Bank Closures: Rural Areas
Simon Hoare Excerpts(2 days, 17 hours ago)
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Simon Hoare (North Dorset) (Con)
We now have the enjoyable prospect of an Adjournment debate lasting an hour and a half, which I know will fill the Minister with joy. I can see the boyish smile on his face—he just cannot contain himself. I do not intend to take an hour and a half, although a number of colleagues from across the House have indicated that they wish to intervene.
I am very pleased to have secured this debate. It is clear that our banking world is going through a period of transition. There are changes in technology; there is the move—some would say at too high a speed—towards a soon-to-be cashless society; and there is the cost of running branches, which includes insurance, business rates, staff costs and the like. I know full well that the closure of a high-street bank hits an area hard, whether the area is urban or rural. However, North Dorset is a rural constituency, and the thrust of my thesis is that the impact is felt disproportionately harder in rural communities than in an urban setting.
Why do I say that? I do not believe that North Dorset is unique in how it operates. [Interruption.] Heckling from the cheap seats. Our market towns operate on a hub-and-spoke model: the market town grows, and the villages are magnetised towards it, which is good for businesses large and small across the sectors, as we all recognise. It is also good for community cohesion at a time when we are all rightly concerned about rural exclusion and isolation; it brings people together. Our rural areas, by accident rather than by design, contain a disproportionately high number of retired or elderly people.
Jim Shannon
The hon. Gentleman is very kind. I commend him on bringing forward this debate. He is right to highlight elderly people. Social isolation is an issue for many people, not just those who are elderly or vulnerable, and it is worsened by the loss of basic banking. The hon. Gentleman told me before the debate that he has lost 14 banks. I have lost 11 banks in my constituency in Northern Ireland, which means that going to the bank becomes an all-day job, taking buses and making connections. Does he agree that there is a moral obligation on banks to ensure that they look after their customers? Indeed, if the banks do not do it under a moral obligation, does he think it is time for the Minister to make legislation to make it a legal obligation?
Simon Hoare
I agree. I will certainly come on to what I am asking the Government to consider, but the hon. Gentleman is right to talk about social isolation. We have lost 14 banks in my constituency since 2015. In 440 square miles, we have five banks remaining. We have had a fall of 74%. Across the county of Dorset, which includes the major conurbations of Bournemouth, Christchurch and Poole, we have had a decrease of 68% overall, with 101 branches closed and only 48 remaining in the whole of the county. Eight parliamentary constituencies are served by just 48 banks.
My constituent Deborah Jones made a good point in response to a recent announcement by Lloyds that it is closing its branch in Blandford Forum, a market town in my constituency with a large village hinterland. With the exception of Nationwide, it now has no proper, traditional high street branch.
Wendy Chamberlain (North East Fife) (LD)
The hon. Member mentioned Nationwide. My understanding is that 142 towns in the UK do not have a bank, and many are left only with a building society. It seems that the banks have exited while the building societies have stayed behind. I would appreciate his thoughts on what that says about the lack of community cohesion as a result of losing those banks. Often we are losing post offices at the same time.
Simon Hoare
The hon. Lady is right. She allows me to pause to pay tribute to the Post Office and to members of the Association of Convenience Stores, which have stepped in to provide some level of service in those areas where the banks have gone. That brings me to one of my key asks of the banks, and the Minister as well. Yet again, a rubric seems to be used to argue in favour of closures that is blind to whether it is an urban or a rural setting. That differential needs to be taken into account.
Dame Karen Bradley (Staffordshire Moorlands) (Con)
Will my hon. Friend give way?
Simon Hoare
I will, but I just want to make the point that was well made by my constituent in her email. She is a customer of Lloyds in Blandford and she does online banking, but during the storm, her digital services were down. She needed to do some important banking and had no way of doing it. She asks how her 92-year-old mother-in-law, who no longer drives and does not use the internet or have a mobile phone, is to contact her bank. At the moment, she is taken into Blandford every Wednesday for shopping and can pop into the bank. What will she do? She is a very independent lady and not ready to hand over all her affairs to a family member just because they have internet access. A number of organisations have drawn attention to that issue, such as Age UK in 2023. But before I get to that, I give way to my right hon. Friend.
Dame Karen Bradley
I congratulate my hon. Friend on securing this important debate. In Leek in my constituency we are about to lose our last two banks. We will be left with a building society with a cashpoint and the post office, yet Link has done a review suggesting that we do not need a banking hub because there are sufficient branches 9 or 10 miles away. That does not take account of rurality. We are a market town with, as he rightly described, a hub-and-spoke model, and it simply is not possible for elderly people to get to those other bank branches that are not easily accessible and are not on bus routes. Does he agree that rurality and topography are incredibly important and should be considered when deciding on banking hubs?
Simon Hoare
My right hon. Friend is absolutely right. When a bank closed in my constituency on an earlier occasion, I remember it telling me, “If customers need to talk to an actual person, they could use the branch in Poole.” I explained that that was right, but it would take two days out of the week, because those customers would have to get a bus to Poole, book a hotel, stay over and get the return bus the following day. It did sound a little bit nonsensical. I am therefore grateful to my right hon. Friend for underlining the point that I am seeking to make: there must be rural-proofing of the rubric for these decisions in the first instance and a better understanding of the geography of our rural areas as well as of the lack of public transport or other connectivity between the two places.
It is easy—dare I say it—if one represents Ealing, where the Minister is from. There are plenty of buses and tubes, and heaven knows what else, that I have no doubt will take the people around Ealing. North Dorset does not have those things, and nor do many of our rural areas, but I just do not think that point is recognised by the banks.
