Harland & Wolff
Nusrat Ghani Excerpts(1 year, 1 month ago)
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The Secretary of State for Business and Trade (Jonathan Reynolds)
With your permission, Madam Deputy Speaker, I shall make a statement on the UK shipbuilding firm Harland & Wolff. I am pleased to inform the House that, subject to approvals, a commercial deal has been reached that will protect jobs, drive investment and secure the future of the workforce. The deal will see Navantia UK, a specialist in shipbuilding, purchase all of Harland & Wolff’s shipyards.
As right hon. and hon. Members will know, Harland & Wolff is a major employer in Belfast, with additional important yards at Arnish and Methil in Scotland and Appledore in Devon. For more than 150 years, the firm has built famous vessels for notable shipping organisations and companies, including the Royal Navy, the Royal Mail and the White Star Line. This industry-led deal, which we expect to complete shortly, will secure all four of Harland & Wolff’s shipyards, protecting around 1,000 jobs right across the UK. I hope that this announcement will come as some relief to Harland & Wolff’s employees. I realise that this has been a deeply worrying time for them, and for everyone affected by the continued speculation over the firm’s future. I welcome Navantia UK’s intention to work closely with the relevant unions to protect workers’ existing terms and conditions. That is important for the hard-working employees and communities who have served the firm over many years.
I was first informed that Harland & Wolff was in serious financial difficulty on day one of the new Government. As the previous Government had open-book arrangements with the company, it was clear that the firm had significant and unsustainable debts. Members will be aware that, at that point, Harland & Wolff was seeking a Government guarantee or liquidity loan. Had that occurred, the British taxpayer would have been put at significant risk of losing millions of pounds, without the safeguarding of any yards, jobs or ships. I believe that the possibility of the Government providing such a guarantee or loan, which was much speculated on in the press, was preventing a market-based solution. The former Government’s inability to make a decision left the yards and the workforce in limbo. That is why I made it clear in my first weeks in this job that no taxpayer guarantee or loan would be provided. I was dismayed that when I did so Conservative Members opposed that, knowing as they did that with a guarantee or loan there stood a significant risk of losing an eye-watering amount of taxpayers’ money. That was deeply irresponsible.
Crucially, the deal that has been agreed will secure the delivery of the fleet solid support contract of the Ministry of Defence. The Government have worked closely with Navantia UK on the future of the FSS programme. We have agreed the absolute minimum of changes to the contract to ensure its continued delivery. Navantia UK is the prime contractor of the Team Resolute consortium, which is charged with building three logistics support vessels for the Royal Navy, and it will maintain the required portion of UK-only build as part of this deal. It is also worth saying that FSS is a vital component of the UK carrier strike capability, providing munitions, spares and stores. At a time when strategic alignment with our NATO allies is more critical than ever, the Government fully endorse this deal, which will also see Navantia UK invest significantly on commercial terms in Harland & Wolff shipyards.
Anyone familiar with Navantia UK will know that the firm boasts strong expertise in naval shipbuilding. I am pleased that, thanks to this agreement, it will continue to bring the next generation of technology to its operations here in the UK. This is quite simply a good deal for the Harland & Wolff shipyards, a good deal for its employees, and a good deal for British shipbuilding. It provides the best opportunity to sustain our essential sovereign shipbuilding capacity and capability, now and over the long term. Defence is at the heart of the industrial strategy that we have identified. Defence is one of our eight growth-driving sectors of the UK economy. That industrial strategy is unreservedly and unashamedly pro-business, engaging on complex issues that are currently barriers to growth and investment. National security is one of the foundations of our plan for change. Without it, we cannot deliver on our milestones to raise living standards across the UK, with good, skilled, productive jobs like those at Harland & Wolff.
UK shipbuilding alone supports some 42,500 jobs nationwide and adds £2.4 billion to the economy every single year. We recognise how important it is, as a vital pillar of our civil and defence industrial base. That is why my Department, together with the Ministry of Defence and the National Shipbuilding Office, is doing everything that we can to bolster our world-class shipbuilding industry. That includes the significant progress that we are making on key procurement programmes. We have a major contract with BAE Systems, which has increased the order from three to eight Type 26 anti-submarine warfare frigates on the Clyde, and a contract with Babcock for five Type 31 general purpose frigates at Rosyth. Those projects have already brought significant recapitalisation investment to shipyards throughout the UK, and there are further procurements to be won, ranging from Border Force and local councils to marine in-port service vessels at His Majesty’s naval bases.
The Government are absolutely committed to supporting vibrant, growing and successful shipbuilding and fabrication industries across the country, and I pay tribute to the skilled, diligent workforces who have made these industries what they are today. Thanks to the deal that has been announced, workers in Belfast, Arnish, Methil, Appledore and right across the country can be confident that the Government are squarely behind them, that UK ship- building is secure, and that together, as a United Kingdom, we will lead the sector into a better future. I hope that all workers in all four yards are now able to enjoy this Christmas with their families, as they should. I commend this statement to the House.
Andrew Griffith (Arundel and South Downs) (Con)
I thank the Secretary of State for an advance copy of his statement. The famous yellow gantry of Harland & Wolff stands tall, not only on the skyline of Belfast but in the history of our nation. It is difficult to overstate what Harland & Wolff means to people in the communities of Belfast, Appledore, Arnish and Methil. Extended families across the country will welcome today’s confirmation that the shipbuilding contract that we awarded in government will now proceed. There remain, however, many unanswered questions, which I would be grateful if the Secretary of State could answer. If he cannot answer them at the Dispatch Box today, I would be grateful if he or the Defence Secretary would write in the coming days.
First, at a time of enormous geopolitical uncertainty, can the Secretary of State confirm that there will be no change to the in-service date of the three fleet solid support ships, with the first ship entering service as expected in the fourth quarter of 2028? Secondly, what funding or commitment, if any, has been provided by any part of the Government to Navantia to secure this finalised deal? If so, which budget will that be appropriated from? Has he received state aid clearance for the transaction and, if not, could he clarify the process by which that will now be obtained?
The Secretary of State said in his statement that the Department has agreed the
“absolute minimum of changes to the contract,”
but the statement provides absolutely nothing whatsoever as to what that actually conceals. Can he guarantee, as Navantia promised as part of its original bid for the contract, that no less than 60% of the whole supply chain activity will take place in the UK? Will he confirm that there are no additional work packages beyond those originally envisaged moving from Belfast or anywhere in the UK to Puerto Real in Cádiz? Above all, will he assure the workers and their families who are watching that the final assembly and systems integration, which is where much of the high-value work sits for all three of those vital ships, will take place in Belfast, rather than in Navantia’s parent shipyards in Spain?
The Secretary of State will appreciate that it is sometimes hard, though one tries, to take him at his word after the number of impacts on business over the past few months. The wider context—though welcome in respect of this particular contract and these defence jobs—is the large-scale uncertainty that our defence companies, contractors, workers and employees face about the timetable for the Government to reach 2.5% on defence spending. They do not have the certainty that Harland & Wolff workers now do this Christmas. We do not even have a timeline for a timeline as to when that 2.5% will be hit, and we have seen a degree of equivocation on exactly when the strategic defence review will be published. Again, I would be grateful if the Secretary of State clarified that or if a colleague wrote to me.
It is, at the end of the day, action not words. We welcome this deal for Harland & Wolff and the certainty that it will provide to workers and their families, and I thank the Department officials for their work on that, but there are still many questions to be answered.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call the Secretary of State. Having served in his Department, I too will be paying close attention to the answer.
