Oral Answers to Questions

Jim Shannon Excerpts

Tuesday 29th October 2024 Commons Chamber

[Rachel Reeves]

All of the above. That is why my hon. Friend is in his place and Conservative Members are on the Opposition Benches.

[Jim Shannon (Strangford) (DUP)]

If the Chancellor wants to increase investor confidence, the thing to do is help small and medium-sized enterprises. Tomorrow she will have the opportunity to do that. What will be done to help them? In Northern Ireland, 85% of businesses employ 10 or fewer employees. If she helps the SMEs in Northern Ireland, that will increase employment.

[Rachel Reeves]

I know that the hon. Gentleman is a proud supporter of businesses big and small in his constituency and across Northern Ireland. I will set out more detail in tomorrow’s Budget, including on business rates, but I recognise how important it is for us to support small businesses, so that they can grow and create jobs right across the United Kingdom.

Fiscal Rules

Jim Shannon Excerpts

Monday 28th October 2024 Commons Chamber

[Darren Jones]

I thank my hon. Friend, and I thank his constituent for putting her trust in this Labour Government. As the Prime Minister said today, this Government will “run towards” the problems, as opposed to running away from them, as the Conservative party did. That will mean difficult decisions at the Budget on Wednesday to deal with the mess that we inherited, to reset public finances and to be able to start to deliver our manifesto. But this Government will take those decisions and we will announce the detail on Wednesday.

[Jim Shannon (Strangford) (DUP)]

I thank the Minister for his statement. I want to ask what the legacy of this will be. Will he further outline how the change to the fiscal rules to allow for more efficient borrowing will not simply pass more debt on to, for example, my six lovely grandchildren and everybody else’s grandchildren, who already face a scaled-back welfare system and increased costs of living before they even earn their first pay cheque? How will the Minister’s so-called guardrails not simply be barriers to future generations owning their own homes and making ends meet? I am thinking of the ones who come after.

[Darren Jones]

I thank the hon. Member for his question. He and his constituents will know, as much as mine do, that the problem for this country before the election was that the last Government had to borrow each month to pay for bills that they did not have the money to pay for, and that they made a whole list of promises across the country that they knew they could not pay for. That is why we have the £22 billion black hole, and why our first fiscal rule is that day-to-day spending will be paid for from tax receipts by the Exchequer. We will put the public budget back into surplus so that we are not in a doom loop of borrowing and borrowing just to keep ahead of ourselves each month. Where the Government do borrow, we will do so for productive investment to modernise our public services and to get growth back into our economy.

Business Property Relief and Agricultural Property Relief

Jim Shannon Excerpts

Thursday 17th October 2024 Westminster Hall

[Jim Shannon (Strangford) (DUP)]

It is a pleasure, as always, Dr Huq, to serve under your chairship. It has probably been more than once this week but, none the less, it is lovely to see you in your place. I thank the hon. Member for Gordon and Buchan (Harriet Cross) for setting the scene so well and giving us all an opportunity to make a contribution on an important issue. It is an honour to speak on a subject that is not just a matter of fiscal policy, but is of vital importance to the very backbone of the United Kingdom. I declare an interest as a farmer, landowner and member of the Ulster Farmers Union for some 40 years. I joined the Ulster Farmers Union not because it was in Northern Ireland, but because the insurance premiums were very cheap. They are maybe not quite as cheap now, but then no insurance is as cheap now as it is used to be, and that is a fact.

I can attest to the importance of agricultural property relief in ensuring the sustainability and longevity of farming enterprises across our great nation. In my constituency of Strangford, farming is not just an industry, but much more—it is a way of life. It is about generations of families working the land, providing food, maintaining the landscape and contributing to the rural economy. More than that, it is about stewardship, which the hon. Member for Gordon and Buchan referred to in her introduction. It is really important that we focus on that. Farmers are custodians of the countryside, caring for the environment while ensuring food production to feed the nation. That means everyone; not just the farmers, but everyone who lives in this great nation. Agricultural property relief plays a critical role in maintaining that balance, allowing farming families to pass on their land and business without crippling tax burdens.

Agricultural property relief is one of the key supports for farming families across the United Kingdom, and in Strangford it is essential. In Northern Ireland, agriculture is responsible for some £501 million in income, as of 2021—a substantial 8.3% increase from 2020. It is no exaggeration to say that agriculture is at the heart of our economy, and everyone has said it. Agriculture is critical to everyone. Not a person who has spoken so far has not said that about our rural community.

My constituency of Strangford is home to a vibrant agrifood sector that employs thousands of people through major employers such as Willowbrook Foods, Lakeland Dairies and Mash Direct. Those companies are household names. They are family businesses that started as farms and then diversified—something that the right hon. Member for Orkney and Shetland (Mr Carmichael) referred to. They have ensured the sustainability of our rural community. Without APR, those family-run enterprises could be forced to sell land and assets just to meet inheritance tax liabilities, potentially dismantling businesses that have been built up over generations. This issue is critical to the future of my constituency’s farming community, and to those businesses.