Simon Hoare
Let me make a little progress and I will give way first to my hon. Friend and then to the hon. Gentleman.
At the heart of everything this place does, we must think about social inclusion and trying to deliver services that meet the needs of a wide range of our population. According to Age UK, four in 10 adults over the age of 65 do not bank online, and three quarters of those who are over 65 have expressed the very clear desire that they wish to bank in person. The over-80s, people with disabilities and those on low incomes disproportionately want physical facilities, and yet they are being denied them.
As the Royal National Institute of Blind People points out, in my constituency alone there are, I think, 4,170 constituents who are either blind or partially sighted. They are unable to conduct banking online. Why are we excluding them from the personal management of their financial affairs?
Sir Bernard Jenkin
I congratulate my hon. Friend on obtaining this debate, which has attracted a large number of colleagues; he has touched a nerve. May I enter a plea on behalf of coastal towns such as Harwich, which suffer exactly the same difficulties as somewhere like Blandford Forum? In Harwich, the TSB has closed down and the Halifax has closed down, and that is affecting business in the town. Businesses need a banking hub. The Government have really got to come up with a solution, and a single hub representing all these financial institutions must be able to provide some kind of efficiency. I very much look forward to hearing my hon. Friend’s proposals.
Simon Hoare
I am grateful to my hon. Friend. His constituency, and indeed a lot of our coastal communities, will have that profile of constituents that is older and more settled, and they will want to see things delivered in the way that they are used to. That does not mean that they shun change completely, but they do have a legitimate expectation.
Let me take the House briefly through the timeline narrative of justification, and then I will give way to the hon. Member for Middlesbrough South and East Cleveland (Luke Myer). You and I, Madam Deputy Speaker, as part of that great Tory intake of 2015—those were the days; it is nearly 10 years—will remember being told that there would never be a town without a bank.
Gregory Stafford (Farnham and Bordon) (Con)
Will my hon. Friend give way on that point?
Simon Hoare
Let me just finish this point.
That was the first promise, but it seemed to disappear quite quickly. Then the Post Office came in, and then there seemed to be an over-reliance on building societies. I notice that Nationwide—I think it is Nationwide; I could be wrong—is saying in its television advertisement that it pledges not to close a branch before 2028, but it is under exactly the same cost and other pressures as its high street competitors.
Then we were told that the answer to the maiden’s prayer was going to be the banking hub, but there has been quite a lot of disappointment surrounding that. I suggest to the Minister that that is in part to do with the erroneous conflation of access to cash and access to banking services. Link has assessed, perfectly properly, that in Blandford there are ATMs at the local Tesco, at the local Morrison’s and at Nationwide, but just try asking an ATM to amend or set up a standing order or direct debit. A small businessman or businesswoman who wants to extend their line of credit or has a question mark over something cannot ask an ATM those questions. Saying that there is access to cash, as important as that is, is far too blunt an instrument when trying to assess the impact of these closures.
Luke Myer
North Dorset is quite far away from the north-east, but many of the issues the hon. Gentleman is talking about are issues that I am encountering in my constituency as well. The rural side of my constituency in East Cleveland contains many villages and towns with high deprivation and high rurality, and I am endeavouring to get a banking hub in one of those towns that has lost access to banks over many years. Does he agree that deprivation needs to be included as a metric alongside rurality?
Simon Hoare
I agree absolutely. A more sensitive and refined definition of the hub-and-spoke model is also needed. If we look at the resident catchment of a market town, we can construct a compelling argument that a proposal for a hub does not stack up, but we must add in the thousands of people who live in the villages that look to it and are magnetised to it, and who will spend more money in those businesses, and the businesses themselves—not just individuals—who use those businesses.
Simon Hoare
Let me give way to my hon. Friend from Surrey and then I will give way to the hon. Lady.
Gregory Stafford
I would not like to claim that I am the Member of Parliament for the whole of Surrey. My Hampshire residents would not be pleased about that. Just last Friday, the Barclays bank in Farnham closed, leaving the whole of my constituency of 101,000 people with just one bank, Santander, and one building society, Nationwide. We are lucky enough to have a banking hub in Haslemere, and we are going to get another one in Whitehill and Bordon—Liphook does not have one—but given that there are only 100 banking hubs across the country and that the Government say they are going to put forward 350, does my hon. Friend agree that the Government are going to have to turbocharge those banking hubs, not just for access to cash, but more especially, as he mentioned, for proper banking services for residents in rural constituencies?
Simon Hoare
I agree entirely with my hon. Friend who represents Surrey and part of Hampshire.
I would be happy for the Minister to write to me on this point if it is easier, but it strikes me that there is scope for a little bit of wiggle room with regard to the Financial Services and Markets Act 2023. The Act did not give the Financial Conduct Authority powers to reflect on and assess wider banking services. The Minister’s party, when in opposition, was very keen that it should do so. When my party was in government, for some unknown reason we resisted amendments to that effect, and Labour, then in opposition, did not push them to a Division. I just think that there is too gaping a lacuna in all of this, in that it is only access to cash that is assessed, and not access to banking services.
Simon Hoare
Let me give way to the hon. Member for North Shropshire (Helen Morgan), then I will give way to my hon. Friend.
Helen Morgan
The hon. Gentleman is making an excellent speech outlining the issues. In North Shropshire, four of my five market towns have lost all their banks and only two of them will get a banking hub. Does he agree that we need to look at a much wider area to make those banking hubs work, because people who work in small hamlets and villages without access to public transport simply cannot access one that is maybe 20 miles away?
