Co-operatives and Mutual Societies

Gregory Campbell Excerpts

Tuesday 14th December 2021 Westminster Hall

[Mr Baker]

Marvellous. I am looking forward to the hon. Gentleman’s contribution later, when I hope he will tell us all about that. It is wonderful to have cross-party agreement on some of these subjects, and I hope we can drive forward the agenda.

Large co-operative employers are at the forefront of good business behaviour when it comes to investing in people. I think that follows directly from the ethos of the co-operative movement—the idea of valuing everybody equally and having open and inclusive membership, for example. I will not go through all the details, because we will be here for an hour, but co-operative models can be used as tools for community-led economic development. There is a wide range of examples from right across the country—I hope Members will share some—which show how co-operatives can be at the heart of bringing people together.

What can co-operatives achieve? They can expand wealth and well-being. The efficacy of the model can lead to a proliferation of co-operatives that can help to strengthen the private sector, including in places that need it the most. That is because co-operatives are distributive by design. Value, wealth and well-being are shared more broadly through day-to-day activity.

A growing body of data shows that co-operatives are especially resilient businesses. At a time like this, resilience could not be more important. Official data in our country shows that co-operative start-ups are twice as likely as start-ups generally to survive the first five years of trading, for example, with similar findings in other countries. Separate research shows that co-operatives in the UK that raise equity via community shares—a crowdfunding model unique to co-operatives—are more resilient still, with a 92% survival rate.

Official data also shows that co-operatives were four times less likely to permanently close in 2020 than UK businesses generally. Research published by Scottish Enterprise shows resilience among employee-owned businesses in Scotland throughout the pandemic. The fact that twice as many co-operatives were created as dissolved in the UK in 2020, when there was a net reduction in the number of businesses in the UK overall, suggests that co-operative entrepreneurship was a comparatively resilient force during the economic and psychological shocks of the pandemic.

Why are co-operatives so resilient? They have purpose, and their ownership and governance dictate long-termism. In an economic shock, it is the members making the tough decisions in their collective, long-term interests; it is not investors demanding lay-offs to protect short-term returns. Co-operatives also patiently build up and re-invest reserves and use members’ capital wherever possible, rather than piling on debt to achieve faster growth. My hon. Friend the Minister knows some of my views about excess debt creation.

I am conscious of time, and I want to give way to other Members, but I will say that at a time like this, when we need to recover to from coronavirus, co-operatives can be an ever more important part of our society in bringing people together and giving them a shared purpose and an equal stake in the business in which they work.

[Mr Gregory Campbell (East Londonderry) (DUP)]

The hon. Gentleman is speaking about co-operatives now, but I am sure he will come on to mutuals, which are also included in the heading of the debate. Does he agree that it has been remarkable and refreshing to see the members of the mutual society LV= use their power in the past few weeks to demonstrate exactly what he has referred to? They wanted power to go to the membership, as opposed to going to shareholders for a fast buck.

[Mr Baker]

I am grateful to the hon. Gentleman for his intervention. I hope to make a few remarks about mutuals, but I am focusing first on co-operatives. I have been involved in the inquiry into LV= by the all-party parliamentary group for mutuals. LV= made quite a compelling case, but the point is that, as he said, it is up to the members what they do. In a free society, we make progress through trial and error. It might well be that that members have made a mistake in rejecting the bid, but it is their right to do so; it is their right to choose.

I am a huge fan of mutuals, because I can see that they are bound to create a set of incentives that support the people whom the business serves. I remember in my youth being very disappointed that so much carpetbagging was going on, with people taking £500 in exchange for demutualising. I was very disappointed at the time, and even as a teenager I could see that it was not a good idea. In the case of LV=, I fear that things are not going where they should. I very much hope that my hon. Friend the Minister will ensure there is a good quality inquiry into what is going on, and into how regulation can better support people’s desire to support the mutual spirit in the future. I think he would agree that we cannot afford to be romantic and exempt co-operatives and mutuals from the realities of commercial life, or the exigencies of things such as competition law.

I turn to performance and efficacy. The principle of mutual purpose and democratic governance is found in all co-operatives, and it has significant advantages. It is a proven way for people with a shared interest to collaborate effectively, achieving things together that they could not on their own. That is a great way to expand liberty.

Liberty is something that should be exercised in community. One of my favourite scholars said:

“Society is cooperation; it is community in action.”

We should remember that entrepreneurship is a great search to help other people; that is what entrepreneurs seek to do. If people make a profit justly, without breaking the rules or exploiting others, that is a good thing. It shows that those people have served others, according to their assessment of what has been produced. I believe that that combination of mutual interest and service to others through a market means that co-operatives should be a crucial part of our society.

I am conscious of time, so I will wrap up. The Co-operatives UK brief makes a number of suggestions to the Government, including that there could be more co-operatives, and some particular policy suggestions. There are three themes: to have better tailored business support and enterprise finance for existing co-operatives, co-operative entrepreneurs and the conversion of existing businesses to become co-operatives; to have legislative and non-legislative action to provide a more enabling corporate framework, through law, regulation and processes; and to have tax support for investment in co-operatives and co-operative development. I will not go through the full brief, but Co-operatives UK intends to publish it after the debate.

I appreciate this opportunity to hear from Members from all parts of the House about co-operatives. We can all enthuse about co-operatives, even as we remain, as I am sure the Treasury will do, robustly pragmatic rather than romantic. As the Conservative party softens and become more inclusive and society minded in the 21st century, we ought to say that co-operatives and mutual societies are an important part of our society that should be fostered in everyone’s interests, particularly as we come back from coronavirus. We need to build up the mutual relations of interdependence on which we all rely.

--- Later in debate ---

[Jim Shannon (Strangford) (DUP)]

It is a pleasure to speak in this debate, and I have spoken in these debates in the Chamber and in Westminster Hall as well. First, I thank the hon. Member for Wycombe (Mr Baker) for setting the scene so well. He brought the issue to Westminster Hall some time ago and I spoke then, and I mean it honestly when I say that his presentation has been absolutely on the button.

I have often said that co-operatives, mutual societies and indeed credit unions are a phenomenal help to so many families throughout Northern Ireland—I obviously want to give a Northern Ireland perspective to the issue. I want to speak about the co-operatives in my constituency and the Newtonards Credit Union branch, which has been the salvation of many people I know in a difficult time.

