Covid-19: Economic Package

Ed Davey Excerpts

Tuesday 12th May 2020 Commons Chamber

[Rishi Sunak]

Companies in the aviation sector, like all others, can benefit from the considerable range of support measures already announced—indeed, I know that many companies in the sector are benefiting currently from the jobs retention programme. Of course, individual companies have the opportunity to engage with the Government on a bilateral basis, where that is appropriate, but it obviously would not be right for me to comment on those conversations.

[Sir Edward Davey (Kingston and Surbiton) (LD) [V]]

May I give the Chancellor a small birthday present by welcoming the extension of the furlough scheme and the greater flexibility for employees coming off furlough—not least because the Liberal Democrats have been campaigning for an almost identical package? But may I urge him yet again to look at those employees and self-employed who have not been helped at all and are in dire straits—people who have moved jobs, who were not on their employer’s payroll by mid-March? Will he consider the new starter scheme that I proposed in early April? Will he please review his refusal to properly help those self-employed people who operate from limited companies and who have just been cut adrift?

[Rishi Sunak]

The self-employment scheme in this country remains one of the most generous and comprehensive anywhere in the world. It was designed to provide support to those people who have a different pattern of working. As I have explained previously to the right hon. Gentleman, there is a difficulty in distinguishing the dividends that company directors earn from the dividends that anyone might earn through earning a passive share portfolio.

I have seen the proposals that the right hon. Gentleman and others have sent. Of course, my team and I have considered and are considering those, but that does not take away from the fact that what has opened this week is a scheme that will support millions of those in self- employment and enable them to receive the same level of support as those in employment, starting with cash coming into their accounts as early as next week.

The Economy

Ed Davey Excerpts

Monday 27th April 2020 Commons Chamber

[Rishi Sunak]

I thank my right hon. Friend for her comments; having held the positions that she has had in government, she knows better than most the importance of business to our economy and to driving our economy. She is absolutely right that businesses will need time to prepare. As I have alluded to, work is already under way in government, through engaging with businesses, unions and others, to ensure that when we are in a position to get to phase 2 and refine the social and economic restrictions, work has already taken place to prepare everyone and give them suitable notice, so that they can kick-start the engines of our economy.

[Sir Edward Davey (Kingston and Surbiton) (LD) [V]]

I welcome the micro-loans scheme, but may I press the Chancellor to do more for the self-employed—in particular the self-employed who are not in his scheme, many of whom have only modest incomes, such as cleaners, builders, taxi drivers and musicians? Such self-employed people often work through limited companies, relying on dividends for income, and are getting little or no help, with devastating consequences. I know that the Treasury is worried about fraud, but I wrote to the Chancellor on 8 April with a Liberal Democrat proposal to help those self-employed people and protect the taxpayer. Will he please now help self-employed people who are dependent on dividends, before it is too late?

[Rishi Sunak]

The right hon. Gentleman mentioned groups that I engaged with specifically in the design of the self-employed scheme, and who I am fairly certain released reasonably positive comments on the day it was released, notably the Licensed Taxi Drivers Association and, I believe, one of the musicians’ federations. I spoke to them both personally as we developed the scheme, and I believe that they were very supportive at the time.

We have designed these schemes at pace to get support to as many people as we can in the time available, and the decisions that we have taken enable that. At this point, complicated changes to the schemes would just mean delay in getting support to millions of people who are either already in receipt of it or very shortly about to receive it.

Finance Bill

Ed Davey Excerpts

2nd reading & 2nd reading: House of Commons & Programme motion & Programme motion: House of Commons & Ways and Means resolution
Monday 27th April 2020 Commons Chamber

[Sir Edward Davey (Kingston and Surbiton) (LD) [V]]

Today’s economic crisis is the worst and most alarming of our lifetimes. Never since the second world war has Britain’s economy faced such damage and uncertainty. I recognise just how difficult it is for Treasury Ministers, the Bank of England and other policy makers trying to tackle this crisis, but the Liberal Democrats agree with the Leader of the Opposition that we need a public debate about how the lockdown can be phased out in due course. I would add to that that we need a really mature debate about how economic policy will help in the economic recovery. Indeed, whether it is in the immediate solutions, the emergency packages or the preparations for that recovery, Liberal Democrats believe that economic policy must be guided by three key objectives: producing a fairer society; building a more sustainable economy; and restoring our reputation as a country that is outward-looking and internationalist.

Economic policy must tackle Britain’s unequal society, so exposed in this crisis, including the poor pay of people in the care sector, the problems with the universal credit system and the low levels of statutory sick pay. All these problems show that we must do far more to increase social justice in our country, and I believe that they show that we should look more seriously at proposals for a universal basic income.

Alongside greater fairness, we must move our economy much faster towards net zero so that we address the climate emergency in the recovery. I am pleased that the Government are talking about this, but we need urgently to debate specific policy proposals to make sure that the new economy that we must build is genuinely low carbon. We are seeing how fast the Government can move in a crisis; well, there is a climate crisis and we need to move just as fast to tackle that, too.

We must also work with other countries to ensure that the recovery is as strong as possible, and deepen international co-operation, especially with our closest allies. We cannot allow this crisis to move us back from support for free and fair trade, even where we adapt trade to secure an improvement in our biosecurity. We must remember how the recovery from the second world war was driven so much by agreements such as Bretton Woods and by growth in international trade.

I have already commented widely elsewhere on the Chancellor’s emergency packages. The business loan scheme has just been too slow and although today’s micro-business loan scheme is welcome, it is very late. I urge the Chancellor to go further and look at the Liberal Democrat plan for new online marketplaces for these Government-backed business loans. Using existing platforms such as Funding Xchange, Funding Options and Alternative Business Funding, businesses could fill in just one form and those applications would be sent immediately to lenders whose lending policies show that they are much more likely to say yes, so the businesses could get the cash more quickly. If we do not see businesses getting the cash quickly, we will see more businesses fail.

The element of the Government’s emergency package that I would most like to talk about today is the challenge facing local authorities. The Government’s help so far just is not sufficient to help councils on the frontline of this crisis, which are so crucial to helping vulnerable people and businesses. Councils are having to increase spending dramatically just at the time when their income is also being slashed—from a huge loss in income from parking and services such as leisure centres, to real concerns that council tax income will fall significantly too.

May I ask the Treasury today to commit to the principle that for councils across the country it will not just fund extra crisis-related spending in full but provide grant funding to cover these dramatic losses in revenue? Just as the Chancellor wrote off the debts of NHS trusts as part of his emergency assistance, will he now look at reducing or writing off councils’ debts? Writing off housing debts could help stimulate a council house building boom in the recovery. Writing off debts linked to spending on special educational needs and disabilities would help our schools recover, too.

