Mortgage and Rental Costs

Matt Rodda Excerpts

Tuesday 27th June 2023 Commons Chamber

[Matt Rodda (Reading East) (Lab)]

I would like to speak in favour of the motion. Time is pressing, so I will touch briefly on the scale of the problem facing the UK.

It is fair to say that many families—indeed, up to 7.5 million—face a very difficult challenge at present because of the increase in interest rates and the effect on mortgages. As we have heard, it has been calculated that that increase means around £2,400 extra on household mortgages every year, which is £1,000 more than the increase in mortgages in the United States.

The situation affects both buyers and renters, because landlords put up rents as well, but the Government are proposing only a voluntary scheme, which obviously falls well short, and about 1 million families are likely to be missed by this inadequate measure. Earlier, the Shadow Chancellor set out a much more effective scheme, which I obviously commend to the House.

Given the lack of time, I will move on swiftly and speak about how the Government’s mortgage bombshell is affecting local residents in Reading and Woodley. This crisis is making what is already a difficult housing situation far worse for local people in our part of Berkshire. We have had high house prices and rents for some years, given the shortage of supply and many other related housing matters.

To give colleagues a taste of the situation locally, terraced houses in Reading town centre can sell for as much as £300,000, so these are quite expensive properties. There is also a real shortage of property and a large waiting list for local authority properties. For a family house, the price may be as much as £600,000 or £800,000, so we are already talking very large amounts of money. As I said, renters face additional problems. We have an issue with dangerous cladding not being removed in some cases, as well as issues with leaseholders and landlords. There are, therefore, serious problems in our area, and that is on top of the national problems facing families, which I mentioned earlier. Colleagues from across the House have also mentioned the 20% rate of food inflation and the UK inflation rate being the worst in the G7.

I would like to point out some of the problems facing individual constituents. Without giving away too many personal details, perhaps I could just give a flavour of the problems involved, and I hope the Chief Secretary will reflect on them. One constituent—a gentleman called Peter—is in a good job. He has a young family, with two children, and they live in a three-bedroom house. They face an increase of £800 a month in their mortgage, and they simply do not know how they will cope.

Another constituent, Donna, who lives in a flat in Reading town centre, faces a £400-a-month increase. Again, that is an absolutely incredible increase in what she has to pay for her home. Sadly, she is one of many residents locally who have been affected by the cladding scandal and by delays in removing various types of dangerous cladding. She is already under enormous pressure because of the emotional stresses and strains of having a flat with cladding problems. In addition, she now faces this enormous extra increase in her payments. She is self-employed and has a small business. Imagine how this feels to her. This truly is a dreadful crisis.

I realise that time is limited, and I hope my hon. Friend the Member for Stockton North (Alex Cunningham) can get in shortly, but I ask the Chief Secretary to report back to the Chancellor just how dire the situation is and how it is affecting people up and down the country—both my residents and those of colleagues from across the House. I also urge him to think about the five-point plan outlined by the shadow Chancellor, which has been well researched and well received across the industry.

[Mr Deputy Speaker (Mr Nigel Evans)]

Alex Cunningham is the final speaker.

Finance (No. 2) Bill

Matt Rodda Excerpts

Report stage
Tuesday 20th June 2023 Commons Chamber

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

I wish to speak to my new clause 3, which would compel the Chancellor to assess the impacts of the Bill on poverty and inequalities, and, subsequently, our health. It states:

“The Chancellor... must review the public health and poverty effects of the provisions of this Act and lay a report of that review before the House of Commons within six months of the passing of this Act.

(2) The review must consider—

(a) the effects of the provisions of this Act on the levels of relative and absolute poverty across the UK…

(b) the effects of the provisions of this Act on socioeconomic inequalities and on population groups with protected characteristics as defined by the 2010 Equality Act…

(c) the effects of the provisions of this Act on life expectancy and healthy life expectancy across the UK…

(d) the implications for the public finances of the public health effects of the provisions of this Act.”

Most notably, it must consider those implications on the NHS. So the ask is simple: that the Government should disclose their evaluation of the impact of their economic policies on the health of our constituents—that is it. It is fairly straightforward, and I think we are all aligned on that; these are ambitions the Government have professed to have in their levelling-up agenda. My new clause would contribute to that and to the achievement of the reduction in health inequalities to which the Government say they aspire. They should have nothing to fear from the transparency that this new clause would bring.

As we know, there is overwhelming evidence that socioeconomic inequalities are the key determinants of our health and, consequently, our health service use; inequalities in income, wealth and power will determine how long we are going to live and to live in good health. It is, therefore, only reasonable that the Government report on how the Finance Act will have an impact on those inequalities. For example, life expectancy for men is four years lower in Oldham than it is in the Prime Minister’s constituency. In the past 13 years, Oldham Council has had £230 million in funding cut from its central Government funding—that is 29% of its total budget in 2010. It has received funds through the competitive bidding processes for the towns fund and levelling-up fund totalling £44 million. A GCSE in maths is not required to see the shortfall there. However, in Surrey, where the Chancellor is an MP, people have seen their council budget cut by just 8.3%. The issues are clear when we compare that 8.3% with that 29%.

How can it be right that in the sixth richest country in the world people are dying younger because of their socioeconomic position? Poverty and inequality are not inevitable; they are political choices that can have deadly consequences. The pandemic revealed that stark reality, exposing how our structural socioeconomic inequalities impacted on who was infected by covid and their experience of the disease. People on low incomes were more likely to be infected and to die of covid; within that, and at every other level of the income hierarchy, people of colour and people with disabilities were disproportionately represented in case numbers and deaths. If we are to prevent the same mistakes from happening, the Government must listen. If they do not listen to me, they should listen to Professors Sir Michael Marmot, Clare Bambra and Kate Pickett, and to countless others. There is overwhelming evidence to show that structural inequalities in our country drove the unequal death toll from covid.

Michael Marmot revealed that instead of narrowing, health inequalities, including how long we are going to live and to live in good health, were getting worse; prior to covid, our life expectancy and healthy life expectancy was getting worse. Most significantly, his analysis showed that unlike the situation in the majority of other high-income countries, our life expectancy was flatlining. For the poorest 10% of the country, including in my part of the world, it was actually declining, with women being particularly affected. He showed that “place matters”; living in a deprived area in the north-east was worse health-wise than living in an equally deprived area in London.