Agriculture is not just a business; it is the fabric of rural life. We often talk about food security, environmental stewardship and rural economies, and yet without the right fiscal support, those pillars of our country are put at risk. That is why this debate is so important. APR helps farmers to plan for the future, ensuring that the next generation can take over the family farm without being forced into financial hardship. It allows them to focus on what they do best: producing high-quality food, maintaining biodiversity and contributing significantly to local economies.

We have a rich agricultural tradition. Our dairy farmers, sheep farmers, pig farmers and vegetable growers are among the best in the world and take immense pride in their work. Lakeland Dairies, which employs more than 250 people in my constituency, and Mash Direct, which employs more than 230, have been the cornerstones of our agrifood economy.

Let us not forget the Comber early, a potato with protected geographical indication status, which means it is recognised across Europe for its unique quality. It is grown right there in the fields of Strangford. Those enterprises are not just businesses; they are a way of life. It is about not just tradition, but innovation. Innovation is part of what farmers do. They are not just the boys who plough the fields and scatter the seed—that is almost like the hymn “We plough the fields and scatter”.

Let us take Mash Direct, for example. A family-run business that began in a kitchen 20 years ago now supplies some of the largest retailers in the United Kingdom, including Asda and Spar. The business is forward-thinking. It has installed solar panels and invested in sustainable practices, all while providing hearty, healthy food at affordable prices. Lakeland Dairies, meanwhile, exports its milk products across the world and contributes to the economy. These are family businesses that started off in a very small way and have grown and created jobs. They are success stories, and we must ensure that the tax system supports their continued growth and does not hamper them.

This is why I am calling on the Government to ensure that agricultural property relief remains intact and that it is not reduced or removed as part of any future tax policy. We must give farmers the confidence to invest in their businesses, to innovate and to continue producing high quality food for our nation. The very last thing we need is for farms to be sold off piecemeal because families cannot afford the tax burden. Let us be clear. APR is not a loophole for the wealthy; it is a lifeline for farming families who are working hard day in and day out to maintain their land and their livelihoods.

In Strangford, where agriculture is not just a part of our economy but a part of our identity—it is who we are—support is vital. As we look to the future of UK farming post Brexit, with new trade deals, changing subsidy regimes and heightened environmental targets, we must ensure that the fiscal framework surrounding agriculture is robust and supportive. APR is a crucial part of that framework, allowing farmers to pass on their businesses, invest in new technologies and ensure that rural communities remain vibrant and sustainable.

Farmers in Strangford and across the United Kingdom are already taking steps to reduce emissions, embrace low-emission technology and promote biodiversity. However, those efforts cannot come at the cost of financial viability. Many of the improvements needed to reduce emissions, such as upgrading farm infrastructure, require significant investment, as the hon. Member for Gordon and Buchan said. She set the scene very clearly. The money that is made must go back into the farms so that they can move forward.

APR helps to ensure that farmers have the financial security to make those investments. Without it, we risk failing not only our farming communities but our environmental goals. I say this to the Minister kindly—he knows that I do not criticise or give people a hard time, but I do make a point. The Secretary of State for the Environment has made it clear that Labour is committed to achieving environmental goals. The farmers whom I and others here represent are also committed to achieving those goals, but that can only happen if the money comes through for that purpose.

I want to mention the need for better protection of farmland from schemes such as solar farms and pylons, which can remove valuable agricultural land from production. While we must embrace renewable energy, we must also ensure that food production remains central to our land-use framework. There has to be a balance, as Members of both the previous and the current Government will understand. We need to strike the right balance between energy production and food security. Farmers should not be forced to choose between their livelihoods and environmental progress. Both things can, and must, go hand in hand.

I have spoken fairly quickly, and I think I have got more words in than anyone has ever done. Farming is at the heart of our nation, and agricultural property relief is at the heart of farming. Without APR, many of our farming families—those in Strangford and across this great nation—would face insurmountable challenges. The loss of that vital relief would be a blow not just to rural communities, but to our food security, economy and environment. Each of those is critical, so let us continue to back our farmers, protect our rural communities and safeguard our food security by maintaining agricultural property relief. I urge the Government to make that commitment and recognise that the future of farming in the United Kingdom of Great Britian and Northern Ireland depends on it.

Independent Schools: VAT and Business Rates Exemptions

Jim Shannon Excerpts

Tuesday 8th October 2024 Westminster Hall

[Richard Fuller (North Bedfordshire) (Con)]

My hon. Friend is speaking eloquently about the impact on children’s education, on children with special educational needs and on children being ripped out of their schools, perhaps in the year of their GCSEs or A-levels. This is obviously a debate about education. There are Members of Parliament in the Chamber from the Conservative party and the Liberal Democrats, as well as independent MPs and Members from Reform—

[Jim Shannon (Strangford) (DUP)]

And the DUP.

[Richard Fuller]

And the DUP.

[Jim Shannon]

I am always here, by the way.

[Richard Fuller]

It is not always about the hon. Member for Strangford (Jim Shannon). The Labour party has marshalled all but two of their MPs, one of whom hates the policy—I do not know what the other thinks.

