Entrepreneurs from Ethnic Minority Backgrounds

Stephen Timms Excerpts

Tuesday 20th December 2022 Westminster Hall

[Sir Stephen Timms (East Ham) (Lab)]

I beg to move,

That this House has considered support for entrepreneurs from ethnic minority backgrounds.

I am delighted to serve under your chairmanship, Mr Hosie. I am grateful to Mr Speaker for granting this debate, and I am very pleased to see the Minister in her place.

I represent in Parliament the eastern half of the London Borough of Newham, which is probably the most ethnically diverse community on the planet. Last year’s census showed that just 45% of residents were born in the UK, and that 52% identify as Asian, compared with 9% nationally, and another 14% identify as black. Some 25% identify as white, compared with 82% nationally, so ethnic minority entrepreneurship is very important for the prosperity of the community that I represent. I regret the closure of the Department for Work and Pensions support programme for self-employment, with no sign of a replacement as yet. That programme gave helpful support to a significant number of my constituents to start up in business for themselves.

Minority-led businesses have made a lot of progress. Minority Supplier Development UK, a not-for-profit membership group that champions diversity and inclusion in public and private sector supply chains, highlighted in a report last year called “Minority Businesses Matter” that of the UK’s 23 unicorns—start-ups valued at $1 billion or more—eight had ethnic minority founders, including Deliveroo. That gives a sense of the huge potential in this area, which we need to realise much more. In May, the London Chamber of Commerce and Industry published the report “Ethnic Diversity in Business”. I commend the work of Esenam Agubretu and her colleagues. That report identifies the barriers that minority-led businesses face.

In 2021, about 14% of the UK population was from an ethnic minority background, but ethnic minority-led businesses constituted just 5% of small and medium-sized enterprises in 2020, and those businesses also tend to be in lower-paying sectors. We need to be doing much better than that. The economic contribution of ethnic minority-led businesses is large, but the potential is larger still. Baroness McGregor-Smith’s 2017 review, “Race in the workplace”, concluded that

“If BME talent is fully utilised, the economy could receive a £24 billion boost.”

We need to realise that opportunity. The Social Market Foundation has found that ethnic minority-led businesses are often more innovative, with a lot to contribute to levelling up the economy, and that the economy is weaker because those businesses lack support.

I want to highlight two main points arising from the London Chamber of Commerce and Industry report: the need to address the barriers that ethnic minority businesses face in accessing finance, and the need for better data on how those businesses are getting on. The key barrier, and the focus of that report, is problems accessing finance. Black entrepreneurs in particular report bad experiences with banks, and Asian entrepreneurs struggle to access funding outside their own communities. Those who do apply for funding are far less likely to receive it. The London Chamber of Commerce and Industry quotes Ismail Oshodi describing his experience:

“we had different people dealing with us and I had to repeat myself on several occasions, even with all of that, we were unable to get the amount we needed. We weren’t given a clear reason why, we was just told we did not meet their criteria.”

The LCCI says that 44% of black African business owners and 39% of black Caribbean business owners fear prejudice from financial providers, compared with just 4% of white owners. Let us be frank: racism is part of the problem. It is not that the banks do not recognise the problem; they do, and they are trying to do something about it. UK Finance published a report in July, “Supporting Ethnic Minority Entrepreneurship in the UK”, which profiled numerous initiatives. HSBC sponsored last year’s Black Business Week and Black Business Show. Santander works with a network of women of colour in business and supports a black inclusion programme. NatWest has a racial equality taskforce and an ethnicity advisory council. Barclays has a black founders accelerator.

The initiatives that I have seen most of are those supported by Lloyds bank. It has a black business advisory committee, chaired by Claudine Reid MBE, whom I first met when I was a Minister in the Department of Trade and Industry 20 years ago. I had embarked on a tour of social enterprises and found myself at PJ’s in Croydon, set up and run by Claudine and her husband. I also know the work Lloyds does with the Black Business Network, founded and chaired by Shari Leigh, which was highlighted to me by my former constituent Shi Dolor, whom I knew when she was a teenager and whose Noir Squared branding business has worked with the network.

In September, the network published the second of three annual reports called “Black. British. In Business …and Proud!” As a Lloyds executive recognises in her foreword, it makes for “uncomfortable reading”. The report refers to a

“breakdown in trust of formal institutions”,

and reports that 67% of black business owners have been negatively discriminated against in their past entrepreneurial efforts, that 84% of business owners see racism and society’s attitude to black entrepreneurs as a barrier to their business, and that black business owners turn to their friends, black business community groups or social media groups rather than banks for advice and support.

[Dr Lisa Cameron (East Kilbride, Strathaven and Lesmahagow) (SNP)]

I thank the right hon. Gentleman for bringing this vital debate to the House. Does he agree that where there is intersectionality between ethnic minority groups and disability or gender, the barriers faced by people can be multiplied, and that banks and the Government should also take that into account?

[Sir Stephen Timms]

I very much agree with the hon. Member. That point is made in the London Chamber of Commerce and Industry report, and she is right to highlight it.

Over half of black business owners say that they have seen banks taking action to deal with the problem, but only 12% think that that action taken is significant. Minority-led businesses also account for very little venture capital investment, less than 2% of which went to all-ethnic founder teams in 2019, according to the London Chamber of Commerce and Industry. Black African firms are four times more likely than white firms to be refused a loan, according to the British Business Bank. Mainstream services do not seem to be working for ethnic minorities. Ethnic minority groups have less wealth than their white counterparts, and there is a strong correlation between that and business success. They have fewer savings, so they are more reliant on external financial support.

Given that, it is no surprise that minority-led businesses do less well. According to London Chamber of Commerce and Industry research, 38% of Asian and other minority business owners and 28% of black business owners reported making no profit, compared with 16% of white business owners. Thirty-nine per cent. of black entrepreneurs and nearly half of Asian and other ethnic minority entrepreneurs stopped working on their business idea because of “difficulties getting finance”, compared with a much smaller proportion—just a quarter—of white entrepreneurs.

We need to be doing better than this, for the sake of not just business owners but the wider prosperity of our society. I welcome the Labour party review of start-up funding, led by Lord O’Neill, who was a Treasury Minister in the coalition Government. The review will consider how to ensure that ethnic minority entrepreneurs can access the finance, support and networks they need. Newham-based Shpresa is a community organisation supporting self-help among London’s Albanian community. It was founded and led by the remarkable Luljeta Nuzi, a social entrepreneur I first met when she came to the UK seeking asylum from Kosovo. She went on to graduate from the School for Social Entrepreneurs, and when today’s debate was announced, she drew my attention to the school’s match trading initiative, which provides enterprise grant finance, supported by Lloyds bank; the aim is that racially minoritised social enterprises should be early adopters.

When the Minister responds, can she give us the Government’s assessment of the lending practices of financial institutions to ethnic minority businesses, and say whether she sees real progress being made? It is welcome that between 2012 and 2018, over 11,000 ethnic minority entrepreneurs received Government-backed start-up loans. The additional action that is needed is largely for the financial services industry, but there is one area where Government action is particularly needed: public procurement. A big section of the report by the London Chamber of Commerce and Industry is devoted to this area, and it calls for a Government taskforce to work on increasing public procurement from ethnic minority businesses.

The LCCI wants the Government to move beyond merely “best endeavours” to introducing, for example, minimum target percentages for procurement from minority-owned businesses, in order to simplify procurement procedures and increase public purchasing from micro-businesses. It also wants tenders to be scored, in bid assessments, on supply chain diversity, and the Government to establish prestigious awards to highlight the achievements of minority-owned businesses.

In the LCCI’s report, a quote caught my eye from Demi Ariyo, founder of a funding platform:

“It became clear to me that there was a problem to be solved upon witnessing my church’s experience and hearing the first-hand experience of other minority ethnic entrepreneurs who had tried to seek funding.”

As the chair of the all-party parliamentary group on faith and society, I would like there to be greater support for entrepreneurship among people who are coming together in faith groups. Britain’s history is replete with great businesses that have their roots in religious faith. Let us have more of them, and newer ones.

