Oral Answers to Questions
Kerry McCarthy Excerpts(4 months, 1 week ago)
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Bim Afolami
Mortgage costs and interest rates have gone up throughout the world, and we are in more or less the middle of the pack—they are higher in the United States, for example—but what will definitely make things harder for the hon. Lady’s constituents, and indeed all our constituents, is borrowing an extra £28 billion that will only serve to increase inflation and keep rates higher for longer.
Kerry McCarthy (Bristol East) (Lab)
Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)
The Chief Secretary to the Treasury (Laura Trott)
The OBR revised up its growth figures after data revisions by the Office for National Statistics indicated the economy had recovered more fully from the pandemic than had been expected, which means that the current level of real GDP is nearly 3% higher than was predicted in March forecasts.
Kerry McCarthy
The Government put a positive spin on the provisional local government finance settlement yesterday, but the Local Government Association said that it did not provide enough funding to meet the severe cost and demand pressures on councils, and assumed that all councils would increase their tax bills by the maximum allowed next year. What will that do for my constituents’ living standards?
Laura Trott
As the hon. Lady will know, we put billions of pounds into councils this year, and the provisional settlement is above what is expected to be the inflation rate next year. If she has specific issues with her local council, I shall be happy to take that up with her.
Oral Answers to Questions
Kerry McCarthy Excerpts(7 months, 3 weeks ago)
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Gareth Davies
The aim of the plastic packaging tax is to provide a clear incentive for businesses to use more recycled plastic in packaging. Following extensive consultation, we looked at a range of possible exemptions and decided to limit those exemptions because we want to encourage innovation in the industry. Put simply, the more exemptions, the less innovation. However, all taxes remain, of course, under review.
Kerry McCarthy (Bristol East) (Lab)
A proactive approach to a circular economy could create hundreds of thousands of jobs and cut our consumption emissions. What circular taxation measures is the Treasury looking at to help us achieve those outcomes?
Gareth Davies
We are clear that we want all taxes relating to the environment to have an impact. The plastic packaging tax, for example, will clearly have an impact on the amount of recycling that takes place and on the amounts put into landfill. Those are all things that we assess as part of evaluations, and the plastic packaging tax will be evaluated this year.
Non-domicile Tax Status
Kerry McCarthy Excerpts(1 year, 2 months ago)
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Kerry McCarthy (Bristol East) (Lab)
That was very interesting from the hon. Member for Newcastle-under-Lyme (Aaron Bell)—particularly his revelation that Labour aspires to be in government.
It is pretty much universally accepted that people who work in the UK, make their life here and benefit from all we have to offer should pay their taxes here. I cannot see why that is a controversial point. Non-dom tax status completely undermines that by creating a tax system that is rigged against working people. It cannot be one rule for the wealthy and another rule for everyone else. This is not about envy or wishing that we were incredibly rich, or anything like that; it is about basic fairness.
Those benefiting from non-dom tax breaks are estimated to have almost £11 billion a year in unreported income and capital gains overseas. As has been mentioned, a study by LSE and the University of Warwick estimates that this means the UK has lost more than £3 billion in tax revenue. Labour believes this money would be better spent on the NHS than on lining the already bulging pockets of the extremely rich.
This debate is about transparency, fairness and prioritising areas of society that need support. It really is as simple as that. If there were a direct choice between more non-doms and more nurses, between a tax break for the wealthy and a school child’s breakfast, what would the Government choose?
We have to ask ourselves whether we want to live in a country in which it is easier to avoid paying taxes than to see a GP. There are 4,500 fewer GPs in England than there were a decade ago, with more than 1.3 million people having to wait more than a month to see theirs. We have heard Conservative Members floating the idea that people might have to pay to see their GP. My father in Ireland had to pay to see his GP, and perhaps he would still be with us now if he had not put off going to investigate the symptoms of bowel cancer. We certainly do not want to go down that route.
The money raised by abolishing non-dom tax status could double the number of medical school places, double the number of district nurses and provide 10,000 more nursing and midwifery clinical training places. In my constituency, we have a wonderful University of the West of England campus that is training midwives and nurses. We also had a birth unit at Cossham Hospital, which had to close because there simply were not the midwives to staff it. Southmead Hospital had to be given priority, where the more critical cases go. We absolutely need to invest in more doctors and more nurses, shorter waiting times and better care.
We could also use the profits from closing this loophole to provide breakfast clubs for primary school children. We know that far too many children are spending the day at school too hungry to learn; according to Magic Breakfast, as many as 3 million children could be in that situation. Some £3 billion in lost revenue from abolishing the non-doms loophole would go a long way to filling that gap.
