Supporting Small Business

Rachel Reeves Excerpts

Tuesday 19th October 2021 Commons Chamber

[Rachel Reeves (Leeds West) (Lab)]

I beg to move,

That this House recognises the importance of British businesses to high streets and communities across the UK and the exceptional challenges they face due to the pandemic and rising costs; regrets the Government’s current plan to end all temporary support for businesses from April 2022; calls on the Government to support businesses by freezing the business rates multiplier and extending the threshold for small business rates relief from £15,000 rateable value to £25,000 in 2022-23; and further calls on the Chancellor of the Exchequer to update the House in person before January 2022 on his Department’s assessment of the impact that removing the temporary business support will have on small businesses.

Our high streets are not simply units of economic activity or just a place to buy the things we need. They are an important part of the tapestry of where we live, work and share our everyday lives. It is where people meet, eat, catch up over a cup of tea, bump into old acquaintances, receive a smile or a kind word. My first Saturday job as a teenager was working at a chess shop called the Chess and Bridge Centre on the Euston Road. People would come from miles around not just to buy, but to ask the advice of the owner and those of us who worked there. I learnt a lot. Our shops are as much about people as they are about products, and that is why they must and they will endure. That has been so many people’s experience during the course of the pandemic. As businesses have done everything asked of them—despite advice from Government often chopping and changing—they have bent over backwards to find new ways to serve their customers and to keep their own businesses afloat. We should all be thankful.

Some 2.8 million people are employed in retail in our country. As the Union of Shop, Distributive and Allied Workers points out, retail is one of the few sectors that regularly offers flexible opportunities for workers to balance their work alongside caring commitments they might have. Yet, incredibly, there is no Government industrial strategy for the retail sector to work with business to increase wages, skills and productivity. We have allowed an imbalance to be formed where bricks and mortar businesses are at a significant disadvantage to online retailers—online retailers whose warehouses typically attract considerably less business rates and, indeed, may not even pay corporation tax in our country.

One in seven shops remain shuttered after the lifting of pandemic restrictions, with the north of England seeing a higher proportion of closures. A British Retail Consortium survey concluded that business rates were a factor behind two in three shop store closures in the last two years. That cannot be allowed to continue. It should alarm this House that the Office for National Statistics business impacts survey data suggest that 330,000 business, responsible for over 800,000 jobs, are at risk of closure in just the next three months. Even a fraction of those losses will be deeply felt in all our communities.

[Ellie Reeves (Lewisham West and Penge) (Lab)]

Some 99.8% of businesses in Lewisham are small and medium-sized enterprises. They are the lifeblood of our high streets and they support our local community, and many have suffered during the pandemic. Does my hon. Friend agree that the Government’s plans to remove temporary support are an unfair cliff edge that could see many viable small businesses go under?

[Rachel Reeves]

I know my hon. Friend is a keen supporter of businesses, including the Kirkdale Bookshop on Sydenham’s high street and Billings butchers. She is a fine steward for the people of Lewisham West and Penge. I cannot offer expertise on the shopping behaviours of all hon. and right hon. Members—[Laughter.]—but some of our shopping behaviours changing does not mean that our high streets should not have a positive future. There is scope for fresh ideas and a renewed relationship with our high streets, but without easing the pressure of business rates for next year, many shops, including many carrying debts from the pandemic, just will not make it. That is why action is needed now.

[Dawn Butler (Brent Central) (Lab)]

Four hundred businesses in Brent are at risk. Our high streets have the most independent shops compared with any other high streets in the UK. Does my hon. Friend agree that it is so important that the Government reach out and help to support businesses?

[Rachel Reeves]

My hon. Friend is absolutely right. She speaks about businesses in Brent, but that could go for so many other constituencies, high streets and town streets across our country. We want businesses to thrive and power our recovery and for every village, town and city across the UK to feel the benefits of a stronger and more resilient economy. Diluting ambition or postponing new thinking comes at a high price for businesses and jobs.

[Jessica Morden (Newport East) (Lab)]

In Wales, the Welsh Labour Government have helped 70,000 businesses, which will not have to pay any rates until next year, whereas in England over the summer, the support was scaled back. Does my hon. Friend agree that there is a stark contrast between Labour in power supporting business and the Conservative party?

[Rachel Reeves]

My hon. Friend is absolutely right. The Labour Government in Wales ensured that there would be no business rates at all for the retail and hospitality sectors in Wales for this financial year. That is in stark contrast to the Conservative Government in Westminster, who pushed ahead with restarting business rate bills in June this year.

What is decided in this place has huge implications for businesses, from the kitchen-table start-up to our high streets, industrial parks and commercial giants known across the world. That is one of the reasons it is so worrying that, at this crucial time, the Prime Minister and the Chancellor concocted a new jobs tax to arrive in the spring. Despite all their election promises to cut national insurance contributions, they are actually raising them against the strong advice of businesses and trade unions.

The Conservative Government’s actions will make each new recruit more expensive and increase the costs to business. The decision to saddle employers and workers with the jobs tax takes money out of people’s pockets when our economic recovery is not yet established or secure and only adds to the pressure on businesses after a testing year and a half. When all other costs are going up—the costs of energy and of supplies—these tax rises are only hitting them harder.

[Alex Sobel (Leeds North West) (Lab/Co-op)]

My hon. Friend is making an excellent speech. Does she agree that the tourism and hospitality industry has particularly suffered over this period and has had its support taken away? Many travel agents are land-based businesses that do not have the demand coming back because people are still unable to go on holiday. Do they not need additional support, such as a business rates cut and a reversal of the additional tax on them, because they cannot afford to employ people any more?

[Rachel Reeves]

I thank my hon. Friend for that intervention and I know that he is a staunch supporter of businesses in Headingley, Otley and across his Leeds North West constituency. The Government should not break their promises to voters—that should be a given—and he is right to mention the tourism sector, which is so important to so many of our constituencies, whether we represent cities, towns or villages. That is why the decisions of the Labour Government in Wales to support the retail and hospitality sector during this difficult time were so welcomed by businesses in Wales.

[Emma Hardy (Kingston upon Hull West and Hessle) (Lab)]

One of the ways that the difference is being felt by people living here in England is through increased levels of debt, which is why I find it so remarkable that the Money and Pensions Service is looking to reduce the funding for face-to-face debt consultations at a time when, because of the lack of support in the economy, people find themselves going further and further into debt. Does my hon. Friend agree that the Money and Pensions Service should look at that again?

