Finance Bill (Ways and Means)

Rushanara Ali Excerpts

Ways and Means resolution & Ways and Means resolution: House of Commons
Tuesday 19th May 2020 Commons Chamber

[Rushanara Ali (Bethnal Green and Bow) (Lab)]

Self-employment is a vital part of our economy. People who are genuinely self-employed deserve to be properly supported while ensuring that everyone pays the right amount of tax. While we welcome the extension to 2021, it is crucial that we ensure that there is levelling up and protection of people’s rights, whether they are in the public or the private sector. That is why a joined-up approach is required in bringing together consideration of tax and employment law and protection for the self- employed.

I want to turn to my wider concerns about the Finance Bill. With every passing day, it is clear that we are entering a severe recession, which is going to lead to more poverty, inequality and greater unemployment if the Government are not bold in their response. The Office for Budgetary Responsibility has already said that the economy could shrink by 35%, with unemployment soaring to 2 million. Youth unemployment is likely to reach 1 million, with an additional 640,000 young people being made unemployed. We desperately need to support them so that they have hope for the future and we do not lose another generation. They need job guarantees, training, and mentoring and support from wider society.

We also need to make sure in relation to the Finance Bill—it could do so much more, given that it was conceived before the crisis—that Ministers look at the areas where the Government’s programmes following covid do not go far enough, leaving many out. The first is the job retention scheme, and while I welcome the extension to October, many employers are not clear about what their contribution to the furloughed salaries needs to be. That needs to be clarified, and I hope the Minister will do that. Research by the New Starter Justice campaign has found that 83% of its members received no universal credit for April. How do the Government expect them to survive for eight months with no income or welfare? Those in the hospitality sector also face huge challenges because they do not qualify for support. Between 350,000 and 500,000 remain unable to be furloughed, despite the extension of the job retention scheme.



When the Chief Secretary to the Treasury was asked about those issues at the Treasury Committee, he talked about “trade-offs” and “hard edges” to avoid the risk of fraud, but these are not people who are committing fraud. These are hard-working people—hundreds of thousands of them—who are getting no support from this Government. That is wrong, and it must be corrected. I hope the Minister will say something about that, because they desperately need our support.

The Institute for Fiscal Studies estimates that 2 million freelancers in sectors such as arts and entertainment and the creative industries who have some self-employment income are not covered by the scheme, while 675,000 people who get over half their income from self-employment will not be covered. The Government need to act to help them.

Finally, limited company directors are also left out. Local government need support from the Government. Only £3.2 billion of emergency funding has been provided, and yet there is a shortfall of £10 billion. They desperately need the Government to act now, so that they can cope with the crisis. My local authority has lost £35 million of income and will have to spend an extra £25 million to address the coronavirus crisis. The Government need to make sure that they are prepared for tough times. The Bill does not do that, and this particular change does not address the bigger crisis that is looming ahead of us.

Finance Bill

Rushanara Ali Excerpts

2nd reading & 2nd reading: House of Commons & Programme motion & Programme motion: House of Commons & Ways and Means resolution
Monday 27th April 2020 Commons Chamber

[Rushanara Ali (Bethnal Green and Bow) (Lab)]

We are humbled daily by the efforts of the NHS workers and all the other key workers in our country. They are making unimaginable sacrifices to treat the sick and care for the vulnerable, and to provide supplies of medicine and food. We owe them everything and it is right that we should continue the pressure to ensure that PPE, testing and equipment is provided, as we continue to enforce the lockdown.

This is a national struggle but it is being fought hardest at the local level in communities. My constituents in Bethnal Green and Bow are resilient people. Some still recall surviving the blitz, and today, there are many who survive a daily struggle of poor housing, low wages, a lack of opportunities and antisocial behaviour, but no matter how resilient and tough they are, they need the Government on their side. They need targeted interventions to help them in these difficult times. They need protection against the vagaries of a global economy, to protect their jobs, incomes and businesses.

The economic projections are chilling. The latest International Monetary Fund analysis suggests that the global recession is going to be far worse than the 2007 global crash. The World Trade Organisation says that global trade could collapse by 31% this year, just as post-Brexit Britain is desperate to strike deals.

A terrible economic storm is coming, and we are just not ready. The UK is ill prepared after a decade of under-investment, imbalances between the nations and regions and the deep scars of inequality and poverty caused by a decade of austerity characterised by stagnant wages and cuts to our public services.

Young people are once again likely to be the lost generation unless our Government take immediate steps to ensure that they have the training and support—virtually, while we are in distancing mode—and other provisions they need to get into the labour market. We need to use the hundreds of thousands of people who volunteered to help the NHS to support young people by mentoring and backing them, as we find a way through this crisis.

This Finance Bill does little to strengthen our economy or make us more resilient. Even before the covid crisis, it was inadequate. It does not deal with the challenges of climate change and the climate emergency, and it does not go far enough to reverse the challenges posed by the deep-seated inequalities in health, education and other spheres over the last decade.

The Office for Budget Responsibility predicts that there will be a 35% reduction in GDP in the second quarter of the year and that unemployment will rise by more than 2 million. Already, the deficit hawks are circling over the Treasury Bench, calling for huge cuts in public spending. Another decade of austerity as the answer to Government debt is absolutely not acceptable. Surely we have learned from the financial crisis in recent weeks that we have to ensure that our public services are resilient and strong in order to face the threats of global pandemics and economic downturns.

