Port Talbot Transition Project

Debate between Jonathan Reynolds and Lindsay Hoyle

Wednesday 11th September 2024 Commons Chamber

[The Secretary of State for Business and Trade (Jonathan Reynolds)]

With your permission, Mr Speaker, I would like to update the House on the improved deal that this Labour Government have secured for the workers of Tata Steel, specifically as it relates to its plant in Port Talbot. As well as setting out the details of this improved deal, I am also announcing today our ambition for a new UK-wide steel strategy—one that equips our steelmaking industry with the right support not just to adapt but to thrive in the new green economy. But before I do so, I want to address the situation we have inherited.

Since becoming Secretary of State two months ago, I have had to respond to a series of challenges, not just with the steel industry but in shipping—such as at Harland & Wolff—and in other areas where the previous Government had simply ceased to make decisions and decided to leave them for us to deal with. That was a dereliction of duty and it has left the steel industry in particular in an extremely perilous position. The previous Government had been promising a plan for the steel industry for years. With what I am able to announce today—with the signing of a legally binding deal that enables Tata to order its electric arc furnace as part of a significantly improved package—this Government have made more progress in two months than they made over the previous Parliament. But if we had started these negotiations even a year ago—never mind years ago as they had the opportunity to do—I have no doubt that we would have secured an even better deal for the community.

So I start with an apology to the people of Port Talbot, because they were let down by the previous Government. While this deal is much improved, I acknowledge that it falls short of what would be my ideal. I have, however, been to Port Talbot several times and met the workforce there, along with the reps and the generations of families who have literally forged Port Talbot as we know it. That is why, when Tata first announced that it would be closing the blast furnaces, resulting in some 2,800 job losses, I knew that the workforce deserved so much better. I warned my predecessor not to proceed with what they had negotiated. Why? Because I was confident that the Government could secure a better deal: a better deal for Tata’s workers and a better deal for the people of Port Talbot. And I am able to announce today that this Government have secured that better deal, but I reiterate that if we had had the opportunity that the previous Government had over so many years we could have done more.

The key features are as follows. First, we have agreed a process with Tata to assess investment opportunities for new, additional capabilities that will deliver more secure, long-term jobs than the deal we inherited. This is on top of the plans for the instalment of the electric arc furnace. We have agreed a process with Tata to take this forward, and I will report back to the House on that progress. But this is the most important element, so I am announcing the deal now, rather than after the process is complete, because for Tata to secure the build slot for the electric arc furnace, that element needs to be sorted now. Further delays would put the whole project at risk and could lead to a much worse outcome.

Secondly, in every conversation I have had with Tata’s directors, I have stressed the need to avoid compulsory redundancies wherever possible. I have asked them to channel their efforts instead into job matching and retraining so that the steelworkers of Port Talbot, who have dedicated so much to the industry in the past, can now help shape its future as they will be able to transition and move within the business. As well as that, Tata is agreeing to offer a comprehensive training programme for any employee as an alternative for those at risk of compulsory redundancy. This would be on full pay for one month, then £27,000 a year per employee for 11 months. Tata will fund all those costs. Employees will be able to choose from recognised qualifications to develop sought-after skills that will be in high demand in the local economy now and long into the future. We know, too, that Tata expects that during the construction of the electric arc furnace at least 500 new jobs could be created, which will tap into the local labour market wherever possible.

Thirdly, where we cannot secure new jobs or training, working closely with the unions we have helped to secure improved terms on redundancies. Tata’s employees are now able to express an interest in the most generous voluntary redundancy package the company has ever offered for a restructuring of this size. Employees will now be paid 2.8 weeks of earnings for each year of service up to a maximum of 25 years. At the same time, we are ensuring that there is a minimum redundancy payment—£15,000 pro rata—and a retention payment of £5,000 for employees leaving the business because of these closures. Over 2,000 members of staff have expressed an interest in voluntary redundancy who will be eligible on these terms.

Fourthly, as part of the deal the company will also be releasing 385 acres of its site for sale or transfer. This is valuable real estate which will help bring in more companies and more employers not just from the steel sector but from a whole host of other industries too, helping to diversify the workforce at Port Talbot.

While Conservative Members told us that there was no alternative to the original proposal, we knew that there was, and we have bargained hard for it. And we are putting in watertight conditions within our grant funding agreement for job guarantees to claw back investment if these jobs do not materialise. For example, there is now an improved grant repayment of £40,000 for every job that is not retained post transformation. This money will be repaid directly to the Government and is a powerful incentive for Tata to deliver the 5,000 UK jobs target.

But our ambition for steel is so much bigger and broader than one single company: it is about the whole sector. The UK has always been a proud steelmaking nation, with a rich heritage stretching back to the industrial revolution. From cars to cranes to ships and scaffolding, British steel has been, and is still, used the world over, embodying our industrial might and innovation. Yet for years steel has been a neglected industry in this country. Crude steel production has declined by more than 50% in the last 10 years. Indeed, some proclaimed the industry’s decline would be inevitable in the 21st century—that it was somehow a sunset industry—but those people are wrong: we on this side of the House have never believed that decline is inevitable and while the industry faces challenges today we want to do everything we can to ensure that it can adapt and grow tomorrow.

That is why I am pleased to announce that we will introduce our new steel strategy. As hon. Members know, our manifesto included plans to make available £2.5 billion for steel, on top of the £500 million transformation of Port Talbot. Our intention is to increase our UK capabilities, something the previous Government never attempted, so that we can create a more vibrant and competitive steel sector in the UK.

As part of our steel strategy, this Government will look seriously at options to improve steel capabilities across the supply chain, including in primary steelmaking. We are clear that we cannot prioritise short-term subsidies over long-term jobs, which is why, with the help of independent experts, we will review the viability of technologies for production of primary steel, possibly including direct reduced iron.

Steel is essential to delivering on our net zero goals and building the next generation of green infrastructure, and I know that Labour Members are passionate about that. That is why, under our steel strategy, we intend to use the Procurement Act 2023 to drive economic growth and account for social value in the things that the Government buy and the projects we commission. Work is already under way to increase the role of steel as we build our manufacturing base.

We recognise that, for far too long, Britain’s energy-intensive industries, including the steel sector, have been held back by high electricity costs. More often than not, this has made the UK less attractive to international investors, but we will take action on that. Our clean energy mission will ensure that we are no longer exposed to the kinds of gas price shocks that we have seen in recent years, and that will help British businesses to compete and win in the global market. In support of that ambition, we are working with like-minded nations to tackle global trade distortions, including through our chairing of the global forum on steel excess capacity this year.