When it comes to planning the recovery, may I ask Treasury Ministers to consider three key issues? The first is how the furlough scheme is wound down to make sure that we protect jobs. We must prevent staff who are furloughed today from becoming staff who are laid off tomorrow. The second is that in the recovery we must achieve a historic and dramatic rise in both private and public investment in green technology and climate-friendly infrastructure. After solving the current international crisis, let us solve the next global crisis—the climate crisis—that we all know is facing us.

Finally, over the thorny issue of Brexit and the transition period, I once again urge the Minister to recognise that this crisis and its immediate aftermath is exactly the wrong time to add to the uncertainty, the cost and the loss of markets that businesses are already facing. Surely suspending the Brexit talks and seeking an extension to the transition period is just economic common sense.

This Finance Bill will pass its Second Reading, but the Chancellor must do far more to ensure that Britain’s economy after this crisis is fairer, greener and more outward-looking to the world.

[Madam Deputy Speaker (Dame Eleanor Laing)]

The hon. Member for Leeds East (Richard Burgon) is still having some technical difficulties. Although we are not able to see him in action, we have his photograph and are able to hear him.

Contingencies Fund Bill

Ed Davey Excerpts

Committee stage & 2nd reading & 2nd reading: House of Commons & Committee: 1st sitting & Committee: 1st sitting: House of Commons
Tuesday 24th March 2020 Commons Chamber

[Jesse Norman]

The Government have not had any time for that narrative, nor has there been any decision in our mind other than to act as decisively, effectively and comprehensively as we can to defeat this virus and to protect livelihoods, businesses, jobs and wellbeing. That is what we are seeking to do. I do not agree—if I may say so to my right hon. Friend—that the requirements that this Bill seeks to address would or could have been accommodated in any other economic circumstances. To move at the speed at which we are moving to offer the support we are offering demands the cash movement that this Bill is designed to achieve.

[Sir Edward Davey (Kingston and Surbiton) (LD)]

Can the Minister confirm that the amounts that we are talking about in this Bill relate to departmental spending that may need to happen over the next few months, and that they do not relate to the balance sheet of the Bank of England or any of the lending facilities that have been made available to business?

[Jesse Norman]

The right hon. Gentleman is absolutely right. This legislation, as I will go on to describe, relates to departmental spending. It as an advance against departmental spending that will be properly ratified, accommodated and acknowledged within the estimates process, as one might expect.

Departments—this goes straight to point just made by the right hon. Member for Kingston and Surbiton (Sir Edward Davey)—need money from 1 April, and they need more than the House has already allocated to them via the vote on account. The Government cannot afford to wait until July to deliver the resources needed for the next financial year, and the Bill seeks to close that gap.

The House has long recognised that the Government sometimes need to act without recourse to the normal processes, which is why Parliament has historically provided for the existence and use of a contingencies fund. But Parliament has wisely limited the amount that can be issued from the fund to 2% of the previous year’s cash spend. For 2020-21, that amounts to some £10.6 billion, which would be more than adequate in a normal year. But, as we have discovered, we do not live in normal times. These times are without precedent in the modern era. Through this Bill, the Government therefore ask the House temporarily to raise the limit on the amount that sits in the contingencies fund to 50% of that expended last year; I should be clear that that is approximately £266 billion.

Let me go further and say—again, this is a response to the point made by the right hon. Member for Kingston and Surbiton—that this is not new spending and it is not a blank cheque. All advances will have to be repaid once the main supply estimates are voted on in the summer, when the House will have the opportunity to scrutinise and debate where the resources have been allocated in the normal way. Nor does this represent additional Government borrowing. The Chancellor has said that he will update the Debt Management Office’s financing remit in April to reflect his recent announcements.

Quite simply, this Bill is about cash flow and the need to deliver the support we have announced without delay. It allows the Treasury to provide cash advances where they are urgently needed, and it provides for a safety net between supply estimates. This is an exceptionally short Bill, but it is an exceptionally important one in that it allows the Government to deliver the extraordinary package of support announced by my right hon. Friend the Chancellor. It solves a cash timing issue arising from the current process, and balances the need for an urgent response to the unfolding crisis with the necessary parliamentary scrutiny and oversight.

This Bill is yet another demonstration of the Government’s commitment to fighting the threat from covid-19—protecting businesses, jobs and, most importantly, our fellow citizens, from the ravages of this deadly disease. I wholeheartedly commend it to the House.

--- Later in debate ---

[Sir Edward Davey (Kingston and Surbiton) (LD)]

It is a pleasure to follow the hon. Member for Thirsk and Malton (Kevin Hollinrake). He made two points with which I wish strongly to agree. First, I agree on the need for clarity on people who can go to work: who are the essential workers? The issue is causing huge concern. If there are too many people on public transport because we are not leaving it for the essential workers, that is bad for the whole public objective of stopping the virus spreading. The hon. Gentleman is absolutely right on that. The bad news is that people are almost going to be forced to stay at home anyway because business is collapsing. Let us take the construction industry, which the hon. Gentleman talked about. I am getting messages telling me that because mortar supplies are basically collapsing, people will not be able to do any construction. That shows Members how dramatic is the impact of what is happening out there. There should be clarity from the Government on that because leadership is important.

The second thing on which the hon. Gentleman is right—I really want to impress this upon those on the Treasury Bench, and we have heard other colleagues talk about it already—is the genuine accessibility of the loans that have been made available via the Bank of England. The Government trumpeted their announcement and we all welcomed it, but I keep hearing stories of small businesses that find that, if they can get through to the bank—by the way, it is taking quite a long time, although that is not a complaint, because of course a lot of people are contacting the banks and I expect they are extremely busy—they have to give personal guarantees. At a time when it is very difficult for people to know how their business is going to pan out—how can they know that in such an uncertain certain time?—no one their right mind would give those sorts of personal guarantees. It is just not realistic for them to put their house and the whole family’s income and savings on the line. The Government are going to have to think again about the terms of the loan guarantee scheme. These are unusual times and the Government have made money available; rather than just giving a guarantee to the financial institution, they will have to find a way to transfer that guarantee to the business concerned. I know there are huge moral hazards with that—I get that—but if they do not, it is not going to work.

[Bim Afolami]

On that point, has the right hon. Gentleman come across the same thing as I have? I have found that the people who have been asked to give personal guarantees are often the ones with the lowest debt—indeed, no debt—in their businesses, and the people who have found it easier are those who already have a big debt facility with a bank that can be easily extended. It is almost a double punishment for those who have been prudent in managing their small businesses so far.

