Pension Reforms
John Glen Excerpts(4 years, 1 month ago)
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The Economic Secretary to the Treasury (John Glen)
The Government are developing proposals to address the unlawful age discrimination identified by the Court of Appeal in the 2015 reforms to the judicial and firefighters’ pension schemes.
On 15 July 2019, the Government announced they would take steps to remove this discrimination retrospectively [HCWS1725]. It confirmed that this would apply to pension scheme members with relevant service across all those public service pension schemes that were introduced in 2014 and 2015, regardless of whether individuals had made a claim. This is a complex undertaking, and it is important to get it right.
Since February 2020 relevant pension schemes have been conducting technical discussions with member and employer representatives to seek initial views on the Government’s high-level proposals for removing the discrimination.
I am grateful for the constructive engagement of trade unions, staff associations, public service employers and other stakeholders in these discussions. The Government are considering the initial views of stakeholders and continuing to work through the details of the technical design elements of the proposals. Detailed proposals will be published later in the year and will be subject to public consultation. The Government will welcome views on these proposals.
For the avoidance of doubt, members of public service pension schemes with relevant service will not need to make a claim in order for the eventual changes to apply to them.
I would like to reassure members that their pension entitlements are safe. The proposals the Government are considering would allow relevant members to make a choice as to whether they accrued service in the legacy or reformed schemes for periods of relevant service, depending on what is better for them. The Government will provide more detail later in the year, but if an individual’s pension circumstances change as a result, the Government may also need to consider whether previous tax years back to 2015-16 should be reopened in relation to their pension.
The Government will also set out their proposal to remove the discrimination for future service in the forthcoming consultation.
In January 2019, the Government announced a pause to the cost control mechanism in public service pension schemes, due to uncertainty about benefit entitlements arising from the McCloud judgment. Alongside their proposals for addressing discrimination, the Government will also provide an update on the cost control mechanism.
[HCWS187]
Oral Answers to Questions
John Glen Excerpts(4 years, 1 month ago)
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Mr Alistair Carmichael (Orkney and Shetland) (LD)
The Economic Secretary to the Treasury (John Glen)
The Government take seriously their climate change responsibilities, including the target of net zero greenhouse gas emissions by 2050. That means enabling a diverse range of low-carbon technologies, and we see the use of marine renewables in the future energy mix, though developers must demonstrate how those can compete with the low prices achieved by wind and solar technologies.
Mr Carmichael
In order to compete with those technologies, these renewables have to get from the research and development stage to commercial deployment. The industry knows that and has come up with a mechanism known as the innovation power purchase agreement. Is there any reason why the Government are not engaging with that? I have to tell the Minister that these developers are not going to hang around in this country forever. If they cannot make that step here, they will go elsewhere and do it.
John Glen
I am very aware of the 1,700 people who work in this area in the right hon. Gentleman’s constituency and across Wales and Scotland. I am also aware that he wrote to the previous Exchequer Secretary, who moved post before he could get a reply. At the moment, renewables are five times more expensive than wind and solar, but the Government will engage in a dialogue with the industry as we look to resolve this and move forward constructively.
Paul Bristow (Peterborough) (Con)
The Economic Secretary to the Treasury (John Glen)
Low-paid workers will continue to benefit from above-average pay rises, with the national living wage set to reach two thirds of median earnings and to be extended to workers aged 21 and over by 2024, providing economic conditions allow. That is projected to benefit nearly 4 million low-paid workers.
Paul Bristow
I thank the Minister for that response and for everything he is doing to protect jobs in Peterborough and across the country. I was proud to stand on our manifesto in December and, in particular, on our commitment to protect the low paid. The Government have taken vital steps in the short term to protect jobs. Will he confirm that this Budget is also providing a £200 tax cut for the typical family in Peterborough?
John Glen
Absolutely. I can confirm to my hon. Friend that a typical employee will be about £104 better off next year through the cut in national insurance and the freeze in fuel and alcohol duties, and the abolition of other taxes, such as the tampon tax, will also be of benefit to many of his constituents, for whom he has been fighting hard since he came to this place.
Kevin Brennan (Cardiff West) (Lab)
Many low-paid workers are self-employed. When I raised this matter with the Leader of the House yesterday, he said:
“The Government are inevitably conscious that when we close places by order and that has an effect on people’s livelihoods, there is a societal responsibility.”—[Official Report, 23 March 2020; Vol. 674, c. 27.]
Many of these low-paid self-employed people work in the music industry. I know that we have an urgent question coming up, but I say to the Minister that they will be looking for more reassurance than we have heard so far this morning that the Government are going to introduce a scheme and do it soon.
John Glen
My right hon. Friend the Chancellor has set out clearly not only the range of measures that we have taken but our determination to come up with an enduring solution that addresses the range of challenges. The whole Treasury team is fully aware of how distressing and challenging people are finding it out there and we are working as fast as we can to come up with a solution that works for everyone.
David Linden (Glasgow East) (SNP)
If the current coronavirus and financial crisis has taught us one thing, it is that we need to look again at zero-hours contracts and the difficulty that they put many of our constituents in. I very much welcome the measures that have been brought forward on support for businesses and employees, and I very much hope that we will hear about support for the self-employed in the response to the urgent question this afternoon, but there is a lot of concern among zero-hours workers. Will the Minister outline what support the Government are going to bring forward for zero-hours workers in Glasgow East?
John Glen
If they are on pay-as-you-earn, they are eligible for the job-retention scheme, but the hon. Gentleman makes a fair point about the range of concerns that exist, and we continue to look carefully at what we can do to enhance the measures that have already been announced. He will be aware of the enhancements to the welfare package—my right hon. Friend the Chancellor has announced that an additional £6.5 billion has been put in so far—and we will continue to look at what more can be done.
Bill Esterson (Sefton Central) (Lab)
I encourage the Minister not to make the perfect the enemy of good in the design of the scheme. Many self-employed workers are worrying about their inability to put food on the table this week. They are finding the universal credit system completely overwhelmed, so I encourage Ministers to announce the scheme and make sure that the cash gets through. It has to be soon; otherwise, people are going to be in real hardship.
John Glen
The hon. Gentleman makes a reasonable point. That issue is why we have tried to move forward on interventions that could be done quickly and have done them as quickly as we can. In respect of universal credit, we have increased the UC standard allowance from £317.82 to £409.89 per month for single claimants. We have increased the local housing allowance, we have relaxed the earnings rules for self-employed UC claimants, and we will continue to look at every measure that we can to make an impact in the lives of those people who are suffering as the hon. Gentleman describes.
Patrick Grady (Glasgow North) (SNP)
The Minister talks about looking at every measure that we can, but the Chancellor just appeared to rule out a universal minimum basic income. Is that not quite disappointing? The way to answer these questions—the way to avoid thousands of people being laid off, ending up on universal credit and potentially getting trapped in the benefits system—is to provide a minimum income guarantee for everyone. That would also help to provide a fiscal stimulus in the economy once we start to get through this crisis.
John Glen
My right hon. Friend the Chancellor set out clearly the reasons why we have some concerns about, and indeed would not want to have, that universal guarantee. We want to make sure that the interventions we make are targeted at those who are most in need at this time, and not giving money unnecessarily to people who are wealthy.
Joy Morrissey (Beaconsfield) (Con)
The Economic Secretary to the Treasury (John Glen)
The right hon. Gentleman makes a very reasonable point, and sets out a range of issues. The Government will be looking into this, and I will liaise with my colleagues in the Department for Business, Energy and Industrial Strategy to ensure that they are focusing on all the dimensions of the problem that he has outlined.
Sir Desmond Swayne (New Forest West) (Con)
Christian Matheson (City of Chester) (Lab)
One of the problems with this crisis is that we do not know how long it is going to last. I have businesses in my constituency—events companies, conference companies and sporting companies—that have long lead-in times to organise their events, but they cannot cancel them yet and thereby claim insurance because there is no Government guidance. Do the Government have any plans to give guidance, particularly to the insurance companies and events companies, that will perhaps say, “No events for the next six months”?
John Glen
We are working closely with the insurance industry, and obviously events companies are underpinned by contractual obligations. We established that if they have cover relevant to non-specified diseases, the announcements by the Prime Minister and the Chancellor have triggered those policies to be paid out, but I am happy to look at any specific cases that individual Members want to bring to me, which I can take up with industry representatives.
Stephen Crabb (Preseli Pembrokeshire) (Con)
In the wake of the last economic crisis, when we needed the banks to stand on the side of small businesses, too often they did not, and many of us have seen too many examples of small businesses being bullied into bankruptcy. What can my right hon. Friend the Chancellor say about the posture he wants to see from the banks at this time?
John Glen
The Chancellor and I have had dialogue with individual heads of high street banks. I have been speaking to the head of UK Finance this morning and will be convening a meeting of bank representatives later today. We anticipate that the banks should be taking the most sympathetic forbearance measures possible, and we have set out very clearly, as my right hon. Friend the Chancellor did, that the loan scheme is interest-free for the first 12 months, with no fees or repayment penalties. I expect the banks to step up to the mark, as I know they will. We have to remember that many of the people actually delivering this service in high street branches or in call centres are not very well paid and are working flat-out to deliver a key service to our nation at this time.
David Linden (Glasgow East) (SNP)
The message from the Prime Minister last night for our constituents to stay at home could not have been clearer, but many of our constituents who are staying at home will have increased energy bills as a result. The hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) is co-ordinating a cross-party letter to the Government asking for a reduction in VAT on energy bills. Are they willing to look favourably upon that to support our constituents, who will have higher energy bills as a result of staying at home?
Coronavirus: Employment Support
John Glen Excerpts(4 years, 1 month ago)
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Urgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
Each Urgent Question requires a Government Minister to give a response on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Greg Clark (Tunbridge Wells) (Con)
(Urgent Question): To ask the Chancellor of the Exchequer if he will make a statement about support for the wages of employees.
The Economic Secretary to the Treasury (John Glen)
This is an uncertain time for our country, but the Government are clear that they will do whatever it takes to protect our people and businesses from the coronavirus pandemic. On Tuesday, the Chancellor of the Exchequer set out further steps in the Government’s economic response, building on the initial response he outlined in the Budget last week, which included standing behind businesses, small and large, with an unprecedented package of Government backed and guaranteed loans to support businesses through this crisis. I have been working very closely with him and the banks, and they are very clear about their responsibility to make these measures work. The Government have made available an initial £330 billion of guarantees, equivalent to 15% of our GDP. That means that any business that needs cash to pay salaries will be able to access a Government-backed loan on attractive terms. The Government will do whatever it takes to support our economy through this crisis and stand ready to provide further support where necessary. As the Chancellor announced, we will go much further to support people’s financial security working with trade unions and business groups. Following his appearance at the Treasury Select Committee yesterday afternoon, the Chancellor spoke to the trade unions, and he will today be meeting the TUC, the CBI, the British Chambers of Commerce, and the Federation of Small Businesses. This will be with a view to urgently developing new forms of employment support to help protect people’s jobs and incomes through this period. I am sure that you will appreciate, Mr Speaker, that these are unprecedented times. The Chancellor has said that he will look at further steps to help protect jobs and incomes, and he will announce further details in due course.
