Coronavirus Bill

Liam Byrne Excerpts

Committee stage & 3rd reading & 3rd reading: House of Commons & Committee: 1st sitting & Committee: 1st sitting: House of Commons
Monday 23rd March 2020 Commons Chamber

[Mr Davis]

I am now glad that I teased the hon. Gentleman, because it got something very useful on the record. If I may pick up on the point made by my hon. Friend the Member for Wycombe (Mr Baker), it is why I tabled amendment 6, which recognises that the Government need these new powers and that parliamentary counsel have created a 320-page Bill in what sounds like a matter of days—in truth, they did it in an astonishingly short amount of time. They have done it at a time, however, when scientific evidence is, to put it mildly, fragile and likely to change. It has changed already in the past two weeks and is likely to change again as different tests, different vaccines and so on become available. Scientific evidence will change. Economic analysis of future outcomes is unbelievably uncertain and the societal effects are completely unknown. The Bill is guaranteed to have flaws, even with the best draftsmen in the world.

Amendment 6 therefore proposes that instead of the sunset being two years, which anyway is too long, it would be one year. We invite the Government to write a new Bill in nine months. If they think the Bill is perfect in nine months, put it back again and we will put it through again, but this time, with three months for the House to consider it. Remember, the Civil Contingencies Act 2004 took a whole year to go through both Houses, so with three months we would have proper democratic approval of the process.

[Liam Byrne (Birmingham, Hodge Hill) (Lab)]

The right hon. Gentleman is making an excellent speech. There will, of course, be many things that we learn, not just things we need to take out of the Bill but critical measures that we need to put in, so flexible legislation will be essential as we go through the emergency and learn things.

[Mr Davis]

I agree. I think the Government have done a pretty good job so far in the face of unbelievably difficult judgments and decisions. The Americans talk about drinking from a fire hose, which is how every Minister in this Government must feel because of the information and problems arriving on their desk every day.

The right hon. Gentleman is right that there will be changes in the science and in the economics. We will also know, frankly, what worked and what did not work in the previous nine months. If we then allow Parliament three months to scrutinise it, we will get good, solid law that is well supported on both sides of the House. We will have the sort of debate we have had today, which has been one of the better debates I have heard in years because both sides are committed to the same cause.

Finally, I recommend that colleagues read the report on this Bill published at lunchtime today by the Delegated Powers and Regulatory Reform Committee of the House of Lords. That expert Committee considers our legislation and makes recommendations to the other House, and it is led by Lord Blencathra—those who have been here a long time may remember him as David Maclean, a tough, no-nonsense Security Minister at the Home Office. The Committee’s analysis is very clear and very straightforward, and it is not a libertarian fantasy. This is the conclusion, the last five lines of a five-page report:

“We anticipate that the House may well wish to press the Minister for an explanation about why the expiry date was not set at one year, thereby enabling the Government to exercise the powers needed in the immediate future while allowing a further bill to be introduced and subject to parliamentary scrutiny in slower time.”

A House of Lords Committee has arrived at exactly the same conclusion on this Bill as my amendment proposes.

--- Later in debate ---

[Nick Thomas-Symonds]

I hear what the hon. Member for Wycombe says, but this has to operate on the ground, and we are all hearing various stories of what is happening in the universal credit system. It may well be what the Government intend, but that has to be implemented right across the country.

The Government must stand beside each and every person to get through this. We of course support the principle of doing whatever it takes, but that has to mean whatever it takes for each and every person. Let me say a word about the food supply—this is in clauses 23 to 27—and the power to require information. The Government require a strategic approach to the profiteering and unnecessary stockpiling—all of it. We have to ask people to think of others in what they are doing, but I also say to the Minister that the Government may well need a more strategic approach on that.

[Liam Byrne]

I will be brief. In all emergencies, there is profiteering, and in countries such as the United States, where it has been prevalent for a long time, two thirds of states have legislation in place to stop profiteering. We need it here now because it is hitting the poorest communities hardest now.

[Nick Thomas-Symonds]

My right hon. Friend is absolutely right that profiteering is affecting people now. We have heard some examples from across the House and, clearly, that issue needs to be seriously considered.

I turn now to what all this means taken together—I will draw my remarks to a close, Dame Eleanor, because I know that you wish other people to come in. This is an unprecedented change in the relationship between Government and Parliament, and Government and people. First, I say to the Minister that the imperative is to protect everyone and support them in this time of peril. We ask people to make sacrifices and we must support them, too. Secondly, the need for safeguards in this legislation is paramount. I hope that the Minister will look in particular at the suggestion that I made on the six-month review and that being amendable.

We are not seeking to divide the House, but we hope very much that the Government will heed what has been said, and we, of course, reserve the right to pursue these matters further in the other place.

High Speed 2

Liam Byrne Excerpts

Wednesday 10th July 2019 Westminster Hall

[Liam Byrne (Birmingham, Hodge Hill) (Lab)]

It is an honour to serve under your chairmanship, Mr Hosie. I congratulate the right hon. Member for South Northamptonshire (Andrea Leadsom) on securing the debate and on giving the House a chance to confront a couple of important choices. She is right to say that nettles need to be grasped and bullets bitten, but I think she has chosen the wrong nettles and bullets, and I will explain why in the next few minutes.

As is traditional now, the argument against HS2 is couched in terms of value for money. In any value-for-money calculation, the money is easy to calculate, but the value is much harder to put your finger on. There were arguments in a previous debate about the Treasury Green Book, which is not a wide-ranging analysis. If we measure what we treasure, we will clearly see that HS2 is one of the best value-for-money projects that this country has contemplated for many years.

[Craig Tracey (North Warwickshire) (Con)]

Will the right hon. Gentleman give way?

[Liam Byrne]

I will in a moment.

Coming from Birmingham, what I treasure above all is jobs. We have had the slowest jobs recovery since the financial crisis of any city region, and HS2 will bring lots and lots of jobs, not at some distant point in the future but over the next five years. It will bring something like 33,000 jobs around Curzon Street and 77,000 jobs around Birmingham Interchange, in addition to the 30,000 jobs that will be created on the line at peak. This is the most important fiscal stimulus outside London and the south-east. Indeed, if we were to cancel HS2, I would bet my bottom dollar that we would put the midlands back into recession within a year.

[Sir Patrick McLoughlin (Derbyshire Dales) (Con)]

Will the right hon. Gentleman, with his local knowledge, describe what is happening around Curzon Street now, and what has happened around Curzon Street for the last 20 years?

[Liam Byrne]

The former Secretary of State is right to make that point, because a number of significant businesses are now relocating to what is the worst unemployment hotspot in the country; the worst unemployment and youth unemployment in the country is in and around east Birmingham. We have a chance ahead of us to wipe out that youth unemployment, but only if we grasp the nettle and drive through HS2.

[Graham Stringer]

My right hon. Friend makes a brilliant case. If anything, he underestimates the result. When the Transport Committee went to France to look at the impact of the TGV, it found that the go-ahead cities that used the high-speed lines got huge extra investment that had not been calculated in the original assessment. Birmingham, Manchester and Leeds are all go-ahead cities, so I expect more jobs than my right hon. Friend says.

[Liam Byrne]

Precisely. If we measure what we treasure, and if we treasure jobs, HS2 is, frankly, a project that we need.

However, that is not all I treasure; I also treasure tangible action to decarbonise our economy and our region. I want the west midlands to lead the first zero carbon revolution. Back in 1712, when the Newcomen engine was demonstrated up at Dudley castle, we sparked the carbon revolution the first time around. We need a radical plan that allows us to move trucks off the road and on to rail. Only with the capacity that comes with HS2 can we reopen 36 new freight lines that can take a million lorries off the road each year. We cannot de-clog the M6, the M5 or the M42 unless we get that freight off the road. It is impossible to see how we can drive forward the decarbonisation of a sector that contributes 40% of our carbon emissions each year if we do not drive ahead with HS2.

