities and Local Government, who opened the debate, clearly lacks the clout to be able to argue his Department’s case with the Chancellor, for the Budget had nothing to say about housing and did nothing to reverse six years of failure, from rising homelessness to falling home ownership. What a contrast with the Labour Government’s record! We more than halved homelessness. There were 1 million more home owners during our time in office, and 2 million were homes built.

When it came to housing, there was a huge hole in this Budget. There was nothing about new affordable homes to rent and buy, nothing about investment, and nothing about tackling the causes of rising homelessness. In particular, there was nothing to ease the housing pressures in London, where housing is the No. 1 issue. The Budget has completely exploded the claim of the wannabe Mayor, the hon. Member for Richmond Park (Zac Goldsmith), who has said “I can get a good deal from this Conservative Chancellor.” It makes more urgent, and more clear, the case for electing a Labour Mayor, my right hon. Friend the Member for Tooting (Sadiq Khan), who will be a Mayor for all Londoners.

This was billed as a Budget for the future. There was big talk of big infrastructure schemes, but the small print showed small sums, mostly for design and feasibility studies throughout the rest of the Parliament. I say to Members on both sides of the House, “Do not listen to what the Chancellor says; look at what he does.” In 2009-10, the last year of the last Labour Government, infrastructure investment was 3.2% of our wealth—3.2% of our GDP. In 2010-11, the Chancellor cut that to 2.5%. By the end of that first Parliament, the figure was 1.9%, and now the Chancellor is doing it again: at the end of this Parliament, it will be just 1.5%.

In truth, the Chancellor is too tightly bound by his own misjudged fiscal rules for the good of the country. His plan to achieve a £10 billion total budget surplus by 2019-20 will prevent him from doing what is needed most, and investing for the future: investing in good homes, good jobs, and good infrastructure projects. In the debate that followed the Chancellor’s statement, the right hon. Member for Chichester (Mr Tyrie), the Chairman of the Treasury Committee, said:

“He has altered his plans of only four months ago, and so long as the rule remains in place, he will have to do so again after the next fiscal event. That is…why the Treasury Committee concluded… that it was ‘not convinced that the surplus rule is credible in its current form.’”—[Official Report, 16 March 2016; Vol. 607, c. 976-77.]

We have fiscal policy without credibility, and a Chancellor without credibility. What we were given in this Budget was a downgraded economy from a diminished Chancellor who was speaking to a divided party and for a damaged Government. This is a black hole Budget: a Budget which, like the Chancellor, does not deserve support from any party in the House.

Oral Answers to Questions

John Healey Excerpts

Tuesday 16th June 2015 Commons Chamber

[Greg Hands]

My hon. Friend is absolutely right, which is why the Government have, and will continue to have, an excellent record on the skills agenda. I look forward to looking at the funding for the further education sector as part of the spending review this autumn.

[John Healey (Wentworth and Dearne) (Lab)]

Among all 20 of the world’s most advanced economies, why have only France, Italy and Japan grown more slowly than the UK in the five years the Chancellor has been in the Treasury? Is not weak growth, not the deficit, the real problem for the UK economy?

[Greg Hands]

The right hon. Gentleman, as a Treasury Minister in the last Labour Government, will know that the size of the deficit we inherited—which, at more than 10%, was one of the highest—made our job difficult in the first couple of years. However, the UK is now growing faster in 2014 and 2015 than any other EU or G7 country.

Oral Answers to Questions

John Healey Excerpts

Tuesday 10th March 2015 Commons Chamber

[Danny Alexander]

Investment in the transport infrastructure of the south-west has been a much higher priority for this Government than, I think, for any previous Government. We have committed £7.2 billion-worth of investment in the transport infrastructure of the south-west, including £2 billion in roads—for example, dualling the A303 and the new tunnel at Stonehenge, sorting out the A30 all the way to Camborne and the electrification of the Great Western main line with new inter-city express trains. I have recently asked the south-west peninsula rail task force to bring forward more proposals for investment in strategic rail schemes for the region.

