Arrivals Duty Free at UK Airports

Lord Vaizey of Didcot Excerpts

Thursday 30th March 2023 Lords Chamber

[Baroness Penn (Con)]

My Lords, Northern Ireland enjoys frictionless trade with both the rest of the UK and the EU, and the Government are committed to ensuring that that remains the case. Introducing duty-free shopping for goods moving between Northern Ireland and the rest of the UK or the EU would undermine that commitment.

[Lord Vaizey of Didcot (Con)]

My Lords, it may well be that the introduction of duty free has been one of the fantastic benefits of Brexit, but it seems odd that the Government have taken the opportunity of Brexit to get rid of tax-free shopping. That means that wealthy tourists who used to come here and shop now go to France, Germany, Spain and Italy. It hits our regional airports and our small manufacturers. The change has been opposed even by the Scottish National Party, which must be a clue that the Government have got this catastrophically wrong. Will the Minister keep this policy under review and eventually change her mind?

[Baroness Penn (Con)]

My noble friend is a persistent campaigner on this issue. He is right that, in leaving the EU, we were not able to maintain the previous policy of offering tax-free shopping to non-EU citizens only; it would have to be extended to all visitors, which would come with a significant cost. However, I reassure my noble friend that we keep all taxes under review, and we welcome representations to help to inform future decisions on tax policy.

Theatre Tax Relief

Lord Vaizey of Didcot Excerpts

Thursday 9th March 2023 Lords Chamber

[Baroness Penn (Con)]

My Lords, I should remind noble Lords that the level of tax relief will remain enhanced from April at an elevated rate of 30% or 35%. I know that my noble friend Lord Parkinson and the Secretary of State have been engaging with the sector carefully to hear about its ongoing challenges and, as the noble Lord has said, they have fed that back across Whitehall and to the Treasury.

[Lord Vaizey of Didcot (Con)]

My Lords, the theatre tax relief has been a resounding success, and the higher rate has resulted in one US producer increasing their investment in UK theatre by 250%. We all have a duty to make my noble friend Lord Parkinson as happy as possible, so will the Minister acknowledge that administering the tax relief costs a great deal of money? Will she either provide a special grant to the British Film Institute, which administers the film, TV and audio-visual tax credit, or introduce a levy on the film tax credit—a very small levy—to cover the institute’s significantly increased cost in administering it so well? She will make our noble friend extremely happy if she agrees to that.

[Baroness Penn (Con)]

My Lords, there are two different tax credit systems, as I understand it: one for film and audio-visual and the other for theatres. Both have huge value to the sector and also to the sector’s contribution to our economy. We are committed to ensuring that they continue to be able to contribute in that way. We want to make the system as simple to operate as possible, and all suggestions for doing that are gratefully received.

Money Laundering Regulations: Politically Exposed Persons

Lord Vaizey of Didcot Excerpts

Monday 28th November 2022 Lords Chamber

[Baroness Penn (Con)]

My Lords, as I have said, we have had an ongoing dialogue with the FCA around the guidelines. In turn, they have had engagement with those that they regulate. I do not have any statistics for the noble Lord on enforcement action. However, one area where we have some statistics is that, since 2018, the Financial Ombudsman Service has received fewer than 10 complaints in this area. That is not to say that people have not experienced problems, but I would encourage them to use the points of contact and, where they are experiencing problems, to advance those complaints, so that we can have better data with which to assess the impact of the issue.

[Lord Vaizey of Didcot (Con)]

My Lords, I have used my noble friend the Minister’s point of contact. My son was refused an account with Starling Bank. I got through to a senior executive there, who stated to me very clearly that: “It is our policy not to give accounts to the relatives of Members of the House of Lords.” That is about as clear a breach of the regulations as you could have. Will the Minister use her convening power to collect in one room the banks, the FCA and Treasury officials? Let us sort this out and introduce some common sense.

[Baroness Penn (Con)]

I cannot comment on an individual case, but I can be absolutely clear with my noble friend that the FCA has been clear that designation as a PEP should not be a reason to end a business relationship. I said to the noble Baroness, Lady Hayter, that I am very happy to have a meeting, and I will use all the efforts of my convening power to bring to the table those I cannot directly commit to attending the meeting today.

Fashion Industry

Lord Vaizey of Didcot Excerpts

Thursday 31st January 2019 Commons Chamber

[Mary Creagh (Wakefield) (Lab)]

I thank you, Mr Deputy Speaker, and the Backbench Business Committee for allowing me to present to Parliament this interim report on the sustainability of the fashion industry, the 15th report of this Parliament’s Environmental Audit Committee. I also thank the dedicated staff and Committee members who, despite the Brexit crisis, continue to work tirelessly to hold the Government to account on environmental protection, and I am delighted to see so many members in their place.

We launched our inquiry last June to examine the social and environmental impact of fast fashion and the garment industry and to consider what actions consumers, retailers and the Government must take. Our final report will be published next month. The subject of today’s statement is the interim report, which focuses on retailers’ responsibility to ensure they employ people fairly and reduce fashion’s footprint and to ensure that fashion does not literally cost us the earth.

We heard evidence that fast fashion encouraged the over-purchase, over-consumption and under-utilisation of clothes. This leads to excessive waste. In the UK, we throw 11 million items of clothing worth £140 million into the bin every year. People in this country buy more clothes than people in any other European country: 27 kilos per person a year, or two big suitcases, which is twice what the stylish Italians buy. This is spurred on by retailers selling clothes at pocket money prices—£2 T-shirts, dresses for a fiver—and encouraging consumers constantly to change their wardrobes, to stay on trend, to instagram it and to treat garments as single-use items.

If retailers are selling their T-shirts for £2, how much are the people making them getting paid? The answer is not enough, and they are sometimes working in terrible conditions. As Livia Firth from Eco-Age said this morning on Radio 4, we wear the stories of the people who make our clothes, and if we wear those stories, we must reflect deeply on the fact that five years ago the Rana Plaza building collapsed in Bangladesh, killing 1,130 garment workers. It was the biggest industrial accident of the modern age. The victims were mostly young women producing clothes in inhumane conditions and being paid poverty wages to fuel fast fashion on the UK high street.

Our inquiry has heard that harsh working conditions are not just a problem in Asia and China. We have heard worrying evidence of illegal practices in clothes factories here in the UK, particularly in Leicester, where 10,000 textile workers produce more than 1 million items of clothing a week. One whistleblower told me they saw fire exits padlocked shut. Online retailer Missguided told us that two of its inspectors were manhandled by factory bosses. It raises the question: if that is how factory owners treat their potential customers, what are the conditions being endured by their workers?

We heard that workers were working long, gruelling shifts and often earning as little as £3.50 an hour. Her Majesty’s Revenue and Customs told us that since 2012 more than 90 factories in the UK have been caught in breach of minimum wage regulations, illegally underpaying their workers, and have been forced to pay out £90,000 in wage arrears—an average of £900 per worker. David Metcalf, the director of Labour Market Enforcement, said in his first annual strategy that labour abuses, exploitation and modern slavery were all part of a single continuum of abuse and needed to be tackled holistically.

Last autumn, we wrote to the UK’s top 10 fashion retailers, four major online retailers and two supermarkets, Tesco and Asda. We asked 16 questions—for example, whether they were signed up to the Waste and Resources Action Programme’s sustainable clothing action plan to reduce their carbon, water and waste footprint or to Act, Collaboration, Transformation, an initiative by the global garment workers union IndustriALL that works towards a living wage for all garment workers through collective bargaining, and about their use of sustainable cotton and recycling. Based on their replies, we have grouped them into three categories: most engaged, moderately engaged and least engaged. Only six of the 16 retailers are signed up to that ACT global trade union initiative. We were pretty shocked to see a group of major household name retailers failing to take action to promote action to protect their workers. Let us take their responses in turn.

The most engaged retailers were ASOS, M&S, Tesco, Primark and Burberry. They all use organic or sustainable cotton in some of their garments and recycle their materials. They all have in-store take-back schemes or recycling banks. However, the Committee was shocked to hear that Burberry incinerated over £26 million of clothing last year. We welcome its commitment to end this completely unsustainable practice.

All five of these engaged retailers are members of the Ethical Trading Initiative, which aims to improve conditions for workers globally. The Committee particularly welcomes ASOS becoming the only retailer to sign a global framework agreement with IndustriALL, the global trade union, committing to the highest standards on trade union rights, health and safety, and labour relations. We would like to see many more retailers follow its lead. We believe that freedom of association is far better than company audits at driving up worker protection.

The moderately engaged retailers were Next, Debenhams, Arcadia Group and Asda. These retailers are the proverbial curate’s egg, taking some steps towards sustainability in the social and environmental spheres, but still falling short. For example, Next does not run take-back schemes for used clothing, saying that it would just be too expensive. Arcadia has one take-back scheme in one Oxford Street store out of its 2,500 UK shops. None was committed to reporting on climate change risk and only Next is taking action to tackle hazardous chemical discharges in its fabrics supply chain.