Does my hon. Friend the Member for Bromsgrove (Bradley Thomas) think that it is shocking that not a single member of the Education ministerial team of the Labour Government has bothered to show up today, yet they continue to use the airwaves to spew out spiteful and divisive messages about this Labour policy? The Minister present, the hon. Member for Ealing North (James Murray), does not care about education; he cares about money—he is a Treasury Minister. He knows that the policy will not raise any money, but it is going to cost taxpayers.

--- Later in debate ---

[Jim Shannon (Strangford) (DUP)]

To provide an example of the two minutes, I will speak at a very speedy rate. I thank you, Dame Caroline, for allowing me to speak, and I congratulate the hon. Member for Bromsgrove (Bradley Thomas) on bringing forward the debate.

I will make two points. I have a large number of independent schools in my constituency, but I want to speak about our local grammar school, Regent House. It is one of the top schools in Northern Ireland and has a preparatory school attached. I have been contacted by parents of children in the school, who have succinctly outlined their view: this is clearly yet another blow to the working family who are trying their best for their children and making sacrifices, which become more difficult with every passing Budget. Our schooling system in Northern Ireland is different, and I agree with my party colleague, the Education Minister Paul Givan, who has outlined reasons why the change cannot go ahead. Some 2,500 pupils in Northern Ireland attend grammar school preps, Christian schools and other independent schools, and their parents top up to allow them to have this privilege.

Let us be clear about what is happening: these are not people with lots of money. These are people who use their money to send their child to a good school to provide them with an education. Taxation is decided at Westminster, as the hon. Member for Edinburgh West (Christine Jardine) said, and that is important. The headmaster of one independent Christian school said,

“We have some pupils in our Christian schools who are entitled to free school meals, so by no means are many of our parents rich.”

The options facing those parents are to send their children to the mainstream school against their religiously held views or to homeschool them, and there is very little regulation of homeschooling in Northern Ireland. A private school in Northern Ireland is not a status symbol, as many believe, but a human right based on people’s right to their faith. The Government will massively overstep if they use a massive, sweeping brush to address something that requires a fine brush.

A school in my constituency on the border in Holywood has a different approach to learning, under which children are excelling. Other international schools need to be able to provide schooling for children who move around with their parents’ work and who need access to a different format of education—one where there is some continuity. None of those are status symbols, and they need to be considered separately. I fully agree with the arguments that have been made today, and I ask the Minister to consider them.

VAT: Independent Schools

Jim Shannon Excerpts

Tuesday 8th October 2024 Commons Chamber

[Damian Hinds (East Hampshire) (Con)]

I beg to move,

That this House regrets that the Government has decided to impose VAT on independent school fees; believes that educational provision should not be taxed; regrets that the Government is rushing to implement this change part-way through an academic year; calls on the Government to exempt from the VAT charge fees paid in respect of children of military and diplomatic families, all children who have an Education, Health and Care Plan, or who are in the process of applying for one, all children on SEN support, Centres for Advanced Training and schools in the Music and Dance Scheme, all children at schools whose fees are lower than the average per capita funding for a state school place, and children at religious schools of denominations for whom there is no faith school provision in the state sector; further calls on the Government to postpone imposition of the VAT charge for schools in areas where state schools in the relevant key stage are already on average over 95% full; also calls on the Government to postpone imposition of the VAT charge for fees paid in respect of children who have started a public examination course, to September 2025 for pupils currently in Year 11 or Year 13, and to September 2026 for pupils currently in Year 10 or Year 12; and calls on the Government to publish a full impact assessment of the effects of this policy on independent schools and the state sector ahead of the Budget.

There are 85 days to go until the introduction of Labour’s education tax, and we are still in the dark. Many questions remain for parents, for children and for schools—when I say “schools”, that is both independent schools and state schools—and also for the local authorities that are responsible for special educational needs provision and generally for ensuring that everyone can get a place at school.

This is a huge change, which is being made in a headlong rush. There are big worries about children with special educational needs or a disability, about military families, about the talented musicians and dancers of tomorrow, about small religious faiths and about the widest impact of all—that on state schools, because this means disruption, bigger classes, budget overstretch, and ultimately, parents being less likely to get their preferred choice of school. Even those who do not necessarily object to this in principle are saying it cannot be pushed through this fast, from the Chartered Institute of Taxation to the NASUWT.

It is a long-standing principle that you do not put tax on learning—a principle all but universally observed around the world. On the Conservative Benches we believe in that principle and we believe in the sanctity of parental choice. The vast majority of children, of course, go to state-funded schools, and we defend the right of parents to choose those schools and defend the diversity of those schools. A small number of parents choose home schooling; we defend that right too. And yes, some choose the independent sector.

Parents are the first educators of their children. The state sets an expectation of a suitable education for all children, and beyond that, parents should make the choice of what is best for their child. Parents might decide to opt out of state education for any one, or many, of several reasons—quite often simply because they have found the school that they believe is right for their child, and where their child is most happy.

[Jim Shannon (Strangford) (DUP)]

rose—

[Graham Stuart (Beverley and Holderness) (Con)]

rose—

--- Later in debate ---

[Damian Hinds]

My right hon. Friend is right to identify that many parents make great personal financial sacrifices to do what they believe is best for their children. Some parents whose children go to independent school are rich, and some are definitely not. I include in that latter bracket most of the parents sending their children, for example, to small religious schools in Hackney, Salford or Birmingham. Very many more are in the middle, including many professionals working in our public services.