[Luke Graham (Ochil and South Perthshire) (Con)]

I share the right hon. Gentleman’s aspirations, but for Scotland. To meet the UK-wide net zero carbon targets we have set for 2050, we need to make sure that these new rail lines work for the entire country. Does he agree that we need to review HS2, not only on its business case, but on making sure that it works for the entire United Kingdom and connects the powerhouses in the midlands with the true northern powerhouse, which is of course Scotland?

[Liam Byrne]

I am all for that, so long as it does not introduce a moment of delay in driving this forward. Frankly, our economy cannot have any further delay.

I treasure a project that puts the west midlands at the centre of this economy. I particularly treasure the speed, which will result in a journey time of something like 65 minutes from Birmingham International to Canary Wharf, the most important business site in the country, via the connection at Old Oak Common.

The right hon. Member for South Northamptonshire advanced the traditional bang-for-buck argument, which is that if we got rid of HS2, there would be plenty of bucks left for other kinds of projects. I have to say that that is not fiscal realpolitik at all. The fiscal realpolitik will mean that money currently earmarked for HS2 will be quickly absorbed into other projects, and Opposition Members will be forgiven for worrying that it will disappear into the £10 billion-a-year tax cut proposed by the right hon. Member for Uxbridge and South Ruislip (Boris Johnson).

The right hon. Member for South Northamptonshire was right to demand choices, but the choices that she proposes are wrong. The real strategic transport choice that this country must confront is not between HS2 and other rail network lines, but between planes and trains. We should drive ahead with HS2 and cancel the ludicrous decision to build a third runway at Heathrow airport for £14 billion. We could use half that money to build a high-speed loop and take passengers from Heathrow to Birmingham, where there is already untapped capacity for 17 million passenger movements a year.

Around the world, a trillion-dollar high-speed rail revolution is under way, and we are being left behind. It is time that this country got on with it.

[Stewart Hosie (in the Chair)]

I call Victoria Prentis. Please be brief. Then I will call the Front-Bench spokespeople.

Intelligence and Security Committee of Parliament

Liam Byrne Excerpts

Thursday 16th November 2017 Commons Chamber

[Mr Bradshaw]

I do beg my hon. Friend’s pardon.

I hope that one of the Committee’s early inquiries will be into Russian interference in the UK. As you know, Madam Deputy Speaker, I have been raising questions about this for the past year, during which the evidence of Russian interference in the American presidential election became credible and compelling. Until recently, the UK Government gave every impression of not wanting to talk about it, but mounting evidence on both sides of the Atlantic of covert Russian propaganda and social media activity, and the role of dark money in our democracy, makes it imperative that the Intelligence and Security Committee looks at this as a matter of urgency. The Digital, Culture, Media and Sport Committee has already launched an inquiry and the Electoral Commission is conducting investigations into Russian-backed interference in the referendum, including with regard to social media and the funding of the pro-Brexit campaign and its main financial backer, Arron Banks.

The American investigation into alleged collusion between the Kremlin and the Trump campaign, led by Justice Department special counsel Robert Mueller, has also now reached Britain. The FBI has named Nigel Farage, the former UKIP leader, as a person of interest, and Mueller has indicted a former Trump campaign operative, George Papadopoulos, who had meetings in London with a UK-based academic, Josef Mifsud, to discuss the latter obtaining dirt on Hillary Clinton from the Kremlin. We know that Mr Papadopoulos has had access to British Ministers, and that Professor Mifsud has met the Foreign Secretary, although that was at first denied.

While it is imperative that the Government and their agencies give the fullest help and co-operation to the Culture Committee, the Electoral Commission and the Mueller investigations—although I know this is not his area of responsibility, I would be grateful if the Minister could assure the House that that will be the case, especially as I have been told that the Mueller team was in London recently and was not happy with the co-operation it was receiving from the UK authorities—it is the Intelligence and Security Committee that has much freer and direct access to our intelligence and security services and can question them directly. That is why its reconstitution is so important.

Despite the mounting evidence of recent months, the Foreign Secretary was still insisting last week that he had seen no evidence of Russian interference, but on Monday the Prime Minister said, or at least implied, something very different in her Mansion House speech. She excoriated the Putin regime for hacking, interfering in elections, and spreading fake news to sow discord in western democracies and threaten our international order.

It would be helpful to the Houses of Parliament and the country as a whole if the Government would end this confusion now. Is Britain among the countries that the Prime Minister had in mind when she made her speech? Indeed, it would be rather odd, given the uniquely disruptive impact of the Brexit vote and Putin’s well publicised desire for it, if Britain alone were immune from the Kremlin’s intentions. If the Government will not clear this up, I hope the ISC will. I hope that the ISC will also use its good offices to ensure that the Government and all their agencies give every assistance necessary to the other UK bodies investigating these matters and to Robert Mueller’s team.

Additionally, I urge the ISC to include the issue of dark money and the role of think-tanks in any of its deliberations on this matter. We know that more than £400,000 was donated during the EU referendum to the Democratic Unionist party by the Constitutional Research Council. The CRC has also given money to hard Brexit-supporting MPs, including the Under-Secretary of State for Exiting the European Union, the hon. Member for Wycombe (Mr Baker). It was reported last week that the fine the Electoral Commission imposed as a result of the DUP donation resulted from a failure to disclose its source. That is not acceptable.

[Liam Byrne (Birmingham, Hodge Hill) (Lab)]

My right hon. Friend is making a brilliant and forensic speech, and he is to be commended by us all for pursuing this matter over the past year. Does he agree that a priority for the ISC should be to get to the bottom of whether foreign money was donated to the election campaigns and to the referendum campaign? A gap in the law means that the Electoral Commission is not empowered to investigate foreign actors and foreign money, and their influence on our democracy and this House.

[Mr Bradshaw]

I completely agree with my right hon. Friend. Our legal framework is completely outdated for meeting the challenges that we face.

There is a further issue that I hope the Government will address. They have promised to close the loophole in Northern Ireland, where political donations remain secret for historical reasons, but that is completely unacceptable. It is quite clear that Northern Ireland has recently been used as a channel for such donations. The Government, to their credit, have said that they will change the law. Every single party in Northern Ireland— except the DUP, I think—believes that such a change should be retrospective. That would allow us to go back to the time of the referendum so that we would know where the money came from, and we could have full confidence in the integrity of our political and democratic process.

I also urge the ISC to look at the Legatum Institute, its relationship with the Government, and the background of its founder and main funder, Christopher Chandler. It should also consider the activities and funding of political organisations such as Conservative Friends of Russia, now renamed as the Westminster Russia Forum.

I come now to my final and perhaps most important point: the relationship between our intelligence and security services and those of our closest ally, America; and the relationship of each with their respective Government. President Trump is at war with his intelligence community. He has made it abundantly clear that he would sooner believe Putin than his own intelligence and security professionals. That is shocking, but it would be even more worrying for us if that breakdown in relations were mirrored here and had a negative impact on the vital work of our agencies and the extent of their co-operation with their US counterparts.

When the news website BuzzFeed ran a series of articles recently about unexplained Russia-related deaths in Britain, its head of investigations, Heidi Blake, was inundated with American intelligence sources complaining that they did not think their British counterparts were taking these incidents seriously. If that is true, it is extremely worrying.

Until recently, British Ministers have gone out of their way to avoid talking about Russian interference. They might have been worried about doing anything that might cast doubt on the legitimacy of the EU referendum result or embarrass President Trump, from whom they hope to get a trade deal to save them from the Brexit disaster.

I hope the ISC, now that it will finally be reconstituted, will be able to reassure itself and this Parliament that our intelligence and security services continue to act freely within the law, unhampered by any narrow political concerns of Ministers, and that their vital co-operation with their US counterparts has not been affected by the breakdown between the latter and their President. This issue goes to the heart of the security and integrity of our democracy and political system, and I wish the members of the Committee well in their important work ahead.

