Economic Crime and Corporate Transparency Bill

Margaret Ferrier Excerpts

Report stage
Tuesday 24th January 2023 Commons Chamber

[Seema Malhotra (Feltham and Heston) (Lab/Co-op)]

It is a pleasure to follow the Minister and to speak to our amendments.

The Labour party has supported this important Bill’s passage in a cross-party spirit through Second Reading and Committee. I pay particular tribute to my right hon. Friends the Members for Barking (Dame Margaret Hodge) and for Member for Birmingham, Hodge Hill (Liam Byrne) for their contributions during our proceedings. May I add my words of support? The Minister has a long track record on these issues and a reputation through the all-party group on anti-corruption and responsible tax and other campaigns, which I hope bodes well for further progress and amendments to the Bill. However, it was frustrating that in Committee the Government did not accept a number of amendments tabled by the Opposition and other Members that would have significantly strengthened the Bill even further. The Minister did agree to keep some issues under review, which we will pick up on today.

This long overdue second economic crime Bill is an opportunity to finally end Britain’s role as a global hub for dirty money, and to support honest businesses to trade and flourish, with better standards and more transparency, helping to level the playing field for businesses and co-operatives. I echo the Minister’s words on the importance of that in tackling terrorism, economic crime and illicit finance, and in cleaning up our economy in the way we all want to see.

The amendments we have tabled seek to ensure that the Bill goes further in areas including reporting and parliamentary scrutiny, strengthening the objectives of the registrar to see a more proactive role in preventing and detecting economic crime, and tightening up the authorisation and supervision of corporate service providers. Amendments scheduled for tomorrow include provisions on the failure to prevent economic crime and director liability.

[Margaret Ferrier (Rutherglen and Hamilton West) (Ind)]

Is the hon. Lady aware that many stakeholders strongly feel that the Bill’s powers require further development to be effective? Does she agree that a statutory review process set out in the Bill would be good practice and should be implemented?

[Seema Malhotra]

I thank the hon. Lady for her comments. She is alluding to a theme that goes through the Bill: we cannot expect this to suddenly be the answer to everything, so we have to keep it under review and to have the mechanisms for that review, including effective information coming to Parliament.

The Minister has just spoken to the Government’s amendments. We are pleased to see that there have been some concessions following Committee. The Government have tabled about 25 amendments that remove powers to exempt directors from identity verification requirements. That is a huge concession by the Government to a central question asked by us in Committee about the completeness of the legislation, the extent of the Secretary of State’s powers and the challenge required for parliamentary oversight. The extent of these powers risked riding a coach and horses through the defences against economic crime that we are seeking to build through the legislation. But even after those amendments, a number of Henry VIII powers are left unchecked. I am sure that will be debated in the other place.

The next welcome concession is Government new clause 15, which imposes a duty on the Secretary of State to prepare and lay before Parliament reports about the implementation and operation of parts 1 to 3. That significant step, however, is surprisingly weak as regards setting any expectations of what Parliament would expect to see in the report. That is why my hon. Friend the Member for Aberavon (Stephen Kinnock) and I tabled new clause 16, which has cross-party support and is similar to amendments tabled by colleagues in Committee. Under our amendment, the purpose of the report would be clearer and stronger. We would have an annual report with an assessment as to whether the powers available to the Secretary of State and the registrar were sufficient to enable the registrar to achieve her objectives under proposed new section 1081A of the Companies Act 2006, which is inserted by clause 1.

Retained EU Law (Revocation and Reform) Bill

Margaret Ferrier Excerpts

Report stage
Wednesday 18th January 2023 Commons Chamber

[Justin Madders (Ellesmere Port and Neston) (Lab)]

I am grateful for the opportunity to rise to speak in support of the amendments that appear in my name and those of my right hon. and hon. Friends. Our amendments, even if they are all accepted, cannot completely cure this fundamentally defective Bill, but we will see where we go with that. Let me add my appreciation, as the Minister did, to those on the Committee for their efforts in scrutinising this Bill and to the Clerks for assisting us in doing that.

First, turning to amendment 18, I have yet to hear any rational justification for the deadline of 31 December 2023 for the jettisoning of all EU regulations. We are told that it is an imperative that we free ourselves of the shackles of these regulations by that date and that we must hurry along and free ourselves of the 2,400 or 3,800 regulations—or however many it turns out to be—that are holding us back.

I understand the importance of having a target to work to, but the date has been plucked out of thin air, seemingly at random, and we should not accept it unless a compelling and rational argument is put forward, especially, as I shall go on to explain, as it carries far greater risks than benefits. We were told by the Minister at the Committee stage that, in essence, the cliff edge is being used as some sort of management tool to ensure that civil servants remain focused and can deliver the work necessary to clear the statute books of all this legislation. What a sad state of affairs it is that the only way that the Government think they can get officials to function properly is to legislate for them to do so. Imagine if we got ourselves into a position where every time the Government wanted the civil service to work to a deadline we had to put it in a Bill. It is an explanation that is as threadbare as the impact assessment that accompanies the Bill.

[Margaret Ferrier (Rutherglen and Hamilton West) (Ind)]

As we have heard, the vast majority of policy, from use of harmful pesticides to air quality, that will be impacted by the changes brought through this Bill is with the Department for Environment, Food and Rural Affairs. Does the shadow Minister share my concern that, even if the timeline were extended, that is a lot of work for one Department and its officials to make sure they are getting right so quickly?

[Justin Madders]

I will go on to explain why that deadline is inappropriate and, indeed, impractical.