Our real concerns involve the least engaged group of retailers. JD Sports, Sports Direct, Amazon UK, TK Maxx, Boohoo and Missguided are clear industry laggards, and Kurt Geiger did not even give us the courtesy of a response. I leave hon. Members to draw their own conclusions about that. None has signed up to WRAP’s sustainable clothing action plan to reduce their carbon, water and waste footprint. Internationally, none has signed the ACT labour rights agreement.

Amazon was notable in its lack of engagement. It is taking none of the sustainability actions that we asked it about, nor has it signed up to ACT or the Ethical Trading Initiative. Its size, online reach and potential for growth as a fashion retailer mean it must get serious about its responsibilities.

We also have major concerns about the online retailer Boohoo’s approach to trade unions. When we asked its joint CEO, Carol Kane, about unionisation at its distribution depot in Blackburn, she told us that it would recognise a trade union if there was demand from workers but there was not really any sort of demand. Shortly after that, we got a letter from Mike Aylward, from the Union of Shop, Distributive and Allied Workers trade union, contesting her evidence. He said that Boohoo

“has, over a prolonged period of time refused even the most basic level of engagement with Usdaw and appears hostile to the very idea of recognising a trade union.”

We recommend that Boohoo engages with USDAW as a priority and stops blocking union recognition and collective bargaining for its UK workers and its workers overseas.

This interim report shows that the current business model for the UK fashion industry is unsustainable. We are disappointed that so few large retailers and supermarkets are showing leadership. If we are to tackle climate change, cut emissions and reduce fashion’s heavy footprint, these socially exploitative and environmentally damaging practices must end. Retailers must do more. By using this report, customers and consumers can make informed choices about where they choose to spend their money. We know they want to use their spending power wisely. It is time that retailers follow their lead. We will be setting out a blueprint when our full report is published. I commend this report to the House.

[Mr Edward Vaizey (Wantage) (Con)]

Mr Deputy Speaker, you will know just from looking at me that I was the Minister for fashion for six years and the hon. Lady will know just from looking at me that none of my clothes enjoys a single-use outing.

I warmly welcome the hon. Lady’s report, which I urge Ministers to consider. The British fashion industry is one of the most successful parts of our economy and the British Fashion Council does a huge amount to promote it and, indeed, to promote sustainability. Does she agree that her report is so good it should not gather dust, and that Ministers and other willing Members should work with her and fashion stakeholders to give British fashion a fantastic competitive edge in being the world’s leading sustainable fashion industry?

[Mary Creagh]

I thank the right hon. Gentleman for that question. He is right that the UK fashion industry is a £32 billion industry. Areas such as my own in West Yorkshire have a long and proud tradition of textile manufacturing, weaving and spinning—I have the Sirdar factory in my Wakefield constituency—and of reusing and recycling: industries are using shoddy and mungo in mattresses, carpeting and bedding. So this is a proud industry. We found that no one is speaking for the end-to-end industry. There are people focused on the high street and people focused on the British Fashion Council side of things—all the exciting creativity—and then there are the textile manufacturers, but they are not really altogether in one group. We think that they need to speak with one voice.

Last week, I visited the UK Textile Centre of Excellence in Huddersfield, where I saw some of the plasma technology and digital laser technology that it is inventing to reduce fashion’s footprint and to give clothing antimicrobial properties so that it becomes more waterproof. So instead of processes using chemicals that wash off and wash down the drain, they are done at reasonably low temperatures with no chemical or water discharges. This is the future of fashion. We are inventing it here, but it is being exploited by a US company, which will shortly be listing on AIM—the alternative investment market. We need to keep this home-grown technology in our country. We have fantastic heritage brands. I am wearing a John Smedley sweater, made in Derbyshire, which has been worn at least 1,000 times—and darned. It offers lifetime repair and reuse services, as do Church’s for shoes and Burberry for raincoats, which are made in the constituency next door to Wakefield: the constituency of Normanton, Pontefract and Castleford. We have to celebrate what is good and shut down the bad things.

HBOS Reading: Independent Review

Lord Vaizey of Didcot Excerpts

Tuesday 18th December 2018 Westminster Hall

[Kevin Hollinrake]

My hon. Friend is absolutely right. It is completely one-sided. It means there is a complete imbalance of power in what is supposed to be an independent review, because the bank itself has phalanxes of advisers, whereas the victims clearly cannot afford to provide for the same number or calibre of advisers.

Offers are not made on an open basis; it is a take-it-or-leave-it offer. Imagine, Sir Christopher, that you have been stripped of all your assets over a period of 10 years. You are desperately trying to seek justice, and finally somebody offers you a cheque. Your only other option is to go to the court. What do you do? It is a take-it-or-leave-it offer. If you say, “Actually, I don’t think that is enough,” you get a secondary meeting, but there is no interrogation of the facts; it is simply take it or leave it. That is the nature of the review.

[Mr Edward Vaizey (Wantage) (Con)]

I am grateful to my hon. Friend for calling this debate. In fact, I called a debate on this very subject 10 years ago, when my constituents Justin Riggs and Karl Capp told me how they were being treated by their bank. This is one of the biggest frauds to hit many hard-working small business people in this country. The simple point is that the bank, rather than hiding behind regulations and technicalities, should be giving generous and quick compensation to many people who have lost their businesses, because of a fraud that was covered up and hidden for years by senior members of that bank.

[Kevin Hollinrake]

My right hon. Friend is absolutely right. The levels of compensation should be determined by an independent third party, not by the bank itself, because there is no methodology. Nobody can contest the findings of Professor Griggs. There is no way of interrogating how he has arrived at a number. They simply say—I have heard this so many times from Lloyds directors—“Well, we settled most of the claims,” as if that is somehow an endorsement of the process. The fact is that the victims had no other option—no appeal process—other than going to court, which would have cost millions of pounds.

Victims cannot even get access to the evidence. In a normal court process there would be disclosure of evidence, so that they could see the evidence they are being judged against. There was no disclosure of evidence. Lloyds has found a better way, according to a letter it sent me on 20 September. It said it had “created an alternative approach” to disclosure, “to protect customers interests”. That is its approach. It is complete obfuscation.

Eligibility is determined by the bank itself. It decides who is eligible for the review and who is not by invitation only. Only directors get to decide, not shareholders or suppliers, nor Her Majesty’s Treasury, which must have lost a lot of money through this process in respect of tax. It only dealt directly with the individuals who were convicted, not their deputies or other people who may well have been involved in the fraud. This is not an independent review. Professor Griggs is paid by the bank. His remit is determined by the bank. I have seen evidence that determinations he has made have been overruled by the bank.

This is in no way an independent process. Of course, everybody who goes to it is subject to a gagging order. The bank provided us with confirmation that clause 4 in its settlement agreements does not prevent victims talking to it or to the press. However, I have seen another agreement, completely different from the one the bank provided to the Treasury Committee, which contains extra clauses that do prevent these victims speaking to the press or to the authorities. Justice must be seen to be done. Lloyds bank is the judge, jury and executioner. The all-party parliamentary group on fair business banking and finance, of which I am now co-chair, said right from the start that this is the wrong way to deal with the process, but Lloyds pushed on anyway.

Moving on to a solution to these problems, the APPG believes that all cases—anybody who has been subject to the Griggs review—should be re-examined through a completely independent process. The APPG has recommended a financial services tribunal, which would judge cases based on a fair and reasonable test, with one-way cost shifting, so the banks cannot simply keep people out of court by writing huge cheques out to their own lawyer. That would mean that people would get an independent examination of their case. Victims can then get compensation and move on.

We believe that a tribunal is required, with an arbitration process for past claims. There have been four different reviews this year of how we can fill this gap, make this process fairer and get back to a more balanced situation, with restitution and redress. Three of those reviews recommended a financial services tribunal, as we do. The one report that did not was sponsored by the banking industry itself and it simply says that we should increase the powers, remit and jurisdiction of the ombudsman schemes. While that is a good step forward, we do not feel that it is enough.

That addresses compensation, but we need to go further. We need to change the culture in the whole sector, as the hon. Member for Ogmore (Chris Elmore) said. In terms of the Lloyds management, I do not see how the position of the chief executive, António Horta-Osório, is tenable. Given the way that the effective whistleblower has been treated, the way this has been covered up and the way that the process has been deliberately partial, I do not see how the Lloyds management have been consistent with the behaviour required under the senior managers regime. I think António Horta-Osório should resign. I also think he should face investigation under the senior managers regime.

Finally, the Financial Conduct Authority itself—our regulator—has many questions to answer. Why did it approve the scheme? Did it approve the scheme? We have heard conflicting evidence on that. It is a national disgrace that Lloyds has been allowed to operate this sham of a review process. Andrew Bailey himself has questions to answer. Why did he allow the process to continue? Why was he not aware of the patent defects in the process? Nevertheless, the FCA should take charge and undertake an investigation of the senior management under the senior managers regime.

