Covid-19: Household Debt

Rebecca Long Bailey Excerpts

Thursday 8th July 2021 Westminster Hall

[Rebecca Long Bailey (Salford and Eccles) (Lab) [V]]

It is a pleasure to serve under your chairmanship, Mr Bone. I thank my hon. Friend the Member for Makerfield (Yvonne Fovargue) for the securing this important debate and for her brilliant contribution.

Although the Government trumpet the billions spent so far during the pandemic on support such as on furlough and business support grants, we all know that millions have been excluded from support, or worse, have lost their livelihoods. As each day goes by, many fall further and further into debt. As we have heard, StepChange estimates that between the start of the pandemic and March this year, 11 million people built up £25 billion of arrears and debt. Unsustainable household debt is not just devastating for those involved; it damages the economy. Economic activity declines as households in debt cut back their spending, and the banking system is affected when there are loan defaults. Without a clear covid recovery plan that tackles the household debt balloon, our ability to recover economically from the pandemic will be in peril.

I will outline briefly a few elements that I would like the Minister to consider. For immediate support to repay council tax and rent debt, the Jubilee Debt Campaign and other organisations advocate providing grants directly to households to help clear rent debt and council tax arrears. I agree with other speakers that the £20 uplift in universal credit must be maintained and should be extended to those on legacy benefits. There must be an emergency grant for the millions who have been excluded from any Government support and complete parity with the extension of the coronavirus job retention scheme and the self-employment income support scheme. Payments for those excluded should also be backdated.

To manage long-term debt, the Government must first remove barriers to insolvency procedures such as debt relief orders. There should also be fair debt write-down. Many lenders sell on their problem debts for a fraction of their value, only for debt collectors to enforce them at their full value, which places debtors under increased and unnecessary pressure. The Government could tackle that by creating a consumer version of UK Asset Resolution, the public finance company that was set up to purchase problem debts from the banks during the financial crash. Such a public vehicle would allow the offloading of many problem debts, to be refinanced at affordable rates for borrowers. Only the Government can borrow at low interest rates to make that happen effectively.

Finally, is the option of a debt jubilee must be examined —writing off some debts for households and businesses that will simply never be able to repay them, even at more affordable rates. Even former Chancellor George Osborne has called for all coronavirus emergency debt taken out by small and micro-businesses to be forgiven. In practice, that would need to be carefully and strictly limited to specific types of problem debt. An example of how it could work is if a lender decided that an outstanding loan was simply not going to be repaid, they could discharge the debt and be offered a tax break in return.

The Government must heed the warning signs. Responding to the growing covid debt crisis is not just morally the right thing to do, but essential if we are to have any chance of rebuilding our economy as the pandemic ends.

Economy Update

Rebecca Long Bailey Excerpts

Wednesday 16th June 2021 Commons Chamber

[Steve Barclay]

My hon. Friend is absolutely right that businesses will continue to benefit from support. It is about getting the balance right between support for businesses and the cost to the Exchequer. There was 100% support for those businesses last year, and this year it equates to a 75% reduction in their business rates bill across the financial year.

[Rebecca Long Bailey (Salford and Eccles) (Lab) [V]]

Both the Association of Independent Professionals and the Self-Employed and the CBI have this week called for urgent sector-specific support packages; the British Chambers of Commerce and the TUC have urged the extension of the full furlough scheme; and ExcludedUK has reiterated calls to support the millions who have been left without support for over 15 months.

Will the Chief Secretary heed these calls and commit today to outlining urgently updated sector-specific support for industries subject to continuing restrictions, to extending the full furlough scheme for as long as needed and, finally, to ensuring a comprehensive and backdated package of income support for the excluded?

[Steve Barclay]

We have already covered the point that furlough has been extended until the end of September. As I said in my answer only a moment ago, there are specific sectoral support packages in addition to that. At the same time, we need to get the balance right between that and the very considerable cost to the Exchequer—borrowing £200 billion last year and with significant further borrowing this year and next. We need to get the balance right between that level of borrowing and the wider package of support offered.

Finance (No. 2) Bill

Rebecca Long Bailey Excerpts

Committee stage & Committee of the Whole House (Day 1)
Monday 19th April 2021 Commons Chamber

[Seema Malhotra [V]]

In my limited remarks, I want to support the arguments made by my hon. Friend the Member for Ealing North (James Murray), and to speak in support of Labour’s new clause 23, to which I have added my name, seeking an equality impact assessment of the measures in the Bill that affect family incomes. This includes the impact of specified sections of the legislation on households at different levels of income, on people with protected characteristics, and across the regions and nations of the UK.

About 700,000 people have lost their jobs since February last year, and many more families have seen a drop in their household income. Over 39,000 are now on universal credit in Hounslow alone, and we have seen a huge rise in the use of food banks. There is no doubt about the importance of financial inclusion at this time. The Financial Inclusion Commission, on which I sit, has highlighted how there are now millions more people facing economic hardship as a result of the covid-19 pandemic. However, the UK entered the crisis with half its population financially vulnerable: 12 million categorised as financially struggling or generally on low incomes, and 13 million as financially squeezed. Covid has laid bare existing weaknesses, vulnerabilities and structural inequalities, and StepChange research shows that 10% of people say they will certainly or probably be unable to pay for essentials in the next 12 months.

