Taxation (Cross-border Trade) Bill

Richard Graham Excerpts

2nd reading: House of Commons
Monday 8th January 2018 Commons Chamber

[Mel Stride]

The issues that my hon. Friend raises are probably slightly beyond the scope of the Bill, but they are none the less important. If he would care to write to me, I should be happy to consider them, and, indeed, to meet him if he so wishes.

[Richard Graham (Gloucester) (Con)]

My right hon. Friend is being very generous. It would help us all if he could confirm that this is really an enabling Bill, and that it therefore should not alarm either those who wish to see the continuity of existing trading arrangements, or those who want significant differences. It paves the way for either scenario, depending on the negotiations in Europe.

[Mel Stride]

As usual, my hon. Friend is eloquent and to the point. He makes an important point because, as he says, the Bill is intended to ensure that wherever the deal with the European Union lands, we will be in a position to be ready on day one to ensure that we keep trade flowing across our frontiers, to the benefit of our economy, our businesses and our consumers.

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[Peter Dowd (Bootle) (Lab)]

I beg to move an amendment, to leave out from “That” to the end of the Question and add:

“That this House recognises that the UK will need considered and effective arrangements to ensure a customs and tariff regime, including the potential of a customs union with the European Union, is in place before the UK’s exit, in order to guarantee frictionless movement of goods at UK ports and the ability to levy customs duty and VAT and to protect manufacturing and other key industries through the power to enact protective tariffs, but declines to give a Second Reading to the Taxation (Cross-border Trade) Bill because the Government has failed to provide a coherent plan for the operation of the customs and tariff regime after the UK’s exit from the European Union or for the maintenance of frictionless movement of goods at UK ports, because the Bill is not accompanied by proposals to ensure that Her Majesty’s Revenue and Customs are properly resourced and organised to implement a new customs and VAT regime, because the needs of UK manufacturers and producers have not been properly reflected in the design of the proposals and because the Bill proposes to give excessive powers to Ministers without appropriate procedures for parliamentary consultation and scrutiny.”

Here we are at the start of another year, and it feels much the same as the last one—the same old empty Bills, long on rhetoric and short on detail. Yet always the Government’s default position is a fresh set of powers for Ministers, which is the one fixed point in a changing world. This Government seem to be taking back more control from Parliament as each day passes.

The Bill ostensibly sets out to create a functioning customs framework for the United Kingdom once we leave the European Union—hope springs eternal. We accept that such an arrangement is necessary, regardless of the UK’s future relationship with the EU or, indeed, the nature of its wider trading relationship, yet once again we have been denied any detail in the Bill itself, as hon. Members have identified. There is nothing to guarantee frictionless trade through the UK’s ports from the moment of exit, no measures properly to resource Her Majesty’s Revenue and Customs for the task and nowhere near sufficient detail on the powers and provisions of the Trade Remedies Authority that will be charged with ensuring that our vital British industries are protected. Only yesterday we saw the potentially disastrous consequences of that lack of detail, with reports on the likely result of the Government’s failure to address the EU VAT area for thousands of businesses.

In short, instead of setting up a stable customs framework, this Bill provides few of the policy or, indeed, practical considerations required for the task of leaving the European Union.

[Richard Graham]

It seems rather curious to criticise the Government for denying any detail while we are in the middle of a negotiation. How could the hon. Gentleman expect any Government to guarantee anything until that negotiation is complete?

[Peter Dowd]

This Government have guaranteed absolutely nothing whatsoever. Time after time, they hide behind the veil of negotiation.

Before addressing the Bill’s specific failures in meeting the Government’s objectives, I will raise the issue of the powers created by this Bill that enable Ministers to do whatever they want. The leave campaign’s central message, the one repeated time and again and printed across its campaign literature, was that leaving the European Union would allow the Parliaments and Assemblies of the UK to “take back control” of our law making. And yet again, every piece of legislation published by the Government relating to our exit creates more powers for Ministers, while ignoring Parliament completely. Parliament is in a persistent state of having its head patted—that is as much as Parliament is getting at the moment.

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[Kirsty Blackman]

I think that we should remain in the customs union and the single market, because then we would not have any of these issues. I appreciate that the Minister says that the Government are looking at this, but I am trying to make it clear how important this matter is, and I hope that I have been able to do that in my discussion of cumulation.

[Richard Graham]

The hon. and learned Member for Edinburgh South West (Joanna Cherry) raised the importance of the EU FTA deal with South Korea—indeed, it adds some £2 billion to our exports every year—but the interesting question is why the EU has been able to make free trade agreements only with South Korea and Vietnam. What about the rest of Asia? Does the SNP believe that sufficient progress has been made in expanding our trade, especially in Scottish whisky, across the whole of Asia, or could the process perhaps have been done more energetically and dynamically by Britain making its own free trade deals?

[Kirsty Blackman]

There are EU FTAs with many countries and we trade through them. Because the EU has such a large market, it is able to strike much better free trade agreements than the UK Government will be able to strike for their much smaller market. That is just the reality.

On the capacity of HMRC, I also want to talk about the issue of authorised economic operators, which was mentioned a lot in the customs White Paper. Relying on the AEO system causes a bit of a problem, as the UK is just not that good at either promoting or administering it. Some of the rules applied by HMRC are nearly impossible for many of the smaller operators to meet, such as the requirement we have heard about that the person who is in charge of customs in organisations has three years of customs experience. Some of our businesses have been trading exclusively with the EU, so they cannot meet that requirement very easily. HMRC must look at this as a matter of priority, and particularly consider the situation in Austria, where it takes less than three months for an initial AEO application to go through. Germany has increased the number of authorised economic operators incredibly successfully. The UK Government could benefit from looking at those countries when they consider making changes. It is not about making the regime slacker and enabling more people to jump through the hoops for AEOs; it is about making the process of applying for and getting AEO certification more accessible and streamlined. I know the UK Government have had representations on this matter, and I urge Ministers to consider them and act as soon as they can. We need to get the system in place as soon as possible so that companies can register and receive the certification to become AEOs in advance of the exit date.

As we heard earlier, there is also an HMRC capacity and streamlining problem in the area of VAT. That was also raised in the media recently in the context of the British Retail Consortium’s concerns. The changes to the VAT regime could create major cash-flow problems for businesses, and they might have to restructure or take on burdensome new cash-flow loans. The BRC says that there is no impact assessment produced by the Treasury about the costs of these measures in terms of additional compliance burdens for business, nor about what the costs of HMRC collecting and refunding these upfront costs would be. It seems that there is a real problem and that the required VAT changes have been pretty badly thought through.

I also want to raise the issue of virtual free trade zones. The Bill contemplates only physical free trade zones, but a virtual zone would allow businesses along the supply chain to benefit from simplifications and facilitations without having to incur the time and expense of individual applications, such as with inward processing relief. The British Chambers of Commerce has requested that the Treasury consider the possibility of including virtual free trade zones in its powers relating to designated free zones.

In the context of HMRC, I also want to mention import VAT on gifts from the EU, which I have spoken about before. Folk will be shocked when they get a bill because they have received a gift worth more than £39 from somebody in the EU. Such a system currently applies if people get a gift from elsewhere in the world, but the Government are suggesting that it should also apply in the case of goods from the EU. That is a major concern, because as there has been free movement and people have been able to live in other European countries, it is perfectly feasible that an awful lot of people will have family members in other EU countries and therefore will be likely to receive gifts of a value of over £39. I want to make it absolutely clear that if and when people start getting those bills, they will be totally caused by Brexit, leaving the customs union, and the proposed changes to VAT.

Trade remedies have been mentioned, particularly by Labour Members. Some of the evidence about the matter that the International Trade Committee received last year was concerning. The EU currently has anti-dumping and countervailing measures that would normally be expected to still be in place after Brexit day, such as a five-year measure that was put in place two years ago, meaning that it will have about two years to run at the time we leave the EU. Bernardine Adkins of the law firm Gowling WLG told the Committee that

“it won’t be possible to grandfather the measures, otherwise you will face problems with the World Trade Organization.”

If she is right, we have a pretty significant problem, especially because the call for evidence the Government issued at the end of November seems to suggest they do not know which trade remedies are relevant to UK companies. If the UK Government have to create a trade remedies agency, get it up and running, and furnish it with details that have not been provided in this Bill—how to conduct investigations, how subsidies are to be defined, how to assess if a UK industry has been injured, how to define a UK industry, and how to calculate the level of duties and guarantees needed to rectify the injury caused—and if they have do all that before putting in place even the trade remedies that currently exist, we have another problem.

UK Steel has been particularly vociferous in its criticism of this aspect of the Bill. It says that the chief and overriding concern is that schedules 4 and 5 to the Bill, concerning anti-dumping and anti-subsidy measures respectively, contain very little detail. It goes on to point out that for many of our major trading partners, including the EU and US, such issues are covered by primary legislation. The UK Government have chosen to deal with this through not primary legislation, but secondary legislation. That is yet another concern that we have about the Bill. The Bill does not even have the level of detail of the WTO agreements, so if the Government had included those, the Bill would have been substantially better.

The lesser duty rule is also a significant issue, as the UK Government are looking to go in that direction at a time when the EU is looking to move away from it. This is a concern for us, and for UK manufacturers and jobs in particular.