Greg Clark
For much of yesterday, like many Members of the House, including the hon. Member for Birmingham, Erdington (Jack Dromey), with whom I have been working, I was speaking to businesses in our constituencies who are facing a crisis. With revenue collapsing and no knowledge of when normal trading can resume, they see no choice but to lay off workers now. The loan scheme that the Chancellor announced on Tuesday is not enough to prevent that. These businesses have no idea when they will be able to pay back the debts they would incur and it provides no reason to keep staff employed. In fact, the reverse is true because, the smaller the wage bill, the less would have to be borrowed. On Tuesday, the Chancellor promised that there would be employment support, but as each day goes by, businesses are making decisions that will be irreversible and if the Government do not act immediately, large numbers of people will be unemployed and registering them will put huge pressure on the welfare system. Vital skills will be lost and good businesses, which will themselves be the customers and suppliers of other businesses, will cease trading.
There is a straightforward and immediate solution. All employers have an account with Her Majesty’s Revenue and Customs to pay tax for employees through pay-as-you-earn. The monthly wage bill is known to HMRC. Instead of firms paying PAYE to the Government, that flow should now be reversed, with the nation paying the wages of people for the next few weeks if, and only if, they continue to employ their staff. Separate arrangements would need to be made for the self-employed, but at a stroke this would save people’s jobs, save businesses and put an immediate end to the risk of contagion and help to save the economy. This is a crisis the like of which we have not seen for 100 years. It requires a response that is immediate, effective and equal to the scale of the problem. The Chancellor said that he will do whatever it takes, and do so urgently. He now needs to make good on that without delay.
John Glen
I am very grateful to my right hon. Friend for raising this matter. I made clear in my response the urgency of the Government’s deliberations on this—it is absolutely at the top of everything we are doing. Ministers are working flat out, 24/7, to look at all the options.
My right hon. Friend raises the specific anxieties of businesses. I recognise that the package of measures that we have put out—with respect to statutory sick pay, easier access to universal credit and employment and support allowance, the business rates relief, the small business grant facility, the local authority hardship funds and the HMRC forbearance measures—will for some not feel sufficient at this point. However, he will also know from his experience in government that it is very important that when the Government announce the measures that we wish to take to assist with supporting employees, they need to be effective and need to work. So I say to the House and to my right hon. Friend: be in no doubt that all options are being examined. We are looking at models that exist in other jurisdictions and when, very imminently, the Chancellor comes to the House, we want to be sure that what we announce will be effective.
Peter Dowd (Bootle) (Lab)
It is now six and a half weeks since the first cases of coronavirus were reported in the UK. For over a month we have known about the substantial risk that coronavirus poses to the economy and to workers, yet the Government have announced no plan to protect jobs and wages—no full plan for employment support. We are all—all of us—inundated with so many questions, and I have just four of those questions to ask.
People are asking us: why, for example, have Denmark, which had its first coronavirus case on 27 February, and New Zealand, which had its first case on 28 February, four weeks after our first case, both announced comprehensive job protection plans, while we have announced nothing to secure people’s jobs and wages? Given that, the second question is: what consideration has been given to the models in Denmark and Austria, which the Economic Secretary referred to, which involve the Government paying the bulk of people’s wages in exchange for job guarantees?
The third question is: why, when the Chancellor announced the loan guarantee on Tuesday, did the Government not tie those loans into an undertaking from business that no one would be laid off? The fourth question: will the Minister accept that freelancers will need additional support if they do not qualify for statutory sick pay? For example, in the culture sector we have as many as 2 million people, hundreds of thousands of whom may be affected.
The country deserves answers to those questions as a matter of urgency. We will continue to ask these questions not as a matter of political point scoring or ideology, but to ensure that we have a Government response that properly protects the public and matches the scale of the crisis affecting us here and now, not just next week.
John Glen
It is in order for the hon. Gentleman to raise those points, and he is right to draw attention to the experience in Denmark. Throughout this crisis, the Government have acted on the best scientific and health advice, and that has clearly had to move over time. That advice has been challenged and questioned, and the Prime Minister and the Cabinet have made decisions based on the best advice available. Consequent to the health advice, which is clearly motivated to relieve as much pressure as possible on the NHS, there are other issues that we are dealing with urgently, and sequentially we are offering that advice as urgently as we can in different domains.
The hon. Gentleman asked about the Danish experience, and we are looking at the furlough system. We are looking at the proportion of support that is available, and we are also looking at the German system. In the last significant recession that happened in 2009-10—that is broadly the comparator that we could use—only 3% of German firms were helped. We are aware of what is happening in the US, and we are aware of the proposals that have been put forward by various think-tanks this morning. We are looking thoroughly at all those options, but it is very important that we have a system that delivers the support that is required to employers.
We have extended the coronavirus business interruption loan to up to £5 million. It is clear that there will be no interest payable in the first six months and no fees, and obviously we expect businesses to use that to support their employees during this time.
Several hon. Members rose—
Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)
I commend my hon. Friend and I agree with him—that is something that the Government should be moving on now, but there is something else the Government could do literally today. Universal credit has three basic levers that can all be pulled now enormously to help people who are in work. First, the taper could be lowered dramatically at this stage, which would push the floor right up underneath people in work at the moment, allowing them to fall back on that if employers cannot deal with them. Secondly, Ministers could change benefit rates, allowing a greater expanse of money to flow to claimants: that could be done today. The third area where my hon. Friend could act is to look at the waiting time and reduce that almost immediately. Those three things were always built into the system for flexibility and they can be done today. They can be delivered within days by a Department that already has the ability to do that while he gets on with the other facilities.
John Glen
I am grateful to my right hon. Friend, who has unrivalled experience in this area. He makes some very reasonable points, and we are looking very carefully at all the options. As I said earlier, when we have decided—very imminently—the Chancellor will make announcements to this House first.
David Linden (Glasgow East) (SNP)
In recent days, the Chancellor has already outlined support for business, which the SNP has welcomed. In Scotland, that support has been passed on in full by our Finance Secretary, Kate Forbes. However, I remain concerned that not enough support is being mobilised for sole traders, freelancers and the self-employed. Today though, our focus is rightly on people, many of whom are already self-isolating or moving to work from home, if indeed they can. But bills are still coming in and rent payments are being sought, and so I welcome the news that some support will be put in place, for example, for payment for energy bills. The question is who is eligible for that, and will that go far enough. Will the Government use the tax system to put thousands of pounds in people’s pockets by way of an emergency universal basic income? Will the Government extend statutory sick pay to the 2 million people who earn less than £118 a week and benchmark it to at least the real living wage?
Firms are already starting to make staff redundant, but we need to stem the flow of that immediately, and today. The Government should introduce a statutory retention scheme to provide firms with financial support to keep staff in employment during this uncertain time.
Now more than ever, our social security system needs to kick in. To protect families impacted by hardship and strengthen automatic stabilisers that support demands in the economy, does the Minister agree that the main adult rate of out of work support in universal credit and other benefits, including carer’s allowance, should rise by a third to £100 per week?
We are in the midst of a national emergency the likes of which I have never seen before. How this generation of politicians responds to the crisis will be how history judges us. During the financial crisis of 2008, no expense was spared to bail out the banks, so today with the coronavirus outbreak we must similarly be prepared to bail out household budgets at this time of economic crisis. It calls for us all to rise to the occasion.
John Glen
The hon. Gentleman is absolutely right. It is important that the Government do whatever it takes in these circumstances. He raises a number of specific points. He will be familiar with the changes we have made in terms of access to statutory sick pay and eligibility starting much sooner; that commenced from 13 March. He will be aware that, to make that easier, there is now no need to have a GP note. He makes number of points on universal credit and changing the eligibility there. Advances are available online; the minimum income floor has been temporarily released. He also makes a number of points about freelancers and the self-employed, which the Government are clear about.
The hon. Gentleman mentioned the universal basic income. The Government are looking at that, but the question whether it will help the most affected most urgently is one we have to consider. Many of us in this House, for example, would not require such support. We have to ensure that we target it at the most vulnerable.
Bob Stewart (Beckenham) (Con)
I have had a lot of emails on this subject, so may I ask the Minister again how the Government are going to support freelancers and the self-employed? They are desperately worried.
John Glen
My hon. and gallant Friend is right to raise that. We have changed the rules on access to employment support allowance and sick pay. It will depend on individual circumstances. We have also released funds to local authorities for hardship relief. Further advice on that will be given tomorrow by the Ministry of Housing, Communities and Local Government.
Stephen Timms (East Ham) (Lab)
I very much agree with the proposals just made by the right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith). It is particularly important that the advances paid to people claiming universal credit become non-repayable for those affected by the crisis. The Minister mentioned the suspension of the minimum income floor for self-employed people—a welcome announcement made by the Chancellor in the Budget—but it appears to relate only to people who are directly affected by covid-19, whereas many of those suffering at the moment are not themselves ill but are affected by the wider changes in the economy. Will the Economic Secretary confirm that the lifting of the minimum income floor will apply also to those who are not directly affected? Will we know the details of the employment support package—I am glad the Government are working on that—before this weekend?
John Glen
The right hon. Gentleman makes some specific points essentially about the consequential effects on different groups of employees who are affected. I cannot comment on the details of that. As for the timing of the employment support announcement, we are working on it as quickly as we can. There is no timetable or specific date because we have got to get it right. We are working as urgently as possible, but I cannot tell him the precise moment at this point.
Sir Bernard Jenkin (Harwich and North Essex) (Con)
I commend my right hon. Friend the Member for Tunbridge Wells (Greg Clark) for his urgent question and endorse everything he said. Those of us who are not in the engine room of Government are being told by our constituents that, welcome though Tuesday’s package was, it is simply not going to be enough. When diehards such as my right hon. Friend the Member for Wokingham (John Redwood) and Allister Heath of The Daily Telegraph are lining up for far more radical measures than the Government have yet announced, the Government must take note. May I urge the Government to say something today to give people assurance that the help will come?
John Glen
I thank my right hon. Friend for his observations. He is right, but there is no sense that the Government are saying that what we have announced is the last announcement we are going to make. It is a question of making sure that when we announce measures, they will be effective in meeting the needs that we know exist. All of us, across the House, will have been inundated with emails from concerned individuals and businesses. We are taking that on board and acting as swiftly as we can. The points raised today are directly informing the nature of our response.
Dame Diana Johnson (Kingston upon Hull North) (Lab)
I understand that this is very difficult for the Government and I am sympathetic, but this is about real people’s lives. The Treasury’s natural approach—being cautious and wanting to stress-test everything—is not appropriate in these circumstances. The right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith) suggested some really good ideas. Why can they not just be implemented today?