Jonathan Reynolds
I agree with the shadow Secretary of State on the iconic nature of this business; its role in British history and in the community, particularly in Belfast; and the esteem in which it is held. I do feel he could have thanked us for cleaning up another mess that the previous Government left us, although perhaps that is too much to ask. After all, they could have made the decisions to allow the market-based solution with support from Government that we have been able to achieve. Despite those caveats, I welcome the fact that he welcomed the news and recognised it as a substantial good news story for many workers as we go into Christmas and for the next years.
I turn to the hon. Gentleman’s specific questions. On the delivery of the fleet solid support contract, the issues that the previous Government left us may have some material impact, although there is no large, foreseen delay to the delivery of the project at this stage. On the support to the business, there is no support going directly from Government to the business to subsidise the transaction. There have been amendments to the contracts supported by my Department and the Ministry of Defence. He asked for the details. I will not reveal it in the House because of the commercial sensitivity, but I will find out whether there is a way to share that with him. On whether the deal is compliant with the Windsor framework and our commitments as a country under those arrangements, I am satisfied with all that. Despite the fact that we will always respect those arrangements, we are the UK Government and we make decisions for every part of the UK, with the regulatory approvals, and I seek no one’s permission to be the Secretary of State for Business and Trade across all the UK.
On additional work packages, there are no additional promises from the Government, although he will know that there is a 30-year supply pipeline for shipbuilding in the UK and many opportunities, particularly in sectors such as energy, maintenance and fabrication, and a whole range of functions where Members across the House would want to have a strong, diverse and competitive shipbuilding and maintenance sector.
Finally, on defence spending, the hon. Gentleman had a bit of a try-on. He asked what assurances the sector can have. The biggest assurance I can give is that we only ever hit that 2.5% under Labour Governments. The fact is that we have a Labour Government with that commitment to the defence sector and its role—the ability to deliver maximum economic benefits for the UK, as well as that vibrant and important defence role—and we will continue to deliver on the way to that.
Liam Byrne (Birmingham Hodge Hill and Solihull North) (Lab)
Congratulations to the Secretary of State. This is excellent news for the people of Appledore and of Northern Ireland and for workers across the Harland & Wolff supply chain. He might want to confirm that the peril of providing a Government guarantee was the possibility of entailing a huge payout to a US-based hedge fund, which was the largest creditor for Harland & Wolff. What is happening to the contract value for the FSS deal? It was priced at about £1.6 billion. Has that contract value now gone up? Crucially, what does the Secretary of State envisage for Harland & Wolff after that enormous contract is safely and soundly delivered?
Jonathan Reynolds
I thank the Select Committee Chair for his kind words. I am delighted that we have been able to secure this future for Harland & Wolff. His assessment is right that the largest creditor to Harland & Wolff when we took office was Riverstone, a significant US hedge fund. He is right to say that had we gone ahead with that Government guarantee or loan, there would likely have been no real return to the taxpayer—no guarantee of jobs, shipyards or ships being built. That money would have gone to the creditors. Actually, in the commercial market-based solution that we have been able to broker, all creditors have behaved responsibly, but, understandably, if anyone thinks the Government will come along and give them free money, they will hold out for that option. That was why it was so important to make that decision early on to secure this far better outcome.
On the specific question, and I should have directed my answer to the shadow Secretary of State, the hon. Member for Arundel and South Downs (Andrew Griffith), there is no change to the UK-based content of the contract. As I said in the statement, there have been some changes on commercial terms, although they are relatively minor based on the overall value of the contract.
On the future, I can tell the right hon. Member for Birmingham Hodge Hill and Solihull North (Liam Byrne) that the deal we have brokered guarantees not only all four yards, but the jobs in the Belfast yard for three years and jobs in the three other yards for two years. We therefore have a chance not just for new investment coming into those yards, but for the long-term future to be secured for a pipeline of work and energy and defence contracts, which is a vibrant and successful opportunity for the future.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call the Liberal Democrat spokesperson, who has up to two minutes.
Steve Darling (Torbay) (LD)
This is an outstanding Christmas present for the 1,000 employees from Devon to the Isle of Lewis who will benefit from this decision and the deal that has been pulled off by the Government. In the west country, we have a low-wage economy, and in the Appledore dockyard, which is not too far from my constituency of Torbay, this will go down extremely well, so congratulations are in order. That is in sharp contrast with the failure of the previous Administration on implementing an industrial strategy, supporting our shipping industry and growing our economy over many years. The position that the Conservatives are taking now is utterly shameful. How can we hardwire that long-term support for our shipping industry so that we see growth in this area and support for industries such as steel manufacturing?
Sir Bernard Jenkin (Harwich and North Essex) (Con)
I add my congratulations to the Government for getting this agreement over the line, but when will we get their defence industrial strategy? So far we have had only a rather lengthy statement of intent. We need to reindustrialise our defence industrial base in order to face modern challenges, and that is particularly essential given the threats we face from the east of Europe at this time. That is very difficult to do in government, because the Treasury hates his stuff, as the Secretary of State may already have discovered, but we will hold him to account on what he described as leading this sector into future growth, and indeed on reindustrialising our steel industrial base and so on, so that we have the self-sufficiency that is vital for the defence of the country.
Madam Deputy Speaker (Ms Nusrat Ghani)
I encourage the Secretary of State to be brave in responding to the point about the Treasury.
Jonathan Reynolds
Absolutely, Madam Deputy Speaker. I very much welcome the question and would like to put on the record that I have only good things to say about His Majesty’s Treasury at all times. [Laughter.] It is true; I mean that. The hon. Gentleman is absolutely right to say that there is great imperative—with a particular degree of responsibility in the defence part of the industrial strategy—in the challenges we face. It is imperative not just that we work closely with colleagues in the Ministry of Defence on procurement issues and Government-to-Government sales, in which my Department plays a major role, but that we address wider regulatory issues.
As the hon. Gentleman may know, the Department recently did work on environmental, social and governance criteria to ensure that they do not prevent investment into defence companies. There are issues with small and medium-sized enterprises in the defence sector struggling to access bank accounts—not through a prohibition on defence, but perhaps because of a lack of understanding about such commercial contracts being different from those in other parts of the economy. There are a whole range of issues that we must get right, but I think that, in the main, Members across the House share his aspirations and objectives. He has been a voice of expertise and authority on these issues throughout my time in Parliament, and I am grateful for his engagement on them.
Jonathan Reynolds
I recognise the role that shipbuilding has played in my hon. Friend’s city. I grew up in Sunderland —part of what was once one of the major civil shipbuilding locations in the world—and I recognise the identity and pride that comes with that industrial heritage. In many cases, people feel that it is something of the past, but in this statement we are stressing exactly what she said about the contemporary contribution and the opportunities for the future, about which we should be excited. There are a whole range of increasing needs to shipbuilding expertise, particularly in the energy sector—offshore wind, for example, creates a range of demand for different types of maintenance and supply vessels—so this should be an optimistic story for the future. Sometimes I feel that the wider British public perhaps do not understand the number of jobs or the economic benefit that come from such a sector, so it is always good to make that case from the Dispatch Box—as my hon. Friend does every day from the Back Benches.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call John Cooper, a member of the Business and Trade Committee.
John Cooper (Dumfries and Galloway) (Con)
I congratulate this Front-Bench team and the wider Government on landing this deal in the face of what the Secretary of State has euphemistically called the “headwinds” —I would call them a full-force gale—created by the Budget. Did Navantia raise concerns about the forthcoming Employment Rights Bill? It swings the pendulum very much in favour of trade unions, which, as we know, are very often red in tooth and claw. Was that an issue in landing the deal?