We need to ensure that we protect those on the frontline, who have often been the low-paid and have not been treated well—the teachers, nurses, carers, delivery workers and shop workers. They do not run the country, but they make the country run, as we have seen in recent weeks. We need a modern-day Marshall plan, rebuilding and reconstructing our NHS, social care, police, schools and other vital public services, rather than leaving them vulnerable and fragile as we face crises like the current pandemic.

We need to ensure that local authorities on the frontline get the support they need. Tower Hamlets Council in my constituency is having to spend around £25 million and is losing £35 million of income—that is a significant amount of money. I call on the Minister to ensure that local authorities get support. The job retention scheme is welcome, but hundreds of thousands of people in hospitality and other sectors are still being excluded, and they need help urgently.

Finally, I want to highlight the impact in the global south. In countries like Bangladesh, the failure of companies such as Asda, New Look, Edinburgh Woollen Mill, Peacock and Urban Outfitters to pay up for contracted work is leaving millions of people vulnerable to unemployment and starvation. It is important to ensure that our companies are responsible and that people’s lives are protected. We have a duty to work together domestically and internationally.

Coronavirus Bill

Rushanara Ali Excerpts

Committee stage & 3rd reading & 3rd reading: House of Commons & Committee: 1st sitting & Committee: 1st sitting: House of Commons
Monday 23rd March 2020 Commons Chamber

[Mr Steve Baker]

I stand first with my hon. Friend the Member for Isle of Wight (Bob Seely). We cannot neglect his constituents on the Island. I fear that this issue has gone on for far too long, and I want to say sorry to him that we did not weigh in behind him sooner. This issue has just got to be dealt with, and I know that my right hon. Friend the Minister knows that.

Secondly, I would like to pay tribute to hon. Member for Bradford West (Naz Shah). She has done an absolutely fantastic job in the last 24 hours. It has been a real privilege to work with her to secure what I think is a fantastic result. At a time like this, matters of the hereafter are close to everybody’s thoughts. They sometimes say that there are no atheists in a foxhole. I certainly would not want to stand by and see my constituents cremated against their wishes, and nor, indeed, would I want to see people buried against their wishes. I really want to congratulate her; she has done a fantastic job, and she has done it in a wonderful cross-party spirit, which has done a lot to reinvigorate my faith in this place and in what we can achieve together when we put our constituents first. Well done to her.

I will pay particular attention to amendments 1 and 6 and Government new clause 19, which relate to the expiry of these powers. When I got into politics, it was with the purpose of enlarging liberty under parliamentary democracy and the rule of law. When I look at this Pandora’s box of enlargement, discretion and extensions of power, I can only say what a dreadful, dreadful thing it is to have had to sit here in silence and nod it through because it is the right thing to do.

My goodness, between this and the Prime Minister’s announcement tonight, what have we ushered in? I am not a good enough historian to put into context the scale of the infringement of our liberties that has been implemented today through the Prime Minister’s announcement and this enormously complicated Bill, which we are enacting with only two hours to think about amendments.

I could speak for the time I have available several times over just on the provisions relating to the retention of DNA, which we addressed in the Protection of Freedoms Act 2012. [Interruption.] I see from the expression on the face of the Paymaster General, my right hon. Friend the Member for Portsmouth North (Penny Mordaunt), that she understands the anguish—she probably knows it better than any of us—that we are all going through in passing this Bill.

Let me be the first to say that tonight, through this Bill, we are implementing at least a dystopian society. Some will call it totalitarian, which is not quite fair, but it is at least dystopian. The Bill implements a command society under the imperative of saving hundreds of thousands of lives and millions of jobs, and it is worth doing.

By God, I hope the Prime Minister has a clear conscience tonight and sleeps with a good heart, because he deserves to do so. Libertarian though I may be, this is the right thing to do but, my goodness, we ought not to allow this situation to endure one moment longer than is absolutely necessary to save lives and preserve jobs.

Although I welcome new clause 19 to give us a six-month review, I urge upon my hon. and right hon. Friends and the Prime Minister the sunsetting of this Act, as it will no doubt become, at one year, because there is time to bring forward further primary legislation. If, come the late autumn, it is clear that this epidemic, this pandemic, continues—God help us if that is true, because I fear for the economy and the currency—there certainly will be time to bring forward further primary legislation and to properly scrutinise provisions to carry forward this enormous range of powers.

Every time I dip into the Bill, I find some objectionable power. There is not enough time to scrutinise the Bill, but I can glance at it—I am doing it now—and see objectionable powers. There would be time to have several days of scrutiny on a proper piece of legislation easily in time for March or April 2021.

I implore my right hon. Friend, for goodness’ sake, let us not allow this dystopia to endure one moment longer than is strictly necessary.

[Rushanara Ali (Bethnal Green and Bow) (Lab)]

I concur with the hon. Member for Wycombe (Mr Baker): although supporting this legislation is absolutely the right thing to do, we must make sure that scrutiny remains and that his and the Opposition’s warnings are heeded by the Government.