The Government are using the Bill as a motivational tool. That message has not got through to DEFRA, which, as we know, is considered to be the Department with the most regulations, although, of course, until we see a definitive list, we cannot know that for sure. At the moment, according to the Secretary of State, there are probably about 1,100 regulations in DEFRA that are subject to the sunset. I will not get into whether the word “about” is good enough in this context, but the number of civil servants that we have been told are working on this in that Department is three. It is no good this Bill being used as a way of focusing Departments’ minds if they do not have the resources to do the job properly in the first place.

This is a serious issue. The House of Lords Common Frameworks Scrutiny Committee even complained about a lack of engagement from that Department after not receiving a response from it to five separate letters. We know from a written ministerial answer that the Department itself does not know how much the exercise will cost or how many staff it will need. If the deadline is meant to focus attention, it has not succeeded in doing so yet.

Skills and Labour Shortages

Margaret Ferrier Excerpts

Thursday 12th January 2023 Westminster Hall

[Patricia Gibson (North Ayrshire and Arran) (SNP)]

I beg to move,

That this House has considered the matter of skills and labour shortages.

I am delighted to have secured this debate on labour and skills shortages across the UK. The reality of those shortages affects my constituency of North Ayrshire and Arran and every single constituency across the UK, so the matter should be of concern to all of us. It acts as a drag on our whole economy, and unless specific and deliberate measures are taken to address it, it will undoubtedly prevent the kind of economic recovery that we all want to see. I thank hon. Members for turning out for this important debate.

[Margaret Ferrier (Rutherglen and Hamilton West) (Ind)]

I am sure the hon. Member will agree that the Government’s post-Brexit approach to migration has had a negative impact on the UK’s ability to fill crucial posts in sectors such as agriculture, farming, healthcare and the arts. Does she agree that the Home Office should be looking wholesale at the efficacy of visa programmes, rather than bit by bit, country by country?

[Patricia Gibson]

I absolutely agree with the hon. Lady. She tempts me to get into that particular area before I am ready to do so, but I will say more about it in a moment.

I extend my thanks to the Association of Colleges, the Chartered Management Institute, the Heart of London Business Alliance, the House of Commons Library, the Open University and several others for the helpful and informative briefings that they have provided for this debate.

The shortage of skills and labour affects, to a greater or lesser degree, every single sector of our economy and every area of our lives. It affects our productivity and our public services. We see it in areas such as health and social care. There are shortages right across our NHS —in radiology, audiology and that is not to mention doctors and nurses. The Nuffield Trust estimates that in England alone, the shortage of doctors in the NHS could be as high as 12,000, and the shortage of nurses could be over 50,000.

There are also shortages in food processing, agriculture, transport, haulage, construction, butchery, tourism, manufacturing, veterinary medicine, information and cybersecurity and hospitality. Pressures on supply chains have helped to increase the cost of goods and services, which we see particularly in the soaring cost of food.

As the title of the debate indicates, there is a shortage of labour and required skills in a range of areas. That matters. The Open University’s 2022 business barometer estimated that 78% of UK organisations suffered a decline in output, profitability and growth as a consequence of a lack of available skills. The Recruitment and Employment Confederation estimates that if labour shortages are not addressed, the UK economy will be £39 billion worse off each year from 2024. The Chartered Management Institute found that overall, 71% of managers said that their organisations experienced ongoing difficulties in recruiting the skilled staff they need.

The cost is huge. Research, again from the Open University, found that 72% of businesses had increased the workload on other staff because of staff shortages, and 78% reported that those shortages were causing a reduction in activity, service delivery, profitability and long-term growth plans. Significant strains are consequently placed on service levels and supply chains, and members of existing workforces leave due to the impact on their own wellbeing of prolonged staff shortages. According to the Federation of Small Businesses, 80% of small firms face difficulty recruiting applicants with suitable skills.

The number of vacancies unfilled across the UK is now slightly higher than the number of people registered as unemployed. Managers are doing all they can to recruit the staff they need. They may be doing so through the old-fashioned method of word-of-mouth recommendations, by engaging recruitment agencies, by use of social media and print media, by distributing leaflets and flyers advertising vacancies, by offering introductory pay bonuses, by paying more competitive salaries, and by revising their wider employment practices and policies to attract and retain those with the skills they need—such as offering flexible working hours where possible—but despite those best efforts, the challenges remain.

There are several reasons for the shortage of labour and skills across our economy. We know that the demand for labour has recovered faster than the labour supply since the pandemic; indeed, the labour demand is above pre-pandemic levels, while the labour supply is below pre-pandemic levels. When the pandemic hit, older workers responded to the initial reduction in labour demand by no longer looking for work, so they went from being unemployed to being inactive. Since the pandemic, the number of people unable to work due to health reasons seems to have increased. However, in October 2022, the Institute for Fiscal Studies’ longitudinal data showed that many among the older population who are economically inactive because of long-term illness left the labour market before they became ill—they left because they decided to retire. Indeed, with the advent of remote working, many older workers found that they quite enjoyed spending time at home and did not wish to return to the workplace, and they took the opportunity to retire as a result.

The other driver of the labour and skills shortages we face, which poses the real threat to our economic recovery and potential prosperity, is—as everyone in this Chamber and outside it knows—Brexit. Even a House of Lords report last month pointed to an increase in early retirement and changes to migrant worker patterns since the Brexit referendum as exacerbating the main drivers of those shortages. It found that

“Over the last few years many EU workers, who filled these roles, have left the UK.”