[Rachel Reeves]

My hon. Friend is right to make that point. I have had constituents raise concerns about cuts to money advice, for example, through StepChange, the charity based in Leeds. This is linked to the fact that a lot of the funding comes from banks and, due to the formulas set by Government, the funding that goes into debt advice charities is falling at a time when inflation is going up and there is a risk that interest rates might go up, and all the rest of it. She is right, and I hope that Ministers have heard those concerns, which I expect will be echoed by Members across the House.

In November 2019, just weeks before the general election, the Prime Minister told the CBI conference that

“to make sure that the businesses of this country can continue to flourish I am announcing today a package of measures cutting business rates further…particularly for SMEs to help…stimulate the high street.”

Labour welcomed the Government’s review of business rates, which was formally launched 15 months ago, four months into the pandemic. They were right to make the decision to start the review. Businesses, even during those difficult times, found the time to make submissions, and they did so in good faith. The Government promised

“final conclusions in Spring 2021”,

so they are already overdue, and now there is news that the review may be pushed even further into the long grass.

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

rose—

[Rachel Reeves]

Perhaps the hon. Gentleman can give us an indication of when the review might finally be published.

[Kevin Hollinrake]

I am afraid I cannot, but I am interested in whether the hon. Lady will come on to her own proposals for reforming business rates, which she announced at her party conference. I welcome at least a first stab at some reform, but I have a question. She would use the digital services tax, but as I understand it, the multinational agreement on the issue means that that tax will no longer be allowed—it has to be scrapped as part of the corporation tax deal. How does she propose a sixfold increase to a tax that cannot exist?

[Rachel Reeves]

I will come on to those points. It is great that Conservative Members are asking for advice, because we have plenty about how to level the playing field in taxes for businesses. I will come on to points about the global minimum rate of corporation tax, because that is how we can help to level the playing field.

The Chancellor must now complete the review and make the changes that the Government have promised. It would be quite astonishing if the Treasury had time to cost up the Prime Minister’s vanity yacht, yet no time to fulfil its pledge on something as important as reforming business rates.

The Minister may argue that everything has changed because of the pandemic. He would be right: everything has changed, including for businesses. The unfairness in the system has been enlarged, not narrowed, during the past year and a half. Almost 180,000 retail jobs were lost in 2020, according to the Centre for Retail Research, while some online retail profits have soared.

Fundamentally reforming business rates is more important now than ever before. I am sure that Members on both sides of the House would welcome confirmation from the Minister that the Government will take the radical action required, which is exactly what businesses are urging them to do in next week’s Budget.

Last week, 42 trade bodies wrote to the Chancellor making clear their view that

“in their current form, our business rates system is uncompetitive…and unfair.”

The British Chambers of Commerce are clear that tinkering around the edges will not do. The British Retail Consortium warns:

“Sky high business rates are closing stores up and down the country and preventing new ones from opening.”

[Matt Rodda (Reading East) (Lab)]

Does my hon. Friend agree that our retail centres face a very serious situation? Even thriving retail centres in towns such as Reading, which has the major retail centre for central southern England, are being affected. In our borough, 1,200 small businesses are currently receiving business rates support, which is unheard of. I encourage my hon. Friend to address that point. Does she agree that it is a serious issue?

--- Later in debate ---

[Rachel Reeves]

I thank my hon. Friend for speaking up for businesses in Reading that are struggling because of the unfair system of business rates. I expect that, like many other businesses up and down the country, they talk about the unlevel playing field and the unfair competition whereby some businesses pay their business rates—and corporation tax, if they make enough money—but their main competitors are paying a lower level of corporation tax because they have no shop fronts and might not even be registered for corporation tax in this country. That is not right for businesses in Reading, and it is not right for businesses in any of our constituencies.

As the Federation of Small Businesses points out, unlike other forms of business taxation, business rates are a tax that

“hits firms before they’ve even made a pound in turnover”,

let alone in profit. The CBI says that business rates have

“literally become a tax on investment.”

The Union of Shop, Distributive and Allied Workers explains that the crucial jobs and services provided to our local communities are under threat.

In each of the last four Conservative Party manifestos, there has been a promise of action on business rates. How many businesses and shops have needlessly closed as a result of the dither and delay in delivering on those promises? In 2011, the Conservative Government brought in Mary Portas to work on ideas to transform the fortunes of the great British high street. Her frustration with Ministers a decade on cannot be dismissed. She has said:

“It’s shameful that they have still not readjusted their thinking on how Amazon and the delivery giants should be paying equivalent rates of tax online…Their slowness in understanding, their tardiness, is ridiculous."

We agree. Labour is unapologetically pro-worker and unapologetically pro-business. We believe in helping businesses large and small, start-ups and the spin-offs from our universities, all of which can provide exciting new growth for the future. In the everyday economy, the fate of shops on our high street matters.

If the Conservative Government will not make these reforms, the next Labour Government will—and more. My core principles are to tax fairly, spend wisely, and grow the economy. That is why Labour will scrap business rates as we know them. We need a much fairer system. Labour will incentivise investment, promote entrepreneurship and efficiency, reward businesses that move into empty premises, and help our high streets to thrive again. We will ease the burden on the bricks-and-mortar businesses, and especially on the smaller businesses. Our party is on the side of entrepreneurs and the communities who want to do something different—who want to start a business and get on in life.

If Labour were in government today, we would freeze business rates next year and extend small business rate relief. We would pay for easing that burden on businesses by raising the UK digital services tax. We would ensure that online companies, including Amazon, which have thrived during this pandemic and made bigger profits than ever were paying their fair share too. But we know that more fundamental reform is needed beyond just one year, and so, in government, Labour would scrap business rates entirely and replace them with a fairer system fit for the 21st century.

We welcome the backing of the G20 and the OECD for a global minimum rate of corporation tax for multinationals. Labour supports its being set at the 21% originally proposed by President Biden and US Treasury Secretary Janet Yellen, which would have done more to level the playing field between online giants and retail stores and small businesses; but even at 15%, as watered down by the British Chancellor, the global minimum rate of corporation tax will bring in substantial amounts of money that could be used to ease the burden of property taxation on our high streets and for our small and start-up businesses. That is a model of fair business taxation, and that is what a Labour Government will do.

Today’s Opposition day debate on business rates is important for businesses and for our country’s economic recovery. It is about so much more than rates and multipliers: it is about business growth and opportunities in all the places that we are sent here to represent. It is about what we as a country buy, make and sell.

[Kevin Hollinrake]

I thank the hon. Lady for giving way again. She is being very generous. If I heard her correctly, she is going to scrap business rates in the next Parliament. Business rates bring in about £30 billion a year. How will she make up that shortfall? What will be the replacement system to bring in that £30 billion a year?