Jonathan Reynolds
I am grateful to my hon. Friend for his comments on the deal and for his observations about the questions from the Opposition Front-Bench spokesman about the 2.5% target. On the modern industrial strategy that we are creating, we have had an incredible response to our Green Paper—some 22,000 individual answers to the questions it asked—showing that there is a huge appetite from industry across the board, both in the UK and abroad, to engage with what the Government are seeking to do. Again, I stress that that should always be on a cross-party basis; there is nothing in that Green Paper that anyone of any political stripe should be able to oppose. It is based on our national interest and the goal of being more competitive and business-friendly, succeeding to a greater degree on the world stage.
This week, we had our first meeting of the Industrial Strategy Advisory Council, with some tremendous representatives with expertise across the board—UK industry, academics and business figures. It is an incredibly exciting time. This is just one component of our growth mission, but clearly an important one, alongside areas of work for me such as the small business plan that we are putting together. I genuinely believe that everyone should be excited about the future.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call Alison Griffiths, a member of the Select Committee.
Alison Griffiths (Bognor Regis and Littlehampton) (Con)
Madam Deputy Speaker, I am sure you will have noticed that the Secretary of State did not answer one question, which was whether he would clarify that the final assembly and systems integration will take place in Belfast, rather than in the Navantia shipyards in Spain.
Future of the Post Office
Nusrat Ghani Excerpts(1 year, 3 months ago)
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The Parliamentary Under-Secretary of State for Business and Trade (Gareth Thomas)
With permission, I will make a statement on the Post Office. Frankly, the Government inherited a Post Office that is simply not fit for purpose, following disinterest from the previous Government, a toxic culture in head office and years of under-investment.
Our top priority remains delivering redress to those affected by the Horizon scandal. We have already taken significant steps to increase the payment of redress, which has nearly doubled under this Government. Let me be clear with the House, though. There are still complex cases to resolve, and we have identified gaps in the compensation process, but we are beginning to make progress. As of 31 October, £438 million has been paid to over 3,100 claimants. In July, we launched the new Horizon convictions redress scheme for victims whose convictions were overturned by legislation, and we have announced our intention to set up an appeals system for the much-criticised Horizon shortfall scheme.
We were clear in our manifesto that we will work to strengthen the post office network in consultation with postmasters, trade unions and customers. The post office network provides critical services that are valued by communities across the whole of the UK. Their essential services go beyond post; they provide access to cash, banking and other financial services too. This Government recognise that access to cash remains particularly important to millions of people across the UK. Through its network of 11,500 branches across the UK, the Post Office continues to provide vital banking services to communities and businesses alike through the banking framework, and to protect access to cash.
I know how highly this House rightly values postmasters and what they provide day in and day out to the communities they serve, but we have to recognise that the Post Office is far from perfect. We have seen this from the evidence given at the inquiry. It is clear that there needs to be a significant cultural change at the Post Office to ensure that it genuinely prioritises the needs of postmasters and delivers customers’ needs far into the future. It is also clear that more needs to be done to rebuild trust within the business and with the public who depend on its services. It is also no secret that the business is facing commercial challenges. Nearly half of its branches are not profitable or only make a small profit from the Post Office business, postmaster pay has not increased materially for a decade, and the company has a high cost base and needs to transform its IT system.
Earlier today, Nigel Railton set out his ambition for the future of the Post Office, in his role as its chair. Postmasters have to be placed front and centre of the Post Office, and we agree that the culture of Post Office headquarters, in particular, needs to change fundamentally to deliver that. As part of this, the Post Office plans to reduce central costs and look seriously at other ways to deliver efficiencies, which should enable real-terms increases in postmaster pay.
Mr Railton’s ambitions are a new deal for postmasters that puts postmasters at the heart of the Post Office. There will be stronger postmaster engagement in the running of the business. As part of this, a new postmaster panel will be established to enable current postmasters to work with the company to improve the support and training provided to postmasters. The Post Office will also set up a new consultative council that will work with the Post Office’s senior management on how these new plans are taken forward, to provide genuine challenge and maintain focus on the needs of postmasters. Mr Railton’s plan seeks to makes changes to the business, with the ambition of significantly increasing postmaster remuneration, and it sets out an intention to transform the service and support that postmasters receive from the Post Office.
No decisions to close any or all of the remaining directly managed branches have been taken. The Post Office will continue to deliver on the 11,500 minimum branches requirement set by Government. We have made it clear to the Post Office that we expect it to consult postmasters, trade unions and other stakeholders before any individual decisions are taken. Aspects of the plans are also subject to Government funding and the outcomes of the upcoming spending review.
Lastly, we have already set out our plan to publish a Green Paper to consult the public on the long-term future of the Post Office, not least on how it should be governed after a decade of decline. Doing nothing at the Post Office is simply not an option. There is more work to be done, but there has to be change. I commend this statement to the House.
Gareth Thomas
I am grateful to the shadow Minister for some of his comments. I am happy to confirm that I will keep the House updated on work around the future of the Post Office, as well as, even more importantly, on the work to ensure that all those sub-postmasters who were the victims of the Horizon scandal get full and fair redress. On that point, I should say at the outset that I have met a series of sub-postmasters who were victims of the Horizon scandal, and each of them certainly left their mark on me. Their stories will stay with me for a very long time, and in that regard I am sure that I speak for the whole House, given the conversations that Members have had with individual sub-postmasters in their constituencies. I am therefore acutely aware of my responsibility, and the Government’s responsibility more generally, to follow through on our commitment to speed up redress.
The number of cases that have been settled with full and fair compensation has nearly doubled in the four months since we came into government, compared with the four months before. We have taken a series of additional steps to try to make it easier for sub-postmasters who were the victims of the scandal to get full and fair redress quickly, not least by fixing some payments for those applying under the Horizon shortfall scheme and similarly fixing some payments under the Horizon convictions redress scheme, which we launched back in July.
The hon. Gentleman’s wider point about the Budget’s impact on the high street sounded like he was replaying his lines from last week’s Budget debate. I recall him being the right-hand man to Kwasi Kwarteng, who helped to do huge damage to businesses up and down the country and helped to drive interest rates to a 16-year high, so I gently suggest that he has more work to do to be convincing on his support for businesses.
I hope the hon. Gentleman is willing to take responsibility for another impact, because more than 9,500 bank branches have closed over the past 14 years, which has had a considerable impact on the future of the high street. With Nigel Railton, our plan is to improve banking services and to roll out banking hubs, which I hope will make a significant difference.
On the Budget more generally, given the financial mess in which the Conservatives left the country and given the lack of money set aside for Horizon compensation, I think the hon. Gentleman should be a little more honest to this House about his responsibility for the scale of the mess we inherited.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call the Chair of the Business and Trade Committee.
Liam Byrne (Birmingham Hodge Hill and Solihull North) (Lab)
Today is the last day of the Horizon inquiry. I look forward to working with you, Madam Deputy Speaker, and with colleagues across the House to explore appropriate sanctions for those who clearly misled us as the scandal unfolded. I look forward to seeing the Minister and the Minister of State, Ministry of Justice, my hon. Friend the Member for Swindon South (Heidi Alexander), before the Committee on Tuesday 19 November to explore how redress payments can be paid faster.
It is surely right that we aim to grow the top line of Post Office businesses, which has to mean that high street banks contribute more to the core business. What steps can the Minister take to ensure this happens?