My second point is about the lack of reliable data on ethnic diversity in business, which the report describes as “a recurring theme”. Here again, we need action by Government and by business. Companies House does not record the ethnicity of company directors. There is no legal requirement for businesses to publish their ethnicity pay gap, although they are rightly obliged to publish their gender pay gap. In 2017, the then Prime Minister, the right hon. Member for Maidenhead (Mrs May), promised to ask large employers to publish their ethnicity pay gap data. It has not happened yet. Can the Minister tell us whether that 2017 commitment still stands, and if so, when it will be implemented?

The paucity of data means that there is a lot that we just do not know. Without detailed and reliable data on ethnic minority entrepreneurship, we cannot fully understand the barriers that exist, as we must if we are to remove them. In this recession, the gap between ethnic minorities and others in business may well get worse. We need to grip this issue now, so that trends can be monitored and support appropriately targeted. We cannot meet the needs of minority-led businesses without having adequate information about their characteristics and their performance.

In the LCCI report, Dr Tony Matharu, chair of the LCCI’s Asian Business Association, and Lord Michael Hastings, chair of its Black Business Association, call for financial institutions to collect data about their support for ethnic minority businesses, as they do for women-led businesses under the Investing in Women code.

The two issues that I have highlighted are part of a much bigger set of challenges. When the Minister responds, can she assure us that the Government recognise the need, spelled out by the LCCI, for strategic engagement between the business community, Government and ethnic minority entrepreneurs?

[Sir Peter Bottomley (Worthing West) (Con)]

I support the right hon. Gentleman’s efforts on faith and society. As one of the officers of the all-party parliamentary group on black and minority ethnic business owners, I am supported by Diana Chrouch. I direct hon. Members’ attention to an article in The Sunday Times of 14 February 2021, by Oliver Shah, talking to Wol Kolade, who has the initiative 10,000 Black Interns. He talks about unkinking the pipeline of black talent. It seems to me that letting people get through and do what they are capable of is what we should be aiming for.

[Sir Stephen Timms]

I completely agree with the Father of the House. I had not seen that article, but it sounds to me as though it makes exactly the case that needs to be made.

I wonder whether the Minister will commit to better engagement between the groups I mentioned, in order to boost diversity in business. Bridging this large and persistent ethnic diversity gap is not straightforward. Realising the potential to which the Father of House has rightly drawn our attention is a long-term challenge. We need to be determined to end racial and ethnic inequality across UK society, including when it comes to start-up support, and to closing gaps that have persisted for far too long.

I hope that the Minister can reassure us that the Government recognise the importance of the issue, and will set out plans to make sure that we can all benefit from the skills and contributions of all those who want to set up in business but are too often excluded by unfair and unnecessary barriers.

[The Minister for Industry and Investment Security (Ms Nusrat Ghani)]

It is a pleasure to serve under your chairmanship, Mr Hosie. First, I congratulate the right hon. Member for East Ham (Sir Stephen Timms) on securing the debate, and on raising this important issue. I do not want anyone to think I am consumed by Christmas spirit, but I very much respect him, as does everyone in the Department for Business, Energy and Industrial Strategy. We take every point that he raises very seriously.

The right hon. Member talked about his constituents, the fact that the majority of them were not born in the UK, and the challenges they face. That is me and my community. I am delighted to speak on behalf of the Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake), who is responsible for enterprise, markets and small business, because I want to make sure that we take all the issues raised incredibly seriously.

To continue with the Christmas spirit, we can certainly agree on the importance of ethnic minority entrepreneurs and their valuable contribution to our vibrant business landscape. I will not disagree with the right hon. Member on the challenges that have been mentioned. It is testament to the dynamism and resilience of ethnic minority entrepreneurs that they continue to adapt, and that they overcome so much, especially during covid. From small retail stalls to tech unicorns, the value of ethnic minority founders must not be understated. I am pleased to have an opportunity to shine a light on this community and what they do for the broader community.

On all of the issues raised, there are no challenges from this side of the House, but let me focus on some of the barriers that were mentioned, and talk about what the Government are doing to support ethnic minority businesses and to encourage an inclusive entrepreneurship environment for all. As has been said, if we get this right, and fundamentally get finance right as well, we could make that environment incredibly dynamic, which would be a boost to all our local economies.

The economic impact of ethnic minority entrepreneurs is far-reaching, with some estimating the contribution to the UK economy to be worth up to £25 billion. However, the crucial role of these businesses is much more than just economic. Their impact reaches much further than across the business ecosystem. As was mentioned, these businesses are most likely to invest in innovation, which is critical in helping us to achieve our ambitions around research and development investment and making the UK a science superpower. With more innovation comes improvement in productivity, so building on the potential of these businesses will be crucial to improving our productivity record.

What really matters to me is that these businesses operate in every region of the UK, including the most deprived parts. I doubt that East Ham is different from where I was brought up, Small Heath—an area often overlooked and underestimated. The efforts of black and Asian businesses are invaluable to ensuring that we level up across the country. Even more excitingly, these businesses are most likely to export, which puts them at the forefront of our efforts to harness global opportunities, which include our changing how we do business and diversifying our business models, especially now that we have left the EU.

Let me respond to some of the questions raised, starting with those about opportunities to access finance. Despite the impact of ethnic minority businesses, there is evidence to suggest that there are still barriers preventing them from reaching their full potential. Access to finance is regularly raised as one of the most significant issues holding those businesses back; there are reports of ethnic minority entrepreneurs keeping reservations about accessing financial assistance from traditional lenders.

As noted in the latest “Black. British. In Business & Proud” report from the Black Business Network and Lloyds Bank, 67% of black business people state that they have experienced some form of discrimination in their past entrepreneurial efforts, with only 40% trusting banks to have their best interests in mind. That has to change. The report’s recommendations rightly focus on improving the link between financial institutions, Government and the ethnic minority community as the best way forward. I will come back to some of the points raised to show how we are supporting ethnic minority entrepreneurs in accessing finance.

The issue of data was raised. In addition to the difficulties in accessing finance, the ongoing lack of data collection continues to inhibit funding opportunities for ethnic minority business leaders. Greater information sharing is crucial for bolstering our understanding of lending patterns, and this Government are committed to securing this transparency.

[Sir Stephen Timms]

I am grateful for the case the Minister is making, and I agree with what she has said. On the point about Companies House, would it not be a welcome step if it recorded the ethnic origin of company directors, so that we had some sense of the scale of what is happening?

[Ms Ghani]

That is a very important point. As I am not the Minister responsible for that portfolio, I do not have an exact answer. Let me get through this speech; if the right hon. Gentleman is not satisfied, I will ensure that he is written to with that information.

Turning back to action 55, the Department for Business, Energy and Industrial Strategy is working with the Investing in Women code signatories and with trade associations to pilot data collection on the ethnicity of entrepreneurs applying for finance.

Trust in institutions is low in many ethnic minority communities, who often struggle to get the experience or even the exposure required, or the support that they need to run a business effectively. One way that we are trying to help is by improving the communication flow between Government and the ethnic minority business community, engaging with businesses and the organisations that represent them directly to understand their specific needs. In terms of business support, black, Asian and ethnic minority business leaders value mentors more than any other ethnic group; they are more likely to want a mentor and more likely to value the impact of having one. It is reassuring to see organisations such as Be the Business championing the role of mentoring. Furthermore, our Help to Grow Management programme, with its delegated mentorship component, offers businesses a subsidised training course designed to improve leadership and management skills and address firm-level productivity challenges.

While we should celebrate the success and impressive contributions of these businesses, we must acknowledge our role in helping to tackle the remaining barriers to growth and prosperity, which were mentioned. Off the back of the British Business Bank’s “Alone together” report, which emphasises the difficulties faced by ethnic minority entrepreneurs in accessing funding, we are working with stakeholders to understand what further interventions we can take.