[Rachel Reeves]

The Chancellor would have a lot more money to play with if he had gone ahead with President Biden’s proposals for a 21% global minimum rate of corporation tax. There are choices in politics, and this Chancellor chose to water down the 21% proposals to 15%. As a result, he has lost £5 billion or £7 billion. We would have used that money to reduce—[Interruption.] We will use that money to reduce the burden of business taxation, and I hope that the Ministers will stand up today and say that they will use the global minimum rate of corporation tax to ease the burden on high streets and small businesses. That is the choice that a Labour Government will make, and we will hear shortly whether it is the choice that this Government will make. [Interruption.] You are not doing anything! The Minister says that we are still short of money, but this Government made the choice to water down proposals that would have brought in £15 billion a year. They made that choice because they are not interested in levelling the playing field on taxes.

In four manifestos now, the Conservatives have said that they would ease the burden of business rates. If the Government want advice ahead of the Budget, they can look at the speech that I wrote for our party conference in which I set out what Labour would do. Instead, they propose to kick this into the long grass and to do nothing to help our high streets and our small businesses. A Labour Government would ease the burden on our businesses and help to create a level playing field with a system of property taxation that asks the retail giants with warehouses and out-of-town centres to pay a bit more, to ease the burden on our small businesses and high streets. That is the right thing to do.

The Budget should be about recovery. The cost to businesses has been going up, supply chains have been disrupted and costs are spiralling as a result of the Government’s unwillingness to invest in gas storage and the skills of British workers or to take any meaningful action to deal with the chaos that has been created. What is the answer from Ministers? A jobs tax and an increase in business rates next spring. Our high streets have been paying a high price for Government inaction for too long. The case for fundamental reform has been made by businesses, by trade unions and by Labour. This is now about the Government’s priorities and their political will. Will they ask more of those online giants, or will they leave the burden of business taxation as it is today, falling on our high street businesses and small businesses? Those are the choices that the Government can and must make in the Budget. We have set out the choices that we would make. It is now time for the Government to act on business rates. Those choices will be available next week, and I hope that the Government will take them.

Oral Answers to Questions

Rachel Reeves Excerpts

Monday 4th May 2020 Commons Chamber

[Michael Gove]

My hon. Friend makes a very important point. We do need to show flexibility in the way in which procurement operates, particularly in order to ensure that we have domestic production in the future upon which we can rely. My right hon. Friend Lord Deighton is leading the work in this area.

[Rachel Reeves (Leeds West) (Lab)]

Colleagues have made important points about shortages of PPE. Those who look after the sick and the vulnerable deserve our protection, and getting PPE to them is the priority of all of us. The Prime Minister said last week that as part of coming out of the lockdown, face coverings will be useful. As the Minister knows, in Germany and France it is now required or advised to wear face masks on public transport and elsewhere. So as the Government look to announce plans to ease some of our lockdown restrictions, how many face masks suitable for wearing by the public are currently available, and what work is being done with health experts to ensure that face coverings that people are using are of sufficient quality to stop the virus from spreading?

[Michael Gove]

I am very grateful to the hon. Lady for her questions. She is right that there are other European countries that are prescribing face coverings, particularly on public transport and in other settings where a number of people congregate. We follow the scientific advice. There is a clear distinction, as I know she knows, between the sophisticated type of face mask that will be appropriate in a surgical or social care setting and the sort of face covering that can be used by individuals in order to shield others. It is important to recognise that the wearing of these face coverings affords no protection to the individual, but, properly worn, they can be a contribution to making sure that others are protected from the aerosols—from the droplets—that all of us might be responsible for producing when we cough or sneeze. That is why Lord Deighton and my right hon. Friend Lord Agnew are working together in order to ensure that we can increase domestic production of just such face coverings.

[Rachel Reeves]

I thank the Minister for that, but it is of huge concern that he lacks clear answers to the questions that I put, especially given the ongoing fiasco of getting PPE to health and social care workers. So I ask again: how many of these face masks, for public use, are currently available? Other countries are ahead of us. France has increased production and procurement to about 8 million masks per week. The Japanese Government are sending masks to 50 million households. What are the Government doing to ensure that masks are distributed to all those who need them? Given that the Government were slow to engage with the UK textile manufacturing sector in the production of PPE for frontline workers, what are they doing to ensure that production of masks by British manufacturers is increased, looking forward to what might come next?

[Michael Gove]

The hon. Lady again makes a series of important points. In terms of the numbers of masks that have been distributed overall, from 25 February to 3 May we distributed 152 million masks, and just on 3 May we distributed 2.7 million masks. Of course, it is the case that for those masks that are appropriate in surgical settings we do need to have a particular material—melt-blown plastic—in order to provide the necessary protection for those wearing the masks. We have been in touch with the specific suppliers of that type of material here in the United Kingdom. It is also the case that suppliers of those materials tend to predominate in countries that have petrochemical industries, and we have been in touch with those, including in the Gulf in order to provide it. They are a very different sort of material from the type of face covering that would be appropriate on public transport or elsewhere, and that is a very different exercise, and the numbers that we can produce of those would be significantly greater because we do not have a reliance, as I have said, on that meltdown plastic, which can generally only be provided by other countries.

Oral Answers to Questions

Rachel Reeves Excerpts

Tuesday 3rd March 2020 Commons Chamber

[Alok Sharma]

I make the general point that innovation is vital in all sectors of industry, but particularly in the renewables sector. As my hon. Friend will know, the proposal that we set out will help the UK to achieve its 2050 net zero ambition. Ultimately, this is about achieving value for money by driving further cost reductions in renewable electricity.

[Rachel Reeves (Leeds West) (Lab)]

I welcome the Secretary of State and his new ministerial team to their places. The Business, Energy and Industrial Strategy Committee looks forward to taking evidence from them, and I am sure that they look forward to that as well.

May I follow up on the question from my hon. Friend the Member for Southampton, Test (Dr Whitehead) about our fourth and fifth carbon budgets? Those carbon budgets are premised on achieving an 80% reduction in carbon emissions, yet this House has unanimously passed legislation to achieve net zero. It is neither coherent, nor showing leadership, for our fourth and fifth carbon budgets to be based on an outdated objective that this House has rejected. Can the Secretary of State confirm that we will be updating our fourth and fifth carbon budgets—and, crucially, that we will meet them?

[Alok Sharma]

I thank the hon. Lady for welcoming my ministerial team and me. Of course I look forward to coming before her Select Committee. Let me be absolutely clear: we are one of the first countries in the world to have legislated for a net zero target, and we have demonstrated our global leadership. We have met the first two carbon budgets and are on track to meet the third, but I take her point.

