Alcohol Duty

Jim Shannon Excerpts

Monday 19th December 2022 Commons Chamber

[James Cartlidge]

I enjoyed meeting the hon. Gentleman, other parliamentarians and alcohol harm stakeholders on, I think, 24 November in the Treasury. It was a good meeting, where I think there was acceptance that we are trying with the reform package to strike that balance. We want to have competitive duty rates and to look at levelling the playing field that exists between pubs and supermarkets, but, equally, alcohol harm and consideration of public health must be at the heart of this. That is why the reform package in August has one underlying principle: taxation on the basis of ABV. We think that that is the right way forward, balancing both those approaches.

[Jim Shannon (Strangford) (DUP)]

I very much welcome the statement. It is good news not simply because the hospitality industry is on its knees, but because the steep increases in prices have led to more people having not a social drink with friends but a sustained drinking at home mentality, which can be detrimental to families. Has the Minister considered taxation aimed at multibuys in supermarkets, in co-ordination with the welcome freeze for pubs and hospitality?

[James Cartlidge]

I am grateful to the hon. Gentleman for his comments. As I said last time he asked me a question, the occupant of the Chair always seems to save the best till last. The hon. Gentleman hit the nail on the head. Let us be clear. He is talking about friends who cannot go for a drink because of economic pressures. With the enormous surge in energy costs and the rise in inflation, the biggest impact economically is on consumption and therefore discretionary spend such as in pubs, hitting hospitality. When we talk about the support that matters, it is not just help for businesses with their energy bills but the help that we are giving to consumers, so that they can still find that expenditure to support our pubs this winter. Of course, we are helping them by freezing duty for six more months. It is a win-win for consumers and for the sector.

Business Rates and Levelling Up

Jim Shannon Excerpts

Tuesday 13th December 2022 Westminster Hall

[Jim Shannon (Strangford) (DUP)]

It is a pleasure to speak in the debate, Mr Mundell; I thank the hon. Member for Waveney (Peter Aldous) for setting the scene so very well. He and I, and others in the debate today, often join forces to support our communities. His and my communities are similar in their culture and geographical stance, and we share an interest in fishing issues. It is always a pleasure to come along and support the hon. Gentleman. It is also a real pleasure to follow the hon. Member for Torbay (Kevin Foster), good friend that he is. He is back on the Back Benches now, but when we were on the Back Benches before, I used to follow him and he me. To be honest, normally, I follow everybody else—but it was a real pleasure to hear his contribution. I am also pleased to see the Financial Secretary to the Treasury in her place; I know she always generously tries to respond to our requests and I look forward to her contribution.

I think we are all on the same page on this one. I very much support the two hon. Gentlemen who have just spoken and what they are trying to achieve. I hope to be able to achieve that as well. I am pleased to see the shadow Minister, the hon. Member for Ealing North (James Murray), in his place. We are a bit sparse in numbers on this side of the Chamber, but I know that the hon. Gentleman’s contribution will make up for that.

Like many others, I am and was excited about the Government’s levelling-up agenda. I looked at the money for Northern Ireland and imagined how many improvements could be made with that funding. Like the hon. Members who have spoken and who will speak afterwards, I have been concerned that the levelling-up programme seems to gloss over the needs of coastal communities. The hon. Members for Waveney and for Torbay outlined their requests on behalf of their communities. I have not read the speech of the hon. Member for St Ives (Derek Thomas), who will follow, but he will probably endorse what we are saying as well. The hon. Member for Waveney gave his presentation of the subject at the start of the debate. It has been incredible to hear all of them.

As a quick aside, I should say that as I travelled up the beautiful peninsular roads in my Strangford constituency to the airport on Monday, in cool, crisp air, my thoughts were not only on the condition of the roads and their iciness, but on the knowledge that the road verges were getting smaller and smaller each year, giving less space for slippage and increasing the danger of those winding coastal roads. That is part of the reason why I have advocated for levelling-up funds to address coastal erosion concerns. We can have all the wonderful attractions we like, but if villages and roads slide into Strangford Lough, those attractions will mean nothing for those places.

Moving on, I want to highlight the concerns of small businesses. I always give a Northern Ireland perspective in these debates. I believe that it adds to the value of this great United Kingdom of Great Britain and Northern Ireland that we can all come together from four regions to debate these issues and thereby engender support for all businesses in the regions, just as I support my colleagues here in the mainland.

In March 2022, most of the businesses in Northern Ireland—some 89%, or 70,510—were microbusinesses with fewer than 10 employees. Just over 2%, or 1,640 businesses, had 50 or more employees. Almost half of businesses in Northern Ireland—45% or 35,415 businesses—had a turnover of less than £100,000, while 10%, or 8,220, had a turnover in excess of £1 million. When the Government talk about percentages, I presume they are thinking in terms of thousands of pounds, yet the cost for many of these businesses is hundreds of pounds, which could cover the cost of, for example, pens, biros and pencils for their office. Yet, for a small business, these perpetual small increases can be the death knell. When the debate came forward, I was pleased to support it and add a Northern Ireland perspective.

In Northern Ireland, our small businesses pay 30% more for the delivery of products. That is, in part, to do with the Northern Ireland Protocol Bill, but also the movement of goods. They seek to absorb some of the cost, and this finds their profit margin down to 15% to cover all overheads. With respect, the pressure on businesses in Northern Ireland is more acute than it is for those on the mainland. When rates are put up by a few per cent, it can mean business owners working for less than the minimum wage. There is probably more pressure today than there has been for a long time, so again this debate is relevant to my constituents and businesses in Strangford.

Another struggling demographic is pubs. I support what both the hon. Members for Waveney and for Torbay said and will give my own perspective. Pubs pay more in business rates per pound of turnover than any other business. Both hon. Members referred to the hospitality sector, and that is a sector we are concerned about. I know we always come asking for things, but it is the nature of life that we seek to illustrate in these debates where our constituents are coming from. What help can the hospitality trade be given? I know the Government have helped in many cases, so this is not a criticism—I am not in the job of criticising; I am in the job of trying to find solutions, as others are.

The business rates bill for the sector accounts for 2.5% of total business rates paid, despite only representing 0.5% of total rateable turnover—an overpayment of £570 million. When the hon. Member for Waveney introduced the debate, he clearly suggested that the rates for the hospitality sector, including pubs and restaurants, need to be substantially reviewed, because the overpayment does not reflect a fairness in the system. It is time to look at that.

The draft ratings list for 2023 to 2026 shows pubs’ rateable values falling on average by 17%, which will start to address the overpayment, but there is still a long way to go, and we should look to the immediate concern. The extension of, and increase in, the hospitality business rates relief for 2022-23 was therefore extremely welcome. I always think we should give credit where credit is due. The Government have made some substantial moves, and it is important that we recognise that. The freezing of the multiplier and the abolition of the downward transition on relief were also welcome.

However, the decision not to bring forward—this is one of my requests for the Minister—the online sales tax to offset the cost of pub rates and provide for a fundamentally fairer business tax regime for the digital age was disappointing. I ask the Minister to see whether that request could be looked at. It is important because it is one of the solutions. In these debates, the hon. Member for Waveney always sets out how we can do things better, and that is incredibly helpful. The current business rates system remains unbalanced. I join the British Beer and Pub Association in urging the Government to bring forward meaningful reforms that level the playing field.

