Devolution and the Union
Naomi Long Excerpts(9 years, 11 months ago)
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Mrs Anne Main (St Albans) (Con)
I apologise for missing the first few remarks made by my hon. Friend the Member for Esher and Walton (Mr Raab). I should like to say that it was a pleasure to listen to the hon. Member for Birmingham, Hall Green (Mr Godsiff), but it kind of wasn’t, really. It was disappointing to hear the suggestion from the Opposition that the devolution of powers is a way of splitting up the Union by the back door. I do not believe that it ought to be, or that it was ever meant to be. Scotland voted to remain part of the Union, and I am very glad that it did so.
Powers have gone to Wales and Scotland, and quite rightly so. They should have a say over how they run certain important matters that are particular to them. This cannot be a one-way street, however. We cannot give powers back and not expect that to have an impact on the workings of this place. Inevitably, there will be subjects relating to Scotland and Wales that we will be expected not to vote on. Stamp duty could well be one of them. This is a subject that I am particularly passionate about, because Scottish Members could potentially vote on stamp duty in England. According to the latest figures, my constituency pays more stamp duty than Scotland and Wales put together, and I find it amazing that I would have no say over stamp duty in Scotland, yet Scotland could well have a vote on stamp duty in my constituency. That is rather bizarre.
The logical conclusion of our giving powers to Scotland is that we should recognise the democratic deficit that it has created in our own Parliament. That needs to be addressed. I accept that we have a united Parliament, but that does not mean that we cannot come up with a system that recognises the new arrangements. We do not need to create a whole new English Parliament, as the hon. Member for Birmingham, Hall Green suggested, but we need to observe custom and practice and say that there are certain things that hon. Members from Scotland or Wales should not participate in. That would be a fair situation.
Naomi Long (Belfast East) (Alliance)
I remind the hon. Lady that Northern Ireland remains part of the United Kingdom, in case we are in any doubt. Does she agree that a similar approach should be taken when reserved and excepted matters for Northern Ireland that affect only Northern Ireland are voted on in this place? On those occasions, where Northern Ireland Members have agreed on a certain course of action we are often overruled by English MPs.
Mrs Main
The hon. Lady makes an interesting point, and I am certain that there would be no reason why, if the motion is carried today, everything could not be on the table for discussion. It would be up to her to make her case, but I think that what she describes is very different from what the hon. Member for Birmingham, Hall Green was suggesting, which was that we have to split up the whole of the Union into little tranches of competences. It would be unrealistic, and it would certainly result in a democratic deficit, to suggest that people in Scotland can have grabbed power for themselves, and rightly want to use it, but resist giving away any of their powers in this place. I know it suits the Labour party to try to keep those powers, but we have to make the case that it is not reasonable and not fair.
Lord Barnett has said the following about the Barnett formula:
“It is unfair and should be stopped, it is a mistake. This way is terrible and can never be sustainable, it is a national embarrassment and personally embarrassing to me as well.”
I do not believe we should scrap the Barnett formula, but we should certainly review it, and whatever comes out of that would be done with the will of the House. Far less money is spent on my constituents and I find it hard to justify to them that in my constituency, which contains areas of multiple deprivation, people get some 11% less than the UK average, 23% less than Scotland gets and 28% less than Northern Ireland gets.
Mr Reid
The hon. Gentleman makes an interesting point. Legislation does not of itself lead to more spending. We allocate spending when we pass the estimates every year. Although legislation may mean that carrying out certain functions costs more money, the decisions on spending are made only when we pass the estimates. Certainly when we pass the estimates for the English health service, there is a knock-on effect for Scotland. It is perfectly in order for Members of Parliament representing constituencies outside England to vote on those issues, but legislation purely for the English health service could be left to the English representatives. But the only way that that can happen in practice is if we set up a federal United Kingdom with an English Parliament. If Members cannot vote on some issues in this Parliament, it will lead to a situation in which a Government cannot get their policies through.
Naomi Long
I will be brief. Welfare reform has a massive impact on Northern Ireland, yet the devolved powers that we have are technical only, and we cannot deviate from parity and still be able to afford it. So will he not accept that there is an issue?
Mr Reid
Clearly, there is an issue that affects Northern Ireland. It is responsible for a great deal of spending, but has no tax-raising powers by itself. I am not in favour of devolving welfare to Scotland, but it is already devolved to Northern Ireland. Perhaps the Northern Ireland experience is an indication of why it is not a good idea to devolve welfare.