No one would propose this non-dom policy now if it did not already exist. As has been mentioned, this move would simply bring us into line with major economies, including France, Germany and Canada. What the proponents of the non-dom regime, and some MPs speaking here today, have failed to understand is that to the British public, who regularly poll in support of abolishing the exemption, it is about what is fair and right. A common refrain throughout the pandemic was, “We’re all in this together. We are all contributing to a common cause.” The fact is that we are not and we should be.
Landfill Tax Fraud
Kerry McCarthy Excerpts(1 year, 3 months ago)
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Mr Jones
Yes, and I will come on to such an example in a minute. We only have to look at a company’s directors to question the situation, and I know that the right hon. Member for Haltemprice and Howden is aware of such individuals. It would not take a great Google search, or an officer could have a look on the police computer to discover that these people have no interest in waste crime until they understand how lucrative it is.
Waste crime has become a very profitable business. The PAC report of last April, which came off the back of pressure from me, the right hon. Member for Haltemprice and Howden and others, outlines that of the 60 main organised crime groups in landfill tax fraud, 70% are involved in money laundering and 63% in other illegal activities. Waste crime is a way of washing or hiding drugs money, for example, and generating huge sums of cash—it is a licence to print money if people are not declaring what is going into a site.
People may ask, “Surely someone has noticed this?” People have been screaming about it for years. Are the police on it? Is His Majesty’s Revenue and Customs on it? Is the Environment Agency on it? They are not. I offer the House one simple fact: how many successful prosecutions for landfill tax fraud have there been since 1996? Not one.
The example I now come on to is the interestingly named Operation Nosedive—I would love to know why they named it that. Operation Nosedive was focused on the activities of a company called Niramax in Hartlepool in the north-east of England. At least, it operated in the north-east, but also elsewhere, as I am sure the right hon. Gentleman will allude to later on.
His Majesty’s Revenue and Customs instigated Operation Nosedive to look into illegal tax fraud. I have been told by individuals in the north-east about this company and what it did. It was set up, bought into the waste management business, had various sites around the north-east and other parts of the country, and I think it was running both scams: not only was it running the inert and active waste scam, but there is a question as to how much landfill tax was actually being paid on stuff it was dumping.
Someone explained it to me this way: looking at what Niramax was charging companies for taking away their waste. There is no way it could have charged that rate if it was paying the full landfill tax charge. Likewise, how could it be economically viable to transport waste from a council in south Wales to the north-east? It was quite a big operation, and certain local companies went out of business because they were being undercut by Niramax.
Three regional police forces, Durham, Cleveland and Northumbria, had contracts with Niramax, which shows how big the business got. If anyone had looked at the directors of the company and seen their backgrounds, I would have thought it would have rung a few alarm bells with those three police authorities and made them ask why on earth they were giving a contract to that company.
After a few years of badgering, HMRC took action and Nosedive was launched, with a great deal of publicity, in 2014 with a raid of Niramax’s headquarters in Hartlepool. £250,000 in cash was found under somebody’s desk and a lot of documents were taken. To quote the Teesside Live newspaper at the time:
“Simon York, Fraud Investigation Service director at HMRC, said: ‘This is the culmination of 18 months’ painstaking investigation into the suspected systematic abuse of the landfill tax system. We believe that over £78m revenue may be involved, money which could be used to fund some of the UK’s most vital public services.’”
That is £78 million for one operator. I thought, “Great!” when that happened, and so did people I know in the industry, but six years down the line a journalist rang me and said, “Do you know they’ve actually dropped the Operation Nosedive prosecution?”. Nothing happened, but HMRC spent £3.5 million of public money on the investigation.
I tried to find out how much that investigation cost; I know my hon. Friend the Member for Blaydon tried too, but HMRC would not tell us. We only found out because the right hon. Member for Haltemprice and Howden and I got the National Audit Office to do an investigation into it. There is a fundamental question of accountability here. Before the Minister tells me that we cannot have control over HMRC, I agree with him, but there is a lack of accountability in this situation if I or Parliament cannot ask why public money is being spent in that way.
Operation Nosedive was a complete failure and Niramax got away with the fraud—and that £78 million is just one organisation. The other point is that Niramax was not the only operator using that landfill site or the other sites it owned. Other operators were using them too, which raises the question who else was in on the scam and who else was not paying full landfill tax, because I suspect others were at it as well.
The strange thing is that one of the main directors of Niramax is currently in prison—it has nothing to do with this situation, but rather with a very nasty murder case in Hartlepool. Were people surprised when he was found to have been involved in that situation or found guilty? No, they were not, but why are people with criminal records allowed to run those industries? Because they are making money. That is just one case.
