Oral Answers to Questions
Tulip Siddiq Excerpts(1 year, 6 months ago)
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Tulip Siddiq (Hampstead and Kilburn) (Lab)
Last week, the Public Accounts Committee revealed that our country lost £9 billion-worth of tax revenue during the pandemic because HMRC redeployed 4,000 staff members whose jobs were to chase down tax avoiders. The Prime Minister was Chancellor at the time and presumably signed off that decision. Can the Minister tell me whether the Prime Minister did that as a deliberate act to give the green light to tax avoiders, or is it just another example of Tory incompetence?
John Glen
I think that is a ridiculous suggestion, to be honest. HMRC received £863 million to modernise the tax system, and that included £136 million invested over the spending period to deliver improvements in terms of a single customer record and account. On what happened over covid, I have already set out the investment we made, including the £100 million in the taxpayer protection taskforce. We take fraud very seriously. Now it is about HMRC looking at financial records of excessive trading to come to terms with those businesses that used some of those schemes fraudulently. We will continue to work on that.
Draft Insider Dealing (Securities and Regulated Markets) Order 2023
Tulip Siddiq Excerpts(1 year, 6 months ago)
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Tulip Siddiq (Hampstead and Kilburn) (Lab)
It is a pleasure to serve with you in the Chair, Mrs Latham. Labour fully supports the draft statutory instrument; we will always welcome any tightening of the rules on insider dealing. However, I have a few questions for the Minister, as he would expect.
First, I understand that the order is the outcome of the 2015 fair and effective markets review. Will the Minister explain why it has taken eight years to deliver the order and modernise our rules on insider dealing? As he knows, the EU has been years ahead of us in criminalising most forms of serious market abuse. Why did we have the delay? What assessment has the Treasury made of how much that serious eight-year delay has cost the public?
Will the Minister tell me about the scale of insider trading that preceded the order? How many instances of abuse were treated simply as civil offences? How many instances would have been treated as criminal offences if the draft order had been made earlier, as should have happened eight years ago? The Opposition support the draft order, but I hope that the Minister will be able to answer some of the questions about the long delay.
Funding for Major Infrastructure Projects
Tulip Siddiq Excerpts(1 year, 6 months ago)
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Tulip Siddiq (Hampstead and Kilburn) (Lab)
It is a pleasure to serve under your chairmanship, Mr Sharma. I congratulate the hon. Member for Bath (Wera Hobhouse) on securing this important debate. Some Members may be surprised to see me; I am covering for a colleague in the shadow Treasury team, but I always welcome the opportunity to hold the Government to account on their record on public and private funding for major infrastructure projects. There are three main areas that I will focus on: the Government’s underinvestment in energy, the Government’s record on transport and the dysfunctional planning system that means that infrastructure, especially housing, simply does not get built.
First, on energy, the UK is losing the global competition for green jobs. We are now investing five times less in green industries than Germany, and roughly half of what France and the USA invest. The Institute of Directors has warned that:
“the UK will find itself left behind in the accelerating race to lead the green economy.”
Only now, eight months after the passage of the Inflation Reduction Act, has the Chancellor finally confirmed that the UK will have to wait more than a year to respond. The Opposition think that is simply not good enough.
Ordinary families have paid the price for the Government’s dithering and delay. In 2015, the Government slashed solar subsidies, causing a huge crash in the market. That missing capacity has left household energy bills another £2.5 billion higher this winter in the midst of the worst cost of living crisis on record. We must remember that in 2013, the coalition cut energy efficiency programmes, which saw home insulation rates crash by 92%. If we had insulated 2 million homes every year since then, people’s bills would today be £1,000 a year lower.
On the offshore wind markets, as Scottish Power CEO Keith Anderson has said:
“The wind farms that are coming online today were approved when Gordon Brown was in power.”
Unfortunately, yards across the UK are closing and we are delivering three times fewer offshore wind jobs than Denmark, despite our being over 10 times their size. The Government said in December 2022 that they would introduce planning reform for onshore wind by April of this year. That deadline has been missed and no action has been taken. I hoe that the Minister will confirm whether the Government will end the ban on onshore wind, and, if so, when that will happen.
Let me turn to transport. A recent survey of global investors has seen the UK slip down the rail infrastructure rankings; we now sit between India and Kazakhstan at 30th in the global league table. That is a national scandal—how on earth did we get here? We know that transport projects need certainty, but time and again Ministers have mismanaged key projects. On the key trans-Pennine route, for example, we wasted hundreds of millions of pounds of taxpayers’ money before cancelling the project and starting again. That has meant that on one of the major rail routes in the country, which transports millions of passengers a year, upgrades are almost a decade late. That has hurt the taxpayer and has profound consequences for the UK, costing the northern economy £16 billion.