There is no dispute about the fact that before the EU referendum and the pandemic, free movement from the EU was a major source of labour in the UK. By 2020, an estimated 55% of foreign-born workers who said that they originally moved to the UK for work-related reasons were born in EU countries. Now, many have left the UK since the UK left the EU—years that coincidentally saw a pandemic, as well. Even if those workers who have left want to return to the UK, many will find themselves unable to do so because of the UK’s restrictive post-Brexit immigration policies. That is despite the fact that our economy—our labour market—needs them to fill the gaps that we are suffering, which are acting as a drag on our economy and our current and future prosperity.

--- Later in debate ---

[Theresa Villiers (Chipping Barnet) (Con)]

It is a pleasure to serve under your chairmanship for this important debate, Sir Graham. I warmly congratulate the hon. Member for North Ayrshire and Arran (Patricia Gibson) on securing it; it matters so much to many of our constituents. Although our views are very different on a number of matters, such as Brexit, I agree that addressing labour and skills shortages is crucial for our economy. That point was made strongly to me at a recent advice surgery by a constituent who has been struggling to recruit workers to her car repair business in Barnet. I strongly believe that apprenticeships can help us tackle that problem, and I will largely focus my remarks on them.

Apprenticeships are a highly effective way to improve people’s skills. That is important for several reasons. First, they make our economy more productive and competitive, and that boosts growth and raises living standards. They help plug the labour shortages that we have been hearing about this afternoon.

[Margaret Ferrier]

Does the right hon. Lady agree that if the Government invest both time and money in engaging unemployed people in younger age groups, and support them in careers that they have a passion for and enjoy, that could head off a further growth in labour and skills shortages? Could that begin to balance out the inactivity that we see in those approaching retirement years?

[Theresa Villiers]

I certainly agree that investing in adult education, apprenticeships and skills is crucial for giving people opportunities in life and the skills that they need. That is why I welcome the huge amount of work that the Government have done on this issue. Indeed, the Prime Minister identified that as a key priority for him.

Apprenticeships, skills and adult education are crucial in giving people the chance to succeed in life, whatever their background. They can be an engine of social mobility and social justice. Apprenticeships in the science and technology field can strengthen the capacity of our workforce to tackle the two huge environmental challenges we face: climate change and nature recovery. For those three reasons alone, I am a big enthusiast for apprenticeships. I have met a number of people whose lives have been transformed for the better because of them.

Future of Postal Services

Margaret Ferrier Excerpts

Tuesday 10th January 2023 Westminster Hall

[Tahir Ali (Birmingham, Hall Green) (Lab)]

I beg to move,

That this House has considered the future of postal services.

It is indeed a pleasure to serve under your chairmanship, Sir Gary, and I refer you to my entry in the Register of Members’ Financial Interests as a proud member of the Communication Workers Union and an employee of Royal Mail.

The question of the future of postal services has been thrown into stark relief in recent times. The pandemic meant that many were confined to their homes, reliant on deliveries to meet their basic needs. It became clear to everyone that postal workers were key to the economy and to the regular functioning of our society. For many during lockdown, the relief provided by our postal services was vital in maintaining wellbeing and keeping families and communities safe.

During the pandemic, the volume of parcels delivered grew by a staggering 50%, with a total of 4.2 billion parcels delivered in the year 2020-21. Royal Mail saw its parcel volumes increase by 30%, with a total of 1.7 billion parcels delivered, which means 40% of the total number of parcels delivered in the UK were delivered by Royal Mail.

[Margaret Ferrier (Rutherglen and Hamilton West) (Ind)]

I congratulate the hon. Gentleman on securing the debate. While Royal Mail may have some challenges, it is important to recognise what it does well, which includes parcel delivery. With Evri, formerly known as Hermes, parcels are stolen, lost or delayed at huge cost to customers and businesses alike. Does the hon. Member agree that companies such as Evri should be held to account for their failings?

[Tahir Ali]

I agree with the hon. Member’s comments and I hope to cover that specific issue later in my speech. The longer interventions are, the less time other Members will get.

All Royal Mail deliveries were achieved in a way that satisfied most service users. Some 83% of residential customers said they were satisfied with Royal Mail’s service, while 79% of small and medium-sized enterprises said they were satisfied. That was all the result of hard work and sacrifice by Royal Mail staff, who increased the revenues of Royal Mail by a huge 40%, generating healthy profits of £758 million for the company in 2021.

However, £576 million of those profits were promptly paid out to shareholders, with the chief executive officer of Royal Mail, Simon Thompson, paying himself a massive bonus of £140,000. Let us pause for a minute and think about what that £570 million could have done if it had come into the Treasury. It could have contributed hugely towards money to pay nurses, doctors and ambulance drivers.

Family Businesses: Contribution to Local Communities

Margaret Ferrier Excerpts

Tuesday 20th December 2022 Westminster Hall

[John Stevenson]

The hon. Lady is right. It is always lovely to hear Members promoting family businesses and demonstrating their success. She also highlights an issue that I will come to about how we can ensure they get the support that they need to be successful.

I have talked about family businesses being small or large, but we must also remember that there are some huge international businesses, including Mars and McCain. An interesting general observation is that many large, international family businesses are invariably owned from North America. That indicates that family businesses are not just part of our economy but part of international economies across the world.

Family businesses are involved in all sectors. The obvious one is transport, with large transport businesses up and down the country displaying their logos. They are also in retail and manufacturing. One particular area that features a lot of family businesses is the food and drink sector. That is a very popular sector in which to set up and grow a family business. That has a knock-on impact on the hospitality industry, which has a large number of small family businesses.