Kerry McCarthy (Bristol East) (Lab)
I am finding my right hon. Friend’s speech very educational. Does he share my concern about the prevalence of modern slavery and trafficking in this sector? I think in 2018 it was found that two thirds of modern slavery victims ended up in the waste sector at some point during their period of exploitation. That is part of the model he is talking about, whereby cowboy or even criminal elements are running the business, cutting costs at every corner and not caring about the cost of human life while they do so.
Mr Jones
I am not suggesting that happened in the Niramax case, but my hon. Friend is right that the individuals involved in these businesses are involved in everything from drugs to prostitution and, no doubt, modern slavery practices. That is why I cannot get my head around the fact that the Government, whether individual Departments or as a whole, just turn a blind eye to this problem, when it is causing so much damage.
There are now promises that the new joint unit for waste crime that has been set up will look at those things, but I ask the question again: it has been up and running for three years now, and has it prosecuted anybody yet? No, it has not. There is a sense of frustration at Nosedive and at the fact that HMRC does not seem to think these crimes are important. I hate to think how many billions—and it is billions—of taxpayers’ money has been lost over the years because of this process.
HMRC does not seem to be bothered. I remember when I first contacted HMRC about this situation, and they said, “If it’s not worth more than £20 million a year, we’re not really bothered.” Well, it reckons Nosedive was worth £78 million, and when I asked in a parliamentary question whether the individual quoted was giving his private estimate or HMRC’s, I got no answer, because HMRC hides behind a wall of secrecy. There is a serious issue with holding these organisations to account.
The other side to this issue is the environmental cost. We have lost revenue, we have funded organised crime and modern slavery and other things, but there will also be a cost to the environmental clean-up, and I am sure the three other Members who want to speak in this debate will highlight cases in their constituency. Not only will this activity be harmful for those various sites, but the cost will fall on the taxpayer.
My other point is about what communities can do when they have an illegal landfill site or someone who is operating a so-called legal site but is completely ignoring the regulations. It is very frustrating; people feel powerless, and I am sure we will have some good examples of that later in the debate. I know the hon. Member for Newcastle-under-Lyme has some good examples of where, even as a parliamentarian, he feels powerless when raising these issues. If he feels powerless, certainly his constituents do too, living next door to piles of rotting waste and quite rightly worrying about the environmental effect that will have on their community. I think that the PAC has done fantastic work to highlight the lack of regulation. The main thing is whether that has got any better since I have been involved, and I would argue that it has got worse. There are a lot of good and sound words, but there is not a great deal of action.
One issue is enforcement. The Environment Agency—another arm’s length quango—does not have the enforcement culture that it needs. It mainly issues guidance notes or warning letters. Frankly, giving guidance notes and sending warning letters to the types of people we are dealing with is a complete waste of time. I mentioned the joint unit for waste crime, which I have met. To their credit, the individuals in that unit are well meaning—they certainly come from an enforcement scope—but unless we see prosecutions taking down some of the big operators soon, this will just carry on. I am quite sceptical, frankly, about whether there is a will, certainly in HMRC, to grasp this. The Environment Agency has had its budget cut, and I accept that it does not have an enforcement culture—one of my hon. Friends refers to that agency as “newt lovers”, which they possibly are—but we need a certain culture to tackle what is a bigger problem.
I come back to a point that I cannot get my head around. We need a political lead from the Government to grasp the matter and ensure that the regulations are enforced and targets operated on. I, the hon. Member for Newcastle-under-Lyme and the right hon. Member for Haltemprice and Howden met the National Crime Agency a few months ago to talk about that, because, as my hon. Friend the Member for Bristol East (Kerry McCarthy) said, the money generated from such activity goes into a host of things that cost our society dearly.
The new joint unit for waste crime is a step in the right direction, but unless it starts delivering, a lot of us will be sceptical. The Minister needs to grasp this through HMRC, and there needs to be a politically led focus in Government, with someone who can say, “Right, where are you up to with this? What are you doing? What is needed?” Personally—others may think differently —I do not think we need more legislation. What we need is enforcement of the existing legislation, not just to ensure proper waste management to prevent environmental devastation, but to support the existing waste management industry, which is playing by the rules. That is an important point.
I raise this in the debate, as I am sure other hon. Members will, in the hope that someone will grasp the matter and take it forward. If they do not, we hon. Members present will not go away.