John Glen
I understand the hon. Lady’s frustration. It is totally reasonable for Members of this House to be extremely concerned in the absence of the announcement, but it would be even worse, I would suggest, if we made ad hoc announcements when different Government Departments were not quite ready to implement those effectively. We are talking about an unprecedented crisis, and therefore we will need to take unprecedented measures. It is important that we do that as swiftly as possible, but it is also important that we do it as effectively as possible.
Nickie Aiken (Cities of London and Westminster) (Con)
I thank my hon. Friend for his recent announcements, and I absolutely understand that we are living in unprecedented times. In my constituency, hospitality and hotels are obviously huge employers. Is there any scope for the suspension of national insurance contributions, which would really help many of the chains, and particularly the smaller hotels? From speaking to those at the Goring hotel this week, I know that they are very concerned, and they are now offering their hotel to the Government for anything they need—for hospitals or for employees. Suspending NI contributions would be great.
John Glen
I thank my hon. Friend for her suggestions. Obviously, we have made a specific package of interventions available in the retail, leisure and hospitality sectors. We also have the grant facility at a high level for those sectors. She makes a reasonable point, and we will look at it—and we are looking at it—very carefully.
Sarah Olney (Richmond Park) (LD)
I was here on Tuesday night when the Chancellor made his statement, and there can be no doubt what the attitude of the House was at that time. It was that the package of loans and other measures announced by the Chancellor on that occasion would not be sufficient. It would not be sufficient for those who are relying on benefits, it would not be sufficient for those who are already finding themselves out of work, and it would not be sufficient for the self-employed. Here we are two days later, and the Minister is telling us that there simply has not been time to consider these things. This is urgent, and we really must have action now. Why is it taking so long?
John Glen
Every day, Ministers across all Departments are working on different aspects of the package. Yesterday my right hon. Friend the Housing, Communities and Local Government Secretary brought forward some measures for renters. We also have the three-month relief for mortgage holders where they need it, and for buy-to-let mortgage holders. There is more work being done urgently to give clarity on the elements that Members of the House are raising, but, as I said earlier, it is a question of making sure that when these measures are announced, they are going to be effective and can be delivered efficiently.
Peter Aldous (Waveney) (Con)
The feedback I am receiving is that many businesses will have difficulty in accessing Government loans because of restrictions they have in granting additional security to a new lender. With that in mind, may I urge the Government to support payroll costs far more directly, as other European Governments are doing? This is the way to avoid large-scale redundancies.
John Glen
My hon. Friend refers to the loans. I was meeting the banks last night to make sure that these loans are accessible. The criteria for issuing them are based on the solvency of businesses prior to this crisis arising. It is absolutely clear that the banks see they have a massive responsibility to make this scheme work. That term sheet is being finalised; it may already have been finalised this morning. The banks are now working on making sure that that will be available through all their call centres and branches. He makes the suggestion of a supplementary measure, and we are looking at these things very carefully.
Lilian Greenwood (Nottingham South) (Lab)
A constituent of mine works in a residential home for adults with learning disabilities. Her son’s school will be closed from Monday. She does not know whether she is considered a key worker, and even if she is, as seems obvious, her son has respiratory problems, so she is uncertain whether she wants to send him to school. Her employer says she will not be paid and is not even entitled to statutory sick pay if she cannot come into work because of childcare. What should she do? Where is the clear advice and guidance, and where is the helpline for the thousands of other constituents of mine and of every single Member in this House? Where can they get answers, because they are so worried?
John Glen
The hon. Lady makes a reasonable point about the concerns that are being raised. That is why the Cabinet Office will give further advice today on key workers and the support that will be given. I recognise that yesterday’s announcement on schools will be a significant disruption to the lives of many of our citizens. It is very important that we put in place urgently clarity about who is involved—who is designated in those categories—and the support that will be available. I will ensure that her point, which I am sure reflects the views of many, gets to the Cabinet Office after this session.
Dr Julian Lewis (New Forest East) (Con)
Given that the suggestions of my right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith) could be implemented so speedily, will the Minister undertake to try immediately after this session to get an answer on whether they should be implemented?
Tommy Sheppard (Edinburgh East) (SNP)
The very essence of the hospitality industry is to provide social contact. Does the Minister understand the real anger of many in that industry that the Government have given advice to their customers but not to them? If the Government believe premises should close, they should say so, and they should accept the consequences of paying people whose idleness is enforced because of a contribution to a public health emergency. What is so hard to understand is that the system for doing that is staring the Government in the face. It already exists. It is called Her Majesty’s Revenue and Customs. That is a system for taking money out of wage packets every month and giving it to the Government; now, it should be put into reverse to put money into the pockets of those employees.
John Glen
The hon. Gentleman is right to express the deep frustration of people in that sector, and I am sure his words resonate across the House. We have put in resources for 2,000 people from HMRC to take calls for bespoke solutions to deal with some of those issues. He is right that there is also an issue in terms of access to insurance. I was on a conference call with the insurance industry to clarify that where insurance has been taken out, that will be effective. However, he is perfectly right that more work needs to be done, and I have been very clear that more will be forthcoming imminently.
Joy Morrissey (Beaconsfield) (Con)
I thank the Minister for the measures that he has already taken to help the self-employed, but my constituency has the highest number of self-employed in the country, so will he elaborate on what tax incentives, or tax advice or support, can be given to the self-employed at this time, particularly during April over the end of the financial year?
John Glen
As I said to the hon. Member for Edinburgh East (Tommy Sheppard), people have access to an HMRC support line, which is properly manned and up and running. That should give them bespoke support for their circumstances. I have referred to the package of other measures that the Chancellor announced a few days ago.
Carolyn Harris (Swansea East) (Lab)
Charities such as Faith in Families in my constituency are really nervous that they will not be able to pay their wages. Without staff, they cannot deliver the projects for which they are applying for funding, which would provide food and childcare facilities in very deprived areas. That is necessary now; it will become essential in the future. What can the Government do to help those charities?
John Glen
The hon. Lady is right with respect to the role that charities play across our communities, binding communities together and working closely with local authorities. My colleague in the Ministry of Housing, Communities and Local Government is working on these matters, and we will make further announcements shortly.
Mr Tobias Ellwood (Bournemouth East) (Con)
I echo the calls for urgent support for British tourism, which I know the Minister will be familiar with in his constituency. In the Bournemouth area, tourism is worth more than £1 billion and directly employs 17,000 people. I received a letter from David Bailey, who is chair of the Bournemouth, Christchurch and Poole destination management board. He talks about lay-offs happening right now, as we speak, affecting the future of businesses. He asks whether it would be better if, rather than handing out benefit claims, the Government provided salaries immediately. That would mean the industry could retain the skills that will be needed to spearhead the economic recovery and would reduce the number of businesses that cease to trade. Will the Government consider that?
John Glen
My right hon. Friend makes some very reasonable points about the tourism sector just down the road from my constituency. The issue of what we do to support sectors that are directly and immediately affected by the action we have had to take will be at the front of our minds as we examine what employment support to put in place.
Clive Efford (Eltham) (Lab)
After six and a half weeks, when we knew we might reach this stage, it is hard to understand why the Government have no idea what they are going to do to pay the wages of those who are being laid off. A whole tranche of people are going to be laid off now, and more industries will lay people off next week and the week after. If the Government do not act now, they will not be able to retrieve the situation. How have we got to the point where the Government have not got a clue?
John Glen
I accept the hon. Gentleman’s frustration, but characterising the Government as not having a clue misrepresents the situation considerably. There are a large number of issues that we need to examine, and we are doing so at pace. We will make further announcements to address those that have been raised in the House today. We have sequentially done more by the day, reflecting the evolving nature of this crisis and the steps we have had to take, based on health and scientific advice. I understand that the hon. Gentleman is not happy with the Government’s announcements so far, but more will be coming.
Bob Blackman (Harrow East) (Con)
This weekend, pubs, clubs, restaurants and other retail outlets will be considering whether to close on an almost permanent basis, and the people employed in them have an uncertain future. However, most of them are relatively young and mobile, and they are able to offer help and assistance to the weak and vulnerable. Could we not guarantee loans to those outlets on the condition that those people continue to be paid and that they then become part of a volunteer force to help the weak and vulnerable at this time of crisis?
Nick Smith (Blaenau Gwent) (Lab)
I do wish Ministers would stop using hyperbole such as “whatever it takes”, when they do not follow through sufficiently quickly. Will the Government extend SSP to support all workers and pay it at the rate of the real living wage straightaway?
Mr Philip Hollobone (Kettering) (Con)
Many of the “just about managing” are not managing, and there will be many more of them in the next few days. The last thing we need at this time is an over-engineered new system. As a humble Back Bencher, I have heard many good ideas in the Chamber this morning—particularly from my right hon. Friends the Members for Chingford and Woodford Green (Sir Iain Duncan Smith) and for Tunbridge Wells (Greg Clark) and the right hon. Member for East Ham (Stephen Timms). If those three right hon. Members are not in No. 11 for a meeting later today, I will be really disappointed. We have had the architect of universal credit in the Chamber, and he has given the Government the answer to their problem. Please can we get a move on?
John Glen
I take the challenge from my hon. Friend in the spirit in which it was intended. There is no sense that the Treasury is trying to over-engineer anything. We are not trying to restrain spending for the sake of restraining it. We want to bring forward an effective package of measures that effectively meets the needs of the most vulnerable. My hon. Friend makes the reasonable point that a number of colleagues of great seniority have raised significant points of interest, and I will ensure that their contributions are heard at the heart of this process today.
Bambos Charalambous (Enfield, Southgate) (Lab)
Dental practices are at high risk of spreading coronavirus, yet there was nothing for them in the financial package on Tuesday, which means they have to stay open, with an increased risk of spreading coronavirus. Will the Government give assurances that they will cover fixed-price dental costs so that dentists can close and provide only urgent care?
Mark Pritchard (The Wrekin) (Con)
Many of the Government’s schemes have to be delivered through retail banks, which means people and businesses calling already overloaded call centres and going into retail branches—where they exist—which might restrict hours over the coming days. Most banks and most large private sector companies in this country that rely on some phone contact have resilience and contingency places dotted around the country that have pop-up call centres in times of crisis. Could the Government deploy those to ensure that desperate immediate-need calls from businesses and individuals are dealt with as quickly as possible?
John Glen
My hon. Friend makes a very good point about the resilience required in banks at this difficult time. I discussed that with the heads of the banks last night and over the previous two days. We need to ensure that the terms of these loans are effective in allowing people to access them swiftly and we need to ensure that the banks can ramp up the accessibility of their specialist advisers. I have been given assurances that that will be in place.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
So many of my constituents are caught up in this, like those of other hon. Members, and I have constituents who have no recourse to public funds, so when they are unable to work they cannot claim benefits. Many are freelancers and people who are self-employed and running small businesses. None of the packages the Government have announced help them so far. The Minister has had to be dragged here to answer an urgent question and has nothing he can say that will comfort our constituents. I think we all recognise that it is difficult, but could he not even give us a clue about the general direction of thinking from the Government? Will he raise the local housing allowance? Will the Government ensure that those with no recourse to public funds get funded? Will they stop this ridiculous loan system, which will never get paid back? Businesses will go bankrupt before they can pay it, and they are laying off staff now.