[Jim Shannon]

The shadow Minister has rightly underlined the issue for those who send their children to faith schools or independent schools. Many constituents in Strangford have told me that they have saved and persevered, have not been on holidays, have not bought a second car, or have even continued to use their old car longer than they should, so that those moneys can go into their children’s education. Does he, like me, find it impossible to understand how it can be that it is the Labour party—the party of conscience, I would say—that has let us down on this issue and is going to penalise people who are hard-pressed to find education for their children?

[Damian Hinds]

The hon. Gentleman is right about the financial sacrifices some make. Let us be clear: it is possible to tax wealthier people or people with a higher income more, but the Government should be honest about it. The way to do so is through the income tax system, not through a choice that people make to have their child in an independent school. The hon. Gentleman did not mention this, but I might add that because the situation in Northern Ireland is different from that in England—by the way, the situation in Scotland is different, too—the Government need to think carefully about how the policy is applied throughout the whole United Kingdom, because VAT is a reserved matter, and about what it means for the hon. Gentleman’s constituents and others across these islands.

Winter Fuel Payment

Jim Shannon Excerpts

Tuesday 10th September 2024 Commons Chamber

[Jim Shannon (Strangford) (DUP)]

I rise to publicly oppose this proposed change. I understand the need to balance the books—we all do, and we know how it works—but to be perfectly frank, and it gives me no joy to say this, I never imagined ever in my life that a Labour Government would seek to balance the books on the backs of pensioners throughout the United Kingdom. I put that on record at the beginning. I say it respectfully, but with great grief.

I fully comprehend that the system could do with an upgrade. Perhaps we should look at a household cap, as we have with the child benefit payment. Perhaps we could look at allocating per household, rather than per person. Perhaps we could look at ensuring that everyone who is still earning more than their pension through employment can have deferred payments until full retirement. Perhaps we could look at an opt-out scheme for pensioners such as me. I do not need the money; I asked not to take the money. I give the money to charity. I am not better than anybody else—never am I better than anybody else—but I realised that I did not need that money, so I gave it away. Others might want to do the same thing.

It should be direct face-to-face applications for pension credit. There should not be a nine-week wait for the application to be processed. My goodness, people need the money now. The threshold should be raised. The Government and the Minister have said about the £440 that is coming next spring, but pensioners need the money this winter and as soon as possible.

In Northern Ireland, 68% of homes rely on oil-fired boilers for heating. There are high levels of fuel poverty, with 22% of the population currently spending more than 10% of their household income on heating their homes. I think about the women who have a tiny workplace pension from the hours they worked while their children were in school. The women of the Women Against State Pension Inequality Campaign have already been disadvantaged and will pay a further price for not being allowed to save for their needs. I am begging this Government on behalf of my constituents in Strangford not to remove the benefit from everyone in one fell swoop.

[Carla Lockhart (Upper Bann) (DUP)]

National Energy Action estimates that close to 45 people die every winter’s day in the UK due to cold homes. This Government, in their wisdom and through this decision, have decided to imperil many more. Does my hon. Friend agree that it is wrong, it will have an impact and it will cause deaths right across the United Kingdom?

[Jim Shannon]

My hon. Friend is absolutely right. We all recognise that this winter will be one where pensioners will feel the gravity of this and the pain of the cold. I stand for all those who are making do with less than £1,000 a month and those pensioners who will be impacted by the winter fuel allowance being taken away from them. For them, this is a lot of money. It is the difference between being warm this winter or simply surviving. It is not an exaggeration; it is life for my constituents and, respectfully, for the constituents of those on the Government Benches.

I will conclude. The clock for speeches has stopped. I will be respectful of the time, as you would expect, Madam Deputy Speaker.

Those who have worked all their lives deserve to be paid for what they paid in. There is a basic standard, along with women and children go first in the lifeboat: protect those who cannot survive the icy cold. So let us slow down the ship—I look to Labour to make that happen—and veer away from the iceberg, which some Members only see the tip of at the moment, which could be the destruction of the Government before their first journey even begins. Let us correct course and get this right. Let us support the Opposition motion, which reflects the mood and opinion on the Opposition Benches. I hope that the Labour party will realise that it is going the wrong way. We are trying to direct them the right way.

Oral Answers to Questions

Jim Shannon Excerpts

Tuesday 3rd September 2024 Commons Chamber

[Rachel Reeves]

The rural economy plays an incredibly important role in our economic prosperity as a country, and boosting food security and biodiversity is obviously incredibly important to a whole range of this Government’s objectives. I will ensure that the Secretary of State for Environment, Food and Rural Affairs hears loud and clear the message from the hon. Member, and I am sure he will include it as part of his submission to the spending review on 30 October.

[Jim Shannon (Strangford) (DUP)]

I thank the Chancellor for that and I welcome her to her place. It is important to encourage inward investment. It is also important to address the issue of youth unemployment. As of the first quarter of 2024, the youth unemployment rate in Northern Ireland was 5%, compared with 3.8% the month before. What discussions has the Chancellor had with the Northern Ireland Assembly Minister in charge to ensure that youth unemployment in Northern Ireland will be reduced to an acceptable figure, which should be zero?