Simon Hoare
The hon. Lady is absolutely right. Again, I hope that any of the banks or regulators who may listen in or read the report will understand that this is not an issue that divides by party; it affects constituents across the country irrespective of which party represents them in this place. The key point is to have a proper assessment of rurality and the differential of living in a rural area compared with an urban area.
I commend the Government for their support for hubs, but they need to be more physical and robust in driving them forward. It is almost as if the banks are marking their own homework as to whether the argument in favour of a hub stacks up. As Sarah Coles of Hargreaves Lansdown commented a year or so ago:
“The closure of bank branches is a vicious circle. The more that close, the more people move online”.
Of course, by definition, the more people move online, the more that almost hollows out the argument to justify creating a hub.
I understand that initially the banks were slightly reticent, just as the mobile phone operators were about shared masts—that somehow clients would be pinched and all the rest of it—but the hubs are a shared facility jointly financed by the banks. Those banks need to remember that they are still in business principally due to the good will of the British taxpayer and the Exchequer during the financial crash of 2008, who keep our banking sector afloat. They owe a little bit of payback, as a number of my constituents have been keen to point out.
The hubs seem to work and fill that gap; but as I say, marking one’s own homework and setting the rubric to decide whether a hub will work is not right. The Treasury could take a more engaged and proactive leadership role on the matter.
Harriet Cross
I thank my hon. Friend for securing this important and timely debate. I certainly spent a lot of my recess looking at banking hubs, especially in a town called Ellon in my constituency, which has recently lost its last bank. Ellon is a large town of over 7,000 people, and if the surrounding villages are included, it is getting up towards 11,000 people. However, it does not qualify for a banking hub. Link has not given its permission to have a banking hub, saying that there are not enough businesses in the town. It does not take into account, for example, the farming businesses, and the rural nature of the area, as we have touched on, is not taken into account in the criteria set out by Link.
I am glad that my hon. Friend mentioned the importance of “rural-proofing” the conditions that Link looks at to deliver a banking hub. I hope that this debate and the Minister’s response will put some pressure on Link to look more holistically at the rural environment when it comes to considering hubs, because places like Ellon need a banking hub.
Simon Hoare
I am grateful to my hon. Friend, because again she enhances and underlines the argument that I have been deploying, and for which colleagues across the House have been kind enough to add their support.
I suppose my annoyance is that the people who write the policies, whether they are the regulators or those in the bank boardrooms, do not know what living in a rural area is like. If they are in the Square Mile, they are not part of a rural community. They may have a getaway weekend retreat that they dash off to in their personalised number-plated Land Rover or Range Rover, in which they take their food down from Waitrose, before coming back to London on the Sunday, but that is not living in a rural area. That is not running a business in a rural area.
Simon Hoare
I give way to the hon. Member for North Northumberland, which really is a rural area.
David Smith
I thank the hon. Member for securing the debate. He mentioned the Square Mile there. In my constituency of North Northumberland—the third largest in England—there are eight branches in 2,100 square kilometres. That has gone down by 64% since 2015.
I want to highlight a point raised elsewhere in the debate. Banking hubs are important and, like other Members, I am pushing for them in my constituency; but again, the role of the Post Office in those banking services is key. We had to fight together as a community to secure Wooler post office. I must give credit to Glendale Gateway Trust for securing that. Does the hon. Member agree that post offices are absolutely vital and part of the solution to this problem?
Simon Hoare
The hon. Gentleman is absolutely right. In many respects—[Interruption.] I am beginning to get paranoid; I hear voices. He is absolutely right to make the point that he does. I pay tribute to how the Post Office has stepped up. Very often, in providing that sort of transactional bank service, it has supported the continuance of rural post offices, which can often be marginal and fragile businesses themselves. Again, I think it an easy crutch to lean on to say, “Well, of course, the post office does this.” We can all applaud what post offices do, but customers cannot use them to talk to someone from their bank to discuss their overdraft, loan, mortgage, business credit card maximum or whatever it may happen to be.
I say to the Minister that we want our local businesses and small and medium enterprises to flourish—small, micro and family-owned businesses are very much the hallmark of a rural economy—and they have the greatest need, on a more regular basis, for that relationship with their banks. Then, the banks know the nature of the business and its long-term viability, and they can build that relationship.
Wendy Chamberlain
I am grateful to him for giving way a second time. He is making an important point. One of the things that I have always found interesting is that when a bank has closed in North East Fife, it offers to deliver not an access-to-cash service but some kind of pop-up banking advice service in the constituency. That suggests to me that banks know very well that giving banking service advice is important. Instead of doing it as a sop for a number of months before giving up, they need to do it on a more regular and permanent basis.
Simon Hoare
The hon. Lady is again absolutely right. Surely it makes good commercial sense for high street banks, as we used to call them—increasingly, they are not particularly high street banks—to be able to tout their wares to existing or potential customers. That is how to generate business: by having a presence. A hub makes a very good presence for them all, but they seem to move at the speed of the slowest, and if one is not particularly convinced, the whole thing sort of seems to fall down. I know that the Government are trying to do more on that, but I think they could do even more to turbocharge it.
Jayne Kirkham (Truro and Falmouth) (Lab/Co-op)
Falmouth is to have a banking hub. We are losing our last bank; Lloyds is going at the end of the year. The interesting thing about that is that the banking hub will be open 9 to 5, five days a week—and potentially even more—whereas the banks were very slowly cutting their opening hours after covid, and it was hard to find a bank outside school hours. That of course did not help rural businesses, which could not get there in time.