I express my deepest sympathies for those who have already lost their lives in my constituency and around the country, and I pay tribute to the emergency workers around the country who, right now, need our support and direct, immediate action from the Government to give them the PPE they lack.

Here in London, we are at the frontline. There are densely populated areas in my constituency and around the city with huge amounts of overcrowding, intergenerational living and high health risks, which means that, ahead of the challenges spreading around the country, we face challenges now.

We have had several reports of major problems in my constituency in the last week. Doctors and clinicians at the Royal London Hospital have described the situation as being like a warzone, and others have said that they are already having to make devastating decisions—choosing between who to save and who dies. They speak of collateral damage and of doctors having to order equipment online. I echo the importance of making sure that PPE is sent to people immediately.

The Economy

Rushanara Ali Excerpts

Thursday 24th October 2019 Commons Chamber

[Sajid Javid]

I will give way when I have made some progress.

We have turned the economy and the public finances around, and I am not prepared at all to throw away that hard work. The Queen’s Speech puts fiscal responsibility at the heart of our plans, with a clear commitment to ensuring that we keep control of borrowing and debt. I will set out our detailed plans in the Budget.

[Rushanara Ali (Bethnal Green and Bow) (Lab)]

I just want to highlight the brass neck of the Chancellor, having worked in the banking sector, not to accept that it is the banking crisis—the clue is in the name. He then came into Parliament and presided over dreadful, drastic cuts on our constituents—police cuts, school cuts; the list goes on. Now he has the brass neck to say that it is all going to be fine—that we can have our cake and eat it. Having damaged people’s lives, he should take responsibility before he starts attacking the Labour party.

[Sajid Javid]

Now, I know the hon. Lady has to say those things, because I think she is applying for a job as well, but she knows that when she became an MP, in the same year as I did, the deficit that the new Government inherited was 10% of GDP. She talks again about the banking crisis. She has to ask herself: why did Britain have the biggest banking crisis in global history? The answer is, because of the Labour Government.

[Rushanara Ali]

rose—

[Kevin Hollinrake]

rose—

Oral Answers to Questions

Rushanara Ali Excerpts

Tuesday 1st October 2019 Commons Chamber

The Chancellor of the Exchequer was asked—

[Rushanara Ali (Bethnal Green and Bow) (Lab)]

1. What recent assessment he has made of the economic effect of the UK leaving the EU without an agreement.

[Helen Hayes (Dulwich and West Norwood) (Lab)]

11. What assessment he has made of the effect on the economy of the risk of the UK leaving the EU without an agreement.

[The Chancellor of the Exchequer (Sajid Javid)]

We would prefer to leave with a deal, and we continue to work energetically and determinedly to get a better deal, but the Government are turbo charging their preparations to ensure we are ready to leave without a deal on 31 October. All necessary funds have been made available. The fundamentals of the British economy are strong: real wages are growing; employment is at a record high; and unemployment is at an historic low.

[Rushanara Ali]

The Government’s Yellowhammer document, or base case scenario, states that there will be job losses, that food supplies will decrease and that financial services and law enforcement data and information sharing will be disrupted. Last night, we heard about customs clearance zones in Ireland and Northern Ireland, and the Brexit Secretary has admitted that there is insufficient time to complete the work. The Government spent £100 million on a PR campaign called “Get Ready for Brexit”. Is it not time that the Chancellor admitted that the Government are far from ready for Brexit and instead are heading for causing chaos in our country?

[Sajid Javid]

The hon. Lady will appreciate that the uncertainty around Brexit has caused businesses significant concern. They want to see the Government deliver Brexit and leave on 31 October, and that is what we will do. Significant preparations have been made for a no deal, including trade agreements reached, increases in personnel at Border Force and more than 600 statutory instruments laid in this Parliament. If she wants to help, she should support the Government in getting a deal.

Oral Answers to Questions

Rushanara Ali Excerpts

Tuesday 2nd July 2019 Commons Chamber

[Rushanara Ali (Bethnal Green and Bow) (Lab)]

I welcome the Chancellor’s remarks about a no-deal Brexit and the disaster it would be for our country, costing jobs and livelihoods. Does he agree that both Conservative leadership candidates, who support a no-deal Brexit, should stop selling out the country to serve their own political ambitions? Will he commit to joining us in voting against a no deal when and if he returns to the Back Benches, and to voting with us on a no-confidence motion, if it comes to that, to stop a no deal?

[Mr Philip Hammond]

At this stage of my career, I will not speculate on my future actions. What I will say is that the Government’s analysis shows that a no-deal exit would mean that all the regions, nations and sectors of the UK economy have lower economic output compared with today’s arrangements and compared with the White Paper scenario that the Government set out. It is important we all understand that preparing for a no deal, which is a perfectly sensible thing to do because it might happen to us without our volition, is not the same as avoiding the effects of a no deal.