Our steel strategy will be developed and delivered in partnership with the steel sector and trade unions, and it will work in lockstep with the Government’s industrial strategy, which will set out our ambition to ramp up investment, strengthen our supply chains and create more well-paid jobs in the places where they are needed most. In order to drive forward our partnership on the steel strategy, I will shortly meet industry experts and interested parties for discussion on the industry’s future. We intend to publish the steel strategy in the spring of next year.

The Government care about steel and the communities it supports, and recognise steel’s fundamental importance to the economy. Supporting steel in this country is about being involved in the detail and shepherding individual plants into the future while protecting the people in them, but it is also about providing a direction of travel, an inspiration for investment and a cause for confidence, so that the sector can play its part in the next 10 years and beyond.

We are not naive about the scale of the challenge before us. Although the situation is still challenging, this is a better deal for Port Talbot than was on the table, and it is the maximum improvement we could make in two months. It represents a better destination and a better transition to the bright future that steel will have under this Government. I commend the statement to the House.

[Mr Speaker]

I call the shadow Minister.

--- Later in debate ---

[Jonathan Reynolds]

I have been a Member of Parliament for 14 years, in which I have seen some interesting political events, but I do not think I have ever heard a contribution with such brass neck. That is quite something, because there is quite a menu to choose from.

Let me explain what I was doing during polling week, in the lead up to 4 July. Parliament was not sitting, and I was shadow Secretary of State. I was going between key seats, as would be expected, negotiating with unions, Tata, my colleagues in the Welsh Government and every relevant body to prevent action that would have resulted in the entire closure of the Port Talbot works on polling day. It was as though the Government had already gone; they were not on the pitch. The first thing I had to do, before I even became Secretary of State, was ensure that there was something there to save, because it would have gone under the Conservative party. [Interruption.] Conservative Members really need to listen, because my contributions are factually accurate, and I will help them to understand the real situation.

The point of the new investment is to save jobs. There will be better terms for the people who are unable to get the new jobs, including better cushioning during their retraining for entry into the rest of the economy. I have explained why it is a better deal, as I hope the shadow Minister has seen. He mentioned media reports; they have not come from my Department, but I appreciate that there were lots of interested parties. The unions and the Welsh Labour Government recognise that this is a better deal. I hope that the Conservative party recognises, on taking a step back from the statement, why the deal will make such a difference.

The shadow Minister mentioned virgin steel. Let me talk about my frustration about that. He will understand that the two blast furnace sites, Scunthorpe and Port Talbot, lose a great deal of money every day. The managers are so fed up with the lack of action under the last Government that they have put timescales on their closure. The simple truth is that I do not have the timeframe that was available to the Conservative party. Moreover, when it comes to Scunthorpe, I do not yet have the carbon capture infrastructure in place that will be necessary for the ideal solution. I would love to be a position to look at the hybrid solution that the shadow Minister put forward—keeping the blast furnaces open while we bring the electric arc furnaces online—but all the time that could have been used to work on that was during the Conservative Government, and they did not do that work. There are therefore far fewer options available to us, and the situation is far more challenging.

Since I became Secretary of State, I have had many meetings with the UK management about Scunthorpe, and have had three meetings, I believe, with Mr Li, the principal shareholder. I also met him when I was shadow Secretary of State. We have been clear that we want a transition in Scunthorpe, and want to put up Government money alongside what the company may offer, but that has to be part of a transition to the future. The workforce and the route that is offered to them has to be part of that.

Even if we are successful in doing that, my frustration is that the options available are very difficult for the area. The solution I would ideally deliver, which could have been delivered by the Conservatives in those 14 long years, is not available. When Conservative Members leave the Chamber today, I hope they reflect on the mistakes they made, their lack of action, the legacy they bequeathed us and, fundamentally, the improvements we have been able to make in such a short time.

[Mr Speaker]

I call the Chair of the Business and Trade Committee.

[Mr Speaker]

Order. May I say to Members, especially senior Members, that when they speak facing the opposite direction from where I am sitting, I cannot hear what they say? Please, speak towards the Chair. That is how we keep neutrality working as well.

[Jonathan Reynolds]

My right hon. Friend is absolutely right. We are not just seeking to deliver new, improved transition deals for the key sites, but want to improve the overall business and investor environment for steel in the UK. I believe that can be done. The kind of investments in core capacities that we are thinking about could be very successful in the United Kingdom. Obviously, two months is insufficient for the due diligence that is required on some of the elaborate and considered business cases necessary, but the process is about delivering that. We can turn this into an extremely positive story for UK steel.

--- Later in debate ---

[Jonathan Reynolds]

I very much welcome the hon. Member’s words and her recognition of the improvements that we have made with this deal. Fundamentally, we have recognised the need for a better business environment, moving away from relatively short-term responses to that much better, more secure long-term framework. She will understand that the significant increase in investment that this new Government are willing to make can make a substantial difference. However, the emphasis must be on long-term investments for the future, so that we can secure those long-term secure jobs. There are several different ways that we can do that. I absolutely agree that our method should be aligned with the industrial strategy, and we will be able to make some announcements on that in the near future, leading up to the launch of the steel strategy next year.

[Mr Speaker]

I call the other potential Chair of the Select Committee.

[Matt Western (Warwick and Leamington) (Lab)]

That is incredibly gracious of you, Mr Speaker. [Laughter.] I think your words were heard across the Chamber.

May I welcome the Secretary of State to his place, and underline the importance of his commitment and the strength of his negotiation? I add my voice to those who talk about the importance of public procurement, but may I draw his attention to the carbon border adjustment mechanism? As I understand it, we have a disadvantage in this area because of how the mechanism was established in the UK. It is due to be introduced on 1 January 2027, which is later than in the EU, clearly disadvantaging our UK producers. Will he update the House on what he plans to do in that area?

Oral Answers to Questions

Debate between Jonathan Reynolds and Lindsay Hoyle

Thursday 5th September 2024 Commons Chamber

[Jonathan Reynolds]

I thank the hon. Member for that question. That is a key issue. There have been positive developments in recent years, particularly through the work of the British Business Bank. The Government feel that the landscape for public finance institutions is now quite busy. The key policy is to ensure that the national wealth fund aligns with priorities in this area, expands the work that has been done, and ensures consistency, so there is a ready way for businesses to understand what can sometimes be a confusing landscape. Also, policies such as that on growth hubs will continue, so the interface for businesses is straightforward and simple, and, fundamentally, the product to access finance will be there when they need it.

[Mr Speaker]

I call the spokesperson for the Liberal Democrat party.