Simon Hoare
The hon. Lady is right. The cynic might suggest that the opening hours were set in order to try to deliberately reduce footfall—possibly. That might be hugely cynical, and if it is, Madam Deputy Speaker, I will plead guilty as charged.
Dame Karen Bradley
My hon. Friend is so very generous to indulge me a second time during his excellent speech. I am struck by the impact on charities. As any trustee of a charity will know, trustees quite regularly have to prove their identity at the bank that the charity chooses to bank with. When it is simply not possible for trustees to get to a branch of the bank to prove their identity, the impact on rural charities will be devastating.
Simon Hoare
I admire my right hon. Friend’s perseverance in ever trying to change the signatory on a charity bank account. People have died of boredom and exasperation trying to do it. A 60-year-old has to turn up with their great grandparents, their first cat and everything else to prove who they are. The fact that the bank has known them as a private customer for years seems to pass it by.
I hope I have made my points to the Minister, but let me rehearse them very briefly in bullet point form. One concerns the rubric to defend a bank closure. The assessment of access to cash needs a rural dimension, and there needs to be a much more granular understanding of the hub-and-spoke geography of a rural economy, which is very different from an urban one. We need to move away pretty quickly from merely assessing as satisfactory access to cash as defined by access to an ATM.
We need to turbocharge the delivery of hubs and bring pressure to bear on the banks, and there are a variety to do that. It can be carrot and stick, through tax and other policies, to try to nudge them to move at a faster pace. I hope, however, that the Government will take the lead on social inclusion for our rural areas, reflecting the fact that they have far more small, independent shops and businesses, and that the population is disproportionately older and/or retired and dealing with disabilities, infirmities, frailties and so on. Those things should be taken into account, and I remain to be convinced that they are.
I think an opportunity exists to amend the Financial Services and Markets Act 2023 to give the FCA greater powers to look at wider banking services, not just cash. Our rural communities struggle. Our economies are fragile, and wages are usually lower than in urban counterparts. Another bank closure is not just another bank closure in a rural market town.
James Naish (Rushcliffe) (Lab)
Although I welcome banking hubs, I am increasingly concerned that banks see them as an excuse to accelerate the closure of core services. Does the hon. Gentleman agree that pressure needs to be applied, first and foremost, to the banks to keep branches open on the high street, and that banking hubs should remain as an infill as opposed to being seen as the solution? That is the danger when we, as a collective, talk so frequently about banking hubs.
Simon Hoare
The hon. Gentleman makes an interesting point. I think the trend has been pretty clear, and the goalposts have moved. From late 2008 or 2009 through to about 2015 or 2016, I think the Government could and should have been much tougher and more exacting, but we are where we are. I take his point and I understand it, but let us not let the delivery of the good be sacrificed in pursuit of the excellent, which seems unattainable.
I think the trend in what the banks are doing is pretty well set, and it is probably irreversible. All sorts of things play into that. What I think is arrestable is the attitude of, “We will pull out even if we are the last branch open, and somebody else will pick up the slack”—principally the Post Office—or “We expect our customers to travel great distances to find a bank that is open and can help them.” That may require a number of visits in the case of something like an overdraft.
That is where the idea of a hub comes in. I understand that we are due to have our first hub in Dorset at some point this year—in Sherborne, in the constituency of the hon. Member for West Dorset (Edward Morello)—but North Dorset needs one as well. I will certainly be campaigning for one in Blandford. I would value the support of the Treasury Bench to emphasise to the banks that they have a duty of care to their customers, and they cannot just cut them adrift and say, “Make your own way. Find an alternative. Beat a path to another branch. It is terribly inconvenient for you, but that is what we are telling you to do, because we have no social responsibility at all.”
For the sake of our rural communities, economy and businesses, for charities and the farming community, and for a host of other people who want that personal interaction because they do not have access to the internet, or do not want to use online banking or an app and so on, there should be a bank teller, as we used to call them, from a bank, in a hub at set times, to help their customers. By so doing they will not damage our rural and market town economies as much as many of us fear, and as many hon. Members have attested to in this short debate.
Agricultural and Business Property Reliefs: OBR Costing
Simon Hoare Excerpts(1 month ago)
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James Murray
My hon. Friend is absolutely right. The party opposite—in fact, the parties opposite—routinely support the Government’s spending and investment decisions but will not support any of the difficult decisions we have to take to fund them.
Simon Hoare (North Dorset) (Con)
The weight of public and business opinion is not with the Minister on this issue, and the body of expert opinion speaking out against this tax proposal is now overwhelming. The Minister is a kindly man, so I wonder if he will indulge me. What would he be saying if he were in opposition and that weight of opinion was being expressed against a Conservative Government’s Treasury policy?
James Murray
The hon. Gentleman is a kindly man, too. I value the conversations that he and I have had outside the Chamber. People looking at this policy, and all our policies in the Budget, will recognise that we had to take difficult decisions, and will understand the context: our inheritance from the previous Government. We recognise the toughness of those decisions—they were not easy to make—but we prioritise balancing the public finances and economic stability, because that is how we get investment in growth, which our country so badly needs.