Since its launch in 2012, the Government-backed start-up loans programme has issued around 20% of its loans to black, Asian and ethnic minority businesses. The future fund has also approved 1,190 convertible loans, totalling more than £1.1 billion. More than half—61.6%, to the value of £683.5 million—of the convertible loan agreements approved have been for companies with management teams consisting solely of ethnic minority team members and those with both ethnic minority and white team members. This is promising progress, but, of course, there is no denying that we have much further to go.

As previously mentioned, we are also delivering actions 55 and 56, set out in the inclusive written report, which aim to support and encourage those from less-advantaged backgrounds to thrive—this is where I am thinking of those from my community of Small Heath and the community represented by the right hon. Member for East Ham. Through these specific actions, we will support ethnic minority entrepreneurs in accessing finance more effectively and becoming more productive.

The Procurement Bill includes a new duty on contracting authorities to have regard to the barriers facing small and medium-sized enterprises. Among other things, they must consider whether there is a diverse representation of businesses in the pre-market engagements. We are always looking to engage with ethnic minority business leaders and networks to better understand the issues facing them. There was a recent opportunity to do so: the Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Thirsk and Malton, was asked to speak at the third anniversary reception for the all-party parliamentary group for black, Asian and minority ethnic business owners. The Department is dedicated to continued engagement with ethnic minority entrepreneurs through valuable events, including those hosted by the APPG, as well as through the ethnic minority business group, a forum that convenes bimonthly to discuss priority issues affecting entrepreneurs from diverse backgrounds to see how we can work together to find practical solutions.

Ethnic minority leaders want to see themselves represented in the business landscape. That could be through their mentors, or through wider representation in senior leadership positions. The value of visibility and its longer-term impact on entrepreneurs cannot be overstated. Through the Parker review, we acknowledged that building a fairer economy means ensuring that the UK’s organisations reflect the nation’s diversity. The latest figures show that the number of FTSE 100 companies with an ethnic minority director on their board has increased to 89, with 42 companies having exceeded the target. The progress made so far is encouraging, but I argue that we have much further to go. We look forward to those figures increasing further, to reflect the real diversity of talent in the UK.

A question was raised by the hon. Member for East Kilbride, Strathaven and Lesmahagow (Dr Cameron) on dealing with disability and other issues—I would expect that question from her, as she is the chair of the APPG for disability. Of course, that is another issue that we need to explore. The Father of the House talked about unkinking the pipeline of black talent, and I do not doubt that the Department will now be looking very closely at the report that he mentioned.

The right hon. Member for East Ham raised the Government’s update on the ethnicity pay gap data. As the Government have set out, ethnicity pay gap reporting continues to be voluntary. We will not be legislating for mandatory ethnicity pay reporting at this stage, but good firms, obviously, will want to make sure that their data is on record.

Again, I thank the right hon. Member for East Ham for introducing this important debate. Separately, I congratulate him, in his role as Chair of the Work and Pensions Committee, on today’s publication of the “Universal Credit and childcare costs” report. Affordable, accessible childcare is key to enabling parents to work and to increase their working hours; that is linked to today’s debate on entrepreneurial activity.

I conclude by reiterating the importance and the wealth of ethnic minority talent across the UK, which we are committed to nurturing and celebrating. On the one point that the right hon. Gentleman raised that I could not respond to, I will ensure that he is written to by the appropriate Minister with a formal response. I reiterate that we want to work closely with parliamentarians across the House, and with business and financial institutions to ensure that access is equitable. We want to improve our understanding of the issues faced, and to identify practical solutions that we can offer. I remind all colleagues from across the House that we are committed to bolstering the potential of ethnic minority entrepreneurs who, in turn, will help the UK economy to thrive.

I thank the right hon. Member for East Ham for raising this issue and, if I may be so bold, I wish you a happy Christmas, Mr Hosie.

Question put and agreed to.

Oral Answers to Questions

Stephen Timms Excerpts

Tuesday 29th November 2022 Commons Chamber

[Grant Shapps]

I do enthusiastically support our SAF—sustainable aviation fuel—industry. Actually, it is a little known fact that last year at COP26 we sent more than 500 aircraft home with sustainable aviation fuel in their tanks, and this country has set a more ambitious target for sustainable aviation fuel than elsewhere, with 10% by 2030.

[Sir Stephen Timms (East Ham) (Lab)]

The Groceries Code Adjudicator has done a good job over the past 10 years, leading to a big fall in the number of breaches of the fair purchasing code, but bad practice is still rife in the fashion industry, with UK fashion retailers among the worst offenders. The Environmental Audit Committee called for a garment trade adjudicator. Will Ministers bring that proposal forward?

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Kevin Hollinrake)]

I thank the right hon. Member for all his work in this area; I know that he has done an awful lot. We have no plans to bring forward a garment code adjudicator, but we do take reports of illegal and unsafe employment practices very seriously. Since October 2020, a wide group of stakeholders, comprising retailers, manufacturers and non-profit organisations have been working with the Gangmasters and Labour Abuse Authority to address poor practice and working conditions.

Economic Crime: Planned Government Bill

Stephen Timms Excerpts

Wednesday 26th January 2022 Commons Chamber

[Paul Scully]

We are really aware of the issues and we appreciate the comments in that report. As that Bill progresses, we will consider them with all due process.

[Stephen Timms (East Ham) (Lab)]

The introduction of universal credit has led to a big increase in fraud. The current growth of economic crime and corruption poses an existential threat to financial services—one of our biggest and most successful business sectors—and therefore to the UK economy as a whole. Does the Minister accept that effectively tackling this scourge urgently requires an economic crime Bill?

[Paul Scully]

I dispute the right hon. Gentleman’s comments about universal credit, but yes, tackling economic crime requires legislation. That is why we remain undiminished in our appetite to push this forward.

Economic Crime

Stephen Timms Excerpts

Thursday 2nd December 2021 Commons Chamber

[Dame Margaret Hodge]

Absolutely. That is another really important point; hiking up the prices at the top of the market obviously has an impact right through the housing market here in London. Some terrible instances have been uncovered in the various leaks. The Crown Estate, for example, sold 120 of its properties to companies registered in 14 different tax jurisdictions, demonstrating again the way in which the system is abused. Those are people such as Vladimir Chernukhin, who owns a residence in Regent’s Park through a company registered in the British Virgin Islands, or James Ibori, a Nigerian governor who was prosecuted here for fraud and money laundering, and who had property in Hampstead and Dorset. In the recent Pandora Papers, the Crown Estate bought a £67 million property from the Aliyev family, who are the well-documented abusers of their rule in Azerbaijan.

In 2015 we were promised a register of beneficial ownership for properties owned abroad. There was a consultation in 2016 and a draft Bill in 2018. It was mentioned in the Queen’s Speech in 2019, and again in the G7 meeting in Cornwall in 2021, but we still have not got a Bill, although it is my understanding that such a Bill has been written and is literally gathering dust on the shelf. The problem is enormous, and if we fail to act robustly it will overwhelm us. Economic crime is costing us our international reputation as a trusted and respected jurisdiction. If that trust goes, our ability to develop and grow our economy will be fatally curtailed.

[Stephen Timms (East Ham) (Lab)]

My right hon. Friend is talking about the amount of resource we commit to this, but has she seen the statistic that the National Economic Crime Centre put to the Work and Pensions Committee, which is that fraud now accounts for a third of crime in the UK, but for 1% of police resources?

[Dame Margaret Hodge]

Throughout this, when we talk to the enforcement agencies, they all minimise their expenditure on economic crime and have other priorities. That statistic is very frightening, and I am grateful to my right hon. Friend for bringing it to the attention of the House. I think it can be reflected in all four or five agencies that do a similar job.

We will never achieve sustainable prosperity on the back of dirty money. With the economic crime plan drawing to a close, this is the perfect opportunity for the Government to put the proposals in our motion before the House, so that we can debate and enact them, and embark on that long and difficult journey of ridding this country of the cancer that is growing in our economy and society. Across the House we will then all feel that we are not just debating, but that we are acting to expel economic crime from the Britain we all love and seek to serve.

--- Later in debate ---

[Stephen Timms (East Ham) (Lab)]

I am very pleased to follow the hon. Member for Thirsk and Malton (Kevin Hollinrake), and I welcome his collaboration with my right hon. Friend the Member for Barking (Dame Margaret Hodge). They both advanced powerful arguments in opening the debate.