[Margaret Ferrier (Rutherglen and Hamilton West) (Ind)]

Last week I went to the opening of a state-of-the-art factory by Equi’s Ice Cream in my constituency. That business has been around for a century, with its ice cream sold locally as well as in a number of supermarkets such as Morrisons, Co-op and Asda, and even as far away as Texas. Does the hon. Gentleman agree that such family-owned businesses not only contribute to our communities but are great ambassadors for them?

--- Later in debate ---

[Jim Shannon (Strangford) (DUP)]

It is a real pleasure to speak in the debate because I obviously have a particular interest. I commend the hon. Member for Carlisle (John Stevenson) for leading the debate so knowledgeably and for setting the scene so well. What a pleasure it is to follow my friend and colleague, the hon. Member for Torbay (Kevin Foster). The tag team is back together—I follow him or he follows me—and I thank the hon. Gentleman for his contribution. Unashamedly, I will tell hon. Members about some of the small businesses in my area—not all of them, because that would take me an hour and a half and, Mr Robertson, you would say, “Sit down.” I will pick out some of the smaller ones that I have known over the years. There are many.

As we approach Christmas, it is important to recognise the important role that local businesses play in our economy, including the family-run businesses that have served our local towns and villages—in some cases, for decades. I do not intend to wax lyrical about how great a place Strangford is—everybody already knows that—but I am more than happy to encourage everyone to make a journey to Strangford at some time in the future, as many in this House have done, including Ministers and other hon. Members, who have enjoyed it. At this time of year, we must take time to reflect and acknowledge that businesses are the backbone of our constituencies—they certainly are for mine. Some 99% of businesses in my constituency are small and medium-sized enterprises, and the pattern is similar across the whole of Northern Ireland.

There are many benefits that come along with family-run businesses and ultimately contribute to their long line of success, and there are so many success stories that I want to mention. The right hon. Member for Aldridge-Brownhills (Wendy Morton), who will follow this speech, and I have been working together, and she and I were just saying how we will unashamedly tell everyone in this House about our small businesses. I look forward to what she is going to tell us in a few minutes as she namechecks every one of those businesses, and I will probably do the same.

Strong commitment and common values are some of the successes of small businesses. When an enterprise is built on familial lines, people are more likely to put in extra hours and go the extra mile to ensure success, and the stability of the family structure has been pivotal for long-term family professions. One that always sticks in my mind is N.G. Bell & Son. I am probably the only person present who knows about N.G. Bell & Son, but I will share its success story. It is a family-run business specialising in timber, building, electrical and plumbing supplies, and it has become one of Northern Ireland’s leading building merchants. Norman and Elsie Bell came to Ballywalter from west Ulster in 1950 and bought an existing grocery and hardware business. On the untimely death of Norman Bell in 1973, his son Graham took over the running of the business at the early age of 19. He and the family have built the business, making it a complete success, and their business park in Greyabbey Road is at the centre of that.

The story of N.G. Bell & Son in Ballywalter resonates with me, because my own parents ran a shop in the same village from ’59 to ’79, and many of the relationships I built through the shop as a child remain strong to this day. I am minded that Margaret Thatcher, who was the daughter of a shopkeeper, said we were a nation of shopkeepers. I am pleased to be the son of a shopkeeper, and I am also proud of my roots. I understand at first hand how central the local shop can be to community life. My mum and dad owned a shop in Clady, south of Strabane. They also owned one in Ardstraw, and then they moved to Ballywalter in 1959. They owned the first V G Store, which was part of a chain of shops that are now run by the SPAR group and owned by the Henderson Group in Northern Ireland. It is an example of how a local business has grown—again, it is good news.

I am sure that I have mentioned before the importance of family businesses to our high streets. Newtownards is one of the main towns in the Strangford constituency and has many great businesses, most notably Wardens of Newtownards, which has been a presence in the town’s high street since 1910. In 2002, Wardens celebrated its 125th anniversary. As part of the celebrations, the store ran a competition to find the oldest receipt from the shop. A local farmer came forward with a receipt dating back to 1890s—not the 1690s, Mr Robertson, but the 1890s—which is just astonishing. There are still family members who work there today, and hopefully they will do so for many generations to come. For anyone who is curious—many are—Wardens has also had videos go viral on TikTok. I am told that the store has an account—I do not know how to use one—that has gained over 180,000 followers and millions of views. Again, it gives an indication of what a small, family-run store in Newtownards can do when it comes to promoting itself.

H & J Carnduff butchers in the square in Newtownards employs 55 people and is a local business that has done extremely well. It farms its butchery business out to other shops across the whole district.

[Margaret Ferrier]

Cafés are important businesses for local communities. To name a few in my constituency, we have the Tea Bay, Stacks, Niu Cafe, Vin 18 and Café Gelato, and they provide a place for people to meet, chat and come in out of the cold. Does the hon. Member agree that small, family-run cafés are often the highlight of local towns in providing that atmosphere?

[Jim Shannon]

I certainly do. Again, the hon. Lady says many things in her interventions that I absolutely subscribe to, and I thank her for that. The Regency is such an example of where people come together. I have a fry there every Saturday morning—it is my wee treat for the week as a diabetic as I try to be careful about my eating. Corries meats in Newtownards town is a family business that has grown to own a chain of half a dozen shops, and Knotts Bakery is another family business in the town.

The people of Strangford love a bargain—who doesn’t? My mother is a 91-year-old who loves going shopping and always wants to tell me about the bargains she has got. One place where bargains are guaranteed is Cotters, which is a family-run business that has been in the town for 20 years. My two youngest staff members have what they call their monthly “Cotters haul” where they get new cleaning supplies, bits and bobs for the office and, most importantly for two young girls, crisps because they are always a special price in Cotters—that is probably the attraction.