Oral Answers to Questions

Rachel Reeves Excerpts

Tuesday 21st January 2020 Commons Chamber

[Kelly Tolhurst]

I thank my hon. Friend for raising the subject; yes, I would be very happy to meet him. The sector has been the subject of focus. Her Majesty’s Revenue and Customs, which is responsible for enforcing the national living wage, and cross-border agencies have been doing extensive work, but any details that my hon. Friend may supply would be helpful.

[Rachel Reeves (Leeds West) (Lab)]

18. We hear warm words from the Minister, but the truth is that in the last 10 years, just nine firms have been prosecuted and fined for non-payment of the minimum wage. When those fines are levied, they are at only half the level that they could be. Why is that the case if this is such an important area for the Government?

[Kelly Tolhurst]

I note the hon. Lady’s interest in this area, but I would just correct her: there have actually been 14 prosecutions for non-payment of the national minimum wage. I would also make it clear to the House that there are ways other than just bringing prosecutions to ensure that employers pay. Ultimately, we should focus on ensuring that businesses understand their obligations to their employees, that they pay the minimum wage, and that when they do not, we enforce correctly. I am determined to make sure that that continues to happen.

Oral Answers to Questions

Rachel Reeves Excerpts

Tuesday 22nd October 2019 Commons Chamber

[Kelly Tolhurst]

My hon. Friend is right, and that is what the Government’s reforms have done. As I outlined, shareholders have a vote every three years and an advisory vote every year. Through the reforms, we have also enabled employee directors, non-exec directors or employee councils to have representation on the board. Companies now have to explain their wider pay policy and how it affects the whole company.

[Rachel Reeves (Leeds West) (Lab)]

The chief executive of Thomas Cook was paid more than £8 million during his time as chief executive of a company that has now collapsed, costing 9,000 jobs in this country, with 150,000 customers having to be brought home at a cost to the taxpayer. When he gave evidence to our Select Committee last week, he said he would reflect on whether he will pay back any of his bonus. What will the Government do to ensure that bonuses can be and have to be clawed back after catastrophic failures of businesses like that?

[Kelly Tolhurst]

I thank the hon. Lady for the work she is doing on the Select Committee. Thomas Cook did have clawback and malus arrangements in place for the recovery of directors’ bonus payments in specific circumstances, as required by the UK corporate governance code. My right hon. Friend the Secretary of State has asked the Insolvency Service to fast-track an investigation, and it will report back. As the hon. Lady outlined, the CEO did advise the Committee on 15 October that he would consider voluntarily surrendering some of his 2017 cash bonus, but it must be pointed out that no bonus was paid to the ex-CEO in 2018.

British Steel

Rachel Reeves Excerpts

Wednesday 24th July 2019 Commons Chamber

[Greg Clark]

I am grateful to my hon. Friend for his participation in the support group in support of his constituents, which has been very valuable. As I made clear, this is for the official receiver, and I do not want to get ahead of his progress. The situation is still not resolved. He has said that it is encouraging, but we need to work very carefully to ensure that it is resolved satisfactorily. In terms of audit, one of the striking things he has found, as my hon. Friend the Member for Middlesbrough South and East Cleveland (Mr Clarke) and the hon. Member for Redcar (Anna Turley) will know, is how loyal customers of British Steel have been, in many cases confirming orders well into the future. Network Rail is one such customer, for two reasons—partly for steel reasons but partly because I believe that we should have big upgrades in our national infrastructure. I very much endorse what my hon. Friend said.

[Rachel Reeves (Leeds West) (Lab)]

I very much welcome the activist approach that the Secretary of State has taken with regard to British Steel. I also welcome the fact that no deadline has been imposed, because the most important thing is that this time we find a buyer who is going to support British Steel, invest in it and see it through to the future, unlike the previous owner. Will he give an assurance that the Government will stand by British Steel until a new buyer is found? He knows full well that if a steelworks is closed, it is incredibly hard to reopen it. I urge him to look again at a sector deal for the steel sector, which is so important for the whole industry’s future. Our Select Committee, the Business, Energy and Industrial Strategy Committee, will be looking specifically at British Steel, but also at the wider steel industry, in our inquiry in September. We will be looking both at the actions that this Secretary of State has taken, which we welcome, and at those of his successor.

[Greg Clark]

I am grateful to the hon. Lady, the Chair of the Select Committee, and I welcome the prospect of that inquiry. There is a lot to examine, and she will approach it with her usual forensic attention to detail. I very much hope that the new Prime Minister will continue the commitment that the current Prime Minister was willing to give and the authority that she has given me to act in the way that I have. She and others will hold to account the new Prime Minister and his team on that.

The hon. Lady is right; there is something special about steel assets in many respects, but one is that if they are closed down, it is very hard for them to spring back into life, so continuity is of great importance. That is one of the achievements that, together, we have been able to bring about over recent weeks.

No one is keener than I am to conclude a sector deal. It requires investment. There is an opportunity for the British steel industry to be more strategic than it has been and, as some other sectors have done, align itself to some of the products that we know will be in demand in the future, backed by research and development. That is the approach that the industrial strategy takes, and it applies in spades to steel, so I hope there will be a sector deal to reflect that.

Oral Answers to Questions

Rachel Reeves Excerpts

Tuesday 16th July 2019 Commons Chamber

[Chris Skidmore]

I think we have the opportunity to look at alternative sources of all energy and power. The latest round for contracts for difference opened in May and will close on 18 June. We have looked at alternative sources of power and we want to be able to explore that. But this is also about creating a market mechanism by which we can look at establishing new technologies, moving away from subsidies and ensuring that we have a proud record for the future on renewable energy supplies.

[Rachel Reeves (Leeds West) (Lab)]

The most recent report from the Committee on Climate Change shows that we are moving in the wrong direction in terms of meeting our fourth and fifth carbon budgets. We have now rightly strengthened those objectives to achieve net zero, but without a single policy to help us get there. The long-awaited energy White Paper has still not been published, so can the Minister confirm today that that White Paper will be published before the summer recess and that it will include policies to get us there with onshore wind, solar technology, battery storage and electric vehicles?

[Chris Skidmore]

The hon. Lady mentions electric vehicles and battery storage. The Prime Minister made a significant announcement yesterday at her business council, attended by the Secretary of State: £500 million-worth of export finance will be provided for electric vehicles. There are also the guarantees on looking at charging points. The White Paper is due this summer; I cannot give any more guarantees beyond that, but it is absolutely critical as the next milestone going forward that we have the legislation in place for net zero, and we now need to set out a plan. The clean growth strategy was set out earlier—late last year. We are on track to meet 90% of carbon budgets 4 and 5, and we will do more to ensure that we meet them.