Sir Michael also emphasised that it is predominantly the socioeconomic conditions that people are exposed to, not the NHS, that will drive their health status and how long they will live. Analysing the abundant evidence available, he attributed the shorter lives that people in poorer areas such as my north-west constituency are predominantly living to the disproportional Government cuts to local public services, support and income that they have experienced since 2010—and then the pandemic hit. As the National Audit Office and others have outlined, it was always a question of when, not if, there would be a pandemic. Like many of us, Sir Michael has pointed out that the Government’s hubris can be seen not only in their pandemic management but in the high and unequal covid death toll. Improving our health and wellbeing must be a priority of this Government and an outcome of our economic—and other—policies.

[Matt Rodda (Reading East) (Lab)]

My hon. Friend is making an excellent, powerful speech. Does she agree that the inequality she has described also extends across a range of other fields, such as the quality of housing and of food?

[Debbie Abrahams]

My hon. Friend is absolutely right on that. When we look at the socioeconomic inequalities and the social determinants of health, we see that they include both the quality of housing and people’s opportunities for healthy living. That all has an impact, but we know that our socioeconomic determinants are the key drivers—the most important ones—of our health outcomes. There is indisputable evidence about that, which is unfortunately not reflected in some of the choices the Government are making.

I am glad that my party has recognised that, along with the importance of tackling socioeconomic determinants of health, in our health mission. We will take a health-in-all policies approach to tackle the socioeconomic inequalities driving health inequalities across our country. We will create a Marmot England and introduce new mission-delivery boards to ensure Government Departments work together to tackle health inequalities. My new clause is about ensuring that the Chancellor also recognises this and publishes a review into the impacts on poverty, inequality and, ultimately, health. After covid, that is the least the Government can do.

Finance (No. 2) Bill

Matt Rodda Excerpts

2nd reading
Wednesday 29th March 2023 Commons Chamber

[Nigel Mills (Amber Valley) (Con)]

rose—

[Matt Rodda (Reading East) (Lab)]

rose—

[Victoria Atkins]

I will give way once more, if I may, but then I must make some progress.

--- Later in debate ---

[James Murray]

No, I am going to finish what I am saying before I give way again.

That data confirms that we are suffering the worst falls in household incomes in a century. The hon. Gentleman need look no further than the OBR report alongside the Budget, which make it very clear that this Government have little or nothing to be proud of when it comes to our economy. Across the UK, people and businesses want to get on with making our country better off, but we are being held back by a Government who are out of energy and out of ideas. That much is clear from the Bill that is before us today, which seeks to implement some of what the Government have promised.

Of course, consideration of any Bill on Second Reading must include what it omits as much as what it contains. Let us start with the fact that this Bill contains no mention of introducing stealth tax rises for working people, although we know that that is exactly what the Government are doing. We know that in the Budget of March 2021 and in the Finance Act that followed it, the then Chancellor, now the Prime Minister, froze the basic rate limit and personal allowance for income tax for four years. In the recent autumn statement of 2022 and in the Finance Act that followed that, the current Chancellor extended those freezes by a further two years. Now, following this month’s Budget, the OBR has made it clear that the Government’s six-year freeze in the personal allowance will take its real value in 2027-28 back down to its level in 2013-14. What is more, in a double whammy, families across the country will be hit next month by the Tories’ council tax bombshell, a move that will take the bill for a typical band D property above £2,000 for the first time. Look beyond the rhetoric from the Conservatives, and the reality is clear: their stealth taxes are hitting working people hard.

However, while the tax burden for working people is up, important measures that we have been calling for to make the tax system fairer are nowhere to be found in the Bill.

There is nothing in it to close the loopholes in the windfall tax on oil and gas giants, which we have been urging the Government to do for so long. Of course, we have been pressing for an extension of the energy price freeze for many months, and we were glad that the Government followed our lead in the Budget, but it is wrong that they are still leaving billions of pounds of windfall profits for oil and gas giants on the table when those windfalls of war should be helping to support families through the cost of living crisis.

[Matt Rodda]

My hon. Friend is making an excellent point. Does he agree that the pressures that are, as he rightly said, felt by many families are also felt by our hard-working small businesses, which face extreme pressures on their costs, suppliers and energy costs? Does he agree that the Government seem to have forgotten about them?

[James Murray]

My hon. Friend is a real champion for small businesses in his constituency and beyond. We meet small business owners all the time, and they tell us that what they want are stability, certainty and a long-term plan from the Government, but none of that is evident in the Bill.

Something else that is missing is any legislation to tackle non-dom tax status. Non-doms are getting another reprieve from the Government. Labour believes that those who make Britain their home should pay their taxes here, but while families across the UK face higher taxes year on year, the Government are helping a few at the top to avoid paying their fair share of tax when they keep their money overseas. The non-dom rules that allow this to happen cost us more than £3 billion every year, and ending that outdated, unfair loophole could fund the biggest expansion of the NHS workforce in a generation.

For most people, ending non-dom status is a no-brainer, although we know that some opinions to the contrary do exist. Last week, for instance, we learnt of a blog published by Evelyn Partners, a wealth management firm which supplies accountancy services to the Prime Minister. In that blog, the firm makes it clear that it

“would prefer not to see further tinkering with the system”,

and feels that non-doms

“will welcome some continuing stability.”

I am tempted to paraphrase Mrs Merton’s legendary quip by asking, “Prime Minister, what first attracted you to this non-dom-supporting firm of accountants?”

The Prime Minister’s accountants have not only welcomed Government inaction over non-doms; they have welcomed the changes to tax-free pension allowances in part 1 of the Bill. As the shadow Health Secretary, my hon. Friend the Member for Ilford North (Wes Streeting) has made clear, we have long been calling for a targeted scheme to deal with the pension issue facing doctors, which is forcing some of them to retire early. We had thought that a sensible, targeted approach might even gather cross-party support. Indeed, the Health and Social Care Committee made the same call last year, when the current Chancellor was its Chair. In its report published last July, it said:

“The government must act swiftly to reform the NHS pension scheme to prevent senior staff from reducing their hours and retiring early”.

However, now that he has moved into No. 11 Downing Street, the right hon. Member for South West Surrey (Jeremy Hunt) has failed in one of the most important responsibilities of being Chancellor, which is to spend taxpayers’ money wisely.