Where I part company from the movers of the motion is that I think there is no need to hold up the Smith commission process in order to have a review of the whole UK. On the eve of the referendum, the leadership of the three main parties made a vow, and it is essential that that vow is adhered to; what was promised must be delivered.
General Matters
Naomi Long Excerpts(12 years, 1 month ago)
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Naomi Long (Belfast East) (Alliance)
I wish to raise a matter of importance to my constituents and those of many other Members, namely the availability of borrowing to small and medium-sized businesses and, particularly, the monitoring of that lending activity.
Most of us will have spoken to local business people who lament the lack of access to finance and lending facilities. Over the recess, I met a small number of business owners who indicated that their experiences had improved little in the past year. Although banks have repeatedly stated that they are open for business and ready and willing to lend to small and medium-sized enterprises, I continue to receive complaints about aggressive management of existing loans, reduced overdraft facilities and a general lack of flexibility in the approach of banks, all of which place otherwise viable businesses under stress.
Anecdotal evidence suggests that, in some cases, when businesses approach banks to seek an extension of their facilities, bank officials are pressuring them into accepting unwelcome changes to the terms and conditions of their existing loans, or into reducing their borrowing through asset disposal. In the current economic climate, people’s ability to shop around for a better deal is somewhat constrained. The wider impact of that on our economy and its recovery is reflected in the fact that the Government have placed considerable emphasis on initiatives to increase the availability of bank lending specifically to the SME sector. For example, one key aim of Project Merlin was to ensure that banks would commit to lending more money, especially to small businesses. However, that has been superseded by new credit easing plans. Initially there was the national loan guarantee scheme, which was again aimed at encouraging such lending.
As market conditions changed, making it less economical for banks to raise unsecured funding, the Government again responded. On 1 August, they introduced the funding for lending scheme to incentivise bank lending to UK households and businesses by allowing banks that increase lending to borrow more from the fund, and at lower cost. Taken in conjunction with the business finance partnership, the enterprise finance guarantee scheme and other recent announcements by the Treasury and the Department for Business, Innovation and Skills, it is clear that lack of access to affordable lending for business is recognised as a significant problem, a barrier to recovery, and an area to which the Government continue to give considerable attention in search of a solution.
We could probably have a lengthy and lively debate about how effective some of those interventions have been, but I want to focus on two specific issues in the monitoring of lending activity: first, the degree to which announcements of new UK-wide initiatives lead to an improved situation for Northern Ireland’s consumers; and, secondly, the lack of consistency and clarity in the way in which lending generally, and new lending in particular, is defined by the banks.
First, as banking is a reserved matter, work undertaken at UK-wide level will, and indeed should, have a direct impact on my constituents, but there is considerable scepticism as to whether it has done so meaningfully to date. In Northern Ireland, only one of the main banks participated in Project Merlin, owing largely to the structural differences between the Northern Ireland and UK banking sectors. Two of the four main Northern Ireland banks have parent banks in the Republic of Ireland, while a third has its parent bank in Denmark, leaving only one with a parent bank here in the UK. Furthermore, no regional targets for lending were included in the Merlin scheme, with the result that its effectiveness in Northern Ireland, and the reasons behind that performance, were not able to be monitored or to be taken into account when devising replacement arrangements or new incentives. The result was that the national loan guarantee scheme replicated some of those problems where participating banks accounted for a smaller proportion of the Northern Ireland business market than would have been the case in most other regions.
To bridge the gap in regional monitoring, quarterly figures have been provided to the Northern Ireland Finance Minister through the British Bankers Association statistics, “Bank Support for Businesses in Northern Ireland”, for monitoring purposes. These confidential figures are based on the information provided to the BBA by the four main Northern Ireland banks and are intended to allow monitoring of the levels of lending to SMEs, as well as other activity. However, as banking is not devolved, the Finance Minister can neither require banks to provide that information nor require them to do so in a particular format, and as the statistics are deemed commercially sensitive there can be little open scrutiny of their content.
This is a matter that Northern Ireland Members have raised often in this House and with Treasury Ministers. In a statement to the Northern Ireland Assembly earlier today, the Finance Minister indicated that the Treasury has agreed to monitor the participation of Northern Ireland banks in the funding for lending scheme, which is a huge step forward that I strongly welcome. However, for that monitoring to be meaningful and effective, there must be some transparency and consistency in how lending is measured and reported by banks.