[Rachel Reeves]

A huge amount of inward investment goes to Northern Ireland, as the hon. Gentleman knows, and it is important that young people are able to take advantage of those huge opportunities in our economy, whether in financial services, advanced manufacturing, shipbuilding or the many other sectors that are important to Northern Ireland. It is a travesty that something like one in five young people today are not in employment, education or training. The Secretary of State for Work and Pensions will be bringing forward a White Paper to ensure that everyone who can work does work and is given the support to succeed, both in Northern Ireland and across the United Kingdom.

Banking Services: Rural Northumberland

Jim Shannon Excerpts

Monday 2nd September 2024 Commons Chamber

[Joe Morris (Hexham) (Lab)]

I thank Mr Speaker for granting this debate.

The Minister will know as well as I do, and as well as Members on both sides of the House do, that there are banking deserts across the country, with many people shut off from accessing very basic face-to-face services. The figures merely hint at the crisis in my constituency. Northumberland has lost more than half of its bank branches since 2015, and figures from Which? show that Hexham has lost over 70% of its branches, with only five branches remaining in the constituency.

Five bank branches would sound almost luxurious to many colleagues, but Hexham is the largest constituency in England, reaching from Throckley on Newcastle’s western edge to Gilsland in Cumbria, and from Blanchland on our border with County Durham to Byrness, which is a stone’s throw from Scotland. These bank branch closures do not just mean an inconvenience to my constituents; they present a toxic cocktail that both damages quality of life and holds back the growth of our rural economy.

The services that bank branches provide to our constituents are wide-ranging and impactful, and many rely on these services during life’s big moments. Obvious examples include help with large payments and support with mortgages, but there is also help during life events such as bereavements or securing power of attorney. The compassion, expert support and guidance that bank branches provide to our constituents cannot be allowed to disappear as an inevitable consequence of having better digital services. Closures let down our young people who want to start businesses but find it hard to do so due to their inability to have face-to-face discussions, as well as our older people who find access to cash hard to come by; in some cases, they have to trek across rural Northumberland on public transport to reach their closest branch.

[Jim Shannon (Strangford) (DUP)]

I commend the hon. Gentleman for securing this debate. He is absolutely right that everyone in the House tonight will have experienced bank closures. I have lost 11 branches in my constituency. Does he agree that before a bank decides to close a branch, it should have an alternative in place, such as a banking hub, an ATM or alternative services through a post office?

[Joe Morris]

I very much agree that before a bank branch closes, we need to mitigate the consequences. We need to make sure that the rural economy has space to grow, so that people like my constituents do not face such long journeys, which are particularly hard to navigate on public transport.

--- Later in debate ---

[Tulip Siddiq]

I absolutely hear what my hon. Friend says about protecting vulnerable people in our constituencies. That is why a lot of us stood for the Labour party: because we want to protect the most vulnerable. I will come on to LINK, which provides the banking hubs, but if he does not mind writing to me and laying out exactly what the issue is, I can write to him about the topic and about the criteria, because it sounds as if there is a very small matter that needs looking at and I am happy to do so. I will talk later about LINK, but I ask him to make representations as well.

[Jim Shannon]

I congratulate the Minister on attaining her office and wish her well in it. I think she referred to 350 banking hubs, which I presume means across the whole of the United Kingdom of Great Britain and Northern Ireland—I hope so. If not, I ask her to confirm that the same progression and the enthusiasm that she is showing will also happen in Northern Ireland. I ask her one other thing, about which I spoke to the hon. Member for Hexham (Joe Morris) beforehand. Setting up banking hubs seems to take forever. We all want them in place. Is that something that the Minister can help us with?

[Tulip Siddiq]

No Adjournment debate would be complete without an intervention from the hon. Member, so I am glad he intervened; I was waiting for him to do so. I share his frustration about the slowness of the roll-out—I pushed for it when I was in opposition and asked why it was taking so long. I will address this point in my speech, but I can reassure him that with as much influence as I have in our office, we have been asking for the banking hubs to be set up and ready. We are hoping to achieve 100 banking hubs by the end of this year, but I am conscious that they take a long time to set up. It is to do with the planning process, but that is not an excuse. I would like to speed up the roll-out, because I feel it has been dragging on for a long time. I absolutely share his frustration.

As the hon. Member might know, 60 banking hubs have already opened. As I said, we anticipate that 100 will be open at the end of this year, but I agree that it is frustrating to have to wait and watch. We want them to be up and running so that our constituents can make good use of them. We want to ensure that the hubs mean that people and businesses can withdraw and deposit cash, because we know that people still use it. They will deposit cheques, pay bills and make balance inquiries. They will also contain dedicated community bankers from the largest banks in the area on a rotating basis, to help people and businesses carry out wider banking services.

