Economic Crime (Transparency and Enforcement) Bill

Liam Byrne Excerpts

Committee stage
Monday 7th March 2022 Commons Chamber

[Paul Scully]

First, I thought that when I said, “Essentially, yes,” it was a clear, two-word answer to a simple question. I will cover my right hon. Friend’s amendments in my closing remarks, but I wanted to speak to the Government amendments at this point. However, his new clause 29 would give a huge amount of powers not just to the Foreign Secretary in relation to Putin’s regime, but to future Foreign Secretaries. We need to tread carefully and look at that carefully before the House acts in that way.

[Liam Byrne (Birmingham, Hodge Hill) (Lab)]

We can see that the sanctions regulations will become much stronger, but our sanctions regime is still a long way short of the kind of sanctions that have been imposed on, for example, Iran, whereby we are able to sanction secondary entities trading with sanctioned companies. Does this legislation allow us to enforce Iran-like sanctions on Russia, because ultimately, that is what will be needed?

[Paul Scully]

I think the right hon. Gentleman comes from a place of supporting the proposal from my right hon. Friend the Member for Haltemprice and Howden (Mr Davis). I do not want delay the Committee in debating the amendments in full before I respond towards the end of the debate.

On the provisions on the register of overseas entities, we will increase the ceiling of criminal penalties for non-compliance from £500 a day to up to £2,500. Again, we have listened to representations from Members across the House. We are increasing the limit to allow for stronger enforcement mechanisms, but, by making it “up to” that amount, we are also making sure that we do not criminalise people who do not have their house in order but who are using these entities for perfectly legitimate reasons.

We are reducing the transition period for existing overseas entities to register their beneficial owners from 18 months to six months. We want to ensure that there is no place for corrupt elites and kleptocrats to hide, but there are many legitimate individuals and businesses that are likely to be holding property through overseas entities for understandable reasons, such as personal security. As I said, we want to make sure that we can work with people from across the House, including my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake), to make that more secure and to see what more we can do to tackle the issues that we face here and now. It is important to remember that once the register is in place, new transactions will be caught on day one.

I am grateful for the engagement of the Scottish Government on part 3 of schedule 4. We are committed to consulting Scottish Ministers on regulations made under that part that contain provisions within the legislative competence of the Scottish Parliament. Similarly, we are committed to consulting Northern Ireland Ministers on regulations made under the similar mechanism for Northern Ireland in clause 32(4), (5) and (6).

--- Later in debate ---

[Layla Moran]

I thank the right hon. and learned Gentleman for his helpful intervention. I would rather that we deleted these lines now—they cause a lot of problems—and then, when the Bill goes to the Lords, he should by all means have a conversation with the Minister and perhaps it can be tidied up there. My concern is that if this stays in the Bill now, we then end up with too much to do in the Lords. So much is being put off and is waiting for the Lords to have a look at it that we may never get to these things. It is such a small thing, but its impact is huge.

We all want the same thing. Let us not get the enablers to start betting on clause 18(1)(b). Amendment 4 is very simple—it would delete this now. We might have to tidy a few things up in the Lords, but I would be really grateful if the Minister specifically addressed how he will ensure that clause 18(1)(b) does not end up ruining what is otherwise a good Bill that has been made much better by all the amendments that have been tabled, including by the Government.

[Liam Byrne]

Thank you for calling me to speak, Dame Eleanor. I thank the Minister for his presentation to the House and for the spirit that I thought he brought to his remarks at the outset. He slightly walked back from some of that consensus, but I make the point to him that many of us across the House think that the Government’s approach to tackling economic crime is all holes and no net. We have tried, in 27 pages of amendments, to turn what should be a net into some snares. That is why we cannot understand why the Government are not taking on board some of the smaller, technical drafting amendments that we proposed tonight—and frankly, some of the bigger moves. The Minister has it in his power to drive those through tonight so that by the time the sun rises tomorrow, we would have in our country a much stronger framework for tackling economic crime to take to the other place.

I want to speak to the two amendments in my name—amendments 37 and 38—and weigh in on the debate on amendment 26 and new clauses 2 and 29. Let me start with amendment 26, because I was a Home Office Minister for a couple of years, and I have won and lost many cases as a Home Office Minister. I have to say to the Minister that the failure to remove the words “knowingly or recklessly” from the Bill is frankly the oligarchs’ loophole—their “Get out of trouble free” card. I add my plea to those of other hon. Members that we remove those words. Otherwise, frankly, we will stand by and watch the richest people on earth driving a coach and horses through our legislation.

My second point is about new clause 2. As my right hon. Friend the Member for Barking (Dame Margaret Hodge) said, the heart of our problem with sanctioning—our frankly embarrassing performance on it—is that as well as not having the right powers, we just do not have the right resources in place. The fact that the Government took away the title of Minister for Economic Crime tells us everything we need to know about their performance and attitude hitherto.