Loyalty and stability are two qualities of successful family businesses. That success allows for “beanstalk” family businesses where often four generations of a family have been involved. The hon. Member for Torbay referred to such a company in his constituency. The director of SME business at Ulster University has indicated that 74% of Northern Ireland companies are classed as family-run, which is amazing in being unique and serving the Northern Ireland economy in a different way.

The hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) referred to bank managers. I have a story about a bank manager, although I am not sure I have the time to tell it as I am conscious that the right hon. Member for Aldridge-Brownhills (Wendy Morton) is following me. When I visited my bank manager for a loan when I was much younger, the discussion we had was not the same that people would have with their bank manager today. I told him I would pay the loan back as quickly as I could, and I paid it back in one year. That probably meant a lot of scrimping and saving, but I did it. Those were things that would not be done with a bank manager today because of the rules.

When I think of Warren Patton of Patton’s Bakery in Newtownards, which is a family-run business that I have known for nearly all its days, his sense of community spirit is so evident in his charitable donations and discounts for fundraising community events, and that deserves recognition. He employs some 76 people in his business. It is often much easier to get a donation for the local fair from the local bakery than the large supermarkets, and that is another reason why local businesses are a vital cog in the community machine. Warren Patton is fully immersed in everything in Newtownards. He is community-minded. He is the chair of the Ards football club. We are all keen to see them get their new ground, which is at an advanced stage. The land has been identified, the agreement has been done and now we are pushing for some grants to make it all happen. He is also in the Loyal Orders—the Orange Order and the Royal Black Preceptory, which I am in in Newtownards. Those organisations are part of the culture and history of our town. I say that because Warren Patton is one of those local success stories. That business started from nothing and he has it today.

The support provided by the public to keep these enterprises open is incredibly important, and we do our best to help and support all the businesses that make our economy what it is today. The former Minister—the hon. Member for Rochester and Strood (Kelly Tolhurst)—came to visit the high street in Newtownards. She enjoyed her time there, but more importantly she was able to engage with local businesses in a constructive and helpful way. Newtownards has won the best town centre in the whole of Northern Ireland in the past and was featured heavily last time as well. I say this without fear of being quoted wrong: Newtownards truly is the best trading town for businesses, opportunity, variety and family-owned businesses. Looking at the special nature of family-run businesses and their contributions to my constituency, I can only say to people: if you have any time before Christmas, come shopping in Newtownards in Strangford.

Oral Answers to Questions

Margaret Ferrier Excerpts

Tuesday 29th November 2022 Commons Chamber

[Grant Shapps]

That is absolutely right. Voters will have their say. I say no taxation without representation.

[Margaret Ferrier (Rutherglen and Hamilton West) (Ind)]

T3. I welcome the Business Secretary to his place. What assessment has he made of the number of European countries to exit the energy charter treaty on the basis that attempts to modernise the treaty have failed, and will the Government be considering the UK’s position?

[The Minister for Climate (Graham Stuart)]

We consider all those that have left the energy charter treaty, but we have so far supported its modernisation. We keep that under advisement.

Public Ownership of Energy Companies

Margaret Ferrier Excerpts

Monday 31st October 2022 Westminster Hall

[Martyn Day (Linlithgow and East Falkirk) (SNP)]

I beg to move,

That this House has considered e-petition 608056, relating to public ownership of energy companies. 

It is a pleasure to see you in the Chair, Mrs Murray. I am grateful for the opportunity to present this important and prevailing issue—so prevailing that, within one week of the petition closing, another one, with the same title, was opened. I encourage anyone who supports the call for the Government to take back ownership of strategic energy assets to consider signing the new petition, because the issue is clearly not going away any time soon, and Parliament will undoubtedly be asked to revisit it. The new petition will remain open until 1 March next year.

The petition before us closed on 9 August and attracted over 109,000 signatures, including over 200 from my constituency. Before moving on to the essence of the debate, I thank the signatories to the petition and I particularly thank David Abrahams-Edley for starting it. It is David’s action that brought us here today for what I am sure will be an enlightening discussion. It is worth mentioning that David’s petition was started in February this year, just after Ofcom—Great Britain’s energy regulator—announced there would be a substantial, 54% price cap increase from 1 April. The fact that the petition was started before the announcement of an additional, eye-watering rise of 80% from 1 October shows a foresightedness that appears to have largely escaped the Government. I will say more about that later.

The petitioners call for the Government to

“take back ownership of strategic energy assets”

and

“accept that the Free Market has failed the energy sector”.

They believe that

“it is in the national interest to renationalise our energy assets”

because, even back in February, people were

“having to choose whether to heat or eat.”

[Margaret Ferrier (Rutherglen and Hamilton West) (Ind)]

In August, the Financial Times estimated that if a buyer was not found for Bulb the cost to the public purse could have reached £4 billion by spring next year, although transfer of ownership has now been agreed. Does the hon. Member share my concern that bailing out privately owned companies in this way could have a catastrophic impact on the public finances, whereas nationalising them could be much cheaper?

[Martyn Day]

The hon. Lady makes a good point. It is reasonable to say that UK Governments of all stripes have overseen the deeply dysfunctional system of privatised energy companies, and we are where we are today. We need to get out of the hole that we are in.

It goes without saying that the situation that people are now facing has worsened considerably. In September, inflation exceeded 10%—its highest rate in 40 years.