Gareth Thomas
I welcome that the Committee’s first act is to look at redress for sub-postmasters who were victims of the Horizon scandal. I will happily appear next week to talk through where we are on compensation payments.
My right hon. Friend is right to say that one of the bright spots in the Post Office’s future lies in banking, and the continuing commitment of its sub-postmasters is the brightest spot. With the right support from the financial services industry, there is clearly more that the Post Office could offer on the high street through banking hubs and the post office network. We will work with the Post Office, and the banks have a particular responsibility, given how many bank branches have closed, to work constructively with the Post Office to improve the banking offer on the high street.
Sarah Gibson (Chippenham) (LD)
I also thank the Minister for his statement.
Post Office branches across the UK are a vital part of our local communities and high streets, with millions of people depending on them, especially in more rural areas of the south-west, such as my constituency. The news that 115 branches and around 1,000 jobs could be at risk is extremely concerning. I am pleased to hear the Minister’s reassurances, but the organisation needs reform. Local communities cannot be left without the essential services that post offices offer, especially as we see high street banks disappear. The Government must guarantee that local services and post office jobs are protected.
We also urge the Government to take action to set the Post Office on a sustainable footing for the long term. The Liberal Democrats have put forward a proposal for mutualisation of the Post Office, which would give sub-postmasters more independence and control. We should encourage post offices to play a more active role in our local economies, acting, as Members have mentioned previously, as community banking hubs and Government services hubs.
These post offices are often the only non-digital places where a local community can access Driver and Vehicle Licensing Agency services and passport services, or to prepay for their utility bills. These post offices are essential for some of our more elderly and vulnerable residents.
The Government have announced that they are looking into broader reform of the organisation, and they will produce a Green Paper next year. Will the Minister assure the House that these proposals, including mutualisation and strengthening the services provided by post offices, will be properly considered so that we can ensure post offices are fit for the future?
Madam Deputy Speaker, I have a final quick point—
Gareth Thomas
I underline that no decision has been taken on any or all the directly managed branches. However, these branches cost significantly more to run than those run by franchisees. We have made it clear to the Post Office that, as it reviews these costs, it must talk to sub-postmasters, trade unions and other stakeholders.
The more general point about ensuring that people in rural areas can access a post office branch is well understood within the Department and across Government. There has been no decision to change the commitment to run 11,500 branches or to change the level of Government funding provided to run the network across the country.
I agree with the hon. Member for Chippenham (Sarah Gibson) that the Post Office can do more. That is one reason why we committed in opposition—and are delivering in government—to rolling out more banking hubs, which will be run by the Post Office. She made an interesting point about digital exclusion and the Post Office’s potential to do more in that regard.
Lastly, given my background, I am interested in mutualisation, but I hope the hon. Lady will recognise that there are significant challenges in determining whether mutualisation is a realistic possibility at this stage. One reason for our commitment to publishing a Green Paper next year is to explore these issues in more detail.
Gareth Thomas
I am acutely aware of the responsibility of Government to ensure that every community has access to a post office branch. That is why we are continuing to provide a £50 million subsidy to the Post Office to maintain the network going forward. It is also why we think the Post Office should do more when it comes to providing banking services—it is one of the potential areas for it to grow its business. In that regard, given the retreat of bank branches from constituencies such as my hon. Friend’s, we absolutely think that the banks should work directly with the Post Office to improve the banking offer in all our communities.
Madam Deputy Speaker (Ms Nusrat Ghani)
It would help if the Minister occasionally looked at the Chair and kept his answers short so that we can get everybody in.
Sir Gavin Williamson (Stone, Great Wyrley and Penkridge) (Con)
In my constituency, there is real concern about the loss of more rural and village branches. Can the Minister give us some assurance that he will do everything that he can to preserve this vital link and that he will look at how the Post Office can operate more like a commercial franchise operator, which would support and help postmasters to really maximise their business?
Gareth Thomas
The situation the hon. Lady describes is exactly why I welcome the fact that the new management of the Post Office is putting the issue of sub-postmaster pay front and centre in its thinking. If we do not do something to shift sub-postmaster pay upwards, we will see more sub-postmasters making the sorts of decisions that she describes. We must do something urgently to address this. The Post Office management and chair are rightly homing in on that question as fundamental to the future of the Post Office. As I have underlined, I think there is more that the Post Office could do on banking; that view is certainly shared by the Post Office senior management team, and we are working directly with them to see what more can be done.
Madam Deputy Speaker (Ms Nusrat Ghani)
If everybody gives short questions—and short answers, Minister—we can get this done in the next 15 minutes.
Peter Swallow (Bracknell) (Lab)
My constituents in Crowthorne are rightly proud of our high street, but as there is no direct access on that street to banking services or a post office branch, they struggle to access vital services. Does the Minister agree that today’s announcement highlights the need to roll out more banking hubs, while setting out a viable future for post offices, so that communities such as mine can access the vital services they need?
Pubs Code: Guest Beers
Nusrat Ghani Excerpts(1 year, 3 months ago)
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Ms Minns
I agree with my hon. Friend. From March next year, pub tenants just 700 yards from my constituency will be able to open up a direct relationship with local breweries such as those that my hon. Friend referred to and have beer from small independent breweries served to their customers. The Scottish pubs code, championed by the Labour MSP for West Scotland, who brought it forward as a Member’s Bill, is due to be introduced in 2025. It is similar in many respects to our own pubs code, which governs England and Wales, but for one crucial element. In regulating the relationship between tied pub landlords and tenants, it aims to promote fairness and equitable treatment within tied pub lease agreements. It also allows Scottish pub tenants to enter into a guest beer agreement whereby the tenant can sell at least one beer in any format—including cask and keg —chosen by them at a price they determine. They can change that as frequently as they wish. The beer must be of a brand where less than 5,000 hectolitres—I am reliably told that is about 875,000 pints—was produced in the previous production year. That means that it is beer from small local breweries that qualifies and not that from the larger breweries.
That will empower tenants, allowing them to respond to their customers’ requests, and support small local breweries. Introducing a guest beer agreement in the rest of the UK could be worth £28 million to local breweries. It would widen consumer choice, help landlords and support small local businesses, so I am delighted that the Chancellor and Ministers have been watching developments in Scotland closely and promised in the Budget last month a consultation on ways to encourage small breweries to retain and expand their access to UK pubs. The consultation provides an opportunity to maximise consumer choice and support local businesses by enabling more guest beers. It is an important development, and it shows that the Government want local community businesses to have the opportunity to compete, grow and expand.
As we have heard, 78% of the beer sold in our pubs comes from just five global brewing companies. In comparison, our 1,700 small breweries represent only about 6% of the market. That needs to be urgently reviewed to ensure that there is a level playing field where small businesses can compete fully.
On that point, I congratulate the Society of Independent Brewers and Associates on the launch of its new “indie beer” campaign, which seeks to make it easier for beer drinkers to identify beer from independent breweries in pubs, bars and shops as demand for local beer rises across the UK. Research shows that most beer drinkers are unaware that the mass-marketed craft beer brands that we see in our pubs across the UK are in fact owned by global brewers. A good example of that from my own county is Wainwright beer. Inspired by the chronicler of our famous Cumbrian fells, the name Wainwright is synonymous with the county of Cumbria, and that leads many visitors to believe that they are sampling a locally brewed beer when they come to Cumbria; in fact, it is just one of a range of beers produced by the global beer company Carlsberg. The majority of beer consumers say that they want to buy beer from genuinely independent local breweries. I believe that SIBA’s campaign will help many more do just that.