[Liam Byrne (Birmingham, Hodge Hill) (Lab)]

I want briefly to add to the Intelligence and Security Committee’s to-do list, because it is important that there should be a rapid study—with conclusions brought to the House, when appropriate—of what is a rapidly emerging 21st century propaganda operation for which a playbook emerged during the elections in Europe and in America, and in our recent referendum campaign. That involves some reasonably sophisticated techniques in fabricating division and discord on social media platforms such as Twitter, which are then imported into social media networks such as Facebook, with significant—often dark—money behind them, to spread messages that are quite simply not true.

The impact of that is often to undermine democracy, and we in the mother of Parliaments have a particular duty to ensure that the new techniques are fully exposed and that commensurate action is taken against them. We have talked about the gaps in our laws, and we must make sure that the disinfectant of sunlight shines right the way through the elections we have had so that those laws can be fixed.

[Dr Julian Lewis (New Forest East) (Con)]

I speak not only as a former member of the ISC, but as someone who was involved in the 1980s in trying to counter what were called active measures—the use by the Soviet Union of agents of influence and organisations to try to have an impact on British public opinion. The difference between then and now is that it was then quite easy to expose who was behind the influence operations, but now that is much harder because the internet allows concealment.

Does the right hon. Gentleman agree that one of the main antidotes to the concerns expressed in this debate is that the intelligence agencies, and particularly the new technological arm of GCHQ that deals with the internet, should work to expose who is behind the messages that are coming through? We cannot stop messages getting through, but we can neutralise them by showing up their provenance.

[Liam Byrne]

The right hon. Gentleman is exactly right. There are well-sourced reports that there have been at least two briefings about Russian interference to the Prime Minister, if not the Cabinet. It is not clear what action was taken in response, but it is now quite clear that dark forces have new techniques. We recognise their fingerprints in some of the referendums and elections that have played out in our country and elsewhere, but let us be under no illusion that their job is not done. They will continue to try to influence debates in this House because they want to change the political environment in which we debate the terms of Brexit, for example. The faster the ISC can do its work and expose, in an appropriate way, what is truly going on, the better for all of us.

Paradise Papers

Liam Byrne Excerpts

Monday 6th November 2017 Commons Chamber

[Mel Stride]

I thank my hon. Friend for her question. As I have pointed out a few times already, we are currently looking at reporting standards. We are also looking at various recommendations coming out of the BEPS regime, some of which were covered in the Finance Bill, to stop flagrant tax avoidance, sometimes on the part of some of the largest corporations in the country. As I mentioned earlier, the Labour party sought to kill that Bill on Third Reading.

[Liam Byrne (Birmingham, Hodge Hill) (Lab)]

When I asked officials at the Department for International Trade whether tax transparency was required in our trade treaties, they said that this was a novel idea, and it was certainly not included in the text of the Transatlantic Trade and Investment Partnership. It is exactly this kind of secrecy that lets the rich hide billions while the people pay. Will the Minister ensure that we demand and insist on tax transparency in every single trade treaty presented to this House in the future?

[Mel Stride]

As the right hon. Gentleman will know, we are committed to country-by-country reporting, which we will push forward with multilaterally. As for our future trade treaties, they are for the future and for the Department for International Trade.

Economy and Jobs

Liam Byrne Excerpts

Thursday 29th June 2017 Commons Chamber

[Liam Byrne (Birmingham, Hodge Hill) (Lab)]

It is an honour to follow such a brilliant maiden speech. The hon. Member for Chichester (Gillian Keegan) represents one of the most beautiful constituencies in the country and was a great credit to it this afternoon. She betrayed her grasp that all politics is local; she quite clearly has her eyes set on making a significant contribution to the national debate, with all the benefit of her life experience.

I want to speak in support of the amendment tabled by Opposition Front Benchers, but given that we all find ourselves in a new hung Parliament, I first want to set out four or five areas in which it should be possible for us to work across the House on some shared challenges in the years ahead. I want to pick up where my right hon. Friend the Member for Doncaster North (Edward Miliband) left off by discussing the surging levels of inequality and injustice in this country, which are contributing to such instability in politics not only in our country, but across the western world.

The Opposition have talked for some time about the challenges faced by what we used to call the squeezed middle, and the Prime Minister has talked about the challenges confronted by just managing families. It pleases no one in this House that working families are about £1,400 a year worse off than they were before the crisis. The Chancellor and the shadow Chancellor were absolutely right when they pointed their fingers at the core of the problem: the challenge of productivity bedevilling our economy. The fact that the rest of the G7 can finish making on a Thursday night what it takes us until the end of Friday to get done will hold us back from having rising living standards, unless we get things sorted. The level of productivity growth in our economy is worse than it was in the late 1970s, when we used to call the problem the “British disease”.

While there are four or five areas in which we can make significant progress, there was very little reference to them in the Queen’s Speech. If we are to become a richer country, we patently need to become a smarter country. Unless we spend more on science and on research and development, it will be impossible for our economy to become more productive. We spend just 1.3% of GDP on research and development, which is well behind the 2.3% spent across the rest of the OECD and the 3% spent by economies such as Germany, South Korea and Israel, which all have significant manufacturing sectors that are bigger than ours. The Government set out a long-term target for 2.3%, but they should be more ambitious and we should be debating now how we lever in more private sector investment through good public sector investment, safe in the knowledge that public investment crowds in private investment.

[Andrew Selous (South West Bedfordshire) (Con)]

I just want to let the right hon. Gentleman know that our manifesto commits to raising research investment to 3%, which I am sure he would welcome.

[Liam Byrne]

But without a timeframe, unfortunately. The manifesto sets a timeframe for achieving 2.3%, but not that longer-term ambition.

Secondly, moving from the supply side to the demand side, we need a faster rate of growth. The previous Chancellor, George Osborne, sought to try to close the deficit, but with 90% of that achieved through spending cuts, our economy was put in a place where wage growth began to slow. If we want fiscal policy to do more and if we are now going to celebrate across the House austerity being over, we will need a grown-up debate about tax. I think we have overdone things on corporation tax, and for this simple reason: the investment that has gone into our economy since the crash has been dwarfed fivefold by the amount that companies have put in the bank to sit there and do nothing. As the shadow Chancellor said, companies are now sitting on nearly £600 billion in cash. As we cut taxes and hand money back to big multinationals, they are putting much more of it in the bank, where it is doing nothing, than they are spending on creating new jobs. That is why we must have a much more grown-up debate about who needs tax incentives and who does not.

Thirdly, we have to look at not just public investment but private sector investment. Our capital markets are not patient enough and do not invest in long-term growth, but sadly the debate about patient capital stalled at about the time the right hon. Member for Twickenham (Sir Vince Cable) left office. We need a new debate about how we encourage more long-termism in the City and elsewhere, including in our banking sector, because at the moment we do not have it. Back in the 1950s, shareholders held on to their shares for an average of six years, whereas now the figure is six months. We need to encourage longer-term horizons in the boardroom.

Fourthly—there was something in the Queen’s Speech about this—labour markets have to become more skilled. There is good ambition for T-levels and I welcome the apprenticeship levy, but the truth is that in Birmingham, one of our great cities, there are still only 120 young people on apprenticeship paths that take them up to a degree level of skill. That is inadequate, and it holds back places such as my city. We should be devolving the apprenticeship levy as far as is possible. Crucially, we should also be reversing the swingeing cuts we have seen over the past few years to our further education sector, because our colleges are the bridge between lower and higher-level skills, and they need more support.

Fifthly, we need a new debate about enterprise in this House. I heard the speech made by the hon. Member for Milton Keynes South (Iain Stewart), but the reality is that, according to the House of Commons Library, all the tax cuts over the past few years have not stopped 1 million people leaving entrepreneurial activity. Why are we not expanding the start-up loan scheme? Why are we not making sure that every person who leaves school knows how to start a business? Such practical things could make a difference.