It would be helpful if we quickly reminded ourselves what a free market is or is meant to be. Voluntary exchanges take place, accounting for supply and demand, and that is the basis of an economic system without Government intervention, with a key feature being the absence of coerced transactions or conditions on transactions. However, we all know that free market economies do not exist in the real world, because all markets are constrained in one way or another, with Ofgem and the introduction of the price cap being the obvious interventions in the market we are debating, and that is before the current energy crisis triggered even more interventions. So when the opening paragraph of the Government’s response to the petition states:

“Properly regulated markets provide the best outcome for consumers as a driver of efficiency and innovation”,

it raises various questions. Clearly, consumers are not benefiting from the best outcome. Does that therefore signal that the free market has indeed failed the energy sector, as the petitioners believe, or that the energy market is not being properly regulated? Either way, something is not working. Will the Minister tell us what the Government can do to fix it, if he does not agree that nationalisation is the right approach?

It is reported that economists who measure the degree of freedom in markets have found a generally positive relationship between free markets and measures of economic wellbeing. Unfortunately, most people in the UK are not enjoying economic wellbeing—we only have to look at the end of the Government response, which details what is described as the “unprecedented scale” of financial support that the UK Government are providing, to see that. Consequently, although Government intervention in this regard is welcome—indeed, necessary—it also serves as evidence that

“the Free Market has failed the energy sector”,

as the petitioners say.

At this point, a bit of background about the Government action in relation to the current energy crisis would be helpful. We likely all remember that the proposed solution of the right hon. Member for Richmond (Yorks) (Rishi Sunak) to situation at the time was to reduce every domestic electricity bill by £200 and then recover it over a five-year period. That initial intervention was the

“token gestures of mandatory loans”

mentioned in the petition. In case anyone is confused by the revolving doors at the top of this Government, the right hon. Member for Richmond (Yorks) was the Chancellor when David’s petition was started, not the third Prime Minister we have seen this year, as he is today.

Thankfully, that part of the petition was addressed by the then Chancellor, and his so-called loan-not-loan was ditched and replaced by the energy bills support scheme, under which domestic electricity consumers were to receive £400 of support with their energy bills, paid as a grant over six months, starting from the beginning of this month.

Then our second Prime Minister this year, the right hon. Member for South West Norfolk (Elizabeth Truss), announced the two-year energy price guarantee—an intervention in an intervention—which superseded the proposed energy price cap increase of 80% and limited the price that suppliers can charge customers for units of gas from 1 October. That move was of course widely welcomed, not least as the right hon. Member for South West Norfolk was reported to be acting

“so people and businesses are supported over the next two years”,

but it was simultaneously criticised for being misleading. A UK Government press release on 8 September stated:

“a typical UK household will pay no more than £2,500 a year on their energy bill for the next two years from 1st October”.

However, the MoneySavingExpert Martin Lewis, who is arguably the most trusted man in Britain, commented:

“I’ve seen a lot of confusion, so let me start by saying there’s NO MAXIMUM ENERGY BILL.”

Not surprisingly, that confusion continues.

Exactly two weeks ago, the right hon. Member for South West Surrey (Jeremy Hunt), our fourth Chancellor this year—so far—announced that, instead of lasting two years, the energy price guarantee would last only until April next year. In just over five months, many could be placed back on the energy regulator Ofgem’s price cap. According to energy analysts Cornwall Insight, that means another massive hike in bills for millions of people. The current prediction under Ofgem’s existing cap methodology is an increase of 74% more than the energy price guarantee.

I hope everyone here is keeping up with the Government actions taken so far to manage the UK’s energy crisis. Recapping on these recent events demonstrates that the energy crisis could have been handled in a more straightforward way if strategic energy assets were not open to the free market economy but owned by the Government, as the petitioners call for.

In the previously mentioned UK Government press release of 8 September, the right hon. Member for South West Norfolk was reported to say:

“Decades of short-term thinking on energy has failed to focus enough on securing supply”.

I am sure that that is a sentiment the petitioners wholeheartedly agree with. Indeed, they call for a 25-year strategic plan. However, like me, I do not think they would agree that launching

“a new oil and gas licensing round”

and lifting

“the moratorium on UK shale gas production”

is the way forward. That is regressive and builds on a nonsensical investment allowance that, unbelievably, incentivises investment in fossil fuel extraction instead of a just transition. Investment in energy security should be targeted at renewables, carbon capture and storage, and our net zero future. Have the Government forgotten the commitments they made to the world at COP26 last November? Additionally, the press release was entitled,

“Government announces Energy Price Guarantee for families and businesses while urgently taking action to reform broken energy market.”

If that reference to a broken energy market does not align with the petitioner’s claim that

“the Free Market has failed the energy sector”,

I fail to see what would.

Returning to a question I posed earlier about whether the energy market is being properly regulated, will the Minister explain why the Government’s response states that they continue to believe

“that properly regulated markets…provide the best outcome for consumers and promote market competition as the best driver of efficiency, innovation and value”?

Aside from the fact that market competition has all but disappeared, with the removal of lower-price tariffs from the market, and with around 24 million households out of 28 million on standard variable tariffs at the end of August, I do not think people across the UK believe they are getting value from the energy market, not least because of the punishing standing charges that are levied before even a kilowatt of power is used. Perhaps the Minister can come up with something to change my mind on that.

The Government response also mentions that

“properly regulated markets…incentivise private capital to invest in the energy system”.

My basic understanding of investment is that private capital is invested to make money for the people who have money to invest in the first place. Would it not therefore make more sense if those energy assets were in public ownership, so that the return on investment came back to the public purse, not the coffers of the energy companies? Of course, the temporary energy profits levy gains 25% of profits from oil and gas firms, and it is reported that it will raise £5 billion in its first year. That will help, but does the Minister agree that 100% of profits would help more?

