Budget Resolutions

Kevin Hollinrake Excerpts

Wednesday 31st October 2018 Commons Chamber

[Greg Clark]

I do not agree. I think that the future of the industry is strong in all scenarios. I regard our ability to participate in institutions and research networks as being of great importance, and that is why I hope that the deal that is being negotiated will succeed and that we will be able to move forward based on that confidence.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

Does my right hon. Friend welcome our ranking in the climate change performance index? The UK is fifth in that index, ahead of Finland, France and Germany.

[Greg Clark]

I do recognise that. The combination of a rigorous commitment to emissions reduction targets and an industrial strategy that makes it possible for us to glean the benefits of that is being admired by many countries around the world.

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[Drew Hendry]

I shall give way in a moment, because I did promise to, but it will have to be very brief. I want to come to a conclusion soon.

The solar industry has been battered by this Government, and now must be the time to reverse the plans to end the solar power export tariff for solar homes, small businesses and community energy projects. Ending that would be pernicious. The Government appear willing to pour unlimited amounts of public money into only one policy, however: they are obsessed with new nuclear.

Reports suggest that the Tory Government will pump £6 billion-worth of equity and about £9 billion of debt support into the failing Wyfla project, where project costs are trailed at about £20 billion. Both that and the huge white elephant that is Hinckley C have strike prices significantly higher than those for offshore wind. The National Audit Office and the Public Accounts Committee warnings about value for money must be acknowledged. The public will be paying for those projects for decades to come, through higher bills. There was nothing in this Budget for the victims of green deal mis-selling.

[Kevin Hollinrake]

Will the hon. Gentleman give way?

[Drew Hendry]

Very briefly, if the hon. Gentleman does not mind.

[Kevin Hollinrake]

The hon. Gentleman is keen to ask this Government what they are going to do, but what are his Government going to do about the historically slow growth rates in Scotland? Scotland is still growing 30% more slowly than the rest of the UK. Why is he not asking his own Government to deal with those issues?

[Drew Hendry]

The hon. Gentleman says nothing about productivity levels in Scotland, which continually outstrip those of the UK.

The Institute of Directors and the SNP made a demand for a small and medium-sized enterprises support line to help them deal with Brexit. The Chancellor also failed to deliver that. Meanwhile, in Scotland, the Scottish Government help business with a £96 million investment to deliver the most attractive business rates package throughout the nations of the UK. Already, more than 100,000 businesses in Scotland pay no rates at all through the small business bonus scheme. Significantly, the Scottish Government are setting aside resources of £340 million to provide capitalisation for the Scottish national investment bank.

I wanted to talk about much more, but I shall cut a lot out to aid the process today. Before I finish, however, I want to cover the fair treatment of workers. Westminster has failed to end wage discrimination and give young people the real living wage. Young people are used to being short-changed by this Tory Government, as are those whose rights are infringed by the gig economy and unpaid work trials. In the SNP, we believe that a fair day’s work should result in a fair day’s pay.

Contrast the Chancellor’s failure with the success of the Scottish Government’s real living wage accreditation scheme, which ensures that more than 1,000 employers now pay the real living wage and that, as a result, nearly 82% of workers in Scotland are earning it—the highest level in the nations of the UK. Imagine what more we could do if we had the power in Scotland to do so. In the meantime, the UK Government must stop ducking their responsibilities on pay. These measures are not only about doing the right and fair thing; they aid the economy by increasing productivity and boosting revenue through tax takes to spend on services. If the Government will not live up to their responsibilities for fair pay, fair conditions and young people, we should have the power in Scotland to do so ourselves.

I shall end on two things. First, in city deals around Scotland, the UK Government have fallen nearly £400 million short of the Scottish Government’s investment—so much for the 50:50 partnership. The Chancellor came up £50 million short on the Tay region deal and failed to confirm 100% coverage of Scotland, as promised by the Chief Secretary to the Treasury—good at making promises, bad at keeping them. But of course that is nothing new. We saw that in the highlands with the Inverness and Highland city region deal, where the UK Government put in only about 20% of the funding—their £53 million dwarfed by the Scottish Government’s £135 million.

Healthy economies need healthy communities. This week’s Budget had one massive failure. That was the failure to deal effectively with the problem that is universal credit. It should have been halted, fixed and properly funded. Instead, like everything else, it only got lip service. After five and a half years, since the pilot to full roll-out in the highlands, we have seen the misery that people have had to endure. Despite all the begging, cajoling, demanding and asking of Government to listen, they failed to do so. They have made promises to people that they were unwilling to keep. It is about time that the Government took responsibility and sorted that out.