[John Healey (Wentworth and Dearne) (Lab)]

Last month, a couple of hundred senior business figures gave a very warm welcome to the second stage of the review that Sir John Armitt has done on infrastructure for the Labour party, including plans for a new independent national infrastructure commission to identify the country’s long-term needs and monitor Governments’ plans to meet them. Business backs Labour plans; business organisations back Labour’s plans; will the right hon. Gentleman back them?

[Danny Alexander]

Of course, the Labour party’s belated conversion to long-term planning for infrastructure is welcome, although it was not the practice during its 13 years in office. I think that the national infrastructure plan and the architecture around it provides the right framework for delivering that long-term planning. I am not convinced that a new quango is the best way to solve the problem.

Oral Answers to Questions

John Healey Excerpts

Tuesday 10th December 2013 Commons Chamber

[Danny Alexander]

I certainly will. I know that my hon. Friend has campaigned assiduously for this, as has my hon. Friend the Member for Norwich South (Simon Wright) and many other Members in that part of the country, and the ambition that the taskforce has set out is a good one. It is very much in keeping with the direction of travel in our national infrastructure plan, so I look forward with interest to the proposals from the taskforce and to taking them forward in due course.

[John Healey (Wentworth and Dearne) (Lab)]

I refer the Chief Secretary to the graph on page 6 of his new infrastructure plan, which looks like one of those dodgy “Labour can’t win here” graphics on a Lib Dem “Focus” leaflet. The graph apparently shows, as he has boasted this morning, that annual infrastructure investment is up under the coalition, but in the footnote it says that the Treasury had “challenges” putting the graph together and that the data are “not comparable” with the rest of the document. Will he agree to submit the figures to independent scrutiny by the UK Statistics Authority or the Office for Budget Responsibility?

[Danny Alexander]

After the shadow Chancellor’s performance last week, “Labour can’t win here” is a good description of the Chamber of the House of Commons.

Any Member of this House can submit statistics to the UK Statistics Authority, but I think that those statistics present an accurate picture of the level of overall infrastructure investment in this country. I welcome the strong interest that the right hon. Gentleman has shown in infrastructure and the commitment that he has made to taking these proposals forward. I wish that other members of his party showed a similarly constructive attitude.

Finance Bill

John Healey Excerpts

Tuesday 2nd July 2013 Commons Chamber

[The Exchequer Secretary to the Treasury (Mr David Gauke)]

I beg to move, That the clause be read a Second time.

New clause 7 makes changes to the procedure for the granting of interim payments in common law court claims relating to taxation matters. Its effect will be to limit the circumstances in which interim payments may be granted in the rare tax cases originating in a common law claim as opposed to appeal through the tax tribunal. The new clause will bring the treatment of tax cases under the two routes into closer alignment. It will simplify the process and lessen administrative burdens for the Revenue and for claimants.

I should like to set out some of the background to this change. It corrects a difference in treatment with respect to the granting of interim remedies on tax disputes that arise depending on whether the claim is appealed to the tax tribunal or originates before the High Court, or the Court of Session if in Scotland. Generally speaking, appeals against a decision by Her Majesty’s Revenue and Customs on a tax matter are appealed to the tax tribunal. This system is provided for in statutory tax legislation and is the standard route of appeal for a taxpayer who disagrees with a decision by HMRC.

There is no procedure for the granting of interim payments under this system. Instead, tax is paid or repaid as appropriate when a decision is made on the case. This is a sensible arrangement. The interim award procedure was not designed to be a remedy in a tax dispute. Its common application is to victims who have suffered serious injury to their health but the long-term prognosis leaves it unclear how much they should receive. An interim payment allows them to have enough money to make adaptation to their homes and to pay for care. Clearly, the complex adjudication of a tax dispute is a very different circumstance unsuited to the application of anticipatory payments in advance of final judgment. It is therefore right that the normal practice in tax disputes is not to grant an interim payment.