As my hon. Friend the Member for Rhondda (Chris Bryant) said, the United Kingdom has sanctioned 34 individuals and entities since the extension of the invasion; the EU has sanctioned more than 500. Of the Navalny list of 35 that the hon. Member for Oxford West and Abingdon (Layla Moran) read out in the House the week before last, the UK has sanctioned just eight; the EU has sanctioned 19. However, what really troubles me is the question of resources, because that is obviously the core problem.

When I submitted parliamentary questions to the Foreign Office, the Treasury and the Home Office last week, I was frankly horrified. My question to the Foreign Office, which leads on sanctioning policy, was pretty straightforward: how much money is devoted to sanctioning, and how many civil servants are working on it? The answer from the Under-Secretary of State, the hon. Member for Chelmsford (Vicky Ford), was about 16 lines long and did not mention either how many civil servants are working on sanctioning or how much money is being spent.

An answer to the same question came back from the Minister for Security and Borders. In a way, I admire the number of tropes folded into his answer:

“The National Crime Agency welcomes the announcement on the Combatting Kleptocracy Cell…They have already surged additional officers to support existing efforts and will”—

wait for it—

“move at pace to enhance the unit further”.

I put the same question to the Treasury. The Treasury being the Treasury, it said:

“The staff in post in OFSI was 37.8 FTE…This information can be found in HM Treasury’s Outcome Delivery Plan”.

That is the level of precision that we ask of every Department. Frankly, the silence tells us that all is not well. That is why new clause 2 is so very important.

New clause 29, tabled by the right hon. Member for Haltemprice and Howden (Mr Davis), is incredibly important, but I push the Minister to go further. We need to be able not only to freeze assets, but to seize them. Paragraph 3.1.3 of the UK financial sanctions guidance in December 2020 says that the use of an asset, even when it is frozen, is not prohibited.

The Minister will forgive the Opposition for growing frustrated over the years at the economic policy that the Government have pursued, which has created a country of haves, have-nots and have-yachts. He can imagine how frustrated we are that the Government will not even seize the yachts when they belong to oligarchs. Somebody has very kindly shared with me a list of candidates that the Minister might want to consider: the My Solaris, owned by Roman Abramovich; the Eclipse, which is sailing in the north Atlantic and which the Government would have no means of either seizing or freezing as an asset if it docked at a UK port; the Valerie, owned by Sergey Chemezov, which is currently in Barcelona; the Lady Anastasia, which is currently in Mallorca in Spain; the Tango, which is also in Mallorca; the Palladium, which is currently in Barcelona; the Aurora, in Barcelona; Here Comes the Sun, in Mallorca; Ice, in Genoa; the Ragnar, in Narvik; Sailing Yacht A, owned by Melnichenko—

[The Chairman of Ways and Means (Dame Eleanor Laing)]

Order. I appreciate that the right hon. Gentleman has a long list. It is enlivening proceedings and we are all grateful, but we do not have time. Will he please truncate his speech? Just say, “and 12 more,” or something like that.

[Liam Byrne]

I am grateful for your guidance, Dame Eleanor, because I think I have made my point: the Government need to take on more power to seize and freeze these assets.

The final point I wish to make is about strategic lawsuits against public participation. We recently had a good debate on lawfare, sponsored by the right hon. Member for Haltemprice and Howden and myself. In amendments 37 and 38, we make proposals that the Government could adopt. I do not wish to press them to a vote tonight, but I would like the Minister to confirm what the Foreign Secretary and the Justice Secretary said in the media on Friday. The Justice Secretary told “BBC Breakfast” that SLAPPs were an

“abuse of our system and I’m going to be putting forward proposals to deal with that and to prevent that”.

The Foreign Secretary later told The Guardian that she had asked Government lawyers to “find literally any way” to crack down on SLAPPs. I would like this Minister’s confirmation that that is indeed going to happen, not in some consultation response to the Human Rights Act, but as a stand-alone piece of legislation, so that we can live in truth in this country. It is outrageous that English courts are being used as a means to silence journalists such as Tom Burgis, Carole Cadwalladr and Catherine Belton. I want great books such as “Butler to the World” by Oliver Bullough to be written with the freedom to tell the truth, and at the moment the oligarchs are denying us that freedom. They are launching a war on free speech in English courts, of all places. That scandal has surely got to stop.

I will conclude by saying that it is now clear that what our country needs Russia is a recontainment strategy towards Russia. That will entail a refortification of the NATO frontline to the east; resupplying the Ukrainian forces; and suppressing and repressing the Russian economy. Sanctions do not produce instant results—Presidents Mugabe and Maduro presided over economies in ruin for many years—but this would give us progress.