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[Rachael Maskell (York Central) (Lab/Co-op)]

The Prime Minister declared austerity to be over and the Chancellor downgraded the prediction to say that it is coming to an end, but the reality is that each Department is having to make 3% cuts, which hardly backs up those statements. Of course, the corporate giants will still enjoy their £110 billion corporate tax giveaway, while 1,000 people have seen their personal wealth increase by £274 billion over the past five years. For my constituents and many like them up and down the country, the harsh reality of services slashed and under increasing pressure and the daily experience of living in poverty or just scraping by was not addressed by this Budget. We all know that the money is going to the wrong places, and it will take a radical Labour Government to restructure and transform our economy to make sure that we invest in people’s future.

I want to turn to the high streets. On 8 March 2017, resulting from the valuation process and the sharp rises in business rates, we were promised a full business rates review, but it has not happened. Instead, temporary relief schemes have been provided to local authorities, badly managed by local authorities and then withdrawn. We did not hear on Monday about how all the temporary relief has been withdrawn from small businesses. That has had an impact on pubs, which are losing £1,000, and on other small businesses, as well as medium-sized businesses—the anchors of our high streets—which will not be eligible for the one third reduction in their business rates. Again, this will have a massive impact on our high streets, but we did not hear about that from the Chancellor on Monday.

The announcement on business rates was again a short-term one—just two years. All such funding is so short-term; it is about the crisis management of our high streets, although businesses have to sign long— 10-year—leases. They cannot make such long-term investments if the Government do not back them up. We are still seeing the inequality between our high streets and the out-of-town retail sector and between our high streets and online shopping, and they were not properly addressed either. Plasters were thrown out last year and bandages this year, but what we need is surgery—with real reform taking place—on our business rates system. I will not give up until we get real reform.

We need to address the causation of this problem, about which I have yet to hear from this Government. We have investors—mainly offshore investors—owning properties on our high streets, and while the revenue they get from tenants is helpful, it is pocket money compared with the scale of their investments in pension schemes and other investments. That has not been tackled, and until it is, we will continue to have a crisis on our high streets. The escalation in rental values in places such as York is extortionate. The Government are providing relief for such corporate greed, but we need to address the greed where it sits. We are seeing the creation of a bubble on our high streets, and when it bursts, there will be a real collapse. I therefore urge the Chancellor to address the real problem of business rates.

I want to highlight the suggestions that have been made about a turnover or profit-based tax, which is far fairer and will create the greater equality that we need. I want to mention one of my streets, Coney Street, in York. We have about 50 empty properties in York, and footfall in Coney Street fell by 9.3% on the previous year and by 15% in the past two years. That is just short of 27,000 fewer shoppers.

[Kevin Hollinrake]

Will the hon. Lady give way?

[Rachael Maskell]

I am sorry, but I do not have time to give way. The hon. Gentleman had the opportunity to put in to speak in the debate.

Since September 2016, there has been real decline on Coney Street: this year alone, 12 stores have closed. Unbelievably, that—a place where there is no traffic—is where the WH Smith that is meant to be hosting the new post office is based. The current post office, on a prime site in Lendal—the busiest thoroughfare of our city—is to close. It has been there since 1884. That is the most perverse decision, and I urge the Business Secretary, who is listening, to consider the case of York and reverse that decision so that we can have a vibrant post office, rather than losing that public service in a good place on our high streets. Yet another year passes. The Government are ducking the real challenges on our high streets. We need a Labour Government to revive our high streets and communities.

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[John Howell (Henley) (Con)]

It is a pleasure to follow the hon. Member for Ynys Môn (Albert Owen). I spoke to him in the Tea Room about fusion, and I think we both remain very excited about the potential of that project. I want to start by looking at unemployment. There was a time when the Library produced monthly assessments of constituencies, and my own constituency was invariably either at the top or near it in terms of best performance in dealing with employment. It should therefore come as no surprise that less than 1% of the economically engaged population in my constituency is unemployed at the moment. The number of young unemployed people—those under the age of 24—across the whole constituency amounts to 50. It is often argued that I know them all. I do not, but I wish I did.

Those figures illustrate an interesting point, which is that there is not a sufficient population within the constituency to fill the jobs necessary for growth and expanding businesses there. Two things need to happen in that regard. First, we need innovative solutions to the transport issue. I am pleased that the county council has helped to engineer smaller buses and lots of local buses, but I would like to see a little more help for this in next year’s spending review. Secondly, we need to make houses really affordable. A number of speakers have already mentioned the fact that houses are not genuinely affordable. There is one policy in the Budget that will help in this regard, and it is interesting that no one has mentioned it so far. It relates to the Chancellor’s attempt to use the discount on houses to keep them for local people. I fully support that policy, and I do so in my role as a Government champion for neighbourhood planning.