I will use a pun, which I think the hon. Members for Waveney and for Torbay, who spoke before, and the hon. Member for St Ives, who will follow, will perhaps appreciate, as they all come from coastal constituencies. Levelling up only works if the rising tide raises all ships and does not leave the essential but smaller craft marooned behind the yachts that are already away. It is about bringing the other ones on board—the smaller businesses, who are under incredible pressure. I ask again for greater consideration on those issues. I know the Minister will do all she can to try to address that.

--- Later in debate ---

[Victoria Atkins]

Goodness me, I would not pretend to have an intimate knowledge of the economics of Torbay. My hon. Friend knows his constituency extremely well, but the realistic fact is that businesses in his high street have to pay taxes of some sort. That is why we have tried to mould the business rate support package to help the businesses that need it the most, which we recognise are those in the retail, hospitality and leisure industry. I will come on to that particular support, which is a very generous package that I hope will be of great benefit to businesses in his constituency.

We have a duty to ensure that the business rates system is fair and responsive, while raising sufficient revenue to support the public services that I have already talked about. Since 2017, when the Government doubled the 100% small business rate relief rateable value threshold from £6,000 to £12,000, a third of properties in England have paid no business rates whatever. In my own constituency, I know of many properties in my market towns that pay no business rates precisely because of that protection and they are, I hope, thriving as best they can as a result.

The Government provided £16 billion in business rates relief for the retail, hospitality and leisure sectors during the pandemic because it was such a difficult time for them when the economy was essentially closed down. That was an unprecedented level of support for the high street, on which so many communities depend. From my own constituency, I know how vital that support was in keeping businesses’ heads above water during the lockdowns. The Government also provided a £1.5 billion covid additional relief fund for businesses that were affected by the pandemic but which were not eligible for other reliefs. Local authorities, due to their knowledge of their local areas, were responsible for designing and establishing those schemes. Progress has been in line with our expectations, and final distribution data will be published on gov.uk shortly.

As the Chancellor stated in the autumn statement last month, it is an important principle that revaluations should reflect market values. Hon. Members have emphasised that point during the debate. The 2023 revaluation will therefore go ahead. From April 2023, all rateable values will be updated for all non-domestic properties, with evidence from April 2021. This will mean initial bills will reflect changes in market conditions since 2015, and will ensure a fairer distribution of the tax burden between online and physical retail.

The hon. Member for Strangford asked me why the Government have not introduced an online sales tax. He will know that we launched a consultation on the issue earlier this year. We received many responses, which will shortly be published, but it is fair to say that there was not unanimity. Indeed, there was not even agreement—I would not put it as highly as that—as to what such a tax should look like, because many of even the smallest businesses on the high streets of our constituencies now have some form of online presence. It may not be the main part of their business—that may be the shop—but, understandably and laudably in the 21st century, they are trying to diversify by having an online business.

Nobody could quite see how we could differentiate between the enormous multinationals that we are all keen to ensure pay taxes and those microbusinesses that my hon. Friend the Member for Waveney described so well. That is why in the autumn statement the Chancellor decided against an online sales tax, with the important caveat that the changes we are making to business rates, including with the revaluations, will mean that the distribution warehouses, which supply the multinationals that we are all keen to ensure pay their proper taxes, will see significant rises in their bills while we also protect the shops and microbusinesses to which he referred.

[Jim Shannon]

That is a very helpful response, as always; I expected nothing less. I will take the Minister’s point of view out of Hansard and give it to some microbusinesses in my constituency that have asked me these questions. I understand there is a wish for this revaluation to happen, and I understand the difficulties and complexities the Government face to get it over the line. If I could come back to the Minister directly with some thoughts, maybe we could see if we could review it in a positive way.

[Victoria Atkins]

Of course. I am always delighted to hear from the hon. Gentleman. He will appreciate that there are many other factors; for example, click and collect was a stumbling block for many in the consultation. I look forward to his future correspondence.

The support package that we have introduced means that the revaluation will go some way to addressing the imbalance between online and offline retailers. On average, large distribution warehouses will see an increase in bills of about 27%, and bricks and mortar retailers will see decreases of about 20%. We recognise that business rates payers may feel uncertain about the upcoming revaluation, given other pressures the country is facing that are driven by global challenges.

Rising prices around the world, made worse by Russia’s illegal invasion of Ukraine, have hit businesses hard. In the autumn statement we announced the steps that we will take next year to provide support through these difficult times. We will deliver a business rates support package worth £13.6 billion over the next five years. That will protect businesses from facing large bill increases because of high inflation and rateable value increases following the revaluation.

My hon. Friend the Member for Waveney urged the Treasury to cut the UBR to the 1990 level of 35p, showing the trade-offs that the Government must make. Doing so would cost £9 billion a year, which would be a significant potential loss to the public revenue. We have thus taken the steps we have through the support package to protect ratepayers from high inflation, and we are instead freezing the tax rate for three consecutive years at a cost of £14.5 billion.

My hon. Friend the Member for Torbay (Kevin Foster) described the vibrant hospitality sector in his constituency. We are extending and increasing the retail, hospitality and leisure relief scheme from 50% to 75%, up to a cash cap of £110,000 per business. Pubs and the holiday parks he referenced are included.

Russia: UK Companies

Jim Shannon Excerpts

Wednesday 7th December 2022 Commons Chamber

[James Cartlidge]

The hon. Gentleman asks an interesting question, knitting together two points. To be fair to him, I have to say that he has consistently attended all the recent Treasury debates at which I have been present. I am grateful to him for that.

We should not confuse divesting and investing. We are clear that there is an outright ban on investing in Russia: the Prime Minister said back in March, when he was Chancellor, that there was “no case” for such investment. Divestment is happening. It is a process that for some companies will take time, but I think we are all clear that we want to see it happening.

The hon. Gentleman is absolutely right to highlight the windfall tax. While it will raise more than £40 billion to support our economy, help us fund public services and, above all, support people with energy bills this winter, it does have a generous allowance. Let me be clear about the reason why, which goes back to my answer to my hon. Friend the Member for Barrow and Furness (Simon Fell): while we want to raise funds from the levy, we also want to incentivise investment in energy security. Ultimately, the long-term answer to the question of how to defend ourselves against being held to ransom over energy prices is by ensuring our energy security for the future.

[Jim Shannon (Strangford) (DUP)]

I thank the Exchequer Secretary for his answer to this urgent question. It is clear to me and to the House that he is doing his best to address the issue in a firm way.

We have seen not only the continued involvement of UK companies in Russia, but the ongoing involvement of Russian companies and kleptocrats in infiltrating UK companies potentially to commit fraud. What steps will the Exchequer Secretary take to ensure that UK companies are discouraged from any involvement with the Russian economy and ensure that a harder stance is taken to protect our economy from the promotion of economic crime and infiltration by Russia itself?