Finally, I come to our planning system. Planning applications for homes fell to a record low last year, while the number of local housing plans submitted in the last few years have plummeted. What are the Government doing about that? Planning changes snuck out by the Government three days before Christmas have already resulted in 55 local authorities withdrawing housebuilding plans. Experts are now saying that housebuilding is set to fall to the lowest level since the second world war.
Wherever we look, it is the same story—housebuilding is at a record low, inward investment in transport is in decline, and Britain is falling behind on green energy. But we do not need to continue down this path of managed decline, because Labour has a plan to get the economy growing and to drive the investment and infrastructure that we so desperately need. The Labour party is committed to overturning the senseless ban on onshore wind and to the radical reform of planning rules, to drive growth and build affordable homes.
Fixing our transport system is a prerequisite for growth in this country, and that is why we are working hand in hand with business leaders and pledging that a future Labour Government will deliver Northern Powerhouse Rail, including that vital new train line through Bradford. Meanwhile, our green prosperity plan will grow the UK economy by investing in the green industries that can power our economic future, cut the cost of living for British families, and make Britain a clean energy superpower.
The Minister has listened carefully to all the concerns voiced in the debate. I hope that he responds to them, including those that I have just outlined.
Cost of Living Increases
Tulip Siddiq Excerpts(1 year, 7 months ago)
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Tulip Siddiq (Hampstead and Kilburn) (Lab)
I beg to move,
That this House condemns successive Conservative Governments for their mismanagement of the economy over 13 years; regrets that this has resulted in the UK being the only G7 economy that is still smaller than before the pandemic, with squeezed wages and higher mortgage rates that have increased costs by £500 a month for some households; further regrets that successive Chancellors have made working people pay for the Government’s economic failure with 24 tax rises since 2019, creating the highest tax burden in 70 years, while refusing to abolish the non-domicile tax loophole; is extremely concerned about the impact on household budgets of an inflation rate of more than 10 per cent with food prices rising at their fastest rate in 45 years; therefore calls on the Government to ease the cost of living crisis by freezing council tax this year, paid for by an extended windfall tax on oil and gas company profits; further calls on the Government to cut business rates for small businesses and support energy intensive industries including food manufacturers with their energy bills to help bring down the cost of everyday items; and finally calls on the Government to adopt Labour’s economic mission to secure the highest sustained growth in the G7 with good jobs in every part of the country.
It astonishes me that the Conservatives are acting like the cost of living crisis is over and their economic plan is working. The Chancellor is proudly boasting that Britain is back. He has even said:
“The declinists are wrong and the optimists are right. We stick to the plan because the plan is working.”—[Official Report, 15 March 2023; Vol. 729, c. 847.]
What planet does the Chancellor live on? Does he understand the reality on the ground for all of our constituents? Does he understand that on the Prime Minister’s watch, our economy is weaker, with the UK forecast to have the worst growth in the G7 this year? Real wages are lower than they were 15 years ago, with families in the UK going into the cost of living crisis significantly poorer than those in comparable European countries. The price of everyday essentials has risen by an eye-watering £3,000 since 2020, and never before have people in this country paid so much money for so little value from their public services.
The disconnect between this Conservative fantasy and the experiences of ordinary people could not be wider. Decent, hard-working people across the country are being forced to cut back on the things that underpin a good life. Mr Deputy Speaker, I will explain what I mean by a good life: a meal out once in a while with close friends, the special annual family holiday that you look forward to all year round, and a decent home to call your own. Those are increasingly things of the past; instead, people are left worrying about how they are going to pay their household bills at the end of the month and their rocketing mortgage costs.
Florence Eshalomi (Vauxhall) (Lab/Co-op)
I thank my hon. Friend for opening her speech in such a powerful way. Does she agree that it is really worrying that we hear tales of parents going without a meal, just to make sure that their children are able to eat?
Tulip Siddiq
I thank my hon. Friend for that intervention. She is a doughty champion for the children from deprived families who live in her constituency. We have surgeries where people line up to speak to us who cannot afford to eat because, as my hon. Friend says, they are saving their money to buy one meal for their children. This is Britain in 2023. We should not be in this situation.
It is important to remember how we got here in the first place. The Government have mishandled the cost of living crisis at every turn. Indeed, we will never forget the Conservatives crashing the economy last year, and we will never forgive them for it.
Layla Moran (Oxford West and Abingdon) (LD)
The hon. Lady is totally right about the perverse choices that people are having to make. A young mum in Abingdon who has her kids in childcare is having to decide whether she pays the debt that she owes to the childcare provider, pays her prescription charges, or buys food for herself and her children. How is that a country that we can be proud of? It is because the Conservatives mismanaged the economy, is it not?
Tulip Siddiq
I thank the hon. Member for her intervention. She has outlined lots of situations that we hear about every day from our constituents, yet the Conservatives say that their economic plan is working—it is clearly not working. The resulting rise in interest rates and the economic instability have added £500 a month to first-time buyers’ bills. For too many, dreams of home ownership and starting a family have been destroyed—another pillar of the good life knocked away.