I commend my hon. Friend the Member for East Londonderry (Mr Campbell) and concur with his comments on LV= mutual, which the hon. Member for Wycombe also referred to. It is really important that those at the ground level of the co-operatives, mutuals and credit unions have some say in where they go. My local credit union has mentioned that it would do more for people if it was given the opportunity to do so.

I was happy read an article last week on affordable social housing in Northern Ireland that gave examples of how things can progress. In it the Northern Ireland Communities Minister indicated that the role that credit unions and others can play should be further explored. She said:

“If we are to achieve our objectives it is likely that a wider range of sources for financing will be needed such as charitable trusts and foundations, credit union loans, capital markets: from the sale of long-term bonds and developer contributions.”

The benefits of housing co-operatives, community-led housing and self-build initiatives

“will also need to be explored further”.

She is absolutely on the button, and she is right in what she says.

In a debate on affordable housing we had in this Chamber last week, I mentioned the good work of community-led housing and self-build initiatives. The good that could be done must be more widely investigated throughout the United Kingdom, and I urge the Minister—he always responds in a constructive way to our requests—to work collaboratively with the devolved Administrations to unlock further the best-kept secrets of credit unions. He has spoken about credit unions before, and we have had conversations about them both outside and inside the Chamber.

A lovely article in the Financial Times succinctly sums up what co-operatives, mutuals and credit unions are really about:

“The history of non-profit lenders has been intertwined with civil rights movements in the UK and abroad since the second half of the 20th century, as campaigners, religious groups and philanthropists sought to help marginalised groups gain greater access to financial services… Credit unions act like community-focused banks, using deposits from members’ savings accounts to fund low-cost loans with interest rates capped at 1 per cent per month in Northern Ireland and 3 per cent per month in the rest of the UK—about 43 per cent APR.”

In the past, I was fortunate to have one of the Minister’s colleagues—he was then a Minister but he is not now—visit Northern Ireland and particularly the credit unions. His input on that visit was incredibly helpful. We visited the credit union in Newtownards and met the man in charge, George Proctor. He has built up the membership—both adults and young people—phenomenally and it has become a major go-to when it comes to being a voting member and being able to borrow money whenever people need it.

The credit union sector is large and has grown in recent years. There was about £1.6 billion in outstanding loans at the end of 2020—up 19% since 2016—but the sector also faces challenges in keeping up with regulations and changing customer expectations of services such as online banking. The number of UK credit unions fell by more than a fifth in the same period, as smaller unions closed and were taken over by larger groups. Although the numbers are down, the clientele has kept steady and has risen. Credit unions are an essential component in any rural area and town, as they offer people the ability to save money, to borrow money, when needed, at a small interest rate, and to repay that money at an affordable rate, with no stress. Suddenly, the boiler breaking down three weeks before Christmas does not result in a nightmare but can be quickly and efficiently dealt with by using local credit unions.

I am fortunate to have 13 registered credit unions and co-operatives in my constituency, and I will name each one for the purposes of Hansard: Downpatrick Co-operative Marketing Ltd, Northern Ireland Fish Producers’ Organisation Ltd, the Ballynahinch Credit Union Ltd, Portaferry Credit Union Ltd, Newtownards Credit Union Ltd, Newtownards Royal British Legion Club Ltd, BDS Credit Union Ltd, Ards Saturday Market Traders’ Co-operative Limited, Comber Community Credit Union Ltd, Strangford Down Ltd, Northern Ireland Horse Board Co-operative Society Limited, North Eastern Lobster Fishermen’s Co-operative Society Limited, Ballywalter Youth and Community Co-operative, and Comber Earlies Growers Co-Operative Society Limited. All of those, at different levels and with different financial resources, represent a large number of people.

[Mr Gregory Campbell]

My hon. Friend is itemising the co-operatives in his local area, which can be replicated across the United Kingdom. Does he agree that as long as these groups, whether they are mutuals, co-operatives or credit unions, can demonstrate their professionalism and their adaptability in the modern marketplace, are to be supported? They need to see the wider community rally behind them and get involved with them for the better future of all of our communities going forward.

[Jim Shannon]

I thank my hon. Friend for that intervention. Yes, I do agree. When we look at the breadth of the market, and who these organisations represent, it indicates support that goes above and beyond. There are cattle market co-operatives, farmers’ co-operatives, fishermen’s co-operatives, plus a few reasonably sized credit unions. The agricultural co-operatives, the credit unions and the market traders co-operative—bringing all those people together, as my hon. Friend said—are examples of co-ops that help to sustain an independent rural community and a way of life. They are an essential component of these communities and a lifeline for them.

These organisations are undoubtedly able to do more, when we consider that the Financial Conduct Authority estimates that 28 million people—more than half of UK adults—have some element of financial vulnerability. In February 2020, up to a third of adults had less than £1,000 in savings, and one in 10—about 5.6 million people—had been paying a high-cost loan with an annual interest rate above 100% at some point in the preceding 12 months. What co-operatives, mutuals and credit unions do is enable their members to borrow at rates that they can afford to pay back. It is not like going to a payday loan company or others in the community who take advantage of people in their time of vulnerability. What these organisations offer is critical for the future.

Perhaps the Minister can give us some indication of any discussions he may have had with credit unions or co-operatives in Northern Ireland. I know I asked that earlier on, but it is always good to get a perspective here, in Westminster, where we are all under the great Union flag of the United Kingdom of Great Britain and Northern Ireland together—we are all part of that.

There is an issue with lending, and it is my firm belief that credit unions could be a way of dealing with this issue. Further, more investment and help should be given to allow credit unions to push their products and abilities into more communities as a viable savings and loans option. With that, I will conclude by thanking the hon. Member for Wycombe for introducing this debate, and I look forward to the comments from the shadow Ministers and the contribution from the hon. Member for Plymouth, Sutton and Devonport (Luke Pollard).

Community Debt Advice Services

Gregory Campbell Excerpts

Wednesday 1st December 2021 Westminster Hall

[Yvonne Fovargue]

I do agree, but I do not think there is a silver bullet. Some of the problem is that there just is not enough money to go around, and it does not matter how well a person manages their money if they do not have enough to go around. Money management education is one of the tools of the trade, but it is not a silver bullet.