I want to focus briefly on one specific point. I mentioned, in an intervention on my right hon. Friend, the Work and Pensions Committee’s inquiry into pension scams, which reported a little while ago. This is an important area of economic crime, and our report highlighted in particular the menace of online scams, which the hon. Gentleman has just mentioned. As he said, the Online Safety Bill presents a unique opportunity to address this menace. The Prime Minister has said that tackling online fraud is one of the Bill’s main aims, but the current version, which is undergoing pre-legislative scrutiny, leaves out the major part of the problem. That must be changed.

The campaigner Mark Taber gave evidence to our inquiry. He found the compare-uk-bonds.co.uk fake comparison site on Google, and reported it to Google in May last year. An elderly woman who had recently been bereaved contacted him after losing more than £200,000 to that scam site on Google in September. Google finally took it down in December. People think that if they find something on Google, somebody must have vetted it, but of course they have not. Google gets paid by scammers, and then also gets paid by regulators to warn about the scammers people find on Google. It is a pretty good business. I have no idea why Google did not take that scam down in May. Was it because the company was disorganised? Was it because it wanted to keep the advertising income coming in? Google will not say, and I do not imagine that we will ever know. What this shows us is that the law must be changed. If it is not changed, crooks will continue to ruin the lives of thousands by advertising scams online. That would be an unforgivable failure of Government.

Last year, the Pension Scams Industry Group estimated that £10 billion had been lost to pension scams by 40,000 people since the pension freedoms were introduced by George Osborne in 2015. I welcome some of the recent changes that have been made to help. The new Pensions Schemes Act 2021 will restrict the statutory right to transfer, which was given in the pension freedoms, where there are signs of a scam. The High Court recently ruled that the fraud compensation fund could be used to compensate pension liberation scam victims. Those are both welcome steps, but we need to do more. In particular, we must tackle the menace of online scams. The insurer Aviva told the Work and Pensions Committee that in the six months before it gave us its evidence it had found 27 scam websites purporting to be Aviva. Having found them, it takes quite a lot of effort to get them taken down, and there are always victims before the sites are removed.

In the Online Safety Bill, the Government are tackling user-generated scams, but not paid-for scam adverts. That needs to be changed, because it is the scam adverts that are the heart of the problem. That is not just the view of my Committee and the Treasury Committee; it is the view of almost everyone outside Whitehall who has looked at this, except for the internet companies. The Governor of the Bank of England told the Treasury Committee that the risk to consumers from online fraud

“could be tackled through the Online Harms Legislation, but the experience so far...is that there is strong resistance in other parts of the official sector to extending the legislation to financial services. This is a serious problem.”

He is absolutely right.

The City of London police wrote to the Work and Pensions Committee in May that the exclusion of advertisements and cloned websites from the Online Safety Bill

“leaves a gap in the protection provided for the public”.

The City of London police went on to call for

“legislation requiring a duty to protect and/or corporate criminal liability for failure to prevent across all online and telecommunications enablers.”

The Financial Conduct Authority told us in evidence to the Committee that

“financial harms should be included in the Online Safety Bill to ensure that online platform operators take responsibility for the material which they disseminate which could cause consumers financial harm.”

That is absolutely right as well. The Prime Minister told the Liaison Committee in July that

“one of the key objectives of the Online Safety Bill is to tackle online fraud”.

I welcome and applaud that pledge, yet the Bill as it stands entirely misses the major problem of online fraud, which is paid-for advertising.

Martin Lewis of MoneySavingExpert.com, Sir Richard Branson and Dawn French have all had their name or image used in online scams. They all wrote to the Prime Minister last month calling for the Online Safety Bill to tackle scams, pointing out that the current Bill will penalise someone who posts a scam, but not someone who pays to post the same scam. They went on to say that the

“Government has said it wants to eventually tackle scam adverts through changing advertising regulation—but this will have to go through a lengthy process of legislating in the face of fierce opposition from a powerful advertising industry.”

We understand that work to address the problem of scam advertising is going on somewhere—the Department for Digital, Culture, Media and Sport, I think—but on a much longer timetable. If that is the track we go down, it will be years before anything changes, and thousands more people will lose their life savings in the meantime.

[Kevin Hollinrake]

That is a really interesting quote. Who is in the “powerful advertising industry”? The only people I can see benefiting from scams posted in the paid-ads section of Google are those at Google, not those in the advertising industry.

[Stephen Timms]

That hon. Gentleman raises an interesting point. I know that Ministers have been looking into this issue. As I understand it, there is now a very complex infrastructure around advertising. Google is at the end of the chain, but there are all sorts of agencies and intermediaries—a whole industry—in the middle. I imagine that letter is referring to the fact that all those people in the middle would say, “No, don’t touch this because it’s working very well.” It is working well for them, but I am afraid that for the public it definitely is not. If we wait in the way suggested in the letter, it will let crooks and scammers continue to ruin people’s lives for years to come. That would be a catastrophic Government failure. My plea is for Ministers to change course now, face up to the undoubted technical challenges, and legislate in the Online Safety Bill.

Finally, I agree with a point made by my right hon. Friend the Member for Barking in opening the debate: this is an existential threat to the UK economy. Financial services account for a big part of our economy, and we have a worldwide reputation and provide a great deal of expertise and high-quality services. If people conclude that they can no longer trust our financial services sector because fraud is being allowed to run rife, that is a massive threat not just to that industry but to our entire economy. We really do need to tackle economic crime, face it head on, and make the kind of changes that my right hon. Friend and the hon. Member for Thirsk and Malton have argued for, to protect not just the customers of these services but the entire economy.

--- Later in debate ---

[Lee Rowley]

I am grateful to the right hon. Lady, who is an expert in this area. I hope we all agree that having such legislation in place is a step forward, and that the opportunity and ability to use it is a positive thing. As she has outlined, such measures have been used in some instances, but there have also been challenges. I hope that that use will continue to be made in appropriate areas, and I will certainly pass back her comments to the Ministers who are reviewing this issue.

In 2018, the UK’s anti-money laundering regime was reviewed by the Financial Action Task Force, and the UK received the best rating of any country assessed in that round of evaluations. None the less, there is an acceptance that more needs to be done, and as a number of Members have said, a number of months ago we published the economic crime plan. Progress was updated on top of that, with 52 actions to tackle economic crime, and the Government are on track to deliver 49 of those.



There have been achievements as well, including the commencement of reforms to the suspicious activity reporting regime, with £172 million frozen or removed from potential criminals in a recent reporting year, and the creation of the National Economic Crime Centre, which a number of Members referenced. Its work in the fusion cell in April 2020 highlighted potential criminality, potential challenges and potential investment fraudsters. We are also legislating in the current Finance Bill for the economic crime levy. I hope all hon. Members have seen the action to secure a unified position in the G7 on international anti-corruption efforts, including an agreement to implement and strengthen beneficial ownership registers.

[Stephen Timms]

The Financial Conduct Authority, which reports to the Minister’s Department, has made the case for the Online Safety Bill to be widened to include online fraud. Does he accept the strength of that argument?

[Lee Rowley]

I am just coming to that point, so the right hon. Gentleman pre-empts me, but I am grateful for the opportunity to do so.

We have heard some very good speeches in this afternoon’s debate. The right hon. Gentleman highlighted that point about the Online Safety Bill and the importance of tackling online fraud, which was also referenced by the hon. Member for Glasgow Central (Alison Thewliss), the hon. and learned Member for Edinburgh South West (Joanna Cherry) and—albeit, if he does not mind me saying so, once he got through the cheap shots—the right hon. Member for Wolverhampton South East (Mr McFadden). It is an important point to highlight.

Obviously, a specific Department is pursuing that legislation at the moment. The hon. Member for Glasgow Central, who sits on the Treasury Committee, heard on Monday that there is a variety of views about how best to deal with online fraud and which part of the legislation it should go in; I know that there was an active discussion about that in the Committee a few days ago. I will certainly pass back the comments made by the right hon. Member for East Ham (Stephen Timms). I understand the importance of the matter that he highlights. I think all of us in the House agree about the challenge; the question is what it is appropriate to do and where it is appropriate to do it, but I absolutely heard what he and other Members said about the importance of trying to make progress in that area.