[Kevin Hollinrake]

Hear, hear!

[John Howell]

Thank you. The whole point is to ensure that this is done through the neighbourhood planning process. This will give people an enormous incentive to undertake a neighbourhood plan, because they know that it might give them the opportunity to say that the houses involved are genuinely to be allocated to local people.

Moving on, business rates reform will be a real help for businesses, and I do not know why the Opposition are downplaying it. In Henley—I think that the same is true in Thame—the problem is not so much about high rents, but business rates, and the local paper maintains an empty-shop watch to note any fluctuations. I sought some information before this debate, and the number of smaller properties in the Henley area that will benefit from this third reduction in business rates is something like 250,000—a phenomenal number.

I mentioned fusion in several interventions, and it is something that I have kept a close eye on not only because the JET Culham Centre for Fusion Energy is in my constituency, but because I am the chair of the all-party parliamentary group on nuclear fusion. I am therefore pleased that an additional £20 million will be spent on the fusion project, an element of which was recently opened by Prince William. As I pointed out in an earlier intervention, that is a useful sum of money because it is not the commercial project, which is being undertaken in France.

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[Kevin Hollinrake (Thirsk and Malton) (Con)]

It is a pleasure to follow the hon. Member for Liverpool, Walton (Dan Carden). I look at self-management slightly differently, in that I have been in business for most of my life. I draw the House’s attention to my entry in the Register of Members’ Financial Interests. I rise to commend many of the policies in the Budget, and particularly its support for small and medium-sized enterprises. For many years, I also played rugby union for the York Railway Institute, and I look back fondly on those times. However, there were one or two clubs at which I did not enjoy playing quite so much. One in particular was Halifax Vandals, where the ground sloped at what seemed like 45° from one set of posts to the other. Trying to get out of the low-end 22 seemed virtually impossible, particularly with the additional challenge of a head wind and ankle-deep mud. At least it was the same for both sides, but for many SMEs, there is no half-time turnaround. They seem to face a consistent uphill battle with head winds that many big businesses do not have to cope with.

An example of this involves some of the digital businesses, which spend an average of 0.6% of their turnover on business rates, compared with high street retailers that spend around 2.3%, according to the Centre for Retail Research. SMEs also compete with the likes of Amazon, Apple, Google and Facebook, which are able to shift either sales or profits to the lowest corporation tax jurisdiction to avoid paying their fair share of tax while still revelling in their claims to do no evil and in their corporate social responsibility credentials. I therefore welcome the Chancellor’s commitment to business rate reductions for smaller businesses and the introduction of a digital services tax. Our job here is to level the playing field—not to pick winners—and his actions are doing exactly that.

The other area in which SMEs are at a critical disadvantage is when they are in dispute with their bank. It is now abundantly evident—particularly since the Treasury Committee released the full report on the RBS global restructuring group scandal in February 2018—that banks took businesses apart and stripped them of their assets to replenish their own balance sheets. Thousands of viable, significant and substantial businesses were involved. There were similar occurrences at Lloyds and others, yet incredibly, we leave the victims at the mercy of these very banks when they claim for compensation and consequential loss.

The Financial Ombudsman Service has very limited jurisdiction, with a maximum compensation level of £150,000 and limited competence to adjudicate such claims, and the courts are simply out of reach. Lloyds bank, for example, has a £1 billion per annum budget for legal fees. It is impossible to get justice in court against a high street bank. The proposed extension of the Financial Ombudsman Service is to be welcomed, given the vital improvements to its level of competence, but all four of the major reviews of bank dispute resolution over the past year—from our all-party parliamentary group on fair business banking and finance, the Treasury Committee, the Financial Conduct Authority and the Walker review—have concluded that there will still be a gap in the access to justice. Around 86% of businesses will not have access to justice, even with the Financial Ombudsman Service’s extended jurisdiction, and the lack of confidence between banks and businesses will mean lost start-up and scale operations, which will damage our economic prospects.

Three of the four reviews support the establishment of a financial services tribunal that would work in a similar way to an employment tribunal in that the claimant would not suffer the costs of the defendant—the bank—should they lose. That simple but effective measure is supported by the all-party parliamentary group on fair business banking and finance, the Treasury Committee, the Financial Conduct Authority, the FSB, the Small Business Commissioner, several banks and just about every parliamentarian. We cannot have businesses playing uphill and downwind against a much stronger opponent, and it is our duty as legislators to level this most important of playing fields.