Mr Toby Perkins (Chesterfield) (Lab)
My hon. Friend is absolutely right to point to the Chancellor’s suggestion that the Government are the optimists and we are the declinists. In fact, are the optimists not those people who have taken on a mortgage and achieved that dream of home ownership, and who are being so cruelly let down by the incompetence of this Government?
Tulip Siddiq
My hon. Friend is absolutely right. We have to ask the Conservatives how they can continue to live in this fantasy world, because it does not match the reality on the ground. Let us not forget the impact of rising prices. Food prices are growing 50% faster than anywhere else in the G7, putting Britain’s food inflation rate at 19.2%, compared with an average of 12.8%. The price of sugar is up by an incredible 42%. Milk is up by more than 33%, and pasta is up by 25%. The UK has the highest inflation level in western Europe. That is a national scandal.
David Johnston (Wantage) (Con)
The hon. Lady says that the inflation figures here are higher than anywhere else in the G7. Food price inflation in Germany is over 22%, compared with 17% in the UK. Is that also the fault of the Conservative Government?
Tulip Siddiq
I assume that the hon. Gentleman is not proud of all the figures I am outlining and the high inflation that is coming up. The Conservatives can manipulate the stats all they want, but they cannot run away from the fact that we are falling behind our peers. That is not something I am proud of, and they should not be either.
Since 2020, the cost of a typical food shop is up by £700 a year. Clothing and footwear are up by £140. Household goods and services are up by £360. Transport is up by £800. [Interruption.] I do not know why Government Members are laughing; these are real figures that our constituents are dealing with. The essentials of housing, fuel and power are up by a shocking £1,480.
Dr Luke Evans (Bosworth) (Con)
Is the hon. Lady aware that the Government have subsidised people’s energy bills by about 50%, and if so, by how much would Labour subsidise them?
Tulip Siddiq
I will come to energy shortly. If the hon. Member were able to answer, I would ask him whether he thinks 50% is enough, because it is not enough. If he speaks to people on the ground, he will see how much they are struggling. The rising costs of everyday essentials mean that families across the country are making cutbacks just to stay afloat. That has been devastating for local economies, with communities losing the businesses and institutions that bind us together.
Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)
It is a fact that the village of Altnaharra in my constituency is every year the coldest place in the entire United Kingdom. We already have pensioners having to make the invidious decision to wrap themselves up in blankets and put the heating off. No one should face that sort of decision.
Tulip Siddiq
I thank the hon. Member for his intervention. The situations being described are not what we want to hear about in our country in 2023, and we should not be proud of this record; we should be trying to do better.
Under this Government, more than 6,000 pubs, nearly 4,000 local shops and 9,000 bank branches have closed on our local high streets. That is nothing to be proud of.
Margaret Greenwood (Wirral West) (Lab)
My hon. Friend is making a powerful speech, and I am sure we have all been concerned by stories from our constituents who are missing out on meals, eating out-of-date food or unable to clean their clothes as often as they want. Does she share my concern that that is having a devastating impact on the development of young children in the early years? We need to know that those children are fed and have heating.
Tulip Siddiq
My hon. Friend is always fighting for her constituents, and she is absolutely right. As someone who was on the shadow Education team before I came to this role, I know that if our young children are not fed or looked after properly, they will not fulfil their potential in this country. We should be looking at the future generations, and the Government are ignoring them.
The Government’s mishandling of the cost of living crisis is just another chapter in the long story of 13 years of economic failure. More than a decade of Conservative rule has seen our country fall behind as the British economy has experienced low growth, rock-bottom productivity rates and chronic under-investment.
Kim Leadbeater (Batley and Spen) (Lab)
My hon. Friend is making an important speech. I find it deeply offensive that Conservative Members are laughing at some of these statistics. That just shows how out of touch they are with the reality of life for so many people across this country. Does she agree that it is an absolute travesty in 2023 that we have families where children are having to share beds, sleep on the floor or sleep in the bathtub because people cannot afford to move house, to pay their rent and to pay for food for their families? That is not a laughing matter.
Tulip Siddiq
I thank my hon. Friend for her intervention. Having campaigned in her constituency, I know there are huge levels of poverty in certain places. Someone from the back said that we are lucky here because we are MPs and get paid a decent salary. We certainly should not be laughing at people who are struggling to make ends meet.
I remind the House that, when Labour was in government, real GDP growth averaged 2%. If growth had continued at the same rate under this Tory Government, we would have £40 billion more to spend on our public services, without having to raise a single tax. Instead, a lack of strategic policy making, economic uncertainty and the absence of an industrial strategy mean that the UK is going through the slowest economic recovery in the G7.