However, difficulty arises where a tax claim originates in common law. In such circumstances, it would currently fall outside the scope of the tribunal system and would therefore be appealed instead to the High Court. Here claimants may obtain interim payment before the matter is finally settled. Such payments may then need to be returned to the Revenue as the direction of jurisprudence changes at different stages of litigation. This back-and-forth process is administratively burdensome on both parties and adds to the cost of the litigation. Furthermore, it exposes the Revenue to a risk of non-recovery in the event that the taxpayer becomes insolvent after obtaining an interim payment that it is later required to hand back.

Let me set out a little more detail on the new clause. The measure will operate by limiting the power of a court to grant an interim payment to a claimant whose application for such payment is founded, at least in part, on a point of law which has yet to be finally determined. The court will, however, still be able to grant an interim payment to whatever extent is necessary to fund the ongoing litigation, as well as in some other defined circumstances where there is a strong case for granting such award. The measure relates only to those rare tax cases that fall outside the scope of the tribunal system. It is a procedural matter, not a change in tax policy.

[John Healey (Wentworth and Dearne) (Lab)]

The Minister said that such cases are rare. How many are there each year, and how quickly will they be dealt with under the system proposed in new clause 7 as compared with now?

[Mr Gauke]

How quickly a particular case will be dealt with depends on the length of time it takes to be resolved. The right hon. Gentleman will know from his considerable experience as a Treasury Minister that some of these cases can take a number of years. It is worth pointing out that, by and large, large corporates tend to be involved in this type of litigation. The length of time it will take for a case to be resolved is ultimately unaffected by these changes. Their only significance is that there will not be interim payments in these rare cases.

The right hon. Gentleman asked how many cases there are per year. I cannot give him the number straight away, but it is very low. In the vast majority of cases, disputes are taken through the tax tribunal. As I say, this is about making common law cases consistent with tax tribunal cases. It is difficult to give the precise number of cases per year, but we are talking about low numbers.

[Mr Gauke]

We have introduced it at this point because recent jurisprudence has crystallised our view in this regard. As I say, we want consistency between common law cases and tax tribunal cases. A degree of volatility has been created in terms of tax revenues that none of us should welcome. In short, the answer to the hon. Lady’s question is that the reason is recent jurisprudence.

Let me give the right hon. Gentleman a little more detail in response to his question about rare cases. HMRC is aware of fewer than 10 strands of litigation where tax issues are being handled through the High Court. That is not to say that they would necessarily all involve interim payments, but I hope that that gives some sense of the scale of the issue. As I say, it is a procedural matter.

[John Healey]

It is helpful of the Minister to give the House an indication of the scale in terms of the number of cases. Can he also indicate the scale in terms of the amount of tax at stake in such cases?

[Mr Gauke]

The first point to make is that this does not ultimately change the amount of tax at stake, because a litigant will either win or not win. If a litigant who ultimately wins has not had access to an interim payment as a consequence of this measure, that does not change what they will ultimately receive. Some of these cases involve large sums of money, sometimes many millions of pounds. In some cases, interim payments have been very significant. However, I stress that this does not ultimately change how much money will end up in the pocket of the litigant. It is a question of timing and ensuring that we have some consistency.

Turning to why we are doing this now, it follows recent jurisprudence of the Court relating to the application of the interim awards procedure. This jurisprudence has crystallised our view that the interim payment procedure is not suitable for complex tax disputes. There is also an element of risk management in this. HMRC is routinely involved in litigation where the tax at stake may be for very high sums of money. The granting of payments on an interim basis before a final decision has been reached contributes to the volatility of tax revenues. By limiting the application of the interim payment procedure in common law court claims relating to taxation matters, and bringing the system into better alignment with what is standard practice in the tax tribunal, the new clause will cut down on complex work associated with calculating claims on a contingent basis before matters relating to liability and quantum have been resolved by the judiciary.

--- Later in debate ---

[Mr Raynsford]

My hon. Friend makes a very good point. The NAO made an absolutely damning comment—I am astonished that the Government have not looked at this one sentence and said that they clearly need to reconsider the scheme. It is, quite simply:

“We found no association between individual local authorities’ planning application approval rates and their numbers of homes qualifying for the Bonus.”

