Equitable Life

Kim Johnson Excerpts

Thursday 21st January 2021 Commons Chamber

[Kim Johnson (Liverpool, Riverside) (Lab) [V]]

A scandal like the collapse of Equitable Life has unimaginable repercussions for the lives of the victims, many of whom live in my constituency of Liverpool, Riverside. Ten years ago, when the life insurance company collapsed, policyholders lost billions of pounds in total, and the Government were forced to pay more than £1 billion in compensation, but the cost to the lives of those affected was far greater: pensions wiped out; lives destroyed; thousands dying before they received justice. People who had strived all their lives to save for a comfortable retirement had their plans and dreams shattered overnight—a burning injustice and one that undermined the wider confidence in saving for retirement. Everyone has a fundamental right to grow old with dignity and security, to relax and enjoy the fruits of a lifetime of endeavour. These victims were robbed of that opportunity.

It was the Government’s maladministration that played a role in the collapse of Equitable Life, so it should be the duty of the Government to ensure that the victims are fully and fairly compensated, and that this never happens again. Every effort must be made to ensure that those owed compensation are identified, and that the process is accurate and transparent. The Equitable Members Action Group wants full payment for 895,000 traced pension saver victims, finally settling the unpaid debt covering their losses. Current levels of complaints and appeals clearly demonstrate the inadequacy of the system. A freedom of information response exposed that in every case where a complaint had been raised—[Inaudible]—victims of the Equitable Life scandal, it resulted in an increased payment to the policyholder.

On top of this, the scheme has been unable to trace over 100,000 policyholders who are eligible for reimbursement. Many of them will now be in their 80s and 90s. As such, I welcome the proposal for a joint inquiry into the accuracy of the payments made, and I look forward to the response to that proposal from the Public Accounts Committee and the Public Administration and Constitutional Affairs Committee. Would the Government support such an inquiry?

A scandal such as Equitable Life should never be allowed to happen again, yet just last month the Government had to establish a new compensation scheme for London Capital & Finance investors, many of whom lost their entire life savings. Given the apparently flawed methodology behind compensating the victims of the Equitable Life scandal, what steps are the Government now taking to ensure that those eligible for compensation in the London Capital & Finance investor scheme are not short-changed and can have full faith in the compensation process? What action have the Government taken to make sure that such firms are properly regulated from now on, to ensure that such a devastating loss never happens again?

People approaching retirement deserve security and the peace of mind that they can grow old with dignity and comfort and that the savings they put away during decades of hard work will be safe. Flaws in our financial regulations have been exposed in such a disastrous way, and we cannot, a decade down the line, be found again to have been asleep at the wheel. We must tighten regulations, protect savings and uphold people’s right to dignity in old age, and we must ensure that the 2,000 victims of Equitable Life in Liverpool, Riverside receive fair and transparent compensation.

Black History Month

Kim Johnson Excerpts

Tuesday 20th October 2020 Commons Chamber

[Kim Johnson (Liverpool, Riverside) (Lab)]

I congratulate my hon. Friend the Member for Erith and Thamesmead (Abena Oppong-Asare) on securing this very important debate. I am really pleased to be participating.

October is the time of the year when we recognise the achievements, resilience, history and culture of our black communities, but it is also important that the disadvantage and discrimination experienced is also remembered. No one is born racist, yet here we are in 2020 still debating how we eradicate the rise of racism at home and around the world.

This year, Black History Month is even more important. The global health pandemic, the very public death of George Floyd and the Black Lives Matter movement have shone a bright light on the structural racism and inequalities experienced by black people. Racism is a systemic problem that requires systemic solutions. No more reports or recommendations: we need actions, because actions do speak louder than words.

As a black person growing up in Liverpool, I know all about systemic, deeply entrenched racism. We have the longest-established black community in Europe, dating back hundreds of years. We are a city whose wealth was built on the back of the slave trade. I am the first black MP to have been elected in Liverpool—a very sad indictment of the city—but I am also very proud and privileged to represent the constituency of Liverpool, Riverside. In 2008, Liverpool was awarded European capital of culture status, and the strapline was “The World in One City”. While we have long-established diverse communities, these communities remain invisible in the city—under-represented in the retail sector and in our public sector organisations, and with very limited political representation: we have only six black Labour councillors out of 90.