We know child poverty, already extremely high, is rising, so it is inexplicable, when the Government themselves have said in the Budget report that the

“economic impact of restrictions has not been felt equally”,

that they have not themselves published an impact assessment. It should not be for the Opposition to table this vital amendment. It seems that instead of taking action to boost our community recoveries, the Conservatives are choosing to reward families up and down the country for their sacrifices with council tax hikes, the freeze to the personal allowance from next April a whole year before corporation tax rises kick in, a real-terms pay cut for key workers and cuts to universal credit later this year, a move now even opposed 100 Tory MPs.

Even when the Chancellor has done the right thing, such as extending furlough, as Labour called for, these moves need to be underpinned by a strong social security system that provides support when people need it. People need to be protected from financial exclusion and families need a clear route out of financial difficulty when they are struggling. The Chancellor could also look at how Sadiq Khan is working to promote financial inclusion through partnership with the financial sector, social enterprises and credit unions, and at his plans for a new team dedicated to economic fairness.

But instead of economic fairness, what we know is coming is the £20-a-week cut to universal credit for millions of families within six months, just when the OBR predicts that unemployment will peak. It is a cut that takes out-of-work support to its lowest levels since the 1990s. That is why Labour has also called for urgent social security measures, including converting universal credit advances to grants instead of loans, ending the five-week wait, suspending the benefits cap and uprating legacy benefits to match the increase in universal credit. About 2.2 million people on legacy benefits have been deprived of the uplift, and given that three quarters of those claimants are disabled and on employment and support allowance, this has created a two-tier social security system that has left many struggling to cope. Evidence from the Disability Benefits Consortium found that 67% of disabled claimants have had to go without some essential items at points during the pandemic.

Minority ethnic communities have been hardest hit by both the health and economic crisis. The Resolution Foundation found that, at the end of last year, unemployment among young black graduates had risen to 34%, up from 22% before the pandemic, and almost three times that of young white graduates during the same period. StepChange research also shows that those from an ethnic minority are twice as likely, compared with the GB average, to say that they have experienced hardship, borrowed to make ends meet or have run down savings.

In conclusion, the Chancellor is hitting families up and down the country, with a quadruple hammer blow of council tax rises, cuts to universal credit, real pay cuts for key workers and the freeze to the personal allowance. If the Chancellor wants to work for a fairer Britain and build a more inclusive and financially inclusive economy, he needs to know who his policies are helping and who they are not. That is why we need an impact assessment, as called for in new clause 23, and the Government should support it today.

[Rebecca Long Bailey (Salford and Eccles) (Lab) [V]]

I speak to oppose clause 5 stand part, and in support of amendments 2, 3 and 4 in the name of my right hon. Friend the Member for Hayes and Harlington (John McDonnell) and others, as well as amendments in the name of my hon. Friend the Member for Streatham (Bell Ribeiro-Addy) and amendments from the Labour Front Bench.

The Chancellor committed to doing whatever is necessary to support people and businesses through the coronavirus pandemic. I want to believe him, but the £20 a week covid uplift to universal credit will be cut just at the time when the OBR has predicted that unemployment will peak. There has been no uplift at all, as we have heard, in covid support for those on legacy benefits or affected by the benefit cap. At the same time, an equivalent cut in working tax credit for households that have not yet made the move to universal credit will be imposed.

Further councils, whose budgets have been decimated over recent years, will be forced to increase council tax by up to 5%, pressuring household budgets even further, so the Bill is already sorely deficient in honouring the Chancellor’s original promise. However, in clause 5—the proposal to freeze the personal tax allowance—the promise is sadly contradicted entirely. The reality of the clause is that, if there is wage inflation over the next five years, someone earning just under the threshold now, for example, who then receives an inflationary pay increase for 2022-23 will start to pay tax.

As the Resolution Foundation has found, the poorest fifth of households are twice as likely to have seen their debts rise rather than fall during the crisis, so taking some of those lowest earners beyond the personal allowance threshold as their wages might slightly increase with inflation could result in their financial devastation. I therefore supported calls to remove clause 5, or at the very least for the Government to compromise and delay the changes.

I will also briefly mention clause 32 on self-employment income support. I do not disagree with the sentiment of the clause but, as the Government know, the support still does not go far enough. More than 2 million remain excluded from any Government support at all and, as I have repeatedly told this House, some have sadly taken their own lives as a result. I once again urge the Government to provide an immediate emergency grant to those affected, install new monthly arrangements while restrictions remain in place in complete parity with the extension of the coronavirus job retention scheme and the self-employment income support scheme, and remove the hard edges to eligibility criteria. Finally, they should backdate payments for a full and final settlement to deliver parity and fairness for those excluded from meaningful support.

[Jim Shannon]

It is a pleasure to serve under your chairmanship, Ms McDonagh. I very much welcomed the Minister’s response when I asked him about the Low Incomes Tax Reform Group. I will send him all the information that I am concerned about, which I hope he will be able to answer.

Clause 31 ensures that the one-off £500 payment for certain working households receiving tax credit is not taxable, which is welcome. The problem arises when a person receives a payment that they were not entitled to under the rules. As the payment is made automatically by HMRC without requiring a claim from the individual, if HMRC mistakenly makes a payment to someone who is not entitled to one under the direction and it is not subsequently repaid, it appears that the tax credit claimant will automatically be subject to a tax charge under the Finance Act 2020. That triggers notification requirements for the individual, assessing powers for HMRC and potential penalties.

