Co-operative and Mutual Businesses

Debate between Stephen Doughty and Jeremy Lefroy

Thursday 27th June 2019 Commons Chamber

[Jeremy Lefroy (Stafford) (Con)]

As always, it is a real pleasure to follow the hon. Member for Huddersfield (Mr Sheerman). I thank the hon. Member for Harrow West (Gareth Thomas) and my hon. Friend the Member for Wycombe (Mr Baker) for bringing forward this really important debate.

Over the years that I have been in business and, indeed, in this House, I have come to see more and more the importance of the co-operative and mutual movement. Perhaps some Members know this, but I wonder how many people know which bank in the world is top of global sustainability rankings. It is Rabobank, a co-operative bank from the Netherlands, which, last year, had a net income of €3 billion and a balance sheet of more than €40 billion. That shows that a co-operative can be a global player. I have had the honour of working with the Rabobank Foundation in Tanzania where they supported a shallow well drilling project, which my wife was helping to run. I also have seen its work in other countries both as a commercial entity and through its magnificent foundation. That is one thing that a co-operative bank on that scale can do; it can give back enormous sums to the communities in which it works, both through better and cheaper services, financial services in this case, and also through supporting community work.

Further afield across Europe in Switzerland, the two biggest retail groups are both co-operatives: the Co-op itself and Migros, which has more than 100,000 employees. They show how co-operatives can work on a major scale and provide great benefit to their communities and to their staff.

On the international scale, I want to draw attention to Fairtrade, which I have been involved in for many, many years. Without the co-operative movement in the United Kingdom and, indeed, across Europe, Fairtrade would simply not be where it is. We need to remember that the UK has the greatest level of sales of Fairtrade goods of any country in the world—more than £2 billion a year—and the co-operative movement deserves huge credit for that.

[Stephen Doughty]

I thank the hon. Gentleman for giving way. Is he also aware of the role that the co-operative movement and co-operative MPs have played, along with MPs from across the House in the all-party group for Fairtrade, in highlighting corporates, such as Sainsbury’s, that are trying to downgrade the role of Fairtrade products? We highlighted the fact that it was selling tea that it called “fairly traded” which was not Fairtrade tea. It is not only about boosting Fairtrade globally, but about defending its position. That is at the very heart of the co-operative principle.

[Jeremy Lefroy]

I welcome what the hon. Gentleman says, and he is absolutely right. I would say that Sainsbury’s has also been a strong supporter of Fairtrade, but we do not want to see any dilution or diminution of those principles. Fairtrade is like a brand. People will pay that bit extra because they know that what they are buying has been reliably sourced from farmers or other producers who have been properly paid for their work. It is a brand like any other brand, but it is more than that; it is something that we have to have trust in, and we do not want to see any diminution of that at all.

I want to talk briefly about the role of co-operatives in financial services, in three specific areas. First, my constituency is home to the excellent Stafford Railway Building Society, which was founded in 1877. It is local and exists to provide mortgages to local people. It was set up, obviously, by the railway workers of Stafford—Stafford is one of the major railway junctions in the whole UK rail network—and it is still there, providing excellent financial services, profitably, to my constituents and the near neighbourhood. I pay tribute to all those who have made it what it is, because people give up a lot of their time to serve on the board or as staff in the building society. Particular credit goes to Mike Heenan, a friend of mine who was very much involved in the building society for many years; Susan Whiting, who took over from him as the chief executive; and the current board and management of the building society.

Stafford Railway Building Society will be around for the next decade, two decades and three decades, because it is run responsibly and its capital is built up every year as it does not have to pay dividends. Where it can help is by providing cheaper and better services to its members through the retention of that capital.