National Insurance Contributions (Secondary Class 1 Contributions) Bill
Simon Hoare ExcerptsTuesday 17th December 2024
(2 months, 1 week ago)
Commons ChamberRead Full debate National Insurance Contributions (Secondary Class 1 Contributions) Bill 2024-26 View all National Insurance Contributions (Secondary Class 1 Contributions) Bill 2024-26 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Committee of the whole House Amendments as at 17 December 2024 - (17 Dec 2024)
Gareth Snell
No—I will give way in a second. Savana is the provider of the rape and sexual advice service in Stoke-on-Trent. It gets all its money from the Ministry of Justice; it is essentially running a Government service by virtue of contracts, yet it will now see an increase in its national insurance contributions of something between £16,500 and £17,000, which will reduce the number of people it can support with independent domestic violence advisers and independent sexual violence advocates. The other half of its money comes from the Home Office via the police and crime commissioner. Again, that is essentially public money providing a public service that just happens to be provided by a charity that is not covered by the rebate provided to other organisations.
Disability Solutions helps those who are entitled to additional support to access it. That charity brings millions of pounds a year into the city, which has a cumulative economic benefit, because the money brought in is spent on our high streets and in our local economy. The people it helps are not the wealthiest in my city; they quite often have very little in their pockets, and every penny that is given to them is spent in the local economy. They do not hoard it in a savings account, put it into the Cayman Islands or use it as a downpayment on a new car or furniture; they go out and buy food, shoes and school uniforms for their children, or they use it in one of the local entertainment venues.
North Staffs Mind faces an impact of £55,000. That organisation is specifically designed to help people with their mental health, which the Government have rightly identified as a huge inhibitor to economic growth, because if people cannot get their mental health sorted, they cannot get back into work. Another mental health organisation, Changes, wrote to me to say that these changes to national insurance would be unsustainable for them. Finally, the Dove Service is a bereavement counselling service that faces a cost of £2,000. All those organisations are filling a void in state provision in my city.
Simon Hoare (North Dorset) (Con)
In essence, the hon. Gentleman has described what we on the Conservative Benches would have called the big society some years ago. Does he share my concern, however, that that huge bank of volunteers who often prop up and form the supports for the organisations he has described are likely to drift away as their organisations come under pressure? Not only will there be a financial pressure, there will be a pressure on the resource of people who are volunteering, because they will just say, “If the Government are not prepared to help us this one little bit, why should we help?”
Gareth Snell
I actually do not agree with the hon. Gentleman’s assessment, because in my city of Stoke-on-Trent, when there is need, people arrive to offer help. It is one of the things that people often say; we are a friendly, welcoming people, and if someone is in need, we roll up our sleeves and get stuck in.
However, I agree that although dedicated volunteers are excellent, they are not a replacement for staff. In particular, they are not a replacement for the highly trained staff who provide very bespoke services, such as some of the ones I have mentioned. There are thousands of volunteers across Stoke-on-Trent, and I thank every single one of them for every moment of their time that they donate, but as the hon. Gentleman will know from his constituency, we sometimes talk about voluntary organisations as if they have no costs associated with staff, because they are entirely volunteer-run. I think everyone across this House would recognise that that is simply not the case; if it were not for the cadre of professionals who help co-ordinate those volunteers, things would fall apart.
Although I have set out the challenges faced in my city, I am not necessarily drawn to some of the proposed amendments that would set differential rates for charities or other organisations. That is not because I do not believe those organisations should not be protected from the national insurance increase that is coming, but if we are saying that they should have a differential rate, why should that rate not be zero? Why should we not just exempt them entirely? I am also not convinced that we would not see people seeking to reorganise their own businesses to try to claim charitable status and reduce their own liabilities. Fundamentally, I believe that paying tax is a patriotic duty—if someone should, then someone must.
There have been record levels of settlements for the NHS, and I accept the points that have been made about hospices and GPs. I sincerely hope that Staffordshire and Stoke-on-Trent ICB will make use of the better care fund, putting some additional money into that fund to pay for the social care that could help offset some of the national insurance increases that will make those jobs much more difficult. However, many of the organisations I have mentioned receive their operating budgets from Government, albeit passported through funds, a local council or another public body. They are essentially running Government services—they are running a public service on behalf of the Government. Is it not incumbent on us to make sure the services we ask them to provide are provided at the level we expect, and that we resource them efficiently? I would like to think that the difference between this Government and the previous one is that we value the work sufficiently that we will pay those organisations correctly and accordingly. If the Minister could address those points when he sums up, I would be most grateful.
Finance Bill
Simon Hoare ExcerptsWednesday 11th December 2024
(2 months, 2 weeks ago)
Commons ChamberRead Full debate Finance Bill 2024-26 View all Finance Bill 2024-26 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Committee of the whole House Amendments as at 11 December 2024 - (11 Dec 2024)
James Murray
Local authorities and schools already have processes in place to support pupils who move between schools at any point in the academic year. Analysis carried out by the Department for Education under the previous Government suggests that each year, almost 60,000 secondary school moves take place not at normal transition points or over the school holidays. We fully expect the majority of moves to take place at natural transition points or in the school holidays, rather than within the school year.
I have been clear that ending these tax breaks for private schools has been a difficult decision, but it is necessary to secure additional funding that will help us to fulfil the commitments we made to improving education for all.
Simon Hoare (North Dorset) (Con)
The Minister continually refers to tax breaks. They are not tax breaks. Why can he not just be honest with the House and admit that this is the first time that any Government in a civilised democracy has imposed a tax on learning and education?
James Murray
Let me explain to the hon. Gentleman how public finances work. Funding a tax relief or a tax break is equivalent to public spending, because it is money that cannot be spent on something else. The Conservatives have committed, through their new leadership, to repealing this policy if they win the next general election. That implies cutting state education—cutting the investment in education for all that we are prioritising.