That leads me to my second point. For some time, there has appeared to be a gap between the headline figures for new lending by the banks and the experience of those who are seeking to borrow money and finding it difficult to do so. This may be at least partly a result of the lack of consistent definition of what constitutes new lending. This is not a new problem, nor is it unique to Northern Ireland. Research that I obtained from the House of Commons Library confirmed that the Merlin agreement did not include any detail on the definition of “lending” or, in particular, on what constitutes new lending. Since then, the underlying problem of the inconsistent definition of what is included in bank lending figures and what constitutes new lending has apparently remained unresolved.
In the summer I wrote to the main Northern Ireland banks about the breakdown in new lending that they had made available to businesses over the course of the past year. Each institution stressed that the information was commercially sensitive. Furthermore, I would not want to expose those who shared more detailed information with me to a criticism of their approach when it may be no worse or, in fact, better than that of some of their competitors who chose not to be so open and frank. I will therefore refrain from citing any specifics that could identify individual lenders and focus instead on broad trends, which indicate that the actual figures for what the average person would consider to be new lending may well be considerably less than the headline figures that are published. In one case, over 90% of advertised new lending was to existing customers. That is perhaps not surprising, as there are strong commercial reasons why it would be easier to lend to an existing customer than to a new customer. An established relationship, with knowledge of the borrower’s credit history, business cash flow, management strength, and business model, gives the lender confidence that they will be able to service the debt and ultimately repay their loan. However, the fact that that bias extended to 90% of all new lending in that year was more surprising. Given that the remainder would include people who were switching facilities from other banks, and therefore had a well-established credit history, it demonstrates what a small proportion of overall new lending is likely to be to new businesses, correlating with the anecdotal evidence that they, in particular, struggle to get access to the finance they require. Given the importance of innovation and new business set-ups to the economy, and the emphasis placed on those by the Government, this is an area of real concern.
Further examination showed that that new lending also included overdraft renewal and loan restructuring. The lending offered to customers in such circumstances might be no more than was originally the case—it might even be reduced—but it would still be captured by the bank as new lending. Furthermore, it might be accompanied by a worsening of terms and conditions with the result that, although offered and counted towards targets for new lending, it might never be drawn by the company with that agreement. However, it would still count towards new lending in that an agreement had indeed been reached and approved.
From my discussions with banks, there seems to be considerable variation in what is captured by their internal systems as new lending for monitoring and recording purposes. For one bank, new lending figures would not include an extension of existing overdraft facilities or extending the repayment period of an existing loan, in contrast to some of its competitors. However, it also revealed not only that its definition of new lending would capture an existing loan that was increased, but that the entirety of the final loan sum would be captured as new lending, not merely as an increase in the borrowing.
Mr Jim Cunningham
Does the hon. Lady agree that one purpose of quantitative easing was to free up money to help small businesses? Instead, the banks have been using it towards their own debts.
Naomi Long
It would certainly appear from the brief analysis that I have undertaken of banks that service my constituency, and indeed service Northern Ireland, that there has not been a significant increase in lending to small business. That should concern us all.
To return to my point, if a business with a loan of £90,000 borrowed an additional £10,000, the entire £100,000 loan would be captured by that bank’s system as new lending. That is perhaps an extreme example, but it shows the significant distortion to new lending figures that might occur, depending on what is captured by the bank’s internal systems. Given that most new lending is to existing customers, that factor could be very significant. The effect may be offset somewhat by comparing new-lending figures with a bank’s stock of lending—that is, the outstanding loans to be repaid—but there is a lack of transparency and consistency in what is measured, and indeed publicised, by banks, particularly as they most frequently use the new-lending figures to defend themselves against criticism that they are making it difficult for SMEs to access lending.
While the UK Government clearly recognise the importance of access to borrowing for UK households and businesses, there needs to be increased monitoring of the impact and a tailoring of initiatives to Northern Ireland markets, where the banking sector is distinct and different from that in other parts of the UK. The matter is not devolved, and proactive consideration of it in this place is crucial.
Furthermore, in the interests of transparency, there needs to be a clearer and more consistent definition across the banking sector of what constitutes new lending, and of the methods of measuring and reporting on banks’ lending activity generally, so that when such figures are quoted in isolation they remain meaningful and a useful tool to measure the impact of Government lending initiatives where that matters most—in the businesses across my constituency and the constituencies of other Members.
Oral Answers to Questions
Naomi Long Excerpts(12 years, 1 month ago)
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Hugh Robertson
Absolutely, and it is noticeable that many of the legacy programmes from London 2012 are being run as a direct result of this Government’s decision to restore national lottery funding to the levels envisaged by Sir John Major. The figure was 13.7% when we took office; it is 20% now, and that is what is underpinning the legacy.