We in this place are defenders of free markets. For me, this is the most important issue that any of us will ever deal with. Certainly, as far as I am concerned, I cannot rest until the matter is settled. My life has been transformed through the opportunities of free markets. In the main, the bankers I have dealt with over 25 years have done a tremendous job—a fair job—to help my business to thrive through some difficulties. I was one of the lucky ones. Not all bankers are the same. Most people in the industry are decent people trying to do the right thing, so it is even more important to hold those who are not to account. We have to make sure that everyone has the opportunities that I have had—that we have had—including all our children and grandchildren. We must all demand, for the sake of the victims, that justice is done and is seen to be done.

--- Later in debate ---

[The Economic Secretary to the Treasury (John Glen)]

It is a pleasure to serve under your chairmanship, Sir Christopher. I acknowledge the work of my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) in securing this debate and making an excellent speech, as he has done on several occasions this year in this place, and setting out a case that was well reasoned in many elements. I also pay tribute to the hon. Members for Strangford (Jim Shannon) and for East Lothian (Martin Whitfield), who made fine contributions to the debate.

As we have heard today and in previous debates this year, incidents of banking misconduct and fraud have had a severe impact on some small and medium-sized enterprises. It has been and remains a top priority of mine in office to face up to the issues that have been generated by the cases that have been raised. I am conscious that many of the eight Back-Bench Members who have taken part in this debate will have heard sad and unfortunate stories from their constituents about how the actions of banks have affected them and their businesses. That includes not only the events at HBOS Reading, but the actions of the RBS Global Restructuring Group and the mis-selling of interest rate hedging products.

I begin by reminding Members that we expect the highest standards of behaviour across the financial sector. That is why the Government have introduced a number of necessary changes to restore public trust in financial services, such as the senior managers and certification regime. Before I address the substance of today’s debate, it is important that we pause for a moment to recognise the contribution that banks make to both the UK economy and our society. As the hon. Member for Aberdeen North (Kirsty Blackman) rightly said, it is necessary for banks to lend to SMEs. Lloyds Banking Group has, for example, increased its net lending to SMEs by £3 billion since 2014 and plans to triple that by 2020. Lloyds is the market leader in providing basic bank accounts, which help vulnerable customers, and its “Helping Britain Prosper” plan sets out a number of commitments on behaviour, diversity and charitable support.

However, I recognise that there has been a great deal of justified anger, within Parliament and beyond, regarding the fraud that was perpetrated against small businesses through the actions of individuals at the HBOS Reading branch. It is important to remember that the events at HBOS Reading constituted criminal activity. As such, it was right that those responsible were brought to justice, as my hon. Friend the Member for Thirsk and Malton pointed out. The FCA continues to conduct an enforcement investigation into the events surrounding the discovery of misconduct at HBOS Reading, resuming an investigation placed on hold at the request of Thames Valley police. I will be keenly following the progress and outcome of the investigation.

In addition, Lloyds Banking Group has appointed Dame Linda Dobbs, a retired High Court judge, as an independent legal expert to consider whether issues relating to HBOS Reading were investigated and appropriately reported to authorities at the time by Lloyds Banking Group, following its acquisition of HBOS. It will consider issues raised by the Project Lord Turnbull report referred to by my hon. Friend. Dame Linda’s findings will then be shared with the FCA.

It is right that Lloyds set up a compensation scheme for businesses affected by the events at HBOS Reading, overseen by Professor Russel Griggs. That scheme has seen offers made to all customers within its scope, with 90% of customers accepting the offer. However, I acknowledge the concerns that Members have raised about the Griggs scheme. Those concerns have certainly been heard, and I am pleased to announce that Lloyds has agreed with the FCA that Lloyds will commission a post-completion review to quality-assure the methodology and process of the Griggs scheme. [Interruption.]

Overseen by an independent person, that review will go above and beyond a normal lessons-learned exercise. The independence of the person appointed to lead the review is vital. In particular, I would expect that person not to have been employed by Lloyds in any way, and to be able to demonstrate complete operational independence from Lloyds. I am pleased that Lloyds has committed to publishing the review once it has concluded, and I welcome Lloyds’ commitment to implementing any recommendations it produces. I have been consistently clear that it is vital that we get the right processes and procedures in place, to ensure that SMEs can obtain fair redress and resolve disputes with their banks.

[Mr Vaizey]

I know that my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) will wind up the debate, so I feel a bit premature intervening on the Minister, who is a good friend. However, he will have heard the reaction in the Gallery to his announcement. It seems to me that it is just a re-wrapping of the current problem. Perhaps he will meet some of the Members in the Chamber, and some of the business owners affected, to hear and see what has actually been going on.

[John Glen]

I will happily meet my right hon. Friend—a distinguished former Minister who has been fighting on these matters for many years—and my hon. Friend the Member for Thirsk and Malton. Of course I acknowledge the cynicism and concern of those present about the independence of this mechanism, but, as I said, Lloyds has committed to publishing the independent review once it is concluded and implementing any recommendations that it produces. My officials have been working with the FCA to ensure that that comes to pass. I take the concerns about how it progresses very seriously, and will happily meet Members to discuss them.

In the recent Budget, the Chancellor stated the Government’s support for the FCA’s plans to expand eligibility to complain to the Financial Ombudsman Service to small businesses as well as micro-enterprises. Expanding the remit of the FOS will ensure that from 1 April 2019 well over 99% of all UK businesses will have access to fast, free and fair dispute resolution. I am aware that concerns have been raised about the capability of the FOS to adjudicate effectively in such cases, and I discussed those concerns with the Chair of the Treasury Committee just last week.

The FOS has announced its plans to create a ring-fenced, specialist unit to take on the additional cases, and for that unit to be supported by a panel of external SME experts. I welcome those plans, and I will visit the FOS early in the new year to check on how they are progressing. The FCA has also committed to reviewing the expansion of the FOS remit within two years of its coming into force, in addition to its usual oversight processes. I trust that that will reassure some hon. Members who have voiced concerns about the capability of the FOS.

I have also been clear that banks need to work hard to restore businesses’ trust in their institutions. That is why I welcome the banking industry’s recent commitment to establishing two independent voluntary ombudsman schemes, in response to Simon Walker’s review of dispute resolution for SMEs. One of those schemes will address complaints from SMEs with a turnover of £6.5 million to £10 million. The other will address unresolved historical complaints from SMEs that have not already been through a formal process.

I am pleased that the banking industry has set out the key principles for the operation of the scheme to address unresolved historical complaints. Independence, expertise, transparency and the right to an appeal are all hallmarks of a fair and robust process, and it is right that they underpin any approach to dispute resolution. I welcome the banking industry’s commitment to having those schemes up and running by September 2019. I look forward to seeing progress on establishing the implementation steering group very soon, and I am pleased that representatives from the all-party parliamentary group will have a role in that process.

The benefits of an ombudsman-style approach are clear, but I recognise that some hon. Members have advocated again today for the establishment of a tribunal to resolve disputes between banks and SMEs. An ombudsman-style approach can deliver fast, free and fair dispute resolution for SMEs, making decisions based on what is fair and reasonable. I believe that a tribunal, on the other hand, would need the regulation of SME lending, potentially restricting SMEs’ access to credit. It would still require SMEs to pay for expensive legal expertise, and it could make decisions only on a strict legal basis. That is why I believe that an expanded FOS remit, alongside the establishment of further independent ombudsman schemes as announced by UK Finance, will ensure the best outcomes for SMEs.

I highlight again that the Government, financial regulators and industry have done considerable work to tackle bad practice and to ensure that SMEs have access to appropriate dispute resolution and redress mechanisms. The all-party group on fair business banking and finance has been a key part of that work, and I sincerely commend its determination in the work that it has undertaken to ensure that SMEs are fairly treated.

The events at HBOS Reading constituted criminal activity. As such, it was right that those responsible were brought to justice. However, more clearly needs to be done to restore SMEs’ trust in the financial services industry. From the numerous meetings that I have had this year with a wide range of stakeholders, it is clear that we are all determined to deliver the best outcomes for SMEs.

I will closely follow the review of the Griggs scheme. I understand the concerns, but it is a significant step forward that that review will take place, and I will monitor the implementation of both the expanded FOS remit and the industry’s independent voluntary ombudsman schemes. I am confident that we have the right regulatory regime and dispute resolution mechanisms in place for the future. Events similar to those at HBOS Reading should not occur again, and I will do everything in my power in office to ensure that we learn the lessons from those appalling incidents years ago.

Taxation (Cross-border Trade) Bill

Lord Vaizey of Didcot Excerpts

3rd reading: House of Commons & Report stage: House of Commons
Monday 16th July 2018 Commons Chamber

[Mr Edward Vaizey (Wantage) (Con)]

That’s your career over, Mel.