The decisions on the locations of future banking hubs will be made by LINK, which is the banking industry’s cash co-ordinating body. It will consider criteria such as population size, the number of retailers in the community and the availability of alternative bank branches. Communities can ask LINK to carry out an assessment of the local area; I urge my hon. Friends the Members for Blyth and Ashington (Ian Lavery) and for Hexham to make to LINK the case that has so convincingly been made to me. At the end of the day, we have asked it to make the decisions, but I can help in the process as well.

Looking forward, I expect the banks to consider carefully whether the needs of a local community are being adequately served when thought is given to where the banking hubs should be rolled out. However, I also want the industry to ensure that the range and quality of banking services provided in hubs are delivering for customers up and down the country. There is no point in having a banking hub if it does not meet the specific requirements of the town.

Budget Responsibility Bill

Jim Shannon Excerpts

2nd reading
Tuesday 30th July 2024 Commons Chamber

[The Chief Secretary to the Treasury (Darren Jones)]

I beg to move, That the Bill be now read a Second time.

I congratulate you and welcome you to your place in the Chair, Madam Deputy Speaker. It is a privilege to open this debate in my first appearance at the Dispatch Box as a Minister in this new Labour Government.

At the general election, the British people voted for change, and this new Labour Government began work immediately to deliver on that mandate. Sustained growth is the only route to the improved prosperity that this country needs and to improve the living standards of the British people. After 14 years of Conservative failure, this work is urgent—it is now our national mission. To deliver on that mission, as my right hon. Friend the Chancellor set out days after taking office, we must fix the foundations of the economy and restore economic stability. She emphasised that commitment to delivering economic stability by meeting with the Office for Budget Responsibility soon after becoming Chancellor.

Under the legal framework we inherited from the Conservative party, there is no requirement on the Treasury to subject fiscally significant announcements to independent OBR scrutiny. We all experienced what happens when huge unfunded fiscal commitments are made without proper scrutiny and key economic institutions such as the OBR are sidelined. The country cannot afford a repeat of the calamitous mini-Budget of September 2022, when Liz Truss and Kwasi Kwarteng’s reckless plans unleashed economic turmoil that has loaded hundreds of pounds on to people’s mortgages and rents. Conservative Ministers put ideology before sound public money and party before country.

This Labour Government are turning the page: we will always put the country first and party second. Our commitment to fiscal discipline and sound money will never waver. That is why we are firmly committed to the independence of the OBR, and to the important principle that in normal times, the announcement of a fiscally significant measure should always be accompanied by an independent assessment of its economic and fiscal implications, in order to support transparency and accountability. That is why we made a commitment in our manifesto to strengthen the role of the OBR, and it is why we have acted quickly to deliver on that commitment today.

This action will reinforce credibility and trust by preventing large-scale unfunded commitments that are not subject to an independent fiscal assessment. As Richard Hughes, the chair of the OBR, reiterated in his recent letter to the Chancellor,

“it is a good principle of fiscal policymaking that major fiscal decisions should be based upon, and presented alongside, an up-to-date view of the economic and fiscal outlook”.

In line with this, the Chancellor yesterday commissioned a full forecast to accompany our Budget on 30 October, following the important principle that significant fiscal policy decisions should be made at a fiscal event and accompanied by an independent OBR assessment. That fiscal lock is an essential part of our mission to deliver economic stability. It is one of our first steps towards fixing the foundations of the economy, and it is our guarantee to the British people that this Labour Government are a responsible Government who will never play fast and loose with public and family finances, as the Conservative party has done before.

The Bill sets the legal framework for the operation of the fiscal lock. It builds on the Budget Responsibility and National Audit Act 2011, which established the OBR. In line with that, the technical detail underpinning the fiscal lock will be set out via an upcoming update to the charter for budget responsibility. The charter sets out the Government’s fiscal framework, including guidance on how the OBR performs its duties within that framework. To support scrutiny of the Bill during its passage through Parliament, the Treasury has published a draft of the relevant charter text, which will make clear exactly how the Government plan to implement the fiscal lock. A full update to the charter will be published in due course, and Members will vote on it in the usual way.

The Bill itself does five things to ensure that proper scrutiny of fiscal plans will take place. First, it requires the Treasury, before the Government make any fiscally significant announcement in Parliament, to request that the OBR presents an assessment taking the announcement into account. This builds on the usual process whereby the Chancellor commissions the OBR for an economic and fiscal forecast to accompany a fiscal event. It guarantees in law that, from now on, every fiscally significant change to tax and spending will be subject to scrutiny by the independent OBR.

Secondly, the Bill gives the OBR new powers to independently decide to produce an assessment if they judge that the fiscal lock has been triggered. If a fiscally significant announcement is made without the Treasury having previously requested a forecast from the OBR, the OBR is required to inform the Treasury Committee of its opinion and then prepare an assessment as soon as is practicable. That means that, come what may, the OBR, through Parliament, will be able to hold the Government to account.

Thirdly, the Bill defines a measure, or combination of measures, as “fiscally significant” if they exceed a specified percentage of GDP, with the charter then setting the precise threshold itself. Setting the threshold in this way provides clarity for both the OBR and external stakeholders about what constitutes a “fiscally significant announcement”—that is, when the fiscal lock has been triggered—and it ensures that the Government can set it at the right level going forward, recognising economic conditions. The threshold level will be set at announcements of at least 1% of nominal GDP in the latest OBR forecast. As an example, this year the 1% threshold would be £28 billion. This will ensure that we properly capture any announcements that resemble the growth plan of former Members Liz Truss and Kwasi Kwarteng in 2022, with the broader risks to macroeconomic stability that this entailed.