[Sarah Olney (Richmond Park) (LD)]

It is a pleasure to see the Secretary of State at the Dispatch Box. Recent years have seen our SMEs struggling with reams of red tape when they attempt to trade with the rest of the world. Reporting this week has detailed the chaos and extortionate expense that small businesses in the agrifood industries have been dealing with since April’s introduction of the common user charge. I appreciate that this is yet another occasion on which the Government must deal with a mess not of their making, but what concrete steps is the Minister taking to support and empower our small businesses to trade internationally?

Oral Answers to Questions

Debate between Jonathan Reynolds and Lindsay Hoyle

Thursday 7th March 2024 Commons Chamber

[Mr Speaker]

I call the shadow Secretary of State.

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

Last month, the Secretary of State said at the Dispatch Box that she could state explicitly that trade talks with Canada had not broken down. However, the Canadian high commission has since contradicted that in writing, saying that neither negotiations nor technical discussions with respect to any of the outstanding issues have occurred since the UK unilaterally broke them off on 25 January. Mr Speaker, I just want to know who is telling the truth.

Oral Answers to Questions

Debate between Jonathan Reynolds and Lindsay Hoyle

Thursday 25th January 2024 Commons Chamber

[Mr Speaker]

I call the shadow Secretary of State.

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

The Minister knows that we are willing to work with the Government on a way to exonerate the sub-postmasters and get them compensation as quickly as possible. The proposals will have to be imperfect, but they represent a clear option for resolving this terrible issue. As a way to ensure safeguards against any potential future misuse of precedent, could cross-party agreement be established as an essential provision for the exercise of powers of this kind?

Post Office Horizon Scandal

Debate between Jonathan Reynolds and Lindsay Hoyle

Wednesday 10th January 2024 Commons Chamber

[Mr Speaker]

I call the shadow Secretary of State.

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

Thank you, Mr Speaker, for granting the urgent question; I congratulate the right hon. Member for Haltemprice and Howden (Sir David Davis) on securing it. This issue has rightly left the public outraged at the scale and shocking details of this injustice. As I said on Monday, Labour believes the Horizon scandal to be one of the greatest miscarriages of justice in British history, where people lost their livelihoods, liberty and their lives; then, when trying to find justice, they were delayed at every turn.

It is unconscionable that, despite the landmark legal rulings, several years on people have still not been able to access the compensation that they are entitled to. We are all united in this House in wanting the sub-postmasters to be exonerated in full—it is important to say exoneration and not a pardon, because a pardon implies guilt that is forgiven—and for them to receive compensation with urgency. We recognise that that is not straightforward and the result may be imperfect, but this is an unprecedented scandal that requires an unprecedented response. The alternative of not acting is even less desirable. Labour stands ready to work with the Government to deliver a solution that achieves that long-awaited justice and compensation at pace.

May I thank the Minister for the ongoing conversations we have been having on this matter? Can he guarantee that compensation payments will immediately follow any exonerations under the terms of the compensation schemes as they stand today? Could he indicate a timescale for that? I know he appreciates that victims cannot continue to wait years for payments.

Given what the Minister said about the implications of a blanket exoneration, we will need to consider what safeguards might be necessary, to ensure that, as best as possible, public money does not flow into the pockets of those who are not entitled to it. He mentioned that people may be asked to sign a statement. Will that be drawn up consistently with the work of the advisory board?

Crucially, we discussed on Monday the cases that have now been identified from the pre-Horizon pilot scheme, which are identical to those coming out of Horizon. Will those cases be covered by any proposals that the Government bring forward? Any plan that does not cover all convictions will rightly not command the full support of the House.

As the sub-postmasters—they must surely get the credit for these extraordinary measures—have repeatedly said, what matters now is getting compensation to people swiftly. The whole House is united in its determination to deliver the justice, truth and compensation that has been denied and delayed time and time again.

British Steel

Debate between Jonathan Reynolds and Lindsay Hoyle

Wednesday 8th November 2023 Commons Chamber

[Mr Speaker]

I call the shadow Secretary of State.

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

I thank the hon. Member for Scunthorpe (Holly Mumby-Croft) for securing this urgent question, at what will be a very difficult time for her constituents.

The Labour party supports the transition to green steel. We recognise, as the Government have now conceded, that a blend of public and private funding is necessary to do that. We believe electric arc furnaces are part of the solution, but we do not believe they can be the only solution. Specifically, we believe that the retention of primary or virgin steelmaking in the United Kingdom is a matter of economic necessity and of national security. While we all welcome the return of steelmaking to Redcar, which should never have been taken away to begin with, this will clearly mean very significant job losses at Scunthorpe. I therefore have major concerns about this announcement, coming, as it does, just after the Government have confirmed a deal to also close the blast furnaces at Port Talbot.

First, the Minister said in her answer to her hon. Friend that talks are ongoing. I have to say that that is not my understanding of the current status of this deal. Could she confirm that, please? Secondly, is it true that carbon capture technology could not be pursued at Scunthorpe because of delays from the Government to the necessary infrastructure over the last 13 years and uncertainty about a future business model? In addition, is it correct to say that a DRI—direct reduced iron—solution could not go forward because of uncertainty over the Government plans for green hydrogen, which would obviously be essential for a DRI business model? Thirdly, do the Government recognise the figure of 2,000 job losses, and will the Minister confirm that this is the net figure covering Scunthorpe and Redcar—in other words, that once recruitment at Redcar is taken into account, job losses in Scunthorpe will likely be in excess of 2,000? Finally, will she confirm how much public money this announcement involves?

Most of all, I reiterate to the Minister that decarbonisation cannot mean deindustrialisation; we cannot simply outsource our emissions to other countries, call that progress and expect public support for the transition. A real plan for green steel must be open to all technologies, it must be industry-wide, and it should be a story of new jobs, new opportunities and British economic strength. Sadly, this announcement seems very far from that.

Oral Answers to Questions

Debate between Jonathan Reynolds and Lindsay Hoyle

Thursday 14th September 2023 Commons Chamber

[Mr Speaker]

I call the shadow Secretary of State.

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

The loss of Wilko is a significant blow to the nation’s high streets. However, more concerning is that no rescue has proved possible because several bidders have said that town centre retail is no longer a viable business model. In the light of that, do the Government really believe that their current policy environment is sufficient for British high streets to thrive?

Oral Answers to Questions

Debate between Jonathan Reynolds and Lindsay Hoyle

Thursday 29th June 2023 Commons Chamber

[Mr Speaker]

I call the shadow Secretary of State.