As I was saying about the new MaPS contract, it is good to look at the wellbeing of the advisers. I have heard that the debt advice peer assessment scheme has caused advisers considerable strain, with people having to do two web chats at once, which is really not feasible: they have to concentrate on the individual. This focus on wellbeing is acceptable, but I worry about the nine regional branches for debt advice going. About half of the money will go to the three national digital and phone-based services centres in the north, the midlands and the south, which will largely be at the expense of face-to-face provision, and providers can bid for only two of those. That element of competition worries me a bit. We all know that advice agencies are competitive: we have had to be, because we are competing for a limited pot of money. However, setting people up against each other is not the way to do it. Collaboration is the key with advice agencies, and we need to see more of that. I do not disagree with contracts—I think they are a way forward—but I do think we need to look at the way in which the contract is tendered and, in particular, how it can promote collaboration.

The 50% cut in the regional services is another worry. As my hon. Friend the Member for Kingston upon Hull West and Hessle said, it is vital that there is partnership between the local agencies, and those partnerships are often built up on the ground with local knowledge. As my right hon. Friend the Member for Kingston upon Hull North (Dame Diana Johnson) mentioned, it is the wraparound casework support; the writing and phoning creditors; the knowledge of bailiffs in the area and how the local authorities work; and having those personal contacts that are vital. We know that people who have mental health issues often need the comfort of a face-to-face service. They may well be able to move on to a telephone service at some point in future, but an experienced adviser will be able to say when that point is.

I am also concerned about the nature of the contract. A number of smaller agencies are being put off from bidding because payment in arrears is a real problem. Advice agencies cannot cope with payment in arrears. They need to know that the money is there up front. They are not paying their advisers and rent in arrears; they are paying for everything and it is a month-on-month worry. The full responsibility for the TUPE arrangements is a problem, as is clawback, which needs to be specified as to the quality targets and the amounts.

I am pleased that in my discussions with MaPS it said it would not be a month-on-month target, because all of us in the advice field know that December sees a drop in cases, whereas January and February see a big rise. The demand for debt advice is not stable month on month; it goes up and down. I would also like to see time targets, not numbers. Number targets encourage short, easily dealt with cases, whereas the people who need face-to-face support need time to deal with complex debts and the emotional and other associated issues.

[Mr Gregory Campbell (East Londonderry) (DUP)]

On the important issue of face-to-face contact and the empathy needed, particularly for very vulnerable families obviously in need, will the hon. Lady join me in paying tribute to the likes of Citizens Advice, of which she is well aware, and other groups, such as Christians Against Poverty, that offer empathy and a counselling role to assist people through those problems, and in calling for more support for such groups?

[Yvonne Fovargue]

I certainly would. A friendly face is important, somebody outside the family who is not judging, but dealing with someone as an individual with problems, and not just as a problem. Many local providers of face-to-face debt advice have felt unable to bid because of the risks involved in entering the contracts, and the large size of the contract, as well as the lack of any allowance for inflation at a time when inflation is expected to rise.

The specifications place undue risk on the contractors, requiring them to forecast volumes of people over the first three years of the contract. There has been a pandemic and a rise in inflation; how are they going to predict what will happen in three years’ time? Three years ago, could we have predicted what was going to happen now? I do not think so. There is a worry that the small, local providers that rely on the MaPS funding may have to drop face-to-face services or close entirely. Many are not included in the tender bids and they do not have the size or resources to compete for the tender individually.

What assessment has been made of the loss of local services, those that are there now, and those that say they are likely to close if they do not get any funding from the contract? I hope that the shift from face-to-face is not motivated by cost-cutting. That is worrying because the cases are more complex and less capable of being dealt with through telephone and digital service.

Telephone services work where the debt is quickly identified and there is excess income that can be distributed to creditors in a debt management plan. That is when it works. There are fewer and fewer of those cases coming forward. Face-to-face services typically support clients with a wider range of problems, such as benefit claims, charitable applications, access to local welfare assistance schemes, that national and regional contracts are not aware of. Those services become more important because of the new help to claim contract that is being put out to tender, which takes out face-to-face entirely. That is a big mistake and will lead to a lot more debt in the future.

Clients who have complex interwoven problems, including debt, housing issues, mental illness and domestic violence, struggle to access and navigate online services. In my borough, in Wigan, people do not go online as much as in other boroughs. In fact, only a couple of years ago, 30% of people in Wigan said they had never been online. They would be particularly at risk.

It will hit vulnerable clients, less well-off people, young people and people with dependent children. We assume all young people go online to get help with their debt, but that is not the case. Quite often, when they are hit by debt for the first time, they do not know who to turn to. It is important that they can turn to an individual, who can say, “Okay, do this,” and then perhaps move them on.

The previous commissioning strategy seemed to better recognise that people in debt need access to a wide range of wraparound support, but that has now been superseded. How was that previous contract looked at? Why was it seen to be unsuitable in the future?

AdviceUK says that MaPS’ approach is wrong because it is rooted in a mistaken belief that debt is solely a problem of poor choices by individuals. That needs to be part of a wider conversation about welfare support for the most vulnerable, rising living costs, improving life chances, unstable and poorly paid work, which we know is a big driver of debt, and improving the credit industry, especially the way in which people on low incomes are treated by that industry and the products that are available to them, which often cost more and are less suitable.

I agree with my hon. Friend the Member for Kingston upon Hull West and Hessle that there needs to be a pause to this contract and that we need to look at it in the round, and whether it will improve the lives and the chances of people in debt. I would also like us to look at debt solutions and debt enforcement. We need to put more thought into how to prevent people from falling into debt in the first place, how to get more money into people’s pockets and how we deal with them when they get into debt.

Inevitably, people will get into debt. From the time that citizens advice bureaux were founded during the second world war, they have worked to put themselves out of business, but they are now needed more than ever. There is not going to be a solution that will ever bring an end to debt. We have to get solutions that make the lives of people in debt easier and more manageable, and certainly try to take the stigma away from debt.