The Conservatives could have included in the Bill a targeted scheme to encourage doctors to work overtime and not to retire early, but instead they have introduced an expensive blanket change that will benefit all those with the biggest pension pots. This approach fails the test of providing value for money. In the middle of a cost of living crisis, a blanket giveaway for some of the most well-off is the wrong way to spend more than £1 billion of public money a year. As the British Medical Association has said, a scheme targeted at doctors could be introduced at a fraction of the cost. The policy is ostensibly about keeping people in work, yet as Paul Johnson, the director of the Institute for Fiscal Studies says, it will cost in the region of £100,000 per job retained. We voted against the policy last week, and as our amendment today explains, the Government’s approach is a key reason for our declining to give this Finance Bill a Second Reading.

High Street Bank Closures

Matt Rodda Excerpts

Tuesday 28th February 2023 Commons Chamber

[Alex Davies-Jones]

I completely agree with my hon. Friend and constituency neighbour. He will know the impact of the latest announcement of a bank closure in Talbot Green, which is used by our constituents. That is having an impact on local charities and local charity shops on our high street, because they deal in small petty cash. They do not deal in card transactions. I will come on to talk about that issue.

As I said, I secured the debate when I learnt of the latest closure in my constituency. Talbot Green, home to just under 3,000 people, will lose yet another high street bank branch, with Barclays set to close in May. Having already lost HSBC in 2021, as well as Lloyds previously, Talbot Green’s residents will be left with no dedicated high street bank whatever. Across my communities and the many communities neighbouring my constituency, the story is the same: residents are abandoned by their banks and are now forced to travel unacceptable distances to their next nearest branch. In Tonyrefail, Barclays closed in 2015 and Lloyds closed in 2016. In Church Village, Lloyds closed its doors in 2021, leaving the entire village with no dedicated bank at all. Even in Pontypridd town centre, where thankfully several high street branches remain open, the loss of the HSBC branch in 2021 is still part of a worrying trend.

Too many of my constituents are now left with no high street banking presence in their communities. Consider this example: a constituent in Tonyrefail, who does not drive and who is a member of a bank whose nearest branch is now in Pontypridd town, would now be forced to travel for over an hour each way on public transport, catching four buses in total for a return trip.

[Matt Rodda (Reading East) (Lab)]

My hon. Friend is making an excellent speech that picks up on issues around the whole country. Does she agree that there is a particular problem for people who are disabled and immobile? Even when they are able to get public transport, they may find themselves in a large town centre, some distance from a bank branch and facing considerable difficulties getting to the door of that bank.

[Alex Davies-Jones]

I completely agree. For someone who is disabled, elderly, otherwise vulnerable or just does not have a car, the closure of bank branches can be truly devastating. Across the country, it is a similar picture. In some parts of the UK, customers are facing an astonishing 40-mile round trip just to access their bank. That is not good enough.

We all know that face-to-face access to high street banks is a vital service for the most vulnerable in our society. For many constituents who do not use the internet regularly or, in modern-day Britain, do not have reliable enough broadband, online banking is not an option. I fully appreciate that the way consumers spend money has changed and that digital payments now dominate transactions—in part, accelerated by the pandemic. That in itself is no bad thing. Making commerce easier and more convenient for customers and businesses alike should be good for our economy and our high streets. As Labour’s shadow Digital Minister, I have seen at first hand what a digitised economy that works everyone could look like.

--- Later in debate ---

[Matt Rodda]

My hon. Friend is again making an excellent point about the importance of cash purchasing. Does she agree that this is a huge issue for certain small businesses that still trade in cash? Even though, as she rightly says, the digital economy is progressing, we all know that in certain sectors of the economy cash is the only means of transaction.

[Alex Davies-Jones]

I completely agree. I come from the proud market town of Pontypridd. As I will go on to talk about, for many traders it is not profitable to operate with purely card payments. They operate in very small monetary values and cash is a main aspect of their business model, so it is absolutely vital that we have that presence on our high street.

--- Later in debate ---

[Alex Davies-Jones]

I agree that credit unions can plug some of the gap. The Welsh Government are exploring opportunities with Banc Cambria, which would be a national bank for Wales with a presence on the high street, but until it is established and until our banks have a statutory duty to provide a service to our communities, services will be sadly lacking. Businesses, communities and constituents will suffer as a result.

[Matt Rodda]

I am grateful that my hon. Friend is being so generous in giving way. Is she aware that another issue for customers of some banks or building societies is that the software does not always work with post office software? If a member of the public wants to cash a cheque or take money out, it is not always possible with every single bank or building society.

[Alex Davies-Jones]

I agree. If the infrastructure does not line up, that can cause problems. It can make simple transactions arbitrary and time-consuming, especially when people are having to deal with numerous other transactions during their day. Besides, there are functions that building societies and credit unions are unable to fulfil, such as those connected with mortgage issues or people’s concerns about fraud involving their accounts. People need that presence on the high street and in the community. They need these trusted individuals who can support vulnerable customers and, indeed, the ordinary customer who just has a query and wants a chat about their account.

The Minister will no doubt be aware that the Social Market Foundation and the Treasury Committee have expressed concern about the over-reliance on post offices as a stop-gap. As I have said, such stop-gaps are unsustainable, and put far too much pressure on already overworked postal staff who, despite the vital service they provide, are not trained banking specialists. We need that trusted expertise on our high streets. The Committee also found that post offices were not an adequate environment for many requirements of face-to-face banking, especially for more vulnerable customers, not least because a post office does not provide the privacy and dignity that many bank customers deserve and rightly expect.

While post offices must be commended for the role they play in providing basic banking services, shifting face-to-face banking in rural communities to post offices is clearly not the right answer for everyone. We need to focus on protecting dedicated high street bank branches instead, and in that connection I cautiously welcome the provision in the Financial Services and Markets Bill—now in the other place—for banks to potentially share face-to-face branch services, although the exact mechanism for that is yet to be determined. Independent organisations such as Link are already involved in creating those “shared services” in some parts of the UK, and I pay tribute to the work that they do to ensure that high streets can continue to thrive. However, the Bill represents a clear opportunity to enshrine this community-driven model in law, and an excellent opportunity for the Government to address the issues that I have raised tonight.

I urge the Minister to provide the House with any clarification he is able to offer on how these shared services might work in practice, as well as the criteria by which communities that are eligible for them are now selected. None the less, research by Which? suggests that since the Government introduced the Bill, a shocking 390 bank branches have closed in the UK. It is clear that immediate action is needed, and I therefore urge the Minister to set out a timetable for the shared services to be brought online.

High street banks are the lifeblood of local economies and, indeed, whole communities in constituencies such as mine. They must not be allowed to disappear completely, and they must play a central role in the regeneration and levelling up of former industrial communities such as mine. The unprecedented rate at which they are vanishing from the high street is not only holding local economies back, but making life challenging for the most vulnerable people in society who depend on easily accessible face-to-face banking.