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

It is now over 12 months since the audit reform Bill was promised in what was then the Queen’s Speech, and it is over two years since the Business Department’s final consultation on these matters closed. There is widespread agreement on the need for reform, which began following the devastating collapse of Carillion five years ago, yet the draft Bill has not even been published, despite Parliament regularly rising early due to the Government’s light agenda. Does the Secretary of State support reform, and does she accept the recommendations of the Kingman review, the Brydon review and the CMA market study? If she does, when will we finally see some action?

[Mr Speaker]

Can I say to the Front Benchers that a lot of Members are standing? These are topical questions, which are meant to be short. If you want a long question, come in early, please. Help me to help our Back Benchers.

Oral Answers to Questions

Debate between Jonathan Reynolds and Lindsay Hoyle

Thursday 18th May 2023 Commons Chamber

[Mr Speaker]

I call the shadow Secretary of State.

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

It has now been 100 days since we first welcomed the right hon. Lady to her new post. In that time, we have seen steel production fall to record lows; the automotive sector has issued warning cry after warning cry that Government policy risks shipping jobs overseas; and the US has seen incredible sums invested under the Inflation Reduction Act and the EU has put forward its own significant response. Meanwhile, the UK remains trapped in the Conservatives’ low growth, high tax loop, with the lowest business investment in the G7. This morning, three of her predecessors, each from a different political party, have said that the Government need an explicit industrial strategy. Does the current Business Secretary agree with them?

UK Car Industry

Debate between Jonathan Reynolds and Lindsay Hoyle

Wednesday 17th May 2023 Commons Chamber

[Mr Speaker]

I call the shadow Secretary of State.

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

I thank my hon. Friend the Member for Ellesmere Port and Neston (Justin Madders) for securing this urgent question on an area of fundamental importance not just to his constituency, but to the prosperity of the whole country.

For months now, Labour and industry have been warning the Government that this cliff edge was coming. It is a statement of the blindingly obvious that the lack of battery-making capacity in the UK, combined with changes to the rules of origin, was a car crash waiting to happen. It is a fact that, without domestic batteries, there will be no domestic automotive industry in the UK, yet the Government have no strategy to bring in the investment and infrastructure needed, and the rules of origin just make that even more compelling. This deadline to conform with the rules of origin has not been a secret, but where is the urgency, the ambition and the determination to keep our world-class automotive industry in the UK?

Once again, industry has been treated to a Government who are fond of big-state, top-down targets, but completely missing in action when it comes to how to deliver on those targets. Dare I say it that, despite warning after warning, it is clear that this Government are asleep at the wheel. Labour has a plan, through our industrial strategy—which Members can read as it is published—not just to protect the industry and the jobs that we have, but to deliver even more. We will part-finance those eight gigafactories, create 80,000 jobs and power 2 million electric vehicles, matching the incentives on offer from our rivals.

This is not just about public investment; it is about planning reform, changes to business rates, domestic energy security and supply, and more. That is the action that is needed. With respect, the Minister has not really answered any of the questions from my hon. Friend the Member for Ellesmere Port and Neston yet, so will the Government outline how they will secure the battery-making capacity that we desperately need in the UK? What is the Government’s view on the suitability and application of the rules of origin as they currently stand? Finally, will the Government wake up, grab the steering wheel and get control of the situation before it is far too late?

Oral Answers to Questions

Debate between Jonathan Reynolds and Lindsay Hoyle

Thursday 23rd March 2023 Commons Chamber

[Mr Speaker]

I call the shadow Secretary of State.

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

The automotive industry is a jewel in the crown of British manufacturing, but to keep that jewel we need to be building batteries for electric vehicles in the UK. So far we have one gigafactory up and running, while Germany already has 10 times our capacity. Alarm bells are ringing across the sector, and we recently had disappointing news with Ford announcing job cuts in Essex. The Faraday Institution estimates that the UK needs 10 battery factories by 2040 to retain our car industry. Does the Secretary of State agree with that assessment? If she does, how and when will she publish a clear plan for how the Government intend to hit that target?

Oral Answers to Questions

Debate between Jonathan Reynolds and Lindsay Hoyle

Tuesday 17th January 2023 Commons Chamber

[Mr Speaker]

I call the shadow Secretary of State.

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

Last Monday the Government presented the next stage of their energy support scheme, but it got a decidedly mixed response. The Federation of Small Businesses calculated that it is worth just 2p per kilowatt hour of electricity to the average small business, which it says is not enough to be material to a business’s decision to close or not, despite that element of the scheme costing £2 billion of taxpayers’ money. The worst of all worlds would be a scheme that costs a large amount of money, while failing to improve the situation facing businesses in any significant way. Will the Secretary of State respond to that criticism and explain the Government’s thinking behind the design of that stage of the scheme?

Oral Answers to Questions

Debate between Jonathan Reynolds and Lindsay Hoyle

Tuesday 29th November 2022 Commons Chamber

[Mr Speaker]

I call the shadow Secretary of State.

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

I welcome the Business Secretary to his first oral questions. He is the third Business Secretary we have had this year, and I have to say that lack of stability is the No. 1 complaint from businesses, which genuinely cannot keep track of Government policy in any particular area. If they do know the policy, they feel it could change at any moment if the internal politics of the Conservative party shift one way or the other. Does he accept that political instability has very real consequences for economic stability?

Newport Wafer Fab

Debate between Jonathan Reynolds and Lindsay Hoyle

Monday 21st November 2022 Commons Chamber

[Mr Speaker]

I call the shadow Secretary of State.

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

I welcome the new Business Secretary to his responsibilities in the House, and I congratulate my hon. Friend the Member for Newport West (Ruth Jones) on securing this urgent question and on her tireless advocacy for her constituents on this matter. I welcome the fact that a decision has finally been made on Newport Wafer Fab, but the chaotic process and the lack of strategy from the Government have left workers and businesses facing a great deal of uncertainty that the Government are now honour-bound to rectify.

Nexperia first announced a takeover of Newport Wafer Fab in July last year. It has taken 16 months for the Government to make this decision. In April, the Foreign Affairs Committee was forced to conclude that the review had

“not, in fact, been started.”

Finally, the Government have decided to block the transaction. Meanwhile, jobs have been left hanging in the balance, and the costs of unwinding the deal have risen over that time. We also have to question why we are in this situation in the first place. The south Wales compound semiconductor cluster employs thousands of workers in one of the world’s most strategic sectors, but we are still yet to see the long-awaited semiconductor strategy, which has been 22 months in the making.