Mortgage Prisoners

Rushanara Ali Excerpts

Thursday 6th June 2019 Commons Chamber

[Charlie Elphicke (Dover) (Con)]

I beg to move,

That this House notes that the practice of selling mortgages and unregulated commercial loans to unregulated funds has been creating mortgage prisoners, exposes businesses to asset stripping and threatens to continue to create further mortgage prisoners and risks to businesses; is concerned that mortgage prisoners are being exploited by such unregulated funds by being kept on high standard variable interest rates and therefore denied the opportunity to take advantage of historically low interest rates or fix their mortgage interest payments to gain certainty over their mortgage payments; is further concerned that businesses continue to be exposed to asset stripping; further notes that many of those unregulated funds pay little or no UK tax while depriving citizens of opportunities and in many cases their homes; believes that HM Treasury should immediately require UK Asset Resolution to cease selling mortgages to any unregulated entity; considers that HM Treasury and the Bank of England should take all possible measures to ensure that mortgage prisoners are given access to new deals and fixed interest rates, and that banks cease discriminating against mortgage prisoners by offering them less favourable mortgage terms; further considers that the Government should expand the scope of FCA regulation to include all mortgages and all unregulated purchasers of mortgages; and calls on HM Treasury and the Bank of England to hold an urgent inquiry into the sale of mortgage and commercial debt by any financial institution to any unregulated entity, with the findings of such inquiry to be published.

I thank the Backbench Business Committee for agreeing to list this important debate. A number of Members have been unable to attend because they have been detained elsewhere, and that includes the hon. Members for Feltham and Heston (Seema Malhotra) and for Burnley (Julie Cooper), the right hon. Member for Normanton, Pontefract and Castleford (Yvette Cooper) and my hon. Friend the Member for Worthing West (Sir Peter Bottomley).

The reason for bringing this debate to the Chamber is that it is time for a new covenant to deliver fairness for borrowers—a deal that will set mortgage prisoners free. Who are the mortgage prisoners? They are the people who are trapped by changes in mortgage regulation. They are trapped in expensive mortgages, unable to remortgage to get a better deal. The rules say that they cannot afford payments on a mortgage of, say, 2% so they are forced to continue with a mortgage of 5% or more. It makes no sense at all. It is estimated that there are up to 200,000 mortgage prisoners in the United Kingdom today. Every one of those 200,000 families has a story to tell about how they struggle to get by, forced to keep up payments to keep a roof over their heads, often going without.

One of those is Charlotte’s family. Charlotte is 39 years old, and lives in the west midlands with her family. They took out a Northern Rock mortgage in 2007. In 2010, she had twins who suffer from a serious disability; both are wheelchair bound. The family have never missed a single mortgage payment, but they cannot remortgage due to the regulators’ affordability test—a test that came into effect after the financial crash and after she got her mortgage. She says,

“How can we not afford to pay less?”

Why does this matter to Charlotte and her family? If Charlotte had a better mortgage at a lower interest rate, she would be able to afford more therapies for her disabled children, rather than having to spend so much time crowdfunding from people whose good hearts help to provide the cash she needs to help her kids.

Charlotte is far from alone. Mr and Mrs Adams live in Bournemouth. They took out a Northern Rock mortgage in 2007 that is now owned by TSB’s Whistletree fund, to which the Treasury sold off their mortgage. Mr and Mrs Adams are trapped at a rate of 5%. TSB will not allow them to switch because it says that they are not TSB customers, but they cannot go elsewhere. They failed the regulators’ affordability tests for lower payments on their mortgage, even though they have made all their mortgage payments and their loan to value is just 62%. This has put terrible pressure on the family, causing them to suffer real illness from all the stress.

Mortgage prisoners live in fear of interest rates rising. The whole House knows that we have been living in a period during which interest rates have been very low for a very long time. That might change in the next couple of years. The whole House knows that we have seen an extended economic growth cycle—much longer than is normal—but that could also change in the next few years. That concerns Jayne, who is 50 years old.

Jayne took out a mortgage in 2007. She is on a five-year tracker at 0.5% above base rate, and her mortgage was sold to Cerberus by the Treasury. Cerberus is described in the popular press as a “hound from hell” vulture fund. Jayne is now paying nearly 5% interest on a variable rate and worries about what will happen if rates go up. She cannot go elsewhere because she is self-employed. Her income fluctuates, meaning that she fails the so-called affordability test to be able to have a new mortgage with lower payments, even though she has made all her mortgage payments and the loan to value in her case is just 50%. She is basically paying £4,000 a year more than she would be if she was not a mortgage prisoner.

These cases highlight the plight of Britain’s 200,000 mortgage prisoners, but what about the people who got them into this mess? All those I have referenced are Northern Rock customers. What has happened to Northern Rock’s old boss, Adam Applegarth? Has he been made to atone for his role in blighting the lives of thousands of people? No—not a bit of it. In fact, he got a £760,000 payoff in 2008 and is set to enjoy a £304,000 a year pension.

As I said, there are 200,000 mortgage prisoners. That number is incredibly high and threatens to become even higher. Despite the recent sales, the Treasury still holds £5.5 billion of mortgages for 35,000 customers. If these, too, are sold to unregulated funds, it could mean tens of thousands more mortgage borrowers stuck without hope of escape. On top of that, Tesco has been looking at what the Treasury has been doing and has now announced plans to sell its £3.7 million mortgage book, which would affect 23,000 customers, and it is understood that Metro Bank is considering following suit. If these books also go to unregulated funds, yet more borrowers could struggle to escape.

That is why it is important the Government now lend a helping hand, not a tin ear. The Treasury should not be selling mortgages to Cerberus or any other vulture fund without proper protection, and the regulators should be doing their bit to help free the mortgage prisoners.