[Anna Soubry]

For the record, that was said by my hon. Friend the Member for Huntingdon (Mr Djanogly). If anyone else had said it, I would have been very rude. [Interruption.] Sorry. Scrub that; it was my right hon. Friend the Member for Wantage (Mr Vaizey)—ever the trouble maker.

This is really serious. I told the Minister that I would not press my amendments to a vote. That is not because I lack courage—in fact, given events, I would like to think I have a bit of courage. Some say I do not have a fear gene at all. Just to remind hon. Members, three people have received custodial sentences for the death threats I have received. I am getting a bit tired of being called a traitor. Certain people on these Benches support a newspaper that, disgracefully, had the temerity to suggest that the Prime Minister of our country might in some way have committed treason by the production of this White Paper. That is outrageous. Right hon. and hon. Members on these Benches really need a bit of a reality check, not just on Brexit but on the way this party is conducting itself and on who they choose to call their friends.

Let me return to why I will not press my amendments to a vote.

Customs and Borders

Lord Vaizey of Didcot Excerpts

Thursday 26th April 2018 Commons Chamber

[Matt Warman]

I would like to agree with my hon. Friend, in the sense that if the European Union were to offer an option that said, “Remain in the customs union and remain in the single market, but you don’t have to have freedom of movement and you do have the ability to go and strike your own trade deals”, then a lot of us would think that that was a very attractive move. However, that would make it a better deal to be outside the EU than to be in it.

I simply do not see how it is a sustainable, coherent position to think that the European Union would offer us that sort of compromise, so we have to live, as Opposition Members have so often said, in the real world. That requires us to say that people did not vote for the European Court of Justice to continue to have its rulings being valid in this country when we play no part in that organisation, and people did not vote for us to have no remedies on our trade policy. What people voted for, whether some in this place like it or not, is a clean break, because that is what allows us to have the control that they wanted. Many Conservative Members accuse the Opposition of trying by subterfuge to force us to remain in the European Union. However, the more we pursue the line that we can remain in the customs union but also do our own trade deals, the more we not only undermine faith in the referendum result overall but undermine faith in democracy as a whole, and we have to preserve that above all else.

[Mr Edward Vaizey (Wantage) (Con)]

Rubbish!

[Matt Warman]

My right hon. Friend proclaims, “Rubbish!”, from a sedentary position. I think he knows me well enough to know that I am not an ideological hard Brexiteer, by any means. However, surely we all have to accept that we should be ideological about preserving the primacy of democracy. If we in this place are not all democrats, then we have a real problem.

--- Later in debate ---

[Mr Edward Vaizey (Wantage) (Con)]

I see that a Treasury Minister is responding to this debate, not a Trade Minister. This is a new phenomenon: when the Government are in trouble, they no longer uncork the Gauke; they un-shell the Mel.

I do not know about the emperor’s new clothes, but I feel I am living in an Alice in Wonderland world. I am learning more and more about Brexit every day. I have learned that we can be out of the EU but in the single market; that we can be out of the EU but in the customs union; that we can be in the EU and have a blue passport made by a British company; that we can be out of the EU and have a blue passport made by a French company; that the Windrush scandal is the Europeans’ fault because they are in favour of people presenting papers, and that Brexiteers are very pro-immigration; that there will no longer be a bonfire of EU regulations—but it’s all right because we are going to adopt them all; that we are not trading enough with the EU so we are going to make it more difficult to trade with the EU; and that the Good Friday agreement is a waste of time and we are to have a hard border with Northern Ireland because of Brexit; and I have heard that anything I do to contradict anyone who supports Brexit is undermining the will of the people, even though during the referendum, as far as I am aware, there was a clear question—“Do you want to leave the EU?”—but no clear proposition about what that meant, which has left it to Parliament to decide what leaving means, or at least to guide and engage with the Government.

[George Freeman (Mid Norfolk) (Con)]

In Mid Norfolk, where my constituents voted to leave, the majority opinion on the doorstep was: “Mr Freeman, I wanted to be in the single market, not in a political union. It was Mrs Thatcher who took us into the single market. I want to be in the single market, not in the political union.” Does my right hon. Friend agree with my constituents?

[Mr Vaizey]

That is absolutely right. My right hon. Friend the Member for West Dorset (Sir Oliver Letwin), in his excellent memoirs, says he parted company with the Brexiteers, having been a Eurosceptic, because he supported a free trade arrangement with the EU but did not want to leave the EU in order to cause damage to our economy—I have not put that very well, but the key point is that, if we are to leave the EU, which we are, and we are a free and sovereign nation, we can then make decisions in the interests of our economy; and if it is in the interests of our economy to be a member of a customs union, it should be possible for Parliament to debate that and make that decision without being accused of betraying the will of the British people. The people who are passionate about Brexit have tipped over into an ideological fervour where anything that involves Europe in any shape or form is wrong.

I have come here to ask un-shelled Mel some questions to educate myself, because I want to make the decision that is best for my country. I am one of the Prime Minister’s trade envoys to Vietnam, so I know a tiny bit about trade. If it is best to leave the customs union and make up for the economic impact of doing so by means of free trade deals, can my right hon. Friend the Financial Secretary to the Treasury tell me when we are planning to sign these new trade deals, who we are planning to sign them with, what their value to our economy will be and what the related issues will be? For example, I have read in the newspapers that one aspect of trade deals with countries such as India and Australia—they are both countries that I love—will be more relaxed immigration and visa rules. I do not have a particular problem with that, but is my right hon. Friend aware of that issue, and how does he think it will go down with the public?

When it comes to regulatory standards, I agree with my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke), although I do not have a problem with food standards in America or Australia; we do not see a lot of Australians or Americans dropping down with food poisoning. Given that food standards in those countries are different from ours, are the Government content to sign up to them? Let us face it; one of the reasons we have tariffs is that there is an element of protectionism in every economy. What will be the reaction of sectors of our economy, such as agriculture, when we sign these trade deals?

I would like to know the Government’s view on the cost of leaving the customs union, and the impact of doing so on sectors that are important to our economy, such as cars, agriculture, pharmaceuticals and chemicals. The hon. Member for Leeds West (Rachel Reeves)—the excellent Chair of the Business, Energy and Industrial Strategy Committee—has done a lot of this work for the Government. Perhaps the Minister could help me, as a bear of little brain, with something else. As far as I am aware, staying in the customs union will allow us to export goods to the European Union without tariffs, but it should leave us free to negotiate free trade deals outside of those goods. It should, indeed—this is particularly important given that services now account for 80% of our economy—allow global Britain to negotiate service agreements with the US, as my right hon. and learned Friend the Member for Rushcliffe pointed out.

The Minister could perhaps help to explain the paradox of how Germany, which is a member of the customs union, has managed to increase its exports to China so significantly while it has been anchored and shackled to this protectionist racket. Why is Germany exporting five times as much to China as Britain is doing? Is it simply that Germany makes a hell of a lot of effort to export goods? If we made a hell of a lot of effort while we were still in the customs union, perhaps we could continue to increase our exports to China.

--- Later in debate ---

[Mel Stride]

As the hon. Lady knows, we are currently working on transferring the EU’s agreements with third-world countries. Of course, in future we will be free to strike our own FTAs with other countries, which we are currently prohibited from doing.

It is good to hear the hon. Member for Bootle (Peter Dowd) agree with Margaret Thatcher at long last. She stood for free markets, free trade and fiscal responsibility, and I look forward to hearing more of that from him in the years to come.

I have just been informed that I must leave two minutes for the right hon. Member for Normanton, Pontefract and Castleford, which I will endeavour to do—[Interruption]— although she is generously saying that one minute will be enough.

The hon. Member for Bootle suggested that the Government’s position is confused, although I am not sure whether he was thinking of his own position when he said that. The reality is that the Labour party has a classic fudge on the customs union. It wants to tell everybody that we can somehow be in the customs union while not being a rule taker—that we can somehow negotiate to be in the room when FTAs between the EU and other countries are negotiated. The Labour party accuses us of seeking to cherry-pick, but by its own logic, it is quite clear that this is just not a realistic possibility.

The hon. Gentleman specifically mentioned clause 31 of the Taxation (Cross-border Trade) Bill, which will indeed permit the UK to enter into a customs union with another customs union or territory. That is something we will almost certainly wish to do with our Crown dependencies. The clause will therefore not be relevant to the European Union after our departure. The Government are therefore clear that when we leave the European Union we will leave its customs union. That is a matter of fact. The Government have also been clear that forming a new customs union with the EU is not compatible with a meaningful independent trade policy, so we will not be doing that. Outside the EU and a customs union, the UK will be able to sign its own trade deals with our partners around the world.

[Mr Vaizey]

Now that the Minister has been un-shelled—he is doing very well—could he name one trade deal and tell us when it will be signed?