Fourthly, the Bill ensures that the fiscal lock does not apply to Governments responding to emergencies, such as the covid-19 pandemic. The Bill does so by not applying in respect of measures that are intended to have a temporary effect and which are in response to an emergency. The charter will define “temporary” as any measure that is intended to end within two years. This recognises that it is sometimes reasonable—for example during a pandemic—for the Government to act quickly and decisively without an OBR assessment, if that is needed in response to a shock. Of course, in emergencies it may be appropriate for the Chancellor to commission a forecast from the OBR to follow measures that needed to be announced or implemented rapidly, and that would happen in the usual way. Alongside any such announcement, the Treasury will be required to make it clear why it considers the situation to be an emergency. As set out in the updated charter, the OBR will have the discretion to trigger the fiscal lock and prepare a report if it reasonably disagrees.

Fifthly and finally, the Bill requires the Government to publish any updates to the detail of the fiscal lock—such as the threshold level at which it is triggered—in draft form at least 28 days before the updated charter is laid before Parliament. This is an essential safeguard in the Bill, preventing any future Government from choosing to ignore the fiscal lock by updating the charter without the consent of Parliament.

[Jim Shannon (Strangford) (DUP)]

The Minister is setting out the stark realities of where we are financially, which it is important that we all understand. Given that the financial positions of all of us within the United Kingdom could be fairly dramatically changed, regionally, it will be important that discussions with the Northern Ireland Assembly, the Welsh Assembly and the Scottish Parliament take place early enough for the impacts of what might happen to be better understood.

[Darren Jones]

I thank the hon. Gentleman for his contribution. As I am sure he knows, the Chief Secretary to the Treasury is traditionally the lead Minister in Government for relationships with the Finance Ministers in the devolved Governments. I have already met a number of times with counterparts in the Northern Ireland Executive, as well as those in Scotland and Wales. I look forward to meeting them in person in Northern Ireland, I hope in September, for further such discussions.

To conclude, people across the country are still suffering the consequences of the Conservative party’s economic experiment in 2022. Conservative Ministers took the most reckless decisions without any thought for their real-life impact on the British economy and on family finances. Astonishingly, they have still made no apology.

With this Labour Government, our commitment to fiscal discipline and sound money is the bedrock of our plans. The Budget Responsibility Bill guarantees in law that, from now on, every fiscally significant change to tax and spending will be subject to scrutiny by the independent OBR. The Bill will reinforce credibility and trust by preventing large-scale unfunded commitments that are not subject to the scrutiny of an OBR fiscal assessment. This delivers on a key manifesto commitment to provide economic stability and sound public finances by strengthening the role of the independent OBR. This is a crucial first step to fix the foundations in our economy, so that we can achieve sustained economic growth and make every part of the country better off.

For those reasons, I commend the Bill to the House.

--- Later in debate ---

[Jim Shannon (Strangford) (DUP)]

It is a pleasure to follow the hon. Member for Kettering (Rosie Wrighting). I wish her well in her new role. She brings youth with her, but also experience of how life is. That is important when it comes to representing people here.

It is lovely to see you in your place, Madam Deputy Speaker. I wish you well in your new role—well done. We have been incredibly blessed today with all the maiden speeches we have heard. Each Member showed their talent, skill and clear love of their constituency. We are all greatly encouraged. As I said to the hon. Member for Ceredigion Preseli (Ben Lake), we have seen MPs who will bring a lot to the debates we have in this Chamber, whether on the Department for Work and Pensions, roads, farming, fishing, bigger issues such as human rights around the world, or whatever it might be. Each MP will bring their expertise and their point of view, which will enrich this House and encourage us, so I am pleased to have heard those speeches. It is a real pleasure and a privilege for me to sit and hear them.

I commend the hon. Member for Ynys Môn (Llinos Medi). I loved the wee thing she said at the end about her can-do attitude. Every one of us can do in this House. The hon. Lady has told us we can do, so I think we can do from now on. I look forward to working with everyone on the things we can agree on. The issue for many of us in this House is not our differences. I suppose I maybe look at things in a slightly different way, but I do not often see the politics; I see the person. If we do that, we can see the goodness that we can all bring to the debates here.

I am very pleased that you have allowed me the opportunity to speak briefly about the Bill, Madam Deputy Speaker. I will not take too long. I was pleased to see the additional brake or fiscal lock, as it is clear that Governments should take cognisance of high-level support and opinion. I believe the Bill will secure just that. The Minister and the Labour Government are bringing the Bill forward for the best reasons, which is welcome, and I am very pleased to see it.

However, I do believe that advice should be considered here. It is the role of Governments to do what is right, with a total vision for the country, and we must always ensure that the decisions are made in this House by elected representatives and not by unelected Members behind closed doors. I know that our Government and our Minister will be aware of the need to strike a balance between taking reasoned opinion and taking instruction, and I know the Minister will take that on board. He has always spoken in a reasoned way in the House and I know that he will not be found wanting today when he gives his reasoned opinion at the end of the debate.