[Sir Edward Davey]

The hon. Gentleman is absolutely right. It is that old saying, “If you borrow a lot, you are able to borrow more,” whereas those people who have run things prudently are finding it a problem. This is a really crucial issue and the Government must give it some urgent attention. In the exchanges on the urgent question that I asked earlier on the self-employed, there were some welcome statements about the loans being available to sole traders and the self-employed more widely, but I do not think they will be able to access them, because they will not be able to give those sorts of personal guarantees. Given that cash-flow is going to be king, certainly until the Government come up with a solution for the self-employed, they will have to have access to some money. If that is just a loan on their personal bank account, with the interest we have been talking about, that is not going to work for people. People are going to be in real trouble. I welcome what the Government have done, but they need to look at how it is operating in practice—and look at it fast.

People out there remember what happened in the financial crisis. They remember that this House said, across party lines, that we must bail out the banks—that the banks could not collapse and the financial system had to keep going. They were pretty upset, because a lot of them took cuts in their own income and then saw that although some bankers lost their jobs—we knowledge that—many did not, and the banking system sort of recovered and looked like it was treated with quite a lot of generosity through our taxpayers’ money. When we hear stories now about ordinary people who have put their lives into building their businesses not getting help from the banks because the banks are getting in the way, I have to tell the banks that they have to sort themselves out, because this House will not be able to resist the political pressure. We need the banks in our society, right? No one is suggesting that they do not play a critical role, but if at this stage, after we helped them out 10 years ago, the banks do not come to the rescue of small businesses, sole traders, the self-employed and ordinary people, they will reap a whirlwind. I really worry about that, because I believe in the banking system, but the banks have got to step up to the plate.

[Bim Afolami]

I thank the right hon. Gentleman for giving way again. Is it not also important to recognise the nature of the schemes—that is, that they were put in place by the Treasury, the banks and the Bank of England all working together? The terms on which the banks are operating were agreed by all of them, so we need to ensure that all those parties—the Treasury, the Bank of England and the banks—collectively realise what needs to happen, rather than us necessarily saying that it is just the banks that are making it difficult; the structures and the terms are actually very important.

[Sir Edward Davey]

The hon. Gentleman makes a really important point, and backs up the thrust of what I am trying to say. The banks have been given access to free money. They are being looked after by the Bank of England through this extension of the Bank of England’s balance sheet, so they are doing okay. So why are they not stepping up to help the rest of the economy? There are some really quite serious questions on this issue. I hope that the Government say in response to this debate that they, the Bank of England and the Financial Conduct Authority are going to look at this situation, because it is just not good enough. I want to work on a cross-party basis on this issue, as the hon. Member for Thirsk and Malton (Kevin Hollinrake) said; this is vital to all of us, and we need to send a message to those who are running the banks that we are expecting them to step up. It is time that they did their duty, right?

I actually want to come to my speech, because that was just a response to the hon. Member for Hitchin and Harpenden (Bim Afolami). I want to talk about the Bill in front of us—I know that is a bit unusual—as well as the supply process of which it is a part, and then I will give some thoughts on the economy.

On the Bill, will the Minister tell us why the Treasury chose to change the percentage limit of the contingencies fund, which is normally set at 2% of total authorised expenditure in the preceding year, to 50% until the end of 2020-21? In absolute figures, the amount before this Bill would have been £10.7 billion. That has gone up to £266 billion. I hope that the Minister can explain why. It does not seem unreasonable, given the pressures on Departments, but it is quite a big change. I am not against it—let me be clear that I will be supporting the Bill today—but it would be good to put on the record, for the House and for history, why that figure has been chosen. When people look at this situation in the future, they will need to know why that decision was taken.

The Minister said in his opening remarks that this was not an increase in expenditure. Well, I hope that he meant to say that it is an increase in expenditure in that it takes account of commitments that the Chancellor has made both in the Budget and since the Budget. If I have understood correctly, there is a big increase in expenditure because we need one—for the health service, our social care system and other parts of our public services that need the cash now.

I have another question for the Minister. If these contingencies are being given to Departments so that they have the cash they need, is the money also being given to local authorities? I want to underline this point: local authorities are on the frontline now, and they are having to spend money all the time on a whole range of things that are completely unbudgeted for. They are confused about the proposals for business rates, whether they are going to get any income in, what money they have to give out and all the rest of it. Local authorities are slightly unclear about what is happening. I hope that there will be genuine desire and action on behalf of the Treasury to get some money out—on account, if you like—to them so that they have the cash flow to ensure that they can provide the extra services that they are being asked to provide. It is essential that we hear that local authorities are getting the support that the Whitehall Departments seem to be getting.

I said that I also wanted to talk about the supply process. This legislation is part of the almost anachronistic supply process in this House. I am afraid that I am a bit of a geek on this. In 2000, I wrote a pamphlet called “Making MPs Work For Our Money: Reforming Parliament’s Role In Budget Scrutiny”. It is a cure for insomnia, so I do not necessarily suggest people read it, but in it I tried to argue that this House does not really have sovereignty over the Budget. We look at these Bills when they come along and we nod them through, but our processes of examining draft budgets and estimates are shocking. In my pamphlet, I made the comparison with all the OECD countries, and this House has the worst processes for examining draft budgets and measures such as this Bill—that is worrying. I do not wish to resurrect the Brexit debate, but it was supposed to be about parliamentary sovereignty and I used to say, “I wish we had some.” That is because this House rarely, if ever, looks at the estimates properly, analyses them in Select Committees and makes proposals about draft spending decisions. Other Parliaments do those things quite easily—the Swedish and New Zealand Parliaments are good models. Our approach undermines the value for money and undermines what we are here for, and we really need to look at the estimates procedure.

That is why this Bill looks so weird in many ways; it is called the Contingencies Fund Bill and we are not used to doing this sort of thing, because we have given up control over supply—it is just nodded through. The last time MPs voted against a spending request of the Government was in 1919, more than 100 years ago We have given up properly controlling the draft estimates. Although I will be supporting the Bill tonight, because it is really important that we let this one through, I just want to say to the Minister that I hope we can reflect on this. I raised this issue when I was in government and tried to get the then Chancellor to look at it. There was a flurry of excitement and then the dead hand of the Treasury said, “No way, we are not giving up control.” That was the wrong move, because control can be exercised with greater transparency. I hope that that may be one thing that comes from this experience in this emergency situation.