Mr Davis
That is absolutely correct. I am sure Gresham did not have in mind blackmail and threats as well, which also come into it when the operation becomes criminal rather than legal. The joint failure of HMRC and the Environment Agency led to theft from the public purse—it is as simple as that—the devastation of public spaces, and the undermining of public confidence in this whole policy area. Ostensibly, the issue is that HMRC is focused on the collection of tax, while the Environment Agency is following a remit to manage waste. That is the excuse given, if you like. Frankly, it is extraordinary that the Environment Agency would not collect data on a tax designed to incentivise good waste operation. That is its purpose, so why on earth is the Environment Agency not monitoring that carefully? If it is not working, it is a failure of its own remit.
Kerry McCarthy
I am finding what the right hon. Gentleman has to say very interesting. In the past, I have asked questions about the Environment Agency’s role. It is meant to have a role in enforcing the waste hierarchy, in which things going to landfill should be at the bottom. The Environment Agency should be incentivising recycling, reuse or not creating waste in the first place. Does he agree that we need a fundamental overhaul so that the Environment Agency is properly resourced and there are incentives and disincentives so that the waste hierarchy is proper observed?
Mr Davis
I agree with the aims the hon. Lady describes, but I am not sure whether this is a resource issue for the Environment Agency—I think there is a resource issue in other areas. If the Environment Agency does its job right first time, that is it dealt with. To bring it down to the microcosm of a single waste tip, if it does not enforce the first, second or third complaint, it will have hundreds and thousands of complaints, and its time will be sucked into dealing with them. To some extent there may be a resource issue, but a bigger issue is, straightforwardly, to do with management and the determination to make the industry obey the rules and to spot such things as tax evasion. If tax evasion takes place, the whole structure she describes disappears. The cheap operator who is not paying taxes gets all the business, and therefore nothing is pushed to a better waste outcome. I take her point, but in many ways management is more important.
Non-domestic Energy Support
Kerry McCarthy Excerpts(1 year, 3 months ago)
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James Cartlidge
I pay tribute to my hon. Friend for being an absolute champion for his constituency. I know that he had a question on hospitals earlier and now he is championing his pubs. We all know how important pubs are to all of our constituencies. I will make two points.
First, in response to my right hon. and learned Friend the Member for South Swindon (Sir Robert Buckland) I referred to the letter that the Chancellor is sending today to Ofgem, urging it to update him as a matter of urgency on its review of the non-commercial market. Hopefully, that will look at some of the factors around how contracts operate and, indeed, at whether there are abuses and what can be done about it.
Secondly, one of the reasons we are maintaining universal support is precisely because there will be examples, such as the one my hon. Friend raised, of those who came to the end of a deal and fixed when prices were high, and so will not have benefited, even though prices are falling. This support is there to prevent that sharp cliff edge. It is about getting the balance right.
Kerry McCarthy (Bristol East) (Lab)
The Christmas period should be a boom time for hospitality companies; sadly, in Bristol we saw quite a number go under, and energy bills were a huge reason for that. The Newtown Park Brewing Co. was forced to stop production—a 500% increase in its energy bill quote was the final straw. It was not helped by the fact that, when it tried to speak to its energy company about what support was available, its energy company did not know. It said, “We would tell you if we did know, but we have no idea what we can offer you.” Will the Minister ensure that, with packages going forward, everybody is in the know, the details are communicated and there is enforcement so that people get the help that they are entitled to?
James Cartlidge
The hon. Lady asks a pertinent question. I will make a point about hospitality this Christmas. Of course, a particular factor facing hospitality was that people could not get around on our railways to enjoy hospitality at Christmas as they normally would. We all know the reasons for that. It is a great disappointment to me that that industrial action has threatened many otherwise viable businesses up and down the country. However, her question was perfectly fair. Payments should be automatic. I obviously do not know the exact circumstances of, I think, the pub—
James Cartlidge
Sorry, the brewery that she was talking about. Assuming that it is still going, it would benefit from the scheme; I hope that it can. On whether it would benefit from the universal scheme or the intensive scheme, it would likely be the universal one. If colleagues want to find out whether a particular sector is in the intensive scheme, that information should now be available on gov.uk.
Greening the Financial System
Kerry McCarthy Excerpts(1 year, 4 months ago)
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Kerry McCarthy (Bristol East) (Lab)
It is a pleasure to see you in the Chair, Mr Bone. I see that the Financial Secretary to the Treasury is on her feet in the main Chamber, so we may be interrupted, but let us see how we get on. I congratulate my hon. Friend the Member for Sheffield, Hallam (Olivia Blake) on securing the debate. Having served on the Environmental Audit Committee, I know that this is a complex area. We did inquiries into green finance, and there are many aspects that could be covered.