I would like to understand whether consideration has been, or will be, given to ensuring that HMRC will set the bar high in terms of what constitutes fraud, and whether it will be limited to those people who fall under section 35 of the Tax Credits Act 2002, in relation to their underlying tax credit award. Over the last period, you, Ms McDonagh, I and everyone in this House has seen young families on the brink of financial collapse—in particular, in my office, due to the inconsistencies of the working tax credit as between those who are self-employed and those whose annual pay packs are constant.

Briefly on clause 32, I highlight the fact that taxpayers who have made amendments to their self-assessment tax returns on or after 3 March 2021 may have to pay back some or all of the grants that they have claimed. There is a real concern, which I share, that unrepresented taxpayers may not be aware of their obligations to notify HMRC and, accordingly, may face penalties, inadvertently and perhaps without right. Minister, how will we ensure that HMRC will take steps to ensure that taxpayers become aware of any obligation to repay in time to avoid such penalties? In particular, it is unsatisfactory that taxpayers who have made amendments on or after 3 March 2021 but prior to the date of the claim appear to be obliged to pay back some or all of the grant immediately upon receipt. Some may be unaware that they have to do so, but they face harsh penalties, which were originally aimed at fraudulent claims or for failing to do this on a timely basis. So I am concerned that innocent participants in this process may find themselves in difficult times.

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[Antony Higginbotham (Burnley) (Con)]

I agree with almost everything my hon. Friend the Member for North East Bedfordshire (Richard Fuller) said about corporation tax. It is a tax on success, and on this side of the House we are all naturally low-tax Conservatives—we believe fundamentally that businesses are most successful when they are left to innovate and grow, and can keep more of the money they earn. However, we also have to accept that that is not the only thing that drives businesses. Globally adaptable businesses that look around the world at where they are going to locate their next manufacturing plant or innovation look at myriad factors: the support available; the skills of the local population; and the infrastructure in place. All of those things cost money. As we have seen during the past 12 months, the Government have gone to great lengths to support businesses. In my constituency, 11,000 jobs have been supported by the furlough scheme. That is money that has helped businesses across Burnley and Padiham prepare and stay ready for when the economy reopens. We are also talking about £20 million in grants so that those same businesses can restart as soon as the economy opens up. All businesses understand that; they understand that responsibility comes with this and the taxation they pay enables them to take part in society in a meaningful way.

With all that in mind, I agree with the measures my right hon. Friend the Chancellor set out on corporation tax, as a low-tax Conservative. I do so because the Chancellor has struck exactly the right balance in making sure we secure the economic recovery first: we do not look at businesses now as they are just starting to reopen and get trading again and say, “Just because you are profitable, we are going to increase your tax rate immediately”; we look ahead and say, “When the economy has recovered and you are trading as you were pre-pandemic, that is when we will look for you to make a fair contribution to repay some of the support we have been able to put in place.”

In Burnley and Padiham, we are heavily reliant on small and medium-sized enterprises—those small innovators. As we recover from the pandemic, we often see the most SMEs and new businesses start up; people who used to work for one company and who may have been made redundant—something may have happened—then start their own businesses. That is why the small profits rate of corporation tax is so important, because it is the incentive those innovators and entrepreneurs need to start their business, to grow, to employ someone else.

We also have to recognise that one thing we have suffered from historically in the UK, for many, many years, is low productivity, and that has come from a huge lack of investment from businesses. If we are really going to level up across the country, we need to drive investment in growth and utilise the power the private sector has through whatever means are available to us. We know that since 2007-08 there has been a systemic lack of investment, driven by the uncertainty we have had, so that there is a pot of money that so many businesses are sitting on, waiting to be unlocked. That is where the super deduction will prove so important, because it encourages those businesses that have had a stockpile—that have lived with uncertainty for the best part of a decade and so have not been able to invest, as they have not had that confidence. As we emerge from the pandemic, the super deduction gives them the confidence to invest.

In Burnley, we are talking about aerospace manufacturers, automotive manufacturers and textile makers. The super deduction will help businesses transition to green technology, as we have spoken about. It will help aerospace businesses to move into HS2 and textile companies to move into weaving—we do still make textiles here in the UK.

All of these things will result in a high-skill, high-wage manufacturing economy here in the UK. So, yes, we need to keep the UK attractive to investment, job creation and new businesses, but we do that through a fair corporation tax system, lower rates for new businesses and using schemes such as the super deduction to drive investment into manufacturing jobs, which are going to be so vital for our future.

[Rebecca Long Bailey [V]]

I will limit my comments to the super deduction which, as we have already heard today, will be one of the largest single-year tax giveaways ever enacted in the UK. Arguably, some companies’ corporation tax bills will be wiped out entirely for a couple of years.

My right hon. Friend the Member for Hayes and Harlington (John McDonnell) has already said that the Public Accounts Committee found that tax reliefs cost more than £100 billion a year in forgone tax, but HMRC does not know how many reliefs exist; nor does it monitor the efficacy of such reliefs. That is staggering. Can we be confident that HMRC will know what effect the super deduction will have, and who will actually benefit from it? Many of my small and medium-sized enterprises in Salford would love a super deduction, but sadly it will not benefit them. The Financial Secretary to the Treasury told the House last year that the enhanced annual investment allowance of £1 million already covers the capital expenses of 99% of businesses in the UK, so it seems that this super-relief will overwhelmingly benefit only 1% of extremely large businesses.