[Rushanara Ali (Bethnal Green and Bow) (Lab)]

I congratulate the hon. Gentleman on securing this debate. As he knows, those of us on the Treasury Committee have been working to get Ministers and the FCA to commit to reviewing the affordability test and changing it from an absolute test to a relative test. As he sets out very clearly, however, this is a much bigger problem that is going to affect thousands more mortgage holders, because the terms of operating for these companies is changing. The Government and the Minister should consider whether new legislation will be required to prevent these problems happening to many thousands more people under those changes.

[Charlie Elphicke]

I thank the hon. Lady for that powerful point. Like me, she is a member the Treasury Select Committee and has been pressing for us to explore this matter on the Committee in greater depth. She has been a true champion on behalf of mortgage prisoners. As the House can see, it is a subject that has crossed the political partisan divide to become an issue on which we need to work together collaboratively to provide a solution and resolution.

--- Later in debate ---

[Rushanara Ali (Bethnal Green and Bow) (Lab)]

I congratulate the hon. Member for Dover (Charlie Elphicke), who sits on the Treasury Committee with me, and other hon. Members on securing this important debate.

There is something especially cruel about the way people have found themselves trapped in these mortgages—these much more expensive mortgages—that have already been described. They took mortgages out before the financial crisis—banks lent them the amount they borrowed—but following changes to the affordability tests they are now no longer eligible for mortgage rates that are a lot cheaper. As others have said, they are therefore trapped in more expensive mortgages that are costing them thousands of pounds a year.

These are not the super-rich or the privileged; they are decent, hard-working customers who cannot switch to a more affordable mortgage, even though they have mostly been able to pay. People who have struggled and whose homes are under the threat of repossession are those whose circumstances have changed, but despite what has been happening they have largely kept up with their mortgages, even though that is costing them tens of thousands of pounds. However, that has led to enormous hardship, as the Minister has already heard both here and in various Committees, while other representations have also been made to him and his colleagues.

As I have said, many young people who took out mortgages before the crisis are being punished because the regulations have changed. Understandably, those changes to regulations were about sorting out and learning the lessons from the financial crisis, but they have found themselves caught in the middle, unfairly and unjustly, with the unintended consequence of leaving them trapped in this situation.

As the hon. Gentleman has said, in 2016 the Government sold off £13 billion of Northern Rock mortgages to Landmark Mortgages, which is owned by the US equity company Cerberus. This represents a huge error in public policy and, as others have said, it should form part of an inquiry into what went wrong, what we need to learn from this and how we prevent these errors from affecting many thousands more people in the future.

According to a “Panorama” programme, the US firm misled Ministers and officials on mortgages. Our Government believed in the undertaking that these people would have access to mortgages and competitive rates of interest, and that that would be honoured, but it has not been. Inactive lenders, such as Cerberus and even the Government firm UK Asset Resolution, are not authorised to offer mortgage products to their customers who are stuck with high interest rates.

As has already been said, the FCA estimates that between 120,000 and 150,000 people are stuck in this predicament. Only about 10,000 people may be supported, leaving many tens of thousands more stuck. Some people have paid £40,000 more—or more—in interest than they would have done if they were on a cheaper mortgage interest rate of, say, 2%. This is desperately unfair.

There are many heart-breaking stories, and we have already heard some of them today. One of the widely reported cases was that of Lisa and Mark Elkins. They have had to pay £2,500 a month on their mortgage because their interest rate is now nearly 5%, which is three times the best rate available in the market at the time the report was provided. Lisa and Mark had to borrow tens of thousands of pounds that they would not have had to borrow had they had access to alternative, cheaper, rates. It is not acceptable for people to have to live like that when, through no fault of their own, they find themselves in that predicament.

It is concerning that the Government’s latest sell-off of NRAM mortgages was to the inactive lender Citi because—as colleagues have highlighted—they were unable to find an active lender for the deal. It is frankly irresponsible of the Government to pursue such sales, and it sets a dangerous precedent. The Government must consider this issue comprehensively and protect other consumers, as well as addressing the issues affecting current mortgage prisoners.

With other colleagues, I have raised in the Treasury Committee the plight of mortgage prisoners. The Minister probably thinks that I sound like a broken record when he appears before that Committee, but this has gone on for more than a decade. The reality is that the FCA has not acted—it has been too slow. Thanks to pressure from Members across the House, the FCA has finally stepped in to address the affordability test, and the Minister has responded reluctantly, grudgingly, gradually and in a piecemeal way that seems indicative of a number of Ministries at the moment. Perhaps Ministers are distracted by a talent show that is currently going on, but I hope this Minister will carry on working and build on what he has done so far.

I appeal to the Minister to ensure that the change in the affordability test from an absolute one to a relative one is meaningful. The danger is that the FCA will wriggle out of this—frankly, the FCA has been utterly complacent, and it should not have taken so long. The danger is that the FCA will advise banks to provide for these mortgage prisoners, but that there will be no teeth to that advice and banks will not be required to apply the affordability test as a relative test. We will still be stuck in the same position, and very little will change. Will the Minister assure the House that he will instruct the FCA to take this issue seriously and ensure that the affordability test is meaningful, rather than trying to push aside MPs who have been campaigning on this issue by giving them something that looks mildly satisfactory but does not change anything for our constituents who are suffering?