I and my party have general concerns about the loss of the customs union and the single market. We also have very specific concerns, which echo the views of businesses, about aspects of this Bill. A Fraser of Allander Institute report last year said that 134,000 jobs in Scotland are supported by trade with the EU, and Brexit threatens to cost our economy in Scotland £11 billion a year by 2030 and to result in many fewer jobs. The OECD highlighted in June last year:

“In case Brexit gets reversed by political decision…the positive impact on growth would be significant.”

There are major issues about tariffs if we leave the single market. The EU average tariff on imports from outside the EU was 5.2% in 2014. The average tariff on food was 15%. Skimmed milk exported into the EU from outside the single market attracts a tariff of 74%. If our organisations get hit by these tariffs when they are exporting—if we end up outside the EU single market and customs union as part of a no-deal scenario —we will not just have the problems I have mentioned about issues with the Bill, trade remedies and how HMRC will cope with all this. All these things are an incredible problem. Would it not be better and easier, and would it not be in the economic interests of everyone in this country, if the UK Government were to say, “Actually, we are going to stay in the single market and the customs union”?

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[Richard Graham (Gloucester) (Con)]

In following the hon. Member for Redcar (Anna Turley), I can only applaud her support for her local port.

I support this Bill. Above all else, as I said earlier and the Minister confirmed, it is an enabling Bill to create a post-Brexit functioning customs, VAT and excise regime. Because this is being done well ahead of the results of the negotiation, it does not predetermine the result. That necessarily disappoints those in this House who want the predetermined detail in order to see the extent to which the Bill suits their own vision of what our post-Brexit relationship should look like. In so doing, the Bill satisfies those for whom the Bill is intended—not politicians, but traders, exporters of goods and services, businesses and organisations, including universities and hospitals, with cross-border business in a wider sense—for we and, above all, they need to have in place the mechanisms for setting import duties, regulations, protections, dispute resolution procedures and so on, whatever the final trade and customs arrangements with the EU turn out to be.

That should be uncontroversial, but because the details are not in the Bill, Members are finding all their concerns and worries in their own imaginations. After a speech of some half an hour, for the hon. Member for Aberdeen North (Kirsty Blackman) it all boils down to the fact that she wants to stay in the current customs union with the European Union. For the hon. Member for Stoke-on-Trent Central (Gareth Snell), it is about protecting the ceramics industry. With respect to him and to Stoke-on-Trent, however, no customs Bill can do that, for the customs Bill is about making arrangements for future import duties, not about defining the new technology and brilliant designs that the world admires and wants to own, which is what will determine the future of the ceramics industry there.

[Stephen Kerr]

My hon. Friend is making a powerful speech. Does he agree that without this Bill we will have the archetypal cliff edge that the Opposition parties go on and on about? By not supporting Second Reading, they risk creating the cliff edge that they are always going on about.

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[Richard Graham]

My hon. Friend is absolutely right. He brilliantly pre-empts the point I was about to make, which is that although some Opposition Members have described the uncertainty that they say the Bill will cause, the Bill will precisely help to avoid the cliff edge that all of us—but, above all, businesses—want to avoid. I thank him for his intervention.

The key is that the Bill will ensure that a customs regime is in place for cross-border business to flourish, whatever the results of the negotiations. To be honest, I think my right hon. Friend the Member for Broxtowe (Anna Soubry) underestimated the importance of technology not just in business, but for our customs processes. Regardless of whether or not we had decided to leave the EU, replacing the existing customs system, CHIEF, with the new IT platform, CDS, will, although it comes with a caveat about new Government IT systems, help our customs regime—it is currently rated fifth out of 160 countries in the world for its efficiency by the World Bank—to maintain or improve our position. The trusted trader system used by Canada and Australia, for example, has obvious replicability for trade at the border between Northern Ireland and the Republic of Ireland.

At the same time, the Bill is not devoid of ideas. The earlier customs White Paper outlined the two key negotiating positions for the Government, the first being a streamlined option and the second being a new customs partnership. My own belief is that if our European partners—that is entirely the right word for members of an organisation with which we have 44% of our exports—prove pragmatic in their interpretation of the new partnership, I very much hope that option 2 will prove possible. This option would allow the UK to mirror EU customs arrangements and trade policies for goods that are eventually to be consumed within the EU—even if they are first used, as it were, in the UK—thereby ensuring that the right amount of EU duty is paid without introducing new customs processes between us. This would be a practical benefit from a new partnership that I very much hope will come forward from the negotiations.

Let me turn to the amendment. The hon. Member for Bootle (Peter Dowd) talked with some passion about the manufacturing jobs in his constituency—rather fewer, I have to tell him, than the 4,000 manufacturing jobs in Gloucester; we all have manufacturing as a key element of our constituency business. He has concerns about the Bill’s impact on manufacturing, and the amendment therefore raises three objections to the Bill, which I will come on to. At the same time, there is clearly a certain demand from Opposition Members for an internal Labour debate about their party’s position on the customs union. The hon. Member for Nottingham East (Mr Leslie) would like a special debate on whether the preference of the leading Opposition party is for a customs union or for the customs union, and I am sure others from the Scottish National party would add weight to his discussions on that subject.

The truth is that Labour’s objection to powers coming back to the UK because we are “denied any detail”—the hon. Member for Bootle used that phrase—is bizarre, given that the whole point of the Bill, as my hon. Friend the Member for Stirling (Stephen Kerr) mentioned, is to avoid a cliff edge by putting in place the mechanisms needed, whatever the result of the negotiation, which has not yet started in detail. At the same time, Labour is complaining that the Bill gives powers back only to the Government, rather than to Parliament. In fact, of course, all the detail post-negotiation would come to Parliament through secondary legislation, on which all of us in this House would decide.

[Mr Leslie]

Has the hon. Gentleman had a chance to look at clause 31(4) in relation to forming a customs union with the United Kingdom? He can correct me if I am wrong, but I do not think that that would necessarily come before Parliament. It would be done by Her Majesty through an Order in Council.

[Richard Graham]

On that specific detail, the hon. Gentleman may well be right, but, ultimately, Parliament will decide the shape of any future agreement.

[Nigel Mills]

Will my hon. Friend give way?

[Richard Graham]

Let me respond to the intervention, if I may, and I will then come to my hon. Friend.

The key thing in all the arrangements for a future customs union is that the precise nature of its structure has not yet been decided. It is all still up for debate, and the Bill is therefore an enabling Bill that puts in place the future mechanisms.

[Nigel Mills]

I was just trying to help my hon. Friend. The answer is in clause 32(10), which states that the Order in Council cannot happen unless this House has approved the order first.

[Richard Graham]

Precisely. I am grateful to my hon. Friend. Everything comes back to this House.

The point about the options that the Government have set out and the new customs partnership is that this will have huge practical benefits. Let me give a couple of examples. We could apply our own tariffs to goods destined purely for the UK. For example, for mangoes from India and the Philippines, which are not really a competitive product with anything we grow in this country, there is no reason why the EU should determine what tariff we apply. However, if a basic bicycle was made in another part of the Commonwealth and then exported to the UK for further modifications for onward export to the EU, it would make absolute sense for us to mirror the EU trade and customs arrangements.

The future customs arrangements, which are being negotiated, will therefore have profound implications for our future trading opportunities, and the Bill provides the way forward and opens the door to success, whatever the outcome of the negotiations. That is why the Liberal Democrat amendment, seeking a guarantee that the UK’s trading relationships with the EU and the rest of the world are not damaged, is so bizarre. How can anything like that be guaranteed, particularly during a negotiation? That was doubtless the reason why the amendment was not selected for debate.

This evening, one Opposition party is concerned about guarantees while a negotiation is going on, and another—the main Opposition party—is complaining about being denied any detail about the same negotiation, which has not yet properly started, while a third has already decided, regardless of the results of that negotiation, that it is all a terrible mistake. This evening therefore provides us with an opportunity to back a Bill, which should be entirely uncontroversial politically, that enables the businesses and manufacturers in all our constituencies to know with certainty that, whatever the results of the negotiation, we will have in place the mechanisms for their future exports. It is precisely because the Bill is practical and flexible and because it caters for all outcomes, while making sure that there is no cliff edge, that all of us should support it this evening.

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[Mr Leslie]

I will come on to that when I discuss part 3 of the Bill and the VAT consequences for not just businesses, but potentially consumers as well.

[Richard Graham]

I know that the hon. Gentleman holds his views deeply and sincerely; colleagues of mine hold very different views equally sincerely. Surely the crucial thing for all of us, however, is that the Bill allows for any of those possible outcomes. It does not predetermine the result of the negotiations or determine whether the United Kingdom will have a future free trade agreement with the European Union that replicates almost completely the existing customs union. Therefore, surely we can agree tonight about the importance of having a mechanism in place that avoids the cliff edge that all the businesses in all of our constituencies want to avoid.

[Mr Leslie]

If only that were the case. In fact, that same point is raised in paragraph 9 on page 6 of the explanatory notes, which states:

“The Taxation…Bill does not presuppose any particular outcome from the UK’s negotiations with the EU.”

That is not true. The Government have absolutely presupposed that the customs union is off the table. It is the ultimate presupposition, if ever anyone wanted a definition. This Bill apparently does not allow us to stay in the customs union, but it should allow us to do so, because I happen to believe that there is a majority in this House of Commons for membership of the customs union. I have a little job of work to do to continue to persuade my own party’s Front Benchers of that particular point, but I will try my best to do so because I think they will eventually recognise that being part of the customs union is incredibly important for our economy not just in the transition period, but for the longer term. I believe that the numbers are here in the House of Commons to support that and that it will eventually be proven.

