British Bioethanol Industry

Phil Wilson Excerpts

Wednesday 16th January 2019 Westminster Hall

[Nic Dakin]

I know.

[Phil Wilson (Sedgefield) (Lab)]

I congratulate my hon. Friend on securing this debate, which is really important for Teesside and the south Durham area. I want to raise an issue about farming. The National Farmers Union has put out a report on the importance of bioethanol. My constituency covers 150 square miles and is an agricultural area of County Durham. Does my hon. Friend understand what the NFU has briefed on the implications of this for climate change? It could lead to 700,000 cars being taken off the road. We require an infrastructure that can secure that, especially in the agriculture industry, where we can grow the appropriate crops for this kind of industry to prosper. We are missing an opportunity should we not invest in it.

[Nic Dakin]

My hon. Friend makes the point very well and begins to answer the question from the hon. Member for Henley (John Howell) about the 700,000 cars that would be taken off the road if E10 were introduced, and on the impact on both air quality and carbon reduction. The bioethanol industry makes an important contribution to farming across the country.

In 2005, the Labour Government gave a very clear message to investors that they would support a substantial growth in demand for renewable fuels, announcing that 5% of petrol sold in the UK would come from renewable sources by 2010. The subsequent coalition and Conservative Governments retained these commitments. On the back of that, large scale investments of over £1 billion were made to ensure that the UK could produce high-quality and sustainable bioethanol to meet forecast demand. During the following decade the Government reduced target levels for renewable biofuels while addressing questions on the sustainability of biofuels. The installed capacity, which was put in place to meet the Government forecast of demand, was substantially higher than demand. Producers have suffered regular and sustained losses, which have led to recent plant closures. Higher demand has not materialised, because at present only E5 petrol with a 5% blend of bioethanol is available at British petrol stations, which is insufficient to support a viable British bioethanol industry as it currently exists.

There have been signals from the Department for Transport that suggested that E10 would be introduced imminently, giving the sector further false hope. The Department’s transport energy taskforce recommended lifting the blend level and reintroducing E10 in 2020. The industry interpreted that as meaning that the Government were fully behind it. Nearly four years on, the Government have still to act on that recommendation.

The Minister’s Department issued a consultation and call for evidence on E10 in June last year. The consultation closed in September, but the Department has yet to publish its response to the submissions. Unfortunately, the consultation did not propose to mandate the introduction of E10. Instead, it proposed the introduction of a protection grade requirement to ensure the continued availability of E5 petrol, representing 95% of all petrol sold today. If implemented, that may be a disincentive to move to E10.

European Union (Withdrawal) Act

Phil Wilson Excerpts

Thursday 6th December 2018 Commons Chamber

[Phil Wilson (Sedgefield) (Lab)]

We all know, whatever our views on Brexit, that this is a moment of history critical to the future of our country. I think of my children and my grandchildren and their future in a world that is becoming more uncertain, from climate change, to globalisation, to international terrorism, to the threat of countries like Russia—and into this pot of international and global uncertainty, we throw Brexit. At a time of international political divergence when our global institutions and alliances that have been the foundation of the rules-based order are in question, we decide to break away from one of those economic unions because of nationalistic politics and fantasy economics pedalled by populists, many of whom cannot even be bothered to stay the journey and help sort out the mess they have created.

I am proud of my country. I am a patriot, not a nationalist. Nationalism, as we know, leads down bleak avenues and dark cul-de-sacs. As a patriot, I look around the world at the economic might of the USA and China, and I do not believe it is wise to leave a union of 27 other European countries that provides one of the biggest single markets with 500 million consumers. However, the British people voted to leave the EU.

The Prime Minister started her tenure with the red line of “Brexit means Brexit”—a solid, simple red line that has been washed away with a withdrawal agreement in which Brexit means fudge. If this deal gets through, on 29 March we will have nothing to guide us forward except a vague “all things to all people” political declaration. When I ask the Prime Minister in this Chamber whether her deal is better than the one we have now, she cannot answer yes, because she knows in her heart of hearts that the answer is no. With the Prime Minister unable to answer a direct question, the Government press on, sound in the knowledge that our constituents will be worse off and that nothing more can be done. That is the perverse logic of Brexit. We know that what we are doing will damage our country, but we are going to do it anyway.

I campaigned to remain in 2016, and I cannot say in good faith to my electorate that I have changed my mind on Brexit. First, my constituents would not believe me, and secondly, I did not enter politics to knowingly make my constituents poorer. That presents a moral dilemma for remain-supporting MPs, especially those whose constituencies voted to leave. Many of my Labour remain-supporting colleagues who represent leave-voting constituencies feel this acutely, and I feel it, too. In my constituency, almost three out of five voters voted to leave. For me, however, the fundamentals have not changed. Brexit will be bad for Britain, the north-east and my constituents. Remain MPs know that if leaving the EU was not good for the country in 2016, after all the Brexit twists and turns since then, leaving is certainly not the right thing to do now.