The Government response stated that

“if the Government renationalised energy companies, the British taxpayer would have to compensate directors, shareholders, and creditors to the tune of tens of billions of pounds—money that would be better spent supporting families.”

This is where I return to the Government’s lack of foresightedness. Have they considered that the taxpayer has already been saddled with the burden of paying for the Government’s cost of living support for years to come? Has any assessment been done comparing a one-off payment to directors, shareholders and creditors with the repeated, ongoing costs that have been forced on the taxpayer? Why should the public be paying for energy costs while companies rake in significant increases in profits earned from UK oil and gas extraction?

Earlier this month, the chief executive of Shell said:

“The solution should not be government intervention but protection of those who need protection.”

That was before Shell’s third-quarter profits of $9.5 billion were reported just last week—eye-watering profits for the super-rich, compared with eye-watering bills for those who can least afford them. The Government are making the rich richer at the expense of low-income and middle-income households. Can they take immediate and prudent action to protect those most impacted by this energy crisis, now and in the future?

I am reminded of a famous George Bernard Shaw quote:

“Success does not consist in never making mistakes but in never making the same one a second time.”

Can the Minister convince me, as well as David and the other petitioners, that the Government’s refusal to nationalise the country’s strategic energy assets is not, in fact, an ideological blind spot? A nationalised energy sector would have the potential to deliver an integrated approach, guiding the country away from its dependency on unstable fossil fuels, thereby tackling climate change while, at the same time, protecting consumers. Are this Government capable of using some foresight?

I feel I have barely scratched the surface of the issues surrounding today’s petition, but I look forward to hearing the contributions of the other speakers. I particularly look forward to hearing what the Minister has to say in response.

[Margaret Greenwood (Wirral West) (Lab)]

It is an honour to serve under your chairmanship this afternoon, Mrs Murray. I pay tribute to everybody who has signed the petition.

Energy is a necessity for all of us, yet people are at the mercy of big business when it comes to deciding who can afford to heat their homes or run their businesses. Profits at the world’s biggest oil companies have soared to nearly £150 billion so far this year. At the same time, as the e-petition acknowledges, people are having to choose between heating and eating. That cannot be right. As Lord Sikka has written:

“It is Christmas every day for oil and gas companies, and their shareholders and executives are laughing all the way to the bank, leaving the rest of us to pick up the cost in higher energy prices, inflation, bankruptcies and a deepening cost of living crisis.”

Labour called for a windfall tax on oil and gas back in January so that some of the eye-watering profits that are being raked off by big business could support people to pay their bills. However, it took months for the Government to U-turn and follow Labour’s lead, and even then the then Chancellor, now Prime Minister, could not resist resorting to his instinct to put big business first and everyone else last. He allowed those energy giants to shield most of their profits from the very levy that he was announcing. The Energy (Oil and Gas) Profits Levy Act 2022, which the current Prime Minister designed, allows energy companies to apply tax savings worth 91p in every £1 invested in fossil fuel extraction in the UK. Promoting fossil fuel extraction instead of investment in renewables is irresponsible as we face the climate emergency, and it is an insult to young people and to future generations. Labour has called for the tax to be tightened to remove the option for energy firms to claim tax relief on 91% of the levy if the money is reinvested.

It is notable that, during the passage of that Act, the Government voted against a Labour new clause that would have required an assessment within three months of the Bill becoming law of how much extra revenue would have been raised if the levy had been introduced on 9 January 2022 rather than 26 May 2022. The 9th of January is significant because that is when Labour first called for a windfall tax—four and half months before the Government came forward with their U-turn. Why did it take the Government so long to act? I would be grateful if the Minister could respond on that point. There have been reports over the weekend that the windfall tax on energy companies could be raised to 30% and extended by three years. Perhaps the Minister could give us more information today, and let us know what discussions have taken place about that in Government.

It is clear that there is a need for long-term change where energy is concerned. As the independent campaign group We Own It has highlighted, of the top 10 countries in the world that are leading the energy transition to renewables, only the United Kingdom does not have a publicly owned renewable energy generation company. Of those that do, Sweden owns 100% of Vattenfall, one of Europe’s largest producers of electricity and heat; Norway owns 100% of Statkraft, Europe’s largest renewable energy producer; Switzerland owns 100% of Axpo, the country’s largest producer of renewable energy; Iceland owns 100% of Landsvirkjun, the country’s largest electricity generator; and France will soon own 100% of EDF, a world leader in low-carbon electricity generation and a company that many of us in this country use—despite the fact that the French people will own 100% of it fairly shortly. The other countries—Denmark, Austria, Finland and New Zealand—all own at least 50% of renewable energy generation companies.

There is a lot of public support for the United Kingdom to go down a similar path. There are no profits for shareholders in a publicly owned energy company. A poll for We Own It, carried out by Survation, found that 66% of those surveyed wanted energy in public ownership. Earlier this month it was reported that a YouGov poll found that 55% of more than 1,700 adults who were surveyed across Great Britain favoured public ownership of energy. In August, a poll by 38 Degrees found that 73% of voters would favour temporarily renationalising energy companies if they cannot offer lower bills.

Public ownership of services is understandably popular, whether that be energy, water, buses, trains or the NHS. The NHS has been massively opened up to the private sector on the Conservative’s watch, with billions of pounds of taxpayers’ money being handed to private companies to treat NHS patients. Privatisation is never a guarantee of quality. According to a study by the University of Oxford, private sector outsourcing in the NHS corresponded with significantly increased rates of treatable mortality, potentially as a result of a decline in the quality of healthcare services.