[James Cartlidge]

As ever, Mr Speaker, you have saved the best till last. I am grateful to the hon. Gentleman for his kind words. There is a legal side to protecting our economy—the sanctions regime protects it from the impact of sanctioned individuals and companies—but I think the most important way to protect our economy is by providing support this winter to our businesses and constituents, including constituents in Northern Ireland. We will be bringing forward many energy schemes with specific application in Northern Ireland; I know that he takes a keen interest in them. We are working with BEIS to ensure that we deliver those programmes in Northern Ireland, as well as in the rest of the United Kingdom. The hon. Gentleman makes an excellent point. Ultimately, we are supporting not just the people of Ukraine, but our businesses and our constituents.

Greening the Financial System

Jim Shannon Excerpts

Wednesday 30th November 2022 Westminster Hall

[Jim Shannon (Strangford) (DUP)]

I thank the hon. Member for Sheffield, Hallam (Olivia Blake) for securing the debate and for setting the scene so well, and it is always nice to follow the hon. Member for Rother Valley (Alexander Stafford), who cannot be ignored—indeed, he was not ignored in the Chamber today by you, Mr Bone. He is certainly a gentleman who sets the scene well on subjects that he is interested in and knowledgeable about.

As part of our climate change goals, greening our financial system has become a priority, and the hon. Members for Sheffield, Hallam and for Rother Valley are absolutely right to say how important that is. I believe that our financial systems across the UK have a duty to ensure that they are investing wisely in green strategies and understand that banks can take steps to become greener. I always speak from a Northern Ireland perspective, and I will give examples of some of the things that we are doing. Before I do so, I want to say that I am encouraged by Government strategies in relation to mapping and charting a way forward. Perhaps we will hear more about that from the Minister, who I hope will give us encouragement.

In November 2020, the then UK Prime Minister, the right hon. Member for Uxbridge and South Ruislip (Boris Johnson), set out his “The Ten Point Plan for a Green Industrial Revolution”. I always welcome such steps, but what we want to see, and I think what the hon. Member for Sheffield, Hallam wants to see, is a wee bit more meat on the bones, to see what the plan means. The former Prime Minister stated that his plan would create hundreds of thousands of jobs,

“making strides towards net zero by 2050.”

The highlights included a ban on combustion engine sales by 2030, a pledge to quadruple offshore wind power by 2030—the hon. Member for Sheffield, Hallam referred to offshore and onshore wind power—and an investment of £525 million towards new nuclear power. I am not absolutely sure whether the target for the ban on combustion engine sales by 2030 is achievable, given that we live in a country whose population is dispersed between urban and rural areas. I live in the countryside, where people need to have cars—usually diesel cars in the case of the farming community—because bus services are not always dependable.

The hon. Member for Sheffield, Hallam also referred to charging points. We have a lot to do in Northern Ireland to catch up on charging points; I mean that. I know that the Government, Northern Ireland Assembly and local councils back home have taken some steps, but again they are all commitments: we have not yet seen much of how they will work out.

In relation to nuclear power and the other things in the former Prime Minister’s strategy, the Northern Ireland Department for the Economy came up with its own strategy entitled “Future Energy Decarbonisation Scenarios”, which aimed to represent realistic green truths for the future of our economy, financial sectors and businesses. Both strategies ensure that the banking and finance sector will play a key role in the greening of the economy and the ambition to reach net zero by 2050. I, the hon. Lady and others welcome the commitment, but we want to see how it will turn out.

The UK must ensure that we consolidate our position as a global hub for green finance. We must position the UK at the forefront of green financial innovation and data and analytics, and build skills and capabilities on green finance. Banks are looking to help their customers thrive in the low-carbon transition, and build a more sustainable future for themselves, their businesses and ultimately the planet that we live on, which we will leave for our children and grandchildren.

I commend the Ulster Bank in Northern Ireland in particular. One branch is only a couple of doors down from my office in Newtownards. That bank is offering green initiatives for Northern Ireland businesses, which include the adaption of smart technology, going paperless, cutting energy costs by introducing remote working, and carrying out energy audits that allow businesses to spot where costs could be saved. That is a very practical and physical way of showing how we can move forward. I commend the Ulster Bank for its commitment and clear strategy, and for doing its bit for customers. I wish that other banks in Northern Ireland, and indeed across this great United Kingdom of Great Britain and Northern Ireland, would take similar initiatives.

The Green Finance Institute in Northern Ireland has stated that we need an extra £5 billion over the next decade to protect and restore nature. In relation to the UK as a whole, the Parliamentary Office of Science and Technology released a briefing to discuss the financial risks of nature loss. The shadow Minister, the hon. Member for Bristol East (Kerry McCarthy), and the shadow spokesperson for the Scots nats party, the hon. Member for Kilmarnock and Loudoun (Alan Brown), have a deep interest in that subject, as does the Minister. We cannot ignore nature loss.

The Amazon rainforest has always been a pet subject of the right hon. Member for Epsom and Ewell (Chris Grayling), who is no longer in his place. He often talks about it. Just last week in the national papers, I read an article that said the Amazon rainforest is at a crux. It is reaching the stage where it will no longer be the lungs of the world, such has been the destruction and the removal of trees. We need to encourage the Brazilian Government. The article made the point—and this ties in well with the debate today—that many investment companies, finance companies and banks are investing in the companies that are removing the trees from the Amazon rainforest. There is a duty upon them to look at what they are doing, and how it is affecting the Amazon.

Some people will ask how relevant the Amazon rainforest is to us here in London today. Well, it is incredibly relevant. It is the lungs of the world and the biggest rainforest—at least it is now; we are not sure whether that will continue. I will ask the Minster one question, ever mindful that he is out to respond in a positive fashion. What discussions has he been able to have with the Brazilian Government, and with the finance companies and banks that are investing in the firms that are removing trees from the rainforest? What happens there will become irreversible at some stage. We in this part of the world—in London—will be poorer for that. Let us do something positive if we can.

Some of this economic activity is driving the nature loss that I referred to. That results in physical sources of financial risk for businesses and financial institutions. For example, that 1 million species are under threat of extinction should not solely be an issue of concern for conservationists, ecologists and nature lovers. It should also concern global business, the finance industry and the agri-environment sector. We cannot ignore the fact that we unfortunately get regular notifications about the animals, birds and plants that are in danger of becoming extinct because of what is happening.

We need a strategy and a way forward for the finance industry and the agri-environment sector. Meeting our targets will require unprecedented public and private sector investment. The Government have not been slow to respond to requests about environmental technology, infrastructure, services and jobs, and we welcome that.

It is encouraging that several Northern Ireland and United Kingdom banks and financial institutions have joined green marketplaces. That indicates that we are heading in the right direction to green our financial system. I know this request does not suit everybody, and perhaps it is not the right thing to do from a ministerial point of view, but I sometimes wonder whether we should set targets, although if we do that and do not achieve them, does that mean that we are not winning? It is good to have a target or a percentage at least to ensure we are heading in the right direction in greening the financial system.

It is great to see the uptake of green loans, which ensure environmentally friendly and sustainable investments into businesses. That is another indication of the success of financial institutions and their willingness to take part in supporting this agenda.

We all recognise that there is still a long way to go, but we are committed to the strategy and the programme of change, and are doing our best to head that way. What discussions have other countries in the world had? COP27 has just finished. It was good to get a deal at the end, but it took a long time. I noticed when I watched it on TV that they were sitting there for 36 or maybe 48 hours, and were under a bit of pressure. How do such agreements relate to a strategy for the future? I look to the Minister to assess what further steps we can take as a collective on green finance to meet our 2030 and 2050 targets and goals.