[David Linden (Glasgow East) (SNP)]

I rise to speak to amendment 63, which stands in my name and those of my colleagues. I am grateful to you, Dame Eleanor, for selecting it as a manuscript amendment, particularly at such short notice. I am not normally a fan of ramming a Bill through in such short order, but I understand the need for speed in this case.

As others said on Second Reading, the Bill is to be broadly welcomed, but it does not go far and fast enough. A much bigger and more wide-ranging debate stems from the Elections Bill, which is currently in the other place, and the eligibility of overseas voters and donors to influence our politics, but I do not think we want to go too far down that rabbit warren this evening. However, clause 38 makes provision for financial penalties to be applied in respect of overseas entities, and I support that.

My amendment seeks to close off a loophole: we could apply significant financial penalties to an individual, yet said individual, even if they lived overseas, would still be able to vote and, more concerningly, donate significant sums to UK political parties and influence our elections. I am the first to accept that our focus right now should be on applying the maximum economic sanctions on Russia to alleviate and end the military bombardment that it is subjecting the poor people of Ukraine to. It strikes me as a little bizarre that we can have a debate—and indeed legislate tonight—on the issue of dirty Russian money in these islands, but miss a trick by not also cleaning up our politics of said dirty Russian money. Countless warnings have been sounded on this issue, most notably in the Intelligence and Security Committee’s Russia report, which flagged up the vulnerability of our politics to Putin’s influence in cyber and in funnelling money into some political parties and referendum campaigns.

Corporate Transparency and Economic Crime

Liam Byrne Excerpts

Monday 28th February 2022 Commons Chamber

[Kwasi Kwarteng]

I think my hon. Friend is right. There is always a balance to be struck in legislation of this sort, but I think that, as he takes the temperature of the House, there is a real feeling that we need to expedite it. I feel confident that it strikes the right balance between fairness and transparency, and will not be overburdening people with bureaucracy.

[Liam Byrne (Birmingham, Hodge Hill) (Lab)]

This is at best a half measure. Companies House has 11,000 shell companies where there is no person of significant control registered, yet there have been only 112 prosecutions, which is just 1%. We have 12 different agencies in charge of economic crime, there is no Minister with clear responsibility, and the National Crime Agency says that its budget needs to be doubled. Irony of ironies, journalist Tom Burgis is being taken to court this Wednesday for daring to reveal the truth about the corrupt company ENRC; our courts are being used as arenas to shut down journalists. We need a far bigger, bolder plan from the Minister.

[Kwasi Kwarteng]

What the right hon. Member says about Companies House reform is not accurate at all. This set of measures will be the biggest reform to Companies House in 200 years. It is something significant. It has not been done in 200 years and it is something which we are very proud to have expedited—[Laughter.] I would have thought there would be a bit more recognition of the fact that this is vitally important legislation that is going to be brought in in a timely way.

Government Plan for Net Zero Emissions

Liam Byrne Excerpts

Tuesday 8th October 2019 Westminster Hall

[Liam Byrne (Birmingham, Hodge Hill) (Lab)]

I will be extremely brief, Mr Gray. Labour Members are proud of the Climate Change Act 2008, but we are even prouder of the green new deal that we passed at the Labour party conference, which takes forward the principles of decarbonisation, jobs and justice. That is why we held a citizens’ assembly in Birmingham within 24 hours of Parliament declaring a climate emergency. Several ideas emerged from that, which I will touch on.

First, we need green power. We spend £10 billion a year on green power in our region. Some 99% of that spend leaves the region, which is why we need a municipal solar company to turn our rooftops into power plants across the region.

Secondly, we need to decarbonise our transport system. We cannot do that unless we connect transport together. That is why we need powers over bus and rail franchising. Crucially, we need to transform the number of electric vehicle charging points. There are more EV charging points in Westminster than in the whole of the west midlands; that is not acceptable. We need to decarbonise our housing stock, which means we need devolved control of the £175 million of ecofunding that is our entitlement. We need to start building homes to A plus standards.

Finally, we need to make sure that we have a regional investment bank to back the green firms that are creating green jobs.

None of this will change the imagination without a significant investment in nature. At the moment, we need a forest the size of Tunisia to absorb all the carbon that is produced by the west midlands. That will not happen, but we could insist that our airports become carbon neutral and use that investment to replant Shakespeare’s great forest of Arden. The citizens in Parliament Square remind us that it is not acceptable for politics to remain frozen while the planet is warming. That is why we need to crack on.

International Climate Action

Liam Byrne Excerpts

Thursday 26th September 2019 Commons Chamber

[Andrea Leadsom]

My right hon. Friend will be aware that in our recently published green finance strategy, we committed to aligning all UK overseas development aid with the Paris agreement, so that our development finance is consistent with climate-resilient and low greenhouse gas development pathways. We urge all nations to do likewise.