The final area in which we need change is about not just corporate governance rules, but the powers that we give to local authorities. I do not criticise the deal that the DUP struck. All I would note is that we are talking about an average of £244 per person in Northern Ireland, which is 15 times more than under the devolution deals that have been granted to other local authorities. If we in the west midlands had a Northern Ireland-sized deal, we would have £657 million coming into our area each and every year. I therefore urge the Secretary of State to be an awful lot more ambitious.

The great George Orwell once wrote:

“The world is a raft sailing through space with, potentially, plenty of provisions for everybody”.

Some people have done well since 2010—the stock market is up 40% and the property market is up 25%—so let us use this new wealth to make sure that there is wealth for all in the years ahead.

UK Economy

Liam Byrne Excerpts

Wednesday 29th June 2016 Commons Chamber

[Stewart Hosie]

Indeed, and I will come to the recovery in certain areas in just a moment. The hon. Gentleman is right when it comes to the FTSE 100, but let me come to all the other indices, and we will see the real damage and how it is being played out.

It was not simply stock prices that were affected. Sterling was trading at $1.45 before the referendum. The value of the pound against the dollar fell by almost 8% on Friday the 24th—almost twice the fall in 1992, when the UK was forced out of the exchange rate mechanism on Black Wednesday.

[Liam Byrne (Birmingham, Hodge Hill) (Lab)]

Of course the FTSE 100 is going to rebound a bit, because the vast majority of the business of FTSE 100 stocks is outside the United Kingdom. If we look at indices such as the FTSE 250, which is much more domestically exposed, we see that the fall has been catastrophic.

[Stewart Hosie]

That is absolutely correct. The FTSE 250 is far more exposed to the domestic market. Whether the index moves up or down slightly at any given time, the key point is that the exposure to the UK market and the lack of confidence at the moment are precisely what is driving that uncertainty.

--- Later in debate ---

[Liam Byrne (Birmingham, Hodge Hill) (Lab)]

I welcome today’s debate and the tone that we have heard this afternoon. After what has been all too often a foul-mouthed debate over the past couple of months, the tone of constructive engagement and working together is very important. It is down to the leaders in this House to put the decency back into our democracy and, like many others, I was shocked to hear the statements, tweets, messages and incidents that hon. Members read out during our proceedings on the statement earlier today. We just cannot have that in this country; we are not going to have that in this country. It is a responsibility on all our shoulders to ensure that in the communities we serve we stamp it out, and we stamp it out fast.

Part of a decent democracy is that people honour their promises. Let us be honest that we have already seen promises that were made in the campaign being broken into shreds, tatters and little pieces. It is a job for all of us to hold to account the leaders of the leave campaign who made promises that now appear not to be honoured. We need to hang those promises around their necks in the months ahead because, frankly, our democracy cannot withstand too many more broken promises. The guilty men and women who made those promises must be held to account in this House.

I wanted to speak in the debate because I want to say that we need to honour the people’s decision. They have given us a stark lesson. We know how to globalise, but we do not know how to make globalisation work for the majority of voters. What I think most voters told us in the referendum is that we have become a world of very rich elites and very remote elites. People have had enough of it; they want a different settlement.

We need to move with speed in this House to set out the principles for a new special relationship with our closest neighbours. The sooner we agree those principles across the House, the better. I am glad the Chancellor set out a couple of principles, but I hope that he agrees, and that when the Chief Secretary to the Treasury winds up the debate he will agree, that we ought to have been better prepared. We were told yesterday by the Prime Minister that there is a new EU unit, yet somehow the Government have forgotten to include the Home Office in it, as if somehow immigration was not an important feature of this debate. Quite frankly, that beggars belief.

We are blessed in this House with the European Scrutiny Committee, which does a good job. It is charged with scrutinising individual instruments of EU legislation that come before us. It is, of course, chaired by that neutral and commanding figure the hon. Member for Stone (Sir William Cash). However, it is not equipped to look at the big picture nor to look at the principles that we need to agree. I therefore hope the Prime Minister will take seriously the call from Opposition Members for a new Joint Committee of both Houses to try to get to the bottom of the 6,500 instruments we might need to incorporate into UK domestic law, give or take those aspects we do not like.

Parliamentary sovereignty has just been voted on, but Parliament cannot be sovereign if Parliament is blind. We need to ensure that we are equipped in this House with a method of coming to agreement and making sure that the right plan for a new relationship is on the table.

[Stephen Gethins]

On the question of democracy and sovereignty, does the right hon. Gentleman agree that the Government, in terms of setting out their timetable for Brexit, should also set out a timetable for scrapping the House of Lords so that we do not have any more unelected bureaucrats deciding day-to-day business?

[Liam Byrne]

I am grateful to the hon. Gentleman for that intervention. I am on his side when it comes to the House of Lords. This Government’s idea of democracy is to bring forward proposals to cut the number of people in this House while increasing the number in the other place, I think by more than 200 at the last count. It makes one wonder what they are scared of when it comes to democratic decisions.

I want to touch very briefly on some of the principles that have to define the new special relationship with Europe, and we have to start with national security. Since we put in place co-operation on justice and home affairs, we have made important progress. We have good ideas, such as the European arrest warrant, and we have concerted action on sharing information relating to crime, terrorism and watch lists. Terrorists do not respect international borders and nor must the fight against terrorism. It is therefore essential that we agree to collaborate and co-operate to the maximum possible extent with our neighbours when it comes to the fight against crime and the fight against terror.

Secondly, it is clear from this vote—the hon. Member for South Suffolk (James Cartlidge) made this point well—that we will have to update the principle of free movement and replace it with a new principle of fair movement. I was the Minister for Borders and Immigration who introduced the points system for non-EU immigration into this country. During the French presidency, it became clear to me that there was an appetite across Europe for reforming the free movement directive. I said at the time that it would be a long struggle to get such reform, but the sooner we started, the sooner we would finish. Surely we now have to take that lesson and begin putting on the table serious proposals for the reform of free movement.

There are a million and one choices to make. We have to start by honouring the rights of those who are already here. We cannot retrospectively tamper with the rights of people who have already made the life-changing decision to move home. There are then questions about restrictions on low skill or high skill, how long visas should last, whether visa rights should lead to rights of settlement and citizenship, and what access to benefits should be enjoyed for taxes paid in. Of course, there is the huge question of how, as part of a new agreement on fair movement, this country steps up to its international obligations to help refugees struggling due to war in the middle east. We should be doing far more to help Europe with the burden of giving safe haven to refugees fleeing war zones and make that part and parcel of our proposals for fair movement.

Within all that, we have to be careful that we do not damage the free movement of ideas, which is why I always argue that students and scientists should be exempt. Alongside that, we must ensure that co-operation on ideas, intellectual capital and intellectual property protection are part of the new arrangements.

Thirdly, we must ensure that there is no race to the bottom on workers’ rights and human rights. It was this country, and one of our greatest Prime Ministers, that helped to found the Council of Europe. Over the decades that followed, we were among the most important authors of the European convention on human rights, and we are the proud co-authors of the European Court of Human Rights. We must ensure that there is no race to the bottom on workers’ rights, and that we do not enjoy second-class human rights in this country.

Fourthly, we obviously have to try to maximise free trade, free movement of goods and free movement of capital throughout the single market. We will need to be honest that we will pay a price for introducing restrictions on migration. We need to think carefully about what price we are prepared to pay. That is why I believe we need to introduce the minimal possible restrictions on free movement and the fewest fetters possible.

When it comes to the free movement of trade and of capital, we must ensure that our rights to tax revenue are protected. We have made progress over the past few years in ensuring that multinationals pay their fair share of tax, but heaven knows we have an awful long way to go. We know that hundreds of billions are sheltered by European companies in tax havens. We have to deepen collaboration and co-operation with Europe to ensure that people pay their fair share.

Finally, we need a big debate about sharing the burdens of our neighbourhood. Good neighbours do not shirk their duties, whether on climate change or common border protection. There will be countless other burdens regarding which Britain has to step up and say, “Yes. We are going to take on the obligations that come with sharing this part of the world.” The Prime Minister was right to say that we will not turn our back on Europe. We have to send a very clear signal that we will be not just good neighbours, but the best of neighbours.