Illegal Money Lending

Jim Shannon Excerpts

Tuesday 29th November 2022 Commons Chamber

[Jim Shannon (Strangford) (DUP)]

Will the hon. Gentleman give way?

[Paul Maynard]

I will, of course. I was waiting for the moment.

[Jim Shannon]

I commend the hon. Gentleman for bringing this forward. In Northern Ireland, we have real problems with illegal money lending, and paramilitaries are usually involved. People on estates are desperate, with energy prices and everything else rising to a level that is absolutely beyond their means, and they think the only way out is via illegal money lenders. In these trying times, with the rise in the cost of living, many may be tempted to go down this route for a quick loan, so does he agree that more needs to be done—I am looking forward to the Minister’s response—to make people aware of the damage that loan sharks can cause? A £100 loan could mean an £800 repayment, and that is outrageous.

[Paul Maynard]

I thank the hon. Member for his intervention. As ever, he speaks a lot of sense. His evidence from Northern Ireland shows why we cannot generalise about this issue—there are specific circumstances there—but I join him in looking forward to the Minister’s reply, and I am sure those points will be taken on board.

I was struck by one example in which an illegal lender took all a young girl’s money in repayments because she felt obliged to him, as he had taken the effort to go round and put drops into her pet dog’s eyes because she could not manage it herself. What an awful situation to be in. Coercion and intimidation are all too often encouragements to repay, and that should not be the case.

What about when a victim cannot pay? Illegal lenders have been known to add arbitrary late fees, causing the debt to spiral out of control, and to threaten their victims and even demand sexual favours. I know the Minister is more than familiar with the practices of illegal lenders and their economic abuse, but for the benefit of a wider audience, let me tell the House about Michelle. Michelle met her lender on the school playground. She needed money and her friend—her lender—offered to meet that need. She thought she was borrowing from a friend. When she struggled to repay, her lender made it her business to know when money went into her account so they could make her repay. The more she repaid, the more she needed to borrow, but that was not all. Michelle received threats, and she had her windows smashed. As she tried to sleep at night, she was shouted at, making her own home an unsafe place to stay. It got so bad that Michelle and her two children were put into temporary housing. Why? Because she borrowed £50.

I raise these issues not only because they are a blight on our communities, but because we are facing an increase in the cost of living. Those on the sharpest edges will be pushed further away from financial inclusion and the legal credit market into the hands of the most unscrupulous. I very much welcome the financial support that the Government have already given to support people’s incomes, but we must do all we can to prevent illegal money lenders from taking hold by supporting the illegal money lending team to do its job and provide long-term, scalable market solutions to financial exclusion.

The illegal money lending team is a specialised body equipped to identify and prosecute illegal money lenders, but its current scale is insufficient to meet rising demand. Money is scarce, but support to improve the team and its data capabilities would go a long way to improve understanding of this issue and better tackle it. I know the Minister will be aware of the consumer credit levy that raises funds for the team, but perhaps funds could be found from elsewhere in the Department, even in these straitened times. Another part of this support must surely be improving the quality of debt advice and its ability to identify clients who are borrowing from illegal lenders.

It is worth touching briefly on the Help to Save scheme, which is one of my pet favourite projects of the entire Government. It is a fantastic mechanism by which people on universal credit and some legacy benefits can save for a rainy day. To date, His Majesty’s Treasury reports that the scheme supports almost 360,000 people, but this is well below 10% of even those on universal credit. Improving access to and the uptake of this solution to financial resilience is a priority.

May I make a wider point? I have participated in numerous online sessions, meetings there, speeches—you name it—and often all I hear is how we remedy the consequences of poor financial resilience, not how we avoid it in the first place. Help to Save should be front and centre in all our debates about this, not waiting for things to go wrong when we could solve them further upstream. I urge the Minister, as he is new to the job, to make Help to Save a personal passion, because it can make so much of a difference to so many lives.

Finally, let me touch on credit unions and the consumer credit market more widely. Accessing credit should be something that everyone can do. It should not be stigmatised as wrong for certain types of people, as sadly I often hear in this place. We need to do much better through innovation at ensuring that those who most need credit can access credit that is affordable, and that successful repayments can open the door to future, cheaper forms of credit. That journey—the focus of the much lamented and unadvanced Woolard review—is crucial if consumers are to steer clear of illegal lenders.

Part of creating a healthy credit ecosystem is emphasising the role of credit unions, which are strong, community-focused organisations that offer low-cost, alternative credit. However, they are not currently up to the task of plugging the entire credit gap because of over-prescriptive legislation that is both old and in need of modernisation, as well as designed in such a way that it limits their growth, scalability, size and membership.

I know that this is an area of work that the Minister is taking an interest in, and I welcome the provisions in the Financial Services and Markets Bill, which he is shepherding through the House. The Bill will help to expand credit unions’ coverage across the credit spectrum and improve access to services, but if we are to truly scale these lending bodies, we need to reimagine what is called the common bond. By tweaking existing legislation to allow credit unions to have a maximum membership rather than a maximum potential membership, we might allow them to cover a wider geographic area, pool their talent into bigger, more professional bodies and compete with one another to offer the best services. That would create scale, and it seems to me to be a sensible, market-oriented Conservative policy. If only we had so many more of them at the moment. Come along—it cannot be that difficult.

More widely, it is important that the consumer credit market is fit and able to serve customers across the credit spectrum. I urge the Minister to undertake work to see whether the Bill can be adjusted to accommodate those views. Reimagining the common bond, promoting strategic mergers and supporting the illegal money lending teams to clamp down on illegal lenders are small tweaks. I know that those are issues that he takes seriously. I hope—I ask this in every Adjournment debate—he will meet with me and the Centre for Social Justice to discuss how we can take this agenda forward. I thank him for his time today and for listening to me. I thank hon. Members present and hope that, as I have been concise, the staff of the House can make it in time for kick-off.

[The Economic Secretary to the Treasury (Andrew Griffith)]

It is a pleasure to speak in this debate. I congratulate my hon. Friend the Member for Blackpool North and Cleveleys (Paul Maynard), who has a distinguished record in advocating for this subject that is matched only by his distinguished record in speaking up for his constituents.

As my hon. Friend so persuasively explained, loan sharks—he prefers to call them illegal money lenders, so I will do so going forward—can at best use unfair, hidden fees and sky-high interest rates and, at worst, some of the much more aggressive practices that he talked about. The Government recognise many of the concerns that he outlined, and I recognise them from stories that I have heard.

Illegal money lenders prey on the most vulnerable people, which is one of the saddest things about this particular form of crime. As we heard in the case of Michelle, it causes the victims great harm and distress, as well as inflicting damage on the wider communities—sometimes, those communities already face adversity—in which they operate. It is a devastating crime.