John Glen
The hon. Lady raises a number of sensible points. We are looking at many of them. I reassure her that we will make further announcements very soon. Yes, we are looking at the ideas raised. We are looking at other jurisdictions. But in some cases we have a very different set of processes and IT systems behind some of these Government Department distribution mechanisms. I know that that is very technical, but the bottom line is that we need to ensure that when we introduce something, it delivers.
Bob Seely (Isle of Wight) (Con)
I support strongly the ideas on the universal employment retention package proposed by several right hon. Friends, and I hope that the Government take it on board to prevent a health crisis becoming an economic disaster. In addition, briefly, rateable value capped at £51,000 is too low for medium-sized tourism employers such as the Seaview Hotel. Secondly, we need clarity in the system because my chamber of commerce still does not know how to apply. Thirdly, we need a package for the voluntary sector. West Wight sports centre is a world-leading sailing academy and a major employer on my patch. We need either a voluntary sector package or a universal employment retention programme.
John Glen
I thank my hon. Friend for his points; he raises a number of interesting ideas. He is absolutely right about the voluntary sector needing support. As I have indicated, there will be a package coming and different Departments are working together to make this as effective and comprehensive as possible. His constituency has a number of issues regarding the hospitality and leisure sector, and I am very aware of the representations he has been making to Government over the previous few days.
Bill Esterson (Sefton Central) (Lab)
Letting many people get into rent or mortgage arrears or asking businesses to take on debt are not the answers. They are just going to make the crisis worse—[Hon. Members: “And longer.”] Yes, thank you. Every business, every employee, every self-employed person and everybody in the third sector needs to know that their living costs will be covered. The Government need to show the urgency that the Minister talks about and they need to show it today. Will the Chancellor come back today and make a statement on how they will deliver this?
John Glen
The hon. Gentleman is perfectly right that we need a comprehensive package that deals with businesses, the voluntary sector and individual employees of different categories. We are looking very carefully at the best way to do that, in addition to the significant package of measures we have introduced. I feel his frustration and I will take all these points back and make sure that they are addressed.
Richard Graham (Gloucester) (Con)
The greatest difficulty for the Government in this fast-deteriorating situation of no one’s making is the speed of response. My worry is that the business interruption loans package will be too clunky for most small and medium-sized businesses, and the cash grants will take too long to get to businesses before decisions are made about jobs. Will the Minister look closely at the recommendation of our right hon. Friend the Member for Tunbridge Wells (Greg Clark)? If that were put in place, some of the recommendations made by my right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith) on universal credit would not be so important.
John Glen
I note the point that my hon. Friend makes about the clunkiness of existing measures, and obviously we are looking at the point raised by my right hon. Friend the Member for Tunbridge Wells. My hon. Friend the Member for Gloucester (Richard Graham) refers to the accessibility of the loans. The Government guarantee to the banks through the British Business Bank is in order to provide a massive incentive to making the loans available to solvent businesses as quickly as possible, but I hear his concerns, and they are reflected in the design and in conversations that we are having with the banks.
Patrick Grady (Glasgow North) (SNP)
Does the Minister not understand that a universal minimum income guarantee does exactly what it says on the tin? It will provide that minimum level playing field for tenants and their landlords, for business owners and their employees; it will provide everyone with a minimum level of assurance so that they can have some certainty in this time of uncertainty.
Anthony Mangnall (Totnes) (Con)
Like many Members, I have been fielding calls for the past 10 days from businesses that are sitting on the wire, wondering whether their futures are safeguarded. Has the Minister looked at the possibility of a VAT rebate for businesses that are desperately trying to hold on to their employees to ensure that they have a future? Will he please look into that, and will he also ensure that we have greater clarification of whether pubs are open or closed, because that is causing much greater distress than it needs to cause?
John Glen
My hon. Friend makes a reasonable point about the hospitality sector, and a very credible suggestion with respect to VAT. Across the benefits system and the tax system, we are looking at the optimisation of interventions to support the most vulnerable and most affected at this time, and to give reassurance to the whole country. We will urgently bring forward measures to address the concerns that he has raised.
Mr Kevan Jones (North Durham) (Lab)
Individuals are losing their jobs now—they are in desperate need now. Andrew Brown, a freelance graphic designer in my constituency, contacted me this morning; his business has folded overnight, and he cannot apply for any grants because he works from home. What does he do in that situation? The Minister talks about the great package that was announced the other night, but councils still do not have the guidance to get that money out to businesses. I urge him to get that out as a matter of urgency, because this morning Durham County Council told me that it will not be available until the weekend, and that is too late.
Several hon. Members rose—
Rob Butler (Aylesbury) (Con)
There are more micro-businesses in Buckinghamshire than in any other county in the country. I pay tribute to Buckinghamshire Business First, which is working extremely hard to try to support them, but may I urge my hon. Friend to take the unique needs of micro-businesses into account in the measures that he is developing?
Deidre Brock (Edinburgh North and Leith) (SNP)
Our farmers, crofters and fishers are crucially producing our food, but the situation has rocked those sectors to their foundations. Will the Minister outline what specific considerations are being given to supporting those sectors, so that they can continue their vital work?
John Glen
The hon. Lady will know that a large number of the grants and loans schemes will be accessible to all sectors, as well as grants from the local authority. Comprehensive advice went out to all hon. Members last night setting out all that information, and there will be further announcements. Sector-specific issues are best addressed through the Department for Environment, Food and Rural Affairs, but I hope the announcements that we have made will give some interim comfort to her constituents at this difficult time.
Matt Western (Warwick and Leamington) (Lab)
I am afraid that it is quite evident that the Government have lost support and confidence across the Chamber, and that is echoed by the markets. We have seen a 5% drop in sterling, which will translate into higher food and energy prices for already hard-pressed households. In Warwick and Leamington, we are losing jobs and good businesses. Will the Minister support the comments of the right hon. Members for Chingford and Woodford Green (Sir Iain Duncan Smith) and for Tunbridge Wells (Greg Clark) and introduce some form of universal income support to restore both the supply and demand side?
John Glen
I acknowledge the point on the minimum income guarantee, which I have responded to previously. On co-ordination with the Bank of England, we have worked with the Financial Conduct Authority to introduce better forbearance measures for the banks so that they can act effectively and use their flexibilities. Obviously the bridging facility that the Bank of England has brought forward for bigger businesses is also important.
Ben Lake (Ceredigion) (PC)
Will the Minister assure us that the package of measures that the Government intend to bring forward will offer support to the self-employed, sole traders and freelancers who may not themselves be ill but who may have already lost work due to the economic disruption of covid-19?
Kate Green (Stretford and Urmston) (Lab)
May I raise a specific question with the Minister? Childminders and childcare providers in my constituency tell me that, although they have insurance if they have to close their businesses as a result of a notifiable disease, which covid-19 clearly now is, insurance companies are saying that they will not provide the cover, because it does not appear on the list of notifiable diseases. Will the Minister take that up urgently with the industry?
John Glen
I have taken that up urgently with the industry. Businesses take out business relief, and then about 5% take out insurance for non-specified diseases, and 5% for specified diseases. We have made sure that for those that have taken insurance for specified diseases, that will be triggered by the Government’s announcement this week, and the other package of measures will support businesses that do not have that insurance. We cannot retrofit contractual obligations to insurance companies.
Kevin Brennan (Cardiff West) (Lab)
The Minister is a decent man, but there is a feeling across the Chamber that Treasury Ministers, and the Chancellor in particular, find it difficult to empathise with the situation that people find themselves in and do not speak human very well. I appeal to Ministers to show a bit more understanding of the predicament facing freelancers and the self-employed who have lost all their work, and perhaps take on board simple ideas, such as that of the right hon. Member for Tunbridge Wells (Greg Clark). Reverse the polarity—it usually works.
John Glen
I am sorry that the hon. Gentleman wishes to criticise the tone of my response. I am clear that this is an unprecedented crisis. The Government have made a series of announcements, and will be making further announcements. A range of sensible suggestions have been made, many of which we are already examining urgently.
In response to specific questions about technical matters, I have had to use quite complex and unfamiliar constructions. If I did not do that, I would not be answering the question. If I used too many soundbites, I would be criticised in another way. We will do everything we can to take on board the questions that have been raised today to come forward with a comprehensive package that all our constituents will see as effective.
Daisy Cooper (St Albans) (LD)
I asked the Government 10 days ago whether they would guarantee the wages, rents and business rates of small businesses. The measures that have been announced are riddled with problems. Businesses in St Albans tell me that they do not qualify for the secured loans or the grants up to £25,000, and they are being told that business interruption insurance will be payable only after the event when the insurance company can see how much they have lost. That is not good enough. Businesses are saying that Her Majesty’s Revenue and Customs must be used, not the benefits system; that they need grants, not loans; and that wages for all must be guaranteed, and guaranteed today.
Kerry McCarthy (Bristol East) (Lab)
Can I ask about people who use registered childminders who now will not be able to do so? Quite understandably, childminders are still asking for the fees, because otherwise they will be short. We now have people who cannot go to work because they have to look after their children, but if they are self-employed, they cannot get money either. What support is available to help them?
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
Can I say to the Minister as constructively as possible that his Government’s economic response is undermining the public health response? Job losses are contagious. Fear of economic hardship will spread the virus. The technical details can wait, but he needs to say now—today—that in principle he will guarantee the incomes of everyone at a level that provides security.
John Glen
We will do what it takes to support workers who are in distress. We have brought forward a package of measures, some of which will be imminently delivered, such as the unprecedented loan scheme. We have also added a number of grant schemes available through local authorities and reliefs from business rates, and additional measures will be coming imminently.
Neale Hanvey (Kirkcaldy and Cowdenbeath) (Ind)
The Links market is the largest street fair in Europe and has been happening every spring for the last 700 years in Kirkcaldy. Unfortunately, as a result of coronavirus, the Scottish section of the Showmen’s Guild of Great Britain has had to take the reluctant decision to postpone the event this year. That is going to cause significant hardship for their members. It will also have a significant impact on the local economy because it attracts many visitors. What support will be available to get them through this difficult time and preserve their important fair?
John Glen
The hon. Gentleman highlights what many colleagues are going to experience: events that have been planned and have been going on for many, many decades will be cancelled as a result of what is happening. The package of measures that we have announced will be accessible to many of those people. The sectors that are involved will sometimes have sector-specific packages, where there has been a direct effect as a consequence of Government decisions, and we are urgently working on a broader package with respect to employees.
Thangam Debbonaire (Bristol West) (Lab)
I am sure that the Minister will have heard the cross-party consensus here. If the hon. Member for Harwich and North Essex (Sir Bernard Jenkin) and I are in complete agreement, something is happening, so on behalf of the 130,000 people of Bristol West, I plead with him to take every single one of these suggestions straight back to the Treasury and to put them into practice today.