Climate Change, the Environment and Global Development

Rachel Reeves Excerpts

Wednesday 10th July 2019 Commons Chamber

[Andrew Stephenson]

To go back to the example I have just used of decarbonising transport in this country, “The Road to Zero” is a clear road map that was set out a year ago by the Government. It was not a kneejerk reaction: it was done in consultation with industry, other bodies and our international partners to come up with a credible track to reduce carbon emissions from road transport.

The UN climate action summit in September this year is a key staging post in our efforts. It will be a critical opportunity for world leaders to set out their ambitions ahead of COP 26, and to drive an unprecedented shift in the way we approach resilience and adaptation. Despite the scale of this challenge and the opportunities to be gained from acting, it is often seen as a problem for the future. That is why the United Kingdom and Egypt are co-leading the resilience and adaptation theme at the UN climate action summit in September. We want to drive a transformational change in the way different stakeholders around the world think about and invest in resilience and adaptation.

[Rachel Reeves (Leeds West) (Lab)]

The resilience point is well made and incredibly important. The Committee on Climate Change said today that some 9,000 properties a year need to be fitted with flood protection—up from 500 at the moment. Kirkstall in my constituency flooded in December 2015 and the Government still have not committed to the level of flood protection that the community needs. When the Government speak about resilience, is it not just more warm words and not enough action?

--- Later in debate ---

[Sir Oliver Heald]

Yes; of course, the purpose of the carbon budgets and some of the work of the Committee on Climate Change is exactly to tease out those effects. It is a good thing that the body that we set up to be independent, to give the Government advice and to hold their feet to the fire is doing just that—that is what it is there for. Yes, there are costs, but there are also gains. I just made the point about bioethanol; there is already investment in green jobs in the places where we want them, such as Teesside and the Humber. Those factories could generate more jobs and make money that could be taxed. At the moment, all that is being held back for want of a Government decision of an environmental kind. There is money to be had for the Government in terms of inputs, as well as just outputs, or debits. I agree with the hon. Gentleman to some extent, but we do have a process in hand.

Let me turn to light railway in the context of rural locations. I shall use the example of Buntingford, in my constituency, where housing numbers are being rapidly expanded—basically, planning is being allowed to double the size of the town—but there is no employment, or not much, because it is a rural community, and it does not have a train service. That means there will be many more car journeys, as the new homes go to commuters, who travel mainly to London and Cambridge. If we built a light rail link to Stevenage, people would have the option of going by public transport to the big town to shop or on the main line to work.

Of course, people think that light railway is bound to cost a fortune, because in a city it does—the land has to be bought, and it is incredibly expensive—but we need to look more at whether light railway can be done at a sensible price in a rural location. It would also have environmental and social benefits. I have asked Hertfordshire County Council, which is currently visioning its transport for 2050, to look into the idea, and also to look at whether there might be other possibilities for east-west routes in the county.

[Rachel Reeves]

Both the right hon. and learned Gentleman and my hon. Friend the Member for Harrow West (Gareth Thomas) have mentioned my city of Leeds, so I feel I should stand up and say something. Three years ago we got the first new train station in Leeds for 30 years, and it has made a huge difference to Kirkstall in my constituency. Other new train stations could be opened on existing lines, including in Armley in my constituency. As well as some sort of tram network or underground system, simple things can be done in cities like Leeds, such as reopening train stations and opening new ones on existing lines.

[Sir Oliver Heald]

I am glad that the hon. Lady and I agree on this. In the area near North East Hertfordshire, Cambridge North station was recently opened, and that has had a good effect in respect of building the high-tech businesses in that part of Cambridge. That is another example of using the existing railway system but putting in new facilities.

This might be a bit controversial, but we need to consider as a society where we are going with our shopping behaviour. Walking, cycling or using a low carbon means of transport to visit a bricks-and-mortar shop in a high street is surely more environmentally sound than more and more vans delivering to our doorsteps. We need to consider that in the context of the incentives and disincentives applied by Government.

My hon. Friend the Minister referred to improved environmental fuel for aviation and to electric planes, and such things will happen. This is an enormous subject, but I just wanted to make it clear in my speech that tackling transport emissions is key if we are to meet the net zero carbon target by 2050.

[Chris Law (Dundee West) (SNP)]

First, I apologise for being a couple of minutes late at the start of this debate.

This is such an important debate, as it covers probably the three biggest areas that will affect our lives directly and the lives of our children and of the generations to come. I look forward to travelling to New York next week with other members of the International Development Committee for the High-Level Political Forum on Sustainable Development. This serves as a central United Nations platform for the follow-up and review of the sustainable development goals—I was hoping to hear more about that in today’s debate—which have been described as

“a shared blueprint for peace and prosperity for people and the planet, now and into the future.”

Achieving those goals will be vital for securing global development. Looking at all 17 of them, it is clear that protecting the environment and tackling climate change will play a fundamental role. Let me give some examples. Goal 6, to provide clean water and sanitation, goal 7, to provide affordable and clean energy, and goals 14 and 15, to protect life below water and life on land, all require environmental protection in order to succeed. The fundamental question that we in this Chamber must ask is: how will we achieve goal 1, no poverty, goal 2, zero hunger, or goal 11 on sustainable cities and communities, among many others, when those goals are being put in jeopardy by the disastrous consequences of climate change?

Protecting the environment and tackling climate change must be a priority for all Departments of all Governments in these islands, with clear targets, policies and actions to ensure that that is delivered. As we know, Scotland has a rich and diverse natural environment, and the Scottish Government are determined to lead by example by protecting and enhancing our natural capital.

Studies suggest that the elements of Scotland’s natural capital that can be given a monetary value are worth more than £20 billion each year to our economy, supporting more than 60,000 jobs. Furthermore, many of Scotland’s growth sectors, such as tourism and food and drink, depend on high-quality air, land and water. That is why the Scottish Government are taking action to protect our environment to ensure that we have a thriving and sustainable economy. For example, the Scottish Government have an ambition for Scotland’s air quality to be the best in Europe and have established an air quality strategy called “Cleaner air for Scotland: the road to a healthier future”, with 40 aims to realise this goal. To support this, £10.8 million has been provided to support the introduction of low emission zones—something on which I will touch later and, given what was said by the previous speaker, something that is important for all of us here as well.

Moreover, figures from June have shown that the Scottish Government have met their target of 11,200 hectares of new tree planting and now plan to increase the target further in 2024 to 15,000 hectares. To put that into context, that is 22 million trees. I have to say that, sadly, England has barely managed to make 10% of that, so I am looking to hear more about that later. These actions will not only protect the environment, lead to healthier lives and offer fantastic opportunities for our economy, but play a fundamental role in tackling climate change.