This is not a novel issue affecting only some. Only recently, I too met the Centre for Social Justice, including Matthew Greenwood, who has produced an excellent report, to listen to the findings about the prevalence of illegal money lending in England. I want to be absolutely clear with the House that lending money without Financial Conduct Authority authorisation is a crime. We want to clamp down on this immoral and damaging practice, and that is why, as my hon. Friend mentioned, the Treasury funds the illegal money lending teams across the UK. Those teams include specialist local trading standards officers who operate nationally and work alongside the FCA in maintaining standards in the consumer credit market. They can draw on geographically dispersed community intelligence officers, who are crucial in identifying local illegal money lenders, who disproportionately operate in low-income communities, and clearly, by the nature of the crime—my hon. Friend mentioned that there is often a family and friends link—can be hard to detect.

Since the teams were established in 2004, they have prosecuted over 400 cases of illegal money lending and the associated criminality that accompanies it, and have caused nearly £90 million of illegal debt to be written off. That is a huge number, but there is more we can do.

[Jim Shannon]

I thank the Minister for the comprehensive and detailed response he is giving, which I think is what the hon. Member for Blackpool North and Cleveleys (Paul Maynard) is looking for. I mentioned the issue in Northern Ireland in my previous intervention. I know that the Minister may not have had an opportunity to speak to anyone in Northern Ireland, whether in policing and justice or in the Police Service of Northern Ireland, but if he has, can he give any indication of what discussions he has had with those in Northern Ireland, where paramilitaries seem to be the moneylenders, about how we can take those bloodsuckers—which is what they are—out of society and off the backs of the local people?

[Andrew Griffith]

I thank the hon. Member for his intervention. I have not had that opportunity: I am a relatively new Minister, but one who has already had impressed upon him the gravity and prevalence of this situation. I will undertake to understand the situation not just in England, but in all parts of our Union, including with the Police Service of Northern Ireland. Of course, if we are going to tackle this problem, it is right to tackle it in every corner of the Union and make sure there is no hiding place.

The Government have increased funding since the Treasury took over responsibility in 2017. That funding has gone up by 37%, and this year, the Government will provide around £7 million to the teams. I understand the desire of my hon. Friend the Member for Blackpool North and Cleveleys for more resources to be put into this area. I will take that away, meet with the teams and those responsible, and see what more we can do, whether that is simply a question of resources and priorities or whether some legislative changes could be examined. I cannot make any promises at the Dispatch Box today, but I will do that for my hon. Friend as we seek to bear down on this issue.

Those teams also provide support to victims and education to those who are most at risk, and they tell me that they have helped over 30,000 people through that process. They undertake community work, warning people like Michelle, my hon. Friend’s constituent, of the risks of loan sharks—perhaps that term is okay in this colloquial context—or illegal moneylenders. They also support people through the provision of legal and affordable credit, which is something I am very keen to increase. As my hon. Friend impressed on me, we have to work upstream, providing safe, legal and low-cost alternatives to cut off the demand for this product at source. I want consumers to build resilience through having a savings buffer, as well as getting young children into the savings habit at a very early age, as I did. That is a great life gift to give to somebody, and we are well placed to do so through the provision of things like credit unions—safe, legal and affordable credit when people need it.

[Jim Shannon]

The Minister is incredibly gracious in giving way, and I am not going to hold up the debate for much longer. I just want to say that I was very fortunate to have a mother who, when I was 16, gave me my first £10. I went down to the Northern bank, as it was then—it is now Danske bank—and that was the first stage in my savings. That instilled a habit in me, and probably in all my brothers and sisters, of saving and being able to pay our debts.

[Andrew Griffith]

I commend the hon. Gentleman and his mother—he probably would not be where he is today if not for that brilliant savings habit established at an early age. I had a National Savings and Investments blue book; I used to go along to the post office, put in my pound and get a little entry into that book.

I do not mean to digress—not every part of the United Kingdom has an important fixture, a date with destiny, shortly—but I share the passion of my hon. Friend the Member for Blackpool North and Cleveleys about getting people into the savings habit. I will be meeting soon to understand more about the opportunity presented by community development finance institutions, which provide a local, place-based alternative source of credit to people. Also, as my hon. Friend mentioned, there is the brilliant Help to Save scheme, and it would be a delight to work with him to see how we can upscale that—I am sure that he has great insights into it. The scheme is very creditable. It does a good job, and I am delighted to learn that it has helped more than 350,000 individuals. However, as we learned on the prevalence of illegal lending, there is a great deal more to do, and I am keen to understand that scheme more. I recently met the management team of National Savings and Investments at its new offices just around the corner from here. It operates that scheme on behalf of the Department for Work and Pensions, and that could provide a great opportunity.

I know that people across the United Kingdom are worried at this time about the cost of living. Some of them are seeing their disposable incomes decrease or be squeezed. We are fully alive to the fact that that may induce people to turn to illegal lenders. To help the most vulnerable, we have announced £37 billion of support for the cost of living this financial year. We have taken decisive action to support millions of households and businesses with rising energy costs this winter through the energy price guarantee and the energy bill relief scheme. I know that my hon. Friend would say that there is always more to be done, and that the Prime Minister would say that, however generous the Government wish to be, there is a limit to how much we can do. We seek to get the balance right.

In addition to the energy price guarantee, millions of the most vulnerable will receive £1,200 of support through the £400 from the energy bills support scheme, the £150 from the council tax rebate and a one-off £650 cost of living payment. I hope that that gives my hon. Friend some reassurance about how seriously we take this issue and how we are putting the taxpayers’ money where our mouth is, in terms of helping the most vulnerable and trying to keep them out of the clutches of illegal money lenders. I undertake to him to continue to work hard to introduce safe, legal and affordable alternatives, as well as to be relentless in our pursuit of those who would try to exploit this opportunity.

Question put and agreed to.

Finance Bill

Jim Shannon Excerpts

2nd reading
Monday 28th November 2022 Commons Chamber

[Anthony Browne (South Cambridgeshire) (Con)]

It is a pleasure to speak at the back end of the debate following so many fascinating contributions from the Government and Opposition Benches. I particularly enjoyed the comments from the shadow Minister, the hon. Member for Ealing North (James Murray), positioning Labour as the party of small business. I have long believed that that is true—the best way to create small businesses is to start with a big business and then elect a Labour Government.

I support the Government overall and this well-crafted autumn statement. It balances the books in a way that bears down on inflation without harming growth, and it has been done in a fair way, as many hon. Members have said, helping households who are struggling. The energy price guarantee and the retention of the pensions triple lock are particularly welcome. I also welcome the extra money for health and education. Like my fellow Conservatives, I do not like the fact that taxes are going up to the highest level for 70 years, but I accept that that is necessary and that we must accept sound money before tax cuts.

The main focus of my comments will be on an issue raised by several hon. Members: research and development. I very much welcome the fact that the Government are committing to £20 billion a year of public money for research and development, but my concern is about the changes to the R&D tax relief system. The Government have made major changes, with the system becoming more generous to big firms to make them more internationally competitive, but the rate of relief for small and medium-sized businesses effectively being cut in half, from 33% to 18.6%. It is a bit more complex than that, but that is the gist. Why are the Government doing that? As the Chancellor said in his autumn statement, it is to tackle fraud. Indeed, fraud is a problem—I have looked into that as chair of the Conservative Back-Bench Treasury committee —and we do need to tackle it. However, the trouble with this way of tackling research and development fraud is that it punishes legitimate research companies as much as fraudsters and chancers, lumping them all in together. There are better ways of doing that.