Of course, the Government scrapped their entire industrial strategy altogether when the current Prime Minister replaced it with the hastily cooked-up plan for growth. That has already been replaced, because it may have been the sixth plan in 12 years but it was the first to cause a financial crisis. Meanwhile, firm after firm in the semiconductor sector has been sold off to foreign businesses. It genuinely has not been easy even to understand what Government policy in this area is, so may I ask the Secretary of State these questions? First, why has this decision taken so long, when the Government have known everything about the transaction for at least 16 months? Secondly, what is he specifically going to do to secure the future of the jobs in Newport Wafer Fab and ensure we retain this capacity in the UK? Finally, when will the Government come forward with a proper plan for growth, including for key industrial sectors? Decisions such as this, while at times necessary, must form part of a coherent and consistent policy and must be made promptly. All businesses get from this Government is chaos and crisis, and it is not good enough.

Oral Answers to Questions

Debate between Jonathan Reynolds and Lindsay Hoyle

Tuesday 25th October 2022 Commons Chamber

[Mr Speaker]

I call the shadow Secretary of State.

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

The Government’s economic crisis is now being paid for by every household and business in this country, but the Government’s failure goes well beyond the pantomime of the last few weeks. Twelve years of Conservative Government have given us the lowest rate of business investment in the G7, and that is with the lowest headline rate of corporation tax. So why does the Business Secretary believe the Conservative party has been so consistently unable to provide a platform for the UK’s fantastic businesses to invest in throughout the last 12 years?

[Mr Rees-Mogg]

What we have seen is the lowest level of unemployment in this country since 1973. That is real people and real jobs, and employment is the best route out of poverty. We have seen the most enormous advance in clean energy, with more offshore wind than any other country in the world. We have ensured that, during this difficult winter, we were one of the first countries to come forward with a comprehensive package to protect both domestic and non-domestic users to ensure that the economy could thrive. The hon. Gentleman complains that everything that has gone wrong is the fault of the Government. He seems to have forgotten about Ukraine and covid. Perhaps he should read the newspapers occasionally.

[Mr Speaker]

I think you have forgotten that topicals have to be short and sweet.

[Jonathan Reynolds]

That was an interesting answer on the 12 years of failure—it was perhaps an answer to a question, but not the one I asked. Our wonderful businesses want to expand, invest and grow, but they cannot do that with so much uncertainty hanging over the country. The Conservative party cannot be the solution to that instability because it is the cause of it. Will the Business Secretary give us his honest view and tell us whether he still holds the view he has expressed before—that what we should have, following a change of Prime Minister, is a general election?

Energy Prices: Support for Business

Debate between Jonathan Reynolds and Lindsay Hoyle

Thursday 22nd September 2022 Commons Chamber

[Mr Speaker]

Before I call the Secretary of State for Business, Energy and Industrial Strategy to answer the urgent question, I have to say how disappointed I am that the subject of an urgent question was extensively set out in the media yesterday before being presented to the House. I hope that, as a former Leader of the House who was very supportive of me in criticising Secretaries of State for not coming to the House, the right hon. Member will be especially aware—as I know he is—of Ministers’ duties to explain that important policies are first to be heard in this House.

I understand the importance of the matter and the need for our constituents to have the information as soon as possible and, for that reason, I would have been willing to allow a statement yesterday, if I had been asked. I am deeply concerned that I have to make another statement like this only a few sitting days into this new Administration’s existence. I ask the right hon. Member and all his colleagues to do their utmost to ensure that this is the last time I have to do so. I am not angry; I am so disappointed, and I hope that we will treat the House with the respect that it is due.

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

(Urgent Question): To ask the Secretary of State for Business, Energy and Industrial Strategy if he will make a statement on Government support for businesses facing rising energy prices.

Oral Answers to Questions

Debate between Jonathan Reynolds and Lindsay Hoyle

Tuesday 12th July 2022 Commons Chamber

[Mr Speaker]

I call the shadow Secretary of State, Jonathan Reynolds.

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

In the last 12 years, this country has had a referendum on its membership of the European Union, a referendum on the continued existence of the UK and four general elections, and now we are about to have our fourth Prime Minister. In that time, business investment in the UK has fallen to the lowest level in the G7. Does the Secretary of State accept that one reason for that is the lack of political stability under the Conservative party?

Oral Answers to Questions

Debate between Jonathan Reynolds and Lindsay Hoyle

Tuesday 7th June 2022 Commons Chamber

[Mr Speaker]

I call the shadow Secretary of State.

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

If a chair or chief executive of a FTSE 100 company presided over a culture of rule breaking, broke the law themselves and then said that they would do it again, would that person have the Business Secretary’s support, or would he demand better standards than that in public life?

Oral Answers to Questions

Debate between Jonathan Reynolds and Lindsay Hoyle

Tuesday 11th January 2022 Commons Chamber

[Kwasi Kwarteng]

I am delighted to see the hon. Gentleman take his place. I remember him being a prominent member of the economic team under the right hon. Member for Islington North (Jeremy Corbyn). I am glad to see that there is life after death and that he is here today. My only regret is that the right hon. Member for Doncaster North (Edward Miliband) is not here. I am afraid that the split of net zero from business shows that Labour is not serious about the energy crisis. It is not serious about placing net zero in the context of business and growth and it is completely off the pace in terms of driving clean—

[Mr Speaker]

Order. I call Jonathan Reynolds. [Interruption.] Sorry, sit down and I will just explain once again. These are topical questions. They are not meant to have a “War and Peace” answer. I want to get Back Benchers on both sides of the House in. You are taking their time.

[Jonathan Reynolds]

There was a lot of talk from the Secretary of State, but no answer. However, let us take up the point that he made. Earlier, one of his Ministers gave me an answer about UK steel production. The Secretary of State talks about net zero, but that cannot be achieved by exporting UK industry and jobs. We have pledged £3 billion of investment in steel, which would match fund pilots in hydrogen in place of coal and joint fund investment in electric arc furnaces. Domestic steel is essential to net zero; it is relevant to levelling up because it provides the jobs and the wages in many parts of the country; and it relates to Brexit because our producers now pay higher tariffs than companies in the EU to export to the US. Net zero, levelling up and Brexit amount to the Government’s entire agenda, so Secretary of State, again—

[Mr Speaker]

Order. Do you not both understand? Your Back Benchers are desperate to get in. If the shadow Secretary of State wants to come in, he should be brief. If not, he should come in early when he has got more time. Secretary of State, briefly.

Finance (No. 3) Bill

Debate between Jonathan Reynolds and Lindsay Hoyle

3rd reading: House of Commons & Report stage: House of Commons
Tuesday 8th January 2019 Commons Chamber

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

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

[Mr Deputy Speaker (Sir Lindsay Hoyle)]

With this it will be convenient to discuss the following:

New clause 7—Review of effect of carbon emissions tax on climate targets—

“The Chancellor of the Exchequer must review the expected effect of the carbon emissions tax on the United Kingdom’s ability to meet its internationally agreed climate targets and lay a report of that review before the House within six months of the passing of this Act.”