There we have it: the NAO can find no correlation between the granting of planning consent and the awarding of the bonus, yet that is what it is supposed to do—it is supposed to incentivise councils to improve their performance in granting planning consent. No wonder the Government are embarrassed.

Rather than doing what they ought to by carrying out a thorough and quick review of the scheme and winding it up if it is proved to be as ineffective as the NAO indicates, the Government have done another extraordinary thing and announced in the spending review last week that they will take £400 million of new homes bonus money and transfer it to local enterprise partnerships. It is not their own money—only £250 million is Government money, and the other £150 million would otherwise have been paid to local government. It will now go to the LEPs. Whatever happened to localism? I thought the Government’s mantra when they came into office was that they would allow more decisions to be taken locally. This decision muddies the waters and it will be even more confusing to work out where the money goes.

As my hon. Friend the Member for Hyndburn (Graham Jones) pointed out, there is already gross inequality between different parts of the country, many of which are contributing to the new homes bonus and getting nothing out of it while others, which have done nothing to improve their housing performance because they already have a high demand for housing and because it is already been built in those areas, benefit from the scheme. It is a most extraordinary scheme and it will be made even more opaque and confusing. Clearly, such a scheme has no prospect of achieving the incentive effect it was supposed to achieve.

[John Healey]

My right hon. Friend has put his finger on it. There is not an economic rationale for the policy, but a political one. Essentially, it is a stealth redistribution from poor areas to wealthier ones with a more active, buoyant and successful housing market.

[Mr Raynsford]

My right hon. Friend, as always, is very acute and he realises that this is a political move. The change is being introduced with no analysis and no evidence base—it is a political move that will have significant redistributional consequences in favour of some areas at the expense of others, paying no regard whatever to the principles of localism that the Government used to proclaim.

--- Later in debate ---

[John Healey]

May I tempt my right hon. Friend to reflect on one other aspect of the subject he just touched on? If his figures are right—I am sure they are—by 2017-18 this will cost £7.5 billion in total. That cannot be described as a top-slice from local government as it represents almost a third of the total local government expenditure in England. The proposal will fundamentally destabilise the whole system of local government funding within five to six years.

[Mr Raynsford]

My right hon. Friend makes a valid point, and it is a further argument for the serious and thorough evidence-based review of the subject that the Government ought to be undertaking. It is shameful that they are continuing to tinker with this failed scheme at a time when there is such an urgent need for the limited funds that are available to be used to best effect to stimulate investment in housing and to have the beneficial economic effects that my hon. Friends and I have been talking about.

The amendment specifically calls for a review of the operation of REITs and their interaction with the housing market. That is important because the scale of investment necessary to secure the level of house building and home improvement we need will require a combination of public and private investment. We must therefore have measures that encourage more private investment in both private and social rented housing. Institutional investment in private renting has been a bit of a holy grail for many years for people who saw it as a way of ensuring an improved private rented sector driven by responsible investors who would be keen to see high standards of investment and management.

Infrastructure

John Healey Excerpts

Tuesday 12th February 2013 Commons Chamber

[Sheila Gilmore (Edinburgh East) (Lab)]

It is very important to realise that investment in infrastructure works in boosting the economy. I want to give an example from Scotland that is about investment in housing, and I will start, but not necessarily finish, by praising something that the current Scottish Government did. At the beginning of the UK Government’s term of office, they took a decision to bring forward capital spending in order to boost the economy. They put some of that spending into housing, particularly affordable housing. As a result, for a brief period, they were able to increase the proportion of spending on affordable housing.

[John Healey (Wentworth and Dearne) (Lab)]

In the spirit of generosity to other parties, will my hon. Friend also commend the coalition Government for introducing the borrowing guarantees and earmarking £10 billion for housing, classifying it categorically as infrastructure for the first time? To make her point, I should say that every £1 million of public money that goes into house building generates 11 jobs.