To return to energy, Common Wealth reported recently that 72% of voters think it is a good idea to set up an energy company that is Government owned and aims to create low-cost environmentally friendly energy. Labour has announced a plan to establish Great British Energy, a new publicly owned, clean-generation company that will harness the power of the sun, wind and waves to cut energy bills and deliver energy security and independence for our country, as well as good, secure, high-paid jobs.

[Margaret Ferrier]

On that point, in September, in response to a written question on an impact assessment for nationalisation, the then Minister, the right hon. Member for Beverley and Holderness (Graham Stuart), said:

“The Government does not intend to make such an assessment. Nationalisation will not solve the current challenge of high global fossil fuel prices and the impact this is having on the cost of energy.”

Does the hon. Member agree that it is difficult to see how Ministers can speak with such certainty if they will not even make a full assessment?

Retained EU Law (Revocation and Reform) Bill

Margaret Ferrier Excerpts

2nd reading
Tuesday 25th October 2022 Commons Chamber

[Mr Rees-Mogg]

I am certainly concerned about that. In the last couple of days I had to sign off a couple of explanatory memorandums covering law that was going to come into Northern Ireland from the European Union. That is an unsatisfactory constitutional situation, which is why I am so supportive of the Northern Ireland Protocol Bill that is in the other place today. That is something we must push forward with, to ensure that we have a unified legal system across the whole of the United Kingdom.

[Margaret Ferrier (Rutherglen and Hamilton West) (Ind)]

The Bill creates several new powers that will not require UK Government Ministers to seek consent from the devolved Administrations, essentially retaining power over areas within devolved competence. Does the right hon. Gentleman recognise the impact of this Bill on the devolution settlement?

[Mr Rees-Mogg]

The Scottish Parliament has been reluctant to give legislative consent motions to any Brexit-related legislation because of the politics of the SNP. That is a view that it has taken because it wanted to remain in the European Union—as the SNP, to its credit, argues for firmly and clearly on these Benches. The SNP is rather clearer about this state of affairs than the socialist friends we have in here who like to run with the hare and hunt with the hounds. That inevitably means that, in my discussions with the devolved Administrations, there has not necessarily been a meeting of minds with the Scottish Parliament. But that is to be expected. This Bill in fact returns powers to the devolved Parliaments, because it gives them the authority to reform and repeal EU law too. They will be the decision makers over those areas that are devolved, so we are increasing devolution.

Oral Answers to Questions

Margaret Ferrier Excerpts

Tuesday 25th October 2022 Commons Chamber

[Ms Ghani]

It is curious to respond to the Chair of the Select Committee of which I was once a member. We are waiting for the EU to make a decision on our association to Horizon. It is not within our grasp. We are still focused on securing association, but it would be irresponsible not to pivot if that was not forthcoming in the near future. [Interruption.] The hon. Member is gesticulating at me, but he knows very well that we are prepared to pivot and have guarantee schemes in place to help researchers and academics if needed.

[Margaret Ferrier (Rutherglen and Hamilton West) (Ind)]

In addition to the life-changing innovations from Cancer Research UK, medical research charities make huge economic contributions. How are the Government supporting charities such as Cancer Research UK, and investing in cancer research more broadly, so that they can continue to be such a huge driver of economic growth?

[Ms Ghani]

One of the first meetings I had as the Minister with responsibility for life sciences was with Life Sciences Vision and the mission team, chaired by John Bell and Jon Symonds. This is done with the Department of Health and Social Care, and of course we are looking at this particular issue as well. The hon. Member will be aware of the £375 million grant, which is focused on investing in research into these sorts of diseases. We will shortly be announcing six new life science missions. The hon. Lady will no doubt be pleased to hear that they will cover dementia, cancer, mental health, obesity and addiction.

Net Zero Strategy: High Court Ruling

Margaret Ferrier Excerpts

Thursday 21st July 2022 Commons Chamber

[Greg Hands]

I always welcome questions from Northern Ireland. In my previous job at the Department for International Trade, I enjoyed greatly my interactions with the Ulster Farmers Union, with the hon. Gentleman, and with colleagues on behalf of agriculture in Northern Ireland. It is an important sector for the whole country. We are making sure that Northern Irish agriculture can access markets around the world. I would be delighted to pass on his comments to the Department for Environment, Food and Rural Affairs, though obviously agriculture is devolved to Northern Ireland. On trade in particular, we will make sure that Ulster farmers can access markets.

[Margaret Ferrier (Rutherglen and Hamilton West) (Ind)]

Calculations have been made to quantify the emissions cuts that will result from the policies in the Government’s strategy. The cuts do not add up to the reductions required to meet the sixth carbon budget; there is a 5% shortfall. That is equal to 75 million tonnes of CO₂, which is nearly the total amount of emissions in a year from car travel in the UK. What measures will be implemented to ensure that in future, calculations as crucial as these are informed by those with expertise, and are checked thoroughly before they are relied on in national policy?

[Greg Hands]

To put this in context, what the hon. Lady describes as a 5% shortfall is not, if I read the judgment correctly, a doubt that the Government can reach the target; it is simply a criticism of why we had laid out only 95%, rather than 100%, of the measures that are needed. I remind her that we are talking about carbon budget 6, which is for the years 2033 to 2037. There is a reasonable case—it was made by the Government in court—for saying that it is commendable that they could outline 95% of the journey that we are intending to make in 11 years’ time.