Last month, I spoke in this Chamber and welcomed the UK Government’s decision to legislate for a net zero carbon emissions target by 2050, following the advice of the UK Committee on Climate Change. However, simply setting targets will not solve climate change, and I think we have heard that from across the Chamber. What we need is a clear plan setting out how to transition to a net zero economy. Today, the UK Committee on Climate Change has reported that action to cut greenhouse gas emissions is lagging far behind what is needed, and that the UK’s credibility rests on Government action over the next very short 18 months. There is no time to dither or delay. The Committee has called for a net zero policy to be embedded across all levels and Departments of Government and for the new Prime Minister to lead the UK’s zero carbon transition from day one, working closely with Northern Ireland and the First Ministers of Wales and Scotland.

The Scottish Government’s “Climate Change Plan 2018-2032”, which sets out the actions needed to make Scotland carbon neutral by 2045, is due to be updated within six months of the Climate Change Bill receiving Royal Assent. Work is already under way to meet the enhanced target. Scotland’s energy strategy sets a target for the equivalent of 50% of energy for Scotland’s heat, transport and electricity consumption to be supplied from renewable sources by 2030. In order to help achieve net zero emissions, a publicly owned not-for-profit energy company will be established to deliver renewable energy to Scottish customers. This is not a party political debate about the left or the right, but a debate about how we can combat not only climate change but fuel poverty. The reason for setting up that company is that it will endeavour to ensure that the price is as close to cost price as possible. I urge the UK Government to do that for the rest of the UK, as well as to achieve their recently set targets.

Furthermore, with transport accounting for just over one third of total energy demand, Scotland already has the most ambitious agenda in the UK for decarbonising transport. The Scottish Government have already announced the change in policy on air departure tax and committed to phasing out the need for new petrol and diesel cars by 2032—eight years ahead of the rest of the UK. The plan is to implement low emission zones in Glasgow, Edinburgh, Aberdeen and my wonderful city of Dundee by the end of 2020.

To help achieve all that and send a clear signal that Scotland is a place for innovation and low carbon technology, the Scottish Government will establish an innovation fund to invest a further £60 million in delivering wider low carbon energy infrastructure solutions across Scotland, such as electricity battery storage, sustainable heating systems and electric vehicle charging. The expansion of the charging network will raise awareness and uptake of ultra low emission vehicles among private motorists and accelerate their procurement in the public and private sectors. I am disappointed that the UK Government withdrew the tax incentive from electric vehicles last December; I hope that they will consider putting it back, so that more people move towards electric vehicles again.

[Rachel Reeves]

Does the hon. Gentleman share my concern that the most recent data shows that the number of electric vehicles sold has actually fallen? That suggests that the cut in grant and the failure to deliver the charging infrastructure is deterring people from buying the cars that all of us in the Chamber believe people should be buying to help reduce our carbon emissions.

[Chris Law]

The hon. Lady is absolutely right. This is fundamental: if we want to change public behaviour, we have to put the carrots and sticks in place. Things have happened since 2015. For example, the cancellation of the carbon capture and storage project at Peterhead and the removal of tariffs for on-land wind generation are two other factors that should be reconsidered.

I am pleased to say that my own city of Dundee has the highest proportion of electric vehicles in its council fleet in Scotland and one of the largest electric taxi fleets in the UK. As a result, people now feel that the electric charging points across the city are not novel but normal to use.

I have to correct something. I keep hearing that the UK was the first country to declare a climate emergency, but in fact Scotland was. We understand that we will need to go even further. Progress to date has been achieved with little impact on most people; few of us have had to make any real radical lifestyle changes.

--- Later in debate ---

[Rachel Reeves (Leeds West) (Lab)]

It is a pleasure to follow the hon. Member for Chichester (Gillian Keegan).

The Business, Energy and Industrial Strategy Committee, which I chair, working with five other Select Committees, will in the autumn be setting up a series of citizens’ assemblies to address exactly the challenges and issues that the hon. Lady has mentioned. If we are going to achieve net zero, it will of course require Government policies and Government action, but it will also require all of us to do things differently in our own lives—whether that is the number of times a year we fly, the cars we buy, our diet or how we heat our homes. All of these things will require trade-offs, but I believe they will also create huge opportunities.

The hon. Lady spoke about some of the negative changes in our lives but, over the past few years and decades, reducing our carbon emissions has created better cars and more jobs, and I believe that moving towards a net zero economy and a net zero society will create more jobs and more opportunities. If we are at the forefront and lead this new industrial revolution, we stand to benefit the most from it—we will not stand to lose the most, as some hon. Members seem to suggest—because we will create jobs, skills and technologies that we can export to other countries. That will grow our economy in a way that does not destroy our planet.

[Derek Thomas]

I thank the hon. Lady for her enthusiasm and for the opportunity to intervene. She will be aware that the Committee on Climate Change has said that this is about upscaling and making sure that we have the skills we need right across the country. In places like Cornwall, which I represent, the skills are not there and low-paid jobs are the norm. Does she agree that this gives us the opportunity to create wealth and spread it across every corner of the United Kingdom?

[Rachel Reeves]

I absolutely agree. Some of those coastal towns, cities and regions stand to benefit the most. In my own region, Yorkshire and the Humber, the job opportunities from offshore wind have helped to transform previously deprived communities. There will be huge opportunities in Cornwall, with battery technologies giving huge potential for growth and jobs in an area that desperately needs them.

[Gareth Thomas]

I endorse the remarks of my hon. Friend and of the hon. Member for St Ives (Derek Thomas) on the huge potential for offshore wind to create new jobs in this country. Does she agree that the solar industry also offers significant potential for new jobs, and that it would be good to hear the Government’s plans to accelerate the requirement to put solar panels on new buildings?

[Rachel Reeves]

I very much agree with my hon. Friend, and I would also add the opportunities from onshore wind, which the Government disappointingly continue to block, and from tidal power. The experience of offshore wind is that, after initial Government support and investment, the industry and the energy it produces can become cheaper than those it replaces, which again provides big opportunities for jobs and investment.

Sir David Attenborough gave evidence to the BEIS Committee yesterday. Right at the beginning, he said that the environment around us is essential for every breath we take and everything we eat, as well as for our sanity and our sense of proportion. How we treat our natural environment and what we put into it is incredibly important.

As you can imagine, Madam Deputy Speaker, the BEIS Committee always has huge audiences for every inquiry and every evidence session, but our audience yesterday was particularly large, and the attendance was pretty impressive, too. The audience was also very young.