[Mel Stride]

An ingenious question; I would expect no less. As my right hon. Friend will know, we are not able to enter into and sign such deals until we have left the EU and, indeed, we are beyond the implementation period. Of course we are working actively on these deals, but saying that does not mean that we will no longer need a deep and special partnership with our nearest trading partner. The EU is still and will remain a significant marketplace for us. Our markets are deeply interconnected, and that will remain the case for the future. That is why the Prime Minister set out the Government’s intention to negotiate the broadest and deepest possible economic partnership covering more sectors and co-operating more fully than any free trade agreement anywhere in the world and recognising the point of deep convergence from which both sides begin.

In leaving the EU customs union, we will be guided by what delivers the greatest economic advantage to the UK, framed by three strategic objectives. The first is continued UK-EU trade that is as frictionless as possible. The second is avoiding a hard border on the island of Ireland. The third is establishing an independent international trade policy.

The Government have already set out two options for our future customs arrangements with the EU that most closely meet these objectives. One is a new customs partnership. In this model, the UK would mirror the EU’s requirements at our border for imports from the rest of the world with a final destination in the EU. This would mean applying the same tariffs and rules of origin as the EU for those goods. By following this approach, we would know that all goods entering the EU via the UK pay the right EU duties, removing the need for customs processes at the UK-EU border.

The other option is a highly streamlined customs arrangement. This approach would involve the introduction of formal customs processes between the UK and the EU, driven by technology, to streamline and enable this model. However, the UK would look to implement a range of measures—both negotiated and unilateral—to minimise friction, together with specific provisions for Northern Ireland. The precise form of any new customs arrangements will of course be subject to negotiation, and we are pursuing both approaches vigorously with our European friends. I look forward to further progress in these talks.

For the reasons I have given, the Government cannot support the motion before us today. As we prepare to leave the European Union, a significant opportunity awaits us—the opportunity to promote our national interest above all else and the opportunity to shape our future trading policy—because when the people of this country voted to leave the European Union, they voted for democratic self-government and to take control of our future trading arrangements. Moving forward, we will seek to maximise our trade, across all countries and markets as we prepare for the challenges and the exciting opportunities ahead, confident as an independent trading nation and proud of our long history as a global champion of free trade.

Telecommunications Infrastructure (Relief from Non-Domestic Rates) Bill

Lord Vaizey of Didcot Excerpts

3rd reading: House of Commons & Committee: 1st sitting: House of Commons & Report stage: House of Commons
Tuesday 5th September 2017 Commons Chamber

[The Parliamentary Under-Secretary of State for Communities and Local Government (Mr Marcus Jones)]

The Government are committed to supporting full-fibre telecommunication infrastructure and the roll-out of 5G. This will deliver a step change in the speed, service quality and reliability of broadband and mobile services. Independent research suggests that increased broadband speed alone could add £17 billion to UK output by 2024, so this is a vital measure for the whole economy. The Bill will provide the powers we need to implement an important part of that strategy.

At the 2016 autumn statement, the Government announced 100% rate relief for new full-fibre infrastructure in England. The clauses in the Bill will allow us to deliver that relief with retrospective effect to 1 April 2017. We have already published draft regulations that illustrate how we will use these powers to implement the relief. The draft regulations have been prepared in consultation with telecoms experts in the Government, Ofcom and telecoms providers. Business rates and telecoms are technical fields so there is considerable scope for complexity where they meet. However, I am glad to say that through our work with the sector, we believe that we have found a clear approach to allow the valuation officer to identify, capture and quantify new fibre.

[Mr Edward Vaizey (Wantage) (Con)]

I refer the Committee to my entry in the Register of Members’ Financial Interests. Is my hon. Friend aware of some concerns in the telecoms sector that the tax relief could be gamed? People could switch off lit fibre and light dark fibre in order to take advantage of the tax relief. Some have suggested that a better way of implementing may be simply to limit the quantum of business rates paid by telecoms companies. Will my hon. Friend comment on those concerns, which I have heard from a number of providers?

[Mr Jones]

I understand the concerns raised by my right hon. Friend, and I have great respect for his considerable knowledge of the matter. I reassure him and the various bodies that hold concerns that the relief is not a measure to support the relighting of fibre that has been turned off. Indeed, it is to support the laying of new fibre in the ground. This technical matter is laid out in the draft regulations and explained in the accompanying consultation document published by my Department last week. Consultation will ensure that the proposal reaches the right audience in the telecoms sector. With business rates experts, we will ensure that the relief will work as planned. The consultation will also allow us to move quickly to implement the relief once the Bill has passed and ensure that support is available for new fibre.

[Mr Jones]

My hon. Friend is right that this is an investment in the infrastructure of the country. Indeed, it is a relief that is time-limited for five years. After that five-year period, that fibre will attract its own income into the business rates pool, whether on the local list or on the central list.

[Mr Vaizey]

I hope the Minister will forgive me for interrupting his eloquent speech, but I was spurred into action by my hon. Friend the Member for North West Hampshire (Kit Malthouse), who is a newly elected member of the Treasury Committee—I congratulate him—and who displays the forensic skill we will see in many hearings in months to come. It behoves me to clarify that it is possible under the current regulations for a telecoms provider simply to lay new fibre in existing ducts, turn it on and take advantage of the tax relief, even though there is already fibre in those ducts. That would be seen as gaming the system—taking advantage of the tax reliefs without building the new infrastructure my hon. Friend the Member for North West Hampshire has campaigned for so vigorously. That is simply the warning light that I put up, and it may be that my hon. Friend will drive future Treasury Committee hearings towards that subject.

[Mr Jones]

By definition, full fibre is fibre that goes all the way from an exchange to the particular business or residential property that it individually serves. Therefore, by definition, even if an existing set of ducting was used, the new fibre would be an expansion of the network, because it would serve a different property from the current fibre. I therefore hope that my right hon. Friend is reassured.

--- Later in debate ---

[Mr Jones]

I thank my hon. Friend for that comment. He is absolutely right that it is extremely important that new housing developments serve well the people who purchase the properties in relation to superfast broadband. He is right that it is a requirement for developments of under 30 dwellings to have a broadband connection and for developments of over 30 properties to have a superfast broadband connection. In bringing forward those requirements, which started this January, the Government had to make a very challenging decision in getting the balance right between making sure that people are properly served with the latest technology and that we build the homes required to deal with the housing shortage in our country.

[Mr Vaizey]

I am very grateful to hear my hon. Friend talk about these issues. In my constituency, the developer Linden Homes built a housing development with houses selling for hundreds of thousands of pounds, and for the mere price of £6,000 to deliver broadband, refused to stump up that money. It is this kind of behaviour by developers that brings them into disrepute. I congratulate the Government on making great progress, because no new home should be built without superfast broadband.

[Mr Jones]

My right hon. Friend is quite right. Developers who are not necessarily compelled to provide superfast broadband should think to themselves how the installation of superfast broadband could become a selling point for the property. The provision of superfast broadband is becoming more and more important, particularly as more and more people work from home.

Oral Answers to Questions

Lord Vaizey of Didcot Excerpts

Thursday 9th June 2016 Commons Chamber

[Huw Merriman (Bexhill and Battle) (Con)]

6. What steps his Department is taking to accelerate the roll-out of broadband in (a) rural and (b) urban areas.

[The Minister for Culture and the Digital Economy (Mr Edward Vaizey)]

I am very pleased to tell you once again, Mr Speaker, how well the rural broadband programme is going. We have reached our target of 90%, with 4 million homes passed, and we will reach our target of 95% by the end of 2017.

[Huw Merriman]

My constituents in the parishes of Dallington, Brightling, Mountfield, Ashburton and Penshurst will welcome the Government’s new legal right to fast broadband. May I ask the Minister whether the reasonable cost test will be benchmarked against, first, the realistic cost to install in rural areas that are not currently connected to fast broadband and, secondly, the cheapest cost that any provider would charge rather than the cost that BT Openreach may calculate?

[Mr Vaizey]

We will certainly consult on the reasonable cost test, and it may well be that a number of providers do provide the universal service obligation, which will potentially provide welcome competition. That will be open for consultation once we have passed legislation, which I know will have the support of the whole House.

[Sue Hayman (Workington) (Lab)]

Earlier this week, I received an email from the Minister, which helpfully informed me that 3,198 premises in my constituency—that is 8% or nearly one in 12—are not currently planned to be connected to superfast broadband. What has the Minister got to say to the sizeable number of my constituents who face the prospect of never being able to access an adequate broadband connection?

[Mr Vaizey]

I would say to her constituents that we said that we would get to 90% by the end of last year, which we achieved, and that we would get to 95% by the end of 2017, so we have been completely transparent about what we are planning to do. We are now consulting on a USO precisely to help those constituents of the hon. Lady who are not in the rural broadband programme. We are bringing in important changes to planning in the digital economy Bill, which I hope will have the support of the Opposition Front Bench team. She should congratulate the Government because the way the contracts have been constructed means that almost £300 million is coming back, so we are going to go further than 95% and reach more of her constituents. She should be telling them that rather than complaining.

[Tom Pursglove (Corby) (Con)]

Residents in Denford are extremely frustrated at the lack of progress in securing superfast broadband. Will the Minister encourage Superfast Northamptonshire and BT to redouble their efforts to get Denford connected?