The second area I want to discuss is credit unions, which have already been mentioned by the hon. Member for Stoke-on-Trent Central (Gareth Snell). I declare an interest in that I was a member of the Staffordshire credit union and was very sad indeed when it closed. I have to give credit where it is due; it was closed in a responsible manner and people got their investments back, but it was very sad that it had to happen. I ask the Government to look at why such an important local institution has to close because of regulation. We all know that there has to be regulation, but are there ways in which regulations could be changed so that they would not have such a dramatic effect on a very important and loved local institution? I very much hope that we will see the return of a Staffordshire credit union at some point in the near future.

The third area where the co-operative and mutual movement has a very important role to play is in small business finance, but it is not able to do that enough at the moment. The Co-operative Bank clearly has an excellent record in lending and providing accounts for small business, but the co-operative and mutual movement should have a much greater role to play in the provision of loans to start-ups or equity capital for small businesses. I pay tribute to the Black Country Reinvestment Society, of which I am a member. The society provides lending to businesses in Staffordshire in my constituency and across the Black Country. It is an excellent institution, but we need more such institutions and we need them to play a greater role in the provision of the equity capital that is so often as important—particularly for modern, high-tech businesses—as the loan capital that they more traditionally provide.

I pay tribute to the role that the co-operative and mutual movement has played in the history and economy of the United Kingdom. All speakers, including my hon. Friend the Member for Wycombe have mentioned the fact that it is about not just the money and the business, but the co-operation. It is about building our social fabric—goodness knows we need to bring people together more and more at the moment, in times of quite considerable division. I urge Members on both sides of the House to support mutuals and co-operatives in their constituencies, as I know many do, as much for the fact that they bring people together to work for the benefit of their community as for the undoubted financial and economic benefits that these great movements bring to our country.

Commonwealth Development Corporation Bill (Second sitting)

Debate between Stephen Doughty and Jeremy Lefroy

Committee Debate: 2nd sitting: House of Commons
Tuesday 6th December 2016 Public Bill Committees

[Stephen Doughty]

The Minister suggests we should not be sceptical of the Government and their intents. It is the role of this House to be sceptical of the Government and their intents. To suggest that Ministers are going to take powers but might not use them is a slightly curious argument: I have not seen many cases of that in the past. The timing of this is very odd, given some of the other circumstances, which I will come on to.

[Jeremy Lefroy (Stafford) (Con)]

Will the hon. Gentleman give way?

[Stephen Doughty]

I will give way in a moment, but I just want to make one point. We have seen a very important change in the definition of the ODA, which occurred only last year. Previously, as I said on Second Reading, it was the issue of the CDC net disbursements that contributed to our ODA figures. Normally we looked at the money that the CDC was investing, returns from that investment, the function of the two and ended up, usually, with a positive number. Over the past five years it had been a £100 million or £200 million positive contribution to our aid effort. In fact, last year it would actually have been a negative contribution of minus £9 million. However, the Government changed the rules. They decided to count the capital inflow into the CDC—all of it, in its entirety—as ODA, as aid, rather than the function of what is actually, potentially, being achieved.

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[Jeremy Lefroy]

It is a pleasure to serve under your chairmanship, Ms Ryan. The hon. Gentleman raises a very important point about the capacity of DFID and, indeed, the capacity of the two continents—Africa and part of the continent of Asia, south Asia—to absorb this kind of money, but does he not agree that one major challenge facing the world at the moment is the need to create in the next 15 years 1 billion jobs, most of which will be in those countries, and that the amount of money that we are talking about is tiny in comparison with the amount that would be required to create those jobs and thereby to alleviate poverty?

[Stephen Doughty]

I agree that the challenge of creating jobs is huge and one in which we and others should be playing a role, but it is not solely our role. Again, I hope that one question that we will get on to discussing is whether we should be providing what is in effect private capital in some of these locations or whether the capital should be coming from other sources: other Governments, institutions or DFIs. Indeed, should that be the responsibility of the Governments themselves? We will undoubtedly come on to that in discussion of some of the new clauses, but one of my fundamental questions is about the focus of this money: where is it going currently, and is it doing all that it could do? Professor Collier himself said this morning, in relation to the current bias of funding towards south Asia and India in particular, that he thought that there should be more focus on Africa. I agree.