The Minister said at the beginning of this debate that when he goes into schools in his constituency they often talk about these issues, which is inspiring and gives us all hope for the future. The next generation, who listened to our evidence session yesterday, and the generation after that, who are at Castleton Primary School in Armley and Beecroft Primary School in Burley in my constituency, know what a priority this is, and I hope they will continue to press us to make it our priority in this place, too.

I am proud that this was the first Parliament to pass a climate change Act in 2008, and that the current Parliament has set a target of achieving net zero by 2050 but, as Lord Deben said on the publication of the report of the Committee on Climate Change today, international ambition does not deliver domestic action. That is an important point for us to dwell on. I welcome the bid to host COP 26 next year, and I welcome the fact that we are the first country to legislate for net zero, but we will achieve it in 2050—I hope we achieve it sooner—only if we put policies in place today to make it happen.

[Bambos Charalambous (Enfield, Southgate) (Lab)]

My hon. Friend is making an excellent speech, and I entirely agree with her. Enfield Council will pass its climate change plan tonight but, on her point about the need for action, does she agree that one action the Government could take is not to subsidise fossil fuels? Fossil fuels have caused so much damage over the years, particularly in developing countries.

[Rachel Reeves]

We have made huge progress in just the last decade in terms of our reliance on fossil fuels, and we can now get through a week or two without using coal. By 2025, we will not be using coal to generate energy in this country, and that is fantastic. But as the shadow Secretary of State for International Development said in his speech earlier, we are still funding and investing in the development of fossil fuels overseas. Climate change and the emission of carbon is not something that we can just tackle here at home. It is no good reducing our carbon emissions in the UK if we fund investment in them overseas. That is why international action matters, but so do the investment decisions that British companies and the British Government make. Like Enfield, Leeds City Council has declared a climate emergency and is putting in place policies to address it, which is very welcome in our city.

[Dr Sarah Wollaston (Totnes) (Ind)]

Has the hon. Lady’s Committee looked at the issue of three-phase electricity supply to homes? One of my constituents is keen to invest in solar and Tesla-style wall plugs so that they can recharge vehicles and so on, but the cost of installing the necessary three-phase electricity supply is a problem. Does she feel that that would be a better area for the Government to invest in and allow us to expand renewables?

[Rachel Reeves]

Electric vehicles have been discussed quite a bit already today, and much more could be done to encourage people to buy them and to make it easier for people to charge them, as well as to get the charging infrastructure in all communities, including more rural ones.

Our Committee has produced several reports over the last few years on practical things that the Government could do. It has been disappointing at times that our recommendations and suggestions are often rejected by Ministers, when if they had accepted them, we might be a little closer to meeting some of our objectives. On electric vehicles, our Committee recommended that the target of 2040 be brought forward to 2032, and that was before the Government committed to net zero.

The Committee on Climate Change today said:

“The ‘Road to Zero’ ambition”—

which the Minister is obviously proud of—

“for a phase-out of petrol and diesel cars by 2040 is too late and plans to deliver it are too vague. A date closer to 2030 would save motorists money, cut air and noise pollution and align to the net-zero challenge.”

I urge the Minister to look at the evidence from the Committee on Climate Change, and the evidence that our Committee took, which points resolutely to the need to bring forward the date for phasing out the internal combustion engine.

While we welcome decisions by companies such as Jaguar Land Rover to invest in a new fleet of electric vehicles, we need to do more to work with our car manufacturing industry to turn the Faraday Institution’s ideas and research into practical applications that can revive our British car industry and keep more jobs here, while not polluting the planet in the way that the car industry has in the past.

Everybody who gave evidence to our Committee said that there is no way that we would meet even our previous targets without the roll-out of carbon capture and storage. But we are still waiting for Government decisions on investment in that industry, so that we are not just doing the research and development in labs, but are trialling it and piloting it in some of our communities. That goes back to the point that the hon. Member for St Ives (Derek Thomas) made earlier about communities all over the country. The communities that stand to benefit most from carbon capture and storage are in the north-east, Humber, Merseyside, south Wales and Fife, for example—all areas that desperately need jobs and investment. If the Government unlocked the funding, which they have previously cut, they could ensure more good-quality jobs all over the country while contributing to reducing our carbon emissions.

Our Committee has also just concluded a report on energy efficiency, which we will publish soon. Without giving away the findings—my Clerk might be watching—we heard a lot of evidence that the homes we are building today will need to be retrofitted in years to come because they are not of a high enough energy efficiency standard. It seems nonsensical that we know we are building homes today that will have to be retrofitted in future. Those who got planning permission on a development five or 10 years ago only have to meet the energy efficiency rules and regulations from when they got that planning permission, not those in place today. If we just fixed those things, we would be building homes that do not contribute to global warming in the way that they do today.

The Committee also heard evidence that since the Government scrapped the green new deal, improvements to existing housing stock are just not happening. They are not happening in social housing, the private rented sector or the owner-occupied sector. Unless that happens, we have no chance of meeting the net zero commitments. I urge the Government to look at that when our report is published, and not reject our conclusions and recommendations, which happens far too often, but engage with them, adopt them and put them in place. Only by doing that do we have any chance of meeting the targets that we all say we want to achieve.

[James Heappey (Wells) (Con)]

I have been following the hon. Lady’s Committee inquiry into energy efficiency with great interest. The evidence she has received has been compelling and I look forward to the report. Does she agree that the need to focus on energy efficiency is unarguable, because if we are going to pass on to consumers the inevitable cost as we transition our energy system, doing that alongside the savings that come with a focus on energy efficiency seems to me to be a fair contract with the consumer?

--- Later in debate ---

[Rachel Reeves]

The hon. Gentleman makes an excellent point. We often debate the cost of living in this Chamber. One of the big contributors to the cost of living is the cost of gas and electricity. This Parliament legislated for a cap on energy prices—I welcome that and our Select Committee conducted important pre-legislative scrutiny work—but the cheapest sort of energy is that which we do not use at all. If we improved the energy efficiency of our homes, we would have lower bills. A Government investment strategy through the National Infrastructure Commission that retrofitted homes, particularly for people on lower incomes, would therefore help to reduce our carbon footprint and put money back in the pockets of some of our poorest constituents. That would be a double win and we should all work together to achieve that.

[Stephen Kerr]

I am grateful to the Chairman of the Select Committee that I have the privilege of serving on for giving way. There is a triple win here. A lot of ill health stems from poor-quality housing stock. If we were to have a national mission to upgrade our housing stock, one key benefit would be an improvement in the nation’s health. That would save us a lot in health costs.