The electorate is now faced with the reality of Brexit in 2018, unlike the myths of 2016. That is why the British people should have the right to think again, in a people’s vote. If, which seems likely, MPs are to have two votes on Brexit in the next two weeks, why can the British people not? They may agree to proceed with Brexit, or they may decide to stop what we have started. Either way, the final decision will have been made. This started with the people. It should end with the people.

Leaving the EU: Economic Analysis

Phil Wilson Excerpts

Wednesday 28th November 2018 Commons Chamber

[Mel Stride]

We will of course come forward with further information about the policies that we intend to pursue in the area that the hon. Lady raises, but I point her to the fact that within the analysis being presented today, there is of course an analysis on both a “no net migration” basis between ourselves and those based in the European economic area, compared with the free movement that we have today. So that is actually factored into the analysis that we are reviewing now.

[Phil Wilson (Sedgefield) (Lab)]

The Chancellor admitted this morning that any Brexit deal will make the British economy and the British people worse off. Does the Minister agree with him?

[Mel Stride]

What matters now is that we support this deal, to support the economy. The analysis clearly shows that compared with the other options, particularly no deal, it is by far preferable, in terms of the economics and the impact on the economy, to support this deal.

Community Bank Closures

Phil Wilson Excerpts

Thursday 8th February 2018 Commons Chamber

[Phil Wilson (Sedgefield) (Lab)]

I congratulate my hon. Friend the Member for Stoke-on-Trent North (Ruth Smeeth) and the hon. Member for Hazel Grove (Mr Wragg) on securing the debate.

At the end of June, four bank branches will close in my constituency of Sedgefield. NatWest is closing two branches, one in Ferryhill and one in Newton Aycliffe, Santander is to close its branch in Newton Aycliffe, which is just across the street from the NatWest branch that is to close, and Barclays is to close its branch in Sedgefield village. This recent round of closures will deprive every community in my constituency of a bank branch except Newton Aycliffe, which will still have a Halifax, a Barclays and a TSB. It is the biggest town in the constituency, with about 30,000 people living there. The local post office still operates in these communities and offers banking facilities, but it is hardly the place to discuss banking issues such as mortgages or loans. Sedgefield is a rural constituency, with up to 40 towns, villages and hamlets over 150 square miles. The bus network is not what it should be and it is difficult to get around without a car or other means of transport.

Much banking is now done online, on a mobile app, or on the telephone, but there are still those in our communities who need to be able to walk into their local bank branch because they are not online or do not have access to a telephone or mobile, especially the elderly. I know that the banks that are closing branches in my constituency say that they recognise those concerns. NatWest, for example, has a network of community bankers—I believe the number is 1,000—around the country who will be deployed to reach out to and support vulnerable customers when a branch is closed.

All the banks have pointed out to me that how people do their banking has changed radically over the past few years. NatWest told me that the number of people using its branch network has fallen by 40% since 2014. In the same period, mobile transactions have increased by 73% and, in the first half of 2017, 1.1 billion mobile and online transactions were carried out by the bank’s customers. Since 2012, in the two NatWest branches in my constituency, 88% of the customers in Ferryhill and 89% of the customers in Newton Aycliffe have banked in other ways. Transactions at the Ferryhill branch have fallen by 30% and at Newton Aycliffe the figure was 34%. The number of customers using both branches has fallen to between 60 and 100 a week, although whenever I speak to customers who use the branches they always say that there are queues and that they are busy. The reality for customers seems to be completely different from the statistics revealed by the branch. It is a similar story with Santander in Newton Aycliffe. Santander says that 91% of customers use other means of banking besides walking into the local branch. Some 45% use other Santander branches and 40% use their mobiles to do online banking.

I used to live near Sedgefield village, and I can always remember there being a Barclays bank there. I asked how long a branch had been there and was told that there had been a Barclays in that same building in Sedgefield for nearly 100 years. Now, Barclays says that 74% of its customers use other forms of banking. Of 5,000 customers, 22% use the branch exclusively for their banking. Barclays has identified 200 people it considers vulnerable and tells me that it is proactively contacting them to help with their future banking needs. Overall, the number of transactions at the branch has fallen by 17%, whereas in the wider region the fall has been 12%.

Banks such as Barclays, NatWest and others that are closing branches should report how many vulnerable customers they have been able to retain or how many have gone on to other banking mechanisms and systems, to ensure that they are not financially excluded. If they did that, we would be able to take a snapshot of how many people are becoming financially excluded because of closures.