I am disappointed that the Government have tried to twist parliamentary procedure by deeming this measure to be a money Bill. It is Mr Speaker who will decide whether or not it is a money Bill, and I think he will do so at the end of this particular Commons procedure. The Government, though, in a slightly tricksy way, are putting through the Bill following a Ways and Means resolution. Why have they done that? They have gutted the Trade Bill and stuck everything they possibly can into what was the customs Bill so that it cannot be amended by the House of Lords. It is the most obvious trick in the book—rule 101 for a Minister. I have been around the block a number of times, and I have to tell the Minister that there are whole clauses in the Bill, such as clause 31, that are about the formation of a customs union. How is that a matter purely for a money Bill? It is absolutely an issue of public policy to do with our trading alliances that the other place should have every right to pass comment on. If it has advice and suggestions for this place, it should be allowed to amend the Bill.

Exiting the EU: Costs

Richard Graham Excerpts

Wednesday 29th November 2017 Commons Chamber

[Elizabeth Truss]

The negotiations are taking place at the moment. We want to secure a reasonable transition deal, but we have to know what the future relationship will be like before we enter into the transition deal. The British public will not accept the can being kicked down the road. They want to know that we are leaving the European Union.

[Richard Graham (Gloucester) (Con)]

The greatest risk to the new partnership that both the UK and the EU want is that the EU makes such unreasonable demands that no British Government could accept them, on the wrong assumption that this House will never vote for no deal. Does my right hon. Friend therefore agree that all Members who want a good deal, like the hon. Members for Nottingham East (Mr Leslie), for Dudley North (Ian Austin) and for Cardiff South and Penarth (Stephen Doughty) and the right hon. Member for Wolverhampton South East (Mr McFadden), should make it absolutely clear to their constituents that they do not subscribe to the ludicrous idea that any deal is better than no deal?

Duties of Customs

Richard Graham Excerpts

Ways and Means resolution: House of Commons
Monday 20th November 2017 Commons Chamber

[Richard Graham (Gloucester) (Con)]

It is a great pleasure to follow the hon. Member for Edinburgh South (Ian Murray), who spoke, at considerable length, of his conviction that the customs union is the way forward. He has always spoken with great clarity and certainty, although I suggest that he is more compelling in his usual manner as Tigger than as the Eeyore whom we saw tonight. I would also say that the difficulty of assuming that business is monolithic, and always speaks with one voice, is that it does not. There are businesses in my constituency with which I deal as a trade envoy that are concerned about the future, but there are others that are relaxed. Both those views will depend, ultimately, on what sort of arrangement we reach on trade and customs, and on what terms.

That brings us to this preparatory Bill. As the Minister has explained, it is fundamentally nothing other than necessary preparation for when we leave the European Union. It is a framework, not a position on a preferred type of future customs relationship. It allows for either of the Government’s options: a streamlined system that is, as far as I can see, identical to the current one; and a new customs partnership of which I am sure we shall hear more when the Bill is published. This preparatory work will be even more important in the sad event of future arrangements not being agreed with the EU.

The Minister confirmed that HMRC arrangements at our roll-on/roll-off ports will be in place in January 2019, ready to deal with worst-case scenarios. I believe that there is an important political point behind that, which Members who, like the hon. Member for Edinburgh South, would much prefer to stay in the customs union need to consider very carefully. There are some who believe that leaving the EU without a future deal or any implementation period would be a walk in the park, whereas others believe that it would be impossible to operate our ports, and, perhaps, much of our trade, and that it would therefore be a disaster to leave the customs union at all.

However, many of us who have always thought that both the UK and the EU would benefit hugely from a strong customs partnership for the future, and what Michel Barnier calls a “new partnership” in general, believe that this preparatory Bill is essential to that. It is absolutely vital that the EU does not overplay its strong hand at this delicate stage of negotiations, for if it decides that negotiations on citizens’ rights, Ireland and finance have made insufficient progress to allow us to move on to debating an implementation period, future trade and other partnerships, there is a real danger that the momentum will move behind those who believe not only that no deal is possible, but that it is likely or even desirable, and that we need to prepare for that situation above all else.

[Peter Grant]

rose—

[Richard Graham]

I am sorry, but I will not give way.

For those of us who want the negotiations to succeed and a new partnership, it is therefore incredibly important that our partners in the EU encourage us to build momentum for that by moving to detailed talks on future trade and customs arrangements as soon as possible. For now, this is simply an enabling Bill of changes, allowing for future UK tariffs, VAT levels, goods classifications and so on. As the hon. Member for Bootle (Peter Dowd) said, it is both practical and necessary. Today’s amendments close off the options and it would be sensible to avoid them.

[Tom Brake (Carshalton and Wallington) (LD)]

It is a pleasure to follow the hon. Member for Gloucester (Richard Graham), a fellow remainer, and I hope that remainers on the Conservative Benches will be a little more outspoken about their concerns.

[Richard Graham]

For clarification, I point out to the right hon. Gentleman that he is following a pragmatist.

[Tom Brake]

If I am indeed following a pragmatist, I hope that the hon. Gentleman will listen to what is being said by many economic sectors, and perhaps read carefully the 58 sectoral reports once they are published, and come to the very pragmatic conclusion that he, as a pragmatist, will want to start to be more outspoken about the Government’s agenda of taking us over the cliff.

Members have suggested that the UK needs to leave the EU to be able to trade, but that is clearly not true. Many European countries are just much more successful than us at trading with other countries, including Germany, France and Italy. They do so within the EU, so there is no reason why we could not do so more effectively than at present. If we are unable to trade while we are part of the EU, I wonder why previous Prime Ministers, particularly David Cameron, spent so much time and effort sending trade delegations to various countries around the world to drum up trade. Was that a completely pointless exercise? Was that just about having 10-course banquets in Beijing, or was it because we can do a lot to boost trade while we are in the European Union? I think it was the latter, rather than a desire to have big dinners courtesy of foreign Governments. Of course the UK is in a position to trade—and, perhaps, to do so more effectively—with other countries while we are members of the EU.

It is nice, as a Liberal Democrat, to be able to make a speech that is longer than three minutes, so I might take full advantage of that in the couple of hours that remain for me to make a contribution, before the Front Benchers make their response. First, I want to focus on the issue of Ireland and Northern Ireland. Frankly, Opposition Members have had enough of listening to Ministers’ platitudes about how they will sort out the problem that is the border between Ireland and Northern Ireland. We do not want to hear about “frictionless” any more, or about blue-skies solutions that do not yet exist. What we want to hear from Ministers is the solution to this problem, because if the Irish Prime Minister was asking on Friday for a written guarantee from the UK Government that there would be no border controls, that was because he is worried and because he has heard nothing from our Government to explain how we will be able to leave the customs union, yet have no border and no border controls between Ireland and Northern Ireland.

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[Tom Brake]

Absolutely, and that is why I believe that the question of Ireland and Northern Ireland is the most challenging of the three. The Government could and should have resolved the question of EU citizens 15 months ago by simply saying to them, “You have the right to remain.” The settlement bill is clearly very difficult politically for the Conservative party, because many of its Members are on record as saying, “We won’t give the EU a single penny; in fact, they owe us loads of money,” so they now have a difficult political position to adopt if they say that they support a payment. We do not know how much that will be, but one figure that has been mentioned is £40 billion, and an interesting article in The Sunday Times a couple of weeks ago, which seemed to be flying a kite, referred to £53 billion. Although that question could be resolved at the cost of some political pain, no one has put forward any solution to the issue of Ireland and Northern Ireland that does not involve some sort of control. That might be ad hoc control, and it might not be directly at the border, but some sort of control will be required.

[Richard Graham]

The right hon. Gentleman has touched briefly on citizens’ rights. Given that both sides have said that that is their absolute top priority, can he explain why the European Union turned down our proposal to treat citizens’ rights first, on their own, so that the matter could have been agreed in perpetuity, regardless of what happened to anything else?

[Tom Brake]

That might be an issue on which we agree. If we are moving towards a no-deal scenario, there is an overwhelming case for parking the issue of EU and UK citizens’ rights and resolving it, because it is a question of humanity and giving safety and security to the 3 million EU citizens here and the 1.2 million UK citizens in the EU.

The border between Ireland and Northern Ireland has 275 crossings. If there is to be some sort of control, will it be at each and every one of those crossings? Presumably not; otherwise, the number of people that HMRC is going to have to recruit would be much greater than the 3,000 to 5,000 it already needs.

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[Tom Brake]

Absolutely; I do have those concerns. It is worth knowing that when the 17-mile tailback occurred two years ago, it was the result of just two French border officers not turning up for their shift. The 20 sq km lorry park—whose construction has now been kicked into the long grass because of the judicial review—would accommodate 3,500 lorries. However, 10,000 lorries go through that port each day, so a lorry park that would accommodate 3,500 lorries will not do very much if there is severe disruption at the port. That is why one of the options the port is considering is to create lorry parks all over the country. In the event of a delay, the port could text drivers in, for example, Leeds or Edinburgh to say, “Sorry, we’ve got a bit of a problem at Dover. Don’t bother coming, because if you do, the town will collapse. Just stay in that lorry park and we’ll tell you when it’s safe to come down.”