These issues are wider than just the tenanted pub market, with small breweries facing restrictions in the leased, managed and free house pub markets as well. Perversely, many free houses are not free at all when it comes to beer. Sole supply contracts with global breweries are prevalent, restricting and determining what beers can be sold. Increasingly, these global breweries are also using proprietary equipment in pubs, which prevents a local brewery from even being able to connect their casks to the pub and offer their products to the landlord at all.
Publicans, brewers and beer consumers in my constituency hope that the Minister will be able to start the consultation process as soon as possible. I wonder whether the Minister may be able to offer some clarity on when that might commence, so that all interested parties can have the opportunity to provide their insights and experiences. It would also be appreciated if he could confirm that this will include issues experienced right across the UK, including in England, Wales, Scotland and Northern Ireland. Will it also look at the whole pub market, including tenanted, leased, managed and free houses? Will it include both keg and cask draught beer, which is predominately sold in our pubs?
Finally, will the Minister look closely at the Scottish guest beer agreement to see whether its provisions could be included in our own pubs code for England and Wales, perhaps as part of the statutory review of the pubs code, which I understand is due next year? Should the Minister ever find time in his busy diary, I would like to invite him to visit my constituency to meet some of my local breweries and to join me for a drink—albeit not a locally brewed one—in the Border Reiver, the last pub in Britain to have been designed, funded and built by the UK Government.
Madam Deputy Speaker (Ms Nusrat Ghani)
Before I call the Minister, I have been updated on the recent wedding this weekend of the hon. Member for Inverclyde and Renfrewshire West (Martin McCluskey). I congratulate him, and I understand that his husband Ben has been waiting quite some time to see his new husband. That is some pressure for the Minister.
Budget Resolutions
Nusrat Ghani Excerpts(1 year, 3 months ago)
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Dr Opher
I understand that it will be mitigated through funding. I am not exactly sure how, but I have no doubt—[Interruption.] That is because I have not been informed, but I have no doubt that it will be coped with. I know that this Government will rebuild general practice, just as the Conservative party trashed it and broke the back of it. I am not taking any criticism from any of you about the NHS.
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. Please be seated. You are not taking any criticism from me. You said “you”. Please do not refer to colleagues as “you”.
Dr Opher
Sorry. I did get rather angry there, and I shall not get angry any more.
Let me talk about GP access. We need to get doctors, not receptionists or 111, to perform triage, and we need to start thinking in a different way. We do not want a protocol-driven NHS; what we need is a genuine doctor-patient relationship. We also need to develop neighbourhood—
Graham Stuart
No, it is relevant here. I wonder whether it is in order for the hon. Gentleman to have been given assurances by the Government that funding will be put in place to mitigate the impact on GPs, because that information has repeatedly been refused to this House. I know, Madam Deputy Speaker that you represent all Back Benchers, like me, in making sure the truth is out.
Madam Deputy Speaker
You can definitely raise that in your contribution later. It is not a point of order for the Chair, but no doubt the Minister and Front Benchers have heard and can respond accordingly.
Dr Opher, you will shortly run out of time, so I would be quick.
Dr Opher
Okay. I worked in general practice for 30 years. There is always mitigation for tax changes, and I have no doubt that the Government will look after GPs.
Ben Maguire
Bank shares are soaring following this Budget. Does my hon. Friend agree that the Liberal Democrat proposal to reverse the Conservative Government’s cut to the big bank levy, raising around £4 billion a year, would mean that we would not need the GP tax, the family farm tax or the winter fuel cut and that we could fund upgrades to the Treliske, Derriford and North Devon hospitals—
Martin Wrigley
My hon. Friend is absolutely right: there are other ways that this money could have been found. The Liberal Democrats have long been saying that we should be looking to the banks, the big oil companies and the big international tech companies to pay their fair share, and that is where money should be sought.
There is nothing in the Budget for Devon’s essential transport. Last year’s pothole fund was a “drop in the ocean”, according to Devon County Council, and the 50% increase in this Budget still leaves a big hole. Not even mentioned in the Budget is the completion of the Dawlish rail resilience project, which is key to connecting the south-west. Without funding, the design team will soon be redeployed and all the progress to date will be lost. This project will cost millions more if it is not done now, and I urge the Minister to meet us to get it funded. Growth in the economy in Devon and Cornwall is heavily dependent on fast, reliable train services, and we saw what happened with Dawlish.
The Budget also mentioned housing and local government. Until July, I was leader of my district council, and I am proud that the Lib Dem administration started building council homes—the first in 30 years. They were cheap to rent and cheap to heat because they were well insulated and powered by air source heat pumps and solar power. Additional capital for social homes is welcome, but the frozen local housing allowance hampers housing associations that have already scaled back their plans for development, and commercial developers will still try to cut affordable homes from section 106 responsibilities.
The Budget also offers 300 new planning officers, but those are spread very thinly over the 326 planning authorities. Newton Abbot’s social housing need has increased by 50%. In my constituency—like in Ely—the average house price is 11 times the average earnings and rents have soared. The broken housing market is failing Newton Abbot, and the proposed changes to the planning rules are insufficient to fix it. Homes are unreachable for too many families. People are being denied the right to a safe and secure place to call home.
I welcome the multi-year settlements for councils and the removal of the “Hunger Games”-style bidding for grants involving huge amounts of wasted efforts writing bids and unachievable timeframes. We cannot let that centralised control continue. We need real devolution, but devolution is not just reorganisation—
Rosie Wrighting (Kettering) (Lab)
Like many of my hon. Friends, I have spent my career in business—specifically, in retail head offices—so I am proud to be a part of a Government that is pro-business and pro-worker. The last time a Labour Government delivered a Budget in this House, I was 12 years old. That Labour Government looked after our public services, focused on cutting crime, were ambitious about our education and invested in our NHS. It is because of those decisions that I had the opportunities that I did and that I am standing in this House today. Since then, those priorities have been forgotten and our constituents have had to bear the brunt.
People in my constituency of Kettering know all too well the price they have paid for the last 14 years of Tory failure: crumbling hospitals and schools, rising crime and a crisis in SEND. Working people in this country have not had a Government who have worked for them for 14 years. It is shameful that the previous Conservative Government promised funding that simply did not exist. They let our communities think that they were going to receive money, knowing that it was not there and that it would be someone else’s problem after the election.
We now finally have a Labour Government and a truly Labour Budget that prioritises working people. It is incredible to be the youngest woman in the House today, but it is even more incredible to have watched the first female Chancellor deliver the first Labour Budget in 14 years. It shows me and many young women that there is no limit to our ambitions. Regardless of what the Leader of the Opposition thinks, this was a glass ceiling shattered.
There are some hugely important measures in this Budget for the people of Kettering. Our public services deserve better than the treatment they have had for the last 14 years, and I am proud to be part of a Labour Government who are fixing the foundations and rebuilding Britain. People all over the country are waiting to see what this Government will deliver and, thanks to this Budget, we can give them hope that they will have an NHS fit for the future and a country that invites investment, without barriers to opportunity, and in which working people are at the heart of everything we do.
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. To ensure that I can get in as many people as possible, there should be no further interventions.
Catherine Atkinson (Derby North) (Lab)
My constituents go to work to make trains, planes and automobiles at Alstom, Rolls-Royce and Toyota, and they work in their supply chains. This Budget delivers ambitious plans for rail infrastructure, nearly £100 million in R&D funding for aerospace, and £2 billion to support the automotive sector. To get to work, many of my constituents commute; 1.2 billion vehicle miles were travelled on Derby’s roads last year. The fuel duty freeze and the extra half a billion pounds to fix potholes are hugely welcome.