My hon. Friends the Members for Sheffield, Hallam and for Reading East (Matt Rodda) said that the financial sector needs a sense of stability from the Government—that has obviously been lacking somewhat in the past year, if not previously—so that it knows what the future direction is and feels safe in taking a long-term perspective on investments. As my hon. Friend the Member for Reading East said, pension funds very much need a firm steer from the Government on where policy is heading. My hon. Friend the Member for Sheffield, Hallam talked about the lack of investment in green infrastructure, whether it be transport or home insulation—she mentioned many things. That is because, again, the market does not have confidence that that is where it should put its money. I hope that can be rectified.
I was interested to hear what the hon. Member for Rother Valley (Alexander Stafford) said about the APPG report that is due out tomorrow. I was not aware that that work was in progress, and will certainly be reading it. It is sad that we lag so far behind the EU on green taxonomy. Anything that we can do to root out greenwashing would be appreciated across the board.
As the indefatigable hon. Member for Strangford (Jim Shannon) said, we very much agree on the nature side of things; we agree on quite a few things, perhaps surprisingly. He talked about the Amazon, as did the right hon. Member for Epsom and Ewell (Chris Grayling), who I know is doing good work with the APPG on global deforestation. It is crucial that UK financial institutions are not contributing to that by financing such activities in the Amazon and other places around the globe, and we should definitely seek to stamp that out in supply chains.
The hon. Member for Strangford also talked about EV charging points, a subject that is dear to my heart. Most people who own EVs know the pain of trying to charge at a public charging point, particularly if they have to venture into rural areas. Reliability used to be the issue, but now it is that everybody else wants to charge at the same time. I had to head down to Somerset at the weekend for work reasons, and I was in that situation. It is said that in England, we are never more than 20 miles from a charging point, which is not necessarily okay because we might get there and find we cannot use it and then have to drive another 20 miles. In Northern Ireland, it is 50 miles. We will inevitably get private sector investment where there is quicker market return—in other words, where there are more people to use the charging points and where there is that critical mass. The Government need to do more to pump-prime the market in rural areas and ensure that the public infrastructure is there. That can be done with the help of private finance, but the Government need to step in.
The contribution that the City makes to the UK economy cannot be overstated. It represents 8.3% of all economic output. It is one of our most successful exports and has been so for centuries; it has been at the heart of our economic life. Some people think there is a disconnect between what they call the real economy and the City, but allowing the City to thrive will deliver the tax receipts we need to repair our public services, to support people through the cost of living crisis, and to spearhead and finance economic growth.
Labour is committed to supporting the City to retain its competitiveness on the world stage. We support the principle of a new secondary statutory objective for regulators that prioritises both nature targets and long-term growth, but that in itself is not enough. We need to do more to harness the power of the City to drive growth in the real economy, and that means putting the right incentives in place for financial services to provide capital, credit, insurance and other services to firms in every sector and every region and nation of the UK.
Of course, sustainable growth in the 21st century means green growth. Climate change is the defining social challenge of our times, and we have seen this year what happens when we are overly reliant on fossil fuels and foreign dictators for our energy needs. Globally, the risks associated with climate change from the ever increasing frequency and severity of extreme weather events will require insurance and reinsurance, as well as sustained investment in climate adaptation.
Labour does not see the transition to a green economy as a risk. We see it as an opportunity for both the City and the wider economy to reverse over a decade of stagnant growth and to create hundreds of thousands of green jobs. The financial services industry will have a key role to play. As my hon. Friend the Member for Sheffield, Hallam explained, UK public financial institutions such as the UK Infrastructure Bank must be aligned with predetermined sustainability aims and objectives.
There are numerous examples of the financial sector already supporting green innovation in British industries, yet too often businesses—especially SMEs—struggle to access the green capital they need. That goes back to what I was saying about the lack of market confidence to invest in the green transition. Leaving aside the political and economic instability of the past year, there have been specific moves by the Government that have undercut market confidence. In 2013, for example, the Government cut energy efficiency programmes, which saw home insulation rates fall by 92% in that year alone.
Matt Rodda
My hon. Friend is making an excellent speech. I just want to draw out some detail in relation to that final point from my constituency. It is a tragedy that the Government have made that mistake, because there are many people—often older people—living in terraced houses who do not have adequate home insulation. They have been failed by the Government, and that is a real tragedy.
Kerry McCarthy
Yes, and if the Government had kept that home insulation programme, they would now be having to spend a lot less money on bringing down energy bills, because people would be saving hundreds of pounds a year by having warmer homes.