My hon. Friend the Member for Barrow and Furness (Simon Fell) brings to the House a wealth of knowledge and experience in this area, which his very good speech highlighted. He highlighted the extensive work that has been under way for many years, notwithstanding the requirement for more to be done, and, again, the important point about the real impacts on real, ordinary people. This is not a theoretical crime; it is one that has real impacts in all our constituencies, which we will return to this evening and tomorrow.

I know hon. Members are keen to talk about where we are going. The spending review announced just a few weeks ago highlighted a significant amount of taxpayer spending specifically to reform Companies House, to improve the accuracy of the register, to clamp down on fraud and to strengthen the register in the long term. I hope that that announcement and the real money associated with it demonstrate the Government’s intention to make progress in this regard. On top of that, next year the Government will publish a fraud action plan and an updated economic crime plan, we will report on the review of UK money laundering regulations and the supervisory regime, and we expect to receive a corporate criminal liability options paper from the Law Commission. Officials continue to work on the three consultations from the start of 2021.

A constant theme throughout the work on reform has been a mantra from business and transparency organisations alike that the reforms are important and supported, but that they want to get them right. That does not mean we should delay unnecessarily, but we want to make sure that whatever we bring forward—I accept the challenge from hon. Members that they wish to see that happen quickly—we do it in the right way and as quickly as possible.

Let me spend a few minutes on the specific reforms and proposals that have been outlined today, particularly by the right hon. Member for Barking and my hon. Friend the Member for Thirsk and Malton, who secured the debate. The Government will legislate to expand the function of the registrar of companies to include a new function to maintain the integrity of the register of companies and the UK business environment. The registrar will be equipped with new powers to carry out that function, including powers to query suspicious appointments or firings, and in some cases to request further evidence or reject the filing. Companies House will have more extensive legal gateways for data sharing with law enforcement, other Government bodies and the private sector. That will result in more efficient sharing of information on suspicious activity with law enforcement, and the establishment of feedback loops with other Government bodies and the private sector. It will make anonymous filings harder and discourage those who wish to hide their company ownership through nominees or opaque structures.

Alongside the legislative changes I have outlined, Companies House will change. The combination of legislative reform and the transformation of Companies House will help to ensure that the UK is the best place to start and to grow a business, and that companies on the UK register are run responsibly, transparently and with accountability. Hon. Members have noted the draft Registration of Overseas Entities Bill, which has already received prelegislative scrutiny. That legislation will ensure the transparency of ownership and control of overseas entities that own property in the UK, about which concern was expressed.

The right hon. Member for Barking talked about proposed new corporate criminal liability offences. That is still under consideration. As hon. Members will be aware, the call for evidence a few months ago did not prove to be conclusive, so the Government have asked the Law Commission to undertake an in-depth review of the laws around that and to consider recommendations on proportionate opportunities for reform.

I recognise that hon. Members are keen for us to make progress—that desire was expressed very clearly today—but I hope they recognise that much work has been done. This debate has been a timely reminder of the view of this House on an important area and on the desire to make progress. I thank Members who have spoken today and the Backbench Business Committee for the opportunity to discuss this issue. I look forward to making further progress in the months and years ahead.

Income Tax (Charge)

Stephen Timms Excerpts

Thursday 28th October 2021 Commons Chamber

[Kwasi Kwarteng]

The hon. Lady makes a sensitive point. Nobody engaged in business wants to take on unsustainable levels of debt, but she will appreciate that the credit was offered in totally unusual circumstances; my right hon. Friend the Chancellor had to make decisions very quickly and we used the BBB to distribute that credit. No one is suggesting—not even anyone in the hon. Lady’s party—that the interventions and credit that was provided on good terms should not have been offered to many businesspeople. I am fully aware of the nature of the debt overhang and I am engaged with trying to think of ways of softening that, but the intervention was absolutely the right thing at the time. I must remind the House that many predictions of doom and catastrophe were mercifully avoided thanks to the timely and wise interventions of my right hon. Friend the Chancellor.

As well as supporting businesses, the Budget will protect the health, wealth and livelihoods of the British public. Under this Government, the proportion of people in low-paid work has fallen to its lowest level in 30 years. That is why I was so surprised to hear the hon. Member for Leeds West (Rachel Reeves) suggest that an increase in the national living wage was something to be regretted.

[Stephen Timms (East Ham) (Lab)]

Before the right hon. Gentleman leaves the business part of his speech, will he update the House on the latest provision of support for energy-intensive industries?

[Kwasi Kwarteng]

That is a very direct question and, as I have said, conversations are ongoing. I speak to the CEO of Ofgem on a daily basis and we are always looking at the situation in terms of gas and electricity prices and how we can mitigate those risks.

--- Later in debate ---

[Stephen Timms (East Ham) (Lab)]

I am pleased to follow the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone). I attended the reception he hosted yesterday for young people working in the renewable energy sector. He mentioned the reception in a couple of his earlier interventions, and I agree with those points.

I congratulate the shadow Chancellor, my hon. Friend the Member for Leeds West (Rachel Reeves), on her assured response to yesterday’s Budget statement. I am not sure how much notice she had, but I do not think it was very long—perhaps half an hour. She had to put up with some very ill-mannered barracking from two or three Conservative Members, but she seemed, if anything, to relish it and she set out a compelling case that the heart of the problem is the poor record on growth over the past 11 years. Her commitment to abolishing business rates has clearly rattled the Chancellor, and there is a compelling case for fundamental reform given the dramatic shift to online shopping, as a number of Conservative Members have said. Until the shadow Secretary of State for Business, Energy and Industrial Strategy, my right hon. Friend the Member for Doncaster North (Edward Miliband), told us at the start of the debate, I did not realise that a promise to do that has been included in every Conservative manifesto since 2010. I do not know why, 11 years on, the Government are still nowhere near doing it.

The Secretary of State for Business, Energy and Industrial Strategy told us today that yesterday’s announcement about business rates meant that they would be “more responsive and agile, with more frequent revaluations”; I do not think there is anything very fundamental there. In making the case for fundamental reform, my hon. Friend the shadow Chancellor is absolutely right. That is the kind of bold change that is needed.

It is striking that Ministers currently do not seem to be taking much notice of UK businesses. They got into the habit of ignoring all businesses’ fears about Brexit, so they seem to feel they should continue to ignore their views now. From what I can tell, businesses are currently getting a hearing from the Labour Front-Bench team that they are not getting from Conservative Front Benchers. The argument made by my hon. Friend the shadow Chancellor—that the central problem has been weak economic growth since 2010—is very persuasive. We have a difficult winter ahead and the appetite for an approach different from the Government’s may well be rising rapidly next spring, with real wages due to fall again in the next year.

We all understand why the tax burden is high coming out of the pandemic, but there seems to have been no attempt to share that burden fairly. It is all being borne by working families, what with the national insurance increase—the jobs tax—and the Chancellor’s evident delight in cutting the duty on champagne then seemed to be rubbing salt in the wound.

I welcome yesterday’s announcement of the reduction in the universal credit taper and the increase in the work allowance. Those are significant changes that are large enough to be worth while, and they will help low-paid working families to get over the £20 a week cut and will increase work incentives—those are positive things—but they will do nothing at all for unemployed families and people who cannot work because of ill health, all of whom have suffered the £20 a week cut to the rate of universal credit.

Benefit support for unemployed families is now at its lowest level, in real terms, for more than 30 years. In those 30 years, GDP has increased by more than 50% in real terms, but support for unemployed families is no bigger at all than it was 30 years ago. It is now at the lowest level ever as a proportion of average earnings. In fact, according to the House of Commons Library, support for unemployed people is now at a lower level, as a proportion of average earnings, than it was when Lloyd George introduced unemployment benefit in 1911. These are historically low levels of support.