Let me end with some reflections on the economy, where we are at and the lessons we are taking. I talked about the importance of the banks really delivering, given the agreement with the Government and the Bank of England. That is probably the most essential message from me tonight. There are some longer-term things and possibly some relatively short-term things to address, one of which is the way we do the Bank of England’s quantitative easing. That is monetary policy, where we are, in effect, printing money and sending it out. That happened after the 2008 crash and it is happening now. I am not against it, but I just say that the way it works is not some sort of technical, politically neutral, value-neutral system; it has implications for economic equality in this country, because the money tends to go to people in the City—the financial institutions. It does not go to ordinary people and ordinary businesses. So if we are going to get things right this time and have quantitative easing, I urge the Minister to let us have a debate about how those mechanisms actually work, because in crises we do not want economic inequality worse; we want to make it better. These technical things sound as though they are available only for pointy-heads in the Treasury, but quantitative easing is a political issue and we have not debated that. It has massive social and economic consequences, and we need to make sure that there is democratic accountability on them, and that they are properly understood and work in the interests of society.

[Kevin Hollinrake]

Has that not been solved to some extent with the job-retention scheme, because the Government will issue bonds to fund that scheme, they will be bought by asset managers and the QE will buy those assets off the asset managers? That is the circular nature of that scheme. So this time round, as the Prime Minister said a few days ago, the support would be directed at the people, in terms of keeping them in work and in pay, rather than simply funding the banks. To a certain extent, this time QE does support jobs and real people.

[Sir Edward Davey]

The hon. Gentleman has a point and he is right to take me up on that. I think that there is an improvement, but I do not think we have debated this in the context of QE and the monetary side of the policy response. I think we need to do that, because we need to unpick some deep issues here and I do not think this House has understood that. Although I am a big fan of the independent Bank of England, and I do not think we should interfere with the setting of interest rates, I do think QE raises some political questions which are not technical and require accountability.

[Bim Afolami]

On QE and how that would be done, we must make sure that it does not become too inflationary, that being the problem if we have a distribution network straight to the real economy without mediating it through banks.

[Sir Edward Davey]

I half agree with the hon. Gentleman, but I do not think inflation is going to be the problem; people have not got any money. This form of QE is often called helicopter money and perhaps that is the right move now, and we need to be debating it.

I have a final comment to make and then I will sit down. When we reflect in a few months on this crisis and what has gone on, we will have to look at some of the underlying assumptions of our economic models. I am not saying that we should rip them up—I do not believe that at all—but how the state underpins and works with the market is really important. What I mean by that is that there is an assumption that the market can do it all, that the market is fantastic and that Governments should come out of the way, but markets only exist because of Governments. Regulations and laws make markets and there have always been those.

[Kevin Hollinrake]

indicated dissent.

[Sir Edward Davey]

The hon. Gentleman is shaking his head. Without rules and regulations on competition, on fair play for employees and on consumer protections, markets will not work. Where there is no consumer protection, consumers do not have faith in the products and services being provided, so the markets cannot work. I absolutely think that we need to reflect on that, because I do not think that the model has been working well enough. I will end on that comment, because I hope that we will learn from this and have a proper debate about how our economy will work in future.

--- Later in debate ---

[Jesse Norman]

With the leave of the House, I will speak again. I am grateful to all Members who contributed to what, as the hon. Member for Oxford East (Anneliese Dodds) said, was a very wide-ranging debate. In fact, it was so wide-ranging that it barely focused on the measure before the House. However, I commend those who discussed the Bill. It is a very important piece of legislation, and—let me say this very straightforwardly—I am very grateful for the expressions of cross-party support from the Opposition parties. That has been crucial to the way the Government have thought about and framed our response to this crisis.

The Bill is another key element in shoring up the very wide package of measures to fight the covid-19 outbreak and, as the House has recognised, it represents a proportionate legislative response to recent events. Of course, it is proportionate in part because it will last only for one year; it is not designed to run longer than that.

I will start with the comments by the right hon. Member for Kingston and Surbiton (Sir Edward Davey), because he addressed the topic of the Bill; I am grateful to him for that. He made a series of important points. On whether the banks are really stepping up, as the hon. Member for City of Chester (Christian Matheson) said, we will know by the end of the process who have been villains and who have been heroes. I do not think the public will be shy in reaching conclusions of their own, and I am sure there will be plenty of quantitative bases for that when the moment comes.

The right hon. Member for Kingston and Surbiton asked why the number we will vote through today has been raised to 50% from 2%. That is a very important question. The reason is an anticipated escalation in the need for cash under—this point was made widely by colleagues across the House—conditions of radical uncertainty. It is also fair to say that it is not clear beyond any peradventure when the House will reconvene, and we have to accommodate the possibility of a delayed restart. As one might imagine, no assumption is made, but that possibility has to be contemplated.

The right hon. Gentleman also asked whether this constitutes an increase in spending. This is not a spending matter; it is a cash matter, and he needs to be aware of that. To reassure him on the question of local authorities, this does include spending that the Ministry of Housing, Communities and Local Government will make as part of the usual estimates process.

The right hon. Gentleman described his work examining processes for reviewing and considering Budgets, but this is not a Budget, so it does not fall under that. However, it is worth saying that we have an evolved system. It is a system that involves a lot of scrutiny— repeated days of looking at main estimates and supplementary estimates—but of course it is also a system that gives considerable authority to the majority party at any given time, and that is what constrains the ultimate outcome.

[Sir Edward Davey]

I hope the Minister is right on the banks, but my main point is about the estimates. Actually, we have only three days to debate the estimates. I have attended estimates debates in this House over the last 20 years; when we have estimates days, we never debate the estimates. That is my point.

[Jesse Norman]

That is a different point. My point is that Parliament has plenty of opportunity to scrutinise spending. If it does not do that, that is a choice that it makes.

The right hon. Gentleman’s final point was about whether this Government believe, or any Conservative Government have ever believed, that markets can do it all. Let me assure him that no Conservative Government have ever believed that, and this one certainly do not believe that. At the risk of invoking one of my great heroes, Adam Smith, the position is that commercial society is a dynamic evolution in which forms of property are supported and recognised in law and then used to become the basis of profitable market development. That is how our system has evolved over many decades, and the state is integral to that process for all the reasons the right hon. Gentleman has described, so this is a way of agreeing with him.

May I turn to the comments made by the right hon. Member for Hayes and Harlington (John McDonnell)? Again, I thank him for his support for the Bill, and I think that constructive attitude is important. He is right to call this the gravest crisis we have known, certainly for this generation. A strong theme in his speech and those of others was the need for more communications; it was also mentioned by the hon. Member for Sefton Central (Bill Esterson). Of course, we understand that on the Government Benches. During the debate, the House will be pleased to know, I got a text from gov.uk referring me to the coronavirus website. That is a direct intervention of a kind I am not sure I would approve of outside the context of a national crisis, but one that is very welcome in that context. It shows evidence of and bears testimony to the belief we have in this very important response and in the need for communications.