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

The hon. Gentleman is giving a fine speech. Does he agree that the large number of closures throughout the United Kingdom have badly affected elderly constituents and those who are disabled? Soon, there will be no banks within large radiuses around most of our towns and people will resort to putting money under the bed again, just as they had to do in my grandmother’s day. The humanity has gone out of banking.

[Phil Wilson]

The hon. Lady makes a valid point. There has to be a social conscience in banking, and it should not just be for the public sector to sort out. The private sector has to be part of it.

We cannot deny the growing trend in banking being done online and by mobile phone and telephone. Barclays pointed out to me that on average its customers use mobile banking more than 28 times a month and visit a branch less than twice a month. The bank carries out 12 digital transactions a second and, since 2014, has started to use video banking.

The way we bank is changing, and it is not just a UK phenomenon; it is happening across mainland Europe, too. According to data from the House of Commons Library, by the end of 2016, the number of bank branches in Germany had fallen to something like 32,000, which was a reduction of nearly 6% on the year before. In France, where there has been more robust opposition to branch closures—apparently, it is more difficult to close branches in France than elsewhere—Société Générale has announced the closure of 20% of its branch network by 2020. That bank is going to close one in five branches. However, the French bank branch network is still extensive, with six branches per 10,000 head of population, which I believe is the highest proportion in the EU. In Spain, 10,000 branches were closed between 2012 and 2016. Banking is changing, driven by technology that is obviously convenient to the vast majority of customers.

I would like the Minister to address two areas of concern. First, what more can the Government do and what work are they undertaking with the financial sector to encourage banks to look after their vulnerable customers so that they are not left behind? There is also a wider concern. Rural areas, such as County Durham, are seeing the destruction of rural bus services and there are issues with whether broadband provision is sufficient to allow customers to access the internet and therefore access online banking in the first place.

Secondly, the closure of bank branches highlights a key problem that faces our town centres. For example, the future of Newton Aycliffe town centre has been controversial for many years. Although Freshwater, the shopping centre’s owner, has invested in the centre and won awards for its efforts, the closure of two bank branches will only add to the number of already vacant shops. This is not a story reserved for Newton Aycliffe; it is true of town centres throughout the country. Town centres need to be more leisure-focused, with bars, restaurants and coffee shops, as retail moves online, where people are more likely to shop—with Amazon being a case in point. As a consequence, we see many retailers quitting jobs and issuing profit warnings. I make this request to the banking sector: look at how you can change your offer on the high street; look at how you can make the physical bank presence more affordable and more accessible; and look at whether there is a way to merge banking with leisure, such as, for example, placing bank branches within a café.

The closure of banks does not happen in isolation. It affects vulnerable people, it affects our town centres and it affects our communities and their way of life. The banks must remember that, although there is a trend with new technology towards online banking, other people can be left behind; and there is a life that is offline as well as online. All I ask is for the banks to think creatively, because they, too, have a social obligation to their customers, not just to their bottom line.

--- Later in debate ---

[Ruth Smeeth]

I thank the Minister for his response. I have a great deal of respect for him, and I wish him more luck with Lloyds tomorrow than I had. We need more clarity on a few issues, and the emphasis should be on the banking sector to resolve them, but if they will not act—so far, they have not—the Government and Parliament will have to act to hold them to account. The banks are not being imaginative, so we may have to make them.

The first issue is with LINK and access to ATMs. While I welcome the new announcement and what that may mean for access, the evidence suggests that 3,500 ATMs may close. Given what we are already seeing, that could be a challenge, so I urge the Minister to consider that more closely in addition to using the post office network. Colleagues across the House have agreed that face-to-face, personal contact is vital, and the post office network, while helpful, does not currently provide what we need from it. We also need to start talking about public transport infrastructure, so that people can access alternatives.

I thank the Minister for the debate and look forward to working with him on this issue.

Question put and agreed to.

Resolved,

That this House recognises the vital importance of community-based banking; believes that national banks have a responsibility to their customers; is concerned about the effect of branch closure announcements by Lloyds Bank, RBS/Nat West, Santander, Yorkshire Building Society and the Co-operative Bank; and calls on the Government to support measures to protect access to banking services in local communities in the UK.

[Phil Wilson (Sedgefield) (Lab)]

On a point of order, Madam Deputy Speaker. On 17 January, in moving my ten-minute rule Bill on tightening the regulations on private landlords, I should have declared that my wife owns two houses that she lets out. I regret that oversight, and I take this opportunity to correct the record.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I thank the hon. Gentleman for putting his point on the record.