National Productivity

Gregory Campbell Excerpts

Wednesday 22nd January 2020 Westminster Hall

[Jim Shannon (Strangford) (DUP)]

It is nice to be involved in a debate anywhere in the House, but especially in Westminster Hall. I thank the hon. Member for Barnsley Central (Dan Jarvis) for setting the scene. As he does so often, he spoke in a cool and calm voice, giving all the detail and evidence that backs up the case. He does it well, and it is a pleasure to be involved with him. I see the Minister in his place. I think this is the second time he has responded in Westminster Hall, and we look forward to his comments.

As the hon. Member for Barnsley Central said—it was one of his first sentences—this debate is all about how we help all the regions in the UK to benefit from national productivity. Productivity is certainly an intricate subject, with many facets. As always, I am very thankful to the Library for the briefing note it prepared, which clearly makes the point that while we are up on productivity from this time last year, the overall increase is not satisfactory. The hon. Gentleman talked about ensuring that we improve productivity in areas or regions where it could be better. Productivity rose by 0.4% in the third quarter of 2019 compared with the previous quarter, but it was only 0.1 percentage points higher than a year ago, so the rise is not as significant or as positive as we would like it to be. The slight pick-up in productivity growth should not obscure the continued weakness in the overall trend. We welcome any increase—we have clearly seen an increase, and it is important we recognise that as a positive facet—but at the same time we have to recognise that it is a bit slow.

[Mr Gregory Campbell (East Londonderry) (DUP)]

Does my hon. Friend agree that one of the reasons, if not the central reason, for the decline in productivity has been the past three years of uncertainty about Brexit, and that now that that is—hopefully—departing fast over the ridgeline, productivity will improve in all the regions, but particularly in Northern Ireland, the north of England and Scotland?

[Jim Shannon]

My hon. Friend is absolutely right. The debate should not be centred just on England, but on all the United Kingdom of Great Britain and Northern Ireland and how we can all grow. Historically, UK labour productivity has grown by around 2% a year, but since the 2008-09 recession it has stagnated. To be clear, I am a Brexiteer and I look forward to the possibilities of Brexit and leaving on 31 January. Even though we in Northern Ireland have not got the deal that we wanted, we must be pragmatic and look forward to where the possibilities are. Labour productivity in quarter 3 in 2019 was only 2.4% above what it was more than 11 years ago in Q4. That was the pre-recession peak.

We could play the blame game and blame an ageing population. We could continue to blame the banks for the banking crisis. Some will blame Brexit. People always look for someone to blame—that is the nature of life—but in this case we want to be more positive. We could more accurately blame the behaviour in this place and the refusal to honour the vote of the people, point to the uncertainty that the trading partners have been displaying and point to the new leadership regimes in trading partners, but doing that is now pointless; we have to look positively towards the future, where we are and what we are trying to achieve. With that in mind, there are the possibilities after Brexit for trade deals with many parts of the world, and the Minister might give us some detail of that.

There are many possibilities and positives that we should be looking at to see how we can all gain. We in Northern Ireland want to participate in that gain, as my hon. Friend the Member for East Londonderry (Mr Campbell) said. We want to see what is coming our way, so that everyone in the United Kingdom of Great Britain and Northern Ireland benefits. We must look at how we can increase productivity throughout the United Kingdom and how we can realise those possibilities and new markets.

I put on record my thanks for the hard work of my hon. Friend the Member for Belfast East (Gavin Robinson) and others who played a huge part in securing the future of Harland and Wolff, and indeed the successful sale of Bombardier, or Shorts, as we would all know it and so affectionately still call it in our part of the country. Both those businesses were in doubt not because of the quality of the service or what they manufacture, but because of the uncertainty in the market at that time. It was hard work that secured those businesses, so I put on record my thanks to my hon. Friend for all that he did in relation to that.

At that time, the Government stepped into that gap to help my hon. Friend because the Northern Ireland Assembly was not functioning, but the Northern Ireland Assembly is now functioning. We welcome it being back in place and offer the Minister for the Department for the Economy, Diane Dodds, all the best. Has the Minister had the opportunity yet to speak to the Minister in the Northern Ireland Assembly? If not, when will that happen? It is important that we communicate regionally about where we want to be and how we can benefit each other. More of that needs to be done, and the start of that is ensuring that as much Government business as possible is carried out by British-owned, British-supplied and British-staffed factories.

My constituency of Strangford, like yours, Mr Paisley, has a burgeoning agrifood sector. Manufacturers are not just looking within the United Kingdom to sell their produce. Sales go down south, as far as the middle east and out to the States as well. The businesses involved include Willowbrook Foods, Mash Direct and Rich Sauces. Along with Pritchitts and Lakeland Dairies. Probably 1,600 jobs depend on those factories, and then there are all the farmers that feed into those companies as well. We have a thriving pharmaceutical sector, with Eakin in Ballystockart outside Comber leading the way. It wants new opportunities in markets across the seas. We need a close working relationship between Ministers here and those in the Northern Ireland Assembly.

Light engineering is prominent in North Antrim and elsewhere. Cooke Bros is a small company that does magnificent work through its engineering firm. Again, such companies need help from the Northern Ireland Assembly as well as from central Government here. Bus orders should no longer be fulfilled in Europe because of EU regulations, but by our own Wrightbus. I put on the record our thanks to you, Mr Paisley, for your hard work and endeavours in that respect. We all note the reasons why that firm was helped from going under: by finding a new buyer, retaining some of the jobs and having a really good base for the future. Wrightbus has a global reputation for high quality and reasonable prices. It should win on the level playing field. Such companies from our own areas have done very well, and we want to see how they go in future.

As I said in this Chamber yesterday, I agree with the industrial strategy. Now is the time to invest in ourselves. We want to be more productive and we want to compete globally, so we need help to make sure we can do that. We can be proactive and positive. When it comes to promoting ourselves on the world stage, we should do it under the flag of Great Britain, the Union flag, because that is our flag—that flag of our country collectively. I know the Department does do that and it is really proactive, but I want to make sure we can build upon it. We must show that we have belief in ourselves. We have to encourage employers to take on employees in their 50s. We have those who perhaps need help in that age bracket, so we should try to help. With the increased pension age, people will be in work longer. We must encourage businesses to look at skills and not simply age. By the same token, we must also ensure that we raise generations of skilled workers with a good work ethic and a healthy work-life balance. We have a very good skilled workforce in Northern Ireland, as we have in other parts of the United Kingdom. Again, how do we build on that?