[Richard Graham]

We have heard much of what the right hon. Gentleman is saying before. No doubt he will have heard the mayor of Calais and the head of the port there saying that no deal would be a catastrophe for them as well. Does that not encourage him to believe that good sense should prevail, and that we can arrive at an arrangement that suits those on both sides of the channel equally well?

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[Mr Chris Leslie (Nottingham East) (Lab/Co-op)]

I think that the Minister said at the outset that it is the Government’s policy to leave the customs union. It was not on the ballot paper in the referendum; it is a policy choice that the Government are taking. It is therefore the Government’s policy to exit the most efficient, tariff-free, frictionless, free trade area anywhere in the world, and what we will end up with afterwards is therefore bound to be inferior—possibly very much inferior—to the basic free trade arrangements enjoyed by most countries around the world. We could find ourselves at the mercy of basic WTO tariff arrangements, so the Bill that we are paving the way for with this Ways and Means motion comes at a crucial juncture.

I thought it was unfair that many Government Members referred to the speech of my hon. Friend the Member for Edinburgh South (Ian Murray) as Eeyore-ish. He is actually quite a positive character, who wants to do the best for trade, for business and for this country. In fact, if anything is negative, it is the legislation that the Government are proposing. The Minister was the harbinger of doom, because the Bill plans for a no-deal scenario. This set of legislative changes paves the way for circumstances in which the UK may be imposing tariffs on our nearest trading neighbours and vice versa. I cannot think of something more depressing, defeatist or premature, especially given that we have not even had the negotiations yet. In fact, I cannot think of anything much more aggressive towards the negotiation settlement that we are trying to get than the suggestion that we are going to put into legislation the ability for us to raise significant tariffs with our nearest trading partners, with whom 50% of our trade takes place.

[Richard Graham]

The hon. Gentleman is talking rationally, as always. The reason why I felt that the hon. Member for Edinburgh South (Ian Murray) was being rather Eeyore-ish is that he underestimates the impact on Scottish whisky, about which he talked quite a lot, of the far east. He needs to go and see the Johnnie Walker shops in Shanghai and Beijing. He needs to look closely at Whyte & Mackay—a failing Glaswegian whisky manufacturer now saved and re-energised by a buyer from the Philippines—to understand that the future of Scottish whisky lies as much in Asia and other far-flung places as it does in Europe.

[Mr Leslie]

That may be so, but this is not an either/or situation. This is not about selling a fantastic Scottish whisky product to China or to Europe; we should be doing both. German car manufacturers and French food producers are trading exceptionally well with the far east, while remaining a member of the customs union and of the single market. My quibble with Ministers and some Government Members is that they give an impression that this is a binary, either/or arrangement. They say, “Oh well, we can ditch our trading relationships and partnerships with our nearest neighbours, because we might eventually be able to do something with China, India, Australia or Brazil,” but we should be able to do all those things. We can do all those things simultaneously, while remaining part of the greatest free trade area of any set of nations anywhere in the world, but we are about to throw that overboard for no reason resulting from the referendum, but due to Government policy.

We all obviously hope that we can salvage that relationship within the single market and the customs unions in a short transitional period, but that will take quite a lot of negotiation and depends on several different things. It is a shame that the German Government are in an unstable situation, because I suspect that that will make things far harder. I did not vote in favour of triggering article 50 because I thought that doing so was premature. I thought we should have secured a better timetable than the one we ended up with, because of course the clock ticks down. We could end up with unforeseen diplomatic wrinkles in the process and be backed into a corner, possibly finding ourselves with an inferior transition arrangement and a snap general election that nobody anticipates, least of all Conservative Members.

Let us bear in mind what this Ways and Means motion might presage for tariffs on our different imports and exports. [Interruption.] I know the Whip, the hon. Member for Beverley and Holderness (Graham Stuart), and the Minister are listening very carefully. A 7% tariff would be introduced on ceramic products. On cars, the tariff would be 10%.

Telecommunications Infrastructure (Relief from Non-Domestic Rates) Bill

Richard Graham Excerpts

3rd reading: House of Commons & Committee: 1st sitting: House of Commons & Report stage: House of Commons
Tuesday 5th September 2017 Commons Chamber

[Mr Jones]

My hon. Friend is a keen advocate and supporter of the businesses of Solihull. My understanding is that, by the end of the current roll-out period, 91% of properties will have been reached by superfast broadband. However, the Bill will incentivise providers to roll out more direct fibre services to all parts of the country. Hopefully, businesses and individuals in Solihull will also benefit from the provisions in the Bill.

Through these powers, we will target the relief on operators of telecoms networks who deploy—I have reiterated this point a number of times for the sake of clarity—new fibre on their networks. The proposals will incentivise and reward operators who invest in the fibre network.

These concepts have not been defined before for business rates. The powers in the clauses will therefore allow us to develop definitions with experts in the telecoms and business rates sectors. By taking this approach, we can ensure that we accurately capture in the relief only those parts of the telecoms network that comprise new fibre, which has been a significant concern of right hon. and hon. Members.

[Richard Graham (Gloucester) (Con)]

The Minister knows that I am as keen as he is to make sure that all the blackspots in our urban constituencies are broadband-enabled as soon as possible. For some time, my concern has been that if new developments do not get fibre connections, there will be a continuing gap, and that every time Ministers stand up and say they will get 95% or 100% coverage, there will be new places without coverage. I am pleased that the Minister’s colleague, the Under-Secretary of State for Digital, Culture, Media and Sport, my hon. Friend the Member for Salisbury (John Glen), wrote to me saying that Openreach will “provide FTTP”—fibre to the premises—

“to all new developments with more than 30 plots for free.”

That is great news, and it means that Ministers do not have to consider the option I was recommending of enabling local councils to make it mandatory for new developments to have fibre connections. However, will the Minister say something about developments with under 30 houses, because part of the regeneration of all cities is getting small plots redeveloped with housing, and that may involve developments of fewer than 30 homes?

[Mr Jones]

I thank my hon. Friend for that comment. He is absolutely right that it is extremely important that new housing developments serve well the people who purchase the properties in relation to superfast broadband. He is right that it is a requirement for developments of under 30 dwellings to have a broadband connection and for developments of over 30 properties to have a superfast broadband connection. In bringing forward those requirements, which started this January, the Government had to make a very challenging decision in getting the balance right between making sure that people are properly served with the latest technology and that we build the homes required to deal with the housing shortage in our country.

Summer Adjournment

Richard Graham Excerpts

Thursday 20th July 2017 Commons Chamber

[Richard Graham (Gloucester) (Con)]

I congratulate the hon. Member for Reading East (Matt Rodda) on his maiden speech, in which he paid tribute to his predecessor—his predecessor was well known to Conservative Members—and to many other predecessors. I am sure we will be hearing much from the hon. Gentleman, perhaps particularly on the key aspects of Reading’s regeneration. Those of us who travel regularly through Reading appreciate the work that has been done on Reading station. Anything he can do to keep the station working smoothly will be much appreciated.

Ten years ago to this very day, 12 continuous hours of heavy rainfall downloaded 78 mm of rain in Gloucestershire during what our local paper, the Citizen, rightly called

“the worst natural disaster in the county’s living memory.”

It followed the wettest June and July since records began in 1766. It is worth recapping what happened, what has happened since and the wider lessons that we should have learned—I hope we have learned them.

I will start by recalling what happened on that day, which is as clear in my memory now as it was on the day itself. Some 10,000 motorists were stuck between junctions 10 and 12 of the M5. I remember afterwards meeting a deaf constituent who had been trapped in his car on the M5, and who did not hear the police when they came to ask everyone to move their vehicles. As so often in a crisis, a combination of accident, the situation at the time and a particular individual’s health resulted in a sort of comic-tragic misunderstanding, of which there were many during this extraordinary period of natural disaster.

Some 500 people were stranded at Gloucester rail station. Severn Trent’s Mythe water treatment centre lost power, and 350,000 people were without running water for 18 days. The Castle Mead electricity substation was overwhelmed, cutting power to almost 50,000 of my constituents. Some 4,000 houses, 500 businesses and 20 schools were flooded, and three people died.

There was a precedent. Curiously, 400 years earlier, in 1607, there was a great flood in Gloucestershire in which huge and mighty hills of water some 25-feet high swept up the Bristol channel, spread over 200 square miles of land and killed 2,000 people. The great Gloucestershire flood 400 years later, in July 2007, was different and resulted in much less loss of life, but its impact on all of us was huge, and it almost led to a national crisis. I make no apology for saying that what was important then—and is important now in Kensington—was to start with absolute objectivity in looking at what happened, rather than trying to use disaster as a party political opportunity.

The critical moment in Gloucester was when Severn Trent’s water was knocked out. The Army came in to deliver water and bowsers, and a number of us got involved in organising volunteers to distribute the water in the supermarket and other carparks. I organised a group of about 25 volunteers, and it all went fairly well. The council then asked me to organise taking water to elderly people at home, which was all set up and ready to start when somebody from the city council asked whether we all had Criminal Records Bureau checks. I said that I had no idea but that I would sign a bit of paper personally guaranteeing that no one in the volunteer group was either a granny basher or a paedophile. That was not good enough, and our volunteers had to stand down. I wondered then, and I still wonder now, at what point exactly in a civil disaster situation comes the moment when organisations drop the normal bureaucratic checks because something has to be done fast and we have to cut corners and accept some risk in order to save lives. Leadership at all levels in natural or other disasters is critical, as we have been reminded since the ghastly inferno at Grenfell Tower.