Self-employed Persons: Financial Support

Ed Davey Excerpts

Tuesday 24th March 2020 Commons Chamber

[Sir Edward Davey (Kingston and Surbiton) (LD)]

(Urgent Question): To ask the Chancellor to make a statement on financial support for the self-employed in the light of the covid-19 pandemic.

[The Chief Secretary to the Treasury (Steve Barclay)]

We know that many self-employed people are in real distress, but we are working urgently to address this problem, and I say to the self-employed: we have not forgotten you—help is coming. But the policy and delivery are complex, and we cannot and should not rush to announce a scheme that gives rise to more questions than it answers. The Chancellor has held meetings this morning with representatives of the self-employed and will continue to meet them this afternoon.

It is important to remember that covid-19 is an urgent challenge to our entire economy, affecting workers of all types. It is essential that we respond swiftly, so that people can keep their jobs and businesses can carry on. That is the basis of our coherent, co-ordinated and comprehensive plan. It is a plan that gives those on the frontline the tools they need to tackle the virus, with all the support the NHS needs, backed up by an initial £5 billion fund for public services. It is a plan that puts a shoulder behind business with a statutory sick pay relief package for small and medium-sized enterprises, business rates holidays for all retail hospitality, leisure and nursery businesses in England, and grant funding for small enterprises, as well as support through Her Majesty’s Revenue and Customs’ time to pay scheme. As of yesterday, businesses with cash-flow concerns are also able to access the coronavirus business interruption loan scheme, offering up to £5 million for SMEs through the British Business Bank. For larger firms—[Interruption.]

[Steve Barclay]

The coronavirus business interruption loan scheme, on which Members across the House have raised questions, is now available, offering up to £5 million for SMEs through the British Business Bank. For larger firms, the Bank of England is providing a new facility to help support liquidity.

I urge all Members of the House to continue speaking—as I know many are doing—to the business leaders in their constituencies and ensure they are aware that they are not alone and that help is coming. In this House, we are all standing behind business and everyone who works in it. To encourage businesses to retain staff, we are deferring VAT, and my right hon. Friend the Chancellor has announced the job retention scheme to facilitate that.

Taken together, this is a huge programme of support, and we will keep thousands of workers in jobs, but we know that there are thousands of self-employed people who have been wondering what the future holds for them. My right hon. Friend the Chancellor has already set out a range of measures in support. Sole traders and freelancers will be able to access the business interruption loan scheme as long as activity is channelled through a business account. We are also removing the minimum income floor for the self-employed workers affected by coronavirus so that they too can access universal credit in full. That is not only the standard allowance, but a wider package of support for those with children, disabilities or, indeed, housing needs. At the same time, the next self-assessment income tax payments will be deferred until January 2021, helping those who have set money aside for those payments with immediate cash flow. That means there is a package on tax, on loans and, more widely, through universal credit, to support those with that safety net.

Let me reassure everyone in this House and the self-employed people they represent that further help is indeed coming, but we have to make sure we get this right and that we target the right support to those who are most in need. The Chancellor will provide a further update on support for the self-employed in the coming days.

[Sir Edward Davey]

I thank the Chief Secretary to the Treasury for that answer. He knows that parties on all sides of the House have been supportive of the way in which the Chancellor and the Treasury have given support to businesses and to employees. But I have to tell him that the 5 million self-employed people across the country, who are in all our constituencies, are in real stress and are deeply worried. While we all understand that there are complications, the Government have to move as fast as possible to meet their concerns, because they are literally, in many cases, simply running out of money.

I want to say to those on the Treasury Bench that it is important we remember who the self-employed are: 80% of the 5 million self-employed are sole traders. They are our neighbours, our friends, our family. The vast majority are not wealthy people. They are cleaners, taxi drivers, plumbers, hairdressers; they are musicians, tutors, journalists; and they are builders, electricians and child minders. These people are literally running out of money now, and we have to support them.

Of course there will be stories about wealthy people who are self-employed, but they are the minority. If we look at the figures from HMRC’s own data, 36% of sole traders—the majority of the self-employed—have taxable incomes of less than £10,000 a year. That compares with just 15% of employees on incomes that low. We are talking about people on low incomes: 60% have profits of less than £10,000 a year. These people were struggling before the coronavirus pandemic, and they are now facing ruin.

I think that an urgent package of help is needed now, and it needs to be at least the equivalent of that offered to employees. While we all know the problems that the Treasury is facing, may I say to the Chief Secretary that if the package is capped as it was for employees, if it is temporary as it was for employees and, especially for the self-employed, if there is some sort of clawback mechanism if people are given money that they did not need, surely we can come together as a House and as a country to make sure these people get the support they need? It is not uncommon for the self-employed, when they do their annual self-assessment tax return, to have to pay money back to the Treasury. Surely, if money is given now so they can deal with cash flow—capped, in a temporary scheme—then that money can be clawed back the next time they do their self-assessment, if it turns out that they did not need it.

I honestly urge those on the Treasury Bench to move fast, and not to allow the perfect to be the enemy of the good. People need the money now: please act now.

[Steve Barclay]

The right hon. Gentleman is right to emphasise the importance of timing and speed in this regard. He spoke about how that can be targeted and the fact that there are many very deserving causes within the population, but it is probably useful to draw the House’s attention to the fact that one in 10 of those who are self-employed are over state pension age. Over two in 10, according to the 2017-18 figures, were earning less than £2,000, which suggests that it was not their main source of income. Between one and a half and two out of 10 are already on universal credit. Some remainders will be quite well paid, such as law partners and so on, and some will be in employment and returning self-employment tax forms for part of their income in addition to their employment. The point is that the population itself is complex and we need to ensure that the measures are targeted correctly.

The right hon. Gentleman raised the mechanism. One of the themes that has informed the Treasury’s approach is this: what is operationally deliverable? That is one of the things we are working through. For example, HMRC does not hold people’s bank accounts, which is why the support the package for those in employment was through the PAYE—pay-as-you-earn—system. As my right hon. Friend the Chancellor set out at Treasury questions, tax data is one and a half years old. Those are the issues we are working through. The right hon. Gentleman is absolutely right that urgency is important—that is why the Chancellor is engaged on this—but we are seeking to target a complex population.