There was a series of sudden changes to low-carbon energy policy in 2015 that undermined investment confidence. The moratorium on new onshore wind programmes in 2015 effectively destroyed the market. In the same year, the Government slashed solar subsidies, causing a huge crash in private investment. We are still not quite sure where the Government are on onshore wind or, indeed, on solar. There is the move to reclassify grade 3b agricultural land, bringing that out of solar use. As we have heard, the Prime Minister has not been able to give an answer, and at Business, Energy and Industrial Strategy questions yesterday, the Business Secretary was not able to give a clear line on onshore wind. I know that a vote will happen soon if a consensus is not found, but the market wants confidence. It wants to know whether it is time to invest in things such as onshore wind. That does not mean just a temporary lifting of the ban, subject to local consent; people need a long-term vision to be able to do this.
The Prime Minister did not inspire confidence in his initial approach to going to COP27; he was eventually dragged there. On the issue of international climate finance, there was the groundbreaking announcement of a loss and damage fund to assist developing countries, in response to the damage that they have incurred through climate change. There was a call for financial institutions to raise the ambition, to change the models and to create new financial instruments to increase access to finance. We ought to be at the heart of that global transfer of funds from developed countries that have polluted to countries that need support. Yesterday, I was with representatives of the overseas territories who are really struggling to get finance just to switch from fossil fuels to renewable energy production in what are very small territories. We ought to be looking to support that through finance from the City of London.
The Government promised radical action on a green transition, and we were promised that the UK would become the world’s first net zero financial centre. Instead, as we have heard, we are falling behind global competitors. A recent report from the think-tank New Financial revealed that in both share and penetration of green finance in capital markets, the UK is a long way behind the EU. It found that green finance penetration in the UK is at half the EU level and roughly where the EU was four years ago.
I will say this very briefly, particularly because we are expecting the Division bell to go. Labour has given clarity through its green prosperity plan: £28 billion a year until 2030 for green investment. It is that sort of certainty that the Government need to adopt.
Autumn Statement Resolutions
Kerry McCarthy Excerpts(1 year, 5 months ago)
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Kerry McCarthy (Bristol East) (Lab)
I start by echoing something said a moment ago by my hon. Friend the Member for Bristol South (Karin Smyth) about the pressure on council finances, starting with the fact that the local housing allowance has been frozen yet again. She cited the example of a constituent who needed a three-bedroom home, but because the local housing allowance has been fixed at £950 the constituent is paying £400 out of her own pocket. The Bristol Cable, working with the Bureau of Investigative Journalism, found that in July this year only one two-bedroom property was available in Bristol that fell within the local housing allowance rate. We are finding that people simply cannot afford to pay the extra and it has caused a housing crisis in the city. I raised that survey with Ministers at the last but one Department for Levelling Up, Housing and Communities questions, and was told that they kept local housing allowance constantly under review, so it was very disappointing that we saw no movement on it in last week’s announcement.
As we heard from quite a number of Members at today’s DLUHC questions, local councils, through no fault of their own but because of the Government’s catastrophic, self-indulgent financial mismanagement, are now being forced to cut services to their bare bones. Once statutory services have been paid for, there is very little money left for anything else, which means that councils such as Bristol that have fought year on year to protect precious amenities might now have to let them go. At departmental questions earlier, the Under-Secretary of State for Levelling Up, Housing and Communities, the hon. Member for North East Derbyshire (Lee Rowley), talked about the need to make efficiency savings; there are endless meetings in Bristol City Council about how we can make efficiency savings. It is a constant process, but there comes a point at which there is nothing left to cut.
Nine out of 10 councils face funding shortfalls next year, and Bristol will face a funding gap of £87.6 million over the next five years. I really did think that the Under-Secretary of State seemed to be in a state of denial about this issue when answering questions today. I hope that he comes to Bristol, talks to local councillors and people in their communities and sees just how tough things are.
The Government tell local authorities to try to recoup some money by raising council taxes and the social care precept, effectively passing the buck, but that will mean that our constituents, who are already struggling to make ends meet, with rising rents and mortgages, inflation sending food prices soaring and, of course, energy bills—all these cost of living pressures coming at them from all quarters—will be hit in the pocket once again. It is predicted that council tax for an average property will go up by around another £100. Councils cannot take this level of financial pressure any more and my constituents cannot shoulder the burden any more.
It was notable that although the autumn statement included the windfall tax, there was no move to scrap the investment allowance. Basically, that means that the Government are taking away with one hand and giving back with the other. It means that a company such as Shell, which has made record profits, has not had to pay any tax at all on those profits.