On 31 January, we will turn to a fresh page in the history of this great nation of the United Kingdom of Great Britain and Northern Ireland. We need to take the opportunity to make better decisions, encourage better behaviour and simply do better by our own constituents. We must start productivity reform by being productive in this place and giving better than we have given thus far.

Growth Strategy

Gregory Campbell Excerpts

Tuesday 21st January 2020 Westminster Hall

[John Redwood (Wokingham) (Con)]

I beg to move,

That this House has considered the growth strategy for the UK.

It is a pleasure to serve under your chairmanship, Mr Hollobone. A most welcome change has occurred in economic policy since the advent of the new Prime Minister. We are now told that the aim of economic policy is to promote the greater prosperity of the many in the United Kingdom by means of promoting faster economic growth. The Prime Minister often adds “opportunity” to his justified enthusiasm for growth and greater prosperity.

I welcome that fundamental change, because that is what I have wanted our policy to achieve in recent years, at a time when my party and the general economic establishment thought that priority had to be given to a single, central aim of economic policy—the reduction of state debt as a percentage of GDP. The change of aim in economic policy to the monitoring of state debt occurred first under the Labour Government in 2009, when state debt got out of control. Before the Labour Government left office, they accepted the need to get state debt down, particularly the running deficit, from very high levels, and made some cuts. The coalition Government changed some of those cuts, but went on with that strategy, because they rightly agreed with the outgoing Labour Government that the deficit was far too high and unsustainable.

I supported that policy in those days, but in 2015-16, when the deficit was under better control, I became more concerned about the tension between the central aim of getting the deficit down and the need to promote growth, which, in the longer term, is the best way of getting the deficit down, because it generates more activity and more tax revenue. Therefore, I started campaigning for an economic policy based on the promotion of prosperity. I am delighted that we now have a Government with that as their central aim.

Our economic policy under the previous guidance, from 2009 to 2015, stabilised our position and reduced the state deficit, necessarily, by a substantial amount, without preventing all growth. However, that policy ushered in a period of lower growth than we had experienced prior to the banking crash, primarily because of the way the deficit was tamed. At the time, it was said that the deficit was tamed by big cuts in public spending, but it was mainly tamed by a massive increase in the amount of tax revenue collected from the domestic economy.

It is true that there were individual cuts and individual departmental budgets took a hit, some of which were very contentious on both sides of the House, particularly among the Opposition. However, public spending went up overall in cash terms, and arguably went up slightly in real terms over that period. The main challenge of getting the deficit down was achieved through a series of tax-rate rises and collecting extra tax revenue out of the modest growth that the economy achieved, without any relief of that tax burden. Part of the reason that we had slower growth is that we became a relatively higher tax economy than we had been before.

We have seen an experiment conducted on both sides of the Atlantic since 2016, when the Americans opted for eye-catching and dramatic tax cuts, both cutting the rates companies must pay and putting money into the pocket of every person with a working wage, with a particular emphasis on getting people on the lower end of the income spectrum to have more money to spend. That has proved extremely successful: the American economy has been growing at more than 2% for most of the time since the tax cuts kicked in, whereas the European side, sticking with the Maastricht requirements, deficit reduction requirements and relatively high taxes, has been struggling to grow at 1%.

[Mr Gregory Campbell (East Londonderry) (DUP)]

I congratulate the right hon. Gentleman on securing the debate. He is making a powerful argument for growth across the UK. On the issue of differential employment and income rates, does he agree that if this is to be successful, we must see economic growth and higher wage levels spread more evenly across the UK, so that regions with a much lower wage economy start to see more wealth and employment at the higher end?

[John Redwood]

Indeed, and I welcome the emphasis placed on that by the Prime Minister and Ministers. I hope that we can give them some more ideas on how that can become realistic policy. I am just setting the scene: there has been a big change in the aim of policy, which I warmly welcome. I suggest to the Minister and others that lower taxes might be an important way of trying to develop that aim. The experiment conducted on both sides of the Atlantic seems to suggest that countries with the ambition and desire to cut taxes on working incomes and businesses will experience more growth and success. We have seen a lot of money repatriated to the United States of America by big businesses, which now find the tax rates acceptable and therefore do not require the same legal structures—I am sure they were behaving legally—to keep the money offshore or not to pay taxes for the time being in the United States.

The United Kingdom Government have, even during difficult times, decided on lower corporation tax rates. I think we have a competitive corporation tax structure. Our lack of tax competitiveness rests in the treatment of individuals and income, and employment costs, rather than corporation tax, where we have done a good job relative to continental Europe. We are benefiting from that. It was good to hear it announced this week that the UK is now the third preferred destination for technology investment after only the United States and China—two economies much larger than our own—and that we are attracting more investment than the combined totals of France and Germany, so we must be getting something right in our approach to business investment and the taxation of business profits.

The Government have already set out a new fiscal framework, which I welcome, because they understand that it is not sufficient just to set a new aim for policy—they need a fiscal framework to deliver it. They have directly addressed the issue of state debt, saying that they will not spend money on revenue matters that is not covered by taxation—a prudent control on the situation—but they have also said that there is nothing wrong with the budget deficit expanding from just over 1% to 3%, if the purpose is for good investment, especially given the very low rates that the Government now have to pay to borrow money.

I think that is a sensible compromise that gives us a bit of scope in the public sector. I trust it will also leave us scope to lower tax rates, which is important for getting extra growth from the private sector, where much of the growth will come from. Today, the Government’s 10-year borrowing rate—if they needed to borrow more money from the market—is 0.63%. One would assume that the public sector can find investment projects and get a return considerably above 0.63%, so I fully endorse what they are trying to do.

I hope we can accept the new policy aims and the new fiscal framework, which give us flexibility, and think about what additional policies the Government might need to adopt to boost that growth rate. I have been predicting for some time that we would have a marked slowdown in the United Kingdom, as a result of the fiscal tightening that we have experienced until now and the monetary tightening that the Bank of England has implemented. It has been very curious that the Bank of England has detached itself from the world’s central banks over this recent very marked slowdown in world activity. The slowdown was led by an actual recession in manufacturing in most parts of the world; the centre of the storm has been in the motor industry, but it has also extended more widely into the consumer and service areas.