[Liam Byrne (Birmingham, Hodge Hill) (Lab)]

I want to follow the point made by my right hon. Friend the Member for Doncaster North (Edward Miliband), who is right to say that we will not be a leader abroad unless we are a leader at home. We in the west midlands have been the leader of industrial revolutions for three centuries, but we need a green development corporation to build homes, we need municipal energy companies to roll out solar, and we need a regional investment bank to roll out climate finance here at home. Give us the tools and we will show the leadership.

Net Zero Emissions Target

Liam Byrne Excerpts

Wednesday 12th June 2019 Commons Chamber

[Greg Clark]

My hon. Friend makes an excellent point. Mrs Thatcher was the first world leader to declare a climate emergency. I recently reread the speech that she made to the UN, and I would commend it to any Member of this House. Its prescience and rigour are remarkable, and it bears reading again today.

The 1% to 2% cost estimate of the Committee on Climate Change is exactly what the House voted for in 2008. It is a gross figure, not a net figure, and does not include the benefits. My hon. Friend is absolutely right that it also does not include the consequences and costs of a failure to tackle climate change, although the committee’s report sets out in great detail some of the negative consequences were we and the rest of the world to fail to act.

[Liam Byrne (Birmingham, Hodge Hill) (Lab)]

I, too, welcome today’s statement as an important step forward. I hope the Secretary of State will join me in congratulating Birmingham City Council, which last night declared a climate emergency and a much more ambitious date to achieve zero carbon status. I hope he will also congratulate Birmingham Youth Strike 4 Climate, which has helped to lead this campaign in our region.

It would be a misreading of economic history if the Secretary of State forgot the mission critical role of a creative, active state in making industrial revolutions happen. In our region that means we need municipal energy companies to drive forward solar in the cities, green development corporations to help us build green council houses, an office of community wealth building to target the procurement spend we put into the market each year, a national education service to make sure we have the skills, and a regional investment bank to make sure we have the capital.

Will the Secretary of State work with us to help our region be the first to become zero carbon? That is the target we would like to set because, of course, we sparked the carbon revolution in the first place.

[Greg Clark]

As the right hon. Gentleman says, the west midlands has a distinguished role not just in the history but in the future of industrial production in this country and around the world. He is right that that sense of place is important and that it is crucial the Government play an active role in this at every level. We just need to look at the success of offshore wind, which was driven, in part at least, by a framework in which private companies could invest with confidence, knowing that they would be supported.

It is open to local authorities and to companies to take decisions themselves on when they can be carbon neutral, and many have done so. I am interested to hear that the right hon. Gentleman’s council has followed suit. He knows that the west midlands industrial strategy, which was mentioned in Prime Minister’s questions, has a substantial recognition of the opportunities across the region not only for participating in solving climate change but in reaping the benefits of the technologies.

Climate Action and Extinction Rebellion

Liam Byrne Excerpts

Tuesday 23rd April 2019 Commons Chamber

[Claire Perry]

It is a very serious point. Ms Thunberg’s efforts, which have become a global phenomenon, demonstrate the power of a young person deciding to make these statements. What I would say to protesting schoolchildren is this: “We need the climate engineers, the geo-physicists and the scientists of the future. Those are skills that you will learn best by engaging in education. You are protesting; we are listening. We have to work together and we need your skills to solve this problem.”

[Liam Byrne (Birmingham, Hodge Hill) (Lab)]

The west midlands was the home of the industrial revolution. We sparked the carbon revolution; we would like to lead the zero-carbon revolution. However, it has been harder to decarbonise our power system since the Government phased out feed-in tariffs for solar. It is harder to decarbonise our transport system because of the confusion, identified by the Business, Energy and Industrial Strategy Committee before Christmas, around electric vehicles. It is harder to decarbonise energy in our homes when the Minister cannot tell me, in parliamentary answers, our share of the energy company obligation funding that might fund that retrofitting. Cities in this country would like to lead the green industrial revolution, so why does she not help them?

[Claire Perry]

I will certainly look at the last point. It may be that we just do not cut the data by metropolitan area. ECO is an important fund that we are using to focus on fuel poverty and create more innovation. I do not think there is confusion. The feed-in tariff scheme, which the right hon. Gentleman will know given his time in the Treasury, was an extremely expensive scheme. We have spent almost £6 billion so far and it will cost us £30 billion over the future of the scheme. Essentially, as I mentioned to my right hon. Friend the Member for Gainsborough (Sir Edward Leigh), we have seen the price of the renewable technologies we are supporting tumble. We do not have to subsidise to drive take-up. The smart export guarantee, which I will introduce soon, will pay people for that generation and ensure there is a demand-side aggregation created in the homes investing in it.