I look forward to the Minister’s comments on the issues I have raised, especially the commissioning of shared banking services, as I am sure that thousands of my constituents will be very interested in what he has to say. The impact of bank closures on our high streets will be—indeed, already is—truly devastating. I sincerely hope that the Minister has listened to my concerns and will finally decide to take action.

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

Let me begin by thanking the hon. Member for Pontypridd (Alex Davies-Jones) for securing the debate and raising an important issue that I know is of concern to many Members’ constituents. She is clearly a vocal and passionate champion for her high street, which does her credit. May I also prematurely wish her a happy St David’s Day?

Our local high streets are of the utmost importance in towns throughout the country. They are the beating hearts of communities and form an intrinsic part of the social fabric of our cities, villages and communities. I know that, in joining this debate, all Members will be thinking of their own constituencies and the many conversations that they will have had with people there about—and often standing on—their local high street. I also know from speaking to my own constituents in rural West Sussex that there are legitimate concerns about the decline of our high streets, especially among vulnerable, elderly or isolated people who rely so heavily on what the high street provides. Let me therefore say at the outset that the Government recognise the vital role that the high streets play in society, and that we are implementing policies and directing resources toward protecting them, because that is the right thing to do.

I am proud to be part of a Government that are providing long-term, enduring support. How are we doing that? We are doing so through a combination of direct funding, tax cuts and legislation. The Government have provided a comprehensive package of around £400 billion of direct support. The towns fund and the levelling-up fund are together investing £8 billion in regenerating local communities and high streets. In May 2022 we introduced the Levelling-up and Regeneration Bill, bringing in new legislation to introduce high street rental auctions that will tackle decline by bringing vacant units back into use. We sometimes refer to them as the broken teeth of our high streets, and it is welcome that these measures are being put forward. Just months later, at the 2022 autumn statement, we announced a package of business rate support worth £13.6 billion, including an increased 75% relief for retail hospitality and leisure properties. If the hon. Lady’s constituency is anything like mine, that will have been a lifeline for so many small businesses on the high street. Under this policy, businesses can claim up to £110,000 each in 2023-24. It is a tax cut worth over £2 billion for more than 200,000 local businesses.

I am here as the City Minister to respond to the hon. Lady’s specific point about the closure of local bank branches and how this impacts the high street—I accept that it does. The difficult fact is that the way people are banking is changing. Innovation has led to more online banking, which for many—not all—is more convenient and quicker than banking in branch. It liberates people and allows them to work at different times of the day or night, or perhaps to juggle childcare responsibilities, because banks were never always open. We know that anecdotally, as well as from the data. The industry body UK Finance found in 2021—that is already some time ago—that 86% of UK adults made contactless payments, 72% banked online and 57% banked on their mobile phone. That is not just young people; the latest data shows that more than 70% of people aged over 65 use online banking. We should not be dismissive of the so-called silver surfers. None of that is to deny the fact that there are significant minorities that are excluded from those figures.

In that context, local bank branches are simply receiving fewer visitors than they once did, and I think it is incumbent on all Members to recognise, as the hon. Lady did, that banks and building societies have difficult decisions to make about how best to provide services to those who need them and to support communities. Members should also recognise—this is certainly the view on this side of the House, although I respect other views on the matter—that it is not the role of the Government to intervene in these decisions; nor do we have the powers to do so.

The hon. Lady gave the example of the Barclays branch closing in Talbot Green. According to Barclays—I am not here to defend its actions in any way, but we should look at the data—91% of the people who used that branch also banked using alternative means. Only 35 customers used that bank regularly as their only way to do banking. So although bank branches are an important part of the community, we need to be careful that we do not follow the behaviour of our constituents rather than leading it or maintaining it.

I will come on to the measures that the Government are taking in the Financial Services and Markets Bill—with, I think, the broad support of the House. I am very concerned about access to cash, and we are legislating on that. I took the liberty of looking at the hon. Lady’s constituency, and according to Link there are 97 cash machines there, more than three quarters of which are free to use. Those are probably the ones that we all care about most on behalf of our constituents. That is a substantial number, offering people at least the ability to access cash.

The hon. Member for Strangford (Jim Shannon) mentioned credit unions. The Government support the credit union sector in order to have a greater diversity of provision. The Smart Money Cymru and Dragonsavers credit union both serve the constituents of Pontypridd, and I salute them. This Government will do whatever we can to improve the viability of the credit union model and ensure that we have appropriate, proportionate regulation that promotes the growth of credit unions and the mutual sector more generally.

Some 99% of personal banking customers and 95% of business banking customers—this is measured by the relationship with the banks with which they do business—can do their banking, although not all of it, at one of the more than 11,500 post office branches across the country. While I understand that that will not always be the perfect answer, that is a substantial lifeline for banking services. It also puts a substantial amount of revenue into the Post Office business, and if we do not make a success of it, we might be sitting here on another evening having another debate about the loss of post offices in our communities.

[Matt Rodda]

The Minister may be interested to know that the issue in my constituency was with the Nationwide building society, with many of its members unable to use the post office, which affected thousands of people.

[Andrew Griffith]

I thank the hon. Member, as I thank all hon. Members for their contributions to the debate. The issue we are debating is why we have urged all banks seeking to close branches to examine the Financial Conduct Authority’s guidance to ensure that, when they do make closures, they carefully consider the impact. I hope that those procedures have been followed in the case of the hon. Member for Pontypridd, and I encourage her to contact the FCA if she is concerned. Where firms fall short of expectations, the FCA can and will ask for closures to be paused.

We are taking strong steps on access to cash. We must not impede innovation. People and businesses are embracing the benefits of new services. Some small micro-services are benefiting, and some female entrepreneurs are setting up businesses without the overhead of having to have access to cash. Many people do like to tap and go, so that flexibility is important. As I mentioned earlier—the hon. Lady was also kind enough to mention it—the Financial Services and Markets Bill will protect access to cash, both withdrawals and deposits, because that gives businesses the confidence to take cash safe in the knowledge that they can deposit it, hopefully not too far away. It will be the first time since the ancient Celts first started minting coins in this realm that there will be a statutory right to access to cash.