Jerome Mayhew (Broadland) (Con)
The hon. Lady is asserting that the UK economy has fallen behind since 2010. Does she recognise the figures that show that this country has actually grown faster than Italy, Japan and France since 2010 to date and that, since 2016—since the Brexit vote—it has grown at about the same pace as Germany?
Tulip Siddiq
The Conservatives can manipulate the stats as much as they want, but they cannot run away from the fact that we are falling behind our peers. [Laughter.] I do not care how much Conservative Members want to laugh; I know that is the truth. It is families who are bearing the brunt of the low growth. A decade of stagnant wages has left the British people highly exposed to rising prices. If the hon. Member who just intervened can dispute this figure, he is welcome to intervene again: the average French and German family are now 10% and 19% richer than their respective British counterparts. If we continue down this path of managed decline and our growth rate stays where it has been over the past decade, families in the UK will be poorer than those in Poland by 2030 and poorer than those in Hungary and Romania by 2040. I see the hon. Member—
Jerome Mayhew
It is a great pleasure to be given the role of the Opposition spokesman from the Back Benches here, but there is a difference between economic data that is factual, has happened and can be verified, and straight-line projections of the future between now and 2030 that have not happened and will not happen.
Tulip Siddiq
As I figured, the hon. Member did not have a response to the question I asked. If we do not break with the Tories’ failed economic model, the necessary underpinnings of a good life—as I have mentioned, fair wages, secure work, a decent home—will be further eroded.
Christine Jardine (Edinburgh West) (LD)
The hon. Lady is making a powerful case and making a salient point. Does she agree that the constituents she has already mentioned, who are dealing with all these price hikes—the worst in 45 years—and who come to our constituency offices every week, do not care that we grew faster than Italy in 2010, but they care that they cannot heat their homes now and cannot feed their children and they are worried about their elderly parents? The blame can be laid at nobody’s door but this Conservative Government’s.
Tulip Siddiq
I thank the hon. Member for her intervention. She is absolutely right. This Conservative fantasy just does not match up to the reality on the ground.
Instead of putting forward a comprehensive plan for growth, successive Conservative Chancellors have made hard-working families pay for their economic failure. The Conservatives have become the party of tax rises for the hard-working majority. Since 2019, the British people have been hit with 24 tax rises. It is the highest tax burden in 70 years. Earlier this month, we saw council tax bills rise above £2,000—some Members might think that is funny; it is not funny for my constituents—for the first time, as the Chancellor effectively forced councils to put up rates by reducing their funding. That saw families who were already struggling hit with an additional average tax hike of 5.1%—[Interruption.] If Conservative Members have something to say, instead of chuntering from a sedentary position, they should intervene. They should not shout from the front.
Simon Baynes
Earlier, the hon. Lady mentioned fair work. Does she agree that the rise in unemployment under the last Labour Government from 2.1 million to 2.5 million, and the 45% increase in youth unemployment, is far removed from fair work?
Tulip Siddiq
May I remind the hon. Gentleman that the last Labour Government introduced the first minimum wage, slashed child poverty and slashed pensioner poverty because we grew the economy—something this Government have failed to do?
Alex Davies-Jones (Pontypridd) (Lab)
My hon. Friend is making a powerful speech and outlining exactly what Labour did in government to make a difference for working people. In Labour-led Wales, where the hon. Member for Clwyd South (Simon Baynes) is also an MP, we have just increased the education maintenance allowance, which was scrapped in England, to give students the opportunity not to have to choose between buying books and going to school, and having to find a job to support themselves.
Tulip Siddiq
I hope hon. Members hear that before they start criticising any sort of Labour Government.
Things are only set to get worse. The Government’s stealth tax and freeze on income tax and national insurance contribution thresholds will, according to the Resolution Foundation, cost households £25 billion a year by 2027-28.
Tulip Siddiq
Not now, as I want to make some progress. At the same time, the Chancellor has given the 1% wealthiest pension savers a £1 billion handout, and he has continued to defend the indefensible: the non-domicile tax loophole. Instead of growing the economy and boosting wages, the Conservatives have resorted to hammering ordinary people with tax rises. It is time for a radically different approach.
Tulip Siddiq
I will make a bit of progress. We need a bold plan for growth that confronts the problems of the UK’s declining economy head on. That is why the Government must adopt Labour’s mission to secure the highest sustained growth in the G7, with job creation and productivity growth in every part of the country, making everyone, not just a few, better off. That may seem ambitious, but Britain has so much potential.
Tulip Siddiq
I am just about to come to the part of my speech about the windfall tax and business rates, so if the hon. Gentleman listens carefully, he will hear. The talents and efforts of working people and British businesses mean that we lead the way in financial and legal services, and the tech and life sciences sectors. With a proper industrial strategy, the UK economy will not just lead the pack again, but communities written off by the Conservatives will have the backing they need to make their full contribution to our great nation. Labour will achieve that by forging a new covenant between Government and industry, bringing in public investment through our green prosperity plan to support new industries. That will include investment in areas such as fuel cell manufacturing, nuclear, hydrogen and home insulation to bring down energy prices and create well-paid jobs in the industries of the future across the UK, while fixing the holes in the Brexit deal and bringing in a proper supply chain strategy will help to tackle inflation and build the resilient trading economy we need to get ahead.