My constituents teach and learn at our great university and schools. They treat others and are treated at the Royal Derby hospital. They work in our shops and restaurants, and on the building sites where the regeneration of our city is taking shape. We in Derby are laying the foundations for growth—literally. Building is under way on a new university business school, a new mental health unit at Kingsway and a new performance venue at Becketwell. At Friar Gate goods yard, which has stood derelict for over 50 years, new homes and businesses are being built. There is also investment in our theatres—£20 million of funding that this Budget underwrites.
We needed and got a Budget that supported our ambitions. Last week, I went from the Budget statement to a meeting of small businesses in my constituency, which was organised by the Federation of Small Businesses. We discussed how this Budget will grow the cake, from investment in skills and reform of business rates to the approval of the east midlands investment zone and start-up loans. This is a Budget that is, at last, honest about the public finances being in a mess, and we have made tough decisions so that our businesses can have the stability and certainty they need.
To rebuild Britain, however, we also need to reset the broken contract with working people. For 14 years, in Budget after Budget, from austerity to Liz Truss’s mini-Budget, working people were barely offered crumbs from the table, while productivity and growth flatlined—but no more. Working people now have a proper seat at the table. The minimum wage will increase from £11.44 to £12.21 an hour next April, which will affect one in 10 Derby North workers. For 18 to 20-year-olds, there will be a 16% increase to £10 an hour. Derby has the second highest average salaries outside London, so for those moving on with their careers, there will be a rise in the income tax and national insurance contributions thresholds from 2028-29. Finally, investment—
Sam Rushworth (Bishop Auckland) (Lab)
The Conservative party was keen for us all to declare our membership of trade unions in the debate on the Employment Rights Bill, so we should probably all declare that most of us received funding from businesses during the general election campaign. I certainly did, and I pay tribute to the small businesses in my constituency. Some 89% of them are considered microbusinesses with fewer than 10 employees, so the majority will pay less national insurance under this Budget. I thank the Chancellor for protecting working people and small businesses.
Listening to Conservative Members, as we have been doing for the past five hours, it seems that many of them see the business community as caring about nothing but quick profits and avoiding tax, but the local businesses that I speak to are proud not only to deliver quality products and services, but to create good jobs and strengthen the local economy. They have been doing that in trying circumstances, and many of them have supported Labour candidates at this election because they want a Government who match their ambition. When I ask them what they want to see from Government, they say they want not only a fair tax system but investment, and that is what this Budget delivers. They want a secure power supply. They also want faster planning decisions, including the young farmer who came to see me because he has been pushed back for two years now in his attempt to just build some pig pens.
The biggest barrier, however, is that businesses cannot get the staff, and this is true from manufacturing to hospitality. Britain is held back by a skills shortage, so I welcome a Budget that will invest in Britain’s most precious, productive asset: her people. When we invest in faster NHS appointments, in emergency dentistry, in mental health, in SEND provision, in specialist teachers in STEM subjects and in childcare, we invest in business too, because these are the people who will rebuild Britain.
The people of Durham have been held back for too long. In the past 14 years, our life expectancy has fallen behind. Our children are shorter, and the number of children in care has increased by 250%, so we can see the impact of austerity in people’s bodies and family life. I welcome a Budget that has brought the end of austerity and begun the long, hard job of rebuilding this country. I also welcome a Budget that has put more money in people’s pockets, including by honouring the triple lock, which the Conservatives failed to do in 2022, costing pensioners in my constituency £488.
Madam Deputy Speaker (Ms Nusrat Ghani)
We come to the final Back-Bench speaker, Patrick Hurley.
Patrick Hurley (Southport) (Lab)
When I stand to speak in this House, I often criticise the former Government, and to be fair, there was a lot to criticise, but Liz Truss at least got one thing right. She claimed to make economic growth the driving force behind her plans, but while Truss took a reckless big-bang approach to tackling the stagnation that this country has experienced since 2010, our focus is on long-term investment, not short-term tax cuts. This speaks to one of many big problems with recent Tory Governments—a problem that any business owner in this country could tell you about. It is all about return on investment. Over the last 14 years, there has been too little return because there has been too little investment. To combat that, we have secured £63 billion in private investment, and we have put £2 billion into electric vehicle development. I note, too, that the UK Space Agency says that the space industry is worth £17 billion a year to our economy. It is no doubt helping to ensure that we get early warning of any new super-massive black holes we might not be aware of.
This Budget is the beginning of the change our country voted for. It will make Britain better off; there will be more money in people’s pockets, an NHS that is there when people need it, businesses creating wealth and opportunity for all, the house building that we need, the transport infrastructure that we are crying out for, wages that make work pay, and a state pension that is uprated as it should have been all along. This is a Budget of change, a Budget of investment and growth, a Budget to put more money in working people’s pockets, and a Budget to get our public services back on their feet. It is the most welcome Budget for many years—a Budget in line with the values of the British people. I am proud to support this Labour Budget.
Tulip Siddiq
The right hon. Gentleman has intervened 18 times. I shall not give him another chance.
Let me continue. That is the only way that we can really fix the foundations. Of course, that involves taking tough decisions, particularly on spending and taxation, but I will take no lectures from those who were content to levy a £22 billion pound tax on this country’s future, and, through their unfunded spending commitments, attempt to undemocratically bind the hands of a future Government. Well, guess what? This Government will do things differently. While the previous Government allowed investment in our country to fall to its lowest level on record, this Government will put investment at the heart of everything that we do.
That is why we held the international investment summit in October—to show firms at home and abroad that Britain is open for business once more. That is why we have introduced a new fiscal rule—the investment rule—which, alongside appropriate guardrails provided by the OBR and our new stability rule, means that this Government can meaningfully invest in our country’s future.
Of course, investment means taking a long-term view. As anyone who has bought a property, built a business or raised a family will know, the early days are always the hardest. But if they take the hard calls now, in time they will get back far more than they put in. I pick those examples deliberately, but with regret. The sad truth is that, for working people—particularly young people—up and down the country, home ownership, entrepreneurship and starting a family have never been more distant. This Budget will start to change that.
Our manifesto made a clear commitment to get Britain building again. This Budget puts the first shovels in the ground, with a commitment to spend an average of 2.6% of GDP on public sector net investment over the course of this Parliament. This will include an additional £500 million in new funding for social and affordable homes, which brings total investment in housing supply to more than £5 billion and supports the delivery of tens of thousands of new homes.
We will build more than just homes; we need to build communities. Infrastructure is key to tying those communities together while ensuring that they plug into the wider economy. [Interruption.] The shadow Foreign Secretary asks how. If she listens, she will learn, so she should pay attention. Getting our country moving again will be key to growing the economy. [Interruption.] She should not chunter from the Front Bench. She needs to listen, because our commitment to infrastructure investment will help us to do so—by, for instance, increasing local roads investment by £500 million in 2024-25. These are the things that the previous Government failed to do, but we will deliver for our country. For working families, that means less time wasted dodging potholes and more time for the things that actually matter. Of course, infrastructure helps not just families but firms. In an increasingly volatile world, Government should play an important role in securing our energy supply so that firms can price that into their business plan.
We heard powerful and authentic maiden speeches today from my hon. Friends the Members for North Ayrshire and Arran (Irene Campbell), for Stoke-on-Trent North (David Williams) and for Sherwood Forest (Michelle Welsh). We will see them as huge assets to Parliament. Some of them mentioned that their families did not think that they would get here; I am really pleased that their families were wrong.