The rest of the world’s central banks are busily fighting that, and so we have seen a succession of interest rate cuts in countries with interest rates that could still be cut. We have also seen a resumption of quantitative easing programmes in the European Union, after it perhaps rather foolishly abandoned them at the end of the previous year; we have seen continuous large quantitative easing programmes in Japan; and in China, we have seen a big reduction in the required capital of banks, so that those banks can lend more to the private sector and expand China’s economy, which has also slowed quite markedly.

I suggest to the Treasury Front-Bench team that they look very carefully at the centre of the downturn that we have seen worldwide and mirrored here in the United Kingdom, and in particular at the motor industry. The motor industry was hit by higher taxes on consumers in China; it was hit by changed emission regulations on the continent of Europe; it was hit in the United Kingdom by increases in vehicle excise duty in the 2017 Budget; and it was also held back by Bank of England guidance warning banks against lending too much money for car purchases, in a market where practically everybody buys a car on credit, rather than their having the cash to pay the considerable sums that cars cost these days. So there was a very predictable slowing of the UK car market, in parallel with the slowing going on elsewhere.

That was compounded by the fact that the UK had been incredibly successful at building a very large diesel car industry, and in particular a diesel car engine-making industry in the United Kingdom, just in time for the EU and the UK to become very hostile to diesels and send out the message that people really should not buy diesels, and that in future diesels may even be taxed or regulated off the road. There could also be new controls on diesels, with the Government, in common with the EU and other Governments, wanting people to buy electric cars before they felt confident enough in electric cars, or before the prices of electric cars come down to a more realistic level for them to be a feasible opportunity for people. So we have seen in the UK, as in China and in Europe, a big decline in the sale of traditional diesels, and there has not been an off-set in sufficient numbers by the new vehicles that are being introduced.

So the Government need to look at the car industry and recognise that the issues affecting it are a combination of taxation, availability of credit, and messages about what kind of car people are allowed to buy and drive. The industry needs to be given some time to complete the transition that Governments want, and it is not yet in a state where it can sell enough electric cars to immediately replace the lost capacity that it is experiencing on diesels.

Oral Answers to Questions

Gregory Campbell Excerpts

Tuesday 1st October 2019 Commons Chamber

[Anne Milton (Guildford) (Ind)]

17. If he will suspend 2019 loan charge repayments for the duration of the review of that charge.

[Mr Gregory Campbell (East Londonderry) (DUP)]

18. If he will make it his policy to suspend the 2019 loan charge for the duration of his Department’s review of that charge.

[The Financial Secretary to the Treasury (Jesse Norman)]

The Government have listened to concerns expressed across the House about the loan charge, and, as the House will know, an independent review is now in progress under the leadership of Sir Amyas Morse. While it is under way, it is right for the loan charge to remain in force and for the Government to implement legislation on which the House agreed. The review will conclude by mid-November, to let anyone who may be affected know, and to give people time to plan in advance of the January self-assessment filing deadline. To help taxpayers who may need longer to pay, Her Majesty’s Revenue and Customs has confirmed again that there is no maximum time limit for payment plans.

--- Later in debate ---

[Mr Gregory Campbell]

The Minister is bound to be aware of the scale of concern across the House and among those who are directly affected. He has outlined a date of mid-November. Immediately upon that date being reached, will he take urgent action to assist those affected?

[Jesse Norman]

I have no idea what the loan charge review will conclude, but I guarantee that we will look at its findings with all due speed and dispatch.

Oral Answers to Questions

Gregory Campbell Excerpts

Tuesday 2nd July 2019 Commons Chamber

[Robert Jenrick]

Absolutely—those are exactly the kinds of questions that we dealt with in the consultation.

[Mr Gregory Campbell (East Londonderry) (DUP)]

Some of the problems in our United Kingdom can be traced to the disparity between the regions and nations of the UK. Will the Minister ensure that the shared prosperity fund is not the end, but just the beginning, of ensuring that there is prosperity across the entirety of our nation?

[Robert Jenrick]

The hon. Gentleman is absolutely right: there are disparities of income and productivity across the United Kingdom, and what he mentions will be one of the key objectives. But the shared prosperity fund is not our only intervention in this area: we are taking a range of measures, including significantly increasing the amount of public investment in infrastructure—to the highest levels in this country since the 1970s.

Social Mobility: Treasury Reform

Gregory Campbell Excerpts

Tuesday 11th June 2019 Westminster Hall

[Justine Greening]

I thought the hon. Lady would probably say that. Unfortunately, that illustrates that the Opposition have not understood what social mobility means. It means equality of opportunity. It would probably be better—this is why I raised the point—if we stopped arguing about semantics and started talking about finding common ground on how to get change for the better for millions of young people and communities currently disconnected from opportunity or too far from it. If this just becomes a debate on semantics, which is what I worry the right hon. Member for Islington North is trying to turn it into, we will not get anywhere fast. I will come on to why that is a problem, but the topic of this debate is that, while there are broader problems around how we debate achieving social mobility, which is why it has not happened, there is a bigger problem, which is about how the Government approach social mobility and the Treasury’s place within that.

Let us be absolutely clear: achieving social mobility means we achieve equality of opportunity for everyone in our country, irrespective of where they start, who they are and what their background is. It is not—I repeat, not—just about the gifted few.

I want to see system change. I have talked about the practical work I am doing on the ground with businesses and organisations through the social mobility pledge, outside of the Government, but if we are to finally crack the nut—unlike the Labour party, I do not believe we should give up trying to achieve social mobility—we have to ensure change inside the Government. To my mind, that starts with the Treasury, and that is why I called this debate.

After eight years in government, overwhelmingly as a Cabinet Minister and running three different Departments, my conclusion is that we effectively need to abolish the Treasury in its current form. What we have right now is dysfunctional and not fit for purpose. It does not achieve the transformation in opportunity and social mobility that Britain needs.