[Jeremy Lefroy]

I agree, too, on that point. Will the hon. Gentleman also accept this point about the other DFIs? The Dutch DFI has invested far more money than we have, and the Netherlands has a population one quarter the size of the UK’s. The French Proparco is in a similar position to the UK, but the Germans have invested three times as much. We are laggards in this respect.

[Stephen Doughty]

We are not here to discuss the Dutch DFI, but I do know a reasonable amount about it. It provides only marginally more than us. It does do interesting work; it does not do exactly the same work as us. I do not know its history of recapitalisations and how much additional ODA money it has received recently. It would be interesting to look at that. However, the question here is this. What is the best use of our money? Are we not investing or have we reduced investment in other sectors where we could be using our aid in order to do this, and is that the right choice? That is the question before us, and when we look at, for example, DFID’s closures of bilateral programmes in places such as Burundi, we do not have clarity from the bilateral aid review on whether there will be further closures or changes.

We have heard worrying things about cuts in bilateral funding for HIV/AIDS programmes, despite the good money that is going into the global fund. We have seen a shift away from certain sectors and from budget support. We have seen a shift away from investing in free healthcare and education, and in teacher salaries, and with removing user fees for healthcare, for example. When the CDC invests in private healthcare and private school systems, we might have a debate about the role that voluntary and private play in healthcare and schools, but again it is an opportunity cost—it is a choice about where we invest these things.

I accept the hon. Gentleman’s wider point about the importance of jobs, investing and crowding in capital into some of these sectors, but we have to question what we should be doing with our money and whether that is right versus other potential sources. I contend that the Government simply have not come forward with a case that justifies this level of cap. Some increase in the CDC’s budget might be justified, but certainly not at this level.

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[Jeremy Lefroy]

I will make four brief points. First, there are several reasons for bringing forward the Bill, but one of the major reasons is that reducing the expected rate of return of the CDC’s investments, which I absolutely agree with, creates a need for more capital.

Under the last Labour Government, the CDC grew substantially, was well managed, invested in funds and made a lot of money out of significant investments, such as that in Celtel. All of that was good and I welcomed it, but it perhaps was not in accordance with the CDC’s original mission, although I would argue that it helped to reduce poverty. Capital was generated internally to quite a considerable extent. The required rate of return was relatively high, those returns came in and that money was reinvested.

Now that CDC is quite rightly supposed to focus on harder investments with lower rates of return and higher risk, there inevitably will not be as much free cash flow or free capital available for investment, so the shareholder —the UK Government, DFID and the taxpayer—needs to be prepared to put in more capital if we are to meet those objectives.

The second point is about middle-income countries. I fully accept the Minister’s point about the importance of targeting lower-income countries wherever possible, but let us not forget that the range for middle-income countries is, frankly, ridiculous. It goes from just over £1,000 to £13,000 per year. At the lower end are countries that are basically low-income countries and at the higher end are relatively wealthy countries. If we categorise all middle-income countries as somehow moderately wealthy, that is simply not the case. There was a point—not now, sadly, because of what is happening there—when South Sudan was briefly a middle-income country; look at where it is now. We have to be very careful when we talk about middle-income countries as though they are a homogenous group; they are not.

[Stephen Doughty]

The hon. Gentleman is making an important point and I have no doubt we will discuss this further. Is he not concerned, though, when he looks at the amount that is going into India, for example, and at individual states within India, where the majority of even the CDC’s new disbursements are still going to the richest states rather than the poorest? The top disbursement was to Maharashtra, where Mumbai is.

[Jeremy Lefroy]

Absolutely, we should look at that. However, there are more of the poorest people in India than in the whole of sub-Saharan Africa. If you take the view that a company in India in which you invest is likely to have national ambitions and wants to work across India, you would hope that it would therefore target the poorest as well as those who are perhaps better off. I agree, though, that the CDC needs to look at this and ensure that it does not stray back into the realms of investing only in fairly soft, nice, high rate of return investments.