[Rachel Reeves]

I thank the hon. Gentleman—I was going to call him my hon. Friend, because he is very much my friend and an excellent member of my Select Committee. He makes a really important point. I do not think any Member in this Chamber has not had a constituent come to their surgery because of problems with a damp or poorly insulated home, while also paying astronomical gas and electricity bills. Would it not be wonderful if we could fix that, particularly for our poorest consumers?

I would like to finish where I started—with what Sir David Attenborough said at our Select Committee yesterday. He said that we “cannot be radical enough” when addressing climate change. If we listened to the young people who have been on strike, the protesters, the people who came to listen to that evidence session and all the people who tune into programmes about our natural environment, this would be a national emergency. We would be taking steps commensurate with the scale of the challenge. I very much welcome the Government’s commitment to net zero by 2050, but it is now imperative that we put in place the policies that will help to achieve that, so that our generation can pass on to our children and grandchildren a better world and a better planet.

Climate Change

Rachel Reeves Excerpts

Monday 24th June 2019 Commons Chamber

[Chris Skidmore]

My right hon. and learned Friend has also raised that point with me in private, and I am happy to raise the issue of bioethanol with the Department for Environment, Food and Rural Affairs, which has responsibility for agriculture. It is important to reflect that, as part of a grand challenge in our industrial strategy, we have set out a number of missions on the future of mobility and transport in our cities, including the reduction of congestion, the introduction of electric vehicles and the adaptation of battery technology. I was delighted to visit Warwick Manufacturing Group on Friday, to discuss the advances it has made with lithium batteries. We must do that because of the need to reduce not just carbon emissions but air pollution; we know that tens of thousands of people are literally dying as a result of air pollution in our streets and cities, so the impact we make today is not just for 2050 but for now.

[Rachel Reeves (Leeds West) (Lab)]

The Government have committed to phasing out new sales of the internal combustion engine by 2040. My Select Committee on Business, Energy and Industrial Strategy has recommended that the date be brought forward by almost a decade, if there is to be any chance of meeting the commitment of net zero by 2050. Will the Minister look again at the phasing out of the internal combustion engine, so that we can get more electric vehicles on our roads and bring down carbon emissions?

[Chris Skidmore]

I could not agree more with the hon. Lady: we want to see the greatest possible transition, as fast as possible, to electric and hybrid vehicles for the future, but we have to be able to do it in a sustainable way. We have to ensure that electric vehicle technology, including batteries and other opportunities, moves with us at the same time. Other countries have moved faster than us, and I recognise the points the hon. Lady makes, but what is important is that we begin this discussion about how we can achieve that. There are a number of policy measures by which we can do it. There is also a supply-side as well as a demand-side issue when it comes to electric vehicle technology, and we need to be able to work on both sides of that economic argument in order to increase the number of electric vehicles on our roads. There are issues about charging points, which I also recognise. We need to do it in a sustainable and affordable way that ensures that we can continue a transformation of the economy.

--- Later in debate ---

[Rachel Reeves (Leeds West) (Lab)]

I am proud to speak in this debate, and I am proud that the country that first legislated with the Climate Change Act in 2008 is going a step further today by updating the Act and will be the first G7 economy to legislate for net zero. I think we should all be proud of those achievements. But the role of Parliament, and my role as Chair of the Business, Energy and Industrial Strategy Committee is, where appropriate, to push the Government to go further in a whole range of areas. Those areas include electric vehicles and carbon capture and storage, on both of which my Select Committee has produced reports. Another is energy efficiency, on which a report is coming shortly looking at energy efficiency in homes and at the building of homes—we must not build homes today that we know are not fit for the future given the new commitments that we are making.

Other such areas are international aviation and shipping, which I am disappointed are not included in the SI we are debating today. The chief executive of the Committee on Climate Change, Chris Stark, who gave evidence to our Select Committee, said that it was absolutely imperative to include international aviation and shipping in our climate change commitments, because they contribute 10% of our carbon emissions. I hope the Government will look at that evidence again and update our legislation in light of it.

There are other things that we need to do. Our Committee took evidence last week, including from the World Wide Fund for Nature, which said that a target of 2045 was eminently possible. We heard other evidence that by 2050 we should be looking not at net zero, but at taking carbon out of the atmosphere, as my hon. Friend the Member for Southampton, Test (Dr Whitehead) said earlier, with a 120% target to do exactly that. I hope that when we have the five-year review we can look at being more radical and going further, so that we achieve net zero before 2050 and continue to be a world leader and ensure that we are at the forefront of creating green jobs and taking the opportunities that meeting this target will offer.

However, achieving all that goes well beyond our debates and the decisions we take in this House, and that is why I am also pleased that, along with five other Select Committees, my Committee announced last week that we will be setting up a series of citizens assemblies to bring the public into this debate. Debates and resolutions in this House are not going to take carbon out of the atmosphere; they are not going to get somebody to buy an electric vehicle, or eat less meat, or farm in a different way, or build houses in a different way. To do that we need to take businesses and everyone with us. I hope that those citizens assemblies will look at the evidence, take evidence from a range of experts and deliberate on how all of us can play our part, and I hope that we collectively find that we have in us, in all our communities, the solution to the challenges we face today so that all of us can play our part in achieving a really important objective. That is what all of us should set out to do.

Businesses: Late Payments

Rachel Reeves Excerpts

Wednesday 19th June 2019 Commons Chamber

[Mr Deputy Speaker (Sir Lindsay Hoyle)]

I call the Chair of the Business, Energy and Industrial Strategy Committee, Rachel Reeves.

[Rachel Reeves (Leeds West) (Lab)]

Thank you very much, Mr Deputy Speaker.

When our Select Committee looked into this issue, many small businesses insisted on giving evidence in private, so worried were they about retaliation from the big businesses that they supplied. Larger businesses, including Morrisons, Aldi and WH Smith, are not signatories to the prompt payment code, while Boots pays suppliers at a discount for the privilege of their being paid on time. The power imbalance is so great now between bigger and smaller businesses that. I urge the Government and the Minister to look again, make the prompt payment code mandatory and bring down the period to a benchmark of 30 days.

[Kelly Tolhurst]

I thank the hon. Lady and highlight again the significant work that her Committee has done on this issue, including with our Department. She is absolutely right to highlight the power imbalance, which is why many small businesses feel that they are unable to speak out. That is why we are seeking views in our consultation on powers for the small business commissioner. We will seek to enable the Small Business Minister to make a referral to the small business commissioner; to give the commissioner investigatory powers similar to those of the Groceries Code Adjudicator; and to empower him to carry out an investigation without the small business involved having had to report the issue. There is a suggestion that the process could be anonymised.

The hon. Lady raises an important point, and I am very much aware of it. It will be very much part of my drafting, with the team, in regard to the consultation.