I would have no problem if such businesses desperately required the relief in order to protect jobs or to invest in our local economies, but let us look at some of the potential beneficiaries. Amazon has benefited from the pandemic, seeing its sales jump by 50%. According to TaxWatch, the company’s latest accounts show that they spent £66.8 million on plant and machinery, £80.4 million on office equipment and £15.3 million on computer equipment in the same year, so the 130% super deduction could entirely account for the pre-tax profits of the company even before any deductions of staff pay awards.

Similarly, many energy and water companies find themselves also able to wipe out their tax bill. United Utilities spent £1.275 billion on property, plant and equipment in the past two years, compared with a current tax liability of just under £89 million. Electricity North West stated that covid has had a limited impact, and it had a tax bill of £45 million for 2019-20 while investing £449 million in property, plant and equipment. For both companies, it would only take a small proportion of the capital investment to be spent on plant and equipment to use the super deduction to eradicate their tax bill, too.

Do these buoyant companies really need a super deduction? The answer is no. In the absence of any clear conditions specifying the use of such savings or providing a wider social benefit, such as increasing salaries for workers, investing in decarbonisation or reducing costs for end consumers, I struggle to see the benefits being passed on to anyone other than shareholders.

I hope that the Government support amendment 11 and new clauses 1, 2 and 6 in the name of my right hon. Friend the Member for Hayes and Harlington and others, as well as the Labour Front-Bench amendments, because there are companies that do need support to help them recover from the pandemic. There is a real need to support long-term, patient investment by industry, but the untargeted nature of this relief, without conditions, is not the best use of public money. In fact, it borders on the obscene.

[Rachel Hopkins (Luton South) (Lab) [V]]

I shall speak in support of the amendments in the name of the Leader of the Opposition and those in the name of my right hon. Friend the Member for Hayes and Harlington (John McDonnell). The Budget and Finance Bill represent the Government taking steps towards further structuring our economy on insecure, precarious work and deregulation, which will widen income and wealth inequality.

The Government’s unambitious plan provides neither a foundation for rebuilding our economy nor a plan to tackle the climate emergency that my constituents have called for. They have announced a future cut to social security and a real-terms pay cut for public sector workers at the same time as introducing a super deduction tax cut for big businesses, allowing firms to write off 130% of the value of qualifying capital investment against their taxes.

When we look across the Atlantic to the US, we see a stark contrast. The Biden Administration have committed to fast-tracking a $1.9 trillion Government-led stimulus package, which is about 10% of the annual output of the US economy and which contained no promises of future deficit reduction. That is alongside a forward-looking plan to spend a further $2 trillion on infrastructure. Biden’s spending plan, in proportion to GDP, is three times the size of the UK’s.

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[Sir Bernard Jenkin]

I am very pleased, Dame Eleanor—if I may address you correctly—to make common cause with the hon. Member for Richmond Park (Sarah Olney) at the outset. We can agree that freeports are necessary but not sufficient to deal with regional disparities and levelling up.

I am none the wiser from the contribution by the hon. Member for Erith and Thamesmead (Abena Oppong-Asare) whether the Labour party is in favour of freeports or against them. I would just point out to her that I spent a certain amount of my period in opposition, which was a miserable 13 years, as shadow Secretary of State for the regions, and though the Labour party was elected in 1997 with a very sincere determination to reduce economic disparities between London and the other regions of England and the other parts of the United Kingdom, it failed, and those disparities got wider.

This is a very difficult thing to address, and the answer is that we should use every tool in the box. We should use every tool we possibly can. It is also perfectly clear that all the tools are not available if a country stays in the European Union. Some of the tools were taken away from the Republic of Ireland at its Shannon freeport when it joined the European Economic Community, and it got worse; the notion that tax advantages or tax incentives were artificial tax subsidies was extended.

Of course, we want to see other tax advantages extended to other parts of the United Kingdom, such as differential rates of corporation tax, which we have extended to Northern Ireland, but only with the permission of the European Union to treat Ireland as a separate entity—which has a double edge to it that we perhaps do not want to pursue. We should be able to do that on a sovereign basis and to bring Ireland into the sovereignty of the rest of the United Kingdom in the longer term.

I wish to emphasise that the freeport east was very much driven by the need for levelling up. I see my hon. Friend the Member for Thurrock (Jackie Doyle-Price) nodding in sympathy, because she shares this problem. The perception is, “Oh, you’re in the rich south-east. You don’t need any help. It all needs to be directed to other parts of the United Kingdom.” Well, I can tell the House that I have red wall voters in my own constituency. Places like Clacton, Jaywick and Harwich are hard bitten by economic decline. Average weekly earnings in Tendring district, which is Clacton and Harwich, are £556, compared with a GB average of £587, and incidentally below the rate in Liverpool, which is historically regarded as deprived. We have a project that could generate, we hope, 13,500 jobs. The hon. Member for Richmond Park and others are right: we have to make sure that the minimum is substitution and the maximum is additionality. That is the challenge of making sure this works.