[Sheila Gilmore]

My right hon. Friend makes an important point. The spending in Scotland enabled the Scottish Government to announce that unemployment was not rising as fast as in the rest of the UK, and they took great pleasure in that. Sadly, the situation has not been maintained, and we are hearing less of how wonderful the Scottish Government are at dealing with unemployment; at present, the opposite is happening. I would argue that one of the reasons is that the investment in infrastructure, particularly in housing, has not been sustained. The figures are stark. In Scotland, there were 7,915 new affordable housing starts in 2009-10; in 2010-11, the figure fell slightly to 6,460; and in 2011-12, it fell to 3,405—a halving in less than two years.

There is a consequence for the construction industry, its employees and unemployment in Scotland. The Scottish Government showed that such investment worked, but they have not been able to sustain it. They would probably argue that that is solely because of what has been happening at the UK level—investment in housing and in capital has been falling. They would be right to some extent, although I would add that they are not particularly interested in showing that the situation can be overcome. I suggest two ways in which they could overcome it.

First, the Scottish Government could use the tax-raising powers given in 1999 as part of devolution. They have not chosen to use those, although I think people in Scotland would be prepared for them to be used if they thought that the money could be invested as it was previously. They have also put a stranglehold on local government by having a five-year council tax freeze, which has meant that local government cannot make the choice to say to its local population, “We desperately need more housing. We will put up council tax so that we can borrow”—that is perfectly possible—“and build that much-needed housing.”

So there are ways in which the Scottish Government could continue with policies that for a brief period showed that investment in infrastructure boosts the economy and employment. I urge them to go back to doing that, rather than allowing things to deteriorate so that they can always blame London; that, I am afraid, is what they tend to do.

Some of the discussion is fascinating. If someone had fallen asleep in 1997 and woken up watching this debate, they would have wondered which party was talking. Government Members want to argue, “The last Government didn’t do anything on infrastructure and when they did, it was all this horrible PFI.” I seem to recall that PFI was not a Labour Government invention, but was enthusiastically put forward by the preceding Conservative Government. I am interested to know when that conversion happened. We can get that sort of investment better, but my city is a lot better for some of the public-private partnerships that we put in place—the schools that were built and the investment that was taking place.

A lot of things seem to happen in Scotland first these days, which are then followed, not always for the better, here. In 2007 a Scottish Government of a nationalist persuasion took over, and in my city a Lib Dem-Scottish National party council took over. They both decided that they did not like public-private partnerships and so would instead come up with some magic way of creating these investments. As a result, not one new school was started in the five years of that Lib Dem-SNP administration—not one. Several were finished, and councillors were very pleased to go and open them and have their name put on the opening plaque, but those schools had been planned and funded through PPPs. We seem to have undergone a miraculous conversion at some point—I am not quite sure when—but we have not come up with anything that really works in its place.

I call in support of this argument none other than the Mayor of London, who is quoted in tonight’s edition of The Evening Standard as calling for a £1.3 billion investment in housing in London. Perhaps the Government would like to listen to a mayor of their own political persuasion.

--- Later in debate ---

[Sajid Javid]

I direct the hon. Lady to read the OBR report, which mentions a number of reasons, not least the eurozone crisis. She might like to read that report for herself.

I should respond to the points hon. Members have raised in the debate. Many accusations were made by Opposition Members. They said that, had they won the election, they would have miraculously invested more. The reality is that, had they won the election, they would have continued borrowing recklessly, which would have led to much higher interest rates. They would probably have led this country into the hands of the International Monetary Fund once again, which seems to be their speciality.

Let us look at Labour’s March 2010 Budget. It shows that the previous Government planned to cut capital spending by 6% compared with our latest plans. In fact, in nominal terms, they planned to cut capital spending by 22% between 2010 and 2014. My hon. Friend the Member for North West Leicestershire (Andrew Bridgen) made a good point, which the hon. Member for Newcastle upon Tyne North (Catherine McKinnell) dismissed. Let me read to her the words of the right hon. Member for South Shields (David Miliband). In July 2010, he said the previous Government would have halved the share of national income going into capital spending. That is the truth, and Labour Members want to deny it.

Meanwhile, this Government have overseen an increase in total investment in infrastructure from £29 billion a year, which was the level between 2005 and 2010, to £33 billion a year between 2010 and 2012. In the autumn statement, the Chancellor unveiled a further £5.5 billion of investment, including £1.5 billion for the strategic road network.