Labour will work in partnership with businesses to help people get the skills and opportunities they need. We will not leave potential untapped. We will fix the apprenticeship levy, improve local employment services and help first-time buyers get on the housing ladder through a comprehensive mortgage guarantee scheme to boost local living standards. Only Labour, through our plan to grow the economy, will create the conditions for a good life in every part of the country. We will create well-paid jobs, bring home ownership back within reach for young families and ensure that the NHS delivers for all.
Tulip Siddiq
The hon. Member may want to sit down and hear the next bit because I am sure he is going to ask the same question.
However, we also recognise that people need help today. That is why, if Labour were in government today, we would freeze council tax this year to stop bills from rising above £2,000, paid for by an extended windfall tax on oil and gas company profits. Even though Office for National Statistics figures confirm that 2022 was a record year for North sea oil and gas profits—even though the ONS confirmed that—the Conservatives are again choosing to protect the energy giants’ windfalls of war.
Tulip Siddiq
I think the hon. Gentleman should listen, actually.
By refusing to backdate the tax to January 2022, end the investment allowance tax loophole and raise the rate in line with other countries, the Chancellor has left billions on the table, leaving working people to pick up the rising council tax bill. Labour would use the additional funds raised by a proper windfall tax to cut energy bills for domestic food manufacturers and processors, and we would cut business rates for small shops, paid for by properly taxing online giants, to bring down the eyewatering cost of everyday items. We would also reverse the Conservative decision to hand the 1% wealthiest pension savers a £1 billion handout and instead introduce specific measures to keep doctors in work. And we would close the non-dom tax loophole, so people who live and work here pay their tax here. We would use that money to fund one of the biggest expansions of the NHS workforce in history. Those are straightforward measures. The Government could introduce them today to show people they are on their side, but we know they will not because they have given up on Britain.
At the heart of today’s Opposition day debate is a simple question that everyone up and down the country will be asking themselves: “After 13 years of Conservative rule, am I better off?” The simple answer is no. People now have a clear choice: between a tired Conservative Government out of ideas, and a Labour party committed to forging a new partnership with British business to create good jobs and boost wages; between a Conservative Party that puts developers before first-time buyers, and a Labour party committed to the principle of home ownership and giving young families a start in life; and between the Conservatives, the party of high taxation and Government handouts to the wealthiest 1%, and Labour, the party committed to putting working people and businesses first, freezing council tax and cutting business rates to ease the cost of living. Only the Labour party has a serious plan for growth to improve living standards and wages for working people. [Interruption.] Those on the Conservative Benches can laugh all they want, but only the Labour party has a vision of a better life for the British people.
Amendments of the Law (Resolution of Silicon Valley Bank UK Limited) Order 2023
Tulip Siddiq Excerpts(1 year, 8 months ago)
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Tulip Siddiq (Hampstead and Kilburn) (Lab)
It is a pleasure to serve with you in the Chair, Mr Hollobone.
The Labour party welcomes the quick work done by the Treasury, the Bank of England and regulators to secure the HSBC rescue deal for the UK arm of Silicon Valley Bank. SVB UK serves a high concentration of life science and tech companies in this country. As the Minister said, those firms play an indispensable role in driving growth and innovation across the economy. That is why we will give our full support to the statutory instrument.
I have a number of questions about the detail of the measure, including on where it sits in the Government’s wider strategy for financial stability. In the US, we saw that SVB made financial decisions based on an assumption that interest rates would remain low for some time. That contributed to its failure. We have also seen difficulties in other banks, such as Credit Suisse. How is the Minister working with the Bank of England, regulators and national partners to review the impact of interest rate rises and wider uncertainty on our financial system? What steps is he taking to mitigate risks?
As the Minister set out, under the SI, HSBC has been given an exemption from certain ringfencing requirements so that it can provide preferential intra-group lending or funding to SVB UK. Will he set out in further detail the background to and justification for that decision, as well as the Government’s announced intention to permit SVB UK to remain exempt from the ringfencing rules beyond the four-year transition period? Of course, we recognise the circumstances that SVB UK is in but, as he knows, ringfencing reforms were introduced for good reason: to protect savers and taxpayers from a banking crisis. I need reassurance from him that, contrary to what has been suggested, the Government do not propose any further tinkering with the ringfencing regime beyond this measure for SVB UK.
I wanted to bring up the risks to start-ups. The risk that the collapse of SVB poses to the tech sector underlines the importance of ensuring that UK start-ups have access to a deep and diverse pool of capital. What reassurance can the Minister provide that under HSBC’s ownership, SVB UK will continue to be able to support early-stage tech and life-science businesses in the UK? Beyond that, what will the Government do to ensure that start-ups have access to a wide pool of patient capital?