New clause 12—Review of expenditure implications of Part 3—

“(1) The Chancellor of the Exchequer must review the expenditure implications of commencing Part 3 of this Act and lay a report of that review before the House of Commons within six months of the passing of this Act.

(2) No regulations may be made by the Commissioners under section 78(1) unless the review under subsection (1) has been laid before the House of Commons.”

This new clause would require a review within 6 months of the expenditure implications of introducing a carbon emissions tax. It would prevent part 3 (carbon emissions tax) coming into effect until such a review had been laid before the House of Commons.

New clause 13—Report on consultation on certain provisions of this Act (No. 2)—

“(1) No later than two months after the passing of this Act, the Chancellor of the Exchequer must lay before the House of Commons a report on the consultation undertaken on the provisions in subsection (2).

(2) Those provisions are—

(a) sections 68 to 78,

(b) section 89, and

(c) section 90.

(3) A report under this section must specify in respect of each provision listed in subsection (2)—

(a) whether a version of the provision was published in draft,

(b) if so, whether changes were made as a result of consultation on the draft,

(c) if not, the reasons why the provision was not published in draft and any consultation which took place on the proposed provision in the absence of such a draft.”

This new clause would require a report on the consultation undertaken on certain provisions of the Bill – alongside New Clause 11, New Clause 14 and New Clause 15.

New clause 19—Review of powers in consequence of EU withdrawal (No. 2)—

“(1) The Chancellor of the Exchequer must, no later than a week after the passing of this Act and before exercising the power in section 89(1), lay before the House of Commons a review of the following matters—

(a) the fiscal and economic effects of the exercise of the powers in section 89(1) and of the outcome of negotiations for the United Kingdom’s withdrawal from the European Union giving rise to their exercise;

(b) a comparison of those fiscal and economic effects with the effects if a negotiated withdrawal agreement and a framework for a future relationship with the EU had been agreed to;

(c) any differences in the exercise of those powers in respect of—

(i) England,

(ii) Scotland,

(iii) Wales, and

(iv) Northern Ireland;

(d) any differential effects in relation to the matters specified in paragraphs (a) and (b) in relation between—

(i) England,

(ii) Scotland,

(iii) Wales, and

(iv) Northern Ireland.”

This new clause would require a review of the economic and fiscal impact of the use of the powers in section 89 in the event of no deal and in event of a withdrawal agreement passing.

Amendment 16, in clause 78, page 51, line 32, after “may” insert

“(subject to section (Review of expenditure implications of Part 3))”.

See New Clause 12.

Amendment 1, in clause 89, page 66, line 38, at end insert—

“(1A) The Chancellor of the Exchequer must, no later than a week after the passing of this Act and before exercising the power in subsection (1), lay before the House of Commons a review of the following matters—

(a) the fiscal and economic effects of the exercise of those powers and of the outcome of negotiations for the United Kingdom’s withdrawal from the European Union giving rise to their exercise;

(b) a comparison of those fiscal and economic effects with the effects if a negotiated withdrawal agreement and a framework for a future relationship with the EU had been agreed to;

(c) any differences in the exercise of those powers in respect of—

(i) Great Britain, and

(ii) Northern Ireland;

(d) any differential effects in relation to the matters specified in paragraphs (a) and (b) in relation between

(i) Great Britain, and

(ii) Northern Ireland.”

This amendment would require the Chancellor of the Exchequer to review the fiscal and economic effects of the exercise of the powers in subsection (1) before exercising those powers.

Amendment 13, page 67, line 7, leave out subsection (5) and insert—

“(5) No statutory instrument containing regulations under this section may be made unless a draft has been laid before and approved by a resolution of the House of Commons.”

This amendment would make Clause 89 (Minor amendments in consequence of EU withdrawal) subject to the affirmative procedure.

Amendment 7, page 67, line 19, at end insert—

“(7) The provisions of this section only come into force if—

(a) a negotiated withdrawal agreement and a framework for the future relationship have been approved by a resolution of the House of Commons on a motion moved by a Minister of the Crown for the purposes of section 13(1)(b) of the European Union (Withdrawal) Act 2018, or

(b) the Prime Minister has notified the President of the European Council, in accordance with Article 50(3) of the Treaty on European Union, of the United Kingdom’s request to extend the period in which the Treaties shall still apply to the United Kingdom, or

(c) leaving the European Union without a withdrawal agreement and a framework for the future relationship has been approved by a resolution of the House of Commons on a motion moved by a Minister of the Crown.”

This amendment would prevent the Government implementing the “no deal” provisions of Clause 89 without the explicit consent of Parliament for such an outcome. It would provide three options for the provisions of Clause 89 to come into force: if the House of Commons has approved a negotiated withdrawal agreement and a framework for the future relationship; if the Government has sought an extension of the Article 50 period; or the House of Commons has approved leaving the European Union without a withdrawal agreement and framework for the future relationship.

Amendment 8, page 67, line 19, at end insert—

“(7) The provisions of this section shall not come into force until the House of Commons has come to a resolution on a motion made by a Minister of the Crown agreeing its commencement.”

Amendment 14, in clause 90, page 67, line 22, after “may” insert

“(subject to subsections (1A) and (1B))”.

See Amendment 15

Amendment 15, page 67, line 24, at end insert—

“(1A) Before proposing to incur expenditure under subsection (1), the Secretary of State must lay before the House of Commons—

(a) a statement of the circumstances (in relation to negotiations relating to the United Kingdom’s withdrawal from the European Union) that give rise to the need for such preparatory expenditure, and

(b) an estimate of the expenditure to be incurred.

(1B) No expenditure may be incurred under subsection (1) unless the House of Commons comes to a resolution that it has considered the statement and estimate under subsection (1A) and approves the proposed expenditure.”

This amendment would require a statement on the circumstances (in relation to negotiations) giving rise to the need for, as well as an estimate of the cost of, preparatory expenditure to introduce a charging scheme for greenhouse gas allowances. The amendment would require a Commons resolution before expenditure could be incurred.

New clause 18—Review of effects on measures in Act of certain changes in migration levels—

“(1) The Chancellor of the Exchequer must review the effects on the provisions of this Act of migration in the scenarios in subsection (2) and lay a report of that review before the House of Commons within one month of the passing of this Act.