Naomi Long (Belfast East) (Alliance)
T5. In Northern Ireland we were immensely proud of the huge success enjoyed by Northern Ireland competitors in the recent Olympic and Paralympic games, including the rowing successes of Richard and Peter Chambers, and Alan Campbell. However, although officially they competed for Team GB and NI, it is all too frequently abbreviated to Team GB. Is there any prospect of the Government rebranding Team GB as Team UK, so that all four nations are fully reflected in the success?
Points of Order
Naomi Long Excerpts(13 years, 1 month ago)
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Naomi Long (Belfast East) (Alliance)
On a point of order, Mr Speaker. Further to a written question regarding Government policy on equality issues relating to gender-specific dress codes in the workplace, I was rather surprised when the Home Secretary replied outlining what she was wearing on the day in question—a grey trouser suit and some shoes from L. K. Bennett—and mentioned her personal preference for smart dress and her belief that such dress had never hampered her career. Intrigued, I inquired at the Table Office whether I could seek regular sartorial insights from Ministers via written questions. I was advised that because the choices Ministers make before leaving home, such as
“whether to wash, shave or wear blue underpants”
are entirely personal and are not part of their ministerial responsibility or subject to Government policy, it would not be in order for me to do so. Is it therefore in order for a Minister to answer an entirely orderly and serious question regarding Government policy on an issue that has been raised with me by a constituent with what is a frivolous, albeit fascinating, fashion commentary?
Mr Speaker
The hon. Lady will understand immediately when I say that I do not regard myself as an authority on fashion. In response to points of order, I think an appropriate humility and self-denying ordinance on the part of this Chair would be prudent and seemly.
Business of the House (Thursday)
Naomi Long Excerpts(13 years, 11 months ago)
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Hilary Benn
My hon. Friend has made a powerful point. Judging by the attendance in the Chamber tonight, and because so little time has been allotted, I fear that there will not be time for all the Members who will want to participate in tomorrow’s debate to have a chance to express their views to the House.
Naomi Long (Belfast East) (Alliance)
Although on the face of it the issue at stake is tuition fees in England, the proposal will have profound effects on students from Northern Ireland—and, indeed, those in Northern Ireland. Given the restricted time that we will have in which to debate it, it is unlikely that those of us who represent those students will be able to make our case fully tomorrow. Does the right hon. Gentleman agree that it would be wise to allow us to do so, in the light of the profound implications both for students from Northern Ireland and for those who study there?
Hilary Benn
I agree. The proposal does indeed have profound ramifications and implications for students not only in England but in other parts of the United Kingdom, which is why we need more time.
Naomi Long
At the Northern Ireland Grand Committee yesterday, we were advised that the Barnett consequentials of the anticipated decision tomorrow, and of any bursary or student support arrangements that may or may not be introduced, have already been passed on to the Northern Ireland Assembly in the block grant. I would presume that it might take more than five hours simply to understand how such a calculation could be made.
Mr Jones
The hon. Lady makes a very good point. My right hon. Friend’s central message was that tomorrow we need to discuss, and will discuss, those complex financial implications. There are implications not just for universities and individual students, but, as the hon. Lady quite rightly says, for the Northern Ireland Assembly.
Parliamentary Voting System and Constituencies Bill
Naomi Long Excerpts(14 years ago)
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Chris Bryant
Yes, I do. As the hon. Gentleman knows perfectly well, we have tabled amendments that would include his seat, but also include others. He is a sage man and I know that he would want to pursue the logic of the creation of his own seat so as to make exactly the same exemptions in some other cases where there are overriding concerns—in the Isle of Wight, for instance. That is the nature of the amendment that we have tabled elsewhere.
Naomi Long (Belfast East) (Alliance)
Could we put it this way? Given that the Government have already conceded that there are exceptions to the numerical rule, would it not be better to give the judgment to the Boundary Commission, which could not be perceived to have any vested interest? It could make the judgment on where exceptions should and should not apply, rather than the Government laying that out in the Bill.
Chris Bryant
The hon. Lady speaks with almost as much sagacity as the hon. Member for Na h-Eileanan an Iar (Mr MacNeil). I agree with her that there is no logic to how the exceptions have been laid out. The Boundary Commissions should be given a certain latitude while striving towards a greater equalisation of the number of electors in each constituency.