I am talking about this because it is a particularly big issue in my constituency. South Cambridgeshire is the life sciences capital of Europe. I have literally hundreds of life science companies, from the global headquarters of AstraZeneca down to the newest start-ups. Almost every village has a science park packed full of life science companies. Those small start-ups are at the cutting edge of research and development in life sciences. More research and development in life sciences is now done in small businesses than by the big pharma companies. Without them, innovation would be very slow and the UK would lose its position as a life science superpower. We talk about becoming a life science superpower, but we are one already, and most of the rest of the world recognises that.

It is in the nature of those small companies that they are research-heavy, but clinical trials mean that it could take 10 to 15 years to bring a product to market before they make any revenues. They are funded not by revenues from global sales of blockbuster drugs, like big pharma companies, but by investors who fund research for a decade or more before they have any chance of a return. Their financial models depend on the research and development tax credit regime, which is fundamental to them in leveraging funds from investors from around the world. It has been successful in making the UK an attractive place to do research.

[Jim Shannon (Strangford) (DUP)]

It is important to have research and development. It is also important that those companies can do their research on Parkinson’s, diabetes and heart disease, and all those things must have research and development investment. Does the hon. Member feel that the Government need to enhance that to their betterment and find cures for Parkinson’s, pancreatic cancer, diabetes and heart disease?

[Anthony Browne]

Absolutely. Many companies in my constituency and publicly funded institutes are doing research on those diseases. That is critical to people living healthy lives as well as to the economy, and the Government are absolutely right to support it.

The sudden cutting in half of research and development tax relief is a major challenge to the life science companies in my constituency, which are shocked at what is proposed —seemingly out of the blue. Many, if not most of them, are suddenly having to rethink their research plans. They are in shock particularly because it was proposed at such short notice—it will come into effect next year—and without consultation. They are having to go to their investors now and say that they will no longer have the money they thought they would and that they will have to cut back research and jobs.

Let me give the House a few examples of real companies in my constituency that I have been working with. PhoreMost combines artificial intelligence with drug research. I went to the opening of its laboratories in the village of Sawston. Neil Torbett, the chief executive officer, said:

“The current R&D tax system has been instrumental in our growth as a Cambridge-based Biotech, which has grown to over 50 highly skilled staff, raised £45 million in investment and entered into multiple pharmaceutical industry partnerships. Receipts from R&D tax credits form a critical part of our funding equation, and the proposed SME R&D tax relief cut will materially adversely affect our future growth plans within the UK.”

I opened the offices of bit.bio, another company in my constituency, which does the most amazing genetics research—I have mentioned it before. Mark Kotter, the chief executive officer, said:

“The assistance at the current level is a cornerstone of our financial projections, which also help us to attract equity funding, and any reduction in the claimable amount will have a significant impact on our ability to invest and grow at the desired rate.

As part of our forecast, we will be looking to increase our current headcount of 175 by approximately 30% in the next year, but quite simply this will not be possible if the tax relief changes announced in the Autumn Statement become reality.”

I could give countless other examples. This is dramatically changing the prospects of life science research in Cambridge.

I know that the Government want to champion life sciences as part of their ambition to ensure that we are a life sciences superpower. I have worked with the Government on that. Indeed, I welcomed the life sciences Minister—the Minister of State, Department of Health and Social Care, my hon. Friend the Member for Colchester (Will Quince)—to my constituency just last week. I know that they want to tackle fraud in the R&D tax credits regime. As a taxpayer, I very much want us to do that; it is a duty of Government to ensure that the taxpayers’ money is well spent. We share those dual objectives, but there are better ways to tackle fraud without harming research. We can throw out the dirty bathwater without throwing out the baby.

Here are some suggestions. We can ban contingent fee—no-win, no-fee—tax agents. A whole industry of people are trying to make money out of encouraging other people to put in fraudulent tax credit claims. We could ban that. We should resource HMRC so that it can scrutinise the claims. Most claims are automated and there is no scrutiny of what is put in. That encourages and gives an easy ride to fraudsters.

We can also limit claims for soft innovation—that is, technical maintenance and updates that would have been made anyway and which people would not normally think of as research and development. They should not be getting research and development tax relief in the first place. Lastly, to distinguish between the life science companies that we all want to encourage and the fraudsters and chancers, the Government could create an R&D tax regime for knowledge-intensive companies, which are already recognised in the tax codes; there would be no definitional issue, because those companies are already in the tax code. I am talking about companies with under 500 employees carrying out work to create intellectual property and expecting the majority of their business to come from that work within 10 years, or companies where more than 20% of employees are doing research roles requiring a master’s degree, a PhD or beyond.

If the Government take those steps, they can promote research while tackling fraud. I urge them, on behalf of all the businesses in my constituency—dozens of which have been in contact—to delay the implementation of the change, consult the industry on it and to look at more specific ways to tackle fraud, so that we can distinguish between genuine research that we want to encourage and the fraudsters and chancers. Will the Financial Secretary or the Exchequer Secretary—I am not sure whether this applies to him or her—meet me and industry representatives urgently to talk about the impact of the changes in the regime on life sciences research in the UK? With that caveat—I realise that it is a big one for my constituency members—and assuming a positive answer, I support the Bill overall, and I commend it to the House.

Autumn Statement Resolutions

Jim Shannon Excerpts

Monday 21st November 2022 Commons Chamber

[John Glen]

My hon. Friend makes a very wise point about the interaction between effective care and a vibrant NHS workforce. We know about the significant changes to the character of the workforce, and we know about the patients who are not fully engaged. We need to get into that so that many of these people get back into work.

The 1.6 million employees who work in the social care sector are working extremely hard. Local authorities have rightly expressed concerns about their capacity to deliver the Dilnot reforms immediately, so we will delay their implementation for two years, allocating the funding to allow local authorities to provide more care packages. Members will recognise that only by expanding the capacity of the social care system will we free up some of the 13,500 hospital beds that are occupied by those who could and should be at home.

[Jim Shannon (Strangford) (DUP)]

rose—

[Karin Smyth (Bristol South) (Lab)]

rose—

[John Glen]

I will give way to the hon. Gentleman first and then to the hon. Lady.

[Jim Shannon]

The hon. Member for Bromley and Chislehurst (Sir Robert Neill) referred to the Minister’s pragmatic approach. On nurses’ pay, if nurses go to work as agency staff, they automatically have a better wage structure. I say respectfully that when it comes to paying nurses, surely there must come a stage at which we need to pay them what they can get elsewhere, and thereby keep them. There will not be a crisis if we can keep our nurses.

[John Glen]

I give way to the hon. Member for Bristol South (Karin Smyth).

--- Later in debate ---

[Jonathan Ashworth]

We want to grow the economy so that there is more money to spend on public services. I am sure that the hon. Gentleman, who always listens carefully, will have heard me say a few moments ago that if our growth had been similar to the OECD average, households would be £10,000 better off and the Government would have the proceeds of growth to spend on our public services. The reason our public services are in such a dire state is the 12 years of poor economic performance under the Conservatives—that is the reality.

Let me come to another element of universal credit that has been frozen: the childcare payment. The former Leader of the House, the right hon. Member for South Northamptonshire (Dame Andrea Leadsom), is no longer in her place, but she made a similar point. It looks as if that payment has been frozen again, at £746 per month for a household with one child. That means that the childcare element will cover just half the average cost of childcare for a household with one child, when two thirds of families pay more for their childcare than they spend on rent or mortgages.