On transport, we have been very clear. We have one of the most ambitious programmes of moving to zero-carbon new vehicle sales. [Interruption.] It is true. Opposition Members should look at what other countries are doing. The right hon. Gentleman will know from his constituency that one in five of the electric vehicles sold in Europe is made in the UK. We do not just want to be leaders in how many are driving on our roads; we want to be leaders in investing in the technology that the world is moving towards.

Economic Justice Commission

Liam Byrne Excerpts

Tuesday 11th September 2018 Westminster Hall

[Liam Byrne (Birmingham, Hodge Hill) (Lab)]

I beg to move,

That this House has considered the final report of the Economic Justice Commission.

It is a pleasure to serve under your chairmanship, Mr Hollobone. I hope that you will forgive me if I start with a short hymn of praise to the Archbishop of Canterbury. It was actually at his behest that, two or three years ago, I and others founded the all-party group on inclusive growth, which I chair and in which I declare my interest. His Grace helped to inspire and mobilise the Institute for Public Policy Research’s Commission on Economic Justice.

I congratulate the commission on producing a seminal report. Michael Jacobs, Tom Kibasi and the entire team of commissioners deserve our gratitude for sharing with us in detail a blueprint for reconnecting wealth creation and social justice. The mission is ultimately a moral mission and a righteous ambition. His Grace reminded us in his first major speech to the all-party group that Jesus was a wealth creator:

“Jesus worked for his living and created wealth for ninety percent of his life”,

so he would be unlikely to be much impressed by a country that grows both the number of billionaires and the lines at our food banks. The Archbishop continued:

“the foundations of a Good Economy are given in the nature of human beings: creativity, gratuity, solidarity and subsidiarity”.

We do not have enough of that today.

Branko Milanović, the New York economist, recently published an extraordinary book in which he set out what exactly has happened to the fruits of growth over the past 30 years. The extraordinary statistic that he revealed was that an incredible 44% of the absolute gain in total wealth has gone to the world’s richest 5%. What that means for us here in Britain, as Oxfam and others tell us, is that the richest 1% of the UK population now owns more than 20 times the wealth of the poorest 20% combined. On the streets of my constituency, therefore, among the homeless, the hungry, the young people in despair and the disabled struggling for their social security, I see, feel and share pain—pain that should not exist in the fifth richest country in the world.

The point of the Economic Justice Commission’s report, however, is not to kick off a slanging match; it is to kindle a peace match, an adult conversation that might grow in strength and one day foster something akin to the cross-party consensus that we had on economic policy after the second world war. In that spirit, therefore, I want to begin my remarks with some self-criticism about the past to steer us in the future.

Labour achieved many fine things between 1997 and 2010 but, with a lead that was greater than Attlee’s, we left a legacy that was considerably less. In power, we failed to tame and reform capitalism, and to bend it to the people’s purposes. That is what we must seek to do in the future. There was of course the tragic scar of errors in Iraq, but elsewhere we rolled forward public finance instead of reinvigorating a new public ethos, and our party was too top-down when we should have renewed bottom-up. That, in part, explained why we acquiesced in too much financial engineering and not enough real engineering.

In the face of the China shock, therefore, which unfolded after China joined the World Trade Organisation, and of the doubling of the size of Europe after the Berlin wall came down, we let too many communities deindustrialise. Yes, we created jobs, but we did not create enough good jobs. Former manufacturing powerhouses such as Burnley or Barnsley fared very differently from Berlin or Beijing, which took a different way forward. We allowed too much globalisation without compensation. In the spirit of that self-reflection, I hope that Ministers will accept that we cannot go on with today’s economic muddle when what we need is to agree a new economic model, one that will take us to a different kind of country in which we are better at creating wealth and an awful lot better at sharing wealth.

Today we face a triple curse: growth is too slow, with rates that are far slower than the trend rate of growth achieved in the new Labour years; productivity is too weak, with rates of productivity growth lower now than they were at the end of the 1970s, when it was known as the “British disease”; and, despite today’s news, wages remain much too unfair, as we continue to face the largest squeeze on wages since the days of Charles Dickens.

Ministers need to confront what the capitalism around us has become. In our workplaces, our workers now face a smaller and smaller group of companies, the great technopolies created by the $20-trillion merger wave of the past 30 years. Those companies now power world trade and dominate world technology. They use that power of technology, trade, automation and outsourcing to hold down wages. Ultimately, that is why we need a different economic model in this country. Hitherto, we have failed to create what the IPPR commission calls “a new economic constitution”, and that is what Britain needs.

The linchpin of this very fine report is what the commission called a “mission-oriented industrial strategy”. This debate is the Minister’s first outing—we welcome her to her post—but I suspect that she will say that Her Majesty’s Government do indeed have such an industrial plan. However, we must be honest with ourselves in this Chamber: the industrial strategy that we have is nothing compared with the $300-billion “Made in China” programme, Narendra Modi’s “Make in India” campaign, or the new $100-billion Vision Fund of Japan’s SoftBank. We need an industrial strategy financed on a wholly new scale.