As others have said, the bigger issue at stake is the regulation of mortgage providers. The Government must look thoroughly at how thousands of people are protected, because mortgages are long-term loans. If the rules change in the middle of a long-term loan agreement, those retrospective changes make things very difficult for people and inevitably lead to a trap, and that must be understood and addressed. I hope the Minister will take this issue seriously and protect those who are currently trapped in high-cost mortgages, and that he will also look to the future and be proactive in protecting thousands of others who may find themselves at risk because of decisions that his Department and Government might have made. The Government were warned, but those warnings were not heeded. I hope they will be today.

--- Later in debate ---

[John Glen]

My hon. Friend made reference in his speech to the distinction between business debts and mortgage debts, but I will clarify my remarks on that specific point to him in writing.

In these sales, the Government also stipulate that there must be no financial barriers put in place to harm a consumer’s ability to switch to a new deal with another lender. Once this FCA rule change is implemented, consumers will be in a better position to change their mortgage, provided that they are up to date with their payments and meet lenders’ risk appetites.

Let me also address the point that was raised regarding the sale of commercial loan portfolios to third parties. Since the financial crisis, it has been clear that the standards of behaviour across the financial sector must improve—I have said it in all the debates that we have held in the 17 months that I have been in office—and that banks must work to restore the trust that businesses have in their institutions.

I concede that I have some differences with my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) over some of his assertions about what would be the best solution, but we have tried to work co-operatively where there is common ground, and that work is going forward. I am pleased that banks are now committed, through the standards of lending practice, to ensuring that third parties who buy loans have demonstrated that customers will be treated fairly, and to allowing customers to complain to the original lender if there is a dispute that cannot be resolved. That will help to ensure that all businesses can resolve disputes if they arise.

I thank my hon. Friend the Member for Dover for calling this debate. I have tried to address the points that have been raised. I believe it is right that the Government and the regulator introduced more stringent rules after the financial crisis. Rigorous affordability assessments are an important factor in ensuring that a borrower has the means to pay back their loan, as well as maintaining the financial stability of the UK. Unfortunately, however, a minority of borrowers have since found that they can no longer pass those strengthened affordability assessments, despite being up-to-date with their repayments. That is why the Treasury did act, and is working with the FCA to remove the regulatory barrier.

I recognise the urgency associated with securing this solution, and I am urgently working to ensure that the FCA delivers on both what it wants to deliver and what we have asked it to deliver.

[Rushanara Ali]

Will the Minister give way?

[John Glen]

No; I shall continue.

Borrowers who would like to switch lenders, who are currently up-to-date with payments and not looking to borrow more, can expect to find switching to a new, cheaper deal easier once the FCA changes are implemented later this year and are adopted by lenders. That will apply to all borrowers, regardless of whether they are with an active or inactive lender. In the meantime, those borrowers whose mortgages are sold to a purchaser that does not offer new mortgage deals will continue to be protected by the FCA principles of “treating customers fairly”.

I hope that that is a full response. I will look carefully over the points raised and write to individuals on any that have not been addressed.

Spring Statement

Rushanara Ali Excerpts

Wednesday 13th March 2019 Commons Chamber

[Mr Hammond]

No, I cannot do that but I can assure the hon. Lady that special educational needs funding will be considered as part of the spending review. I am sure that her Committee will want to make representations. We have to make choices. I can confidently predict that the spending review will receive far more bids for funding from across the Government and agencies in all Departments than there is funding available, so we have to look at what our priorities are as a nation.

[Rushanara Ali (Bethnal Green and Bow) (Lab)]

The Government have slashed millions of pounds from policing, with 21,000 police officers taken out of the system. Violent crime has gone up; the knife crime epidemic is terrorising our communities; and the police are at breaking point. Will the Chancellor, ahead of the next spending review, prioritise investing in the police service so that we can genuinely tackle knife crime and violent crime in our country?

[Mr Hammond]

Well, I have just done it with £100 million today. As the hon. Lady knows, we have put £460 million into the police this year, £970 million will go in next year and an extra £100 million has been announced today. Of course the police will be considered very carefully in the spending review.

Communities: Charities and Volunteers

Rushanara Ali Excerpts

Wednesday 13th February 2019 Commons Chamber

[Mims Davies]

It is right to work with local authorities and community groups so that we do not stop people volunteering. We should be actively encouraging people and giving them a chance to shine.

Finally, on youth services, the civil society strategy included a commitment to examine the guidance given to local authorities to provide appropriate local youth services. Through such efforts, we will help people to be more active in their communities, and we have promised a review.

[Rushanara Ali (Bethnal Green and Bow) (Lab)]

Will the Minister give way?

[Mims Davies]

I am going to conclude, because I will be in trouble otherwise.

Despite the challenges in our growing and changing communities, as Members will know from their constituencies, civil society represents an opportunity to come together. The British people are the most generous, enterprising, imaginative and downright determined people in the world. As a Member of Parliament and a charity trustee and fundraiser, I know what it takes to be part of that, and I salute people across all constituencies, including Eastleigh, for what they do. I look forward to hearing from people about what is going on in their communities. Civil society is the best tool we have to connect our communities, to boost the economy and to make us happier, and we can work together to connect our communities further.