I will concentrate on what is in the Bill. I very much welcome the tax provisions in clauses 109 to 111, but there are bits missing from the Government’s additional proposals. Not mentioned in the Bill are the enhanced structures and buildings allowances, or the lower national insurance contributions, or the business rate reliefs proposed in freeport sites, or the local retention of business rates, so I remain concerned that we are offering only what is allowed under EU state aid rules. I will be grateful if the Minister, when he replies to the debate, addresses those points and says how those other tax reliefs will be provided.

It is worth mentioning that the Shannon freeport zone was regarded as such a success that it was imitated and adopted by China, which now has a freeport zone programme that it regards as an important enhancement of its economic competitiveness. I ask those who are cynical about freeports to open their minds, to look at the successful freeports and free trade zones around the world, and to learn from them, as well as listening to what one might call the “economic statics”—the people who think everything is about substitution and nothing is about releasing additional creativity.

I take seriously the points raised by the hon. Member for Erith and Thamesmead about compliance with the necessary conventions, such as authorised economic operator certification, World Free Zones Organisation safe zones rules and the OECD code of conduct for clean free trade zones. Those are all important, but let us recognise that, unless we avail ourselves of all the freedoms available to freeports, they will not deliver the benefits we want. I am reminded that when he was a Back-Bench Member of Parliament, the current Chancellor produced a very interesting report, “The Free Ports Opportunity”, which was published by the Centre for Policy Studies, price £10, which was rather more radical than the Treasury’s current offering. Some of us are a little worried that we will not see that enthusiasm and radicalism. Let us go step by step, let us work incrementally —that is not a criticism, but this is something to build on for the future.

Let us also recognise that the real benefit of freeports is not the tax incentives, but the customs facilitation. We must have really modern electronic customs systems to make the customs advantages of being in what is called a customs inversion zone real. Otherwise, it becomes a bureaucratic nightmare and we will not get the advantages we should get from it. Also, if it is a bureaucratic nightmare, it is the less savoury elements who benefit, not the legitimate businesses.

That is the challenge. We have a great opportunity, for which I really thank the Government in respect of my constituency and others. Incidentally, I think the freeports around the United Kingdom—this is a United Kingdom policy—should be working together. I wonder whether the MPs who represent the freeports that have been designated should get together, stop this mutual suspicion—which is understandable, as we have been competing for designation—and start working together to press the Government for the positive changes that will benefit all our freeports in the future.

[Rebecca Long Bailey [V]]

I will limit my brief comments to freeports. Detailed Government assessments on the operation and impact of freeports are sadly not yet available. As we have heard tonight, the OBR has stated that the announcements made in the Budget came too late to be incorporated into its forecast. If the Government recognise this, they must understand that they have a duty to provide such evidence and legislative reassurance in response to legitimate and wide-ranging concerns on the operation and impact of freeports.

There are concerns that, rather than complementing a local economy by stimulating the growth of new business, existing businesses may simply opt to relocate to freeports. Certainly, the Government have not made it clear how they will mitigate against the significant geographic movement of jobs away from one area and into a freeport—how they will avoid a wild-west scenario of pitting regions against each other, nor the prospect of lost revenue for local authorities from business rates, for example, if businesses opt to relocate to such a zone.

The job creation numbers are equally sketchy. The Chancellor argued back in 2016 that if the UK’s approach performs as well as that in the USA, freeports would create more than 86,000 jobs, but as the Centre for Progressive Policy found, this figure was a cut-and-paste job, being simply the number of people employed in the US free zones adjusted for the relative size of the UK population. There was no data on the labour market impact on specific regional economies or industries, nor any mention of the need for bespoke local skill strategies to feed into this.

On workers’ rights, the TUC has repeatedly warned about the gradual erosion of workers’ protections in these zones. It stated:

“Free ports are a Trojan Horse to water down employment protections”—

in a “race to the bottom”.

Finally, as we have heard tonight, there are real concerns that freeports could create a bonanza for money launderers and tax evaders. Indeed, the EU reported in 2018 that freeports were

“conducive to secrecy. With their preferential treatment, they resemble offshore financial centres, offering both high security and discretion and allowing transactions to be made without attracting the attention of regulators or direct tax authorities.”

The Government must address these concerns before pressing ahead. To that end, new clauses 5 and 25 would allow the Government to create an evidence base for freeports, which the House can then examine, and new clause 4 would impose standards and protections. If the Government are serious about addressing these concerns and building in clear legal protections, they will support these new clauses tonight.

[Jackie Doyle-Price (Thurrock) (Con)]

I commend the Government on the ambitious agenda running through this Finance Bill. It needs to be ambitious because the last year has been a very painful one for us economically. We must do everything we can to foster renewed growth, renewed job creation and, indeed, renewed wealth creation.

I have listened to the speeches from Labour Members. They raise some important things, but if I seriously believed that this freeport policy was going to undermine workers’ rights and lead to massive non-compliance with health and safety and tax legislation, I would not support it. I am supporting it because I have real ambition for my local community and my area, and I am very proud and pleased that the Thames freeport has been chosen as one of the eight. I assure the House that this is going to be the transformation of Thurrock after a very long time.

My hon. Friend the Member for Harwich and North Essex (Sir Bernard Jenkin) referred to the fact that people often see levelling up in terms of north versus south and we have heard that a lot, but nothing could be further from the truth; in fact some of the most deprived areas in our nation are our coastal communities, so it is absolutely right that freeports should be one of the headline levelling-up policies.