Meanwhile, down at the tri-service centre at Waterwells in Quedgeley, the then Chief Constable, Tim Brain, as Gold Commander, had powers to organise national and local bodies in one building. For the first time in a long time, the Army got seriously involved, particularly in sandbagging the electrical substation at Walham and delivering capabilities across the area. These Gold Command structures are crucial, but they work only if residents trust the lead individual and organisation. If that does not happen, the Government have to step in and bring in other individuals and organisations, as we have seen in Kensington.

After the floods, the Pitt review was undertaken to analyse the issue, learn the lessons and make recommendations on how to mitigate floods of the future. The Government of the day were slow to implement those, but much progress has since been made, with brooks and streams cleared; willows cut back; riparian responsibilities better known; Flood Re established to handle insurance issues; and Victorian sewers and drains replaced, notably in the city centre, in the wards of Westgate and Kingsholm, at a cost of some £13 million, absorbed by Severn Trent. Those are huge improvements and there has been no flooding in Worcester Street or Kingsholm Road since, despite two years of considerable new floods, although not on the same scale.

The major Government and county council-financed additional infrastructure is the new diversion lake close to Elmbridge Court, which is on the road towards the neighbouring constituency of my hon. Friend the Member for Cheltenham (Alex Chalk), where surplus water coming down the Horsbere brook is automatically transferred. That has already successfully prevented flooding in Longlevens and Elmbridge twice since 2007, as well as adding a superb walk and birdwatching site to our city’s leisure facilities. Lastly, the Environment Agency has improved its mapping, modelling and communications no end, thanks to better technology. Anyone living near the Severn can now get regular email and text alerts, and I encourage all my constituents to do so; they just need to go on to the EA’s website and sign up.

There are things still to be resolved, such as the height of the wall protecting homes by the river at Pool Meadow, on the northern side of Gloucester—that has still to be sorted. We also know that, if extraordinary events happen again, such as the 1607 surge or mini-tsunami, Gloucester and Tewkesbury would once again be in the eye of the storm. Therefore, we must ensure that watercourses are kept clear, man-made defences are maintained, crisis planning is kept up to date, structures are reviewed, substations are protected and contingency plans are in place. We also need to be cautious about giving planning permission for homes on floodplains and to consider the remotest contingency, as who could have anticipated the events of 1607 or 2007? We may not have to wait 400 years for the next natural disaster.

It is worth highlighting the role of local media in providing brilliant information during crises of this kind, and I know that today all regional media will be running huge articles and reports on what happened 10 years ago. They will highlight the value of resilience; the power of communities; and the importance of everyone pulling together in a crisis. That is relevant to us all here, as parties, as constituencies and as a country. The Brexit negotiations are different from the Gloucestershire floods or the Grenfell Tower inferno, but for them and for all other crises we still need resilience, leadership and shared purpose, in order to get through the crisis. The word “crisis” translates as “danger opportunity” in Chinese. We have to deal with the danger and realise the opportunity to be much better prepared for the next challenge that life throws at us all. Today, across Gloucestershire, we will remember what happened, reflect on the lessons and pray that other communities do not face such natural disasters as the one we faced 10 years ago.

Madam Deputy Speaker, I join others in wishing colleagues time with their families and constituents during the recess, and in thanking all staff in Parliament for all their hard work and kindness, not least in looking after our security here.

Oral Answers to Questions

Richard Graham Excerpts

Tuesday 29th November 2016 Commons Chamber

[Richard Graham (Gloucester) (Con)]

While recognising the points made by the hon. Members for Great Grimsby (Melanie Onn) and for Stoke-on-Trent South (Robert Flello) on the Concentrix contract, which will be covered in the Select Committee’s report, I would like to congratulate Treasury Ministers on responding very fast when these issues really came to a climax in August and on being extremely prompt in looking after constituents who contacted their MPs about this matter.

[Jane Ellison]

I thank my hon. Friend for those words. Having looked carefully at the profile of complaints from Members over the period of the contract, it is clear that there was sharp increase in their number right at the end of the contract, when it became apparent that a number of Members were contacting us on behalf of their constituents. As I have said, it was the sharp decline in service that led to the actions that we took. It is also worth noting that all the 181,000 cases that were taken back have now been resolved and that, where appropriate, compensation has been paid. Most importantly, when claims have needed to be renewed and reinstated, this has been done.

Concentrix

Richard Graham Excerpts

Wednesday 26th October 2016 Commons Chamber

[Richard Graham (Gloucester) (Con)]

Today’s debate is primarily about the HMRC contractor, Concentrix, the delivery of its contract, its customer service and the impact of its work on those receiving tax credits who were wrongly suspected of fraud or error. The hon. Member for Stretford and Urmston (Kate Green) made some valid points about her constituents who have been affected, and other hon. Members have spoken equally movingly about some of theirs. The debate is about more than that, however. It is about the relative value, efficiency and service of third-party contracts as against the direct delivery of services by the Government or by Government agencies. It is also about how the Government—in this case, HMRC—reacted to the unexpected crisis when mandatory reconsideration appeals rose by 95% in August while the “success” in handling calls dropped off a cliff. It is about how quickly contingency plans were put in place, and what those plans were. It is also about whether the structure of the incentives and the contractor’s commission were appropriate for this type of public service delivery.

It is too early to offer definitive answers today, while the internal investigation is still going on. However, the inquiry by our Work and Pensions Committee and the measured comments from the Financial Secretary to the Treasury today offer some clues. To this, I add my own experience as an MP dealing with constituents who have been affected, and the observations that we made in the Select Committee.

The first point has to be that the goal of reducing HMRC’s estimates of fraud and error was the right goal for the Government to have. The 2014-15 estimates, which are the most recent ones, suggest a net £1.2 billion of fraud and error on tax credits, potentially involving 500,000 people. The Government cannot spend billions of pounds of taxpayers’ money on welfare without ensuring that it is spent properly, just as we expect the Department for International Development to ensure that its accounts are correct and its money is spent in the right way. We also expect the European Union to account correctly for the money it receives from its taxpayers, including our own.

The hon. Member for Paisley and Renfrewshire South (Mhairi Black) is absolutely right to say that rich people, and every company, should pay the right amount of tax. I would add that this is not a case of either/or. It is a case of both. The Government were absolutely right to increase HMRC’s resources for collecting the right amount of tax from those who have tax to pay and to ensure that the right amounts of welfare benefits are received by the right people. It is worth noting that the £270 million recovered through this programme will make a decent contribution to reducing fraud and we must ensure that it is made available to the people who need it most.

Secondly, there has been a cost during this process to our hard-working, not-well-off constituents. In each of the dozen or so cases that I or my office staff have replied to, there has been a degree of hardship and, in some cases, considerable hardship. HMRC’s response to such cases is therefore important. My sense, from our Select Committee inquiry, is that HMRC’s chief executive, Jon Thompson, is looking at how quickly HMRC has responded. It is true, however, that the moment HMRC took a grip, beefed up resources and put extra staff on to the MPs’ hotline, my office—and, I suspect, those of other MPs—was able to resolve these tax credits cases very fast. I am unsure whether all the cases were resolved within 48 hours, but all were done within three or four days, and some within a few hours. Indeed, the Work and Pensions Committee Chairman, the right hon. Member for Birkenhead (Frank Field), said that he could not

“recall an experience where, thank goodness, the Executive, whether Government or delegated, has acted so quickly when they have seen a crisis.”

That should be on the record. It is credit to how HMRC responded. In the evidence we took from affected people, there was one particularly gracious “thank you” to HMRC for resolving one individual’s crisis so quickly.

My third point relates to contracts to third parties and the incentive system within them. The National Audit Office recognised this as a complex area, and the jury is still out on how successful the system has been over the past few years. HMRC’s chief executive responded to my question on that with an interesting remark about

“the balance of incentives on third parties in these kinds of contracts”

which

“is essentially based on commission earned.”

He asked:

“Is that the right kind of incentive mechanism for this kind of public service delivery?”

It is a valid question, and other Members have mentioned it. The HMRC chief executive reflected on it. I also have no doubt that the NAO investigation will discuss whether bringing this sort of contract in-house would ensure better quality control, more experience of handling citizens who are on tax credits, and possibly even a reduced cost. From the evidence to the Committee, it broadly looked like Concentrix will have been paid about £27 million by the time its contract comes to an end on £270 million of fraud or error identified, implying a 10% commission. That feels high, but the figures are probably hypothetical at this stage and will need to be confirmed in due course by the investigation.

In all of this, the Government, HMRC and Concentrix have been absolutely right to start with an apology to those who have suffered. When mistakes are made, it is important that they are recognised immediately. HMRC and Concentrix started the Select Committee sessions by making their apologies—the Minister has added hers on more than one occasion—and that was important. There is the issue of compensation for those most affected, and the fact that, as the amendment states, the Government should “ensure that those people”—people on tax credits—

“are treated by HMRC in future with dignity and respect.”