[Mr Gregory Campbell (East Londonderry) (DUP)]

I congratulate the right hon. Lady on securing this debate. She has a long interest in the topic. She referred to the abolition of the Treasury. Has she indicated that to the 10 Conservative hopefuls for Prime Minister?

[Justine Greening]

I will set out my wider strategy on why I think the Treasury in its current form is not fit for purpose. I hope in holding the debate that some of the arguments will get cut-through. If we are here to improve lives, for young people in particular, and to connect those young people to opportunity, things have to radically change, including in government. We need fundamental change in how the Government look at and invest taxpayers’ money, and that means the Treasury.

--- Later in debate ---

[Jim Shannon (Strangford) (DUP)]

I thank the right hon. Member for Putney (Justine Greening) for securing this debate and for setting the scene so well. It is always a pleasure to speak on matters of such importance, and I support and sympathise with her remarks. I am pleased to see that the Democratic Unionist party is the second-largest party represented in the Chamber today, just slightly behind the Conservative party numerically.

I thank the right hon. Lady for her hard work on this issue and for the work she did as a Minister. I completely agree with her assessment of the Augar review, and I enjoyed reading her piece in the Financial Times earlier this month on that very topic—it was helpful for a better understanding of the debate, for which I thank her. Something that jumped off the screen was this:

“Its figures show that graduates going on to earn the highest salaries among their peers will see their overall repayments reduced by £18k—a third compared with now. However, for lower to middle-earner graduates, it is the opposite—Augar raises their overall repayments by £12k, almost double.”

I sincerely believe that that reinforces the view that the rich get richer at the expense of the lower class, who become stuck in a mire, as the right hon. Lady mentioned. We should also put on the record our thanks to the Library for providing a briefing pack with information and examples of the issue to help us.

It is important to look at the different opportunities for social mobility for women compared with those for men. There have been changes, which we must recognise, but later I will give an example and tell the story of a constituent who I think exemplifies the issue from a gender point of view. We must also address the fact that ethnic groups have experienced differing life chances over time. In her concluding remarks, the right hon. Lady referred to the need to give everyone the opportunity to maximise their potential, and I want to see that as well. There is also the issue of social mobility opportunities across the country in business and industry.

I am not here to play party politics—that is not my job in this place or what I am about—but it is only fair and right to recognise that Tony Blair’s Labour Government committed themselves to social mobility. At that time—before my time in the House—Blair also committed himself to addressing the issue of poverty, because social mobility and poverty were interlinked. To be fair, it is only right to recognise those commitments. The Conservative-Lib Dem coalition Government also had a clear strategy to improve social mobility. The then Deputy Prime Minister, Nick Clegg, said, “fairness means social mobility.” Clearly, he looked at that too.

The right hon. Lady referred at some length to human capital—it is important to put that on record—which I think is the crux of the matter. The Organisation for Economic Co-operation and Development defines human capital as the

“knowledge, skills, competencies and attributes embodied in individuals that facilitate the creation of personal, social and economic well-being”.

Clearly, we should never underestimate human capital if we want it to arrive at where its potential allows. In an October 2018 release, the ONS indicated that the total stock of human capital in the UK in real terms was worth £20.4 trillion in 2017, slightly down from £20.6 trillion the year before. It is good to recognise human capital.

Earlier, I mentioned a young lady in my constituency who I believe would fit into this category. She is an example of someone who, through social mobility, tried to advance her status and position in life, and succeeded. It is important to mention someone who achieved her potential when the regime was perhaps not set up to let her do so.

[Mr Gregory Campbell]

Does my hon. Friend agree that part of what we need to do is to further incentivise people, particularly young people, through the tax system, so that they can save? Personal allowances, for example, have risen in recent years, but we also need a rise in the national insurance threshold, so that people—particularly young people and those in part-time employment—can earn a higher net income, then work through the system with greater training and skills, and enter a higher earnings bracket.

[Jim Shannon]

My hon. Friend and colleague so often brings to debates an overarching view of where we and young people in our constituencies and across the whole of the United Kingdom need to be.

I will give an example that came my way only last week—although I know the young lady concerned—while I was researching for this debate. She has four children, works in retail, and her husband works in manual labour. Both are on low incomes and receive tax credits to supplement their income. Tax credits have been a great boost for many people. They are okay as long as they are going all right, but whenever they go wrong—if there is an overpayment, for example—they become a real noose around recipients’ necks. When done right, they are a bonus.

The young lady’s eldest child suffered a traumatic brain injury a number of years ago—he survived, thank God, although his life is altered as a result. The reason she came to my staff was to ask for help understanding the benefits system. Probably for all MPs, including the Minister, the most important issue in our constituency office is benefits—it outstrips by far all other requests to our office.

My constituent had decided that she would like to go back to college to get the qualifications necessary for her to enter higher education, with the goal of being an intensive care unit nurse providing the assistance for which she was so grateful in her life. That lady is everything that we might associate with the job: caring, compassionate, intelligent and dedicated. I believe that nursing is a calling, and she certainly has it. She just needs the opportunity—the social mobility for the human capital referred to earlier, to get the opportunity to advance herself and to do well.

In order to answer that call, however, my constituent needs to have her children minded. Her parents have passed on and her in-laws are both still working full-time. She gets tax credit for the few days that she works to help. That would all change if she became a student to provide a better life for her family. This young lady wanted to do better, but found herself in a system that almost holds her back, as my hon. Friend the Member for East Londonderry (Mr Campbell) was saying. What the right hon. Member for Putney said in her introduction is therefore exactly the issue that we have to address.

“Treasury reform” is included in the title of the debate, and clearly the Treasury has to take the issues on board—giving people opportunity and the chance to do better. My constituent, however, would have her tax credits cut if she was on a course, which she would therefore be unable to afford. That was her predicament. The system as designed does not allow for change, but ties us to where we are. Knowing the young lady as we do, she is a loss to the medical profession. If she wanted to claim housing benefit to offset the loss of tax credits, she would have to go on universal credit, and she simply could not afford the five-week lead-in because she has four children and rent to pay.

My constituent is stuck, and my fear is that the Augar review does not help people like that—the right hon. Member for Putney referred to that in her introduction, I refer to it now and others who speak afterwards will no doubt do the same. Such examples perpetuate the idea that university is only for the young and for the middle and upper classes, and that those who are called to do different things with their life cannot do it all. That frustrates me and, for the record, I would like to see the change proposed by the right hon. Lady, because it would be helpful.