My third point is about employment. I have already mentioned the figure of 1 billion jobs. The World Bank says that 600 million jobs are required across the world in the next decade; others have put it as high as 1 billion. There will be more of those 1 billion jobs in the middle-income countries than in the low-income countries, so we need to invest across the two if we are to tackle this enormous threat.

I was in Tunisia last week at the launch of the Parliamentary Network’s middle east and north Africa chapter—I chair the global network. The problems that a country such as Tunisia faces, with a population of 10 million and unemployment among graduates of 60%, are enormous. We know the social consequences of that. Tunisia has a very high rate of young people who have gone to Syria and Iraq to fight for Daesh. That is one consequence of the very high rates of unemployment and the lack of hope in those countries.

Finally, this is about investment. We talk about money being spent, but it is actually investment. Once it goes in, provided it is well-managed, it is recycled. As I have said, the money that made about £500 million of profit from Celtel under the last Labour Government was recycled into investment and is still there. Some of it may have been invested twice since then. This is not a one-off hit where we make a grant to an organisation and it does excellent work, but is then gone. It is money that goes round and round, that is recycled and that creates jobs.

[Stephen Doughty]

The hon. Gentleman makes an interesting point and I agree that it is investment and it is recycled—the CDC has shown that. However, does he not agree that that applies to our whole aid budget? If we invest in the education of a girl through a bilateral programme, with the opportunities that provides in her life and the opportunity it gives her to contribute to the economy, that is, similarly, an investment.

[Jeremy Lefroy]

Yes; I do not disagree with that.

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[Jeremy Lefroy]

I have to say that I agree with a considerable number of the hon. Gentleman’s points, although I see some problems with the way in which the new clauses address them. For instance, if we restricted new capital to a certain list of countries, where would that leave the self-generated capital, both from existing investments and from these investments once they are sold? That does not seem to be clear, so in effect we would have to segregate capital raised through the profits or the free cash flow of the sale of existing investments, and capital raised through the sale of new investments that had been restricted to certain countries.

[Stephen Doughty]

The hon. Gentleman will correct me if I am wrong, but has that not already happened with regard to legacy investments in Latin America, for example, as a result of the changes in the strategy for CDC in 2012?

[Jeremy Lefroy]

Yes, it has, absolutely, but what I am saying is that the new clauses are not specific enough to achieve what the hon. Gentleman wants.

I must also repeat my earlier point that middle-income countries are a very broad church. I think I mentioned that they cover gross national incomes between £1,000 and £13,000; forgive me, but I meant between just over $1,000 and just over $13,000—dollars, not pounds, although that is less of a difference than it was a year ago. I believe firmly that a country with a gross national income of $2,000 or $3,000 per head per year is absolutely the kind of country that we should be investing in to create the jobs I referred to earlier, but it would be counted as a middle income country.

My final point is that when we invest in multilateral institutions such as the World Bank through IDA, we are investing in low income countries; but when we invest through the International Bank for Reconstruction and Development, which is the major part of the World Bank, we are investing indirectly in middle income countries, including India, China, Brazil and all the other countries that the hon. Gentleman mentioned. I would not like us to treat the CDC differently from our investments in the World Bank or in other multilateral institutions such as the Global Fund.

Trade Union Bill

Debate between Stephen Doughty and Jeremy Lefroy

Tuesday 10th November 2015 Commons Chamber

[Jeremy Lefroy]

Yes, and they do. As I mentioned in an intervention on the hon. Member for Cardiff West (Kevin Brennan), some councils make a surplus from it that goes towards their services.

As has been pointed out, clause 14 singles out union subscriptions. There is no prohibition on other deductions for which there might not be compensation to the employer, such as deductions for season tickets, which have been mentioned, or professional fees. Even on my payslip as a Member of Parliament, the top deduction every month is £2 for the Members fund. There will be no prohibition on that deduction, unless the Members fund is a national union of Members of Parliament, which I do not think it is.