That should happen all the time for everyone with whom the Government deal, particularly where monopolies such as HMRC exist. We all have a duty to treat our constituents with dignity and respect. That is what happens most of the time. My experience is that HMRC is helpful on every occasion with constituent issues.

In conclusion, today’s debate has been measured and the tone has been reflective and thoughtful across the House. Clearly, there are lessons to be learned. It is correct that tax collection is done, that welfare benefits are spent in the right way on the right people, that mistakes are responded to rapidly and that agencies such as HMRC should hold contingency plans. Poor service should be treated and amended as quickly as possible. I therefore welcome this opportunity to discuss some preliminary thoughts on the lessons that can be learned and I look forward to the NAO report in due course.

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Although the hon. Member for Gloucester (Richard Graham) spoke for precisely eight minutes, the previous speakers did not, so I must now impose a formal time limit of seven minutes.

Savings (Government Contributions) Bill

Richard Graham Excerpts

2nd reading: House of Commons & Money resolution: House of Commons & Programme motion: House of Commons & Ways and Means resolution: House of Commons
Monday 17th October 2016 Commons Chamber

[Richard Graham (Gloucester) (Con)]

I congratulate the hon. Member for Harrow West (Mr Thomas) on his comments, particularly those about the Help to Save product the Government are introducing. He talked about the Government looking at the role of credit unions and whether it would be possible to use payroll. It would be helpful if the Ministers, whom I welcome to the Chamber, commented on those matters, as well as some of the IFS criticisms and the very helpful Library briefing.

I want to focus on the Government’s lifetime ISA. We should not question its intentions. Its simple aim is to increase savings among the young and to help more people on to the housing ladder, and surely none of us can have any objection to that in principle. The difficulty is that we do not, of course, start with a blank sheet of paper, and adding yet more products to the already complicated savings landscape risks bringing unintended consequences. I want to focus on that risk.

As the Library briefing rather coyly puts it, over the past 25 years, a string of largely tax-based savings incentive schemes has been brought in under different Governments. Some Members will remember the stakeholder scheme, yet not many will perhaps now remember personal equity plans, tax-exempt special savings accounts, child trust funds—they ceased not that long ago—or indeed the saving gateway, which was never rolled out nationally. When we consider the lifetime ISA and what it is proposed that it will achieve, we must also bear in mind what other savings products exist.

Under the general heading of “savings” I include pensions; they are simply a particular form of savings designed primarily to provide people with adequate income in retirement. Of course as we live ever longer, the value of having those savings, lasting well beyond an age to which people were expected to live not long ago, becomes more important. The Government have a crucial role to play as the body that will prop up all or any of us when we run out of savings. I want to focus on a couple of things within the product range of savings and the potential unintended consequences of this Bill.

The LISA was introduced in this year’s Budget after the Chancellor said that it was clear there was no consensus on the future development of pensions. But in a sense he revealed his own hand by increasing the ISA limit and proposing the introduction of the lifetime ISA. This showed the Treasury’s direction of travel very clearly. It is no surprise that the Centre for Policy Studies has welcomed this ISA since, it says, it is similar to a proposal made in the past. Indeed, Michael Johnson at the CPS has been advocating the end of pensions for a long time. I have described him as the Guy Fawkes of the pensions industry—he would love to blow the whole thing up tomorrow if he could. The lifetime ISA was just one of his steps towards that goal, with a workplace ISA coming in next.

That is where some of the problems start. The Chancellor’s main underlying argument for introducing the LISA was that younger people did not understand pensions—that they were far too complicated and were not popular and therefore we needed to use the well-known brand of the ISA. I have clashed many times with the hon. Member for Ross, Skye and Lochaber (Ian Blackford)—mostly happily—on pensions issues. His contributions are normally way over the top, as, unsurprisingly, they were again this evening. However, he was right to use the quotation in the Association of British Insurers briefing, demonstrating that, interestingly, the opt-out rates in auto-enrolment among the under-30s have been the lowest of all age groups. That arguably suggests that younger people do not necessarily find pensions complicated when they are provided with a solution in the workplace into which they, their employer and the Government can all contribute and the paperwork is easy. So pensions do not have to be any more complex than any other form of savings, but what makes the whole sector more complicated is the constant temptation of successive Chancellors to act as product designer for the industry and introduce yet more different products.

[Kit Malthouse]

I am a little puzzled by my hon. Friend’s use of the statistic that the under-30s have the lowest opt-out rate. The under-30s will of course become the over-30s and the over-40s, and they might well opt out at that point. Their continuing to opt in at this early stage, when they might not have quite so much pressure on their wage packet, is not necessarily indicative of what they will do in the future.

[Richard Graham]

My hon. Friend makes a perfectly reasonable point, but he should bear in mind the fact that opt-out rates were expected to be 25% and are averaging 9% so far. The Government’s expectations about opt-out rates have therefore, happily, been proved wrong. He is right to say that the under-30s will become the over-30s, but we should all be trying to encourage those people to stay in and build up their savings through the pensions scheme, rather than introducing a competitive product that could, for various marketing reasons, seem more attractive and therefore divert people of all ages from the good and noble cause, which I think he supports, of building up more savings for their retirement.

[Ian Blackford]

Does the hon. Gentleman agree that auto-enrolment has been an enormous success, and that one reason for that success has been the relatively low opt-out rates? Does he also agree, however, that there is more to be done to ensure that we include low-paid workers, particularly women and the self-employed? That should be the focus, but the tragedy of the Bill is that it deflects attention from what we should be doing—namely, incentivising pension saving.

[Richard Graham]

That is an interesting point. The hon. Gentleman is absolutely right to say that auto-enrolment is not good for the self-employed, and there are other aspects of it, including women’s savings, that could be improved. Yes, there has been success, but my “yes” is a cautious one. After all, auto-enrolment has not been going for very long. The real test will be over the next couple of years when up to 4 million people could come into the scheme, taking it from roughly 6.9 million savers at the moment to more than 10 million fairly soon. We will have to see whether they come in with the same enthusiasm as did those who work for larger employers. My point is that introducing the lifetime ISA at this stage, before we know how smaller employers and their employees are going to react, risks undermining the success of auto-enrolment so far.

In 2005, the Pensions Commission described pensions, and the tax relief on pensions, as

“poorly understood, unevenly distributed, and the cost is significant.”

It was absolutely right. The cost to the Treasury is £34 billion a year, and it receives back some £13 billion in tax on pensions, so there is a huge cost involved. I am pretty sure that that is why the Treasury is rightly trying to shape a savings policy that is both good for individuals and not so expensive for taxpayers or for the Treasury as the intermediary. I would like to see a much more co-ordinated effort by the Treasury and the Department for Work and Pensions to look closely at the existing range of savings offerings, pensions included, to see how they can be rationalised in order to come up with a simpler, less expensive method of encouraging people to save.

It is interesting that the online information sheet on the lifetime ISA does not mention the fact that contributions come from someone’s salary after they have paid tax. It also strongly urges people to

“use it to save for retirement”.

That is exactly what we would expect people to do with a pensions product, so the concept that the lifetime ISA is not competitive with auto-enrolment and other pensions offerings is slightly disingenuous. Others have made the point that it is competitive with auto-enrolment and therefore offers significant potential for many of our constituents. Let me quote briefly from one or two of those who have highlighted this issue.

The Pensions and Lifetime Savings Association, which used to be called the National Association of Pension Funds, illustrates my point that all pensions are now, rightly, considered to be savings products. It comments:

“We look forward to working with the Government to help make sure that the Lifetime ISA does help younger people build up their savings.”

It goes on to say that it is important to ensure that

“the regulation on charges and governance of the Lifetime ISA are comparable to those for pensions, which have been reviewed to make sure they offer savers good value”.

That refers to the cap on charges and the increased governance. The association is implicitly recognising that this product will be considered by consumers as an alternative to saving. Indeed, former pensions Minister Steve Webb says:

“There is a real danger that the new product will mean that many young people will not start saving for their retirement until their thirties”

because that option is available to them through the lifetime ISA.

It is also interesting that the Association of British Insurers, Zurich and Hargreaves Lansdown have all expressed concern. One of the points raised by the Institute for Fiscal Studies is exactly the same point that I made in an article earlier today in which I referred to the lack of clarity over the extent to which there will be new savings, as against the shifting of existing funds by people who have already saved in ISAs. We must recognise the fact that 21 million people have invested in ISAs. That is not a small body of people. It is not a narrow cohort consisting exclusively of the very rich, for example. If savings are recycled and 80% of the people who put money into a cash ISA in 2014-15 recycle their money into a lifetime ISA to get the 25% Government bonus, that would not necessarily demonstrate a success for the Government in terms of bringing in new savers and people who would not otherwise have the chance of getting on to the housing ladder. Rather, it would demonstrate that people who already have savings are being given an opportunity to increase the return on those savings, and that higher-rate earners will have an opportunity to provide lifetime ISAs for their children or grandchildren.

It would help if the Minister clarified what impact assessment the Treasury has carried out. How much money does it expect to come in from new savers? How much does it expect to be recycled from existing ISA-holders? Who will be the beneficiaries of the lifetime ISA? My concern is that the main beneficiaries of the vast weight of the £850 million that this will cost the Treasury and therefore the taxpayer will be people who already earn quite a lot, or their children, and that the benefits will not reach the many, even though that is the intention behind the Bill.