Taxation (Cross-border Trade) Bill

Phil Wilson Excerpts

2nd reading: House of Commons
Monday 8th January 2018 Commons Chamber

[Mr Leslie]

Just because the hon. Gentleman asserts that it was very clear does not mean that that was the case. In fact, his own friend and colleague, Daniel Hannan, a Member of the European Parliament, was very clear that the single market was incredibly important and that no one proposed leaving it. Many other hon. Members said similar.

[Phil Wilson (Sedgefield) (Lab)]

It was also made quite obvious during the referendum campaign that £350 million a week would be spent on the NHS, but I do not think that has come to fruition either.

--- Later in debate ---

[Phil Wilson (Sedgefield) (Lab)]

Any changes to taxation on cross-border trade between the UK and the European Union after Brexit will inevitably lead to some friction for companies exporting to or importing from the rest of the EU. Whatever scheme is negotiated—if, indeed, any is—it will inevitably lead to greater costs and more bureaucracy.

As an EU member state, we are part of the customs union and the common external tariff, because of which goods produced in the EU are not liable for further duties as they cross either way over the border between the UK and the EU. After Brexit, businesses will be required to make customs declarations on trade between the UK and the EU. HMRC estimates that the number of customs declarations will increase fivefold from the current 55 million to 255 million when we leave the EU and that the number of businesses going through the customs process will increase from 170,000 to 300,000.

The existing declarations system is 25 years old and is to be replaced. The new system, known as the customs declaration system, which was originally designed to accommodate changes to EU customs legislation that take effect in 2020, will be available only two months before the Government’s proposed Brexit date of 29 March 2019 if there is no transitional period. The customs declarations system is part of changes to more than 250 existing projects—a crazy amount of work to overcome in such a short period of time. That presents a strong argument for remaining part of the customs union, at least for a transitional period. In my view, we should do so not only for a transitional period, but beyond it.

My hon. Friend the Member for Nottingham East (Mr Leslie) pointed out the importance of the EU VAT area, of which we are part. When we trade within the EU, it is effectively VAT free. If we leave the EU VAT area, companies will pay VAT up front at the borders, adding to bureaucratic costs and hitting the cash flow of many companies, especially those that are small or medium-sized. That will be exacerbated further, given that many in industry believe that whole swathes of the SME sector are not prepared for what is coming down the road with Brexit. Large companies and multinationals are more likely to have the capacity to plan ahead and compensate, as difficult as that will turn out to be for many of them. They have the space to think strategically. Small companies think tactically about the next few months—about getting the next order out of the door.

For the 130,000 companies that will be dealing with customs formalities for the first time, not being part of the customs union will come as a shock to the system. In oral evidence to the Treasury Committee, Martin McTague, the policy director for the Federation of Small Businesses, said that small companies will be less likely to be prepared:

“If the past is anything to go by, it will probably be the back end of 2018 before some people wake up to what is going to happen. If we are about to drop off a cliff in April 2019, they will be completely ill-prepared for that and it will almost certainly result in business failures.”

In my view, if that were to happen, it would undermine the SME sector, which is the engine room of the economy.

Nationally, 8% of all jobs are in manufacturing. In Sedgefield, it is almost 26%—one in four. Durham and the Tees Valley is a major location for business and science research and development. I want that to continue. That is probably one of the reasons why, according to a recent North East England chamber of commerce survey, 52% of north-east businesses want to remain in the single market and the customs union and 60% want to see at least a transitional period of three years; why 53% believe that the UK’s Brexit objectives should be revisited following the general election result; and why 54% disagree or strongly disagree with the statement that the best interests of business are being prioritised by the Government ahead of Brexit negotiations.

The customs union and access to the single market are important to the economy, especially in the north-east. Latest figures show that 61.6% of the region’s exports are to the EU. Some 75% of businesses in the north-east either sold or sourced goods from the European single market. This is obviously not an insignificant number. What bureaucratic and financial burdens are we placing on our industry with changes to our relationship with the EU? We must consider also that the UK has over 60 trading agreements with the rest of the world because of our membership of the customs union.

Some people say there are potential alternatives, but all will harden our borders, make them more difficult to navigate commercially and will not be as frictionless as they are now. We may do all we can to reinvent the wheel, but I believe we will find that whatever reinvention we come up with will not be as round as the original. I want to congratulate my right hon. and learned Friend the Member for Holborn and St Pancras (Keir Starmer) on restating Labour’s position to remain as part of the customs union and single market for a transitional period, but it should not just be for the transitional period; it needs to be for good. If we want to end austerity, invest in our public services and protect and create jobs, we need to be in the customs union and the single market. For me, not to be in both and to have an anti-austerity strategy is dishonest and fantasy economics.

Sedgefield is home to the largest business park in the north-east. It is my duty to explain to my constituents what could be the repercussions of leaving the customs union, since many of their livelihoods depend on the consequences of Brexit, and I will continue to do so.