In the debates that come, there will be an iron relationship between reform of free movement, access to the single market and the integrity of the United Kingdom. If we are to maximise the integrity of the UK and to keep our trade balance good, we have to keep changes to free movement to an absolute minimum. It would be an error to slam the door to this country closed and lose our place in the world as a great trading nation, which would inevitably lead to the unravelling of the United Kingdom.

We need great British moderation now more than ever. We must have no more pie in the sky from politicians with no intention of honouring their promises, which is why I hope this place continues to lead such debates.

--- Later in debate ---

[Greg Hands]

No, I will carry on.

The result may not have been what some of us wanted, hoped for or even expected, but that does not mean that the Government were unprepared for it. In the past six years, we have been working hard to bring our economy back from the brink and get our public finances back under control. We said we needed to fix the roof for any economic storms ahead, and that is what we have done. We have brought down the deficit, and we have steady growth, record employment and a resilient financial system, which we spent the past six years strengthening.

We have done the analysis on what leaving the EU might mean, and considered the potential impacts on our economy in both the short and the long term. There was general consensus in the House a fortnight ago on the risks we might face, so hon. Members recognise that it will not be plain sailing and that there are challenges ahead, but thanks to the measures we have taken over the past six years our economy is as well prepared as it could be to face whatever comes our way.

We anticipated that there would be an immediate impact on the value of our currency and the stability of the financial markets. The Treasury, the Bank of England and the Financial Conduct Authority have extensive contingency plans in place and we are watching the markets closely. Although we have seen volatility, the markets nevertheless continue to function effectively.

The Prudential Regulation Authority has worked closely with major financial institutions to prepare extensively for the consequences of a vote to leave. The Bank of England stress tests show that UK banks have enough capital and liquidity reserves to withstand a scenario more severe than the country currently faces. Thanks to our work to strengthen our financial stability, banks in the UK have raised more than £130 billion of additional capital in the past six years, and have more than £600 billion in liquid assets to ensure that they can keep lending to UK businesses and households during challenging times. The Bank of England can provide more than £250 billion of additional funds to support the banks and the smooth functioning of the markets. It can also provide liquidity in foreign currency if required. The authorities have all the necessary tools in place to protect financial stability. They are monitoring developments closely and will not hesitate to take further measures as required.

As we embark upon the renegotiation of our relationship with the EU, I reiterate the reassurances of the Prime Minister that the result does not mean that everything changes overnight. For British subjects living in the EU and EU citizens living in this country, there will be no immediate changes. People can still travel across the EU, businesses can trade as they did and our services can be sold as before.

The Prime Minister has been clear that there will be no immediate triggering of article 50, the procedure by which a member state can leave the EU. That gives us time to plan the new arrangements we are seeking with our European friends and neighbours. It also gives the Prime Minister’s successor the opportunity to make any adjustments to economic policy and our public spending, informed by an assessment of our economic situation from the independent Office for Budget Responsibility this autumn. In the meantime, we will continue to work hard to maintain the fiscal stability we have always worked so hard to deliver. A new unit will be set up in Whitehall bringing together experts from across the civil service, and in answer to the right hon. Member for Birmingham, Hodge Hill I can say that it will extend right across Whitehall, including all Departments likely to be affected, and that it will be given the resources it needs.

[Liam Byrne]

The Home Office?

[Greg Hands]

Yes, it will include the Home Office, and it will advise on the many options we face as we determine our future relationship with the EU. As Chief Secretary to the Treasury, I expect to play my own part in that task over the coming months.

Budget Resolutions and Economic Situation

Liam Byrne Excerpts

Monday 21st March 2016 Commons Chamber

[Jon Trickett]

I believe the hon. Gentleman said North Yorkshire. If I remember correctly, North Yorkshire got £10 million in transitional funds. West Yorkshire and south Yorkshire got not a single penny. Not a single council in the whole of west and south Yorkshire got a single penny, yet the cuts that west Yorkshire councils faced were much more acute than those that North Yorkshire had faced.

[Liam Byrne (Birmingham, Hodge Hill) (Lab)]

My hon. Friend is making his case well. Is there not worse to come? We heard last week that another £3.5 billion worth of efficiency savings are to be made in the final year of the forecast, yet this Secretary of State is asking many councils to agree four-year funding deals. Has my hon. Friend heard whether those that agree four-year funding deals will be spared that £3.5 billion extra efficiency savings, or will they just have the money taken off them?

[Jon Trickett]

Not a peep from the Secretary of State so far. Unfairness and inequality run through the DNA of this Government in every Department. Local government provides services that make the lives of the most vulnerable in our society bearable, yet it is suffering the most draconian cuts.

--- Later in debate ---

[Liam Byrne (Birmingham, Hodge Hill) (Lab)]

I do not want to speak at length this evening, but I do wish to add my voice to the chorus of congratulations that has greeted this Budget from all parts of the House. Certainly, in the 12 years that I have been in this House, I cannot remember a Budget in which so big a hole has opened so fast, which is why it is perfectly natural for it to have provoked such a hymn of praise.

According to the right hon. Member for Haltemprice and Howden (Mr Davis), when one starts picking the details apart, the whole thing falls apart. The hon. Member for South Cambridgeshire (Heidi Allen) said that the Government had made some poor decisions. Over the weekend, the hon. Member for Brigg and Goole (Andrew Percy) said that this was a Budget that hit exactly the wrong people. According to The Times, Members of Parliament, who were presumably once supportive of the Chancellor, now say that he is a “busted flush” and “damaged goods”. Let me associate myself with this new consensus breaking out right across the House.

I also congratulate the Chancellor on going to such lengths to, in his words,

“put the next generation first.”—[Official Report, 16 March 2016; Vol. 607, c. 951.]

That was a pithy message, and he has presided over an economy where that is exactly what has happened. This is now the first generation to be worse off than the generation that came before them. This is now the first generation to be more likely to live in poverty than pensioners. Today’s young generation are the first generation to have to work years longer in order to earn their pension. Young people today are the first generation to graduate from university with over £50,000 of debt. This was indeed a Budget for the next generation, but not quite in the way the Chancellor presented it. In fact, it was just the latest from a failed generation of Conservative politicians.

For me, the final proof was this: if the Chancellor wanted to do something for the next generation—if he truly wanted to put the next generation first—he would surely have done something significant, perhaps even magnificent, for Britain’s youngest city, which is of course my home city of Birmingham. Instead, we have a Conservative Birmingham bombshell of over £100 million of tax rises and spending cuts. That is the how the Chancellor has put Britain’s youngest city first. The Government now admit—this is the irony—that the great city of Birmingham needs a fair funding formula. In fact, they are so convinced of the need for this new funding formula that they are determined not to introduce it now but in a couple of years’ time. This short-changing is costing our city some £98 million in lost grants. Indeed, there would be almost no need to introduce cuts in this year’s council budget were it not for that short-changing.

[Jack Dromey]

I am grateful to my fellow Birmingham MP for giving way. The great city of Birmingham has been hit by the biggest cuts in local government history—three quarters of a billion pounds. Had it been treated fairly this year, it would have been £98 million better off. Does my right hon. Friend share my concern, and that of the people of Birmingham, that although we put a powerful case to the Government for support out of the transitional fund, 95p in every 100p goes to Conservative councils, but not one single penny to hard-hit Birmingham?

[Liam Byrne]

My hon. Friend is absolutely right. It takes some doing to sit in Whitehall and write a formula that means that pretty much only Conservative councils get the money, but I take my hat off to the Secretary of State and the Chancellor for somehow finding a way of doing it.

The problem is not just that £98 million was short-changed from the budget for Birmingham this year, but that because we have a weaker tax base in our city, we have to raise significant extra resources from the social care levy, costing us another £5.5 million, and that despite the fact that our police service is on one of the most dangerous frontlines, we have had £10 million of cuts to its budget this year. Altogether, the total is £113 million. This is a bombshell that the people of Birmingham will not forget.