[Mr Steve Reed (Croydon North) (Lab/Co-op)]

I listened with interest to the Minister’s warm words, but I suspect that we will hear much this afternoon about the gap between the rhetoric and the reality in the Government’s approach to civil society. Ever since they were elected, this Government’s method has been to underfund, undermine and sideline the sector at every opportunity. That is a tragedy, because civil society, including the charities, volunteers and community groups that are part of it, play a critical role in reconnecting the communities that this Government have divided.

There is a real mistrust of politics and politicians in our country, which is not surprising. A decade of austerity has ripped the heart out of communities and seen the destruction of shared community spaces. Good jobs have been lost to automation. Once thriving industrial towns have been left to decline. Inequality has grown wider while the economy has grown bigger, because a few at the top have grown richer at the expense of everyone else.

The politics that did all that needs to change. People want back control over their own lives. It is no longer enough for any group of politicians to stand up and tell people to trust them to have all the answers. Trust cannot be a one-way street. People will not trust politicians until politicians show that they trust people enough to open power up to them directly. We need a new politics that is big enough to meet the challenges of our age and responsive enough to meet the specific needs of every community.

At the heart of that are questions about power. Who has it? Who does not? How do we open it up to everyone? In this digital age, with a world that is changing so fast, it is clear that we cannot solve tomorrow’s problems with yesterday’s thinking. That is where civil society comes in, because it offers a way for people to participate on their own terms. It connects communities so that they can exercise the power that lies latent within them. Community-led organisations are a key part of how we can make our system more responsive and more democratic by rebuilding politics around people and putting real power in people’s hands. It once felt like the Conservative party was on to that with its big society agenda, but it withered before our eyes into a crude attempt to replace paid professionals with unpaid volunteers. Now, the Conservatives do not talk about it at all.

Let us look at how much has vanished under this Government: 428 day centres, 1,000 children’s centres, 600 youth centres, 478 public libraries and countless lunch clubs, befriending services, community centres and voluntary groups. Those places where communities came together to act have all gone.

[Rushanara Ali]

Does my hon. Friend agree that the cuts in youth services have been particularly devastating? Although the interventions to support the National Citizen Service have been welcomed in many areas, the reality is that the £1 billion or so that has been spent in that arena has not been matched by support in other areas to help young people get on to successor programmes, to meet their needs and to ensure that they have genuine opportunities to take part in positive activities, rather than get caught up in crime and other risks.

[Mr Reed]

My hon. Friend is absolutely right. As I said, 600 youth centres have closed, and all the activities that could have gone on in them have been taken away. That is a crying shame.

Sadly, the Government have not finished with that agenda; there is worse to come. Their new so-called fair funding formula will remove deprivation levels from how funding is calculated. It will take even more away from the very poorest and will weaken the very communities in which the need to tackle poverty, youth crime and homelessness is greatest. Communities cannot organise, act or assert their voice if the Government keep ripping away the resources they need to do those very things.

The Government passed a lobbying Act that gags charities and prevents them from campaigning. Ministers individually have put gagging clauses in contracts to silence charities and prevent them from criticising their personal failures as Ministers. The Government have discouraged volunteers in the UK by not recognising their work for national insurance credits. They announced a plan for paid time off work for volunteering, but it fizzled out into absolutely nothing.

We are a month and a half away from Brexit, but the Government have still not told us how they will replace lost EU funding for charities or how the shared prosperity fund will work, despite the fact that the Opposition have been asking about it for months. The Minister trumpets the new funding—she did so this afternoon—but she fails to acknowledge that it is a tiny drop in the ocean, compared with the billions that the Government have cut. They can work out the huge financial value of what they have taken away, but the social value that they have destroyed is incalculable.

Despite the cuts and the Government’s failure to open up power, people are doing amazing things in their communities, and are stepping in to help the victims of Government funding cuts. I pay tribute to the food banks and homeless shelters which, in such a wealthy country, we should never have needed. There is a wonderful, rich, emerging practice of sharing, co-operating, collaborating and participating in this country. People’s ingenuity and the creativity in our communities cannot and will not be beaten back, but it is fragile. It needs support and protection. It is clear that the Conservatives will never offer that, but Labour will.

--- Later in debate ---

[Rushanara Ali (Bethnal Green and Bow) (Lab)]

I start by declaring an interest, because I will refer to organisations in which I am involved. I am a patron of a charity called Futureversity, co-founder and chair of the Uprising leadership charity, and co-founder of the One Million Mentors initiative.

We need a lively, independent, vibrant and innovative civil society sector, as many Members have said. Volunteering and charitable activity is a critical foundation of our society and the hallmark of a healthy society and economy. The sector must be underpinned by both Government and philanthropic funding and donations encouraged by incentives such as Gift Aid, which was introduced by the Labour Government. I hope that this Government will consider other imaginative ways of encouraging donations.

No society is truly healthy if the high fiscal rewards for entrepreneurship or investment are not matched by a strong sense of social responsibility and bonds of reciprocity. Charities and volunteers work tirelessly, especially in the current climate, to create a fairer society, to address environmental challenges in our communities, to tackle poverty and inequality and to address social justice challenges. The Charities Aid Foundation found that 80% of UK adults think that charities play an essential role in their local community. Britain is a better place thanks to philanthropy, charity and voluntary activity.