I must not digress, but I recently visited the Royal Mint in Wales—

Sunscreen Products: VAT

Matt Rodda Excerpts

Thursday 9th February 2023 Westminster Hall

[Matt Rodda (Reading East) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Sharma. I congratulate the hon. Member for East Dunbartonshire (Amy Callaghan) on her excellent work in securing this debate and on her powerful speech. I also commend colleagues from all parties in the House for their speeches.

I want to make three brief points, first about the obvious importance of sun protection, secondly about the context of the cost of living crisis, and thirdly about the importance of investment in public health.

First, on sun protection, we have heard a persuasive argument today about the importance of protecting ourselves from skin cancer. Quite clearly, it is a threat that can be managed and that we can protect ourselves from, and the hon. Member is absolutely right to point that out. However, those 2,000 preventable deaths surely prompts a question for the Government: what is the state of their current public health work on this important matter? I hope that the Minister will be able to answer that in detail when she responds.

I also urge colleagues from all parties in the House to consider the context for families—who will perhaps have started thinking at this time about booking a summer holiday, or going away for a weekend or to the seaside at Easter—because we are living through the most serious and sustained cost of living crisis for 40 years. When families go to purchase everyday goods, they will see cost increases of around 20% for those goods in the supermarket, and there is a real issue with additional items possibly not being bought as a result. We need to understand that that is a huge risk. There have been many reports in the media of families paring back other products and services because they are under such severe pressure. I hope the Minister will consider that context and see the obvious additional importance of wise public health advice and any measures that are deemed necessary.

When we consider the cost of the summer as a whole for families, particularly those with two or even three children, which involves buying hats, sunglasses, loose-fitting clothing—as we heard earlier—and sunscreen, there are quite obviously considerable extra costs for the many families who are thinking about a summer holiday, either in the UK or abroad. Obviously, sunscreen is part of that cost, so the point that the hon. Member for East Dunbartonshire made about the cost of sunscreen is an important one.

Finally, I turn to the need for more investment in public health. It is noticeable that in this country we have a very strong tradition of public information campaigns, which have actually been very successful over the years. Some of us will remember campaigns such as Clunk Click, or other campaigns to try to prevent smoking or many other health risks. What are the Government prepared to do to try to prevent the risk of melanoma, perhaps through better advice, through the media and by directing Government information in a more effective way?

There is also a wider point about working with the health service and other public health professionals. It is a tragedy that since 2010, and certainly for the period immediately before the pandemic, there was a cut in Government spending on public health. In my opinion that is a tragedy, and sadly many important health priorities were allowed to drift in that time, including action to tackle smoking, and there may well be other important measures that were not supported, possibly including the battle against melanoma.

I am conscious of time, so to conclude, this is an important health issue, and the hon. Member for East Dunbartonshire has made an interesting point. This debate is also timely, given that this is the time of year when many families are booking holidays and considering what to do in the summer, and at Easter and in other holiday periods approaching in the spring. I look forward to hearing the Minister’s response, and I hope she will address a number of the points made today.

Landfill Tax Fraud

Matt Rodda Excerpts

Thursday 12th January 2023 Commons Chamber

[Mr Davis]

I agree. Exporting from Scotland to England will not help at all, so the right hon. Gentleman is exactly right.

We have a ridiculous co-ordination problem in the midst of all this. The NAO told me that Operation Nosedive failed for a variety of reasons, but ultimately it was felt that defence lawyers for the criminals would be able to exploit all the weaknesses of co-ordination and data in the system. Frankly, it is galling that criminal charges could have been held back by the bureaucracy and box-ticking approach of Government Departments effectively, which were stepping on each other’s toes rather than working together.

Waste crime and landfill tax fraud are cheating the taxpayer out of hundreds of millions of pounds a year, and it is time we got serious about that. Thanks to the NAO, we know that every single year, waste crime in general costs £900 million—the PAC said £1 billion—which is a very, very large number. We should not lose track of the fact that that is an annual cost. And that is without, as it turns out, the costs in Scotland, Wales and Northern Ireland. We do not have the hon. Member for Strangford (Jim Shannon) in his place to raise a point about Northern Ireland, but there are costs there, too. In the current climate, I can only imagine the uproar if that occurred in any other situation.

The right hon. Member for North Durham touched on the importance of HMRC’s joint unit for waste crime. The Government would like to claim it has been a success—indeed, after the first year they said it was a success—but I have to tell Members that I cannot see a single sign of success. It is shameful, frankly. This is where I agree with the hon. Member for Bristol East (Kerry McCarthy) that this is a resource issue. We absolutely need to ensure that, unlike at HMRC before, there is the right legal advice at every stage, the right data at every stage and the right investigative capability at every stage, so that, rather than saving £10,000 here and £10,000 there only to lose £3.5 million on a failed case or £1 billion a year on the system as it is, we actually deal with the issue. The current strategy is penny wise and pound foolish, and in that respect she and I agree.

[Matt Rodda (Reading East) (Lab)]

The right hon. Gentleman is making an excellent speech. Does he agree that the same principle applies—on a much smaller scale, admittedly—to local authorities, which are often inundated with nuisance fly-tipping? I realise that that is on a different scale to the issues he is describing, but it can nevertheless be very distressing for residents and small businesses across many parts of England.

[Mr Davis]

The hon. Gentleman is right. There is almost a generic problem with local authorities. They very often face problems that look intimidatingly large to them, and the temptation always is to penny-pinch—to spend just a little money to see if they can stop it. They fail, and the problem invariably grows. We see that time and again, particularly in this area. This is a separate issue really, but concerns about fly-tipping among the public are as great as they are about waste crime in general. The hon. Gentleman is dead right. My advice to local authorities is always to try and nip it in the bud, because if they are seen as a weak responder, the crime will come to them. That is what will happen.

[Matt Rodda]

I was not seeking to be overly critical of local authorities. I was trying to illustrate the wider point about the Government’s funding of them and some of their powers. We have had an issue with waste on many plots of land in the areas that I represent. Some of that is deposited by people just passing through. The powers seem to be a real challenge for local authorities. Perhaps he will say something about that.

--- Later in debate ---

[Aaron Bell (Newcastle-under-Lyme) (Con)]

It is a pleasure to follow the hon. Member for Blaydon (Liz Twist), whose constituents experienced many of the same problems mine have, albeit a few years before, and to follow two excellent contributions from my right hon. Friend the Member for Haltemprice and Howden (Mr Davis) and the right hon. Member for North Durham (Mr Jones). I was pleased to go with them to the National Crime Agency last year to try to get these issues taken more seriously. I pay tribute to all the work the three Members who have spoken today have done over the years, before I was a Member of this place, to try to get this issue taken more seriously.