I firmly believe in the need for the OBR’s opinion. The reason for that will be clear when we consider the political motivation that seeks to force the Government to spend more than £300 million on Casement Park in Northern Ireland, which could plainly necessitate tax increases because no part of the budget will allow the money to be allocated. I hope the Government will not pursue the project, and wanted to put that on the record.

As I said yesterday following the Chancellor’s statement, I welcome the news that junior doctors will receive their much-needed pay rise. I do not think anyone in this nation will not be encouraged to know that they will receive the increase that we all think they should have. The Government have made that money available, and hopefully it will go in the right direction. The junior doctors’ pay rise is a necessity, and the changes that will be necessary to generate it can be easily understood. Not one of us does not owe our NHS a vast thank you for all it has done.

When we were living through covid, many of us lost family members and loved ones, and we will be eternally grateful for the role that the NHS played. What is not so easily understood is why the tax paid by the average person in Warrington or Wrexham may be increased to fund a Gaelic Athletic Association project—I am referring, again, to Casement Park—which will generate income for a private sporting body, to the exclusion of other sports. I leave that comment on the record. The drive for this is political, not practical, and I hope that the OBR would express the reasoned view that raising taxes for such purposes does not instil confidence in the financial future of the nation.

I hope the Bill will remind Members that every project we undertake must be paid for from the public purse, in these times when the average person is struggling to lead his or her life, in contrast to the position five years ago. The hon. Member for Richmond Park (Sarah Olney) spoke earlier about poverty across this great United Kingdom. In my constituency poverty levels have risen dramatically, especially among children. I can honestly say, for the record, that I confidently believe that the Labour Government and the Minister will address these issues throughout this great United Kingdom of Great Britain and Northern Ireland for the children in my constituency who are experiencing levels of poverty that they have never experienced before, and the adults who struggle to pay their bills—every Member has brought an illustration of that to the debate—so I am encouraged to see the Labour party in the role it now has.

We have holes in the economy in Northern Ireland as a result of under-investment. Our pay structures need to be revamped and our education sector needs improvements to deal with the changing needs of our children. I am thinking in particular of those with special educational needs and disabilities. I remember having meetings about that with a Minister back home in Northern Ireland, and I am hopeful that some of the changes that we talked about have been implemented, but I am seeing demands on SEND education that I have never seen before in all my years as an elected representative—as a councillor, and as a Member of the Northern Ireland Assembly. Our health sector needs an overhaul as well, and all this will take central funding, but we also need a change in the way that happens. We do not need massively high levels of middle management, and we do not need agency staff when we could give our nurses a 10% pay increase that would be cheaper than employing those staff. These are things that we need to change.

Earlier, in an intervention, I asked the Minister about the Northern Ireland Assembly, the Welsh Assembly and the Scottish Parliament. The Minister kindly confirmed that he would have a role involving integration and interaction with the regional Administrations. I am particularly encouraged that he will be visiting Northern Ireland, and the Assembly, in September this year. That shows me that the Minister—my Minister here, through the Labour Government— says what he means and will carry it out, which is good news—I welcome that. Culture and heritage are also important, but they can never take precedence over heart operations or chemotherapy. No debate on budget responsibility can overlook this foundational aspect. I hope that this will serve as a timely reminder to us all that we have responsibilities in this House that outweigh party politics. That must always be the first decision that we make in this House.

[Madam Deputy Speaker (Ms Ghani)]

I call Matthew Patrick to make his maiden speech.

Public Spending: Inheritance

Jim Shannon Excerpts

Monday 29th July 2024 Commons Chamber

[Madam Deputy Speaker (Caroline Nokes)]

Final question. I call Jim Shannon.

[Jim Shannon (Strangford) (DUP)]

Still the strongest legs in the Chamber, Madam Deputy Speaker. Thank you for calling me to ask a question.

I am very pleased to hear the Chancellor’s statement. The clear financial predicament is one that all the United Kingdom of Great Britain and Northern Ireland is in together. Will she confirm that, in light of the budget gap and the welcome announcement of the junior doctor pay offer, savings will be made in ways that do not affect required pay increases at the expense of our health staff, but that they will focus on cutting back on unnecessary quangos, on the estimated £500 million of taxpayers’ money that has been spent on issues such as diversity and inclusion—although important, they do not deserve priority in public spending—or on vanity projects such as Casement Park in Northern Ireland?

[Rachel Reeves]

I thank the hon. Gentleman for his questions, and for persevering for so long. I fully agree that the focus should be on frontline public services. We have committed ourselves to back-office efficiency savings of 2% in all Government Departments, and a reining in of consultancy and Government communications spending. Those things got out of hand under the last Government, and we will rein them in.

May I end by saying this? We have been here for two hours, and in that time not a single Conservative Member on either the Front Bench or the Back Benches has apologised for the state of the public finances and the state of our public services. That says all we need to know about the outgoing Conservative Government, and they should never have their hands on power again.