Loan Charge 2019: Sir Amyas Morse Review

Ed Davey Excerpts

Thursday 19th March 2020 Commons Chamber

[Mr David Davis (Haltemprice and Howden) (Con)]

I beg to move,

That this House believes that the Loan Charge is an unjust and retrospective tax; notes that the law on the Loan Charge was not settled until 2017; and calls on HMRC to cease action on loans paid before 2017.

The motion is in my name and those of the hon. Member for Brentford and Isleworth (Ruth Cadbury) and my right hon. Friend the Member for New Forest East (Dr Lewis), and is supported by some 40 other Members of the House.

I start by commending my right hon. Friend the Member for New Forest West (Sir Desmond Swayne) for having the courage to beat me to the punch in this particular debate. It may seem strange to outside observers that in the midst of a global pandemic and a huge national crisis that we are talking about a tax technicality—at least, that is how it might appear. But actually it is one of the great virtues of our country that no matter what the crisis, whether it is a pandemic or warfare, the House always pays attention to issues of natural justice. We never ignore issues of natural justice, even in times of crisis. As a matter of justice, which this is, it is not a party political issue. In politics and our business, justice is a matter of honour that we deliver to the British people, and that is what we intend to do today.

The loan charge is an injustice with very large consequences. We have all met and listened to constituents who are facing utter financial ruin as a result of this policy. It is ruining people’s lives. There have been at least seven suicides caused by the stress, anxiety and financial hardship of this policy. To give the House a flavour of that—because it does not apply just to those who have committed suicide but to those who are under stress—here is what the family of one loan charge victim told the all-party group about his suicide note:

“He wrote about being at the end of his tether with the Loan Charge matter. He wrote such awful things about himself things that just weren’t true, that he clearly thought about himself at the time. He wrote that he did not set out to do such wrongdoings; he wrote about being unable to speak to his GP about his anxiety as he was ashamed, his fear of going to prison, his disgust in himself for getting mixed up in the Loan Charge and his belief that he would now go to hell.”

In the case of this individual, the loan charge policy took not just his money, but his self-respect and eventually his life. And there could be more. According to the loan charge all-party group, 39% of those affected have had suicidal thoughts. I think the Minister will be hard pushed to think of another Government policy that has caused more than a third of those affected to consider suicide. It is no surprise that it is having that effect on people. Some 68% have suffered depression, 71% face bankruptcy, and 49% could lose their homes. I said in the previous debate on this issue that the power to tax has the power to destroy, and that has never been more clearly demonstrated than here.

[Sir Edward Davey (Kingston and Surbiton) (LD)]

I congratulate the right hon. Gentleman on bringing this debate to the House. In the all-party loan charge group, we took evidence from a number of family members of people who had committed suicide as a result of the loan charge, and I can underline the point that he is making. The impact on people who had been law-abiding and hard-working throughout their lives has been quite traumatic. In a particular case that I remember—I am sure that the hon. Member for Brentford and Isleworth (Ruth Cadbury) will remember this—the person who took his own life did not owe a huge amount of money. It was the fact that he had been made to feel like a criminal when he was anything but a criminal.

[Mr Davis]

The right hon. Gentleman makes an extraordinarily powerful point in his own skilful way. I say this back to him: his group took that evidence before the added economic stress of the coronavirus. Many of the individuals affected will be contractors. They will be people who perhaps have no rights at the moment and certainly no way of finding the money to meet the demands on them. Even small sums of money will bring enormous pressure to bear on the individual. So he is right: this is not some vague and abstract tax issue. This is about people’s lives. That is why I was pleased when the Government launched the Amyas Morse review into the policy, and in December, he published a detailed report. I commend him for his heroic attempt to find a compromise, because that is really what he did. The facts and the conclusions are a little different, and that is because he was trying to find a compromise. However, when it comes to matters of natural justice, I am afraid that a compromise is nowhere near enough. Such a detailed review deserves detailed scrutiny, and I am going to spend a small amount of time looking at his central findings.

Sir Amyas recommended a December 2010 cut-off date for the loan charge. All loans before that date will be out of the loan charge scope. In a piece for The House magazine some time ago I referred to that as arbitrary, and Sir Amyas responded. He said:

“It is not an ‘arbitrary’ date. It is the date from which the Finance Act 2011 ensured that tax was charged on income paid through loan schemes.”

But that simply did not make sense, even in its own terms. The Finance Act was not law in December 2010; it was simply draft legislation. It was not passed for another eight months—until July 2011. HMRC does not, or certainly should not, take its instruction from draft legislation. It certainly should not take it from press releases, which was what actually went out on that day. It takes its instruction from settled law—and the words “settled law” matter.

Sir Amyas went on to argue in his piece that, once the 2011 Act was passed,

“tax should have been understood as being due from that point.”

But even in 2011 the law was far from clear after the Government suffered a series of defeats in the courts.

--- Later in debate ---

[Mr Davis]

My right hon. Friend is absolutely right. I started by saying that this is not a political issue; it is an issue of honour. As we would expect from our House—one of the greatest Parliaments in the world, if not the greatest—all sides take part in defending that honour.

[Sir Edward Davey]

The intervention from the right hon. Member for New Forest East (Dr Lewis) was spot on: this has brought the House together. The issue is not about tax avoidance. I think everyone on both sides of the House agrees that tax avoidance should be clamped down on, and there is no disagreement that the loan charge could apply in the future. What has deeply concerned many of us is that this is an offence against the rule of law, which is supposed to be a basic British tradition—one of our core values, which is taught in our schools. I therefore totally agree with the points made by the right hon. Gentleman.

[Mr Davis]

I thank the right hon. Gentleman—I nearly called him my right hon. Friend, from my days on the Public Accounts Committee.

When financial advisers and accountants could not understand the law, when employers could not understand the law, and when the courts could not agree on the law until 2017, how could an ordinary layperson possibly have understood the law?

The Supreme Court’s eventual decision, overturning three decisions before it, reflects changing national attitudes on the responsibility of the taxpayer—the point the right hon. Gentleman has just lighted on. As a result, one organisation representing the professions involved explicitly changed its guidance to its members. It said:

“Members must not create, encourage or promote tax planning arrangements or structures that…set out to achieve results that are contrary to the clear intention of Parliament in enacting relevant legislation and/or…are highly artificial or highly contrived and seek to exploit shortcomings within the relevant legislation.”

In what year was that changed guidance handed out by the professions? 2017.

--- Later in debate ---

[Sir Edward Davey (Kingston and Surbiton) (LD)]

It is a pleasure to follow the right hon. Member for New Forest East (Dr Lewis). I am delighted to say that on this occasion I agree with every word he said. It is the nature of this debate that it has brought those on all sides together. For people who normally are not necessarily in total agreement on economic and tax affairs, this has brought us together. That is for the reason the right hon. Member for Haltemprice and Howden (Mr Davis) gave: it is about natural justice.