Underfunding local services is completely counterproductive. What does it mean for the growth agenda if council planning departments are swamped and cannot process applications for new development? What does it mean for community wellbeing if councils cannot maintain parks, fund their public health programmes or keep libraries and children’s centres open? What does it mean for social care if we keep kicking it into the long grass? Again, my hon. Friend the Member for Bristol South spoke about that. Cuts have consequences, and we are starting to see that in very stark relief. Things will only get worse.
I want to talk about the labour situation. The Chancellor told us on Thursday of plans to get more people into the workforce, but I am not convinced that they go anywhere near far enough. As the shadow Secretary of State for Work and Pensions said, the Government are commissioning a review, not a plan. We are seeing labour shortages in so many areas. The NHS is ramping up overseas recruitment. Restaurants and shops are being forced to close early or sometimes for whole days because they do not have the staff to stay open. Food is being left to rot in the fields. The birth centre in Cossham Hospital in my constituency has had to close—hopefully temporarily —because of a shortage of midwives. In Bristol, the post-Brexit shortage of HGV drivers is now having a serious impact on bus services. First Bus is having to cut routes, leaving people stranded, because it is simply unable to recruit drivers. It has upped the starting salary and is trying to get people through their driving tests, but to no avail, because there simply are not enough people out there willing to take up driving jobs.
The Government’s solution was to look at the economically inactive and at people on universal credit, who the Chancellor said could spend more time talking with their work coach about increasing their hours and earnings. As has been said, however, what blocks them is often access to affordable childcare. We had the March of the Mummies and the Pregnant Then Screwed campaign in Bristol a couple of weeks ago, which highlighted the crisis in early years and the fact that decent, accessible and affordable childcare is becoming ever scarcer. The shadow Work and Pensions Secretary’s five-point plan gave the Government some real pointers, and I hope we get a response to some of those points when the Minister sums up. My hon. Friend the Member for Stockton North (Alex Cunningham) also made a valid point about carer’s allowance.
The OBR estimates that real household disposable income per person will fall by more than 7% over the next two years. That is the biggest drop on record and will not lead to the growth that this country needs if it is to emerge from this crisis. Yet the Chancellor told the House that only the Conservatives could get us out of this—Conservative—mess. He is basically saying, “There have been 12 years of economic incompetence, but I promise that this time will be better.” Austerity is a choice, not a necessity.
The answer to the cost of living crisis is not squeezing wages, eroding public services and taxing working people as living costs soar. It is about investing in public services, investing in infrastructure and investing in British workers. At conference, Labour unveiled its green prosperity plan, with thousands of new jobs across the country in green energy and retrofitting. We also announced a modern industrial strategy that will see workers and businesses flourish and a long-term plan for growth that will allow us to cut bills and tackle inequality and poverty. That is what was missing in yesterday’s statement, and that is what Britain needs—not a return to austerity.
Energy (Oil and Gas) Profits
Kerry McCarthy Excerpts(1 year, 9 months ago)
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Sir Robert Syms (Poole) (Con)
As the motion relates to a Treasury matter, may I pay tribute to the former Chancellor, my right hon. Friend the Member for Richmond (Yorks) (Rishi Sunak)? He had to get the country through a difficult period in the pandemic. He produced a number of interesting schemes, such as the furlough and the self-employment income support scheme, where the software worked and where people were helped. I think he was very creative in the way he handled a difficult situation. I know that it is not always easy for senior politicians to take decisions such as the one that he has taken today. I wish him well, along with the former Secretary of State for Health and Social Care, my right hon. Friend the Member for Bromsgrove (Sajid Javid). We will see how events unfold.
Let me start by taking a traditional Conservative position and saying that I do not like windfall taxes. The North sea is a tremendous British success story. We have got oil out of deep seas using technology, investment and British initiative over decades and we have benefited the nation in doing so. We are a nation that has oil and gas all the way around its coast, as Professor Peter Odell used to say in the 1970s. It is just a question of whether it is viable to get it out, and whether the tax and investment regime is good enough.
The North sea is quite mature now. Although the rise in prices is unwelcome for motorists, it certainly gives the opportunity to extend the life of some fields and makes other oil fields with more marginal prospects more viable. If we are looking for a resilient future for our country, getting the best out of our natural resources in the transition to net zero, I think we ought to have a stable tax network, not act like a Venezuelan junta by jumping in and trying to take money away from oil companies. And what are oil companies? They are normally vehicles for pension funds for lots of elderly people living up and down the country who rely on that income to pay their cost of living bills. There is no such thing as a painless tax rise. There is no magic money tree if we go and punch the oil and gas companies in the mouth. I think this is a very short-sighted policy. It may raise money, but the consequences are long term, and it may have an impact on investment.