(2) Those scenarios are that—

(a) the United Kingdom does not leave the European Union,

(b) the United Kingdom leaves the European Union without a negotiated withdrawal agreement,

(c) the United Kingdom leaves the European Union following a negotiated withdrawal agreement, and remains in the single market and customs union,

(d) the United Kingdom leaves the United Kingdom on the terms of the draft withdrawal agreement of 14 November 2018.

(3) In respect of each of those scenarios the review must consider separately the effects of—

(a) migration by EU nationals, and

(b) migration by non-EU nationals.

(4) In respect of each of those scenarios the review must consider separately the effects on the measures in each part of the United Kingdom and each region of England.

(5) In this section—

“parts of the United Kingdom” means—

(a) England,

(b) Scotland,

(c) Wales, and

(d) Northern Ireland;

“regions of England” has the same meaning as that used by the Office for National Statistics.”

This new clause would require a review of effects on measures in the Bill of certain changes in migration levels.

[Jonathan Reynolds]

This group of amendments relates to the tax and fiscal implications of the UK’s withdrawal from the EU.

Throughout the last year Parliament has been asked to approve a series of Bills giving the Government the power to deliver every type of Brexit deal conceivable, and this Finance Bill is no different. I said when closing the Second Reading debate on the Bill for the Opposition that this approach was one of “give us the powers now and we will make the decisions later,” and as it currently stands Brexit represents the biggest transfer of power to the Executive in modern constitutional history. That is disappointing for anyone who thought Brexit would see greater powers for this Parliament, but it is also a recipe for very bad decisions, and there is a classic culprit in this Finance Bill in the form of clause 89. Innocently named “Minor amendments in consequence of EU withdrawal”, it gives the Government power to amend tax legislation without any of the usual due process in the event that the UK leaves the EU without a deal.

The Government always tell us—I am sure they will do so again—that this is simply a safeguarding provision that we will never have to use, but all of us here today know that as it stands the Government have absolutely no chance of getting their deal through, because that deal does not deliver the basics of what this country needs. It does not deliver smooth, low-friction borders for manufacturing and supply chains, nor does it deliver market access for financial services. It also fails to resolve the big question: after we leave the EU, will we prioritise market access or trade autonomy? Because of that, we will almost certainly end up in the backstop arrangements, a halfway house without any say for the UK—the very worst of all worlds.

The new clauses and amendments are therefore of seminal importance, and I am extremely grateful to the Chair of the Home Affairs Committee, my right hon. Friend the Member for Normanton, Pontefract and Castleford (Yvette Cooper), for laying amendment 7 before the House today. It is clearly a cross-party amendment, supported by the Chairs of the Treasury, Exiting the European Union and Business, Energy and Industrial Strategy Committees, but it has the Opposition’s support because it offers Parliament a chance to make a clear statement rejecting a no-deal outcome—a statement that cannot come soon enough.

Anyone pretending that crashing out without a deal is simply about resorting to World Trade Organisation schedules is dangerously misinformed. As The Economist magazine said last month:

“A no-deal Brexit is about a lot more than trade—it would see many legal obligations and definitions lapse immediately, potentially putting at risk air travel, electricity interconnections and a raft of financial services”.

It would mean tariffs on trade with the EU, but it would also affect trade beyond the EU as all our current trade agreements negotiated as an EU member would immediately cease to apply. Agriculture, aerospace, the automotive sector—all these major sectors of our economy—would face potentially irreparable damage, and while tariffs may be reduced over time, excise duties and health checks on food, plants and livestock cannot be reduced so easily. Researchers at Imperial College London have calculated that just two minutes more transit time per lorry at Dover and the Channel tunnel translates into a 47 km traffic jam, and for perishable items like food, delays of that magnitude simply could not be sustained. When we add to that higher prices through tariffs and further inflationary pressure from another inevitable fall in the value of the pound, it is a recipe for significant pressure on living standards. That is why the Opposition say that no deal is not a real option.

There has been some suggestion that the Government might accept amendment 7.

--- Later in debate ---

[Crispin Blunt (Reigate) (Con)]

I am afraid that the hon. Gentleman is going to have to do a bit better than this. He talks about crashing out without a deal, but he needs to get into the detail of the implications. Perhaps he is going to start talking about planes, but amazingly, the planes are going to keep flying. Amazingly, we are still going to have drugs supplied into the United Kingdom. He needs to get down into the detail of exactly what the implications will be, because if we are faced with the reality of no overall agreement, there will be a barrow-load of minor agreements to ensure that the common interests of the United Kingdom and the European Union survive the transfer to WTO terms on 29 March with minimum impact on the citizens of the EU and the UK. It is time he got real and stopped this nonsense—

[Mr Deputy Speaker (Sir Lindsay Hoyle)]

Order.

[Jonathan Reynolds]

Thank you, Mr Deputy Speaker.

I have just talked about some of the consequences of crashing out without a deal. I have talked about relationships, about tariffs on products and about the legal definitions under the common agreements that this country has undertaken with other European countries. We all know this—the information is readily available—so I am not quite sure what point the hon. Gentleman is making. I think he is aware of the dangers of taking this course of action.

Finance (No. 3) Bill

Debate between Jonathan Reynolds and Lindsay Hoyle

Committee: 1st sitting: House of Commons
Monday 19th November 2018 Commons Chamber

[Jonathan Reynolds]

The shadow Chancellor did not speak from the Dispatch Box. I think the hon. Gentleman is thinking of the shadow Chief Secretary, my hon. Friend the Member for Bootle (Peter Dowd)—the two should not be confused. On nationalisation, I think the point that my hon. Friend was trying to make is that we can simply look at British history to see how this works. If we take an asset into public ownership and the return from that asset is greater than the cost of the borrowing to take it on, there is no net cost to the taxpayer, and certainly, income tax will not have to rise to cover that.

[The Chairman of Ways and Means (Sir Lindsay Hoyle)]

Order. We are not having a debate on party policy. We have amendments and clauses before us and we are straying from them—I know you wanted to get through your speech very quickly, Mr Graham.

Finance Bill

Debate between Jonathan Reynolds and Lindsay Hoyle

Tuesday 31st October 2017 Commons Chamber

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

I beg to move amendment 7, page 78, line 19, after “day”, insert

“no earlier than 1 January 2022”.

This amendment provides that the provisions for digital reporting in Clause 60 may not be brought into force before 2022.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

With this it will be convenient to discuss the following:

Amendment 8, page 78, line 20, at end insert—

“(4A) No regulations may be made under subsection (4) until 90 days after the Chancellor of the Exchequer has laid a report before the House of Commons which sets out—

(a) the steps which HMRC has undertaken to establish that suitable software is available;

(b) the results of the testing by HMRC and others of that software, and

(c) the reasons why mandatory use of the software is in the interest of HMRC and taxpayers.”