As I set out, we support the SI, which helps to protect the health of SVB UK and the tech sector that it supports, but I would like reassurance from the Minister on my concerns.
Oral Answers to Questions
Tulip Siddiq Excerpts(1 year, 8 months ago)
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Victoria Atkins
If I may, I will gently point out to the hon. Gentleman that the OBR has previously stated that it is too early to reach definitive conclusions. The Government are focused on seizing the opportunities provided by Brexit, including the world’s biggest zero-tariff, zero-quota trade deal. Indeed, Scotland itself will benefit from 71 new trade deals secured with non-EU countries and control of our fishing waters. I hope that the hon. Gentleman also welcomes the £8.6 million invested in Scotland’s festival economy at the Budget last week.
Tulip Siddiq (Hampstead and Kilburn) (Lab)
Now that the Windsor agreement has been reached, I am sure that the Minister will agree that there is ample opportunity to have a constructive working relationship with the European Union. In light of that, and for the sake of struggling British businesses, may I ask the Minister whether she will finally get behind Labour’s proposals for a bespoke veterinary agreement on the mutual recognition of professional qualifications and for a memorandum of understanding on regulatory co-operation for our financial services?
Victoria Atkins
I am very grateful to the hon. Lady for her question and I urge her to get behind our trade and co-operation agreement. As I say, it is the world’s largest zero-tariff, zero-quota deal. I am delighted to say that the Chief Secretary has just confirmed that we have signed the memorandum.
Jeremy Hunt
My hon. Friend is right. We have a very good solution to the Silicon Valley bank issue with the HSBC takeover. In the long run, we would like our brilliant tech superstar companies to have more choice about how they finance their expansion, and we will bring forward plans to make sure that happens.
Tulip Siddiq (Hampstead and Kilburn) (Lab)
On a point of order, Mr Speaker. The Minister said to me in her response that the Chief Secretary had just confirmed with her that we had signed the memorandum of understanding on regulatory co-operation with the EU. Could you please advise me whether she meant that both sides had signed and the agreement has been secured with the EU? I cannot find the details anywhere. Can you advise me where MPs are able to see the agreement?
The Chief Secretary to the Treasury (John Glen)
Further to that point of order, Mr Speaker. I can confirm that we have always been ready to sign the MOU, from two years ago—[Interruption.] Well, we have made it very clear to the EU that we are ready to sign. It is a matter for it to come to the table, and we very much hope it will be able to do that. What happened was that as the Financial Secretary came to the Dispatch Box she did not quite hear exactly what I said, and for that I apologise on behalf of the Government. It was my fault.
Draft Economic Crime (Anti-Money Laundering) Levy (Amendment) Regulations 2023
Tulip Siddiq Excerpts(1 year, 8 months ago)
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Tulip Siddiq (Hampstead and Kilburn) (Lab)
It is a pleasure to serve under your chairmanship, Ms Elliott. The Labour party is completely committed to tackling economic crime. We welcomed the economic crime levy when it was first announced and we will support the regulations today. I want to raise a few questions and concerns with the Minister; they relate to the scope, effectiveness and transparency of the levy.
First, while the increase in funding provided by the levy is welcome, is the Minister confident that it will generate the necessary step change in economic crime enforcement? For example, as Spotlight on Corruption has highlighted, although it is called the economic crime levy, in reality it only covers money laundering. That means that the funds will not be invested in fighting other forms of economic crime such as corruption, fraud and sanctions evasion.
As the Minister may have seen, Transparency International has proposed that the Treasury re-invest the money recovered in the fight against economic crime, such as money seized by the Serious Fraud Office through its deferred prosecution agreement fines, back into enforcement to tackle fraud, corruption and money laundering. What assessment has the Minister made of that recommendation?
On accountability and transparency, the Government have failed to publish any information on what proportion of the funds will be assigned to law enforcement and how the effectiveness of the levy will be measured against enforcement outcomes. I hope the Minister can shed some light on that today. I would also be grateful if he provided clarity on how the Treasury will ensure full accountability of how the levy is used, and how decisions on resource allocation will be made.
Cash Acceptance
Tulip Siddiq Excerpts(1 year, 8 months ago)
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Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
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Tulip Siddiq (Hampstead and Kilburn) (Lab)
It is a pleasure to serve under your chairship, Ms Bardell. I thank the hon. Member for Linlithgow and East Falkirk (Martyn Day) for bringing this important and timely debate to the House—I do not think it is necessary to be of a certain age to appreciate how important it is. Last year alone, there was a net loss of 797 banks and financial services shops providing cash and other services, while the latest Bank of England data, from July 2022, found that 35% of people have encountered a shop that does not accept cash. That should concern us all. I have had lots of representation from constituents in Hampstead and Kilburn who have found shops that will not accept cash, which has proven to be a real problem, as we have heard from Members across the House today. According to a recent report from the Royal Society of Arts, 10 million people depend on cash, and the pandemic, which saw an acceleration in the digitisation of payment services, has made it increasingly difficult for many to pay for the goods and services they need.