Dave Doogan (Angus) (SNP)
The Minister is very keen to point out that he understands the frustration of Members and their constituents. Can I assist him by pointing out that it is no longer frustration, but desperation? What we need are not loans; we need grants. Businesses in Angus are asking me why they should take out a loan to provide incomes for people who cannot work, through no fault of their own. That looks dangerously like welfare, and delivering welfare is the responsibility of Government. When will the Government deliver?
John Glen
I understand the use of the word “desperation”—I recognise that, and that is why we are working urgently to have a package of measures, and extend that package of measures, so that there are a range of options to businesses of different sizes in different situations, based on their sector and the risks that they face.
Jim Shannon (Strangford) (DUP)
The first coronavirus death has been confirmed in Northern Ireland, and I wish, through the House, to convey our commiserations to the family.
I have been contacted by a school bus driver on a zero-hours contract who normally works 45 hours a week but has now been told that there is no work for him until further notice. Does his employer not have an obligation to pay his wages, and the wages of others in the same boat? What is the Minister’s message to help this employee?
John Glen
I am very happy to look at that individual’s circumstance. We have made interventions to provide advances of ESA and to remove the minimum income floor. It is clear that we will need to do more to support employees who have been specifically affected by the tough decisions we have taken. I am very sorry to hear of the first death in Northern Ireland.
Bank Branch Closures
John Glen Excerpts(4 years, 1 month ago)
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Patricia Gibson (North Ayrshire and Arran) (SNP)
I echo the thanks to my hon. Friend the Member for Midlothian (Owen Thompson) for securing this important debate. I feel as if I have spent quite a lot of time in the five years since I was elected bemoaning the stampeding of banks out of our communities without so much as a backward glance.
My constituency has several towns where there is no bank at all, and other Members have talked of similar issues. Ardrossan, Stevenston, Kilwinning—a town of 21,000 people—West Kilbride, Dalry and Beith are all without a bank, and Kilbirnie’s last bank has reduced its opening hours. That is the only bank left in the entire Garnock valley, which is three distinct towns with a collective population of more than 19,000 people. Losing the last bank in our towns is a severe blow to our communities. It undermines their commercial stability and has a significant social impact, which we have heard much about today.
My constituency, like that of every Member who has spoken, has been hit particularly hard, and I share all the concerns expressed by my hon. Friend the Member for Midlothian (Owen Thompson). In Scotland, according to research, we have lost more than one third of our bank branches since 2015. The consumer organisation Which? found that banks shut 396 Scottish branches between January 2015 and August 2019, reducing their number by 38%—an alarming rate of closure, by any measure. My hon. Friends the Members for Midlothian, for East Renfrewshire (Kirsten Oswald), and for Kilmarnock and Loudoun (Alan Brown) and the hon. Member for Strangford (Jim Shannon) have all said similar things.
As we have heard from my hon. Friend the Member for East Renfrewshire, it is clear that any consultations are simply window dressing. They are tick-box exercises so that the banks can reassure themselves and the Minister—“Oh yes, Minister, we have undertaken consultation”—when we know that is not true in reality. I remember the same thing happening in 2007 and 2008, when there were mass post office closures in my constituency. That was long before I was elected to this place, and perhaps innocently—perhaps even naively—I, along with other Scottish National party activists, set up street stalls. We went door to door with petitions. We did everything we could to get the post office to reverse those closures, but of course nothing changed, because the consultations were not at all meaningful. We have memories of these consultations from other times, and I say to the Minister that this has to stop.
The Treasury Committee concluded that
“there are still large sections of society who rely on bank branches to carry out their banking needs. A bank branch network, or at the least, a face-to-face banking solution, is still a vital component of the financial services sector, and must be preserved.”
I know that the Minister probably will not agree—I have said this to him before, during one of the countless debates on this topic I have participated in—but I genuinely believe that because there was no UK Government intervention when RBS announced its radical, eye-watering programme of closures, although we as taxpayers owned a significant stake in RBS, the fact that nothing was done emboldened the other banks that have no element of public ownership. If a publicly owned bank can do it, why can a private bank not do the same without any kickback or repercussions from those in the corridors of power?
If the Government are as willing as they have demonstrated to accept closures of bank branches—banks that they owned, in the case of RBS—that is extremely disappointing. Throughout RBS’s entire closure programme, I listened very hard, but I could not hear anybody in Government condemning those closures. All I heard was a distancing from any sense of responsibility, which is really disappointing for our constituents. It seems that other banks felt they could employ the same tactics and close down wherever they felt it was no longer convenient to have a branch, without any consequences or official condemnation from Government. As a result, the people who pay the price are those in our communities who are suffering for want of a bank, and will continue to suffer. We have heard a lot about that today.
Of course, we have these mobile banks, but they really do not answer the question of what we do without a bank. They are not disability compliant, their reliability is questionable at best, and they simply do not fit the bill or take the place of a bank. We also know that the gaps left by banks cannot be properly filled by post offices. That is no reflection on post offices, which work hard to provide a good service to our communities, but they are not banks and they cannot fill the gap. As the Minister will know, the Treasury Committee concluded that post offices
“should not be seen as a replacement for a branch network, but a complementary proposition”.
Other Members have talked about the fact that post offices simply cannot fill that gap.
Along with branch closures we are witnessing the demise of free cash machines, as we have heard. About 10 free-to-use ATMs a week have been shut down in the past year. As far as I can make out—although I hope the Minister will contradict me—the Treasury seems to have been deaf to all pleas for Government intervention to protect free cash. I hope that the Minister is able to offer some comfort today.
Patricia Gibson
I look forward to hearing from the Minister, who is speaking from a sedentary position.
The ATM Industry Association has warned that one fifth of Scotland’s free ATMs will start to charge consumers in the next year. That can be seen only as a cynical move to force us to become a cashless society. Picking up what has been touched on by my hon. Friends the Members for Kilmarnock and Loudoun, for East Renfrewshire, and for Midlothian, and the hon. Member for Strangford, bank closures have, as we now know—the game is up—been a tool to force people to bank online. As banks have quietly cut the fees that they are willing to pay machine operators to provide bank customers with access to cash, they are forcing us to go cashless and online. Banks are attempting to put pressure on customers who do not act in a way that they—the banks—find convenient. What happened to the customer being king?
Going cashless and banking online may, as we have heard, be the preferred option for some—and good luck to them—but some of us do not want to go down that route, and increasingly aggressive efforts are being made for it to happen, at breakneck speed. I and those of my constituents who do not favour those options will not be forced to bank online. We will not be bullied into doing so or into going cashless. It is a rum do when the service provider is bullying the customer—because that is how it feels. In any case, even among customers who may be interested in banking online there are some who simply are not able to, for a variety of reasons that the Minister will understand, and of which the hon. Member for Strangford reminded us.
I have corresponded with the Treasury about online banking in the past, and it accepted that broadband access is not yet good enough for everyone to rely on digital banking. The Government and the access to banking standard must ensure that banks have a social responsibility to provide banking facilities to all our towns. Such services could be provided relatively easily through the wide rolling-out of banking hubs. Indeed, I met the Minister in his constituency to discuss that very issue last year. I am hoping—I am quite excited about it—that he will be able to update me on progress with that. I am sure that the Minister will correct me if I am wrong but I cannot see any discernible obstacle to the option except for perhaps a lack of political will and, indeed, the arrogance and intransigence of the banking industry.
Our communities and constituents deserve better than they have had up to this point. Banks have to face up to their social responsibilities, get their heads together and create banking hubs in our towns, across the board. There is no real impediment to that, and I urge the Minister to use his good offices to bang some banking heads together and ensure that customers’ voices are heard. The Government have a role to play when the last bank in town is closed. They have said repeatedly that those are commercial decisions, but it is not just a commercial matter. It is about social responsibility and financial inclusion. I urge the Minister to reflect further on the strong feelings and concerns that have been expressed today. Will he finally bring forward legislative proposals to ensure that banks live up to their responsibilities to our communities?
The Economic Secretary to the Treasury (John Glen)
It is a pleasure to serve under your chairmanship, Sir David.
I thank the hon. Member for Midlothian (Owen Thompson) for securing this debate on an enduring concern across this Chamber and the House as a whole. I thank him for our conversation yesterday, following up on his question during business questions at the end of February. Since the start of this year, I have had conversations about similar matters with the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) and my hon. Friend the Member for Colne Valley (Jason McCartney).
In the debate, I listened carefully to the speeches of the hon. Members for East Renfrewshire (Kirsten Oswald), for Kilmarnock and Loudoun (Alan Brown), for Strangford (Jim Shannon) and for Stalybridge and Hyde (Jonathan Reynolds). In my remarks, I will address the points they made.
The hon. Member for Midlothian, in opening, referred to the current context. At this time, obviously, banks will operate using contingency plans. In the light of such circumstances, we expect them to consider what that means for their branch closure programmes.
Customer-facing financial services are undeniably changing, as consumers and businesses opt for the convenience, security and speed of digital payments and banking. In 2018, almost three quarters of UK adults used online banking, half mobile banking and two thirds contactless payments. Meanwhile, branch usage fell by 26%, on average, between 2012 and 2017, with many communities seeing even more drastic declines.
Banks clearly must balance changing customer interests, market competition and other commercial factors when they consider their response. Many have proceeded in different ways. Sometimes they take the difficult decision to close branches in order to strike that balance. Although that is disappointing for communities, I have been clear that banks are best suited to know what works for their customers, and these must ultimately be commercial decisions.
That said, in January, I visited Yarm in Stockton to look at what Barclays is doing with its network. It has taken a group of more than 100 branches—102 or 112, I think—that are the last bank in their towns, and is working hard with the communities to secure a future. I encouraged it in that work, because models exist to sustain such branches, if transfers are made into that last bank. Barclays is optimistic about a large proportion of the cohort surviving for a significant time.
The Government cannot reverse changes in the market and in customer behaviour, and nor can we determine the commercial strategies of individual firms. I still believe that it is not for me in Westminster to decide the shape of a branch network or whether a bank should place a branch in Wolverhampton or Wick, but it is important that the impact of closures on communities is understood, considered and mitigated. I will set out some of the ongoing work in that area.
The access to banking standard is a key mechanism to ensure that customers are well informed about branch closures, and that banks set out their reasons for closure and the alternatives available to consumers. Since May 2017, the major high street banks have voluntarily signed up to the standard. However, I acknowledge that hon. Members have made representations to the effect that the application of the standard lacks transparency, is inconsistent and is insufficiently tailored to local conditions.
Last July, therefore, I met representatives of the Lending Standards Board and UK Finance, which enforce and own the standard, to discuss some of these concerns. As a result, they have agreed to two key improvements to the application of the standard. The first is agreement on a common definition of what constitutes an impacted customer when a branch closes, and the second is agreement on a number of common metrics to be used in impact assessments. Both of those will drive greater consistency of information among banks when they are closing branches.