It is a serious issue. It is not just the cost to the public purse—that has been spoken about many times already—but the cost to our constituents, and to their lives and physical and mental health. That is what people in Newcastle-under-Lyme have been suffering, as I have repeatedly brought to the House’s attention over many years.

The failure of the investigations and of the ill-named Operation Nosedive only emboldens the people in this space. The firm that operates Walleys Quarry, Red Industries Ltd, had a failed prosecution against them, regarding a separate site of theirs, by the Environment Agency over an incident in which cyanide leaked into the River Trent in October 2009. After many years, the Environment Agency conceded the flaws in its case, which were probably caused by insufficiently advanced legal advice, to which the right hon. Member for North Durham referred. That only emboldened the firm—we can see that if we look at the press releases crowing over the failure of the EA’s prosecution—to think that it can get away with things and that it will not be held to account by those who should hold it to account.

We need to learn all the lessons of Operation Nosedive, the incident in the Trent, and all the other occasions where we have failed to prosecute landfill tax fraud, or other forms of waste crime. The fact that there has never been a successful conviction for landfill tax fraud is astounding when we consider the depth of criminality that we have exposed in the waste industry. I exposed some of it in the Westminster Hall debate that I led on 1 February last year—the right hon. Member for North Durham and my right hon. Friend the Member for Haltemprice and Howden both spoke in that debate and referred to it in their speeches.

Perhaps I can briefly update the House on where we are with Walleys Quarry, because it is germane to the debate—I will not repeat the full history, Mr Deputy Speaker, having already secured Adjournment debates, multiple Westminster Hall debates, a ten-minute rule Bill and all the rest of it. What my right hon. Friend said about the Environment Agency’s fear that action might make the problem worse is well founded. It did monitoring and said, “Nothing to see here.” It was reluctant to do further monitoring until eventually it was forced into it by a combination of me and the council leader, Simon Tagg. Once it conceded there was a problem, the idea that we might take the permit away from these people, who continually fail, was barely even discussed, because it wanted to ensure that the company managed the site. I understand that as a strategy, but it sticks in the craw of all the local residents, who can see what is happening. They can see the trucks coming from hundreds of miles away—from Scotland and the Lake district—to bring waste to Walleys Quarry. They are monitoring trucks going in at the wrong times of the day, dumping before they are supposed to. There are so many little breaches along the way that stick in the craw of people. They know that the site is under investigation, yet the company is continuing to make money from its operations. I know how painful that is for my constituents, who have suffered with living with the odour. Walleys Quarry is particularly notorious for its odour. We have had by far the single worst odour problem in recorded history—I believe that the previous record belonged to a site in Chorley, Mr Speaker’s constituency. Our site has broken all records. We have had four Environment Agency monitoring stations ringed around the site for the last couple of years.

I am pleased to report that the odour is diminishing. That is because of the work that the Environment Agency has compelled the operator to do. As far as it goes, that strategy is fine. However, the second part of the strategy needs to be to throw the book at the operator. It has been issued with multiple breaches in the last few years, all of which have required it to do work and said, “We reserve the right to take further punishment action later.” We are waiting for that punishment action to happen.

In fact, in Newcastle-under-Lyme, we have two investigations going on into Walleys Quarry. There is the criminal investigation, which was announced in December 2021. I understand that that will take a long time because it is complex and many counterparties are involved. It is all about misdescription of waste, which is a much wider problem and investigation for the EA. There is also the regulatory investigation announced in September, which I raised with the Secretary of State at Environment, Food and Rural Affairs questions shortly before Christmas. We need to get some results on that more quickly because regulation should be the EA’s bread and butter. It needs to start holding the company to account for the failures.

The odour problem has been getting better. We are catching more than twice as much gas as we were—we have the figures—and the EA has mandated capping in additional wells. That is not to say that it never smells. It did smell a bit in December, particularly when the temperature fell below zero; those are the conditions where the odour gets a lot worse.

I congratulate Newcastle-under-Lyme Borough Council, under the leadership of Councillor Tagg and chief executive Martin Hamilton, who took the bold step—it was almost unprecedented for a local authority—of pursuing an abatement notice against the operator. It is difficult to do that because prosecuting an abatement notice needs the consent of the Secretary of State; it is a regulated site and it has the permit with the EA. However, the impact on our residents in Newcastle was so severe that the council felt it had to do that. It was able to bring that to a successful conclusion with the operator, who initially appealed but ultimately accepted the decision, following consultation and discussion. I think that was the first proper concession that Walleys Quarry Ltd and its parent company Red Industries has made that its site has been responsible for the unacceptable odour.

We need to get those investigations pursued with all deliberate speed. I am grateful to the EA for giving me a briefing on them on Monday. I appreciate that the Minister is from the Treasury and not from DEFRA, but we do need to see all pressure put on the Environment Agency to get those investigations brought to a conclusion as soon as possible so that my constituents can start to see some justice, some accountability and potentially some compensation, whether through Government or through the class action lawsuit that a number of them are considering, because of the impact on people’s quality of life and health, exacerbating pre-existing conditions such as chronic obstructive pulmonary disease and asthma and exacerbating pre-existing mental health conditions of anxiety and depression. It has been phenomenal. I laid all that out in the Adjournment debate, so I will do not so again today. However, even in the most recent month, there have been more breaches of the permit.

[Matt Rodda]

Does the hon. Gentleman want to say a little about the disruption and concern caused by heavy vehicle movements near the site? That is of huge concern around the country. In my area, we recently had planning permission granted for an incinerator in West Berkshire. The road access is likely to be through Reading town centre. Many of my residents are concerned about that. I would be interested to learn how his colleagues have helped to tackle the problem in Staffordshire.

[Aaron Bell]

I thank the hon. Gentleman for his intervention. That has been a significant problem in Newcastle. There have been accidents on the road outside the landfill caused by lorries backing up along the road. Firms opposite have complained that people have had problems accessing their businesses. An arrangement has been recently made through a variation to the planning permission to allow vehicles on to the site before the 7 am opening time so that they can at least queue on the site rather than on the road. There is also state of the road and the mud that some vehicles have left on it. There is a wheel wash that vehicles are supposed to go through when they leave. It is clear that it has not always been working. The county council has had to write on more than one occasion to the operator demanding that it cleans up the local roads as well. Traffic and the state of the roads are significant issues, and I wish the hon. Gentleman well with his efforts to represent the people of Reading in the situation with the incinerator to which he refers. The impact is not just about odour; it is about the whole operation and its interference with people’s quality of life in the surrounding villages.