Financial Services Bill

Rebecca Long Bailey Excerpts

Report stage & 3rd reading & 3rd reading: House of Commons & Report stage: House of Commons
Wednesday 13th January 2021 Commons Chamber

[Rebecca Long Bailey (Salford and Eccles) (Lab) [V]]

I speak in support of new clause 2. I must stress to the Minister that debt advisers in Salford have already warned me that the Government’s debt respite scheme is inadequate. First, debt advisers should be provided with the discretion to extend breathing space. Secondly, the midway review requirements will waste valuable resources and should be eliminated. Thirdly, there must be the option for debtors to access breathing space on more than one occasion in a 12-month period when needed.

Spending Review 2020 and OBR Forecast

Rebecca Long Bailey Excerpts

Wednesday 25th November 2020 Commons Chamber

[Rishi Sunak]

I can give my hon. Friend that assurance. He highlights a perfect example of this country making an enormous difference to millions of people around the world, not just with our aid budget but through the quality of our research and then our desire to find commercial partners who will bring that life-saving treatment to millions of people at cost. It is a fantastic example, and my hon. Friend is right to highlight it.

[Rebecca Long Bailey (Salford and Eccles) (Lab) [V]]

It was frankly opprobrious that there was nothing today to help the 3 million people excluded from Government support schemes. They are desperate, they are struggling, and some have even taken their own lives. Will the Chancellor tell me whether we are to assume that, after eight months without any change in policy, he deems it politically expedient to exclude these people, because they just do not matter?

[Rishi Sunak]

I am sure the hon. Lady heard the answer to the previous question on this issue. She keeps mentioning this 3 million figure without giving an explanation of whether she agrees that 1.5 million of those people should be included, given that they make the majority of their earnings from employment and are eligible to be furloughed. Indeed, that approach was supported by all trade organisations at the time when the scheme was launched.

Additional Covid-19 Restrictions: Fair Economic Support

Rebecca Long Bailey Excerpts

Wednesday 21st October 2020 Commons Chamber

[Rebecca Long Bailey (Salford and Eccles) (Lab)]

The sums requested by Greater Manchester yesterday were a speck compared with the millions given to Serco, G4S, KPMG, Deloitte and other private firms in this pandemic. They were a tiny speck compared with the £745 billion of quantitative easing that was announced in June, supposedly to support our economy.

In Greater Manchester alone, 408,000 people have accessed furlough since its inception, unemployment doubled between March and May, and we saw an increase in universal credit claimants of 76% between March and September. Some 3 million nationally have been excluded from any support so far, from small businesses to freelancers to new starters. Tier 3 brings a very dark winter to them. It brings a dark winter to those forced to close without adequate Government support, and for those not ordered to close the Chancellor’s scheme is not enough to support them in the face of the wider economic impact. Indeed, businesses in my constituency were already having to lay off staff, and that was under tier 2, so at the very least, the Government must agree to support the motion set out today. Not only that: they must also offer a package of support for the 3 million excluded from support so far.

The Government ask my constituents to give up their civil liberties and livelihoods, but they refuse to stand beside them with the support they need, all for a plan that even the Government scientists do not believe will work. To most, this does not appear to be an exercise in infection control. It appears to be an exercise in keeping the north and other tier 3 areas away from the rest of the country to engage in our own version of “The Hunger Games”, where only the fittest and wealthiest will survive.

[Alexander Stafford (Rother Valley) (Con)]

Will the hon. Member give way?

[Rebecca Long Bailey]

No, I will not.

I say to the Minister: is it not the truth that in Greater Manchester we have been in tier 2 for months, but we have seen an increase, not a decrease, in the infection rate? Is it not the truth that the Government’s own chief medical officer said that he was “not confident”—neither was anyone else, for that matter—that tier 3 would actually work? And is it not the truth that the Government continue to ignore many of its own SAGE scientists who have advised that an immediate, short, national circuit breaker is the only way truly to bring infection rates down?

Abraham Lincoln once said:

“I am a firm believer in the people. If given the truth, they can be depended upon to meet any national crisis. The great point is to bring them the real facts”.

The fact is that Government negotiations yesterday were little more than an attempt to make local authorities complicit in the Government’s mismanagement of this crisis. The people deserve better. They deserve support, and they deserve the truth.

Economy and Jobs

Rebecca Long Bailey Excerpts

Thursday 29th June 2017 Commons Chamber

[Rebecca Long Bailey (Salford and Eccles) (Lab)]

I know that I am against the clock, so I will be as quick as possible, but I want first to thank all Members who have taken part today. In particular, I thank those who have given their maiden speeches: my hon. Friends the Members for Gower (Tonia Antoniazzi), for Warrington South (Faisal Rashid) and for Rutherglen and Hamilton West (Gerard Killen), and the hon. Members for Chichester (Gillian Keegan) and for Bath (Wera Hobhouse). I know that they will make their mark on this place over the years to come.