We know that many people want to work increased hours—this is the point made by the former Leader of the House—but cannot do so because of the lack of childcare support. But instead of fixing childcare support, the Chancellor is asking 600,000 people, who often have caring responsibilities, to undertake extra job-searching requirements, with threats to cut their benefits if they do not comply, even though the reason why they cannot work extra hours is that they cannot afford the extra childcare and the Government have frozen the childcare allowance again.

[Jim Shannon]

rose—

[Jonathan Ashworth]

I will give way to my fellow Leicester City fan.

[Jim Shannon]

The childcare issue is very important for my constituents, particularly teachers and nurses, who tell me that when they come to the end of the month, they have nothing left after paying their childcare bill. They want the tax-free childcare allowance to be increased. Does the shadow Secretary of State feel that that is what we should do to encourage them to work while ensuring that their childcare is covered?

[Jonathan Ashworth]

As always, the hon. Gentleman makes his point with force. The consequence of freezing the childcare element is that more parents working limited hours—it should not affect women more than men but does so disproportionately as they tend to do the childcare—will not be able to work extra hours because they will not be able to afford the extra childcare associated with working those extra hours.

--- Later in debate ---

[Dame Andrea Leadsom (South Northamptonshire) (Con)]

It is a pleasure to speak in this very important debate at such a critical time for our country. There is no doubt that the headwinds that face us now are akin to, if not worse than, those in 2010 post the financial crisis. The Government should take full credit for a very well-balanced autumn statement; it ensures that those with the broadest shoulders pay the highest price for the cost of getting our economy back on track and, at the same time, that the vulnerable, the elderly and those on the lowest incomes will be able to get through the next few months as we face unprecedentedly high inflation.

I was a junior trader when sterling crashed out of the exchange rate mechanism. I was in my 20s at the time, and it seemed quite exciting to see the collapse of sterling, but within a few months interest rates peaked at 15% and suddenly it was no joke anymore. This takes me back to that time when, as a young person, initially it perhaps seemed like it was all good fun, but very quickly the reality sunk in. For far too many people that will be the case this winter, as they grapple with the rising cost of living and skyrocketing energy bills. Again, I thank the Government for what they have done to try and help.

I want to focus on what we are doing about energy. As some colleagues will know, we have a 1922 Back-Bench committee on business, energy and industrial strategy, made up of Back-Bench MPs. In April we had an inquiry into what the Government could do to help people with their energy bills this winter. Unfortunately, some of those things have been acted on but not by Government. I would like to go through them again because I think they bear repeating.

There are many things that could be done to help households and businesses reduce their energy costs this winter, such as getting energy suppliers on side to advise their customers, whether businesses or households, on some of the proactive ways that people can cut their energy costs. It might sound simplistic, but people should switch off radiators in unused rooms and take appliances off standby. I know for a fact that lots of constituents do not know how to do that, or indeed whether they would save electricity by taking appliances off standby, or whether it is better to leave them. These issues are quite simple to resolve but quite helpful to our constituents.

Reducing the radiator setting on gas boilers to between 55° and 65° would optimise the energy output. When gas boilers are installed, they are routinely set at a higher temperature; reducing that would save up to 10% or 15% on bills without any loss of output. We can reduce the temperature of hot water—we do not have to scald our hands under the hot water tap or when we get in the bath.

Better insulation of homes is just not trusted by enough people. Even people who could afford it and would like to insulate their homes have all seen stories where it went wrong—the insulation slid down inside the cavity walls, it did not work or people got mould. We need to ensure that the accreditation schemes that the Government give to providers are reliable and dependable, and that if things go wrong, people can go somewhere for help.

Vitally, there must be awareness campaigns on energy saving measures and the value of using a smart meter. I was an energy Minister in 2016 when some people were saying that smart meters were there to spy on people in their houses. To this day, some people think, “I don’t really like the idea of a smart meter,” but if they have one, they can sit there and watch the cost of their energy supply. That puts power into the hands of consumers and businesses, and would be a considerable help to them. It would be even better if the Government brought forward the move to half-hourly pricing, which is planned for within the next couple of years. That would enable people to use the dishwasher or washing machine, or to fill their hot water tank, safe in the knowledge that the price of electricity at that moment is much cheaper.

Delinking the price of renewables, and all our energy, from the price of gas has been talked about and is planned, but much more could be done to ensure that we move to that test. Now more than ever, that work should be done. We should also speed up planning for grid expansion. Recently, the National Grid came before our committee and said that there are such delays with whether we want the grid to be undergrounded or overgrounded. Those are vital decisions that have an impact on local people, but resolving them swiftly would empower the grid to speed up connections, particularly for renewables.

Of course, we know that we need to issue new exploration licences for oil and gas in the North sea basin to shore up energy security. At the same time, we must recognise and get the message out that transitioning to net zero as fast as we can requires a period of continued fossil fuel usage until we have sufficient, reliable zero-carbon energy sources. Many people feel that we have to just switch everything off, but that would absolutely fail our country—everything would switch off. We cannot possibly transition away from natural gas for several decades; we have to face up to that fact and inform people of it.

[Jim Shannon]

In my constituency, senior citizens regularly come to me and say that they are turning their whole heating system off, because they see that as a simple way not to spend any money. Does the right hon. Lady agree that the Government need to focus on and assist our elderly population in particular, so that they can do better?

--- Later in debate ---

[Jim Shannon (Strangford) (DUP)]

It is always nice to speak in any debate in this House. Hopefully, being called last to speak does not mean that my speech is worth less than that of anybody else who has spoken.

First, I thank the Chancellor for his Budget update last Thursday. We are living in a world where, at 10.1%, inflation is at the highest it has been since 1981. Our economy is under pressure. Following the turbulent political events that occurred after the mini-Budget, I am hopeful that the Chancellor’s announcements last week will provide some of the stability that is needed for our local businesses, for people at work and for those households that are desperately in need of help.

I want to focus on some of the pluses that came out of the statement last week. First and foremost, I was pleased to hear that pensioners and the elderly are being looked after. An elderly lady came into my office a few weeks ago. She said that they had not been putting the heat on as they did not want to waste it for the next couple of months. The right hon. Member for South Northamptonshire (Dame Andrea Leadsom), who is no longer in her place, also referred to that. Elderly people of that generation have a very simple way of looking at these things; if they do not have the money, they will not spend it. If they do not have the money, they will not turn on the heat. If they do not have the money, they will not eat. I intervened on the right hon. Lady to suggest that the Government need to reach out to elderly people to see whether they can be helped through the process. In many cases, it may be pride, but sometimes it is simple mathematics: if they do not have the money, they will not spend it. What can be done to help those people?

The continuation of pensioner housing benefit will also decrease anxieties for the next few months. As pensioners, they are aware of what they owe and how the system works. Poverty rates have increased across the whole of the United Kingdom. The Department for Communities in Northern Ireland has said that 316,000 people were living in relative poverty in 2021. That is 17% of the population in Northern Ireland. And 12% of the population in Northern Ireland live in absolute poverty. They are at the very end of the queue.