I will finish by echoing something that the shadow Minister, the hon. Member for North Bedfordshire (Richard Fuller), said. It is not often that I agree with him, but he said that we had choices. The truth is that we did have choices, and guess what? We chose to act. In 10 years’ time, the country will look back on this Budget as the moment when we got Britain’s future back. In the future, the economy will have grown because at this moment we chose to prioritise a healthy workforce; we will have record levels of investment because we prioritised fiscal and economic responsibility; and people will have more money in their pockets because we prioritised protecting hard-working people’s payslips. The merry-go-round of austerity and economic irresponsibility is over. We made a choice—a choice to rebuild Britain.
Question put and agreed to.
Resolved,
That income tax is charged for the tax year 2025-26.
And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
Madam Deputy Speaker (Ms Nusrat Ghani)
Let me explain what will happen next. I am now required under Standing Order No. 51(3) to put successively, without further debate, the Question on each of the Ways and Means motions numbered 2 to 62, and the money motion on which the Finance Bill is to be brought in. These motions are set out in a separate paper distributed with today’s Order Paper.
The Deputy Speaker put forthwith the Questions necessary to dispose of the motions made in the name of the Chancellor of the Exchequer (Standing Order No. 51(3)).
2. Income tax (main rates)
Resolved,
That for the tax year 2025-26 the main rates of income tax are as follows—
(a) the basic rate is 20%,
(b) the higher rate is 40%, and
(c) the additional rate is 45%.
And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
3. Income tax (default and savings rates)
Resolved,
That—
(1) For the tax year 2025-26 the default rates of income tax are as follows—
(a) the default basic rate is 20%,
(b) the default higher rate is 40%, and
(c) the default additional rate is 45%.
(2) For the tax year 2025-26 the savings rates of income tax are as follows—
(a) the savings basic rate is 20%,
(b) the savings higher rate is 40%, and
(c) the savings additional rate is 45%.
And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
4. Income tax (starting rate limit for savings)
Resolved,
That—
(1) For the tax year 2025-26 the amount specified in section 12(3) of the Income Tax Act 2007 (the starting rate limit for savings) is “£5,000”.
(2) Accordingly, section 21 of that Act (indexation) does not apply in relation to the starting rate limit for savings for that tax year.
And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
5. Income tax (appropriate percentage for cars)
Resolved,
That (notwithstanding anything to the contrary in the practice of the House relating to the matters that may be included in Finance Bills) provision may be made taking effect in a future year increasing the appropriate percentages mentioned in sections 139 to 142 of the Income Tax (Earnings and Pensions) Act 2003.
6. Capital gains tax (the main rates)
Question put,
That—
(1) In section 1H of the Taxation of Chargeable Gains Act 1992 (the main rates of CGT)—
(a) omit subsection (1A) (which sets out the rates for residential property gains accruing to individuals),
(b) in subsection (3) (which sets out the rates for gains accruing to individuals that are not residential property gains or carried interest gains)—
(i) for “10%” substitute “18%”, and
(ii) for “20%” substitute “24%”,
(c) omit subsection (4A) (which sets out the rates for residential property gains accruing to personal representatives),
(d) in subsection (6) (which sets out the rates for gains accruing to personal representatives that are not residential property gains or carried interest gains), for “20%” substitute “24%”,
(e) omit subsection (7) (which sets out the rates for residential property gains accruing to trustees), and
(f) in subsection (8) (which sets out the rates for gains accruing to trustees that are not residential property gains or carried interest gains)—
(i) omit “Other”, and
(ii) for “20%” substitute “24%”.
(2) The amendments made by this Resolution have effect in relation to disposals made on or after 30 October 2024.
(3) If an asset is transferred on or after 30 October 2024 under an unconditional contract made before that date, the disposal is, despite section 28(1) of the Taxation of Chargeable Gains Act 1992, to be treated for the purposes of the amendments made by this Resolution as taking place at the time the asset is transferred (rather than at the time the contract is made) unless the contract is an excluded contract.
(4) A contract is an excluded contract if—
(a) obtaining an advantage by reason of the application of section 28(1) of the Taxation of Chargeable Gains Act 1992 was no purpose of entering into the contract, and
(b) where the parties to the contract are connected persons, the contract was entered into wholly for commercial reasons.
(5) A contract is not to be regarded as an excluded contract unless the person making the transfer makes a claim which includes a statement that the contract meets the conditions to be an excluded contract.
(6) But no claim is required if the total amount of—
(a) the chargeable gain accruing on the disposal, and
(b) the chargeable gains accruing on all other disposals made under excluded contracts, does not exceed £100,000.
(7) For this purpose the amount of any gain accruing on a qualifying business disposal is to be taken to be the amount of the gain under section 169N(2) of the Taxation of Chargeable Gains Act 1992.
(8) If the person making the transfer makes—
(a) a claim under section 169M of the Taxation of Chargeable Gains Act 1992 in relation to a qualifying business disposal (business asset disposal relief), or
(b) a claim under section 169VM of that Act (investors’ relief) in relation to a disposal, section 169M(2) and (3) of that Act, or (as the case may be) section 169VM(1) and (2) of that Act, apply to a claim under paragraph (5) in relation to the disposal as they apply to a claim under the section concerned.
(9) In this Resolution “qualifying business disposal” has the meaning given by Chapter 3 of Part 5 of the Taxation of Chargeable Gains Act 1992.
(10) In this Resolution any reference to the transfer of an asset includes its conveyance.
And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
Post Office Horizon: Redress
Nusrat Ghani Excerpts(1 year, 5 months ago)
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The Secretary of State for Business and Trade (Jonathan Reynolds)
With your permission, Madam Deputy Speaker, I would like to update the House on the Government’s response to the Horizon scandal. How appropriate it is to see you, a former Business and Trade Minister, in the Chair.
My priority as the new Secretary of State is to ensure that victims of the scandal receive the redress that they deserve. Over the past few weeks, I have begun meeting with some of the postmasters whose lives have been so badly damaged by those events. Their stories are harrowing, but their resilience and steadfastness in seeking justice are inspiring. I am also grateful for their candour in sharing insights on how the various compensation schemes can be improved.
May I make a personal point, Madam Deputy Speaker? I know I speak for hon. Members across the House when I say that it fills me with sadness to have to stand here today and address such a significant failure of the state. The role of Government must be to do right, seek justice and defend the oppressed, yet Governments have too often had to be forced into action by brave, tireless and resilient campaigning. Once again, I pay tribute to the Justice for Subpostmasters Alliance, and to campaigners such as Jo Hamilton, Lee Castleton and Sir Alan Bates—incidentally, I add my personal congratulations to Sir Alan on his recent wedding. Without their tireless efforts, justice may well never have been done in this case. As we stand here today, in the shadow not just of this scandal but those of Grenfell, infected blood and several more, I know that it is the firm conviction of everyone in this House that we must do better. This is an issue not of politics but of justice.
In that spirit, I cannot speak of the new Government’s work to address this wrong without again acknowledging and appreciating the work of Lord Arbuthnot and the new Lord Beamish—formerly the Member for North Durham—as well as that of my friend the hon. Member for Thirsk and Malton (Kevin Hollinrake) as Minister. The announcements that we make today are built on their efforts to hasten redress payments and quash wrongful convictions.