The Queen’s Speech was sadly threadbare, evading all substantial questions of policy and doing nothing to undo the failed economic policies of the past. Lest we forget, this was the Government who told us seven years ago that we were all in this together—that unleashing excruciating financial pain upon people, public services and businesses, and allowing our once proud industrial communities to be sent into managed decline, while slashing taxes for the wealthiest, was a necessary evil and that we would all be better off in the end. However, we now live in a Britain where the top fifth receive 40% of total income, while the poorest fifth earn only 8%—a Britain reliant on foodbanks and, as the Bank of England cites, with “worrying levels of rapid consumer credit growth” among those borrowing simply to make ends meet, and it is set to get worse. As we have heard from the IFS,

“earnings will be no higher in 2022 than they were in 2007”,

based on current forecasts.

The UK has one of the highest levels of regional inequality in Europe. Fifty-four per cent of future transport spending is due to take place in London, by comparison with the north-east, which will receive only 1.8%, and the picture is no better when we look at income inequality. For example, people in London earn £134 more a week than those in Yorkshire. So what have the Government set out to rebuild our fractured economy? Their industrial strategy Green Paper was criticised by the Select Committee on Business, Energy and Industrial Strategy this year, which stated that it lacked clarity and political will. Sadly, the Government compounded such criticism by simply inserting the abstract words “industrial strategy” in the Queen’s Speech, like some sort of game of rhetoric bingo.

The Queen’s Speech went on to state that the Government

“will work to attract investment in infrastructure”.

Again, there were no details. I am afraid that the Secretary of State for Business, Energy and Industrial Strategy might be in for a shock, as the Governor of the Bank of England stated yesterday that Britain has experienced the

“weakest…business investment in half a century”.

Frankly, it is not surprising, when the Government have done little to foster a fertile business environment. Simply slashing the headline rate of corporation tax alone does not constitute creating a good business environment. Businesses need high-quality infrastructure, both physical and digital, but public investment has been woeful.

Businesses also need a highly skilled workforce, but the Government have cut real-terms school funding, scrapped the education maintenance allowance and imposed huge cuts to further education funding over the past seven years. Businesses also need long-term stability, not huge hikes in business rates—relief for which has still not materialised, months after the event—or what is, quite frankly, a reckless and dangerous approach to leaving the EU. It is perhaps no surprise, therefore, that the letter of support for the Conservative party from business that usually materialises a few days before polling day did not materialise this year.

Vaguer still was the notion that ministers will

“seek to enhance rights…in the…workplace.”

This Government have eroded workers’ rights over the last seven years, with the TUC stating that the number of those in insecure work has risen by 27% in the last five years. If the Government were really serious about improving workers’ rights, they would ban zero-hours contracts, repeal the Trade Union Act 2016 and abolish employment tribunal fees.

Even more vague is the position on energy prices, as illustrated by my right hon. Friend the Member for Doncaster North (Edward Miliband). Staggeringly, in one of the richest nations in the world, we have over 4 million people living in fuel poverty, so I was pleasantly surprised when the Prime Minister called for Labour’s energy price cap to be implemented. This was from a party that scoffed in 2015 that the policy was from a “Marxist universe”, so even I was flabbergasted by this apparent damascene conversion. The Queen’s Speech, however, was completely silent on that commitment, amid reports that senior Cabinet members and the big six energy companies were lobbying for the price cap to be dropped.

Britain stands at a crossroads, and Members of this House have a grave choice to make. Do they choose the Government’s path, which leads to more economic stagnation, falling wages, deindustrialisation and people being held back by economic insecurity at work and at home, or do they choose Labour’s amendment, which sets out the change that Britain needs? That is a path that would rebuild and transform the British economy with an industrial strategy that would invest in regions and nations, and would provide the support that businesses desperately crave. It is a path that recognises that redistribution is not enough, and that job quality and work satisfaction also matter. However, it is a path that the Government refuse to take, and, as they hang on to office precariously by the tips of their fingernails, they are quite simply standing in the way of a fairer, richer Britain.

Class 4 National Insurance Contributions

Rebecca Long Bailey Excerpts

Wednesday 15th March 2017 Commons Chamber

[Mr Speaker]

Extremely germane? Well, there is a Dutch auction in relevance taking place here.

[Rebecca Long Bailey (Salford and Eccles) (Lab)]

On a point of order, Mr Speaker.

[Mr Speaker]

I am going to take the hon. Member for Salford and Eccles (Rebecca Long Bailey), who is speaking from the Front Bench, first, and I shall save the other Members for the delectation of the House.

[Rebecca Long Bailey]

In response to questions, the Chancellor stated that I had confirmed, with reference to the National Insurance Contributions (Rate Ceilings) Bill, that this discharged the Tories’ national insurance manifesto pledge. For the benefit of the record, I stated that it was part of their wider pledge to cap income tax, VAT and national insurance contributions. On Second Reading, I stated that it was part of the Government’s policy to cap national insurance contributions for this Parliament and went on to state:

“If they are going to legislate for every pre-election promise, surely they should apply that to every manifesto pledge. They are certainly not doing that.”—[Official Report, 27 October 2015; Vol. 601, c. 19.]

Interestingly—

[Mr Speaker]

Order. I am sorry, but I cannot have a lengthy dilation. That is not appropriate. If the hon. Lady has something specifically for me, which she can encapsulate in a short sentence of no more than 20 words, I will treat of it.

[Rebecca Long Bailey]

I respectfully request that the Chancellor retracts the comments he made earlier on that very question. They are factually incorrect.