My staff have made inquiries about the help available to get my constituent to the stage at which she can go into nursing with the bursary that being a student nurse brings. As for making education accessible to working-class people, however, we clearly have not achieved that. We sincerely need to work harder to do that. That is why I am supportive of my colleague, the right hon. Lady, and her desire to ensure that those in need of help and support to reach their goals can get it, regardless of the social structure into which they were born.

This debate is about giving opportunity and about ensuring that those who need help can achieve it. At the present time, our system does not help such people in the way that it should. The days of education only for the privileged are, and should be, a thing of the past, and the days of further education only for the young or privileged also need to be a thing of the past. This Government and the Minister must understand where people are coming from and help them to get to where they need to be.

My mum and dad sent me to boarding school. I know, honestly, that that was a big step for them to take. Those five years when I was in boarding school meant that my working-class family had to keep the same car for years, had no holidays, and so on. I am therefore deeply indebted to my parents for giving me that educational opportunity. They worked, scrimped and saved to make it happen. What I want to see in the society I live in and represent is everyone having the same opportunity. I do not see that now, unfortunately. That is why this debate is so important—I thank the right hon. Lady for securing it and for airing the issues so well today. By doing so, she has done a favour and sought justice for people across all of the United Kingdom of Great Britain and Northern Ireland, where opportunity and equality should be there for all.

Financial Exclusion: Access to Cash

Gregory Campbell Excerpts

Tuesday 21st May 2019 Westminster Hall

[Seema Malhotra (Feltham and Heston) (Lab/Co-op)]

I beg to move,

That this House has considered financial exclusion and the future of access to cash.

It is an honour to serve under your chairship, Sir Henry. I thank the Backbench Business Committee for granting our request to hold the debate. I also thank the Access to Cash Review panel, Joe Fortune from the Co-op party, the RSA, Responsible Finance, Hounslow Council, UK Finance, the Payment Systems Regulator, the Treasury Committee Clerks, Visa, Mastercard, the Financial Inclusion Commission, Citizens Advice, the Money Advice Service, Age UK and many others for their help in preparing for the debate. I mention them as an indication of how widespread the concern is and how much of a contribution many stakeholders are making. I also declare an interest as a recent nominee to become a new commissioner on the Financial Inclusion Commission.

There is considerable interest in the debate, so I will try to keep my remarks to about 15 or 16 minutes. I will set out some of the context; where progress is being made, which we should recognise; opportunities that we should seize, including a particular mention for credit unions; and the importance of joining up to move forward together. I will also cover the potential for and importance of future legislation, which the Government have so far resisted and I am sure the Minister will mention.

As the map of stakeholders shows, access to cash is an important and complex issue that can no longer be primarily led by industry. We need a joined-up plan led by the Government that looks at the cost and effectiveness of our wholesale cash infrastructure, programmes for digital inclusion and incentives to diversify services based on complex customer needs. We need to ensure that those services can reach people, and that we both maintain free access to cash for those who need or choose cash as their method of payment and ensure that cash remains accepted.

There is clear cross-party interest, which the Chair of the Treasury Committee referred to in her recent correspondence with the Chancellor. That gives me hope and confidence that we are setting the right foundations for moving forward and addressing the challenges ahead.

Fundamentally, the bigger picture is inclusive economic growth and flexibility, security and choice in personal and family finance. Cuts to welfare, stagnant wages and economic instability in the last decade have exacerbated the precarious position of millions of people in the UK. The Money Advice Service estimates that 22% of UK adults have less than £100 in savings, which makes them highly vulnerable to a financial shock such as job loss or an unexpected bill. Some 8 million people rely on high-cost credit to pay essential household expenses, and may frequently turn to alternative forms of finance such as high-cost lenders or illegal loan sharks to make ends meet. Recent Financial Conduct Authority data shows that the number of high-cost short-term credit firms has decreased, but the volume of lending has increased.

Ten years ago, six in 10 transactions were made in cash, but by March 2019, that number had halved to three in 10. The combined number of banks and building societies is falling steadily, and in 2018, the number of free-to-use ATMs fell for the first time in 20 years.

[Mr Gregory Campbell (East Londonderry) (DUP)]

I congratulate the hon. Lady on securing the debate. The issue of free-to-use ATMs is particularly acute in rural areas, and especially among elderly and more vulnerable communities, which should be at the forefront of the debate.

[Seema Malhotra]

The hon. Gentleman puts on the record an important and well-made point, which I will address later.

Oral Answers to Questions

Gregory Campbell Excerpts

Tuesday 21st May 2019 Commons Chamber

[Mr Speaker]

Put a copy of the answer in the Library of the House—we will all find it most informative.

[Mr Gregory Campbell (East Londonderry) (DUP)]

My party has advocated the raising of the personal allowance, and I am glad that the Chancellor has done that over the past few years, but does he agree that part of the problem now is that part-time and full-time employees on low pay, just below the threshold of £12,500, pay national insurance contributions? Will he consider eliminating that to the same level as the allowance?

[Mr Hammond]

We always have to find the most cost-effective way to deliver the effect we are looking for. We have chosen so far to do that by raising the personal allowance thresholds, but the hon. Gentleman makes a perfectly legitimate argument for a different approach in the future. As I have said, we will have choices as a result of the much improved state of the public finances.

Oral Answers to Questions

Gregory Campbell Excerpts

Tuesday 9th April 2019 Commons Chamber

[Elizabeth Truss]

I think it is an extremely strange idea. What we need to do is cut taxes for those on low incomes, and that is what we are doing: from this April we will cut taxes by £130 for those on basic rate taxes, meaning that they will be able to keep more of their own money.

[Mr Gregory Campbell (East Londonderry) (DUP)]

At this stage of the economic cycle there are many more people in employment, but many of them are in low paid or part-time employment. What steps are the Treasury and the Government taking to increase the level at which people earn a living to pay for the necessities of life?

[Elizabeth Truss]

Let us be clear about the statistics. Over the past year, 90% of the increase in employment has come from full-time workers, and 97% has come from high-skilled jobs. We are building an economy fit for the future.