In its recent annual report, the Lending Standards Board reported improved compliance with the standard among firms. It found that firms were providing more local information specific to the branches in question, and strengthening their relationships and engagement with the Post Office. In due course, the Lending Standards Board will publish examples of best practice to highlight positive approaches and provide a standard for under-performing firms to work towards.
Hon. Members will know the important role that the Post Office plays when branches close, and I have noted the comments of the hon. Member for North Ayrshire and Arran (Patricia Gibson) about the Treasury Committee’s report on this issue. I was therefore pleased by the successful renegotiation of the Post Office’s commercial agreement with the high street banks. That means that for the next three years at least, 99% of personal customers and 95% of small and medium-sized enterprise customers can continue with everyday banking at one of the UK’s 11,500 Post Office branches.
The agreement also ensures that local postmasters will see a considerable increase in fees for processing transactions, which will rise as volumes grow. I acknowledge the hon. Lady’s point about this being a complementary activity; I do think we are on a journey when it comes to the functions that post offices can provide, because they clearly cannot provide face-to-face banking services. Those are being aggregated generally across the industry, but these are issues that the banking industry must come to terms with. I will say more about that in a minute.
Post Office figures from between 2018 and 2019 show that overall transactions increased by 15.5%, deposits increased by just under 40%, and withdrawals grew by 16%. Increased income from fees will help the post office network become more financially sustainable and will allow for investment in automation, training and security. As high street entities, post offices face similar challenges when it comes to footfall and the changing behaviour of customers.
Turning to the issue of access to cash, three in 10 payments in the UK are still made in cash, and the Government want to ensure that cash remains available for those who need it. That is why in last week’s Budget, the Chancellor announced that the Government will bring forward legislation to protect access to cash. We will work with regulators and stakeholders as we develop our approach, including with LINK, the Payment Systems Regulator, and people such as Natalie Ceeney, who carried out the “Access to Cash” review last year. That process will also involve stakeholders such as Which?, who have taken a great interest in this issue.
Improving digital access must be an equally important part of our response. The opportunities created by digital and online products should be open to all, which is why we established the digital skills partnership to bring together the public, private and third sectors to address the digital skills gap in a more co-ordinated and collaborative way. Of course, doing so depends on physical connectivity; some 98% of premises in the UK can access decent broadband, but there is more work to be done. That is why the Budget announced a £5 billion commitment to support the roll out of gigabit-capable broadband.
Mobile coverage is also important; as the Chancellor has announced, the shared rural network agreement has been finalised, which will involve an extra £510 million of funding from the Government. That means that 95% of the UK’s landmass will have that connectivity.
Last year, I concluded a Westminster Hall debate on this topic with a call to arms for the industry, which I reiterate and re-emphasise today. We cannot reverse digital innovation—nor should we, given the benefits it brings. However, this House can agree that vulnerable customers must not be left behind or locked out of opportunities. Government, regulators and industry are already acting to ensure cash remains available. I have just come off a call this afternoon in which I discussed mutual banks, credit union reform—which was also announced in the Budget—and hubs and cash access, which is something I am actively pursuing the banks about.
We must keep putting energy into digital inclusion, and not let the process of innovation run out of steam. I will be working with the industry and pushing it to go further. I value all the contributions that have been made today; they reinforce the energy that I will continue to bring to solving some of these difficult problems, which differ across the country.
Budget Resolutions
John Glen Excerpts(4 years, 1 month ago)
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The Economic Secretary to the Treasury (John Glen)
It is a pleasure to speak at the end of this long but very interesting debate, with 34 contributions by Back-Bench Members from across the House. Before I attempt to respond to many of the questions, I would first like to extend my very best wishes to the hon. Member for Oxford East (Anneliese Dodds) on her birthday today. [Hon. Members: “Hear, hear.”]
We have been fortunate in this debate to hear three excellent maiden speeches. My hon. Friend the Member for Burnley (Antony Higginbotham) said that he is the first Conservative to be elected in Burnley since 1910. He spoke about his passion to end hospital car parking charges. It is great that the Budget has moved us forward in that regard, with the changes beginning in April.
We heard from my hon. Friend the Member for Don Valley (Nick Fletcher), who, very movingly, told the story of Tommy in two different scenarios, speaking very much to the aspirations of the Government in terms of investment in life opportunities. He also spoke very openly and bravely about his Christian faith.
We also heard from my hon. Friend the Member for Great Grimsby (Lia Nici), who, supported by my hon. Friend the Member for Cleethorpes (Martin Vickers), made the case for a free port in her constituency. The Government will take very seriously the representations she made.
I recognise that the debate was punctuated by a very important statement from the Secretary of State for Health. I also recognise that the hon. Member for Oxford East raised a number of questions, some of which I will be able to respond to. I am sure my colleagues across Government will be making further statements in coming days to clarify some of those points. The Government are committed to supporting our world-class public services with the investment they need: investment in the here and now, with a £30 billion package for the country to tackle covid-19, including a £5 billion Cobra response fund for the NHS and other public services; and investment for the future. She is right that there has been a material development as a consequence of today’s announcement, and there are matters that we in the Treasury will reflect on carefully, but a support package for business was set out last week and we will look at that in terms of what we say later this week.
In last year’s spending round, the Government pledged an additional £34 billion for the NHS by the end of this Parliament, together with 20,000 more police and an additional £14 billion for education over the next three years. That was only the beginning of our ambition, however. We are determined to deliver for the people who put their trust in us. We are ready to take the big decisions necessary to transform our country. The Budget is proof of that commitment.
By the end of this Parliament, day-to-day spending on public services will be £100 billion more in cash terms than when we came into government a decade ago. Nowhere is our commitment more evident than in the national health service. In 2018, the Government agreed a historic multi-year funding settlement and committed to spend an additional £34 billion by 2024. Through the Budget, the Government will commit a further £6 billion.
Together, that provides the financial security and certainty that the health service needs to prepare for the future at a time when it is under unprecedented pressure to once again step up and go beyond the call of duty. It means that we can proceed with delivering 50,000 more nurses. It will fund the creation of 50 million more GP surgery appointments a year and it will enable work to start on 40 new hospitals. Crucially, we will also invest in the future health and wellbeing of our society, with £1 billion extra for adult social care every year of this Parliament, and nearly £650 million to help rough sleepers into permanent accommodation.
The Government’s most important task is to keep the public safe. Thanks to the £750 million we made available at the spending round, the first of 20,000 additional police officers are now being recruited. Last week’s Budget confirmed that we will make available an additional £114 million in support of counter-terrorism efforts. Ultimately, a safe and secure society rests on a firm but humane justice system that can reform and rehabilitate offenders back into society, as my hon. Friend the Member for Aylesbury (Rob Butler) said. We will improve conditions for those living and working in our prison system, which my hon. Friend the Member for Henley (John Howell) raised, while increasing the number of offenders required to wear electronic tags and expanding the number of hours offenders can spend doing unpaid work.
My right hon. Friend the Chancellor made it clear that this was a Budget for businesses. If we are to unleash the potential of businesses across the country, we need to equip people with the skills to match our ambition. Last year’s spending round provided schools with a three-year settlement, so that per pupil funding can rise at least in line with inflation, which was welcomed by my hon. Friend the Member for Newbury (Laura Farris) in her thoughtful contribution.
In this Budget, the Government will invest a further £95 million to support the roll-out of T-levels, and we will fund 11 maths schools across every region of the United Kingdom. Meanwhile, £1.5 billion will be made available for capital spending in the further education sector and we will bring together employers and educators to open eight new institutes of technology. Those measures will help to ensure that our country has the skills it needs to prosper, not just today, but into the 2030s, 2040s and beyond.
Alongside our increased investment in public services, we will redouble our efforts to clamp down on tax avoidance and evasion. The vast majority of taxpayers in this country—businesses and individuals alike—pay their correct taxes on time and expect others to do the same. For that reason, the Government will give Her Majesty’s Revenue and Customs more funding to tackle non-compliance and secure an extra £4.4 billion of revenue that is not currently obtained. Every penny that HMRC can recover will mean more money for frontline public services.
Now that we have left the European Union, our future is in our hands. The Government are determined to seize the opportunity to create a country that is not only stronger and more prosperous, but safer, fairer and healthier too.
This Budget will ensure that our police have the resources that they need to keep our streets safe. We will ensure that the NHS has the doctors, nurses and other professionals that it needs to continue delivering world-class healthcare, free to every man, woman and child, for decades to come. The Budget will also help our schools, colleges and universities to equip young people to thrive in life, and our economy to access the talent and skills that it needs to grow. I urge Members in all parts of the House to support the Budget tomorrow evening.
Draft Civil Liability (Information Requirements) and Risk Transformation (Amendment) Regulations 2020
John Glen Excerpts(4 years, 1 month ago)
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The Economic Secretary to the Treasury (John Glen)
I beg to move,
That the Committee has considered the draft Civil Liability (Information Requirements) and Risk Transformation (Amendment) Regulations 2020.
It is a pleasure to serve under your chairmanship, Ms Nokes. The draft regulations serve two important functions. First, they set out information reporting requirements for motor insurers that will allow the Treasury to assess the benefits to consumers of the reforms set out in the Civil Liability Act 2018. Secondly, they will make a technical fix to the Risk Transformation Regulations 2017 by removing barriers to transactions in insurance-linked securities.
I begin by outlining the information reporting requirements, which constitute part 2 of the regulations. Motor insurance is the most commonly held general insurance product in the UK. Of the 26.5 million UK households in 2018, 20 million had an active motor insurance policy. It is therefore essential that consumers get a fair deal from their motor insurers.
As such, the Civil Liability Act 2018 made important changes to the compensation for whiplash injuries from road traffic accidents and to the way the personal injury discount rate is calculated. These changes were expected to generate savings, the benefits of which would be seen in the form of lower motor insurance premiums for consumers. Indeed, when the Act was introduced, the Association of British Insurers, which represents the majority of UK insurers, published a letter from its members—comprising 86% of its motor and liability insurance business—publicly committing to pass on savings to consumers.
The draft regulations are intended to hold insurers to account for that commitment. They will allow the Treasury to make an informed assessment of whether motor insurers have passed on any cost benefits arising from the Act. Insurers issuing more than 100,000 private motor insurance policies annually, which make up 95% of the market, will be required to provide a one-off data submission to the Financial Conduct Authority detailing their costs and premiums for the three years from April 2020. They will also be required to calculate counterfactual data showing what their costs and premiums would have been if the Act’s reforms had not been implemented. That data must be accompanied by a statement from a qualified auditor verifying that it meets the standards set out in the draft regulations. Firms may also provide relevant supplementary information to explain any figures provided.
Once submitted, the FCA will review and aggregate the data, before passing it on to the Treasury. We will use the information to assess whether any savings have been passed on, and an accompanying report summarising the findings will be laid before Parliament after 1 April 2024. The reporting requirements themselves have been designed to provide the Treasury with sufficiently robust data to make an accurate evaluation of the impact of the Civil Liability Act on motor insurance premiums while minimising the regulatory burden placed on insurers.