[Mr Speaker]

The hon. Lady has made her request. The Chancellor can respond, but he is not procedurally obliged to do so. If the right hon. Gentleman wants to respond briefly, he may.

Oral Answers to Questions

Rebecca Long Bailey Excerpts

Tuesday 28th February 2017 Commons Chamber

[Mr Hammond]

Our banking system in the United Kingdom ensures that our banks are safe, and is tackling the “too big to fail” culture. We have a high level of confidence in our banking system. The reserve ratios of our banks are improving consistently, and we do not want to do anything that would undermine them.

[Rebecca Long Bailey (Salford and Eccles) (Lab)]

Thank you, Mr Speaker, for allowing me to join my former team today to discuss this important issue.

As we have heard, the FSB has found that more than a third of small businesses will see an significant increase in business rates, whereas the big four supermarkets may see a 5.9% reduction. Crucially, more than 55% of those small businesses plan to reduce, postpone or cancel further investment. If the Chancellor is serious about productivity, will he tell us what additional transitional relief he will provide for businesses that are facing a cliff edge?

[Mr Hammond]

The hon. Lady is only repeating what I have already acknowledged. Many very small businesses will see big increases because they are coming out of small business rates relief and facing the full rates regime for the first time. We understand the stress that they will experience at that point, and we will be considering how best to deal with those that are worst affected by the phenomenon.

Charter for Budget Responsibility

Rebecca Long Bailey Excerpts

Tuesday 24th January 2017 Commons Chamber

[Rebecca Long Bailey (Salford and Eccles) (Lab)]

The credibility of the Government’s fiscal plan as outlined in the charter for Budget responsibility has been called into question time and again. Labour opposed the Government’s amended charter in 2015 as it epitomised the Government’s austerity agenda and refusal to intervene and invest in our nation’s future. Today, this Chancellor is seeking Parliament’s approval to break with his predecessor’s fiscal targets and amend the charter.

Is that good news? Has the Chancellor accepted the policy advice of the IMF, the OECD, the CBI and the TUC that austerity is not a credible economic model and that the Government’s role is to support investment? Well, no, sadly, he has not. The amendments to the rules that we are considering today still commit to the Government’s austerity agenda, which has forced misery on the most vulnerable people in Britain. It also fails to allow the investment necessary for future growth and prosperity.

As my right hon. Friend the shadow Chancellor outlined earlier, it is encouraging that the previous surplus target for 2020 has been ditched—the Government now seek to balance the books at some point in the next Parliament—but, crucially, capital and current spending are still lumped together and subject to the framework, so the Government’s ability to make large-scale investments is significantly constrained. That is quite the opposite of Labour’s fiscal position, which has been outlined today: £250 billion of direct Government investment, with a further £250 billion mobilised, with private sector support, through a national investment bank and a network of regional development banks. The Government’s own infrastructure pipeline lists £500 billion-worth of projects—that is the scale of investment deemed necessary by organisations such as the CBI simply to put us on a level footing with other industrial countries around the world.

We know that the rules in the charter simply do not work effectively, and so do the Government, but, rather than put in place a new fiscal rule that would provide the structure needed to rebuild and transform our economy as we prepare for Brexit, the Chancellor has chosen to cut off the oxygen needed to create a fertile environment for business. It is time he realised that we must forge a new economic destiny that ensures that Britain has a prestigious place at the world’s table, rather than simply threatening to turn us into a tax haven.

We need to rebuild those communities that have been left behind for far too long. If anything should have woken the Government up, Brexit should. It was those communities up and down Britain that had been starved of investment for decades that were angry, and they were right to be angry. They had endured nearly seven wasted years in which investment had been allocated on almost a lottery basis; an economy in which the Government promised £5,000 of investment per head in London but just £413 per head in the north-east; an economy in which local authorities had lost £18 billion of Government funding in real terms between 2010 and 2015, with the poorest bearing the brunt; an economy in which the Government slashed the budgets of vital services such as social care and then asked local areas to find the money themselves through council tax increases.

But, we are told, it is all part of a bigger plan, so let us assess whether the strategy has actually worked. We were told that, if we pulled together and dealt with the sting of austerity for a while, things would improve. So, is the deficit at zero? Have we slashed the national debt? Well, no. As we have heard today, the Government have, to date, added more than £700 billion to the national debt. We have an economy driven by consumer spending, not trade and exports. Even the Bank of England has voiced concerns about the sustainability of the model going forward, because much of that spending is fuelled by extremely worrying levels of household debt—debt that is incurred by people who simply cannot make ends meet.

We have what the Bank calls a “lost decade” of earnings, with wages having stagnated to the extent that most non-retired families have less money now than they did before the financial crash, according to the Office for National Statistics. We have heard that productivity growth has stagnated. German workers produce the same in four days as UK workers produce in five—I am pleased that the Chancellor brought that up in his contribution. They had a Government who invested in industry; sadly, we do not.

All that is not the soundtrack of a Government who are jostling to make us one of the world’s leading economies post-Brexit. They have carved us out a future based on low investment, low productivity, low wages and skeleton public services. I am a northern MP, as Members can tell by my accent, and I can recall the Conservative Government of the 1980s stripping away industry from northern towns and cities. Our communities suffered immeasurable damage. The Government back then simply allowed our northern towns and cities to enter into a state of managed decline. What we see today in the amended charter is no better than that managed decline, which is why we will not be approving it today.