I have tried to address some of the issues and unintended consequences that could arise from the Bill. Hargreaves Lansdown has written a useful paper on simplifying ISAs and pensions, in which it proposes a number of changes to ISAs. It is worth flagging them up today. It proposes: consolidating six different types of ISA into one; limiting the cost to the Exchequer of the Government top-up to the lifetime ISA; simplifying ISA decision making for investors; reducing the administrative burden for the industry; retaining the help-to-buy element of the lifetime ISA in one simple ISA product; and eliminating the risk that the ISA will undermine pension saving. It goes on to make a similar number of recommendations on pensions as well. The last point about eliminating the risk that the LISA will undermine pension saving is the one to which I keep returning because it is possible to do these things in a different way.

The Pensions Policy Institute found that Canada, Australia, New Zealand, US and Singapore—all countries that broadly follow Anglo-Saxon approaches to finance and investment—allow early access from the same product used for pension saving. That is critical because it means that people do not have to choose between a LISA or auto-enrolment and that they can decide whether they want to save to get on to the housing ladder or to save for their retirement through the same product. It would be a major achievement of this Government and Treasury and DWP Ministers if they could work together to rationalise the structure of pensions and savings so that individual consumers can access the same product for different reasons without having to subscribe separately. That would eliminate the main concern of many about the unintended consequence of the LISA directly and negatively impacting auto-enrolment. That is why I will certainly not be voting against the Government but will abstain from voting on the Bill this evening.

--- Later in debate ---

[Peter Dowd (Bootle) (Lab)]

We have had a number of contributions. The hon. Member for Newark (Robert Jenrick) told us about his grandparents getting to Blackpool courtesy of a jam-jar savings policy, which I thought was novel. The hon. Member for Ross, Skye and Lochaber (Ian Blackford) summed up the Government’s proposals as a missed opportunity, as undermining pension savings and as not tackling the real issue. The hon. Member for North West Hampshire (Kit Malthouse), who does not appear to be here, spoke of the diminution in the number of people with an asset base and said that, in his modest opinion, we should try to push on and get people to have a bigger asset base.

In an excellent contribution, my hon. Friend the Member for Harrow West (Mr Thomas) underlined the need for the Government to look afresh at the timescales in the Help to Save scheme and asked the Government to be more imaginative and reinforce the need to permit credit unions to participate in the scheme and the statutory right of payroll deductions of savings. The hon. Member for Gloucester (Richard Graham) gave us an enlightening exposition of his concerns that the proposal might be moving towards the death of the pension as we know it. I am not quite sure whether that was what he said, but that was the impression I got.

[Richard Graham]

Just to clarify, I said that the proposal risks undermining saving through a pension scheme and we do not want to do that.

[Peter Dowd]

I understand that clarification and I will touch on that topic in my speech.

Finally, the hon. Member for Morecambe and Lunesdale (David Morris), who supports the Government’s proposals, spoke about his experiences as a self-employed person and said that the proposal is not a supplementary pension but a means of saving.

Labour welcomes the sentiments expressed today on both sides of the House about the need to address savings overall. In general, anything that allows more people to save for the future is to be welcomed. Helping younger people and those on low incomes to save is a particularly legitimate and worthy objective, and the Government are right to consider policies to incentivise it. The majority of people on low incomes or in precarious work—categories sadly growing in Conservative Britain—are far from being in a position to save. Six years of Tory failures and austerity has led to many not knowing from where the next pound will come week in, week out. The Government’s clueless approach to exiting Europe simply compounds the problem on a macroeconomic level.

How is it possible for people to save when it is hardly possible for many to live properly on a weekly basis? How can a person save for the future when they can barely get through the day? The scandal of low retirement savings for the less well-off is an indictment on any notion of a cohesive society. One in seven pensioners lives in poverty and a further 1.2 million have incomes just above the poverty line. Distributional analysis by the Women’s Budget Group shows that single female pensioners will experience a whopping 20% drop in their living standards. It is unconscionable that people who have worked hard and contributed to society are forced to spend their final years in hardship and insecurity. We agree that there are problems that need to be solved urgently but the TUC states:

“Products such as… the forthcoming Lifetime ISA are disconnected from the world of work and prioritise goals other than retirement saving.”

As for the lifetime ISA, it is hard to see how its introduction even begins to tackle the problems to which I have just referred; not only does it represent a missed opportunity to build on the success of automatic enrolment, as those on the SNP Front Bench have said, but its introduction could serve as a distraction to tackling the real issues at hand. It misdirects valuable resources, as the money the Government are spending on this scheme is likely to benefit mostly those on higher incomes, as has been mentioned on a number of occasions. It also needlessly complicates the pensions and savings landscape—an arena already fraught with complexity. Perhaps most dangerously, it has the potential to undermine the emerging consensus that a pension ISA approach would be detrimental in the round. Indeed, it has the potential to introduce just such an approach through the back door. That is a concern and we are seeking assurances from the Government that it is not doing that.

In the months leading up to the Budget, the concept of replacing the existing systems of pensions tax relief with an ISA-style approach was widely debated and almost universally rejected as damaging to people’s retirement prospects. I wonder, as do many others, whether, after enduring an embarrassing rebuff, the Tories are back again with the same intent under the guise of this Bill. Many in the pensions industry have described the LISA as a “stealth” move towards pension ISAs. The Work and Pensions Committee has said that the Government are marketing the LISA as a pension product and there is a high risk that people will opt out of their workplace pension as a result. Let me be perfectly clear: people will not be better off saving into an ISA as opposed to a workplace pension. The Committee found that

“For most employees the decision to save in a LISA instead of through a workplace pension would be detrimental to their retirement savings.”

Small Charitable Donations and Childcare Payments Bill

Richard Graham Excerpts

2nd reading: House of Commons & Money resolution: House of Commons & Programme motion: House of Commons
Tuesday 11th October 2016 Commons Chamber

[James Duddridge]

I entirely agree with my hon. Friend that some charities are struggling and that there is a constant shift in funding. I remind Southend charities not to believe all the doom and gloom that was talked pre-Brexit. We are still growing strongly; we are the strongest-growing economy in the G7. Rather than squirreling away money for the rainy day that might come, we should encourage people to spend, enjoy and donate some of that money to charities. The Bill’s measures should allow more of such money to come back to charities.

In common with previous speakers, I should like to mention a charity with which I was involved, although I did not start it up. I was appointed by a charity known as the Bulldog Trust, which is based just down the road from here. Its website said that it was a philanthropy organisation. I thought that it was no good for me because I do not have any significant cash to give to it—it would certainly be a £20 donation from me rather than a £20 million donation—but what this charity does is to link up people who have a skill and want to use it within a charitable organisation. That sent me to the Grow Movement, which at that time was a charity operating in Uganda, Rwanda and Malawi.

I mention that example because I am a little unclear about what happens when a charity such as the Grow Movement is UK based but international. Of the trustees, I think I was the only one domiciled in the UK; it has an international virtual board. We need to make sure that small sums, wherever they might come from, can go to such organisations. At one time it was inconceivable that someone would send a few quid from France or the United States, but now, because of the way the internet is set up, when we purchase something we are quite often asked to “click here” to enable an extra £2 to go to a charity. I urge the Minister to review the position and ensure that charities like the Grow Movement can benefit from this and future legislation.

[Richard Graham (Gloucester) (Con)]

My hon. Friend is making a series of good points about the impact that the Bill could have on small charities. He has mentioned several in Southend, and I suspect that all of us could mention others in our own constituencies. Is he aware that the inability to reclaim through texts is a possible issue for some of those charities, and does he think that the Minister should reflect on that when winding up the debate? May I also ask what he thinks might be the impact on charities such as scouts groups that sometimes, for example, raise funds using buckets outside supermarkets. Under the new provisions, I think that they will be able to—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. I know that the hon. Gentleman is doing a Whip’s job, and I do not mind that, but what we cannot have is the making of speeches rather than interventions. I want to try to help everyone, but I cannot allow myself and the Chamber to be tested by a speech rather than an intervention.

--- Later in debate ---

[Richard Graham]

Contrary to what has been suggested, Mr Deputy Speaker, this is not a bob-a-job contribution. Does my hon. Friend agree that this could also be incredibly helpful to armed forces cadets and other charities? I am thinking particularly of those who help people to pack items that they have bought in shops. Small amounts of money will often be collected in buckets to go to small causes, and the Minister has just confirmed that that will be covered.

[James Duddridge]

Another point is that charitable giving then begins to be inculcated in young people in particular. Their small donations, to both small and big charities, bring them into the system. Certainly, when I see someone under the age of 16 collecting for poppies or Help for Heroes, I feel that the future of the country is in safe hands.

I intervened on the Minister to ask about deeming all donations tax-free. I am sympathetic to Her Majesty’s Opposition’s points about complexity. The points have been made well today, just as they were three years ago, as Opposition Front-Bench Members pointed out. The sooner we can get through all this complexity and decide that the basic rate of tax should come back from all moneys en bloc that are given to charities in small amounts, the better. I will say more about how we define “small amounts” later.

I shall turn now to the specifics of the Bill. Clause 2 deals with the meaning of the term “small donation”, and subsection (3) refers to the United Kingdom. However, clause 6, which deals with the extent of the Bill, refers to England and Wales, Scotland and Northern Ireland. Forgive me if I am being stupid, Mr Deputy Speaker, but I think that they amount to the same thing. I would be grateful if that provision could be amended, if only as a tidying-up exercise, or if the difference could be explained.