Earlier in the summer, the new Government announced the launch of the Horizon conviction redress scheme. I am pleased to report that the first payments have been issued and good progress made on processing the claims received to date. As was the case for the group litigation order compensation scheme, the Department will be setting a target to make, within 40 working days, the first offer to 90% of those who have submitted a full claim. Additionally, the Post Office has now settled over 50% of cases on the overturned convictions scheme, with 57 out of 111 cases fully settled. The Department has also now received over 50% of GLO claims and settled over 200 of them.
Progress has also been made on implementing the £75,000 fixed-sum awards on the Horizon shortfall scheme. As of 30 August, over 1,350 claimants who had previously settled below the £75,000 threshold have been offered top-ups to bring them to that amount, and the Post Office will shortly begin making fixed-sum offers to new claimants. Those interventions will have a significant impact on ensuring that postmasters can access redress swiftly and simply. However, we recognise that this option will not suit everyone and does not address all the concerns raised by postmasters and their representatives. That is why we are taking further action today.
The Horizon compensation advisory board recommended last year that we introduce an independent appeals process for the Horizon shortfall scheme. Today I am pleased to announce that we have accepted that recommendation. That appeals process will enable claimants who have settled their claim under the HSS to have their case reassessed, with the benefit of any new information that they were not able to include in the original application. It will be delivered in-house by my Department, and we will apply the lessons learned from redress schemes to date to ensure that the process is easy for postmasters to engage with and that outcomes are delivered at pace. We will announce further details in the coming months.
There will be no obligation for postmasters to appeal their settlement, and no doubt many will be content that their claims have been resolved fairly. I know that financial redress will never fully compensate victims for their suffering, but we want to help bring some closure to postmasters as soon as we can, which is why we will establish the new appeals process as quickly as possible.
In summary, the new Government will do everything in our power to deliver justice for postmasters, to bring them closure and to ensure that such a national tragedy is never allowed to happen again. I commend this statement to the House.
Madam Deputy Speaker (Ms Nusrat Ghani)
No doubt that statement will mean a lot to many constituents, including those in my constituency of Sussex Weald. I call the shadow Secretary of State.
Jonathan Reynolds
I am grateful to the hon. Member for his response, and for the tone and collaboration that we tried to model when we were sitting in opposite places in this Chamber. I believe that helped advance what was a difficult piece of legislation to put on the statute book, particularly during a wash-up process, but was the only real vehicle for delivering what we all wanted to see. He has asked me a number of questions; all are absolutely reasonable, and I am happy to respond to them.
In a situation where someone has already received a top-up to £75,000, the hon. Member is right to say that the appeals scheme would not be available. It is a choice between the two best methods of redress and satisfaction for the postmaster. I recognise what the hon. Member has said—that, given the issues with the speed of delivering redress, having that system clogged up would not be satisfactory to anyone—but I think that both options represent reasonable ways forward for people who are in that position.
The hon. Member asked specifically about the remit of the appeals scheme, and I have listened to what he said. The reason we are announcing today that we will take this scheme forward, but will then consult with postmasters to make sure the eligibility criteria are correct—he asked about the timeline, which is just a matter of months—is to make sure that we do not have to revisit the scheme, and can all be satisfied that crucially, postmasters themselves have confidence in it. That is the intention, so I am grateful to the hon. Member for his comments about the remit of the scheme.
The hon. Member asked about legal representation. Yes, that is part of the scheme, again learning lessons from where we have been in the past. As he knows, most of the schemes have now been adjusted to reflect that, but I absolutely take his point about new announcements.
I want to be clear about the difficulty that has existed with the Horizon convictions redress scheme. To update the House, I will give the hon. Member the figures: so far, 180 letters have gone out from the Ministry of Justice. Including those letters and the people who have registered with the Government who perhaps have not all received a letter yet, there are now 276 claimants. I will make the appeal again: while we are doing everything we can with Ministry of Justice colleagues to make sure those letters go out, people can proactively register with the Government. To be frank, this has been a frustration. When the hon. Member and I were having our conversations when we sat in different places in the Chamber, neither of us perhaps knew the state of the database and the records, and—having passed the legislation—the frustrations we would face in getting to people. However, doing so is clearly integral to sorting this out.
Finally, the hon. Member asked about the scheme reviewer. If I may, I will come back to him on that; I will write to him to tell him the up-to-date situation.
In summary, I say again that we will work with all parties and all postmasters to get redress at pace, and to learn the lessons from where things have not gone well in the past, to make sure new announcements carry the confidence of the people who really need to have confidence in them.
Madam Deputy Speaker (Ms Nusrat Ghani)
Members should continue to bob if they want to be called. I am going to call everybody, as I know the Secretary of State also wants to respond to everybody. I call the previous Chair of the Business and Trade Committee.
Liam Byrne (Birmingham Hodge Hill and Solihull North) (Lab)
I add my congratulations to Sir Alan Bates and Lady Suzanne on what looked like a very happy day.
I welcome what the Secretary of State has set out for the House this afternoon. When our Select Committee reported back in March, we said that trust in the Post Office was fundamentally broken and that the appeals scheme needed to be independent. This is an important step in that direction, but sub-postmasters have told me this morning that there is still a problem with the time it takes to get offers back when an offer is contested. The claimant’s lawyers have a fixed amount of time to put in a claim; when that claim is contested, it is taking far too long for Addleshaws, in particular, to come back and provide a second offer. What comfort can sub-postmasters take from the Secretary of State’s announcement today? This whole House agrees that justice delayed is justice denied.
Jonathan Reynolds
I am grateful to my right hon. Friend, who will, I hope, see his work as Chair of the Select Committee reflected in this announcement—specifically, that we are setting the target to issue initial offers to 90% of claims within 40 working days of receiving a full claim. On the point of how that is defined, a full claim is one where, following legal assessment, it is deemed that it does not require any further evidence to assess the claim further. Once that is in, the targets, which his Select Committee rightly called for to make sure redress is delivered at speed, are part of this process.
Tim Farron (Westmorland and Lonsdale) (LD)
I thank the Secretary of State for sight of the statement and, indeed, for his decision to come to the House at this early stage to update us on progress.
I think it is worth saying that we are dealing with a catastrophic injustice that has affected hundreds upon hundreds of families—people who have paid with their livelihoods and, in some cases, tragically, with their lives. There is a complete lack of trust in Government, of whatever political colour, over the last 20 or so years because of this. That is why his answer to the questions raised already about the number of sub-postmasters who have been paid interim payments—only six, on the last data available, under the Horizon convictions redress scheme—is such a key issue. Likewise, as we have heard, the latest data show that fewer than one in six wrongly accused sub-postmasters have received letters confirming the quashing of their convictions.
Given this lack of trust—this mistrust—in Governments of whatever kind and in the Post Office management as a whole, would the Secretary of State also turn his thoughts to rebuilding trust in the Post Office management and in the network in the long term? In the eyes of the public, the brand of the post office is solid, but in the eyes of those who work in the industry and those who may come in as sub-postmasters, it is far less so. We were delighted in my constituency recently to see the reopening of post offices in Shap and Kirby Stephen. It was wonderful to see those two reopenings, but in Grasmere, Hawkshead and Stavely we are without post offices. In all three of those cases, it is in part because the former sub-postmaster, while not always directly affected by the Horizon scandal, but with disgust at the Post Office management, has left the industry and left those villages without a post office.
What can the Secretary of State say to this House and to the current cadre of sub-postmasters, and those who may want to join that cadre, to encourage them? Will he focus on pastoral care, financial support and other things that will bring about a package of inducements and enticements, so that those people who have felt let down so badly by Post Office Ltd management over the last 20 years will feel that the Post Office is something they can commit their lives to for the good of our communities and country as a whole?