Apart from the creation of an oil industry, there are thousands of jobs in oil services in and around Aberdeen, in many other parts of the United Kingdom and, now, worldwide. I think we ought to be proud of what this country has achieved, and we ought to be doing what we can to support those well-paid and important jobs as we go towards net zero.
I am not going to divide the House today. I do not think I would get a seconder, as I am probably the only person who is against the windfall tax at the moment, but we will see how this transpires. I think that a stable tax system in which people in the oil and gas industry can look decades ahead—because investment decisions sometimes take decades—is a much better way of dealing with the situation.
Kerry McCarthy (Bristol East) (Lab)
I understand the hon. Gentleman’s arguments, although I do not agree with them, but has he an alternative proposal for helping people to bring down their energy bills? I am sure that many of his constituents are deeply worried about how they will make ends meet, particularly with the next increase in bills coming this autumn. How does he suggest we help them?
Sir Robert Syms
I am not sure that the £5 billion raised from the oil companies will find its way into the pockets of people who are worried about their energy bills. As far as I know, it is going into the Treasury.
I return to my original simple point. The Government have already undertaken a number of measures to help with bills; the problem is the lag between the decision making and the assistance that they are giving. So there is always more pressure to do more. I am hopeful that, as we proceed, people will suddenly see some of the bail-out help with bills that the Government have already factored in. But I think that a stable tax system is a better way of proceeding than adding a higher levy on top of corporation tax rates, which are already higher than the rates for most other companies. Let us not forget that many of these oil companies were losing money 18 months ago when we were in lockdown.
I am unhappy with this policy. I will find it interesting to see how the Government bring the positives forward. I am pleased that they have listened to representations—and the former Chancellor was talking to the oil industry—but I think that in the long term this is bound to have a negative effect on investment in the sector, and that what we should be doing is cherishing and encouraging the sector so that we import less from other countries and give ourselves more resilience and security of supply.
That is really all that I wanted to say. I wanted to make my reactionary right-wing comments about windfall taxes, and I did not want the motion to go through without my putting them on the record.
Downing Street Garden Event
Kerry McCarthy Excerpts(2 years, 3 months ago)
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Urgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
Each Urgent Question requires a Government Minister to give a response on the debate topic.
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Michael Ellis
What I say to Frances and her brother, and to the constituents of all hon. Members on both sides of the House who have suffered loss, is that my heart and sympathies go out to them. I deeply regret the personal loss, tragedy, bereavement and distress that has befallen tens of thousands of people in the country. That is what I offer; I hope that it is accepted. All I can do is say that we are all working extremely hard to mitigate the impact of the pandemic and we will continue to do that.
Kerry McCarthy (Bristol East) (Lab)
I, too, have constituents’ accounts from around that time. One said:
“My aunt committed suicide a few weeks ago and I could not hug my mum (who found her body) at her funeral”.
Another was not able to visit a brother with stage 4 throat cancer or visit her 87-year-old housebound mother.
With all due respect to the Paymaster General, my constituents do not know who he is. They are not interested in hearing about his regret, his distress, his sorrow; they want to hear from the Prime Minister. Unless Mr Speaker has it in his power to extend Prime Minister’s questions to 7 o’clock tomorrow, there will not be time for all of us. The Prime Minister should come before this House and every single one of us should have the opportunity to stand up and read out all our long lists of cases. The Prime Minister ought to show some empathy himself.
Michael Ellis
The Prime Minister will be here tomorrow. The proceedings of this House are well established and the Speaker controls the proceedings of this House. The Prime Minister is here weekly to answer questions and will do so in the normal way tomorrow.
Oral Answers to Questions
Kerry McCarthy Excerpts(2 years, 5 months ago)
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The Financial Secretary to the Treasury (Lucy Frazer)
I know that my hon. Friend will have campaigned hard for the funds that have come through. We will continue to support people across the House and in her constituency to level up.
Kerry McCarthy (Bristol East) (Lab)
Rather than talk about competitive bids for funding, could we talk for a moment about mainstream council finances? We know that this Budget will significantly shift the burden to local authorities and require a significant rise in council tax, which people can ill afford. We also know that councils’ finances have not fully recovered and they have not been fully compensated. What is the Chancellor doing to talk to local councils about the pressures that they are facing?
Rishi Sunak
I actually did engage with representatives from local authorities in the run-up to the spending review. Last week’s spending review outlined an additional £1.6 billion a year of cash grant for local authorities, which will ensure that local government core spending power will rise at about 3% a year in real terms over the spending review period; that is historically high. It has been warmly welcomed by local councils up and down the country, and will ensure that council tax increases can be kept at more moderate levels.