[Mr Vaizey]

I will certainly do that.

[Albert Owen (Ynys Môn) (Lab)]

What discussions are the Minister and his officials having with Welsh Government Ministers and officials about the universal service obligation to ensure that we can have joined-up thinking when the Bills, which I support, come through? To cement this relationship between the Welsh Government and the UK Government, may I repeat my offer of Ynys Môn as the location for a pilot scheme?

[Mr Vaizey]

I would happily work with the hon. Gentleman and the Welsh Government. I have always found him and the Welsh Government to be congenial colleagues in regard to the roll-out of superfast broadband.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

We know that the Secretary of State wants to leave the European Union, but his Minister appears already to have left the United Kingdom to inhabit some fantasy “Broadbandia” in which everything is, in his words, an “unadulterated success”. For the rest of us in the 21st century United Kingdom, however, the reality is different. One in five broadband users still has less than half the speed that Ofcom classes as acceptable, and 70% of smartphone users in rural areas have zero access to 4G. Rather than living in “Broadbandia”, the rest of us are living in “Broadbadia“. Will the Minister stop fantasising and acknowledge the view of the Countryside Alliance:

“This rural broadband betrayal is devastating”?

[Mr Vaizey]

I know that the hon. Lady will want to join me in commemorating this important day, which is the 33rd anniversary of Margaret Thatcher’s landslide election victory in 1983. In that year, there was no broadband and the Minister you see before you was sitting his O-levels. The Secretary of State, however, was on the great lady’s battle bus.

The hon. Lady might quote the Countryside Alliance, but the gardener Robin Lane Fox wrote an article in the Financial Times, which I know she reads, in which he talked about a move to the rural arcadia brought about by our broadband roll-out programme. He said that, like Falstaff, he was looking forward to dying babbling of green fields because he could live in the countryside with a superfast connection. Let us remind ourselves that Labour had a pathetic megabit policy, and that is still its policy. Let us also remind ourselves that we are two years ahead of where Labour would have been, and let us talk up the success of this programme instead of constantly talking down great broadband Britain.

[Mr Speaker]

I am sure that the hon. Gentleman’s performance is greatly enjoyed, not least by the hon. Gentleman.

[Stephen Timms (East Ham) (Lab)]

7. What assessment he has made of the potential benefits for the UK digital economy of completing the EU digital single market.

[The Minister for Culture and the Digital Economy (Mr Edward Vaizey)]

As I was saying, we have a great broadband Britain in a great European Union. Britain sits at the centre of the digital single market, which, if it is implemented, will increase GDP for Europe by 3%, or some £300 billion.

[Stephen Timms]

This time, I think the Minister is on to something. The UK is Europe’s leading digital economy, and we have the most to gain from the digital single market. That is why 70% of techUK members and 96% of the members of the Creative Industries Federation want us to remain in the European Union. Will the Minister have a go at persuading his right hon. Friend the Secretary of State how damaging it would be for digital jobs in the UK if we left the EU?

[Mr Vaizey]

My right hon. Friend the Secretary of State has a mind of his own, and he quite rightly often takes the view that it is not worth listening to me, which is probably why he is such a successful Secretary of State. I do wish he would listen to me on this issue, however, because tech and digital companies do benefit from our membership of the European Union and they will continue to thrive if we stay in the EU.

[Mr David Nuttall (Bury North) (Con)]

Does the Minister agree that the internet has been a huge source of economic growth in this country and that the last thing it needs is to be stifled by the Brussels bureaucrats, which is exactly what will happen under the proposals in the EU’s single digital market strategy?

[Mr Vaizey]

That intervention reminds me that this is the 41st anniversary of the first radio transmission from the House of Commons, and quality interventions such as that keep the British public listening to and watching our proceedings. However, I do not think that the Brussels bureaucracy is stifling. In fact, 500 broadcast companies are based in Britain precisely because of European regulations.

[John Howell (Henley) (Con)]

8. What steps his Department is taking to support the protection of cultural heritage in conflict zones overseas.

--- Later in debate ---

[Mr David Hanson (Delyn) (Lab)]

T4. What protections can my constituents and others expect on mobile phone roaming charges in Europe in the event of an exit on 24 June?

[The Minister for Culture and the Digital Economy (Mr Edward Vaizey)]

That is a very good question. Britain was at the forefront of negotiating the reduction in roaming charges, working with our European partners, and it is yet another example of the benefit to consumers and citizens of being a member of the European Union.

[Mr Robin Walker (Worcester) (Con)]

After the huge success of the London Paralympics, we all saw how Paralympic sport can inspire. Will the Secretary of State join me in congratulating my six Worcester constituents, who have been selected to represent ParalympicsGB in the wheelchair basketball at the Rio Paralympics?

[Gavin Newlands (Paisley and Renfrewshire North) (SNP)]

T2. On Tuesday I met Jean Cameron, the project director for the Paisley 2021 bid for UK City of Culture, for the third time. Despite my asking the Deputy Leader of the House a few weeks ago to give the Secretary of State a nudge, the bidding cities for 2021 are still none the wiser about the dates involved in the process. May I encourage the Secretary of State to get on with it and allow them to plan appropriately?

[Mr Vaizey]

I certainly take the hon. Gentleman’s points on board. We will make sure that the bidding process is as transparent and clear as possible and we will make the rules as clear as possible. While we are talking about culture, it is important to mark today as the anniversary of the publication of the first Book of Common Prayer by Archbishop Cranmer on 9 June 1569, following the Anglican Church’s break with Europe—I mean Rome!

[Dr Andrew Murrison (South West Wiltshire) (Con)]

I thank the Minister for his email on Monday about superfast broadband which I am sending out to my parishes. May I raise with him the problem of not spots in rural areas? What is being done following the cessation of the mobile infrastructure project run by Arqiva?

[Mr Vaizey]

You will be pleased to know, Mr Speaker, that I have run out of anniversaries.

The mobile infrastructure project was a fantastic success, with 75 sites established, but it has been overtaken by the emergency services programme, where the plan is to build 300 sites to complete the network cover—5,000 km of roads. I hope my hon. Friend’s constituents will benefit. In the next few months we will have a clearer idea of where those masts are going and which not spots they are tackling, and I will keep him informed.

[Tom Brake (Carshalton and Wallington) (LD)]

There has been much discussion in the House in recent days about world war three. There is a real risk that world war three will start in my constituency between residents and a local school on the subject of footballs that keep falling into residents’ gardens. Can one of the Ministers advise whether there might be grants available that would help stop this problem?

Mobile Phone Signal (Fownhope)

Lord Vaizey of Didcot Excerpts

Tuesday 6th January 2015 Commons Chamber

[The Minister for Culture and the Digital Economy (Mr Edward Vaizey)]

What a welcome addition to this debate you are, Mr Speaker. The seamless transition from Mr Deputy Speaker to Mr Speaker perhaps reflects the growing importance of this debate.

May I congratulate my hon. Friend the Member for North Herefordshire (Bill Wiggin) on securing this debate. If the people who watch our debates in this House are sometimes sceptical about politicians and their commitment to their constituents, in the past half hour they will have seen a masterclass in how a constituency MP goes about pressing a case for his constituents. Concerned as he is about their broadband and mobile phone coverage, he has met the Secretary of State; he has met and communicated with all the mobile operators; he has met the regulator, Ofcom; and he has invited colleagues, such as my hon. Friend the Member for Windsor (Adam Afriyie), to visit his constituency to test the mobile signal for themselves. He has covered all the bases and listed for our benefit, and that of Hansard, the number of villages where coverage is poor. He is the definition of a constituency champion, and his constituents will recognise his hard work.

My hon. Friend is knocking at an open door as far as the Government are concerned, and he has already achieved one success—no doubt working with his constituency—because the village of Fownhope will now receive the rural open sure signal project. To be clear that I cannot pull any strings in my area as telecoms Minister, I encouraged villages in my constituency to apply to that project, but as yet I am unaware whether any have achieved success because Vodafone has not chosen to share that data with me.

I met Vodafone today and, to add to the range of ideas put forward by my hon. Friend, I stressed that in my experience as telecoms Minister a lot of rural communities are keen to help themselves. Were Vodafone to offer a tariff to rural communities such as parish councils to provide an open sure signal, at a cost, once its effectiveness has been tested—I understand that Vodafone will meet the costs for the 100 villages networking under the pilot programme—I am sure that a lot of parish councils would look keenly at effectively buying an upgrade for their mobile service on behalf of their parishioners. I have stressed that point to other mobile operators as well.

I am also keen to stress that Openreach should have a tariff—I have been pushing this point for many months—so that it can go to a community and say, “You’re not part of the programme. We have been open in saying that the programme does not yet have 100% coverage, but we will work with you and provide you with a tariff. Crucially, we will work with you physically so that you can undertake some of the infrastructure work.” Openreach is represented in rural communities with many keen farmers with their own equipment who could help, and that would make a huge difference.