I set up the loan charge APPG last year, and I think it has become a group that illustrates the way in which the House has come together. We now have 227 members. My co-chairs are the hon. Member for Brentford and Isleworth (Ruth Cadbury) and the right hon. Member for Hemel Hempstead (Sir Mike Penning). I should say that he wanted to be here today, but he has a family issue that has kept him away.

Not only do we represent colleagues from across the House, but I believe we have gone about our business in a pretty professional way, with the support of the Loan Charge Action Group as our secretariat. We have produced reports in the past, and as a group we have reviewed the Morse review itself and published our response. That follows two witness sessions, where we had tax experts and loan charge victims. We have received more written evidence, and we have built on our previous work. This 63-page report, published today, has 17 key findings on the Morse review and it makes 19 recommendations.

I have been on a number of all-party groups during my time in the House, as I am sure you have, Mr Deputy Speaker, and it is relatively unusual for an APPG to do such a thorough and detailed report in such a short time. If I have one disagreement with the right hon. Member for Haltemprice and Howden it is that I wish he had given us a little bit more time to do our work before this debate, although I am really pleased that we have got this debate. I hope the Minister, whatever he says from the Dispatch Box in response to this debate, will undertake to read the APPG’s report and to respond to it.

When the Morse review was set up, we welcomed it; it is what we had been seeking. We had meetings with Sir Amyas, and we gave him a huge amount of material. It is fair to say—I put this on record on behalf of the APPG—that we welcome many aspects of his report. He talks about how unusual the loan charge is and how unique it is in respect of how it overrides statutory time limits, which are meant to protect the individual taxpayer, and how it looks back over 20 years. What an astonishing piece of legislation to put forward.

The report has a number of good recommendations. For example, it says that if the loan charge continues, after 10 years of repayment any remaining liability should be written off if the taxpayer has earnings of less than £30,000. One would have thought that that was a reasonable recommendation, even if the Government want to stand by the loan charge, but they have rejected it. The Government rejected even that relatively modest recommendation.

I would have thought that Her Majesty’s Treasury and HMRC would have agreed with all the recommendations, in the spirit of the Morse review, but they have not. They have rejected some in full and some in part, and they interpret some in a way that is clearly not intended by the Morse review. For example, one group of taxpayers about whom I have been most worried is those who have had closed tax years—in other words, their tax affairs, properly given to HMRC with all the relevant material and back-up, had been accepted and the tax year had been closed. There can be no doubt that going back to such a year is complete and utter retrospection, yet the Government are still seeking to apply the loan charge to those years. They have narrowed in a most outrageous way the way we consider the concept of a closed tax year.

I am really unhappy with the way that the Government have responded to the Morse review itself, but the review does have a big flaw at its heart. Because the right hon. Member for Haltemprice and Howden set out that flaw in detail, I do not need to speak for so long. In essence, Morse says that the law that was passed in 2011 in respect of the Income Tax (Earnings and Pensions) Act 2003, and particularly part 7A, made it clear. Now, the right hon. Gentleman showed that it did not make it clear, even for those people directly linked to it, because of the timings that he set out.

In specific detail, the expert witnesses whom we saw in the APPG made it clear that that legislation covered only some of the schemes to which the loan charge applies—those schemes that involved employees who were being paid via a third party—but completely omitted entire existing schemes that involve the self-employed, companies and loans paid directly to employees. There can be no doubt that the legislation on which Morse was relying does not apply to many people, because they are just not covered by that legislation. It is not a question of debate; it is just a fact.

At the time, experts looked at the legislation and responded in the way that one would expect: they looked at what the legislation said and changed their advice accordingly. Indeed, HMRC’s advice was based on what was actually in the Act, surprisingly enough. There is a 2016 technical note to which our report refers and in which HMRC specifically says that that is what the legislation said.

I find it quite extraordinary that successive Ministers have tried to defend this double-talk from HMRC. As the right hon. Member for Haltemprice and Howden said, no court rulings in any way interpreted legislation in the way that the Morse review does. I have a huge amount of respect for Sir Amyas Morse, but on this point he is entirely wrong. I do not read all the tax literature, but the tax experts who have contacted us are really clear that Morse is getting the legislation, as it was understood the time, completely wrong.

[Bob Stewart]

When the right hon. Gentleman took evidence from people who are subject to the loan charge, did he receive any evidence to the effect that their chartered accountants or financial analysts since 2010 had told them—the people they were being paid by—that they were in real danger and had better change the way in which they paid their taxes?

[Sir Edward Davey]

We took no such evidence and no such evidence was proffered to us. It might exist out there, but we have certainly not seen it.

I do not want to detain the House any longer, as I have made my core point. The whole reason why this has been such a big issue and has united the House is that the loan charge is retrospective, and that is unfair and wrong. We have to defend individual taxpayers, even if we think they might have been ill-advised in the first place. We have to defend the law. Why do we meet in this House? Why do we pass laws, unless we come back here and say, “Government—you’re breaking the law”, and hold them to account for that? That is our constitutional job, and I thank right hon. and hon. Members from across the House for doing their duty.

--- Later in debate ---

[Jesse Norman]

I take it that the hon Gentleman rightly refers to the enablers and promoters of such schemes. As he knows, I take that extremely seriously, and I have insisted on that point ever since I became Financial Secretary. I will say more about that shortly.

I return to the point that such schemes were contrived tax avoidance schemes that were typically run through an offshore vehicle. A person would receive a monthly amount of pay, often deliberately set at or around the level of the personal allowance to maximise the tax avoided, and above the national insurance lower earnings limit, so as to qualify the person concerned for the national insurance contributions required to receive a state pension. Of course, that did not reflect the person in question’s true earnings because, alongside that payment, they would receive a further top-up payment described as a loan. In many cases, the top-up payment far exceeded—often by a large multiple—the salary element declared for tax purposes.



Those facts are not genuinely in doubt, and all Members who have taken part in the debate have rightly condemned tax avoidance, but I put them on the record again because they highlight how contrived that form of tax avoidance typically was. They also go to the root of the problem.

My right hon. Friend the Member for Haltemprice and Howden raised the issue of thesauruses and dictionary definitions. Let me remind him of the difference between a dictionary definition and a thesaurus. A thesaurus gives an alternate word of supposedly the same meaning. A dictionary definition tries to explain exactly what it is that is being talked about.

The dictionary definition of a real loan is,

“an amount of money that is borrowed…and has to be paid back”.