My constituency is famous for volunteers, community organisations and old institutions, such as Toynbee Hall, which employed Clement Attlee before his entry into politics. He became mayor of Stepney in my constituency, then a Member of Parliament in the area, and later one of the most successful Prime Ministers of the past century. The east end of London has a great heritage of charitable activity and entrepreneurship, and that has continued. London’s Air Ambulance, which serves people across our capital, is based in my constituency, and many people do not realise that it is a charity. We have the Osmani Trust, the Attlee Foundation, the Young Foundation, City Gateway, Muslim Aid and many others. The ones that I am not mentioning will be offended, but there are hundreds of them, so I am unable to name them all. The fact is that charities should not replace the functions of the state; what they do must be complementary. They should enrich our society, not put plasters on the wounds inflicted by the Government.

This week, the Secretary of State for Work and Pensions finally admitted that the Government’s universal credit policy has led to an increase in food bank use. We know that food banks do amazing work, but in a civilised society they should not have to do it. Their funding could be invested elsewhere if the Government addressed those issues. The Government should support charities, but not expect them to substitute for what public services should be doing.

I want to draw on my experience of starting up charities. I had the good fortune of working for the author of the 1945 Labour manifesto, Michael Young, in his later life. It was the best kind of apprenticeship in politics and social entrepreneurship. I saw that we can be imaginative in addressing the big social challenges in our country by using insight, observation and research, but that means that the Government must fund innovation. I appeal to the Minister to do that.

I also appeal to the Minister to address some of the issues relating to unspent or ineffective funding, such as the £10 million provided to the National Citizen Service for unfilled places. We need more effective spending in the charitable sector, which desperately needs support. It was promised that £425 million that was invested in the Olympic village would be returned to the charitable sector. That money could be used immediately by charities that desperately need help to address issues such as youth crime.

I was able to set up charities to help young people. I hope that this Government will continue to support them. If they do, there will be direct benefits to our economy. I am grateful that we are having this debate, and I hope the Government continue to invest in that very important sector.

Draft Farriers and Animal Health (Amendment) (EU Exit) Regulations 2019 Draft Veterinary Surgeons and Animal Welfare (Amendment) (EU Exit) Regulations 2019

Rushanara Ali Excerpts

Tuesday 5th February 2019 General Committees

[David Rutley]

That point is understood, and I will gladly meet the hon. Gentleman to discuss further his suggestion of working closely on the issue. That leads on to what else we are doing to help vets, in the event of a no-deal scenario, to prepare for increased demand for export health certificates for animals and animal products, because those products will need to pass through border inspection posts. DEFRA’s internal estimates suggest that we will need the equivalent of up to 50 full-time official veterinarians to respond to the changes in demand for export health certification.

We are providing free training for 400 official vets, and our very detailed discussions and engagement with the industry indicate that, with their existing capacity, the use of new certification support officers and their ability to bring more vets into the market, we should be in a reasonable position to meet that demand. In addition, we are providing free training for 200 CSOs and we are already starting to put CSOs through that training, so that they can add value and help our vets to focus on those issues to which they can make the biggest contribution in what could be quite challenging circumstances if there is an increased volume of demand for EHCs.

The hon. Gentleman asked about the cost of the statutory exam, which is £2,500. We have looked at other professional regulators, and these fees are fairly comparable. For example, they are cheaper than the General Dental Council’s examination fees of about £3,735.

[Rushanara Ali (Bethnal Green and Bow) (Lab)]

How long will it take for those people who are being trained to qualify and be ready? If we crash out—as I understand it, we will not have mutual recognition under the SI—will they be ready and will we have enough people to backfill the shortage? If not, would it not be sensible to be more flexible, here and now, with regard to mutual recognition so that we do not make life more difficult, as my hon. Friend the Member for Stroud has already said?

I also reiterate my hon. Friend’s point about impact assessments. A detailed, or even cursory, impact assessment of the implications would have fleshed out the issues and enabled us to engage with them more fully. The consequences are very dire if we do not get it right. A number of Departments, including the Treasury, have failed to provide impact assessments, and I am sick to death of sitting on Delegated Legislation Committees without impact assessments. I do not think that is an appropriate way to scrutinise proposed legislation, which is especially significant given the context in which we find ourselves.

[David Rutley]

The hon. Lady has also made thoughtful points. I reassure the Committee that we are working incredibly hard to ensure that we are ready for any eventuality, including regarding the availability of vets. There is an ongoing dialogue: I have met the chief veterinary officer and the BVA several times and I am sure I will meet them again tonight. We have worked very closely to make sure that we are in the best possible position for any eventuality come 29 March.

Hon. Members have also asked whether there is a change of policy. The answer is yes, because mutual recognition of qualifications will cease in a no-deal situation. A couple of hon. Members made points about impact assessments, which are required only when there will be a direct impact on business as a result of regulatory change. The SI concerns the registration of individuals only. Those points have been discussed with the RCVS, which is content with the proposals.

I hope that my remarks have answered most of the questions. I am sure that the hon. Member for Stroud will buttonhole me tonight if he has any other points.