As I was saying, there have been far too many breaches and they are still ongoing. Even under intense scrutiny, with four monitoring stations and regular Environment Agency visits—including unannounced visits, which I welcome—the operator is still being found responsible for more and more breaches. I pay particular tribute to Stop the Stink campaigner Dr Mick Salt, who has brought several such breaches to the public’s attention via freedom of information requests.

The operator’s continual failure to comply with the conditions of its permit, even under such intense scrutiny, is staggering. It surely only strengthens the case for stripping it of the permit altogether when the investigation concludes. I will continue to fight for my constituents and fight to ensure that the operator and the EA are both fully held to account and that we get some appropriate action in response to the misery that the landfill has visited on Newcastle-under-Lyme residents, particularly those who live closest.

Let me turn more specifically to the subject of today’s debate: landfill tax fraud, to which I referred in the Westminster Hall last February. The problem, as I said in my intervention on my right hon. Friend the Member for Haltemprice and Howden, is that bad firms are driving good ones out of the industry. I have spoken to legitimate operators in Stoke-on-Trent who are upset that they are trying to do an honest job but cannot compete with the firms undercutting them.

Fundamentally, most people will take assurances from firms that say, “Of course we’ll handle your waste legitimately, don’t worry about that—and here’s a nice price for you.” A lot of people will be guided by that, so the regulator needs to step in. People need confidence that a regulated firm will be regulated. They should not need incentives to go to one firm or another because of ethical considerations; they should be able to trust that any firm in a regulated space is operating honestly and ethically.

As we heard from the right hon. Member for North Durham, the landfill tax differential has gone up to more than £95 per tonne. When the charge was first introduced in 1996, there was only a £5 differential; the rates were £2 and £7. I welcome the fact that landfill tax has reduced the overall amount of waste going to landfill, but it has obviously created strong incentives for misdescription.

Not only is standard waste being misdescribed as inert, but waste is going to landfill that should not be there at all. In the debate last February, we heard examples from a journalist’s research that included cavity wax, arsenic, zinc and even rat poison going into Walleys Quarry. I know that those allegations have been put to the Environment Agency and I am sure that they will be part of the criminal investigation, so I do not want to comment further on them today, but the problem is that charging £100 a tonne for waste is increasingly incentivising misdescription.

--- Later in debate ---

[James Cartlidge]

The hon. Lady will appreciate that that is a DEFRA consultation, but I strongly encourage her to engage with it. She is an assiduous campaigner and contributor to these debates—I think she has been at every debate I have attended—so I pay tribute to her for that. I am sure she will pursue that consultation with interest.

I will talk briefly about the tax gap. My hon. Friend the Member for Newcastle-under-Lyme made the point that there was a spike with the inclusion of unauthorised sites. The latest figures we have, which are for 2020-21, show a gap of 17.1%. That was a fall, but that was partly because the year before was impacted by covid and the year before that we had the spike because of the inclusion of unauthorised sites.

Of course we want to make progress on that, but I speak for the Treasury as a whole when I say that we should be judged as a Government on the totality of the tax gap, because it will vary between taxes; some taxes are fundamentally easier to collect and some are easier to evade. As my hon. Friend the Member for Newcastle-under-Lyme said, the total tax gap was 5.1% in the last year for which we have figures available—a fall from about 7.5% in 2005-06. That is one of the lowest published tax gaps in the world and it has been in decline, which is very positive and shows that overall we are making effective progress, although I agree that we need to make more progress specifically in relation to landfill tax.

[Matt Rodda]

Will the Minister write to me on the related matter of trying to quantify the scale of fly-tipping costs to local authorities, residents and businesses? I appreciate that it is not the subject under discussion, but it is of enormous concern to many people across the country. In my area of Reading, we have huge problems in the town centre and on other sites, often on private land, with enormous cost to neighbouring properties.

[James Cartlidge]

The hon. Gentleman is right that it is not within my bailiwick, but I am happy for my officials to get in touch with him and let him know who is the appropriate Minister.

On waste incinerators, we should acknowledge that energy-from-waste plants have made an enormous contribution: the biggest factor in the reduction in landfill is the use of energy-from-waste plants. In my county of Suffolk, we have a very successful operation. When what would have been landfill is burned, it is used to create energy for homes. That is a joined-up operation and it has made a massive difference.

On joint working, I think it was my right hon. Friend the Member for Haltemprice and Howden who made the point that there was a failure of co-ordination. As he knows, in 2020 we established the joint unit for waste crime in the Environment Agency, in partnership with HMRC, the National Crime Agency and others, to tackle organised waste crime. Through shared intelligence and enforcement, the joint unit is identifying, disrupting and deterring criminals, and I can confirm that between April 2020 and November 2022, the joint unit worked with more than 100 partner agencies and engaged in 175 multi-agency days of action, resulting in 51 arrests by other agencies.

I turn to the report by the Public Accounts Committee, which all colleagues have mentioned. As right hon. and hon. Members know, the National Audit Office and the Public Accounts Committee last year published reports on Government efforts to combat waste crime. Despite the work done to date, the Government are not complacent and recognise that more needs to be done. That is why we accepted and are implementing all the recommendations in the Public Accounts Committee report, “Government actions to combat waste crime”. Importantly, we are not going from a standing start; there are, as I have just demonstrated, a host of multi-agency efforts already under way.

The hon. Member for Blaydon mentioned the landfill tax review. I can confirm that we launched the landfill tax review in 2021 to explore how the tax’s design can continue to support environmental goals. The Government are considering responses to the review’s call for evidence, which closed in February 2022, and we hope to issue a response in due course. The Public Accounts Committee has recommended that DEFRA should work with HMT and HMRC to ensure that the review of landfill tax takes into account the incentives that the tax, as currently designated, creates to commit waste crime. We agree with that specific recommendation and we will look at that factor.

Financial Services and Markets Bill

Matt Rodda Excerpts

Report stage
Wednesday 7th December 2022 Commons Chamber

[Tulip Siddiq]

I always want to listen to experts such as the trade bodies. The hon. Member has a wealth of knowledge in this area, and I accept what he is saying. Overall, the Labour party agrees with a lot of the policies in this Bill, which is why we have given it our wholehearted support. There are some missed opportunities that we feel could have been taken, and I think we could have strengthened our attractiveness for investments, as he is saying—I will come on to that later in my speech. I take his point, which is well made, and I hope the Minister will listen and will respond to it in his summing up.