When the Minister responds to the debate, will she give us some explanation of why unemployment support has been cut so low? We have had no explanation at all. I have pressed Ministers on the issue at the Work and Pensions Committee but they cannot give any justification for why this has happened. Social security has a job to do; we cannot have successive Ministers simply dipping into it to fund other things. At its current level, particularly in some parts of the country, it has been cut below the level at which it can any longer do its basic job. People cannot focus on getting a job if they are worrying about whether they can pay for their children’s next meal.

We have just had 18 months in which people who were unable to work—unable to do their jobs—have had to live not on £75 a week but on 80% of their in-work earnings, up to a maximum of £30,000 per year. That is an approach to supporting people who are not in work that is very different from the one provided by social security in the UK. Perhaps we can learn lessons for the future from the success of that most recent approach. The Work and Pensions Committee is going to conduct an inquiry on this subject over the coming year, to look at what the level of support for unemployed people should be and to consider the approaches being taken elsewhere and the evidence on the effectiveness of those different approaches.

The analysis published yesterday by the Institute for Fiscal Studies shows that the running cost budget for the Department for Work and Pensions has been one of the most deeply reduced in Whitehall since 2010. That is no doubt one of the reasons for the serious problems in the state pension service at the moment. Very large numbers of people—well over 100,000 people now, according to the Department—have not received the correct amount of pension over a period of 30 years or more, with older women particularly hard hit. Just in the past few months, there have been very large numbers of people having to wait a long time to get their pension after applying for it. The reduction of the running cost budget for the DWP must be one of the reasons why those things have gone wrong.

I do hope that the very modest increase in the Department’s running-cost budget will allow some modernisation of the very old computer systems on which the state pension benefit and some other benefits are run. There has been a meeting this morning of the Public Accounts Committee with the permanent secretary, in which questions were asked about how things have gone so badly wrong with the state pension, particularly in these past few months.

By contrast, the universal credit system, which is modern, did a very good job during the pandemic in getting support to a large number of people efficiently and well in a short period of time, but too many of the Department’s other systems, such as the state pension system, need urgent investment.

I note from the Budget document that the Government are planning for the universal credit roll-out, which we were initially told would be complete by October 2017, but which we are now told will be complete by March 2025. The OBR has always and rightly been sceptical about the Department’s forecasts on this and expects it to take 18 months longer. I think that it is likely to be proved right.

I warmly welcome the case that the shadow Chancellor and her team have set out in response to the Budget. The heart of the problem has been this weak economic growth over the past 11 years. I hope that, between us, we can come forward with some compelling proposals for how that failure can be reversed in the years ahead.

Budget Resolutions

Stephen Timms Excerpts

Thursday 12th March 2020 Commons Chamber

[John McDonnell (Hayes and Harlington) (Lab)]

As we face the coronavirus crisis, it is vital that we demonstrate to the people of our country that we are meeting it head-on and that we will defeat it—and we will. As I have said elsewhere, this is no time for partisan political knockabout or, for that matter, publicity stunts. We have lives to save, so we must all work together. We will work with the Government and parties across the House to protect our people and to contribute to the worldwide effort to overcome the outbreak of this virus.

We welcome the Government’s package of measures announced yesterday. We must ensure, though, that alongside the medical and scientific strategy to contain, mitigate and halt the spread of the virus, the economic strategy is equally comprehensive. We agree with the Government that the NHS must receive whatever resources it needs. I pay tribute to and thank our NHS staff, who, as always, are rising to this challenge with their usual professionalism and dedication. We acknowledge that they are doing so at a time when they are already under extreme pressures, but we offer them our thanks.

The other key service that we need to support in this emergency is social care. It is unclear from Government statements so far what additional support is being provided to social care. Social care is already in crisis in this country. Before this virus outbreak, 1.5 million people were not receiving the care they need. There are more than 120,000 staff vacancies, and many of the private providers have been on the financial edge for some time. The majority of those who receive social care are older, disabled and vulnerable people—the very people who are most at risk from coronavirus infection. We have an £8 billion funding gap in social care budgets as the result of 10 years of austerity. Providers and local authorities are already stretched to breaking point in many areas, so we need to know how much additional support is being provided specifically for social care and what contingency plans are in place if individual providers are unable to cope. Like our support with regard to NHS funding, the Government will have our support to bring forward the resources, whatever it takes.

A large section of our care workforce is now under threat from the Government’s recently announced immigration policy. Some Members may have seen the GMB union calculation that the Government’s immigration policy will cost the care sector up to 500,000 staff. Without foreign careworkers, our care system would collapse. The message to the Home Secretary is clear: do not put our social care system at risk. Pragmatism must override ideology and policy at this stage.

Social care in this country largely falls on the shoulders of family members, and in our culture it is still usually the older women in our families. The pension age for many of those women was increased without proper consultation or notification. They were effectively robbed of many years of their pension, and this Government—despite all the Prime Minister’s promises before the election —have refused to compensate them. I met the WASPI women last week, and it is no wonder they are still angry. We may well look at what support can be given to individual carers within families as they cope with this crisis.

If any good is to come out of this developing tragedy, it must be the lessons we learn from it. It is overwhelmingly clear now that no Government can inflict a decade of cuts and austerity on our public services, such as the NHS and care services, without impacting on their resilience in a time of crisis. Ten years of cuts and a failure to invest in services mean that we are extremely ill-prepared for dealing with this type of large-scale health risk to our community.

We know that the NHS is already under pressure—intense pressure—as a result of underfunding and understaffing. Some 17,000 beds have been cut. Bed occupancy levels were at 94% last week, and critical care bed occupancy was at 80%—those are the beds we rely upon in episodes like coronavirus. The NHS is short of 100,000 staff, including more than 40,000 nurses and thousands of doctors. We have to recognise that the NHS needs to be put on a longer-term stable footing, with secure financial backing for the long term. Just as we have over the coronavirus outbreak, we must listen to the clinicians and the experts when it comes to what is needed. It should not take a crisis to secure for the NHS the resources it needs.

I turn to support for individuals and businesses. We welcome many of the Government’s measures set out by the Chancellor yesterday. The Budget stated that statutory sick pay will be paid from the first day of sickness absence and that people will be compensated for self-isolation, but we need more clarity. The Government guidance appears to exclude workers on zero-hours contracts, part-time workers and people earning below the lower earnings limit of £118 per week, saying that they are ineligible for statutory sick pay and are advised to make a claim for universal credit. Can we be absolutely clear who will be covered by statutory sick pay and who will not?

Sick pay is currently set at the low rate of £94.25 a week—that is about £18 a day. Average pre-tax earnings are £511 per week in nominal terms. Without lifting statutory sick pay, the financially secure will err on the side of caution and self-isolate, and all but the most financially secure will be asked to take a significant pay cut in order to self-isolate. That leaves people inevitably choosing between health and hardship.

For those being directed by Government to universal credit, I ask: what, if anything, has been done to reduce the five-week delay in receiving universal credit and to ensure the staffing resources in the Department for Work and Pensions to cope with the volume of demand? The suggestion is that these low-paid workers apply for universal credit, which then becomes a loan. That will push many low-paid workers into debt, which will cause significant hardship for some.

The Chancellor announced yesterday a £500 million fund for councils to administer. Could the Secretary of State clarify how much that means for each local authority and how it will be distributed? Will hard-stretched local authorities receive support for delivering that scheme? Councils are also being asked to administer £2.2 billion of funding to support businesses in meeting their ongoing business costs. Could we be clear about what resourcing councils will be given as they are asked to take on these responsibilities, after 10 years—to be frank, as a result of the cuts that have taken place—of local authorities often being hollowed out of the staffing resources they need?

[Stephen Timms (East Ham) (Lab)]

My right hon. Friend is making some powerful points. Does he agree with me that the announcement of the £500 million fund is a recognition, belatedly, by the Government that we do need something to do the job that the social fund, funded by the Government, used to do?

[John McDonnell]

That is an extremely important point. For those of us who remember the social fund, it was a resource that many of our constituents fell back on in times of need. It did give them the support they needed, and in many ways it was administered relatively well. It got resources to the people with needs, and it did so with minimal costs.