It is really important that we recognise that African history was interrupted by African slavery, when millions of Africans were forcibly removed and sold into slavery. As black people, we still live with the legacy of slavery. Our education system perpetuates the myth of black underachievement, witnessed in the high numbers of black boys excluded from school. Sadly, in Liverpool we have a significant under-representation of teachers in our schools, and only one black headteacher. But in response to the many issues highlighted by the global Black Lives Matter campaign, Liverpool City Council has set up a race task group. The Liverpool Learning Partnership will work with Liverpool schools over the next academic year to develop a curriculum that is far more representative and promote the role of black people across all subject areas and through time.

Learning black history is a vital part of ensuring that young people have a balanced understanding of Britain’s past and how it shapes our society today. It is crucial to ensure that young people have the tools to challenge present-day racism and discrimination, and to understand the key pivotal moments in British history. Winston Churchill is a controversial figure. He is regarded as the greatest Briton ever, but what do we understand of his role in the Bengal famine? The Bristol bus boycott of 1963 is seen as influential in the passing of the Race Relations Act 1965. Mary Seacole is now recognised as the first nurse practitioner. Walter Tull was a professional footballer who debuted for Spurs in 1909. That is to name but a few.

I was very shocked when I arrived here last December and witnessed the stark divisions that replicate our society, with low-paid black people working as cleaners and security and catering staff, the under-representation of young black people working for MPs as staffers and parliamentary assistants, and the lack of black MPs as Chairs of Select Committees. We clearly have a long way to go to be equal in this place.

Black history is all of our history, and it should be taught in the school curriculum all year round. We should not have to wait until October to celebrate the many contributions that black people have made to this country. I just remind people: we only have one race, the human race.

Covid-19 Economic Support Package

Kim Johnson Excerpts

Wednesday 14th October 2020 Commons Chamber

[Kim Johnson (Liverpool, Riverside) (Lab)]

Yesterday, I received the latest claimant figures for my constituency, and its rate of claimants has doubled since the pandemic began in March. The level of joblessness in my constituency is one in five, and this includes those, like many of the ExcludedUK members, who do not feature as they are unable to claim any support whatsoever. Now that Liverpool has been declared a tier 3 zone, our leisure facilities and gyms, and our hospitality sector, are being forced to close. Across Liverpool, approximately 30,000 people are employed in this sector and they all face at least four weeks without work. The job support scheme offers less support than comparable schemes in other countries; it will provide only 67% of earnings, and this will force many people into poverty. The point has been made this week by colleagues that bills, rent and food costs are not reducing by 67% to match that. The support for those who are self-employed and reliant on the hospitality and leisure industries for business reduces to just 10%.

I watched the interview with Natalie Haywood on ITV this week. She is the owner of Leaf and OH ME OH MY, two of our city’s leading hospitality independents, and it was heartbreaking to watch her despair at having fought hard to recover from the first lockdown and now being faced with losing the iconic businesses she has built up, and worse, possibly having to lay off her staff. She is far from alone. Another interview was with the owner of Lunya, a business that has paid more than £10 million in taxes in its 10-year history and employs dozens of local people. The business has been adapted to ensure its survival throughout this first lockdown, but he now risks losing his business and his home. Yellow Sub, one of the best-loved children’s indoor play areas, was one of the last businesses allowed to open. It missed the busy summer season and will now miss the half-term, with the business being put in jeopardy, jobs being axed and more people without work. Many of these businesses accessed the Government grants in the first lockdown and saved their businesses, and they reopened, even on a limited capacity basis, in September. This unforeseen enforced lockdown, without that support, has left them reeling and looking at the bleakest of futures.

Liverpool’s hospitality and leisure industries are critical to our economy. In one of the top five UK destinations, the sector contributes £5 billion to the Merseyside economy and sustains 50,000 jobs. Forcing this entire sector to close for an indefinite period, without the financial support that was available in the first lockdown, will decimate our city and our region.