Hon. Members are aware that the vast majority of spending needs to come from the private sector. That is why we have taken measures to target and support investment—measures such as the UK guarantee scheme, which will provide up to £40 billion of support to critical infrastructure.

[John Healey]

In an answer last month on the guarantee scheme, the Financial Secretary told me:

“No project has been guaranteed under the UK Guarantee Scheme at this stage.”—[Official Report, 18 January 2013; Vol. 556, c. 981W.]

However, in the autumn statement, the Chancellor said:

“I can today confirm a £1 billion loan and a guarantee to extend the Northern line to Battersea power station and support a new development on a similar scale to the Olympic park.”—[Official Report, 5 December 2012; Vol. 554, c. 876.]

Does that not show the uncertainty and confusion at the heart of the Government’s infrastructure failures? Who is right: the Financial Secretary or the Chancellor?

[Sajid Javid]

The right hon. Gentleman rightly made a point earlier about the action the Government have taken to implement the guarantee scheme. Of the £40 billion of guarantees available, about £10 billion have pre-qualified but are not yet issued, and there has been an offer of a £1 billion guarantee for the Northern line extension project to Battersea. That is substantial progress since Royal Assent to the Infrastructure (Financial Assistance) Act 2012 in October 2012.

The Government are working tirelessly to encourage further investment, not just from overseas, but from pension funds. However, the debate should not focus solely on the amount of money we secure for projects. We should also focus on how to ensure the best possible return on those investments—a point made well by my hon. Friend the Member for St Albans (Mrs Main). That is why the Government are running a cost review to reduce infrastructure costs by a target 15%, and why we have reviewed and reformed PF1 and launched PF2. The Government are investing wisely, collaboratively and efficiently.

Some Labour Members would have us believe that our investment is resulting in no action. I found it strange to hear the criticism that our investment has resulted in no spades in the ground. As the Financial Secretary told us earlier, a number of projects are already up and running. For example, major flood risk infrastructure projects have been completed in Nottingham, Truro and Keswick, and four new major road projects and 16 local transport schemes are under construction.

This is a Government with a long-term strategy for infrastructure. Our national infrastructure plan—the first time a Government have set out such a plan—identifies 550 projects with a value of more than £310 billion. It has seen us publish an investment pipeline that gives certainty to investors, which is absolutely key; prioritise projects through the creation of a top 40 list; and utilise a dedicated Cabinet Committee to ensure infrastructure delivery. The Opposition motion alludes to Sir John Armitt’s review into long-term infrastructure. Given the important and valuable role he played in the Olympics, I am sure it will be an interesting read and I will look at his recommendations. I am also sure that his advice will be considered, balanced and politically neutral. I would be very surprised if it were influenced by the shadow Chancellor in any way.

We have recently appointed our own Olympic expert to the role of Commercial Secretary. Lord Deighton is overseeing a review of Whitehall’s ability to deliver infrastructure, to increase commercial expertise across Government. We are enhancing the mandate of Infrastructure UK, increasing its capability to make sure that projects are delivered. Those steps show that this is a Government committed to investing in infrastructure projects and a Government committed to delivering infrastructure projects.

Let me turn briefly to two points raised by my hon. Friends the Members for Halesowen and Rowley Regis (James Morris) and for Rochester and Strood (Mark Reckless). They talked about the importance of rail investment and alluded to making greater investment in regional aviation. They made powerful cases and that is something the Government will look at. My hon. Friend the Member for Rochester and Strood asked whether I would be happy to meet him to discuss the matter further—I would be very pleased to do so.

In conclusion, I thank all hon. Members for their contributions this afternoon. I am sure we all want to see improved infrastructure in our constituencies and in the UK as a whole. While the Opposition have no answers for the challenges our country faces, this Government are getting on with the job. I therefore urge Members to reject the Opposition’s motion and to back the Government’s amendment.

Question put (Standing Order No. 31(2)), That the original words stand part of the Question.