This amendment would require the Chancellor of the Exchequer to report on software suitability and testing before giving effect to the provisions of Clause 60.

Amendment 9, in clause 61, page 78, line 34, after “day” insert

“no earlier than 1 January 2022”.

This amendment provides that the provisions for digital reporting in Schedule 14 and Clause 61 may not be brought into force before 2022.

Amendment 10, in clause 62, page 79, line 12, at end insert—

“(5A) No regulations may be made under sub-paragraph (5) on a day prior to 1 January 2022.”

This amendment provides that the provisions for digital reporting in Clause 62 may not be brought into force before 2022.

Amendment 11, page 79, line 19, at end insert—

“(6A) Regulations under sub-paragraph (5) may not impose mandatory requirements for businesses to generate quarterly updates.”

This amendment provides that any system for quarterly updates to be generated must not be mandatory.

New clause 2—Taxation of chargeable gains: review of treatment of commercial property held by persons with foreign domicile—

“(1) The Taxation of Chargeable Gains Act 1992 is amended as follows.

(2) After section 14 (non-resident groups of companies), insert—

“Review of treatment of commercial property held by persons with foreign domicile

(1) Within three months of the passing of the Finance (No. 2) Act 2017, the Commissioners for Her Majesty’s Revenue and Customs shall complete a review about the taxation of chargeable gains held by persons with foreign domicile.

(2) The review shall consider in particular the implications if the treatment of commercial property were to be the same as the treatment of residential property under section 4BB(2).

(3) The Chancellor of the Exchequer shall lay a report of the review under this section before the House of Commons within three months of its completion.””

This new clause requires a review to be undertaken of the treatment of capital gains on commercial property disposed of by UK taxpayers with a foreign domicile.

New clause 3—Income provided through third parties: review of effects generally and in relation to sports image rights—

“(1) The Chancellor of the Exchequer shall, no later than 21 July 2019, undertake a review of the effects of the changes made in relation to income provided through third parties.

(2) The review under subsection (1) shall consider in particular the effects in relation to sports image rights.

(3) The Chancellor of the Exchequer shall lay before the House of Commons a report of the review under this section no later than 15 October 2019.

(4) In this section—

“the changes made in relation to income provided through third parties” means the provisions of sections 34 and 35 of and Schedule 11 to this Act,

“sports image rights” means the rights or purported rights, whether or not protected or capable of protection under any relevant laws, associated with the identity or activities of a person where those rights or purported rights are associated with their participation or former participation in a sport.”

This new clause requires the Chancellor of the Exchequer to carry out and publish a review of the effects of provisions for disguised remuneration in relation to income provided through third parties, including particularly the effects in relation to sports image rights.

New clause 4—Impact analyses of provisions of this Act—

“(1) The Chancellor of the Exchequer must review the impact of the provisions of this Act in accordance with this section and lay a report of that review before the House of Commons within six months of the passing of this Act.

(2) A review under this section must consider—

(a) the impact of those provisions on households at different levels of income,

(b) the impact of those provisions on people with protected characteristics (within the meaning of the Equality Act 2010), and

(c) the impact of those provisions on different parts of the United Kingdom and different regions of England.

(3) In this section—

“parts of the United Kingdom” means—

(a) England,

(b) Scotland,

(c) Wales, and

(d) Northern Ireland;

“regions of England” has the same meaning as that used by the Office for National Statistics.”

This new clause requires the Chancellor of the Exchequer to carry out and publish a review of the effects of the provisions of the Bill on households with different levels of income, people with protected characteristics and on a regional basis.

New clause 5—Review of the conditions of registration for third country goods fulfilment businesses and traders using their services—

“(1) Within six months of the passing of this Act, the Chancellor of the Exchequer shall complete a review of the conditions of registration for third country goods fulfilment businesses and the traders using their services.

(2) The review shall consider in particular—

(a) an automatic joint and several liability for VAT between registered fulfilment businesses and the traders using their services, and

(b) a requirement that registered fulfilment businesses should charge VAT to customers on behalf of traders using their services.

(3) The Chancellor of the Exchequer shall lay a report of the review under this section before the House of Commons within one month of its completion.”

This new clause requires a review to be undertaken of the conditions of registration for third country goods fulfilment businesses and the traders using their services.

Government amendments 12 to 16.

[Jonathan Reynolds]

I rise to speak to amendments 7 to 11, which relate to the Government’s Making Tax Digital proposals. I do not think I will be able to get in any references to ancient Rome or Greece, unlike my colleagues, because of the subject matter.

Given that the debate on this package of measures has been ongoing since the first version of the Finance Bill, Labour’s many concerns have been well rehearsed at every stage of the discussions. However, they are not our concerns alone. They echo the worries of businesses, service providers and the trade associations that represent them, including the Institute of Chartered Accountants, the Chartered Institute of Taxation and the Federation of Small Businesses.

We recognise that Labour’s repetition of and emphasis on the potential damage that the measures might have had has led to a number of concessions over the summer. The Government had to concede that the timeline for implementation was not feasible and undertook a U-turn to delay the implementation of digital reporting for VAT until 2019. The Federation of Small Businesses described that change to the timetable as a “lifeline for small firms”. Labour has also ensured that there is an exemption for small businesses operating under the VAT threshold of £85,000.

However, we do not believe that those changes are enough. That is why Labour proposes this package of amendments today. To be clear, we support the principle of digitising tax returns, as we would any measure that purported to simplify the compliance and reporting burden on UK businesses and that might help HMRC efficiently and accurately to collect the amount of tax it is owed. That does not change the fact that the Government have made a chaotic mess of implementing Making Tax Digital. This significant and important change to the system needs to be approached with due care and attention.

If the Government’s measures are carried out as currently proposed, there is a risk that added costs and unintended consequences will be passed on to small and medium-sized businesses, as tax experts and accountants have warned. The Government’s target implementation date is unrealistic and unworkable. What is more, it will coincide with the uncertainty created by Britain’s departure from the EU, which is already creating a significantly tougher operating climate for small businesses. I note the comments made by Conservative Members during the debate on the first group of amendments about not wanting a review of any measure in the Finance Bill to coincide with Brexit. I am sure that they will apply that view consistently to this package of measures.

To be frank, nobody is sure whether HMRC or business can be ready for the implementation date. At present, the plans are rushed and poorly thought through. This is why our amendment proposes that the date is put back to 2022 to allow time for consideration and compliance and to avoid a clash with our exit from the European Union.