I must thank our metro Mayor, Steve Rotheram, and the six local authority leaders for pulling together a £40 million support scheme for the sector, without which we would undoubtedly be facing a domino effect of shutdowns in our city centre, but we need more. The local restrictions grant scheme will not provide enough to cover the overheads of most of our small independent businesses, the ones that make Liverpool so unique. I call on the Government to repay the city the unspent discretionary grant fund and allow us to invest in our economy. I am a very proud Scouser and I am privileged to represent such a resilient city, which always fights back to protect its people. But let us have a fair fight. Give us the money we need to protect jobs and livelihoods, and keep our economy going, and we will respond by supporting our businesses and workforces, and we will come back stronger.

Areas with Additional Public Health Restrictions: Economic Support

Kim Johnson Excerpts

Tuesday 6th October 2020 Commons Chamber

[Steve Barclay]

It has been a time when most people have come together and worked together to respond to the very legitimate concerns that we all have on behalf of our constituents. The more we can work together across the United Kingdom and with local authorities and other stakeholders, the stronger the Government’s response to the pandemic.

[Kim Johnson (Liverpool, Riverside) (Lab)]

The further restrictions announced on 1 October will have a huge impact on the Liverpool city region’s retail, hospitality and leisure sector—a sector that accounts for 20% of the city region’s economy. The end of the furlough scheme and the 20% below self-employed income support scheme will impact thousands of jobs and hundreds of businesses. The £7 million to be shared with other areas is not enough. The city region has therefore called for a support package totalling £710 million, in order to ensure that we have an economy to revive. Will the Chancellor make a statement on what financial support will be made available to the Liverpool city region?

[Steve Barclay]

The hon. Lady says that there should be a package for the Liverpool city region of £700 million of additional funding. That would equate to over £23 billion if applied evenly on a per head basis across England. It is important that we are proportionate. Of course, the £7 million is not in isolation; it sits alongside the many other things that have been announced, including £130 million of un-ring-fenced funding to the Liverpool city region in March; but I am happy to continue to work with colleagues across the House in considering our wider response.

Social Security

Kim Johnson Excerpts

Tuesday 5th May 2020 Commons Chamber

[Kim Johnson (Liverpool, Riverside) (Lab) [V]]

Thank you, Madam Deputy Speaker. I welcome the opportunity to contribute to the debate on the increase in employment allowance. Labour recognises that many businesses are facing severe difficulties at the moment and the proposed changes go some way to providing assistance to many struggling small and medium-sized enterprises.

The economic decisions we take now will determine the length of the recession we face going forward. The Government have provided a number of economic packages to support SMEs, many of which have just weeks of cash in reserve. The additional assistance will increase the maximum amount of employment allowance from £3,000 to £4,000 for the tax year 2020-21, which is expected to reduce about 65,000 businesses’ national insurance contributions bill to nil.

My constituency of Liverpool, Riverside covers the city centre, with thousands of SMEs working across a number of sectors, including 4,500 digital and creative industries that employ 22,000 people and contribute £1.8 billion gross value added to the local economy. We are one of the fastest growing hubs in the country for digital companies, devising solutions for all sectors, including the health sector. The vast majority are micro-businesses, and many of them have been supported by our regional Federation of Small Businesses, which has consistently championed raising the employment allowance. It was a central ask in its “Back to Business” manifesto for the 2019 general election, supporting small businesses to cope with the increases in the national living wage. It will also assist half a million SMEs, raise wages and keep more people in work.

I have received a high volume of emails from businesses that are unable to access the support that has been made available. The funding is there to be used to ensure that we have a strong and robust economy to bounce back once restrictions are eased. It also needs to be lasting, as we head into the next phase of the pandemic, with micro-businesses in particular looking to recover. I believe that some businesses are falling through the cracks, and the increase in the employment allowance will be of limited assistance to the many SMEs struggling to keep afloat during the covid-19 pandemic. While I welcome this statutory instrument to increase the employment allowance, I call on the Government to go further—to provide SMEs with the support they need to weather this crisis, and to investigate concerns about HMRC’s ability to tackle tax avoidance effectively following tax office closures.