Many Members have referred to the use of food banks. The Trussell Trust food bank in Newtownards, which was the first one in Northern Ireland, has told me that this past year has seen more people use the food bank than ever before. The food bank has stated in the local press that it perceives this year as being a very difficult one.

However, the Chancellor has stated that households on means-tested benefits will receive a £900 payment and that those on non-means-tested disability benefits will receive a £150 payment, so that is good news—there is some positivity in the process. The cost of living payment will help families on the poverty line to feed their children and make ends meet. The payment will be introduced in 2023-24. However, I look at the winter coming this year and wonder what we can do to help in the short term. I was also pleased to hear in the announcement that, through the Barnett formula and block grant adjustments, Northern Ireland will be in receipt of some £650 million.

I do not want to spend a lot of time on this matter, but I do need to put down a marker here, because this does have an impact on Northern Ireland. We cannot talk about poverty without discussing the impact that the Northern Ireland protocol is having on businesses in Northern Ireland. Small, family-run businesses are having to increase the price of their products, which in turn leads to a shortfall in consumer purchasing. We in the Democratic Unionist party, and Unionists across Northern Ireland, are very pleased that the Government introduced the Northern Ireland Protocol Bill and that it was pushed through the House with majorities of between 71 and 121 votes. We are hopeful that, when the Bill comes back from the House of Lords, the Government will be just as energetic in ensuring that it is in the same place as it was when it left here. If that is the case, the political process in Northern Ireland can move forward and the return of the Assembly will be one of those success stories.

Several announcements have been made on business rates, which should provide a range of relaxations on our local businesses. I welcome the fact that business properties will be revalued for business rates, that the business rates multiplier will be frozen, and that retail, hospitality and leisure relief will be extended and increased from 50% to 75%. This aims to take some of the pressure off businesses in my constituency. Cotters, for example, has been detrimentally impacted by inflation, the rise in the cost of living and the Northern Ireland protocol.

I have previously raised the issue of the lack of action for the working class. There are one-off payments for those on low incomes and for pensioners, but many constituents come to my office to make it clear that after their bills, mortgage, shopping and other necessities, they still cannot make the working wage work. I am keen to know what the Minister’s response is to the working classes who are struggling.

In addition, I am disappointed that childcare costs were not mentioned. I intervened on the shadow Secretary of State, the right hon. Member for Leicester South (Jonathan Ashworth), about this issue and he was clear about childcare in his response. I have heard from teachers and nurses who have little left after their childcare costs—they can hardly pay their bills—so the tax-free childcare allowance should have been increased. Again, perhaps the Minister can respond to that. We are trying to be positive in our comments and to see where we can move forward in a constructive and helpful way.

It is fair to say that there is universal concern about the state of our health service. The Chancellor announced £3.3 billion for NHS England in 2023-24 and 2024-25, and he has allocated Barnett consequentials for the devolved nations. I also briefly mention the increased amount that the DWP will spend on tackling benefit fraud and error. I seek an assurance that there will be no penalty for those who genuinely cannot work due to disability.

I am grateful for the Chancellor’s decisions; something had to be done. He talked about difficult decisions and I am sure that no hon. Member would desire to be in his position with the country’s livelihoods in his hands. Those choices, in some cases, needed to be taken to tackle rising inflation and interest rates, but again, I ask for help with childcare in particular.

The OBR forecast says that the UK is in recession and has been since the third quarter of 2022-23, and that it will last for more than a year. I hope that the action taken is enough to keep our heads above water and to support our constituents. I thank the Government for the action taken thus far and I look forward to some reassurance on the things that I have brought to the Minister’s attention.

Economic Responsibility and a Plan for Growth

Jim Shannon Excerpts

Wednesday 19th October 2022 Commons Chamber

[Rachel Reeves]

I agree that it is a shame that October’s Chancellor is not in his place today. This crisis has been co-written by every single member of the Cabinet and every single member of the Government. The Minister for the Armed Forces and Veterans was crystal clear yesterday in pointing out that all Cabinet Ministers had approved and are responsible for Government decisions, including the disastrous mini-Budget. There is no credibility or stability with this Government, just a shambles. All the time, businesses are looking at the state of the Government and deciding where and whether to invest. The Tories’ recklessness and enduring incompetence will cost jobs and investment here in Britain. The Conservatives should not be put in charge of a tombola, let alone the British economy.

[Jim Shannon (Strangford) (DUP)]

I commend the hon. Lady for what she is saying. Let me back up her comments on economic growth. We need small and medium-sized enterprises to be able to survive and to get through this period. In my constituency, a business—a Japanese restaurant—opened some two months ago. It is doing really well and it employs staff, but its bills are going up from £900 to £3,000. It is clear that unless something happens soon for businesses that are productive and create jobs, they will no longer be there. Does the hon. Lady agree that we need to have a process that helps businesses?

[Rachel Reeves]

I thank the hon. Gentleman for that intervention. Small businesses, such as the restaurant that he mentions in his constituency, are the backbone of all our constituencies and our economy more widely. An energy bill increase from £900 to £3,000 is not affordable for small businesses. The Government need to do more to help.

Economic Update

Jim Shannon Excerpts

Monday 17th October 2022 Commons Chamber

[Madam Deputy Speaker (Dame Eleanor Laing)]

I call Jim Shannon. [Interruption.]

[Jim Shannon (Strangford) (DUP)]

Sorry, Madam Deputy Speaker, you threw me off there. I was looking round to see who it was. Thank you very much for calling me. Can I say how very pleased I am to see the Chancellor in his place? I wish him well, and I think this House wishes him well in the job he has to do.

Northern Ireland is a global leader in areas such as cyber-security and advanced manufacturing, and it is also the top location in the UK outside London for foreign direct investment. However, the rate of economic inactivity in Northern Ireland is higher than anywhere in Great Britain, which costs the economy some £16 billion annually. Can I ask the Chancellor if he can give any indication as to whether Northern Ireland will receive a fair proportion of the levelling-up funding under round 2, rather than in the first phase, when the 3% share target was missed?

Economic Situation

Jim Shannon Excerpts

Wednesday 12th October 2022 Commons Chamber

[Chris Philp]

If the hon. Gentleman thinks it was all so disastrous, perhaps he could explain why he voted for it last night. The real gamble is having taxes that are too high. The real gamble is not having a plan for growth. This Government have a plan for growth; the Labour party has no plan.

[Jim Shannon (Strangford) (DUP)]

Will the Minister outline the specific help that is available to the working poor? They face not simply energy increases but mortgage increases, and increases in the cost of diesel and petrol just to get to work to actually earn some money, and the price of groceries is 15% higher. While those people’s top-line income does not qualify them for universal credit, the present circumstances must surely call for assistance. Will the Minister tell me and the House where that help will come from?

[Chris Philp]

We certainly do stand with the working poor. That is why we have increased the thresholds to ensure that people on lower incomes pay very little income tax and national insurance. It is why we froze petrol duty, and, indeed, cut it by 5p earlier this year. It is why we have increased the national minimum wage by such a large amount, from just £5.93 an hour under the last Labour Government to £9.50 an hour today. So we do stand on the side of the working poor, and I will certainly continue to work with the hon. Gentleman to ensure that his constituents are looked after and protected in the years ahead.