We must therefore have new fiscal rules to guide our budgeting, so that we drive up public investment in things such as infrastructure by an extra £15 billion a year. We need to leverage that with a £200-billion national investment bank with strong regional investment banks on the ground, much like the KfW model that was such a success in post-war Germany. We need new economic governance systems—such as the four new economic executives proposed for England—tasked with ending the regional imbalances that have cursed our country for decades. Crucially, we need to leverage that with change to the Bank of England mandate, as I have argued for a number of years now, so that it seeks not simply price control but unemployment and underemployment as low as possible.

[Liz Saville Roberts (Dwyfor Meirionnydd) (PC)]

The right hon. Gentleman mentioned subsidiarity and the question of regionalism. One of the things that struck me on reading the full report, which he has on his desk, is that in terms of gross value added over the past decade Scotland has far outperformed all the regions of the United Kingdom except for London and the south-east. Scotland, of course, has control over economic development—it has economic powers—so will he join me in asking the Minister what assessment her Department has made of Wales’s potential to increase GVA if Wales had the economic means to do so, as is advocated in the report?

[Liam Byrne]

One of the great achievements of Labour’s time in office was the devolution that allowed different economic models to begin to emerge across the United Kingdom. Although there has been interesting and impressive growth in parts of the country, it is nothing compared with what we need for the years ahead. Let us be honest; it will be impossible to match what is happening in the east, in Asia, unless we put behind a strategy the real power of fiscal, banking and monetary policy.

To rewrite the rules of our labour market, the commission proposes a real minimum wage of £10.20, set 20% higher for anyone on a zero-hours contract—an important, interesting and innovative idea that should command our attention—and it proposes New Zealand-style rights of access for trade unions, crystal-clear rights to join a union and trials of auto-enrolment in unions for workers in the gig economy. Why are these things so important? They are important because of the power that is now exercised by giant firms in our economy. Over the summer, The Economist reported that the $5 trillion merger wave in the United Kingdom is, adjusted for scale, 50% greater than in the United States.

According to the International Monetary Fund—of all people—that rise in market power is much more pronounced in the UK than it is elsewhere. It looks at price mark-ups as a proxy to judge market power. The mark-ups it found in the United Kingdom are about 60% since 1980. That is way ahead of the average for the advanced economy. We are more dominated by technopolies than many other countries, and the price for that is paid not by shareholders or chief executives but by workers. That is why we need to rewrite the rules of the marketplace, to rebalance power in the marketplace.

In the boardroom, we should finally privilege those with a genuinely long-term perspective—also known as workers —by putting them on boards. The IPPR proposes at least two on every company board with more than 250 staff. Why is that important? The chief economist of the Bank of England recently reflected that once upon a time the average length of a shareholding in a British company on the stock exchange was something like six years. Now it is only six months. Shareholders are no longer the long-term stewards or guardians of a company’s interest. It is the workers, and very often suppliers, who have the longer term interest. We need workers on remuneration committees, to stop the ludicrous expansion of chief executive pay. Crucially, we need to change section 172 of the Companies Act 2006, which we wrote, in order to ensure that directors have a fiduciary duty to have regard to the long-term interests of a company and the welfare of all stakeholders, not simply the stakeholders known as shareholders.

In the capital markets we need new fiduciary duties for asset managers and priority rights for long-term investors, like the rights that are enjoyed by shareholders in France. America and Italy. We need new tests for takeovers, plus crucial reform of competition law to introduce a new public interest test to check today’s uncontrolled technopolies that are carving up the digital marketplace. Finally, to ensure that wealth is genuinely shared, we need a new £186 billion citizens’ wealth fund, in order to help redistribute wealth to our young people who are struggling under the burden of high debt, sky-high student loans and the challenge of saving to put down a deposit on a home.

To help rebalance the fiscal system and ensure that money is available, the IPPR proposes a total overhaul of our tax system, with German-style formula-based calculations of income tax. Crucially, we need the equalisation of income and capital gains tax—much as we had when capital gains tax was introduced in the 1960s—and new wealth taxes. It is extraordinary that the stock market is up by about 40% and the property market by about 25% since the financial crisis. The wealth of assets in this country has multiplied exponentially, yet wealth taxes are still only 5% or 6% of GDP—the level they have been since the early 1970s.