Part 3 of the regulations amend the UK’s regulatory regime for insurance-linked securities. The Risk Transformation Regulations 2017 established a tax and regulatory regime that enabled the UK to become an attractive domicile for insurance-linked securities special purpose vehicles. Insurance-linked securities allow insurers to transfer risk to capital markets, with their value linked to an insured loss event.
Insurance-linked securities are complex investments. Regulation 11 of the 2017 regulations clearly provides that only institutional or sophisticated investors can be offered insurance-linked securities in the UK. Regulation 157 prohibits offering insurance-linked securities to the public, and regulation 158 provides that an offer to the public includes any section of the public. That could be interpreted by some as including qualified investors, which was never the intention of the legislation.
None the less, the Government consider it important to remove any perceived ambiguity and make it clear that insurance-linked securities most certainly can be offered to qualified investors. That was the intention when the regulations were passed and it is my intention now. The regulations before the Committee amend the Risk Transformation Regulations 2017 to clarify that the definition of an offer to the public does not include an offer made solely to qualified investors. That puts it beyond doubt that insurance-linked securities can be offered to qualified investors.
Removing the inconsistency in the 2017 regulations will provide increased legal certainty to offerors of insurance-linked securities. I am not proposing widening the legislation beyond what was originally intended. The prohibition on offering securities to retail investors will remain. I am proposing clarification of an ambiguity that could deter the offering of insurance-linked securities in the UK to qualified investors.
The global insurance-linked securities market is significant in size and growing. The Government are committed to ensuring that the UK framework attracts new forms of capital to the London insurance market, and that London remains at the forefront of global financial innovation. For that to happen, it is important that our legislation be as clear and consistent as it can be. I therefore commend these regulations to the Committee. I assure the Committee that the Government are working closely with the sector and the regulator to ensure that the market works for everyone, through both the Civil Liability Act reporting requirements and the technical correction to ensure that insurance-linked securities transactions can be carried out effectively in the UK.
John Glen
I thank the hon. Member for Oxford East for her typically constructive and well-informed scrutiny of this statutory instrument. She rightly asserts the value of the insurance industry to the economy and she asks two questions with respect to part 2.
On the issue of a provision for a penalty based on what the data may—or may not—show following the requirement, the Government believe that the highly competitive nature of the motor insurance sector will mean that insurers will have little or no choice but to pass on the savings to consumers, or risk being priced out of the market. If the data show clearly that insurers have made savings and are collectively not passing them on to consumers, we are satisfied that the FCA and the Competition and Markets Authority have the relevant powers to take action. Given the assurance that I referred to in my opening remarks about the intention of the industry to pass on the savings, clearly it would be an outrage if that then proved not to be the case.
The hon. Lady’s second point was about informally gathering the information in the first place. It was the Government’s original expectation that that would not happen, but in the other place there was scepticism about the industry’s willingness to deliver that, so an amendment was passed. In that context, it was thought wise for the Government to accept the amendment. This additional reporting requirement was a function of the view from the other place, which we looked at carefully.
The hon. Lady asked about the gaming of the term “qualified or sophisticated investor,” in part 3. It is a well-understood term within financial services. People can elect to declare themselves a “sophisticated investor”. It is not something that is generally seen to be a problem in the industry. Again, this is a technical change to bring absolute clarity in an industry in which there is a lot of legal action and activity. That was thought to possibly undermine the maturing and growth in the industry, hence the technical clarification we have made.
I hope that I have fully answered the hon. Lady’s questions and that the Committee will now be able to consent to the regulations.
Question put and agreed to.
Draft Double Taxation Relief and International Tax Enforcement (Gibraltar) Order 2020
John Glen Excerpts(4 years, 2 months ago)
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The Economic Secretary to the Treasury (John Glen)
I beg to move,
That the Committee has considered the draft Double Taxation Relief and International Tax Enforcement (Gibraltar) Order 2020.
May I say what a pleasure it is to serve under your chairmanship, Ms McDonagh? The order before the Committee gives effect to a new double taxation agreement, or DTA, with Gibraltar. DTAs remove barriers to international trade and investment and provide a clear and fair framework for taxing businesses that trade across borders. By doing that, they benefit both businesses and the economies of the countries signed up to them.
I shall say a few words about this agreement. We have agreed a comprehensive DTA with Gibraltar that is based on the OECD’s model tax convention and the domestic tax laws and the treaty preferences of both jurisdictions. This is a first-time DTA with Gibraltar and will introduce a number of improvements for businesses, individuals and Her Majesty’s Revenue and Customs. It will strengthen our relationship with Gibraltar, promote trade and investment and help to tackle tax avoidance.
I shall outline the agreement’s key features. First, it complies with the minimum standards laid down in the base erosion and profit shifting, or BEPS, project, which is the OECD’s framework for combating tax avoidance by multinationals. That means that our DTA includes a statement in the preamble that the DTA is not intended by the parties to facilitate avoidance or evasion, as well as including the principal purpose test—a provision denying benefits under the DTA where the main purpose of the transactions or arrangements is to avoid tax.
Mr Mark Harper (Forest of Dean) (Con)
Does my hon. Friend find it an interesting coincidence, as I do, that at the moment when, in the main Chamber, the Opposition are trying to persuade the House that this Government have done nothing about combating tax avoidance and evasion, the Minister is putting before the Committee a clear example of where the Government are leading our international colleagues in putting in place mechanisms to ensure that we facilitate international trade and business while ensuring that people pay the tax that is rightly due to the British taxpayer?
John Glen
I thank my right hon. Friend for that intervention. I am always very interested in what he has to say. I confess that on this occasion I have not been able to attend the Chamber yet. I look forward to hearing the arguments deployed and will reserve judgment, but what I can do is commend to him the logic and value of this intervention by the Government, and I will go on to explain further why this DTA is a positive step forward.
The DTA is comprehensive in scope, and as such covers all income and gains, including dividends, interest and royalties. However, we have ensured that we will retain the right to apply a withholding tax of 15% on distributions from real estate investment trusts. Also, benefits in respect of interest and royalties are limited to persons who can demonstrate a close connection to Gibraltar. That provides an additional layer of protection against residents of third countries exploiting the provisions.
The new agreement also provides for mandatory binding arbitration, which ensures that disputes are resolved and that double taxation is therefore avoided. Finally, the new DTA provides for mutual assistance in the collection of tax debts. That will mean that, for the first time, the UK can ask Gibraltar to collect tax debts on our behalf.
Together, these features strengthen both countries’ defences against tax avoidance and evasion. In summary, the agreement is one that both the UK and Gibraltar can be happy with. It protects UK revenue and provides a stable framework in which trade and investment between the UK and Gibraltar can continue to flourish. I therefore commend the order to the Committee.
John Glen
I am grateful for the constructive observations of the hon. Member for Stalybridge and Hyde. With respect to the BEPS standards and the principle of stopping the abuse of DTAs, and the wider issue of how the Government might use those standards to inform future DTAs, I acknowledge what he says about the leeway in the OECD standards. I cannot give him a specific commentary, however, because DTAs are done country by country. It is probably appropriate for me to write to him to give him more specific detail, as far as I can, about how we are applying the standards across different DTAs.
The hon. Gentleman asked about transparency and how the arrangement can be scrutinised. The signed agreement was published on the Government website and a ministerial statement was made to that effect on 17 October 2019, which gives MPs the opportunity to make representations. The Government do not consult generally on the content of DTAs, because they are the product of bilateral negotiations that deal with a vast range of complex issues. They are not really suitable for open negotiation, but we have been as transparent as we would expect to be, and as everyone would expect us to be, on that matter.
The hon. Gentleman’s third point was about the UK’s observer status at ECOFIN. I do not have any further information on that; that will be a supplement to the first point in the letter that I write to him. I am aware of the Cayman Islands blacklisting last Monday or Tuesday and the Financial Action Task Force rulings, which we take seriously. I will write to him to give him clarity on that matter, rather than waffle on any further. I hope that that gives him some satisfaction, and that the Committee will approve the order.
Question put and agreed to.
Treasury
John Glen Excerpts(4 years, 2 months ago)
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Damian Hinds (East Hampshire) (Con)
Creditor enforcement action can greatly exacerbate the problems that people going through mental health crises can experience. May I commend the Chancellor and the Economic Secretary for the breathing space initiative, which will help to ease the pressure on those people and so many more?
John Glen
I thank my right hon. Friend for his comments, and I am very pleased that the breathing space scheme is moving forward. We published the impact assessment last week, and 700,000 people will benefit from the scheme next year when it comes into force. That number will rise to 1 million in the following year.
[Official Report, 11 February 2020, Vol. 671, c. 707.]
Letter of correction from the Economic Secretary to the Treasury, the hon. Member for Salisbury (John Glen).
An error has been identified in the response I gave to my hon. Friend the Member for East Hampshire (Damian Hinds).
The correct response should have been:
The Economic Secretary to the Treasury (John Glen)
I thank my right hon. Friend for his comments, and I am very pleased that the breathing space scheme is moving forward. We published the impact assessment last week, and 700,000 people will benefit from the scheme next year when it comes into force. That number will rise to 1 million in following years.
Oral Answers to Questions
John Glen Excerpts(4 years, 2 months ago)
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Sir David Evennett (Bexleyheath and Crayford) (Con)
The Economic Secretary to the Treasury (John Glen)
The UK’s 5.8 million small businesses play a vital role in our economy. We have lowered corporation tax from 28% in 2010 to 19%. We have introduced the employment allowance, to reduce employers’ national insurance contributions bill by £3,000 every year, and we have reduced the business rates burden, so that more than 675,000 of the smallest businesses pay no rates at all.
Anthony Mangnall
Last week, Members from across the House came together to celebrate our beers, breweries and pubs. Will the Chancellor and his team raise a glass to our pubs and breweries and lower the duty on those institutions?
John Glen
The Treasury team love pubs, and we recognise the importance of pubs to the economy and to community life up and down this country; they provide a place to socialise and drink responsibly. That is why we have frozen the duty over six of the last seven years, which means that a pint of beer is 14p cheaper than it would have been otherwise, and we are now at a 30-year low in real terms.
Sir David Evennett
We all know that small businesses are the driver of growth and prosperity across our country, but too many struggle because of high business rates. Can the Minister confirm that the Conservative Government will extend the retail discount of 50% later this year, giving a much-needed tax cut to millions of small businesses on high streets across the country?
John Glen
I am delighted to confirm that the retail discount of 50% will operate from 1 April this year. We will also extend the discount to include cinemas and music venues, extend the duration of the local newspaper office space discount, and introduce an additional discount for pubs, worth £1,000, for up to 18,000 pubs up and down the country.
Chris Evans (Islwyn) (Lab/Co-op)
Most businesses in my constituency are microbusinesses employing one or two people. The biggest problem they have is larger firms not paying their bills on time. What measures can be put in place to ensure that larger companies pay small companies on time so that they can continue with their business?