[Bill Wiggin]

I should perhaps have mentioned this during my speech, but is the Minister aware that DEFRA has changed the rules for most farmers, so that all their single farm payments will now be made electronically online? Those people cannot always get a signal, so perhaps money could be made available from DEFRA to help with that project, which I welcome.

[Mr Vaizey]

I agree with my hon. Friend. DEFRA put up £10 million at the beginning of this Parliament, which DCMS matched, to help smaller rural and community broadband providers to provide broadband in areas that were not part of the national programme. DEFRA is and will continue to be an effective partner in our broadband roll-out programme, which is developing all the time. I do not want to give the impression that we are doing that on the back of an envelope, because we have a clear programme. It is right for my hon. Friend to highlight the difficulties faced by him, his constituents, and indeed the Prime Minister, but it is also worth stating —perhaps I can turn to the glass-half-full element of the debate—that we are making significant progress.

As my hon. Friend is aware, phase 1 of our rural broadband programme involved a £500 million fund from the Government matched by local authorities and Openreach, to enable up to 90% of premises nationwide to get superfast broadband speeds of at least 24 megabits a second. That programme has already gone out to more than 1.2 million homes. We expect soon to announce the milestone of 1.5 million homes, and we are on course to reach 4 million homes under that programme in good speed. Indeed, in many areas the project is ahead of schedule. As my hon. Friend is aware, in his area about £35 million went into phase 1 of the Hereford and Gloucestershire Fastershire project, covering some 113,000 premises. Latest figures suggest that the programme has already reached 35,000 homes. That figure will be higher by now. The vast majority of those 110,000 premises will be reached this year, although some will be reached in the year after.

My hon. Friend will also be aware of phase 2. We secured an additional fund of £250 million, which was again matched by Openreach and local authorities. In the Fastershire area of Herefordshire and Gloucestershire, that amounts to almost £20 million to target a further 33,000 premises; so, just under 150,000 premises all told in phase 1 and 2, reaching coverage of approximately 93% of all premises in Herefordshire and Gloucestershire.

One important point to make is that, when we have these debates, my hon. Friends and other hon. Members will, understandably, point to where things are not going as well as anticipated and where the problems are in order to highlight those problems. As I say to them again and again, however, we are on the same page. These funds have not come from nowhere. They have not been magicked out of the air in the past week. We recognised, in the very first weeks after the election, that rural coverage for broadband was a big problem. We were not prepared to accept the previous Government’s commitment to provide speeds of 2 megabits under a rural broadband programme. We recognised immediately that by the time the programme rolled out people would be demanding faster speeds. We set a target of 24 megabits, which is more than adequate. Most people nowadays would expect, if they think about how they use broadband—accessing iPlayer, or indeed receiving payments from the rural payments agency—speeds of about 7 megabits or 8 megabits to be more than adequate. We have recognised absolutely the need to provide broadband for rural areas. The programme is, despite some of the critiques that have been levelled at it, going extremely well. We will see even more of a step change this year than there was last year.

The other element of the equation is phase 3—I am still dealing here with fibre broadband, but as my hon. Friend pointed out that is very relevant for mobile broadband coverage—where we have set aside £10 million to test out different technologies. Critics of Openreach will be delighted to know that a number of smaller providers have secured those funds to test out new technologies to reach the very hardest-to-reach premises. When we talk about hard-to-reach premises, we are talking about perhaps a house at the end of a long track, where it would cost £20,000 to £25,000 to provide a superfast broadband connection. In terms of value for money, one could argue whether that is an effective use of taxpayers’ money. If we can find new technologies that would bring down that cost substantially, it is incumbent on us to examine them. Those programmes are under way. We will evaluate them and come up with a sum that we think is adequate to get to our often-stated target of reaching 100%. We have not been specific about when or how much money, but that is our ambition.

[Nigel Adams]

Is the Minister able to enlighten us on possible time scales for the evaluation of those new technologies, which are so important for constituents not just in Herefordshire but north Yorkshire?

[Mr Vaizey]

We are evaluating them at the moment. I hope, certainly by March, that we shall have an indicative assessment of how effective those programmes have been. My hon. Friend took part in the Westminster Hall debate that we held shortly before this debate and compared the area he represents to Herefordshire in terms of rurality. It is also comparable to Herefordshire in being one of the first counties out of the blocks in relation to rural broadband. I am pleased to say that he is doing extremely well, because, in effect, £28 million has been spent in north Yorkshire to bring broadband to his constituents and others, covering 130,000 premises. That programme has ended, as far as I am aware, and we have in fact covered more premises than we targeted—about 141,000 premises have been covered. Another important point to make is that not only is the programme, when it is on the ground and up and running, often going faster than we expect, we often end up covering more premises than we originally targeted. As my hon. Friend the Member for North Herefordshire hinted, there is a difference between desktop research and actually having boots on the ground. I am delighted as well that in north Yorkshire more than £8.5 million is going in to cover a further 20,000 premises.

[Nigel Adams]

I was talking about the last 10%.

[Mr Vaizey]

My hon. Friend knows that even when that programme is complete, given the rurality of his area we will have covered about 92% of the county. We therefore need to find a cost-effective way to reach the last 8%. They are not forgotten; and no premise will be left behind.

I have covered the Government’s position on rolling out rural fibre broadband. As my hon. Friend the Member for North Herefordshire said in his excellent and comprehensive speech, which covered very fairly the Government’s approach to broadband, fibre broadband is essential for mobile coverage, which is why I have spent so much time talking about it. However, we are also focusing on mobile coverage—an issue that has become more and more pressing over the past couple of years.

I can remember getting my first mobile phone. It was actually politics that brought me into the world of mobile phones. When I was selected as the candidate for Bristol, East, I realised I would need a mobile phone to carry out my duties effectively. I do not know whether it was the mobile coverage or my own abilities that saw me turn a 5,000 Labour majority into a 17,000 Labour majority in Bristol, East in the 1997 election, but I remember getting a mobile phone and thinking it was the most extraordinary piece of technology I had ever come across.

The 18 years since have passed in a blur—it is hard to think it is almost two decades since I first dipped my toe in the political waters—and now being without one’s mobile phone is almost like being without one’s left or right arm. Smartphones and tablets—my hon. Friend talked about the tablet Bill Gates introduced 15 years ago—now have the sort of computing power one would have found in a large warehouse computer 40 years ago—somewhere such as the UK Atomic Energy Authority in Harwell in my constituency.

Mobile phones are essential pieces of equipment, and there is no reason why people living in rural areas should not have the same decent service that people get in city areas. However, it is worth inserting a caveat. We must remember that mobile phone companies are private companies. Government Members—and there are only Government Members here today, so we can have a private conversation in which free-market thinking prevails and without anyone taking us on—should applaud this private investment rolling out national networks. It is a highly competitive environment providing low costs for consumers. Indeed, the Government and the taxpayer benefit from the spectrum payments made by mobile phone companies.

A lot of obstacles are put in the way of mobile phone companies rolling out their networks: they have to pay high rents to landlords, they have to get planning permission, and the equipment is expensive. My hon. Friend referred to some of those issues. In particular, he mentioned the electronic communications code, which governs the ability of mobile operators to put up and access masts, and we are keen to press ahead with changes to the code as soon as possible—before the Dissolution of Parliament, I hope.

I would always advise hon. Friends in rural constituencies to work with mobile operators, as my hon. Friend indicated he has done. Sometimes an operator wanting to put up a mast will meet with objection from the local community, and sometimes the landlord will demand a very high rent. I know of one project in the mobile infrastructure project, to which I shall turn in a moment, that was stopped because the community itself objected to a mast, and of another that was stopped because the landlord asked for a sky-high rent. A lot of my hon. Friends can work with their local landowners to ensure, where coverage is bad, that sites could be provided at low cost to the operators, although I am obviously not asking them to give away the value of their land as they are commercial people, just as the operators are.

I shall deal shortly with Fownhope, but as I said earlier, the issue of coverage for mobile phones has become more and more pressing as mobile phones become more and more essential. There is no secret at all here: the Prime Minister was recently moved to comment on the poverty of his mobile phone connection when he was visiting some of the more rural parts of this great country of ours. Hitherto, mobile phone coverage has always been assessed in relation to its coverage of premises, and I am pleased to say that, following the successful 4G auction, all the operators are effectively committed to providing coverage to premises of 98%. Even better news is that while the licence stipulates that such coverage should be completed by the end of 2017, because of the competitive nature of our mobile phone companies, they will all have covered 98% of premises with 4G by the end of 2015—some two years ahead of schedule. In fact, it is safe to say that we have one of the fastest roll-outs of 4G anywhere in the world, and certainly one of the fastest take-ups of 4G.