Whoever is winding up this debate should recognise that there are some significant questions that we from our home city need answers to. We would like to know why we have not got any of the transitional funding that went to others. We want to know whether, if we agree a four-year funding settlement, our budget will be put into play in 2019-20 as part of the £3.5 billion of efficiency savings earmarked by the Chancellor last week. This is a significant issue for councils up and down the country. If they agree four-year funding settlements with this Government, will they be protected from the new £3.5 billion efficiency drive that the Government announced last week? Yes or no is the simple answer. Birmingham is up for the challenge of business rate retention, but we need much clearer answers than we got earlier about whether the gaps will be made good. Will Ministers confirm whether the OBR’s assumptions that there will be a 14% increase in council tax over the next four years are true? Do they share those assumptions?

The Labour party in Birmingham is rebuilding our city and getting it back to work, delivering record numbers of new businesses, record amounts of new investment, and record new infrastructure. We have built more council homes than any other council in the country, we have got over 3,000 young people into work, and we promised and delivered the living wage on day one of the new Labour council. Give us the tools and we will do the job!

Tax Fairness

Liam Byrne Excerpts

Tuesday 12th March 2013 Commons Chamber

[Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)]

On a point of order, Mr Deputy Speaker. I wonder whether you have had any indication from the Government on whether they plan to make an oral statement on the subject of the bedroom tax. Yesterday, in questions to the Department for Work and Pensions, Ministers assured us that the scheme was running smoothly, yet this afternoon we have another rushed U-turn that offers no money and no protection for disabled children. Right hon. and hon. Members would have welcomed the opportunity to put those points directly to the Secretary of State, and expose today’s announcement for the shallow nonsense that it is.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

I can tell the right hon. Gentleman that the Chair has received no notification that there will be a statement before the House. I am sure that those on the Treasury Bench and other Secretaries of State will have heard the comments that have been made, and the right hon. Gentleman is well aware that there are other avenues he may wish to pursue.

Jobs and Growth

Liam Byrne Excerpts

Thursday 17th May 2012 Commons Chamber

[Mr Brian Binley (Northampton South) (Con)]

I welcome the overall thrust of this Queen’s Speech and, in particular, the fact that it concentrates on the need for growth, more jobs and private-sector, wealth-producing buoyancy, which we did not see for a very long time under the watch of the previous Government. I must say that, yes, I do my best to be honest with the people I represent—

[Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)]

Yes.

[Mr Binley]

I do—they will tell you that, Sir—as you did when you said that there was no money left. We are both honest men.

I wish that the shadow Chancellor would welcome some of the achievements that the people of this country welcome; it is foolish of him not to do so when there are considerable signs of recovery. It simply lowers the esteem in which all politicians are held, and I urge him, and the Opposition Front Bencher who responds to this debate, to take that into account.

There are welcome signs of recovery. The private sector has created more than 500,000 jobs since the general election; the International Monetary Fund forecasts that the UK will grow at twice the speed of Germany and three times that of France; borrowing costs have fallen, investment has been increasing and only yesterday we saw a drop of 45,000 in the number of unemployed people in the first quarter of this year. All those things are welcome, but it would be refreshing to hear Opposition Front Benchers greet them with some enthusiasm—although I doubt that they will.

The truth of the matter is that consumers and businesses are saying, “To hell with it; we’ve got to get on with life,” and that is one reason why we are seeing some of the green shoots of recovery. Now we need to nurture them and ensure that they continue to grow and bear fruit.

The situation is fragile, and no one would say otherwise. Consequently, I urge the Government and the Chancellor to do more. We will not achieve growth with new laws. The previous Government tried that for 13 years, and we saw what happened. This place does not create the growth; it simply sets the atmosphere and ambience for it. So I appeal to the Chancellor to recognise that we need to change the culture regarding entrepreneurialism and the attitude to small businesses, and indeed serious and important recommendations on doing so are coming forward from various parts of the House.

We must also understand the needs of small businesses, because therein lies our best chance of growing jobs and the well-being of this nation.

--- Later in debate ---

[Mr Ellwood]

My hon. Friend makes an important point. This is a busy year for tourism in Britain and we must get those aspects right. This is not the first time that those points have been mentioned in this debate, and I think that the Chancellor has taken them on board.

The other thing I would like to point out about the local elections—this will be the same in future elections—is the deluge of news that has been thrown at us by the 24-hour news industry. We must think about how the message is managed, not just about the message itself. The Budget is remembered more for Labour’s sensationalist catchphrases, which have been heard again today, than for its game-changing announcements, such as the increase in the personal allowance, which will affect 24 million people; the largest single rise in pensions ever; and the cuts in corporation tax, which make us the most competitive country in the G8.

The latest phrase that Labour is peddling, which has leaked into the media, is “double-dip recession”. If I took my son, Alex, to the fairground and we went on a rollercoaster called “The Double Dip”, he would be pretty disappointed—even at the age of three—if the second dip was eight times smaller than the first. Labour is being disingenuous with the figures and undermines our economy by constantly peddling that phrase. [Interruption.] I hear Labour Members grumbling, so perhaps we should look at the figures. The Q1 results for 2012 were better than the GDP growth results for 2011, which suggests that the graph is going in the right direction.

[Mr Byrne]

The hon. Gentleman is certainly making a case. Will he tell us the cash value of the decline in GDP in the last quarter? How much did it cost our country in lost production?

--- Later in debate ---

[Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)]

It is a privilege to wind up a week of debate and speeches on the Gracious Speech. However, let me start by saying what a disappointment it was to hear not a word of recognition, humility or apology from the Chancellor for a litany of Budgets that have put this country back in recession and given us a Queen’s Speech with nothing to dig us out.

We have, however, had something very significant this afternoon. We have had an admission—a confession, in fact—from the Chancellor. He finally forced himself to say it, in response to the intervention from my right hon. Friend the Member for Edinburgh South West (Mr Darling), although he had to choke it out. He said that austerity is not enough. The Chancellor finally said it. However, confession is not enough; redemption will demand a change of course. He has U-turned this afternoon on his policy for Europe; he should now U-turn on his policy here in the UK. Instead, what we got was a lot of jokes. Most people in this country now feel that if he focused more on economics and less on jokes, perhaps the country would not be in quite the mess that it is. The customary advice is: “Don’t give up your day job”, although most of us probably feel that the sooner he gives up his day job, the faster Britain will be back on its feet.

This is the Chancellor who told us a year ago that he was putting fuel in the tank of the British economy. What has happened? Where has the fuel gone? It has somehow been siphoned off into the jerry cans in the Cabinet Office. Instead, what we have got is £150 billion of extra borrowing, 1 million young people out of work, fewer hours worked this year than last, and a fall in our national output in the last quarter of £700 million —a development that the hon. Member for Bournemouth East (Mr Ellwood) said was a step in the right direction. This is the first double-dip recession since 1975, the year of “Monty Python and the Holy Grail”, the story of a bunch of incompetent chancers, supposedly running the country, chasing after something that they had somehow misplaced. What an allegory of this Government’s pursuit of growth!

All week we have seen an unedifying witch hunt for the culprits—the people who have somehow misplaced Britain’s growth. This week the Government found someone else. The fault, it now seems, lies with those in the British business community, who just need to be working harder. My advice to them is that they should not take the attack personally. Indeed, they join illustrious company: we have had “the weather”; we have had “the wrong type of snow”; and we have also had the royal wedding. When it comes to their failure, this Government will blame only others.

[David T. C. Davies]

Will the right hon. Gentleman give way?

[Mr Byrne]

I will not give way, because there are so many points to respond to.