Other people have made the case much more eloquently than I have, so I will not detain the House any longer on this point.

[Stephen Doughty]

The hon. Gentleman makes a convincing and measured case, and I have looked closely at the wording of his amendment and think it very reasonable. Given what he has just said, if the Government are unwilling to accept this reasoned amendment, does he think that we should test the view of the House on it this evening?

[Jeremy Lefroy]

I will wait to hear what the Minister says. He is an extremely reasonable person and there are other ways in which such things can happen. I encourage the Government to accept the amendment because I do not want to see this clause unamended in an Act of Parliament signed by Her Majesty.

Let me quote someone I greatly admire:

“In most parts of the world the suggestion that someone might be both conservative and liberal would be viewed as absurd…In the UK there is no finer tradition, no more established custom and no stronger institution than that of freedom under the law…That’s why in Anglo-Saxon countries conservatism is freedom’s doughtiest defender and why the advance of freedom gives conservatism its moral purpose.”

Those are the words of the Minister, my hon. Friend the Member for Grantham and Stamford (Nick Boles), and I entirely agree with him.

Health and Social Care (Safety and Quality) Bill

Debate between Stephen Doughty and Jeremy Lefroy

Friday 7th November 2014 Commons Chamber

[Jeremy Lefroy]

With the leave of the House, Madam Deputy Speaker.

Should my Bill receive a Second Reading today, I shall take very clearly from this important debate the points raised by my hon. Friends the Members for Bury North (Mr Nuttall) and for Congleton (Fiona Bruce), the hon. Member for Copeland (Mr Reed) and the Minister, and I am grateful to them.

There are two things that we must discuss very seriously in Committee. The first is justification of all the clauses. I believe they are justified, for the reasons that I set out in my earlier remarks; I will not rehearse them again. Secondly, we must discuss the details, particularly around privacy. With that, Madam Deputy Speaker, I thank you very much for your indulgence.

Question put and agreed to.

Bill accordingly read a Second time; to stand committed to a Public Bill Committee (Standing Order No. 63).

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

On a point of order, Madam Deputy Speaker. I am sorry to detain the House briefly. You may be aware that the shadow Home Secretary has asked the Home Secretary to make a statement on the publication of the Wanless report on whether the Home Office misplaced files relating to child sex abuse allegations, and yet the Home Secretary has so far declined to say that she will. This morning the media are reporting details from the Wanless report. Madam Deputy Speaker, I wanted to ask you whether, after the bungling of the child sex abuse inquiry, you think it would be appropriate and wise, given the seriousness of this, for the Home Secretary to make an oral statement on Monday, so that the House is able to have complete transparency on the important issues around the Wanless report?

International Development (Official Development Assistance Target) Bill

Debate between Stephen Doughty and Jeremy Lefroy

Friday 12th September 2014 Commons Chamber

[Stephen Doughty]

If the economy grows, it will do, of course. The crucial thing is that we are tying this to the state of our overall economy, but it is also setting a worldwide standard, and it is meeting a promise we made in the 1970s, and which, indeed, all parties in this House committed to.

We could give many examples. The right hon. Member for Meriden (Mrs Spelman) mentioned one from Malawi, and I have seen for myself the impact of effective aid led by the expertise in DFID, whether in Sierra Leone in tackling maternal mortality and the deaths of young children, and the impact we were able to make with a very small contribution and removing user fees for basic health care services; in our action to tackle malaria, on which the right hon. Member for Eddisbury (Mr O'Brien) did excellent work in his time as Minister in the Department; or through the education programmes we have funded, which my right hon. Friend the Member for Kirkcaldy and Cowdenbeath, the former Prime Minister, spoke about. There is also our work on HIV and AIDS, which I know many Members are very passionate about, and, indeed, our humanitarian work.