James Murray
I will not give way because I am making a clear point. We have to make choices in politics about what to prioritise. We have said that the VAT tax break for private school fees is not something that we want to prioritise. We want to spend that money instead on improving state education for all children.
Simon Hoare
I am grateful to the Minister for giving way a second time, and I am so grateful for the public finance lesson. Surely he has to accept that as no tax is placed on learning in any sector in the educational landscape across the United Kingdom, this measure is not a tax break. It is not that there is a tax break for one sector while others have a tax imposed. This is an imposition of a new tax in the educational sphere. It is not a tax break because no educational establishment pays VAT.
James Murray
Given the record of the Conservatives over the past 14 years, I do not think it is ridiculous to assume that they might need some education on how public finances work, with the mess that we inherited and the desperate need for us to restore fiscal responsibility to public finances. Restoring that fiscal responsibility requires us to take decisions that are difficult but necessary to raise the finances to fund our priorities. We have taken the decision that we will not support a VAT exemption for private school fees and that we will invest the money that we raise in state education to ensure that the aspirations of every parent across this country can be fulfilled. That is a decision I will defend every time I am in this Chamber.
James Wild
I will make a little progress, if the hon. Gentleman does not mind.
Sadly, this cruel tax, which is being imposed midway through the academic year, will damage the education of thousands of pupils. It is sadly typical of the ideological approach that we have seen the new Government take on education, where they are trashing the record of schools, pupils, teachers and governors over the past 14 years when we rose up the international league tables.
Simon Hoare
Given that there are many on the Government Benches who had almost as their life’s work the destruction of the private school system, is my hon. Friend as shocked as I am that for this flagship policy, which the red flag has so often demanded, the Government Benches are so underpopulated? I thought that they would be there to cheer the Minister on.
James Wild
My hon. Friend makes an important point. He will have been here throughout many of the debates on the Finance Bill, the national insurance and jobs tax Bill, where very few Labour Members have made contributions to defend their first Budget for 14 years. I think we all know why.
Clause 47 removes the exemption for private school fees and spells out what Labour’s education tax will mean from 1 January. As my right hon. Friend the Member for Hertsmere (Sir Oliver Dowden) said, doing that mid-year is a cruel measure.
Farming and Inheritance Tax
Simon Hoare Excerpts(2 months, 3 weeks ago)
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Mr Speaker
I have a point of order—from the shadow Minister’s good friend, of course.
Simon Hoare
This point of order is spontaneous, unlike that intervention. [Interruption.] I am Mr Spontaneity.
Mr Speaker, you are entirely right that many right hon. and hon. Members read their speeches almost verbatim, but surely it is just rude and discourteous to the House for the hon. Member for Scarborough and Whitby (Alison Hume) to read a supposedly spontaneous intervention as if it had just come into her mind. She managed to find a typewriter and a printer in order to write down two pages of intervention.
Simon Hoare
My right hon. Friend is right to highlight the devastating effect of this policy and to highlight the incredible rounding-up exercise on the Treasury account books of the contribution that it will make to NHS expenditure. With the Labour party having a serious foothold in rural constituencies for the first time since 1945, does she not find this rather inept politics, which is perhaps not surprising from such a London-centric Front Bench? The policy shows a wilful ignorance of rural life and a deliberate attempt not to understand the pressures and is, in essence, selling those rural Labour MPs down the river.
Victoria Atkins
I thank my hon. Friend for that point. There is some interesting polling coming out today, which I will deal with. Of course, Mr Speaker, I very much accept your point about trade, but we are genuinely concerned about the national security implications of the Chagos islands deal.
James Murray
I reassure the right hon. Gentleman, for whom I have a lot of respect personally, that we carefully considered how to calibrate the policy to ensure that significant relief from inheritance tax is still available to family farms, while at the same time fixing the public finances in as fair a way as possible.
Simon Hoare
I am very grateful to the Minister for giving way. He has just referred to his analysis of four years of data which led him and the Government to this position. That is an incredible thing to ask the House to believe, because just a few months ago his right hon. Friends the now Prime Minister and Secretary of State were specifically ruling out these policies to audiences of farmers and landowners. If the data of four years’ standing told him that this was the right policy, why were those now Ministers economical with the actualité when they spoke to the farmers themselves?
James Murray
The data we did not have before the general election was the £22 billion black hole that the hon. Gentleman’s party left in the public finances. He knows that, because it is acknowledged by the Office for Budget Responsibility that the full information was not shared with it. It has said that its forecast would have been “materially different” had it known that that was the case. We have had to take a number of difficult decisions.
Daniel Zeichner
Thank you, Madam Deputy Speaker. I am not sure that Conservative Members do want to listen, really.
As a result of the anxiety that we know people are feeling, it is right that the Prime Minister, the Environment Secretary and I have all met with the NFU president Tom Bradshaw to talk about the proposed reforms. The Government have and will continue to engage with the NFU, the CLA, the Tenant Farmers Association and other stakeholders. The reforms will not be introduced until April 2026, so there is plenty of time for people to plan for change and to get, as they always should when running major businesses, professional advice about succession planning.
Let us be honest: last month’s protests were not just about APR. Rural communities have felt ignored and let down by this place after decades of failure. The Conservatives sold out British farmers in trade deals with New Zealand and Australia. I listened to the shadow Secretary of State, the right hon. Member for Louth and Horncastle (Victoria Atkins)—did we get any apology for the trade deals? Not a word; no contrition. They have learned nothing. They left farmers facing spiralling energy bills because they refused to invest in cheaper home-grown British power—a decision that sent fertiliser and animal feed costs soaring.