The Government urgently need to provide the certainty that the public deserve on all these matters. Our worry is that, because this package does not at the moment appear to be comprehensive, it ultimately will not make us all safer, and it may put people at risk, as especially those in low-income groups may have to make the very difficult choice, as I have said, between health and hardship.

Although it has been reported that there has been some communication between Finance Ministers internationally, it is certainly not clear whether it is of the scale or depth of co-ordination in, for example, the crisis in 2007-08. As a result, whatever statements have been made have not had the effect of steadying markets or reassuring people more generally that, basically, there is an internationally agreed strategy to address the economic consequences of this emergency.

--- Later in debate ---

[Alok Sharma]

My hon. Friend makes an incredibly important point. He has had a very successful business career and knows all about attracting inward investment, and he is absolutely right: the UK has been, and will continue to be, a beacon under this Government for foreign inward investment.

[Stephen Timms (East Ham) (Lab)]

The right hon. Gentleman mentioned 2010. I had a look back at the Red Book from 2010, which warned that if nothing had been done and the previous Government’s policies had carried on, then by 2014-15, we would get debt still rising up to 74.4% of GDP. What actually happened was that in 2014-15, debt carried on rising up to over 80% of GDP. Was the Chancellor not right yesterday to have completely repudiated previous Tory policy?

[Alok Sharma]

The right hon. Gentleman knows that I have a huge amount of respect for him—we have had very good discussions in other roles that I have had. He will know that in 2010, when the Conservatives took over in Government, we were on the brink—the economic precipice—and I do not think that, in private, he would disagree with that. We also had a record deficit, and that is now down to less than 2%. The shadow Chancellor talked about the impact on real people. What I am laying out is the precise impact that the Government’s policies have had on real people by improving their employment prospects and their earnings.

[Stephen Timms]

The absolute imperative was to eradicate the deficit by 2015. Today, the right hon. Gentleman is boasting that it is down to 2% five years after that.

[Alok Sharma]

I am a modest man. I do not like to boast—I just like to state facts, and the fact is that we have record levels of employment in our country.

Let us talk about what has happened for businesses. Since 2010, we have seen corporation tax come down by 9% to be the lowest in the G20. Business registrations are up by over 60%, with nearly 150,000 more firms registered in 2010. Wages growth has been outpacing inflation for 23 consecutive months. The UK is in the top 10 countries in the World Bank’s ranking for ease of doing business and in the top five of the Global Innovation Index. [Interruption.] I do not know—maybe the shadow Chancellor finds that funny, but I do not. I think it is something that we should be very proud of in this country.

I certainly am delighted to be part of the most business-friendly Government ever, and of course, we want to go even further. We are extending the British Business Bank’s start-up loan scheme for a further year, supporting up to 10,000 loans. We are providing another £200 million for life sciences and more funding for growth hubs. In short, we are on the way to making the United Kingdom the best place in the world to start and grow a business.

Of course, the best businesses need the best ideas. Research and development drives up productivity, which leads to high-value, high-wage employment and an increase in exports. That is why I am delighted, as I know Government Members are, that we are committing to spend £22 billion a year on research and development by 2024-25. This is the fastest and largest increase in Government R&D spend ever and there is a multiplier effect, for every pound of public R&D spend delivers around £7 of economic benefit for the country as a whole.

Britain is home to four of the world’s top 10 universities. We are a world-leading nation when it comes to winning Nobel prizes. The UK has produced around 14% of the world’s most impactful research. UK researchers and businesses are cutting carbon emissions, curing genetic diseases and pushing the frontiers of artificial intelligence. Ours is a country that gave the world penicillin, the steam railway and the worldwide web, and we are turbo-charging this tradition of invention and discovery by establishing a brand-new research funding agency, letting researchers pursue high-risk, high-reward projects. We are betting big on Britain’s pioneers and problem solvers as they seek to transform every aspect of our lives, from the journeys we make to the medicines we take.

We have already seen how public R&D funding can create centres of excellence right across the United Kingdom. In Coventry, the UK Battery Industrialisation Centre will soon be developing new ways of scaling up factory production for electric vehicles. In Manchester, the Graphene Engineering Innovation Centre is helping to make cutting-edge composites for affordable electric vehicles. In Harwell near Oxford, our Satellite Applications Catapult is working on applications to remove space debris from orbit. In Scotland, we are backing a world first medicines manufacturing innovation centre, which will help new drugs to reach patients faster. In Northern Ireland, our Digital Catapult is providing mentoring and advice to help cyber-security firms to scale up and succeed. In Wales, we are backing the first compound semiconductor cluster anywhere in the world—a technology that could underpin everything from wearable health sensors to autonomous vehicles in the years ahead.

I am determined that as the UK forges a path as a science superpower we use that opportunity to level up centres of excellence across our whole country. As part of that, my Department, with the Treasury, is committing to creating a northern campus, but I want to be clear that levelling up and having staff across the country has always been part of my Department’s agenda. Some 84% of its partner organisations are already based outside London, while BEIS itself already has sites across the UK, including in Aberdeen, Birmingham and Cardiff.

In the coming years, we will need to make the most of ideas, innovations and solutions from each and every corner of our United Kingdom. The shadow Chancellor will agree that nowhere is that more true than in tackling climate change. Part of my Department’s mission is to deliver clean energy and to lead on the path to net zero emissions by 2050. Since 2010, as a result of the actions we have taken, the United Kingdom has cut its carbon dioxide emissions by around 30%. Driven by investment in renewables, 99% of the UK’s solar photovoltaic capacity has been deployed since 2010. Today, the UK has more installed offshore wind capacity than any other country in the world.

Our contracts for difference auctions have helped to reduce the price of offshore wind by two thirds in the last five years. The UK already has more than 460,000 jobs in the low-carbon sector spread right across our country. From Siemens in Hull to MHI Vestas on the Isle of Wight, we have seen hundreds of new jobs making turbine blades, and last year Ørsted launched the world’s largest offshore wind operations and maintenance facility in Grimsby.

In yesterday’s Budget, the Chancellor announced that he would more than double R&D spend in the energy innovation programme. The Budget backed nuclear fusion to develop and build the world’s first commercially viable fusion power plant by 2040. It backed low-emission vehicles, including with funds to support the roll-out of a fast charging network for electric vehicles, and it will fund a new heat network scheme and put £800 million behind two or more carbon capture and storage clusters, one by the mid-2020s and a second by 2030. [Interruption.] I hear the hon. Member for Stalybridge and Hyde (Jonathan Reynolds) chuntering, if I may call it that—I do not mean to be rude—from a sedentary position. I hope he will appreciate that carbon capture and storage will have to be part of the mix going forward, which is why we are investing almost £1 billion in it.

--- Later in debate ---

[Stephen Timms (East Ham) (Lab)]

It is a privilege to follow the hon. Member for Warrington South (Andy Carter) and to congratulate him on a warm and confident maiden speech. I welcome his generous tribute to Faisal Rashid, not only for his brief period in the House but his work as mayor and local councillor before that. The hon. Gentleman is right to highlight the potential of Daresbury science park in particular. The House will look forward to hearing much more from him in the years ahead.

The Financial Times pointed out this morning that yesterday marked the end of the Tory promise to eliminate the deficit. For a large part of the past decade, ending the deficit appeared to be the Tories’ raison d’être, but we cannot blame the current Chancellor for concluding yesterday that his Tory predecessors’ policies on the deficit had comprehensively failed and that the result has been, to quote the Chancellor yesterday,

“a decade-long slowdown in productivity.”—[Official Report, 11 March 2020; Vol. 673, c. 282.]

In what was a remarkable phrase, the Chancellor told us yesterday that his was a plan to “fund…our future prosperity.” I have never heard any Chancellor previously claim that we could spend our way to prosperity, but that is precisely what many Members on the Conservative Benches used to accuse Members on the Labour Benches of believing. It is now apparently official Tory policy. Repudiating past Tory policy is no bad thing, though, and I wish to welcome a number of the measures in the policy area of the Work and Pensions Committee, which I chair.