We know that a massive 3.8 million people in financial difficulty and 15 million people in total use cash for budgeting purposes. The need to protect cash services is only growing in importance, with data collected by the Post Office showing that the use of cash has risen in recent months. As the cost of living crisis deepens, the poorest in society are increasingly turning to cash, as has been reiterated many times in this debate, to manage their budgets on a week-by-week basis, and often day by day.
Of course, Labour welcomes the fact that the Financial Services and Markets Bill, on which the Minister and I both worked, and which is currently in the other place, will finally introduce protections for access to cash. However, we are worried that the Bill has some serious gaps: it fails to even mention cash acceptance, makes no commitment to protect free access to cash—something that Labour is concerned about—and does nothing to protect essential face-to-face banking services, on which the most vulnerable in our society depend for financial advice and support.
According to data collected by the consumer group Which?, there has been a notable decline in the provision of free-to-use ATMs in recent years. In January 2023, there were 12,000 fewer free-to-use ATMs in the UK than in August 2018—a huge decrease of nearly 24%. Does the Minister agree that with the poorest in society increasingly reliant on cash, forcing them to pay for access in the midst of the worst cost of living crisis on record risks further deepening financial exclusion in this country? Will he take action to address the problem? Which? has warned that if the Government do not make clear that their Bill will protect free cash withdrawals and deposits for consumers,
“the entire objective of…the Bill will be undermined.”
Cash acceptance is fundamental to securing the future of cash. There is little point in the most vulnerable having access to cash if they have nowhere to spend it. That is why the Labour party tabled an amendment to the Bill when it was in the Commons, which would have placed a duty on the FCA to collect data on cash acceptance. My colleagues in the House of Lords have been pushing the Government to empower the FCA to monitor and report on levels of cash acceptance across the UK. In his response, the Minister will likely say that we have to wait for the Government’s access to cash policy statement. If so, can he confirm when the statement will be published? Does he also agree that if his Government are committed to protecting the future of cash, there is no reason not to make protections for free access and an FCA remit on cash acceptance explicit in the Bill?
I want to turn briefly to the important and connected issue of protecting face-to-face banking services, which has been mentioned a few times in this debate. Again, analysis by Which? found that over half of the UK’s bank branches have closed since 2015. Additionally, at least 263 branches are expected to close by the end of the year. That will cut off countless people from essential services—I know that from listening to constituents in Hampstead and Kilburn.
Age UK has called for the Financial Services and Markets Bill to be amended to protect the in-person services that older people rely on, such as opening new accounts or applying for a loan, to ensure that banking services can meet their needs. It is not only older people who will struggle without support. Natalie Ceeney does amazing work and has already been mentioned. As chair of UK Finance’s Cash Action Group, she warned in evidence to the Public Bill Committee that there is significant overlap between the people who rely on access to cash—around 10 million UK adults—and those who need face-to-face support. She said,
“every time I meet a community, the debate goes very quickly from cash to banking. It all merges. The reason is we are talking about the same population.”––[Official Report, Financial Markets and Services Public Bill Committee, 19 October 2022; c. 49, Q98.]
She is completely right. It is the most vulnerable, people from deprived socioeconomic backgrounds and the older parts of society who rely on the extra face-to-face help, such as making or receiving payments or dealing with a standing order. Those are the people who will be left behind if the banking question is left unaddressed.
We also should not forget those without the digital skills needed to bank online, people in rural areas with poor internet connections, and the growing number of people who are simply unable to afford to pay for data or wi-fi as the cost of living crisis deepens. That is why I tabled amendments to the Bill that would give the FCA the powers it needs to protect essential in-person banking services. The Government did not vote for my proposal, but it is not too late for the Government to support the amendments in the Lords.
To be clear, we are not calling for banks to be prevented from closing branches that are no longer needed—far from it. Access to face-to-face services could be delivered through a shared banking hub or other models of community provision. We recognise that it is inevitable that payment and banking systems will continue to innovate. That is a good thing—online banking is a far more convenient way for people to manage their finances—but we have to ensure that the digital revolution that we are talking about does not further deepen financial exclusion in this country, and that will require protecting face-to-face services and putting in place a proper strategy for digital inclusion.
Banking hubs or other models of community provision will have to be part of the solution. Those spaces have the potential to tackle digital exclusion through their dedicated staff who can teach people how to bank online and provide internet access for those without it. However, only four banking hubs have been delivered, out of the underwhelming 38 promised. To ensure that no one is left behind, these services need to be protected in legislation.