The Conservatives were so incompetent that they failed to get £300 million earmarked for farmers out the door, leaving farmers out of pocket as the money sat idle in Treasury coffers. The disastrous kamikaze Budget crashed Britain’s economy and sent interest rates and mortgages skyrocketing, at massive cost to our farmers and rural communities. As a result of all that, public services are broken; hospital waiting lists are at record highs; schools in rural areas are crumbling—if Conservative Members use them, of course—and roads across country areas are cratered with potholes.
Rural communities are rightly feeling ignored and left behind. This Government will not accept that. These reforms will disincentivise the wealthy from buying up agricultural land to shield their wealth from inheritance tax, and they will also raise the money needed to fix those public services. This is a turning point for national renewal. The Budget also commits £5 billion to agriculture over the next two years.
Simon Hoare (North Dorset) (Con)
claimed to move the closure (Standing Order No. 36).
Question put forthwith, That the Question be now put.
Question agreed to.
Question put accordingly (Standing Order No. 31(2)), That the original words stand part of the Question.
Finance Bill
Simon Hoare ExcerptsWednesday 27th November 2024
(2 months, 4 weeks ago)
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Connor Naismith
My apologies, Madam Deputy Speaker. I am about to move on to points covered by the Finance Bill.
My constituents want to live in a country that levels the playing field and ensures that working families have as much opportunity at all stages of their life, regardless of their postcode or their background. That is why I support the Government’s decision to end VAT relief on private schools, aiming to equalise educational opportunities. I know that many families work hard to send their child to private school, but I have never met a constituent who does not work hard just to make ends meet, and their children also deserve the very best education that our country can provide. [Hon. Members: “Hear, hear!”] Conservative Members say “Hear, hear!” but we do not often hear them advocating for state schools.
Simon Hoare (North Dorset) (Con)
As a former state school pupil with three daughters in a state school, let me assure the hon. Member that, despite the caricature that sometimes he and others like to paint, not all Conservative Members are privately educated. I say to him quietly that it is not a choice of either/or; we want to see excellence and choice in education right across the board. It is not one against the other.
Connor Naismith
I thank the hon. Member for making that intervention. He says that it is not a choice between one and the other, but for 14 years under the previous Government we heard his side talk about state schools having to make difficult decisions and tighten their belts. As the husband of a state schoolteacher, I know that our state schools were severely underserved by the previous Government. The money generated by ending the VAT relief on private schools will be vital to recruit the 6,500 more teachers that we need in our state schools and to roll out free breakfast clubs across the country, to ensure that no child in education goes hungry.
VAT: Independent Schools
Simon Hoare Excerpts(4 months, 2 weeks ago)
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James Murray
I have made clear the reason why we are proceeding with this policy to a January 2025 date, which is that we want to raise the money as soon as possible to invest in our improvements to state education. There will have been five months for parents and schools to prepare for the change.
James Murray
I am still responding to the hon. Member for Hinckley and Bosworth (Dr Evans), so please let me come back to that point. HMRC is putting in place bespoke guidance, and it is standing by to make sure that schools are properly registered for the change. All the evidence we have seen from the IFS and so on suggests that the impact on the state sector will be very small, which means that it will not have a material effect on children’s education.
Simon Hoare (North Dorset) (Con)
Let me reiterate to the Minister the asks that the Opposition have. In an ideal world we would prefer this policy not to go ahead, but the mathematics of this place indicate that whatever the Government wish to do, they will secure.
This change should be delayed until September 2025; that would allow for sensible planning. Clearly, those with SEND and the children of serving military people or those in our diplomatic service should also be exempt. I would also like, on behalf of many of the schools in my constituency that have raised this, to know whether VAT will be applicable to summer schools and other events that are put on.
Bryanston school in my constituency has a fantastic relationship with Blandford high school. Unlike the Treasury Minister who opened the debate, I have no skin in this game; I was not privately educated, nor are my three children. But North Dorset is not a particularly wealthy constituency. Seven hundred and ninety-two jobs are linked to Bryanston school. The soft power that the schools provide in the international environment also need to be taken into account. Bryanston school alone makes a contribution of £24 million a year to the local North Dorset economy.
My asks are quite small in comparison to the ask that my Labour opponent would have been making of the Government had he won in July. Because when Richard Jones, the head teacher of Bryanston, at a church hustings, set out all the good work that Bryanston does in the community, its contribution to the economy and the jobs that it creates, my opponent said he was fantastically interested, and would table an amendment to the legislation to secure an exemption for Bryanston school. So if the Labour Front Benchers could not even convince their own parliamentary candidate in North Dorset of the merits of this policy, they have signally failed to convince the many parents and others who work very hard to send their children to school in the independent sector.
My final words are for the Secretary of State for Education, after the terrible tweet that she put out a couple of days ago. She is the Secretary of State for the education of all children, irrespective of which sector they are educated in. She used divisive words, referring to “our children” versus theirs. That is them and us. She has aided the Government’s case and argument not a jot. She is the Secretary of State for the education of all children; I wish she would take her responsibilities a wee bit more seriously.
Nigel Huddleston (Droitwich and Evesham) (Con)
It is an honour to follow Citizen Smith over there.
In the large number of contributions today, we have seen the importance of this issue and the alarm felt by many Members and their constituents about the Government’s proposal. I am sorry to say that we have also had a lot of 1970s politics of envy today. We believe in evidence-based decision making, and as many Members have pointed out, it is becoming increasingly clear that Labour’s planned education taxes—removing VAT and business rate exemptions from independent schools— will not do what is claimed.