Let me conclude with a reminder of how much is at stake in this debate. Globally, Oxfam estimates that about half of global wealth is in the hands of the richest few. That means that, globally, 85 families own as much as the poorest 3 billion of our fellow citizens on the planet. We can have an argument about how we share the wealth that is on the table, or we can think afresh about the wealth that is to come. If the richest 1% carry on accumulating wealth at the rate they have enjoyed since the financial crash, they will not own half the world worth by 2030; they will own two thirds—two thirds of global wealth will be in the hands of the top 1%. It will be impossible for us to restore any meaningful measure of equality in this century if we allow that situation to unfold. What will affect inequality in the years to come is not simply the exponential rise in the wealth and assets of the richest—a rise that is forecast as up to £217 trillion in the hands of the luckiest few—but what will happen to the poorest and the working poorest in our country.

We need to zero in on what is happening in the automation of the world of work. At the World Bank and IMF meetings earlier this year, the chief executive of the World Bank was very clear that automation will hit people in different ways. Some people will be hit harder than others—young people will be hit hard, and the working class harder still. My research, undertaken with the House of Commons Library, shows that among the poorest 25% of the labour market—someone who is on less than £9 an hour—2.1 million jobs are at risk of automation. Why? Because automation will hit retail, transportation and routine manufacturing, where most of Britain’s working class happen to work. If we lose those jobs, the impact will be five times bigger than the shutdown of the coal and steel industries put together. Think about how those communities are still scarred today by the seminal changes during the 1980s. We can see these changes unfold in our economy. Those workers will be left behind in tomorrow’s economy unless we change strategy.

We have to answer the question: are we prepared to stand by and watch this happen? We cannot and we will not. We need to have new ideas and turn them into action. We have a blueprint for those ideas today. I want the Minister to tell us just what she disagrees with in this seminal report.

[Several hon. Members rose—]

--- Later in debate ---

[Liam Byrne]

I did not expect to intervene, but my hon. Friend makes an incredibly important point. The case he makes has been rehearsed by the Opposition for some time, but it has now been endorsed by the International Monetary Fund, which reported over the summer that the dismantling of labour protections accounts for a huge slice of the fall in labour’s share of national income. That is not just our view—it is now the IMF’s view.

[Justin Madders]

I did not think I would quote the IMF today, but my right hon. Friend is absolutely right about the share of income that goes to labour. I found that statistic in the report staggering. It is clear that the direction of travel will only continue downwards. We must find a way of reversing that decline. We like to say in this place that economic growth is the answer to all society’s problems, but that growth has to be shared by everyone, and it clear that that is not happening. If we do not solve that puzzle, we will have failed our constituents.

We must also tackle the myth propagated from time to time that an empowered workforce are a barrier to growth when, in fact, as my right hon. Friend said, all the evidence shows that they are an enabler. Many of the countries that outperform us in productivity have better paid workers and stronger workplace rights. The report states clearly:

“If both productivity and pay are to be increased, power will need to be rebalanced in significant ways from employers to workers. This will require stronger labour market regulation and strengthened trade unions.”

Sadly, the Government seem to spend a disproportionate amount of time looking to stifle and inhibit trade union activity.

There has been a lot of soul searching in the past few years about why people voted as they did in the referendum. I think many of the answers are in this report. I always maintained that the arguments advanced during the campaign about the threats to our economic security from Brexit would never work with people who already did not feel economically secure. As the report makes clear, the issues that have created the rampant inequality that fuels division and discontent in this country can be solved only by a Government who are prepared to tackle the root causes of what is a very lopsided economy. The lessons of the past tell us that things will change only if there is a political will to make that change. We will fail this country if we do not take the lessons in the report seriously.

--- Later in debate ---

[Liam Byrne]

A vote is imminent, so I shall be brief. I am not entirely convinced that the Minister has read the report. She did not say much about what she had learned or what she disagreed with; we heard a defence of everything in the Government’s platform. I do not think that the British public want an economic policy that is a nudge here and a nudge there. I think that they are looking for a much more radical transformation.

The Government have an opportunity at the G20, which is focused on the future of work, to make good on the commitments that they made when signing up to the 2015 sustainable development goals and the communique at the 2016 Hangzhou G20 summit. Those commitments were to creating a much more inclusive economy than today. That will not be delivered by a nudge here and a nudge there; it needs the radical transformation proposed in the report. I hope that the Minister reflects on the debate in preparation for another debate after the G20, when we will test her conclusions.

Question put and agreed to.

Resolved,

That this House has considered the final report of the Economic Justice Commission.

Insecure Work and the Gig Economy

Liam Byrne Excerpts

Wednesday 20th June 2018 Westminster Hall

[Liam Byrne (Birmingham, Hodge Hill) (Lab)]

I add my thanks and congratulations to my hon. Friend the Member for Barnsley East (Stephanie Peacock) on securing the debate.

I will just make three broad points. First, it is extraordinary that the Government have not got a grip on the debate. It are not a marginal issue. One in five workers in this country are now self-employed—a bigger proportion than public service workers. If public service workers in this country were confronting the kinds of conditions and suffering the kinds of stories we heard this afternoon, there would be a national scandal. Why are we not getting to grips with this challenge for the country’s self-employed?