It was also a privilege to be able to serve alongside people from DFID, the Ministry of Defence, the Royal Fleet Auxiliary Service and the Foreign Office, who worked on our response to the terrible Haiti earthquake many years ago. Disasters such as Haiti demonstrate exactly what is at stake. In addition to providing the immediate humanitarian response, we also need to address the underlying causes of vulnerability in those situations. That requires long-term, predictable and assured assistance from countries such as ours.

The argument about predictability has been put forward a number of times. Members have asked why we need the Bill, and why we need to firm up this commitment and put it into law. The reason is that the predictable assurance of effective aid in the long term creates an ability to move away from aid. If we can support countries in building up strong health and education systems and good governance, we will ultimately be able to move them away from needing development assistance.

This activity also helps to create a social contract in countries where people should be able to expect services such as health and education to be provided by their Government. Our assistance can get them over that hump. That is what happened in this country. Let us not forget that, many years ago, health care and education services were provided voluntarily, as charity, here before we moved to nationally funded systems. We can have a debate about how those systems should be handled in the future, but we have moved to those national systems with national standards and predictable, secure funding. That creates an expectation among the population and helps to further democracy and the overall quality of life in a country. We should never forget that. This is a fundamental point to be made to those who ask why we need this commitment.

[Jeremy Lefroy (Stafford) (Con)]

Does the hon. Gentleman agree that another important consequence of predictable funding is that, through DFID, we are able to support long-term programmes of research, particularly agricultural research and health research into much needed vaccines and medicines? Does he agree that those are global public goods?

[Stephen Doughty]

I thoroughly agree with the hon. Gentleman. I have seen many of those programmes at work, and we should pay tribute to those in DFID who work on them. DFID is a world leader in research on many of these issues, and we need to see long-term funding going into those programmes to enable us to come up with solutions for agriculture, for vaccinations and for other crucial areas. In the end, such solutions will remove the need for further support. We need the assurance for that funding, however, because if it is simply left to the whims and the day-to-day politics of this place and of other countries around the world, it could easily fall victim to the siren voices, which would ultimately do long-term damage as we would not be able to achieve the scale and effectiveness that we require.

Many right hon. and hon. Members have mentioned the importance of Scotland. It is exemplified by the fact that the Bill is being promoted by the right hon. Member for Berwickshire, Roxburgh and Selkirk and by the presence today of the Chairman of the Select Committee, the right hon. Member for Gordon. We must remember the impact that Scotland has had on these debates, not only here in the House but globally. I mentioned the impact of the Make Poverty History march in Scotland before the Gleneagles summit. That summit would not have taken place there if Scotland had not been part of the United Kingdom. The people of Scotland who feel passionately about these issues would not have been able to have that impact on cancelling debt, trebling aid and arguing for fairer trade rules had that summit not taken place in Scotland and had we not had leaders including our Prime Minister and Chancellor who were willing to stand up for those issues and respond to those campaigners.

Some of the most excellent DFID staff are to be found in Scotland, in East Kilbride. I have had the pleasure of visiting their offices. The right hon. Member for Gordon and my right hon. Friend the Member for Coatbridge, Chryston and Bellshill (Mr Clarke) have rightly said that it would be a huge tragedy to lose them. In response to the hon. Member for Angus (Mr Weir), I would say that, yes, Scotland could have an aid programme—it already gives support to Malawi and other countries, and that is fantastic—but effective aid depends on scale. It depends on doing things together and working with institutions such as the European Union and the United Nations and with successful, long-established development agencies such as DFID. Breaking that up in order to set up a separate scheme and badge it in a different way would be foolish. It would be a sad ending for the hundreds of thousands of people who stood on the streets of Edinburgh in 2005.

The Bill is about investing in the future of some of the world’s poorest people. It is also about investing in our own common future. This is the right thing to do. It is about justice, not charity. It is about putting Britain on the world stage and doing the right thing.