If the Government are serious about securing the future of cash, they must listen to all the concerns raised both today and by many of their own Back Benchers during the Financial Services and Markets Bill debate. They must empower the FCA to monitor cash acceptance and protect free access to cash. I hope the Minister will be able to commit to that today, listen to the concerns voiced in this debate, and take heart from the fact that there are so many people in the Gallery who obviously care passionately about this important issue.
Silicon Valley Bank
Tulip Siddiq Excerpts(1 year, 8 months ago)
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Tulip Siddiq (Hampstead and Kilburn) (Lab)
I thank the Minister for giving me advance sight of his statement today. Labour welcomes the announcement by HSBC that it will be buying the UK arm of Silicon Valley Bank, or SVB UK, in a rescue deal. As the shadow Chancellor, my right hon. Friend the Member for Leeds West (Rachel Reeves), said over the weekend, the UK life sciences and tech sectors play an indispensable role in driving growth and innovation across the economy.
Now that those who bank with SVB UK have some certainty, the Government should examine how we got here in the first place. For example, when SVB UK was granted a separate banking licence last year, what assessment did the Treasury and Bank of England make of the significant liquidity risks arising from its deposit base being a small number of high-value corporate deposits?
The effects of the collapse of SVB are still being felt across the UK market and the Minister said in his statement that HSBC’s purchase of SVB has “supported confidence” in the UK financial system. What assessment has he made of the fact that London’s FTSE 100 was down today, while the UK bank index fell by almost 5% this morning and by more than 10% over the weekend? What will the disruptions in the banking sector mean for confidence, the wider economy and the ability of high-growth companies to access the credit that they need to thrive?
The Minister also said that disruption in the tech sector has been “forestalled”, but what reassurance can he provide today that, under HSBC’s ownership, the bank will continue to be able to support early-stage tech and life sciences businesses in the UK? He also said that HSBC has been given an exemption from certain ring-fencing requirements. Will that be a permanent exemption?
Perhaps the most important question, I am sure the Minister will agree, is this: how can we avoid this happening again? With inflation at record levels, the Bank of England has had to take steps to tackle rising prices, but Ministers must make an assessment of the risk that sharp changes to UK interest rates might pose to our financial system. It is time for the Government to launch a systemic review of the risks that sharply rising interest rates pose to the UK financial sector, and I hope the Chancellor will return to the House having made that assessment.
Finally, the events of this weekend further underline the importance of ensuring that UK start-ups have access to the patient capital that they need to grow, as proposed by the Labour party’s start-up review. I hope that the Minister will return to the House soon to update us with a broader assessment of the risks to the financial sector arising from sharply increasing rates, and with a plan to address the longer-term problems holding back growth and the provision of patient capital to our growing businesses.
Public Sector Exit Payments (Limitation) Bill
Tulip Siddiq ExcerptsFriday 3rd March 2023
(1 year, 8 months ago)
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Tulip Siddiq (Hampstead and Kilburn) (Lab)
We on the Labour Benches fully recognise the importance of achieving the best possible value for our taxpayers. I remind the hon. Member for Christchurch (Sir Christopher Chope) and everyone who has spoken in support of the Bill, however, that the Government introduced a public sector exit payment cap in 2020 and it did not work. The cap failed to provide value for the taxpayer, it had numerous unintended consequences, and it adversely affected dedicated, long-serving public servants who earned relatively low salaries, often less than £25,000 a year. Indeed, due to those failings, in March 2021—less than a year after introducing the regulations—the Government were forced to U-turn and revoke the cap.
Let me take each failing in turn. First, far from saving taxpayers money, the cap produced additional costs. Because the regulations treated payments under a settlement agreement, but not employment tribunal awards, as an exit payment, they created a perverse incentive for people to go to tribunal. An employment tribunal is a time-consuming and costly legal process for a public sector employer to go through, and I remind hon. Members that that cost is passed on to the taxpayer.
Secondly, the cap had other unintended consequences—for example, it did not take into account an individual pension contribution, so through no fault of their own, long-serving staff over the age of 55 who were facing redundancy were hit by the regulations. They were obliged to take their pension if they lost their job, so their final exit payment, when combined with their redundancy pay, could easily exceed the £95,000 cap under the regulations.
Finally, when they introduced the cap, the Government initially said that the regulations were designed to prevent large exit payments to so-called public sector fat cats, but in reality the cap hit low-paid workers hardest. Long-serving local government workers, who earned as little as £23,000, were pulled into the cap when their pensions were taken into account.
All that was foreseen by public sector unions, including Unison, Unite, GMB, Prospect and the Public and Commercial Services Union, when the cap was first proposed, but Ministers refused to listen. The unions were left with no choice but to take the Government to judicial review, which wasted more time and more taxpayers’ money, before the Government finally admitted that the cap had unintended consequences and should be revoked.
The Labour party will therefore not support the Bill today. I advise the Government to do the same to avoid further embarrassment.