If the present day is not bad enough, hon. Members should think about what is to come. Over the next 10 years this economy will be fundamentally transformed by automation, Brexit and the rise of China. Automation alone is likely to destroy five times more working-class jobs than the shutdowns of the coal and steel industries put together. We know that trend is coming; we know what happened when coal and steel were lost to communities across the country in the 1980s. What grew back were the kinds of insecure jobs we are debating now. Let us not make that mistake again. Let us put in place now a regime for good jobs in the years to come.

Secondly, we have to look again at why it is that basic laws, such as the right to trade union organising or the right to the national minimum wage, are not being enforced today. I commend James Bloodworth’s book on the scandals we have heard about. I had the honour of meeting him this afternoon. It beggars belief that some of the biggest firms on the planet, such as Amazon, are being caught not paying the national minimum wage. Where is the inspectorate? Where are the prosecutions? Where are the court cases? Is the Minister prepared to tell us what he is doing to ensure that justice is done?

We have had a useful debate this afternoon about the shortcomings of the Taylor review. The economy will inevitably grow in the years to come, so we have to try to equalise definitions of workers. We have to do away with the nonsense of the Swedish derogation and put in place the kind of action plan that the TUC has carefully and thoughtfully developed.

I will leave the Minister with this thought: there is a basic injustice in a marketplace where, over the course of a single morning, James Bloodworth can earn £29 working in an Amazon warehouse but the wealth of Jeff Bezos goes up by $1.4 billion. We had a long tradition in this country of entrepreneurs, such as George Cadbury, William Lever and John Spedan Lewis, who not only built great businesses, but changed society for the better. We need the Government to ensure that the entrepreneurs of today are doing a damn sight better job on that front.

[Steve McCabe (in the Chair)]

Just before I call the Front-Benchers, the debate is scheduled to finish at 5.51 pm, so there should be enough time for the mover of the motion to make a brief reply, and for the Minister, if he is so minded, to take an intervention or two. That is, obviously, up to him.

Taylor Review: Working Practices

Liam Byrne Excerpts

Tuesday 11th July 2017 Commons Chamber

[Margot James]

I do agree with my hon. Friend. The figures suggest that nearly 20% of people on zero-hours contracts are students. Such flexibility also benefits many people who have parenting or caring responsibilities and do not want to work full-time. We certainly do not want to end that flexibility but, as I have said, we do want to improve protection.

[Liam Byrne (Birmingham, Hodge Hill) (Lab)]

The gig economy brings insecure work. Insecure work demands new rights, but those rights will be worthless unless the Government are prepared to put more resources into enforcement, regulation and inspection. Will the Minister commit herself to providing those additional resources when implementing the Taylor review?

[Margot James]

I very much agree with the right hon. Gentleman that enforcement is crucial. As I said, we have doubled the resources available to HMRC for enforcing the minimum wage and they will continue to rise throughout this Parliament. We have also strengthened the powers of the Gangmasters and Labour Abuse Authority, and the recently appointed director of labour market enforcement has been tasked with bringing the work of the three major enforcement bodies together to understand the extent of the abuse and to recommend ways of giving those agencies the resources that will enable them to deal with it. I hope that the right hon. Gentleman will be pleased with the outcome, in due course.

Oral Answers to Questions

Liam Byrne Excerpts

Tuesday 27th June 2017 Commons Chamber

[Gavin Newlands (Paisley and Renfrewshire North) (SNP)]

7. What steps he is taking to improve business confidence.

[Liam Byrne (Birmingham, Hodge Hill) (Lab)]

14. What steps his Department is taking to foster a positive environment for business growth.

[The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)]

The industrial strategy Green Paper was launched on 23 January and has been warmly received across the country. We have received over 1,900 responses to the consultation, with respondents from every part of the United Kingdom. I look forward to taking our modern industrial strategy forward, with the involvement of all Members of this House, in the months ahead.

[Greg Clark]

Of course we want to avoid industrial action. I am not aware of the particular circumstances, but I am very happy to meet the hon. Gentleman so he can inform me of them in more detail.

[Liam Byrne]

Does the Secretary of State agree with the Secretary of State for Defence, who spoke this morning about the need to provide extra investment in those areas that are left behind—even if the bill comes to something like £1.5 billion? When is he going to open talks with other hon. Members about the needs of their areas, so we can ensure that those left-behind regions are not left behind and left out?

[Greg Clark]

I am very surprised to hear that question from the right hon. Gentleman. Of all the people in this House, he was a great proponent of a city deal and a devolution deal for Birmingham and the west midlands, the value of which is over £1 billion. Looking around the Chamber, there are many Opposition Members who have made precisely such a case that we should invest in areas of the country, outside of national programmes. It seems to me to be reasonable to continue that programme.