I will move on to the details in a moment, but may I first congratulate those who have delivered their maiden speeches today? I thank them all for making gracious comments about their predecessors. I learned something about each of them today. The hon. Member for North East Derbyshire (Louise Jones) spoke eloquently and lovingly about her beautiful constituency, as did my hon. Friend the Member for Isle of Wight East (Joe Robertson), who brought back many holiday memories for me. The hon. Member for Glasgow East (John Grady) gave us all good advice on naming children in Glasgow. The hon. Member for Tipton and Wednesbury (Antonia Bance) may or may not be aware that we share something in common, as we were both student union sabbatical officers, although in my case a few years earlier. The hon. Member for Horsham (John Milne) gave perhaps the most eclectic speech today, mentioning Daleks, potholes and Ann Widdecombe all in one speech.
I am afraid that I will not be so gracious about some other comments we have heard today from Government Members, who still do not seem to realise that they are now in government and their job is to talk the country up. They have constantly talked down not only the country, but the education system. Let me remind them that when we left office, education standards were going up and per pupil funding was at record levels. In contrast, when Labour was in office, we were falling in the league tables. What a brass neck Labour Members have, when we look at Labour’s record in Wales. We have been backing our brilliant teachers, and I would hope that they would do the same.
The motivations behind this policy are clearly questionable. The impact assessment is non-existent and the savings illusory. There are so many potential unintended consequences and uncertainties around these policies that, at the very least, the Government need to postpone implementation, although it would be better to scrap the plans altogether. They are also moving away from a long-held principle that we used to agree on across the House that educational services are not taxed at all. It is a terrible thing that they are now bringing in.
We have five key categories of concern: the impact on state schools; the impact on Government finances; the timing of the proposals; the consideration of exemptions; and the impact on SEND and EHCPs. I will not repeat all my comments from the debate we had earlier, but it is so clear that this policy will not only have a detrimental impact on the independent schools sector, but negatively impact the state sector, because the imposition of a 20% VAT hike overnight will mean that some families will no longer be able to afford the fees. Inevitably that will mean children leaving the private sector and moving to the state system, putting an additional burden on many local state schools, some of which do not have the capacity. As I said this morning, it is not fearmongering or scaremongering; it is happening already and we are already seeing it in schools. According to some forecasts, instead of the predicted £1.5 billion saving, this policy could cost the taxpayer money.
How extraordinary to choose this policy area to try to eke out some cash when so many other options are available, if the Government were brave enough. Out of total Government spending of more than £1.2 trillion, is this really the policy that they want to prioritise?
On the topic of overall Government finances, we have not yet heard clearly whether the Department for Education will get more funding from the Treasury if the number of state school pupils exceeds expectations. Will they be expected to pay it out of existing budgets? Have the Government set aside capital for additional school spaces if it is needed?
Regarding the timing of the proposals, many Members have mentioned that it is beyond belief that the Government are bringing in this policy in the middle of the school year, when schools are simply not ready for it. It is not fair on the independent sector to expect schools to get their heads around new legislation, register for VAT and implement new systems and processes in literally a matter of weeks and before Christmas. That will not happen. We have also not heard whether the Government will create exemptions or special considerations for all these areas: military families, students on music and dance schemes, children attending small schools, language schools or religious schools, those paying low fees or on bursaries, and children in exam years who may have to move to another school that does not offer their curriculum.
What are the Government doing about pupils with special educational needs and those with an EHCP or in the process of gaining one? If, as many predict, there is a displacement of children with SEND and EHCPs into the state sector, is there the capacity for that? Is there adequate additional funding support planned for local authorities to deal with that predicted increase in demand?
I wish to make a couple of other brief points before concluding. As a Conservative, I believe in choice, and I will not criticise choices made by parents about their children’s education. I have no qualms, however, about criticising hypocrisy. The irony that I stand here as a proud product of a state comprehensive education defending independent schools while the Exchequer Secretary to the Treasury who spoke earlier, a product of a private education, is pursuing a policy that could undermine independent schools is not lost on me or others. Many Government Members attended independent schools or sent or are sending their own children to them, and yet they are determined to increase the costs on others, depriving many families of the choice they themselves had.
I am glad to see the Secretary of State for Education now in her place after being conspicuously absent. Perhaps she will take the opportunity to apologise for the tweet. Parents who send their children to independent schools pay twice for their children’s education and deserve better than to be treated with contempt by their Government’s Education Secretary. The divisive tweet that she put out last weekend was shockingly ill-judged and ill-informed, sneering and smirking about embossed paper and swimming pools. Does she really not understand or recognise that not every independent school is like Eton or Harrow? It betrays an incredible lack of awareness and poor knowledge of the facilities and financial status of many independent schools. It demonstrated that the policy is being promoted not on evidence but on envy and spite—ill-informed and misplaced envy at that.
Simon Hoare
I agree entirely with what my hon. Friend has said. Will he add to the indictment of the Secretary of State the fact that she failed signally to realise that she is the Secretary of State for all pupils, whether they are in the independent or the state sector? The divisive language that she used was a very rude signal of two digits to those families who take a decision that she does not like.
Nigel Huddleston
My hon. Friend puts it well. I do not have to add to his comments.
This is a rushed and ill-judged policy that will not raise the money the Government assumed it would, undermine the viability of many independent schools, put immense pressure on the state school system and put in jeopardy the education prospects of thousands of students, including many with special needs. We implore Ministers to reconsider.