We know that this recession was not made by British business. It is not down to the weather, the snow or the royal wedding; it is down to the failed policy of this Government. Despite the good news we had on unemployment this week—there was a glimmer of hope—Britain’s jobs crisis has now gone on for too long. We now have more people working part time or becoming self-employed, because they will do anything to make ends meet. Long-term unemployment is surging towards the 1 million mark, the number of people out of work for two years is up to 500,000, 100,000 more people are signing on than last year, redundancies are up by 50,000, and vacancies are down by more than 10,000. Families all over Britain are facing a disaster, because of the failed policies of this Government.

This afternoon we heard those stories from all over Britain. The point was made forcefully by my hon. Friend the Member for Liverpool, Walton (Steve Rotheram), and it was a story repeated by my hon. Friends the Members for Ogmore (Huw Irranca-Davies), for East Lothian (Fiona O'Donnell), for Blackpool South (Mr Marsden) and for Leicester South (Jonathan Ashworth). We heard in the debate this afternoon that we need growth and demand—a point made by my hon. Friends the Members for Oldham East and Saddleworth (Debbie Abrahams), for Gateshead (Ian Mearns), for Great Grimsby (Austin Mitchell) and for East Lothian. We heard how higher unemployment is hitting some communities and some regions harder than ever—that was the point made by my hon. Friend the Member for Wirral South (Alison McGovern). It is hitting ethnic minorities harder than ever—that was the point made by my hon. Friends the Members for Stretford and Urmston (Kate Green) and for Oldham East and Saddleworth. It is now hitting young people harder—that was the message we heard from hon. Members from all parts of the House, and it was a point made with particular force by my hon. Friends the Members for Islington South and Finsbury (Emily Thornberry) and for Birmingham, Ladywood (Shabana Mahmood).

That is why what we needed in the last Budget and in the Queen’s Speech was not excuses, but action. We needed action on bank lending—that was the point made by my hon. Friends the Members for Leeds East (Mr Mudie) and for North Ayrshire and Arran (Katy Clark), and by the hon. Members for North East Cambridgeshire (Stephen Barclay), for Northampton South (Mr Binley) and for Aberconwy (Guto Bebb). We needed action on infrastructure spending, too—that point was made with great force by my right hon. Friend the Member for Barking (Margaret Hodge), the hon. Member for Erewash (Jessica Lee), and my hon. Friends the Members for Glasgow North (Ann McKechin) and for Glasgow Central (Anas Sarwar). This absence of action is now costing this country a fortune.

[Andrew Selous]

rose—

[Mr Byrne]

Perhaps the hon. Gentleman will tell us just how much the benefits bill is increasing as a result of that failure.

[Andrew Selous]

When the right hon. Gentleman wrote his famous note saying that there was “no money” left, what did he think the implications of that were?

[Mr Byrne]

The hon. Gentleman speaks for a party that has now put up borrowing by £150 billion more than projected. Does he know why? It is in large part because the benefits bill is not being capped by this Government—the benefits bill is going through the roof. It is set to be £25 billion higher than was projected by the end of this Parliament, with the cost of unemployment benefit set to be up by £5 billion and the cost of housing benefit set to be up by £6 billion by the end of this Parliament. I really do not know how he has the temerity to say what he has just said, given that it is his Government who are putting up debt.

The problem is that this Government have not learned the lesson that the way to bring the benefits bill down is by getting people into jobs—that is where this Government are failing. It is no wonder the people all across Britain are saying that this Prime Minister and this Chancellor have no idea how ordinary people live. The Prime Minister is riding on horses with editors of newspapers who are charged with perverting the course of justice while our young people cannot even afford a bus fare to college. We heard this afternoon just how much that bill has now become in a powerful speech from my right hon. Friend the Member for South Shields (David Miliband). We heard that youth unemployment will cost our country £30 billion over the years to come. When are this Government going to heed that lesson?

When will they look at the hit now being taken by working parents, who are struggling with child care? These parents are now losing £500 this year. No wonder 32,000 women have already had to give up work this year because they cannot afford the child care. We should look at what this Budget means for working parents—a point made with some eloquence by my hon. Friend the Member for Islington South and Finsbury and by my right hon. Friend the Member for East Ham (Stephen Timms). Such is the incompetence and such is the incoherence that families in this country are now better off on benefits than they are in a job—what a catastrophic failure of policy and what a catastrophic failure by this Chancellor.

Look at what these proposals mean for savers—people doing the right thing. Alongside the granny tax, the Government tried to sneak out in the Budget small print another £900 cut for pensioners by getting rid of the savings credit. Look at what the proposals mean for workers with disabilities. Some 11 million people in this country have disabilities. Disability Rights UK says that 25,000 people with disabilities have had to give up work this year because their support and help are being cut away from them. This Secretary of State for Work and Pensions is now administering reform of the incapacity benefit system with all the finesse of border control at Heathrow airport. It is now taking people up to 11 months to get a hearing and then, when they reach that tribunal, half the decisions are being overturned. That is not a result that he can be proud of.

Worst of all is the treatment being handed out to workers at Remploy. These are workers indirectly employed by the Secretary of State himself. Worst of all—worse than anything I have heard over the past few months—are the reported comments that he made to Remploy workers. Apparently he told them that they “are not doing any work at all. Just making cups of coffee.” That is not compassionate conservatism; it is the conservatism of contempt. The Secretary of State should apologise to those workers this afternoon. When he should have been launching a war on poverty, he has launched a war on decency.

This Government have no idea how these young people, these parents, these working mothers and these workers with disabilities are now living. They are failing on jobs, they are failing on growth, and they are out of touch, out of their depth and out of steam. We need a change of direction and Labour’s amendment today offers that. I commend it to the House.

Equitable Life

Liam Byrne Excerpts

Thursday 22nd July 2010 Commons Chamber

[The Financial Secretary to the Treasury (Mr Mark Hoban)]

With permission, Mr Speaker, I would like to make a statement on Equitable Life.

Both coalition parties are committed to justice for Equitable Life’s policyholders; we each made manifesto commitments, and these are reflected in our programme for government. No one should be in any doubt about our commitment to policyholders, who have waited a decade for justice. We are committed to implementing the parliamentary ombudsman’s recommendation, made two years ago, and

“to make fair and transparent payments to Equitable Life policyholders through an independent payment scheme for their relative loss as a consequence of regulatory failure.”

We have taken important steps towards implementing that commitment. We announced in the Queen’s Speech that a Bill would be presented to Parliament in this legislative Session, and today we are doing just that.

When I came into office, I reviewed Sir John Chadwick’s terms of reference and asked him to complete the work that he had started. I can tell the House that Sir John’s report, alongside the extensive actuarial advice underpinning it, has been published today, and copies have been placed in the Vote Office. I want to thank Sir John for his dedication in completing this complex and challenging task. Sir John has helped to progress the aim to establish a scheme that is fair both to policyholders and to taxpayers. He has proposed a flexible approach to determining losses that eliminates the need for policyholders to show what they would have done if the maladministration had not occurred.

I want to stress, however, that Sir John’s review is just one of the building blocks in resolving what is a complex matter, and that there are other judgments to be made in determining the final shape of the scheme and the amounts that will be paid out. I have always been committed to dealing with this matter with the utmost transparency. I therefore want to set out to the House today the key elements of Sir John’s methodology and the figures calculated at each intermediate step in quantifying losses according to his approach. First, however, let me make it clear that these are preliminary figures. There is further work to be done before a final estimate can be produced. These figures have been produced for the Treasury by Towers Watson, and I have placed a copy of its letter in the Vote Office.

Let me remind the House that the ombudsman considered that the financial loss suffered by policyholders was a consequence of the reduction in policy values in July 2001. These amounted to a reduction in the gains they expected to make from their policies, rather than the sums they were contractually entitled to. As a result, Equitable Life’s policies are lower in value today than they would have been without these cuts. The difference is the absolute loss, which Towers Watson estimates as being between £2.9 billion and £3.7 billion. Sir John then goes on to identify relative loss—that is, the difference between the returns that policyholders actually received from their Equitable Life policies and the returns they would have received if they had invested in a comparable product in an alternative life insurance company. This step produces a loss of between £4 billion and £4.8 billion.