Finance Bill

Kim Johnson Excerpts

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

[Kim Johnson (Liverpool, Riverside) (Lab) [V]]

We are living in unprecedented times. Since the Prime Minister announced the police-enforced lockdown on 23 March, the country has experienced the biggest challenge it has had to face in a long time. During the weeks since the lockdown, I have received a high volume of correspondence from non-essential businesses forced to close and from constituents experiencing financial hardship and uncertainty during this crisis.

The Riverside constituency covers Liverpool city centre, with a large number of leisure and hospitality businesses, hotels, micro-businesses, universities, private dentists’ practices, and freelancers and the self-employed engaged in a variety of enterprises. It is vital that the coronavirus economic schemes are effective so that we can protect people’s incomes, jobs and businesses, and prevent a deeper and longer-lasting recession.

The current guidance states:

“The government will provide additional Small Business Grant Scheme funding for local authorities to support small businesses that already pay little or no business rates because of small business rate relief… This will provide a one-off grant of £10,000 to eligible businesses to help meet their ongoing business costs.”

By tying eligibility for these grants to the business rate relief schemes, there are unintended consequences that will result in legitimate businesses, which are contributing to the economy through the tax system, not being supported through the scheme as was originally envisaged by the Chancellor.

In Liverpool, Riverside there are thousands of community businesses and charities providing essential frontline public health and wellbeing services to our most vulnerable residents that are not eligible for the grant and face closure. It would appear that the criteria being applied by some local authorities are resulting in a large number of small businesses not having their applications approved, and this is specifically the case in a number of circumstances.

Businesses that occupy separate designated office space under their tenancy licence agreement pay a contribution to the shared business rates in managed workspaces where one rateable value is applied to the whole building. This is often advised as the most appropriate method for business rates collection by the business rates officer. Social enterprises can have many structures, and one such is charitable status. It has been suggested that as these small businesses receive mandatory relief for charities, not small business rate relief, they will not be eligible for this grant.

CBILS has been operational since 23 March, but as of Thursday 16 April, only 6,020 loans, worth £1.1 billion, have been made as part of the scheme, with the survey data indicating that just 1% of firms have been able to access it. The Government will provide lenders with a guarantee of 80% on each loan to give lenders further confidence in continuing to provide finance to SMEs. However, the commercial banks are not acting in a consistent way, nor are they operating in the spirit of the guarantee. Banks are pushing their own products and seeking collateral security from the business owners rather than the business interruption product. Not all banks are offering the scheme, and other banks offer it only to their current customers. There is significant variation in the interest rates being charged to small businesses, and the terms and conditions and rates being offered, despite interest rates being so low, can only be described as extortionate.

The Government must act to increase the uptake of CIBLs, including offering a 100% guarantee, as other countries have. Providing 16,000 loans in four weeks in a country with nearly 6 million SMEs is not good enough. The Government must recognise that the scheme is not working adequately and change it urgently. The future of many of our small firms depends on their decisions.

The Government should also act urgently to protect the incomes of those who are falling outside existing schemes and on to universal credit. There are 9,000 self-employed people in Liverpool, Riverside, many of whom are creative freelancers working in our film, theatre and music industries who have seen their income dry up overnight. The self-employment income support scheme is intended to support self-employed individuals who have lost income due to the pandemic. The scheme allows self-employed people to claim a taxable grant worth 80% of trading profit, up to a maximum of £2,500 per month, for the next three months.

But there are anomalies. Newly established businesses that have submitted their first tax return for part of a year will have the self-employment income scheme 80% profit assessed for a whole year on this amount. While waiting for assessment and the release of the self-employed income support grant in June or July, self-employed people with no income are advised to apply for universal credit. This application results in immediate cancellation of any other benefits to which they are currently entitled, such as working tax credit, housing benefit and council tax benefit, leaving them with no income and in some cases destitute. Self-employed people with personal business savings of more than £16,000 are not entitled to universal credit or associated benefits. They are expected to use their savings to subsidise their income. This compares with the larger businesses—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. I am terribly sorry, but we have run out of time there. I call Miriam Cates.