That accords with our natural experience, as hon. Members will discover if they try to take out a business loan from a bank and not pay it back. If they try to take out a mortgage and not pay it back, they will find the same to be true.

Those loans, however, were not designed to be paid back. They were rather different from loans that might be made to employees that then get written off, on which tax is typically chargeable. They were not designed to be paid back. They were employment income in disguise, so they were subject to tax.

[Sir Edward Davey]

Will the Minister set out which piece of legislation, before the loan charge legislation, saw loans as income?

[Jesse Norman]

I am not in a position to take the right hon. Gentleman through the legal arguments, and I do not need to, because, as I have said, they have been described in detail by Sir Amyas Morse in his review which, of course, is based, as my remarks would not be, on a detailed interrogation with tax experts on all the specific issues behind it. I do not think we have any sensible reason—no one has in fact offered one—for disagreeing at length or in any detail with his conclusion.

Economic Update

Ed Davey Excerpts

Tuesday 17th March 2020 Commons Chamber

[Mr Speaker]

Order. I am expecting to run this to around 9 o’clock.

[Sir Edward Davey (Kingston and Surbiton) (LD)]

Our economy is suffering a heart attack, one deeper and bigger than in 2008, so the Chancellor has a serious responsibility and he deserves constructive engagement from everyone in this House, including my party. His main task is to ensure that there is confidence among the business community and the British people. I have to tell him that although he has made a good start, this is still very much a work in progress. His package for the business sector was large, but may I urge him to say far more about the loan terms he is putting forward? Many small businesses will be very worried about taking on this debt. May I also urge him to go much faster to give confidence to the ordinary people who are suffering in our constituencies?

[Rishi Sunak]

I thank the right hon. Gentleman for his constructive attitude, and I look forward to working with him. The loan terms will be interest-free for six months. Because of the liquidity that has been provided by the Bank of England, they will be incredibly cheap, and they will be available on a rolling basis for commercial paper, so they will be loans that are accessible and very valuable to businesses. They will be ready from next week.

Special Educational Needs and Disability Funding

Ed Davey Excerpts

Wednesday 29th January 2020 Westminster Hall

[Munira Wilson (Twickenham) (LD)]

I beg to move,

That this House has considered special educational needs and disability funding.

It is a pleasure to serve under your chairmanship, Mr Pritchard. I am delighted to be leading my first debate in Westminster Hall as a new Member on this extremely important topic, which impacts some 1.3 million children up and down the country. They are often the most vulnerable and needy children in our education system.

My predecessor, Sir Vince Cable, led a debate in this Chamber on this very topic less than a year ago. The fact that I am leading a similar debate today underlines just how urgent and important an issue it continues to be, not least in Twickenham, despite funding announcements from the Government since the previous debate. Since the Children and Families Act became law in 2014, the number of children and young people with statements or education, health and care plans has increased across the country by almost 50%. The increase in my own borough of Richmond upon Thames is in fact more than 50%—the number of EHCPs there has risen from 941 in 2014 to almost 1,500 now.

That legislation was designed to put young people at the heart of the system but, as the Select Committee on Education recognised last October in a report, that ambition has yet to be realised and has been hampered by both poor administration and a challenging funding environment. We are here today to debate the latter challenge, but on the Committee’s other key point, regarding poor administration, I must acknowledge the local government and social care ombudsman’s report, published earlier this month, which strongly criticised Richmond Council’s children’s services provider, Achieving for Children, for not effectively supporting children with special educational needs and disabilities. I was horrified to read about the three cases highlighted in the report of young people missing out on support and education between 2016 and 2018 because of failures by the provider, for which of course Richmond Council is ultimately responsible.

I am pleased that the council has accepted the ombudsman’s recommendations in full—both to compensate the families impacted and to conduct a thorough audit in respect of all the children for whom Achieving for Children is responsible for providing SEND support. I will personally be keeping a close eye on the results of that audit, meeting with local SEND groups as well as senior councillors and council officers, to ensure that any issues arising are urgently addressed and that Achieving for Children is held properly accountable.

[Sir Edward Davey (Kingston and Surbiton) (LD)]

I congratulate my hon. Friend on securing the debate, and I declare an interest as the father of a child with special needs and an EHCP being administered by Achieving for Children. Does my hon. Friend agree that not only does that company have to improve, but the accumulated debt on Kingston Council’s balance sheet, on Richmond’s balance sheet, and indeed on those of local authorities across the country, creates a huge crisis in funding not just for SEND but for schools and local authority services across the board? It is time that the Government got a grip of this, either by shifting that accumulated debt on to central Government balance sheets or by special funding relief, because this crisis could blow up in councils across the country if they do not act.

[Munira Wilson]

Absolutely. My right hon. Friend makes an excellent point. I was going to touch on deficits later, because Richmond’s finances are in a parlous situation for that very reason.

To return to the main topic of SEND funding, many children are missing out on the support that they require and deserve, because of the enormous funding pressures on local councils and schools throughout the country. The SEND funding landscape is complicated by the fact that there are two separate funding pots. There is the high needs block for EHCPs, special schools and alternative provision; and children with moderate SEND, requiring in-school support, are funded out of core school budgets. Simultaneous demands on both have created the perfect storm. School cuts since 2015 mean that support staff have been the first to be cut. That in turn has led to increased demand on EHCPs, causing delays.

As a parent of two young children, I know that if either of them needed additional support, I and my husband would explore every single avenue open to us to apply maximum pressure on decision makers to ensure that those needs were met fully. However, many parents do not have the time, resources or confidence to navigate the complex system of appeals, ombudsmen and tribunals—even with the support of SEND advocacy groups such as the excellent Skylarks charity in my constituency. The result is that the most disadvantaged families often lose out.

Oral Answers to Questions

Ed Davey Excerpts

Tuesday 7th January 2020 Commons Chamber

[Sir Edward Davey (Kingston and Surbiton) (LD)]

Happy new year, Mr Speaker. May I associate myself and my colleagues with your remarks of support for the people of Australia? In that regard, may I ask the Treasury Front-Bench team whether this March’s Budget will be a Budget for the climate emergency? If it is, will Ministers look at the ideas of the outgoing Governor of the Bank of England to decarbonise finance and green the City and come forward with the rules and regulations that will catalyse private investment to beat climate change?

[Mr Clarke]

I thank the right hon. Gentleman for his question. We are clear that this is a central priority for the Budget in March. Obviously, I am not going to disclose details of that today, but the Government have a clean growth strategy. We are clear that green finance lies at the heart of the UK’s offer to the world, and obviously that goes for both the private and public sectors; we need to bring together the whole strength of the country to make a truly radical offer.