Premises, of course, are not the same as geography. When my hon. Friend refers to the green, orange and red dots, he means that people are driving around his constituency or indeed walking around it and seeing dropped calls or no coverage at all. That is why, following his meeting with the Secretary of State, the latter was keen to press the mobile phone companies to improve their coverage. In my humble opinion as his junior Minister, I believe my right hon. Friend has secured a landmark deal, which will secure 90% geographic coverage of the UK by the end of 2017. My understanding is that that will get rid of two thirds of not spots, which are what we are talking about when we discuss mobile phone coverage and no operator signal is present.

[Nigel Adams]

The Minister is generous in giving way. This is an incredibly timely debate. Will the Minister remark in his summing up on the fact that 30 years ago last week we had the first ever mobile phone call on a commercial network in the UK? Would it not be nice to think that 30 years on, we would have that 90% or perhaps even more coverage in the UK, given that the technology was rolled out three decades ago?

[Mr Vaizey]

I hear what my hon. Friend says. It is important to note that when the first mobile phone call was made, it was done with a device that was the size of a small brick. Now we have devices that can slip easily into one’s inside pocket and, as I say, they have astonishing computing power. We should be alive to what my hon. Friend says. For example, some people who might have a faux retro nod to the past are keen to go on eBay and buy some old phones such as Nokia ones. They do so for two reasons: one is battery life, but the other is voice coverage. The more sophisticated some phones get, the worse their aerials become. The iPhone that we all have to look cool with and do our e-mails on has a pretty poor aerial, and sometimes the voice coverage we get from our smartphones is not as good as that from a phone that might have been in our pockets 10 years ago.

I hasten to say that I do not want people to take what I just said and run away with it, as I am not recommending that people walk around with a smartphone and a retro phone to cover all the bases, but it is worth noting that sometimes poor coverage, whether it be in using a smartphone or making a call inside an armour-plated Daimler, can be affected by factors other than the proximity of a mobile phone mast.

[Nigel Adams]

I echo what the Minister says, because the best phone I ever had for making phone calls—after all, that is why we bought the things in the first place—was a P3 Nokia phone. I am not sure whether the Minister is old enough to remember the P3.

[Nigel Adams]

We certainly do not still supply them, but I concur with everything the Minister has said.

[Mr Vaizey]

Of course we all fondly remember the old P3 Nokia, and there may well be a market for new retro phones that simply provide good voice coverage.

It is interesting to note the way in which the etiquette of using a mobile phone has changed. Not only am I old enough to remember buying my first mobile phone, but I remember when a previous Conservative Chancellor thought that it was a good idea to levy a tax on mobile phones. As a new technology, they were seen as a scourge, particularly when one was trying to have a quiet dinner in a lovely restaurant and someone was talking on a phone. Now, of course, the etiquette problems are different. There may be a lack of communication between a husband and wife when one of them is using a tablet, or people may be reading e-mails during a meeting when others are trying to have a discussion. Personally, I have moved on from making voice calls. I tend only to text or e-mail, and it is very rare for me to make a call. Perhaps there will not be a market for the retro phone after all.

[Bill Wiggin]

The Minister is lucky to be able to make voice calls, and, indeed, to text. He would not be able to do that if he lived in Fownhope. The biggest robbery of the mobile phone industry resulted from the extortionate 2G and 3G licences that were levied under the last Government, which I believe led to the lack of investment with which we are miserably trying to deal by means of this debate.

[Mr Vaizey]

I hope that I do not become a hostage to fortune when I say that I concur with my hon. Friend. With hindsight, I think that £22 billion was an astonishing amount of money, and the last Government did not use it to invest in digital infrastructure. A much more realistic price was paid for the 4G spectrum that we auctioned recently.

Let me now deal with some of the specific points raised by my hon. Friend. He mentioned, in passing, the mobile infrastructure project. We invested £150 million as a first stab at recognising the problem of poor coverage and not spots. As I have said, both in Westminster Hall and during today’s debate, it has not been smooth running. This is the first time that the Government have been involved in a subsidised project with the mobile phone operators. As 4G was about to be rolled out, we made a 2G project into, effectively, a 4G project. As the case of Fownhope illustrates, another reason for the bumps in the road has been the difficulty of measuring mobile phone coverage objectively.

The aim of the project is to provide coverage for the small percentage of people—0.3% or 0.4%—who currently have none at all. Let me return to my definition of a complete not spot as a place where it is impossible to obtain a signal from any operator. In a partial not spot, coverage can be obtained from one operator, or perhaps two, but not from all of them. The first mast went up in Weaverthorpe, North Yorkshire, in 2013, and we have recently put one up in north Molton, in Devon. In order to assess the not spot data locations, we had to update our original radio plan so that MIP could target true not spot areas. Negotiations are taking place with landlords on 120 sites, and so planning applications have been submitted.

In Fownhope, however, there has been a problem. Ten sites in Herefordshire, four of them in my hon. Friend’s constituency, are at various stages of delivery, including the carrying out of site searches. The mobile infrastructure project had been intended to include the building of a mast to provide coverage for the area, and the delivery contractor, Arqiva, had begun discussions with the planning authority. As my hon. Friend explained, the revised data showed that coverage in Fownhope had improved, although it is not great. There is a handful of not spots on the outskirts of the area, but owing to the small number of premises in a total not spot, it does not qualify for inclusion in the MIP. I know that is disappointing news, as my hon. Friend has made clear, for residents in Fownhope. As I mentioned earlier, mobile phone coverage is a key issue for us. That is why I was so pleased that my right hon. Friend the Secretary of State for Culture, Media and Sport was able to negotiate the deal he negotiated with the operators just before Christmas. That will lead to some £5 billion of investment in mobile infrastructure. Mobile services will come to many areas in the UK for the first time. I also mentioned our planned reforms of the electronic infrastructure code.

Our most recent data estimate that about a quarter of Herefordshire is affected by partial not spots and only a small percentage has no coverage at all. We think that, as a result of that deal, complete not spots in Herefordshire will be eliminated all together, and only 5% will remain in partial not spots. Those improvements should happen over the next three years. Therefore, 95% of Herefordshire should have coverage from all four operators. I hope that my hon. Friend will agree that that is a significant improvement.

My hon. Friend mentioned in passing—he did not dwell on the point—that Ministry of Defence infrastructure exists in his constituency. That point was music to my ears. It reminded me of that well worn phrase “Great minds think alike.” For two or three years, I have been mildly obsessed with the fact that in this country a great deal of digital infrastructure is not joined up. I have finally persuaded the Government to put together a digital taskforce, chaired by my right hon. Friend the Minister for the Cabinet Office. Working with me and some very able officials, he has discovered about 23 different digital projects that the Government are nominally responsible for. We are already making significant savings for the taxpayer, running into hundreds of millions of pounds. More importantly, to address the point that my hon. Friend made, we are joining up those projects—I am not saying we can do this overnight or that the infrastructure in his constituency would be relevant—so that we can use existing infrastructure to upgrade the digital capability of an area. His point is therefore extremely well made and we are looking at the issue.

As for the trial period for mobile phones, it is a good point to make to mobile phone operators—they should give people the chance to try out a phone for a period. There may be commercial reasons why that proves difficult. It may be difficult, if people return a phone, to sell it to another customer. There may be an attrition rate for people who take a phone on a trial period and do not return it. There may be costs associated with trying to track down people who inadvertently do not return the phone.

[Bill Wiggin]

It is not necessarily essential that those people should try the phone. It is the signal that is key, so only a SIM card is required.

--- Later in debate ---

[Mr Vaizey]

I hear what my hon. Friend says. Often people underestimate the ingenuity and entrepreneurship that exist in the House. Perhaps we could together propose to mobile phone companies a SIM card that simply expires after seven days so that people could fit it in their phone to check whether it worked. It should be possible to go on a website provided by the relevant operator to at least have some assessment of whether the area receives coverage from that operator.

Speaking off the top of my head, having a lower tariff in areas with poor coverage strikes me as somewhat problematic. I would not want to be too cynical, but people might suddenly arrive as potential lodgers in rural areas to take advantage of the lower tariff and then merrily use their phone in London for extended periods, so that may be difficult. However, my hon. Friend has an answer to that point.

[Bill Wiggin]

The Minister has just created the most marvellous whip with which to beat the mobile phone operating companies so that people do not do that, because the signal will be just as good in the rural areas. I congratulate him on that brilliant suggestion.

[Mr Vaizey]

I am not sure that that would be the answer that the mobile phone operators wish to receive, but as a former Whip my hon. Friend is keen on whipping the mobile phone operators into shape. He has already done that most effectively with this timely Adjournment debate.

May I conclude by offering a metaphorical hand across the Chamber? I often find myself, both in this Chamber and Westminster Hall, hearing the concerns of both hon. Friends and other Members. My message to them again and again is that the Government have heard these concerns, and what we are debating is not the principle that rural areas deserve better broadband coverage and better mobile phone coverage, but the detail of the implementation. The spirit is always willing, but it is, I am afraid, sometimes the case that the flesh is weak.

Question put and agreed to.