--- Later in debate ---

[Rebecca Pow]

I agree with my hon. Friend. I will come on to a bit in my speech about that because I want to mention a number of these issues. My hon. Friend is absolutely right.

[Richard Graham]

Will my hon. Friend give way?

[Rebecca Pow]

Would my hon. Friend mind if I ploughed on just for a minute? I will lose my train of thought. Would he intervene in a minute?

Whenever I visit charities in my constituency, which I do as often as I can, I ask what I can do in Westminster to help them. So often they say that they want access to gift aid. One of their biggest issues is raising funds and then being able to get the right benefits and aids. Another colleague said that often small charities do not even know what they can or cannot claim. So anything that can be done to ease that will help, and I think the Bill will do so.

Whatever we can do to help small charities retain the money that they have worked so hard to collect would be beneficial. If it could be increased with top-ups and things, that would be welcome. While the current system has many good points, it has been criticised for being complex and inaccessible especially for small and newer charities. That is why I am pleased that the Government are listening. I was pleased to hear the Minister speaking earlier, and I am sure that the Bill will help to make life simpler in terms of funds collected and the submissions that small charities are required to make for gift aid.

I welcome the proposed simplifications through this gift aid small donations scheme. I was also pleased that so many stakeholders took part in the consultation and so many charities fed in, and that the Government are listening and taking on board lots of their views. The scheme will definitely help those charities for which it is not practical to obtain an individual gift aid declaration for every small donation made. That is where we come back to bucket collections, the bob-a-job collections that my hon. Friend the Member for Gloucester (Richard Graham) referred to, and even sponsored events. I am sure that Mr Deputy Speaker has done some himself, such as a sponsored bike ride. I did a mini-triathlon to raise money for charity. People give their support, but only with small amounts, and gathering all the intimate details that charities are required to input is often too much for them, so they do not go to the effort of claiming back what they could claim and get the benefit. We would definitely like to help all those charities, and the Bill will do so.

I welcome the reforms that will allow charities to benefit from the top-up system that has been worked into the Bill, so I will now come on to community amateur sports clubs. I am pleased that the Minister particularly addressed areas for them, especially the point that they had to be in one building to raise their money. I am pleased that that slightly ludicrous little piece of the legislation will be relaxed.

I am an ardent advocate of the benefit of sport in our communities, cricket included. We have marvellous cricket facilities in Somerset, many of which operate from the county town, Taunton, working from entry level at school right the way up to the county ground, where my hon. Friend the Member for North East Somerset (Mr Rees-Mogg) often goes. I particularly work with a number of sporting charities. I have helped to bring forward a water sports centre, which is being completed on the river in Taunton, with the charity, COACH—the Centre for Outdoor Activity and Community Hub. My hon. Friend the Member for Chippenham (Michelle Donelan) mentioned bowling. I have helped to attract funds for the bowling club in Wellington, and it is now winning major trophies right across the region. It was in the Wellington Weekly News only this week. Amateur sporting charities, such as Taunton football club, all need to raise funds, and the small change that we will make in relation to the venues where money is raised will really help them to retain more of their own money and make more of it. I welcome all that.

I will make a small nod to the eminently sensible provisions on childcare payments. A simple extension of the timescale for parents to input their children’s details to claim the correct tax free childcare bonus will make life much easier for many families, particularly those families whose circumstances have changed. For example, when two families join together, which happens quite frequently now, and people end up with their own children and some stepchildren, opening and expanding the window for people to input all the data will help all the children under one roof. I very much welcome that and hope that it will all make progress.

All the things in the Bill are really helpful. They will help individual families with childcare payments, and very many charities, particularly smaller and newer ones, will be helped by the new provisions on donations. The Bill certainly shows that the Government are listening. They have listened to all those stakeholders and charities. That is what we should be doing in government—it is absolutely right—as well as working towards making life run much more smoothly, particularly for those who really need it.

Summer Adjournment

Richard Graham Excerpts

Thursday 21st July 2016 Commons Chamber

[Richard Graham (Gloucester) (Con)]

It is a pleasure to take part in the debate and to have an opportunity to welcome my colleagues on the Front Bench, who are serving—I think for the first time—as Deputy Leader of the House and duty Whip. I congratulate them on their new responsibilities.

In a summer when a decade seems to have passed in the last month—indeed, so much has happened since the ghastly murder of Jo Cox that it seems a long while ago, although in reality it was a very recent tragedy—and at a time when Brexit and the how, when and in what way we leave the European Union seem to be the dominant theme of so much media focus, I want to concentrate on issues over which we have always had complete control in this country. At this time, the emphasis is on the need for us—Government, Members of Parliament, local government and other agencies—to come up with answers and deliver them, so that life in our country and our constituencies, in my case the ancient city of Gloucester, gets better from year to year.

Let me begin with transport, because that is how we Gloucester residents travel to and from our city, how visitors arrive, and how our investors gain their first impressions. Two improvements could be made at Gloucester railway station—in the frequency of the trains and in the infrastructure. It still seems extraordinary to me that Arriva CrossCountry’s inter-city service between Birmingham and Bristol, which runs 63 trains a day, stops only three times at the city of Gloucester. My hon. Friend the Member for Devizes (Claire Perry) worked on that problem diligently when she was the trains Minister. I hope that the new Minister will pursue with the same enthusiasm the business of enabling more CrossCountry trains to stop at Gloucester as the Department for Transport completes its programme for a new franchise in the west of England.

As for the infrastructure, Great Western Railway is making good progress with a new station car park, which will open up the southern side of the station for the first time in its 150-odd years of existence. However, there is more work to be done. I hope that the new Secretary of State for Communities and Local Government will look favourably on the bid from the Gloucestershire local enterprise partnership, which includes a significant amount of money for a general station infrastructure project that will undoubtedly be one of the drivers of growth in our city in the future.

Of course, it is also important for our bus, road and cycle infrastructure to be in as good a state as possible. Our new bus station is well under way, and I know that the city and county councils will ensure that it is delivered on time and within budget, but the road situation is more complicated. The so-called missing link on the A417 between the M4 and the M5 is a major blockage to growth, not just in Gloucestershire and in the city of Gloucester but more widely, between the south and the north of the country. I hope that my right hon. Friend the new Secretary of State for Transport will take the same interest as his predecessor in ensuring that the first spade goes into the ground for that important new project before April 2020.

As a keen cyclist—only marginally put off by a promising black eye, which those with keener vision will spot, resulting from an incident this morning—I hope very much that the county council’s £3.5 million project for a new cycle lane between Gloucester and Cheltenham will receive approval from Highways England in due course. I am also separately pursuing longer-term improvements on the towpath between the city centre and Quedgeley. I can tell colleagues who have never had a chance to visit Gloucester that that is a wonderful cycle journey. They would be excused for not realising at any stage, even before visiting the Pilot Inn at the end of their journey, that they were cycling in the middle of a city rather than in a particularly glorious bit of the English countryside, because that is, in fact, what they would be doing.

Finally, I want to refer to two education projects which, in the longer term, will make a huge difference. First, there is the bid that we are preparing for a new Gloucestershire health university technical college, which will serve the people of our county and, possibly, people from wider afield who could travel by train from Swindon or even from Worcester. It will give 14 to 18-year-olds great opportunities to gain BTEC qualifications in either health or care, and also to gain significant work experience with the three NHS trusts in the county, as well as in the private sector. It is to me quite wrong that we should need 400 new nurses a year and that we are only training about 120 and are having to import them from as far afield as the Philippines. Excellent though our nurses from Portugal, Spain, the Philippines and elsewhere are, we should be training them at home; we should be giving them those opportunities to take up the 12,000 jobs in the health sector in Gloucestershire and training them in our own county. I hope very much that that bid goes ahead and is successful.

The other education bid we are making is for a new RAISE academy, which will be for excluded pupils from our secondary schools. This is also important. Everybody deserves a second chance and the opportunity to get back into learning and get the qualifications and skills they need to get good jobs later on, and I hope very much the Department for Education will look favourably at that.

[Dr Tania Mathias (Twickenham) (Con)]

I note what my hon. Friend says about the great training going on. Does he agree that with over 300 different careers in the NHS, that new training establishment for excluded pupils might do well to see if there is a place for each one of them in our great NHS?

[Richard Graham]

Yes, my hon. Friend is absolutely right to stress that. She has experience of the NHS herself as a doctor, and it is right to point out that there are huge opportunities both on the technical level and the care side and on the course she took through university.

I should finish my contribution today by drawing attention to two exciting things happening in Gloucester during this great summer period. The first is our summer of music, art and culture, which is already well under way. The world’s longest running and I think longest festival of all, the Three Choirs festival of Gloucester, Hereford and Worcester, starts on Saturday. There will be spectacular concerts for the next couple of weeks around that. We will then come to the Gloucester history festival, which I created with many other friends and partners some six years ago, and this year is looking to be even bigger and better than usual. That will be in the first two weeks of September, immediately after Gloucester day, when we celebrate the moment when the city of Gloucester refused to open its gates and surrender to King Charles I, thereby preventing the King from succeeding in his mission in the civil war and ensuring the supremacy of Parliament, which I am sure we all celebrate, as I wish all colleagues a very happy summer recess.