John Glen
The hon. Gentleman is right to raise that point. That is why we have the Small Business Commissioner. We are working closely with trade bodies to ensure best practice. The Department for Business, Energy and Industrial Strategy leads on this, but we work closely with that Department so that more progress is made on this vital matter.
Thangam Debbonaire (Bristol West) (Lab)
But small businesses will be affected by the news over the weekend that there will not be frictionless trade and that the Government are insisting on not sticking to a level playing field, which will affect small businesses, whether they import or export. So what is the Chancellor of the Exchequer and his Department doing to prepare small businesses for the inevitable changes that that will bring?
John Glen
We are working closely with the representative organisations to understand those concerns, but it is important that we move forward, secure a free trade agreement and give certainty to small businesses. Their principal concern over the past year is a lack of progress, and it is our responsibility to remove that uncertainty and reach a clear position.
Paul Holmes (Eastleigh) (Con)
Jim McMahon (Oldham West and Royton) (Lab/Co-op)
The Economic Secretary to the Treasury (John Glen)
I recognise the positive impact that co-operatives and mutuals have across all sectors of the economy, including retail, agriculture and financial services. No assessment has been made of the amount of tax paid by co-operative and mutual businesses, but I note that the report last year from the all-party group for mutuals found that mutuals generate over £130 billion to benefit the wider economy each year.
Jim McMahon
It is a matter of fact that the three largest co-ops in this country pay more tax than Facebook, Amazon and Caffé Nero combined, so not only are they creating jobs but; they are also paying fairly into the Exchequer. Will the Minister meet me and representatives from the co-op and mutuals sector to discuss that part of the economy and make sure that Britain can thrive in an inclusive way?
John Glen
Yes, I will. There are 7,000 co-ops across the United Kingdom, employing nearly a quarter of a million people. I have had numerous meetings over the past two years with representatives of co-ops and mutuals, and we had a mutuals workshop last July. I am very happy to meet the hon. Gentleman to discuss the recent Manchester mutuals report and to see what we can do together.
Mike Wood (Dudley South) (Con)
Thank you, Mr Deputy Speaker—[Interruption.] I am sorry, Mr Speaker—it has been so long!
Perhaps I should declare an interest as a member of the Midcounties co-operative. Will my hon. Friend consider broadening the eligibility for social investment tax relief so that more mutuals and social enterprises can deliver excellent services and outstanding social value?
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
Damian Hinds (East Hampshire) (Con)
The Economic Secretary to the Treasury (John Glen)
I thank my right hon. Friend for his comments, and I am very pleased that the breathing space scheme is moving forward. We published the impact assessment last week, and 700,000 people will benefit from the scheme next year when it comes into force. That number will rise to 1 million in the following year.[Official Report, 24 February 2020, Vol. 672, c. 2MC.]
Mr Ben Bradshaw (Exeter) (Lab)
Depending on which briefing to today’s newspapers was accurate, the infrastructure announcement will fund a grand total of either 250 or 1,000 miles of new designated cycleway. That is to be compared with the 1,800 being provided by the Labour Mayor in Manchester alone. How can a small city such as Exeter hope to get any of the help, resources or the powers it needs to deliver on the cycling infrastructure as it desperately wants to do?
Andrey Lugvoy and Dmitri Kovtun Freezing Order 2020
John Glen Excerpts(4 years, 2 months ago)
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The Economic Secretary to the Treasury (John Glen)
I beg to move,
That the Committee has considered the Andrey Lugovoy and Dmitri Kovtun Freezing Order 2020 (S.I. 2020, No. 36).
May I say what a pleasure it is to serve under your chairmanship, Mr Robertson?
The order was laid before the House on 17 January this year and came into force on 19 January. It has the effect of maintaining a freeze of any funds or assets that these two individuals hold in the UK or with any UK- incorporated entities, denying them access to the UK financial system and prohibiting UK persons from making funds available to them.
The order was made because in 2016 an independent inquiry, chaired by Sir Robert Owen, concluded that Mr Alexander Litvinenko was deliberately poisoned in 2006 by Lugovoy and Kovtun through the use of polonium-210. The inquiry also concluded that there was a “strong probability” that Mr Litvinenko, an ex-KGB and ex-FSB officer and critic of the Russian Government, was murdered on the order of the FSB, the Russian domestic security service. The inquiry further concluded that the killing was “probably approved” by the then head of the FSB, Nikolai Patrushev, and the Russian President, Vladimir Putin.
As part of its response to the gravity of those findings, in January 2016 the Treasury imposed an asset freeze on Lugovoy and Kovtun by making a freezing order under the Anti-terrorism, Crime and Security Act 2001. A second order was imposed in January 2018, which expired at the end of 18 January this year. This order, which I commend to the House, was therefore put in place to ensure that there was no gap in the freezing measures that have been enforced against Andrey Lugovoy and Dmitri Kovtun since 2016. Under section 8 of the Act, the duration of a freezing order is limited to two years.
Since 2018, as required by section 7 of the Act, the Treasury has kept the order under review. In May 2019, the Treasury reviewed the facts of the case against the relevant statutory criteria and concluded that the criteria continued to be met in respect of both individuals. Prior to the expiry of the 2018 order, the Treasury reviewed the facts of the case again and decided to make a new order to maintain the asset freeze against these two individuals.
The Treasury believes that making a new order is an appropriate and proportionate measure. The relevant conditions, as set out at section 4 of the Act, are still being met: the Treasury reasonably believes that action constituting a threat to the life or property of one or more nationals of the UK or residents of the UK has been or is likely to be taken by a person or persons resident in a country or territory outside the UK.
The freezing order is one of a limited number of measures available to the UK authorities to act directly against Lugovoy and Kovtun. We continue to believe that the freezing order acts as a deterrent and as a signal that the Government will not tolerate hostile acts on British soil and will take firm steps to defend our national security and the rule of law. The new order maintains a robust approach to Russia, and unity of approach with the US, which also sanctions these two individuals. Continued close co-ordination is a vital part of our joint effort in countering the Russian threat.
Were we not to maintain asset freezes against Lugovoy and Kovtun, we would risk sending a damaging signal that the consequences of murder in the UK are limited and time-bound if someone chooses to evade the UK justice system by remaining overseas. Not to maintain asset freezes against these individuals would likely be perceived as the UK softening its stance towards Russia. Furthermore, it would risk signalling to the Russian state that the UK is looking to normalise relations. That would be contrary to and directly undermining of Her Majesty’s Government’s consistent message that there can be no change in UK-Russia relations until Russia desists from attacks that undermine international treaties and security.
The current bilateral relationship is not the one that we want. We remain open to a different and co-operative relationship, but that depends on Russia stopping its destabilising activity, which threatens the UK and its allies. We engage with Russia on a guarded basis, defending UK national security where necessary, while ensuring that we address the global security issues of the day.
The Government believe that maintaining asset freezes against Lugovoy and Kovtun is an appropriate and proportionate measure, and that not doing so would run counter to the national interest. I hope that colleagues will join me in supporting the order, which I commend to the Committee.
John Glen
I am grateful to Members from across the Committee for their support for the new order. I will come to address the points made, but we should focus on the key point here. Absent any progress in bringing Lugovoy and Kovtun to justice, denying them access to the UK financial system, in combination with the European arrest warrants and the Interpol red notices that remain in place against them, continues to send a clear signal about how fundamentally we disapprove of the actions that they took, which led to Mr Litvinenko’s death.
The hon. Member for Bootle, perfectly reasonably and appropriately, made some points about the review of the codes of practice and ensuring that they are up to date with various pieces of legislation. He spoke about the need to bring and ensure continuing clarity and lack of ambiguity, and for the Government to be open and transparent in this area. Those codes are the responsibility of the Home Office, but I am sure they will have noted the points that he made.
The hon. Member for Glenrothes spoke about wider issues involving the Intelligence and Security Committee and its report into Russia. That Committee will be constituted in the very near future; it is not for the Government to tell the Committee when to publish its reports, but it would be good to get these matters into the public domain.
Peter Grant
I accept that the Government cannot tell the Committee when to publish the report, but they did tell the Committee when not to publish the report. Does the Minister understand that that causes considerable concern to a lot of people—and not only on the Opposition side of the House?
John Glen
I think the Government have made their position clear. It will be for the new Committee, once constituted, to determine the timings.
My hon. Friend the Member for Congleton made some points about the mechanics of how the asset freezing process works and the definition of those assets. It would probably be appropriate for me to write to her on that matter, because that is a technical process that I am not privy to this afternoon, and it would be difficult for me to give her satisfaction.
Stephen Kinnock (Aberavon) (Lab)
I fully agree with what is being proposed here with regard to Mr Lugovoy and Mr Kovtun, but the hon. Member for Glenrothes also raised the issue of unexplained wealth orders. That is an excellent piece of legislation, but to my knowledge only two unexplained wealth orders have been issued in the several years the legislation has existed. Can the Minister explain why so few have been issued?
My other point is about the Magnitsky amendment to the Sanctions and Anti-Money Laundering Act 2018; it is a very important amendment, yet absolutely no action has been taken to draw up a list of individuals from Russia who should be sanctioned under the Magnitsky legislation.
John Glen
The hon. Gentleman will be well aware that those matters are broader than what we are discussing this afternoon. I certainly recognise the Government’s commitment to legislating in this area, and I know that the matter is under urgent consideration. I cannot offer any more comments on that at this point in time.
The prevalence of the use of unexplained wealth orders is an operational matter that I am not able to comment on. I am aware from previous conversations in the House, possibly with the hon. Gentleman, about the frustration that exists in this area, part of which is about establishing a precedent and a legal basis of confidence for moving forward with those matters, but I am not able to offer him more on that at this point.
Alberto Costa (South Leicestershire) (Con)
I have a specific technical point. I would appreciate it if the Minister gave it consideration and perhaps wrote to me afterwards. As a lawyer who has read the schedule referring to legal professional privilege, I think it right that legal professional privilege should remain protected—that is, the privilege under paragraph 4, referring to counsel, barristers or solicitors, or to the confidentiality of communications, as it is known in Scotland. However, there is a little bit of confusion in paragraph 5(2), which adds, cryptically:
“Information and documentation is privileged if the person asked to provide or produce it would be entitled to refuse to do so on grounds of legal professional privilege”.
There is ongoing debate in the courts, both in Scotland and in England and Wales, about who can claim legal professional privilege. I am thinking of those regulated under the Solicitors Regulation Authority and others under the Legal Services Act 2007. Could the Minister write to us to confirm that this only applies to authorised persons in England and Wales—namely solicitors and barristers, and to solicitors and advocates in Scotland?
John Glen
I am certainly very happy to look at that matter and write to my hon. Friend with clarification as soon as possible.
I have responded to the questions as best I can; I recognise that I have not given total satisfaction to everyone, but I hope that the reason and rationale for this order are clear. The Treasury continues to believe that the conditions set out in the Anti-terrorism, Crime and Security Act 2001 for making this order remain satisfied, and I commend the order to the Committee.
Question put and agreed to.