For a number of policyholders, because of the strong performance of comparable life companies, their relative loss is greater than the absolute loss they suffered. Consistent with the ombudsman’s recommendation, Sir John has advised that relative loss for an individual policyholder should be capped at the absolute loss they suffered. It is hard to see how it would be fair either to the taxpayer or to other policyholders if some policyholders received more through redress than they had actually lost. If the proposed cap is adopted, then the figure will be £2.3 billion to £3 billion.

Sir John and the Equitable members action group—EMAG—are in agreement that not all policyholders would have decided against investing in Equitable Life had its regulatory returns not been subject to maladministration. There is scope for debate about by how much investment would have been reduced. Sir John advises that the majority of policyholders would have invested in Equitable Life irrespective of maladministration. He therefore proposes that policyholders should receive only 20% to 25% of the capped figure that I mentioned. I know that some stakeholders will dispute this proportion. This results in a figure of £475 million to £650 million.

Another difficult aspect of Sir John’s methodology is the assessment of internal relative loss—the loss that policyholders have suffered as a result of keeping money in Equitable Life when it was not being regulated properly. Taking this step into account, Sir John’s final loss figure is £400 million to £500 million. This figure is lower principally because a number of policyholders made relative gains as a result of maladministration.

As I said earlier, Sir John’s work is a building block that helps us to produce a fair and transparent payment scheme. I am aware that some of his findings will be contentious and are based on complex analysis, so I will reflect on his report and I will listen to representations by interested parties, including Equitable Life and EMAG, which has campaigned tenaciously on behalf of policyholders. As is apparent from the letter from Towers Watson, further work needs to be done over the summer to produce a final estimate of loss.

As the ombudsman noted, it is appropriate to consider the impact of any scheme on the public purse. The scheme will be a significant spending commitment for this Government and will therefore be considered in the light of what is affordable as a part of the spending review. I will set out the funding available for the scheme at the spending review on 20 October, alongside the final loss figure.

The ombudsman also concluded that the design of the scheme should be independent of the Government. I support this view, and I announced on 26 May that I would establish an independent commission to advise on the best way to allocate payments to policyholders and help to develop the design of the scheme. Today I can announce that Brian Pomeroy, John Howard and John Tattersall have agreed to form the independent commission on Equitable Life payments. I believe that their experience and expertise will be invaluable to the commission, and I am confident that we have the right people to do the job. The commission will start work imminently so that we can begin making payments as soon as possible. I have asked the commission to report by the end of January 2011.

The final question that I would like to address is how soon policyholders will receive payments. I would like to end the plight of policyholders as quickly as possible, and I aim to begin making payments in the middle of next year. If we are to achieve this goal, however, it is important to avoid any unnecessary delays. I will do all that I can to make sure we stick to this timetable, and I hope all interested parties will help us to do so. This is, however, a very complex task. We have made much progress since the Government were formed, but there is a great deal left to do. We need a simple, transparent and fair scheme that meets the needs of 1.5 million policyholders who have between them 2 million policies and have made 30 million premium payments. It is in the interests of each of those policyholders to complete this task quickly, but also carefully and thoughtfully.

In the past two months, we have published Sir John’s report; set up the independent commission on Equitable Life payments; published the first robust figures surrounding the calculation of relative loss; opened up the process, making it much more transparent; put in place a framework for the payment scheme; and produced legislation to give the Treasury statutory authority to make payments. We have achieved more in two months than the last Government did in the two years since the ombudsman reported. The coalition Government have demonstrated their commitment to justice for Equitable Life policyholders, and I commend this statement to the House.

[Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)]

I thank the hon. Gentleman for early sight of his statement and for the opportunity to review Sir John’s report in full at the Treasury this morning.

I would like to start by repeating the words of apology to Equitable Life policyholders that I made to the House earlier this year for the failure of regulation of Equitable Life under successive Governments between 1990 and 2001.

I thank Sir John Chadwick for his detailed report, which we commissioned. He has taken on an extraordinarily complex matter, and he has done an admirable job. I also thank officials at the Treasury for the work that they have done over the past six months in getting ready the legislation which I am glad to see that the hon. Gentleman has published today. I, too, thank EMAG. I am grateful for the work done by the all-party Equitable Life policyholders group, chaired by the hon. Member for Shrewsbury and Atcham (Daniel Kawczynski) and my hon. Friend the Member for Leeds North East (Mr Hamilton).

When I came to the House earlier in the year, I said that there was a clear ethical obligation, even if not a legal obligation, for compensation for Equitable Life policyholders. Equally, however, I knew that case-by-case compensation for policyholders, as suggested by the ombudsman, was not practical. I said that there were two tests for the right solution—speed and justice. I went on to say that we expected the Government to produce a report within two weeks of Sir John’s final report, which we wanted to see in May. So here we are in July, and there are a few questions that I should like to put to the Minister this afternoon.

First, is the Minister actually accepting Sir John’s recommendation? Earlier in the year he did a good impression of wanting to ditch Sir John’s approach and revert to the one set out by the ombudsman. Today, Sir John makes it clear in paragraph 10.17 that the ombudsman’s approach

“poses very difficult issues of principle, and would be impossible to implement within any realistic time-frame.”

Can the Minister confirm that Sir John’s approach is the right one? He called it one of the building blocks, but will he set out whether he is accepting Sir John’s report?

The second question that the House will want to know the answer to is who precisely will be entitled to help. Sir John states in paragraph 6.3 that help should cover new investments made between 1 September 1992 and 31 December 2000. Does the Minister agree with that approach? How many policyholders will be included on that basis, and how many will be excluded?

Thirdly, how much are policyholders actually going to get? Part 6 of the report sets out an approach and a method for calculating losses. Can the Minister confirm that what he has just said is that the maximum compensation will be based on a quarter of the relative losses faced by policyholders, and that that figure will itself be capped at absolute loss? Many policyholders will find that hard to square with what he said in the House earlier this year. What the House will want to know this afternoon is how much, on average, policyholders will actually get.

Fourthly, how quickly does the Minister want to complete this process? I am glad that he wants to get started next year, but the House will want to know how quickly he wants the final payments to be made. Finally, what appeal mechanism will the Government put in place for those policyholders who want to challenge their individual determinations?

It is incumbent on all of us to speed this matter to resolution. I am glad that the Minister has set out legislation this afternoon, and we will support it going through as rapidly as possible, but there are questions that our constituents will want answers to today. I hope that he will be as full as he can in replying to what I have asked.

[Mr Hoban]

I find the right hon. Gentleman’s comments rich, as he was a member of the Government who for nine years sought to frustrate, block and delay investigations into Equitable Life and its regulation; who ignored Lord Penrose’s findings of maladministration in 2004; who did everything they could to stop the ombudsman’s second inquiry; who bombarded the ombudsman with new documents and comments on her draft report; who took six months to reply to her report when it was published; and who set up a review by Sir John with a report carefully timed to be released after the general election. I will take no lessons at all from him about speed of response.

Sir John’s report sets out a range of approaches to calculating loss. As I said in my statement—the right hon. Gentleman had sight of it, as he said—I have not accepted that report. I will reflect on Sir John’s findings and think very carefully about them. The amount that policyholders will receive will be determined by a number of factors, and partly by the compensation figure set as part of the spending review process, as I said very carefully in my statement. The independent commission will need to respond to that matter when it designs the payment scheme, which was a key recommendation of the ombudsman that the right hon. Gentleman and his colleagues rejected but we are prepared to accept and put in place. He will have to wait until that scheme design has taken place and we have worked through its implications across 1.5 million policyholders, their 2 million different policies and the 30 million transactions that they entered into.

I am determined that the scheme will proceed as quickly as possible and that we can resolve the problems faced by Equitable Life policyholders—problems that the right hon. Gentleman and his party did little to sort out over the course of the past nine years.