I warmly welcome the wider availability of statutory sick pay; the faster access to employment and support allowance; and the £500 million hardship fund for disbursement by local authorities, which recognises, as I suggested in my intervention earlier during the excellent speech of my right hon. Friend the Member for Hayes and Harlington (John McDonnell), the need for central Government funding to replicate what the old social fund used to do until it was abolished by the coalition.

I welcome the changes on universal credit. The suspension of the minimum income floor means that self-employed people whose income takes a hit will get at least some extra help from universal credit. The truth is, though, that the minimum income floor should not be there, and there is a strong case for making its suspension permanent.

I also welcome the reduction in the maximum rate of repayment of advances, and the longer period of repayment, although those measure will take effect only from October next year.

As my hon. Friend the Member for Croydon North (Steve Reed) said, the Budget did not address the fundamental problems with universal credit. Research by the Trussell Trust has found that people on universal credit are two and a half times more likely to need help from a food bank than people in otherwise similar circumstances who are still on the legacy benefits. That is a remarkable statistic that underlines the scale of the problems that universal credit is causing.

Even more startling is the article this month in The Lancet. I do hope that Ministers will weigh very carefully the dry academic prose in that article, which concludes that up to the end of 2018:

“An additional 63,674 unemployed people will have experienced levels of psychological distress that are clinically significant due to the introduction of Universal Credit”.

It goes on to suggest that over one third of them

“might reach the diagnostic threshold for depression.”

About one quarter of those ultimately expected to be on universal credit are on it at the moment. The Government say that the rest will be on it by the end of 2024. The Office for Budget Responsibility yesterday expressed its traditional and well-founded scepticism about that timetable, and suggested it is likely to take two years longer than the Department for Work and Pensions says. Given that the harm being caused by universal credit is so well documented, I do not think it is viable for the Government simply to press on.

What is it about universal credit that is causing such hardship? I think it is the delay—never before a feature of the social security system—of five weeks between applying for benefit and being entitled to payment. That is why the Select Committee has made it the subject of our first major inquiry. We want to work closely and constructively with Ministers and the Department to identify workable and affordable solutions to what is, incontrovertibly, a very serious problem.

I want to make one final point. One of yesterday’s Budget’s few revenue-raising measures was the increase in the immigration health surcharge. One might think that this is about increasing the charge to tourists coming to the UK to take advantage of the NHS, but it is not. It is a major burden being imposed on a large number of modestly paid working families, a large number of them in my constituency, and I cannot see how it can be justified. These are families who are settled in the UK, often with children who have been born in the UK, and who are on the 10-year pathway to indefinite leave. They are given leave to remain for two and a half years at a time. They are paying their taxes, like everybody else who uses public services, but every two and a half years they have to pay thousands, on top of their taxes, in visa charges, and now they will have to pay even more through this immigration health surcharge. They have already paid tax and national insurance. How can these swingeing additional charges be justified?

[Madam Deputy Speaker (Dame Eleanor Laing)]

It is a great pleasure to call, to make his maiden speech, Mr James Grundy.

Oral Answers to Questions

Stephen Timms Excerpts

Tuesday 3rd March 2020 Commons Chamber

[Kwasi Kwarteng]

I am grateful to my right hon. Friend for his question. We are very mindful of community consent and engagement with the planning process through consultation periods. We are also ensuring that the planning regime is robust. On balance, it was felt that we needed to make a move on this pot 1 auction in order to reach the target.

[Stephen Timms (East Ham) (Lab)]

10. What discussions he has had with the Secretary of State for International Trade on ending UK export finance for (a) coal-mining and (b) coal-fired power station projects; and if he will make a statement.

[The Minister for Business, Energy and Clean Growth (Kwasi Kwarteng)]

The right hon. Gentleman will know that we have announced, with the Department for International Trade, that we will no longer provide any new export finance or new export credit for thermal coalmining or coal-powered plants overseas.

[Stephen Timms]

I am grateful to the Minister for that confirmation. Following the Prime Minister’s announcement at the UK-Africa investment summit, will the Minister set out whether there is going to be a transition period prior to the welcome situation that he has described? Does he agree that UK Export Finance should be promoting the transition away from all fossil fuels in developing countries as soon as possible?

[Kwasi Kwarteng]

The right hon. Gentleman is absolutely right. Any form of financing should absolutely take into account our net zero commitment, and it is in the process of doing so. On the question of coal, I take the opportunity to reiterate the fact that the Prime Minister, only last month, announced the intention to consult on bringing forward the coal closure to 1 October 2024. Even last month, only about 3% of our power generation was coming from coal. So this is a very achievable target, and we are very hopeful that we can take coal entirely off the grid by October 2024.

Leaving the EU: Workers’ Rights

Stephen Timms Excerpts

Tuesday 29th October 2019 Commons Chamber

[Andrea Leadsom]

My hon. Friend is absolutely right. This Prime Minister has been extremely keen to ensure that all workers get a fair deal. He has presided over the intention to bring the national minimum wage to £10.50 at a greater speed than was previously envisaged. We will bring forward measures to ensure that that can be put into force as soon as we can.

[Stephen Timms (East Ham) (Lab)]

The level playing field clause would not constrain any improvement in workers’ rights, but it would limit and stop the reduction of workers’ rights, so why did the Prime Minister want that clause to be removed from the legally binding withdrawal agreement?

[Andrea Leadsom]

The right hon. Gentleman is absolutely right: the EU sets minimum workers’ rights that all EU members abide by, and the UK then, like many other member states, improves on that—in the UK’s case, very significantly. Under our withdrawal agreement Bill and in a no-deal situation, all existing workers’ rights will be protected, but the UK does not intend necessarily to dynamically align with all future EU legislation. When I say that, I mean that this House will have the opportunity to look at all measures that come forward, but in many areas the UK will want to do things better than the EU. Dynamic alignment means copy and paste, and we do not want to have to do that. I just gave an example to the right hon. Member for Cynon Valley (Ann Clwyd) of an area in which the UK is introducing the right to a day one statement much faster than the EU. That is an example of our wanting to go further and faster in improving workers’ rights.

Oral Answers to Questions

Stephen Timms Excerpts

Tuesday 20th November 2018 Commons Chamber

[Mr Gyimah]

Better late than never.

I will always be delighted to visit Taunton—my hon. Friend is a great champion of her constituency. My Department is now engaging at official level to understand how these prospective developments could fit with the industrial strategy.

[Stephen Timms (East Ham) (Lab)]

T4. Eighty-two per cent. of young people from disadvantaged backgrounds, many with immense potential, say that they find business to be inaccessible. I tabled early-day motion 1807 in support of the Movement to Work charity for young people. How will Ministers help to unleash the entrepreneurial potential of young people from all backgrounds?

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Kelly Tolhurst)]

The right hon. Gentleman raises a great question, and this is one of the things we are working on. The British Business Bank is working on start-up loans, and there are initiatives that work on enterprise in the school setting. I left school and went into an unofficial apprenticeship, and I think that we should all get behind such schemes and apprenticeships, because getting into work really can deliver the entrepreneurial spirit that people need.

Leaving the EU: Airbus Risk Assessment

Stephen Timms Excerpts

Monday 25th June 2018 Commons Chamber

[Greg Clark]

I am grateful to my hon. Friend. If one has the privilege, as I and many of us do, of visiting the shop floors and workforces around the country, one sees how important these jobs are. These are good jobs providing careers and opportunities, as well as decent incomes for workers and their families. It is important that we have that always in mind as we approach these negotiations. If we do, a sensible outcome will, I believe, prevail.

[Stephen Timms (East Ham) (Lab)]

Is it not the truth that Airbus has done a great public service by injecting much-needed frankness and realism into this debate, and will the Secretary of State commend it for being willing to do so?

[Greg Clark]

As I have said to colleagues across the House, Airbus and other companies in the sector, like many other companies, have been very consistent in their approach for many months, including in evidence to Select Committees on which some Members in the Chamber sit. This has caught the country’s attention now, but it is consistent with what the company has been saying for some time.