Turning to my own amendments, I am worried about the lack of ambition in the Bill on strengthening fraud prevention. My new clause 1 would introduce the first national fraud strategy and data sharing arrangement for a decade. The National Audit Office, in its recent report, said that the Government simply do not understand the full scale of the fraud epidemic, despite the NAO calling for rapid action over five years ago. That is a damning statement. UK Finance has found that the Government’s failure to act on the fraud strategy and data sharing has seen the amount of money stolen from hard-working families’ and businesses’ bank accounts through fraud and scams hit a record high of £1.3 billion.

Despite that, in Committee, the Minister urged me to withdraw my new clause on the matter. He told me to be patient, and he told me that there would be a fraud strategy before Christmas. Now he is saying there will be one early next year, but how can we trust him not to kick the can further down the road? So I will be holding the Minister to account. There are only 24 days left until the end of the year, and people whose lives have been ruined by fraudsters cannot afford to be patient any longer.

Following our debate in Committee, leaders from across the financial services sector told me that the Government’s approach of placing data sharing responsibilities on the banks alone was stuck in the last century and allows tech-savvy criminals to get rich at the public’s expense. My new clause would put in place a data sharing arrangement that extends beyond just the banks to include social media companies, crypto-asset firms, payment system operators and other platforms that are exploited by criminals. If the Minister does not listen to the Labour party, I hope he will listen to the National Audit Office, businesses and victims of fraud, and finally give enforcement agencies the powers they need to crack down on criminals by voting for our new clause today. I also hope the Government will support my new clauses 2 and 3 and new clause 7, tabled by my hon. Friend the Member for Mitcham and Morden (Siobhain McDonagh); because we have spent a substantial amount of time speaking about free access to cash I will not elaborate too much on that, but she has our full support.

[Matt Rodda (Reading East) (Lab)]

My hon. Friend is making an excellent speech. Does she agree that new clause 3, on access to banking, is particularly important? For many disabled and elderly people and others with mobility issues, and indeed for small businesses, access to banking as a whole, as well as access to cash, is hugely important; that has been very evident in my constituency.

[Tulip Siddiq]

My hon. Friend is a doughty champion for his constituents. I will speak about that later, but I feel that we politicians have a duty on this: even if there has been a decline in the number of people using cash, there is still a small group of vulnerable people who do so, and they risk being excluded if we do not save free access to cash and face-to-face banking services. We have a duty to our vulnerable constituents, disabled constituents and those from black and minority ethnic backgrounds who still rely on cash.

Greening the Financial System

Matt Rodda Excerpts

Wednesday 30th November 2022 Westminster Hall

[Matt Rodda (Reading East) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Bone. I thank my hon. Friend the Member for Sheffield, Hallam (Olivia Blake) for securing today’s important debate, and I commend colleagues from across the House for their contributions. We are speaking about the most important issue facing humanity and looking at some very specific, important and positive aspects of the contribution that the financial services community can make through wise investment.

I will focus on the potential contribution of the pensions industry in the UK and in other countries. I believe the contribution is entirely positive and should be commended. I praise the work of the Minister I used to shadow, the hon. Member for Hexham (Guy Opperman), who took me to a site where solar farms were being built on reclaimed land, which was previously a landfill site. That is a fantastic example of this type of positive investment, and it illustrates the enormous potential to use onshore wind and solar in the UK to reduce carbon emissions. Pensions investments can be used in a highly constructive way to support and protect the environment and drive this important agenda.

The site that we visited is right next to the M4. It is in Berkshire, but not in my constituency—it is in the constituency of the right hon. Member for Wokingham (John Redwood). It is on a site that used to contain gravel pits and landfill, and the solar panels are next to a motorway, so it is in no way an eyesore or a problem for the local community. In fact, it is an entirely benign development. I believe that there are many more such sites that have enormous potential for solar and onshore wind, and I hope the Minister addresses the Government’s policy on these important issues when he responds.

There is the potential for a win-win: pension savings can be invested constructively in an industry that offers great long-term returns for savers. The industry is aware of that and is working with the Government. What is needed now is a firmer steer from the Government, particularly on the benefits of onshore wind and solar in the UK. They need to make that clear to the industry to help in its planning process and thinking ahead. This area of investment needs a long-term perspective, and greater reassurance from Ministers would be helpful. I urge the Minister to respond to that point. I also reassure Government Members that such sites are plentiful. There is a lot of brownfield land in the UK. There are lots of other sites where solar and wind need not be a visual intrusion to local communities, which may well welcome them as a source of green energy.

On the contribution to pension savings, some funds are actively looking for illiquid long-term investment that can provide a reliable return in the future, and investment in the sector is just what they are looking for. They are looking at similar sectors such as social housing and other forms of infrastructure, but I believe there is particular value in investing in green energy. It would be wonderful if the Minister could do more to reassure the sector when he responds today and, in particular, to move on from the rather negative comments made by some of his colleagues about onshore wind and solar, which have an enormous contribution to make. They are cheaper to deploy than offshore solutions. They also have the advantage of greater accessibility, and are often nearer to the grid. The site that I mentioned was right next to a line of pylons running across the country, so it was easy to plug into the grid, and other sites in other parts of the UK are similar. I hope the Minister will come back on that point.

I appreciate that other colleagues want to contribute—indeed, my hon. Friend the Member for Bristol East (Kerry McCarthy) is due to speak for the Opposition—so I will sum up by urging the Minister to be clear about the Government’s intentions on onshore wind and solar. They can make a very important contribution to this vital issue. There is a real desire on the part of the pensions industry to see that change from Government, so I look forward to hearing what he says. I hope he will be able to reassure us and our constituents across the country.

--- Later in debate ---

[Kerry McCarthy (Bristol East) (Lab)]

It is a pleasure to see you in the Chair, Mr Bone. I see that the Financial Secretary to the Treasury is on her feet in the main Chamber, so we may be interrupted, but let us see how we get on. I congratulate my hon. Friend the Member for Sheffield, Hallam (Olivia Blake) on securing the debate. Having served on the Environmental Audit Committee, I know that this is a complex area. We did inquiries into green finance, and there are many aspects that could be covered.

My hon. Friends the Members for Sheffield, Hallam and for Reading East (Matt Rodda) said that the financial sector needs a sense of stability from the Government—that has obviously been lacking somewhat in the past year, if not previously—so that it knows what the future direction is and feels safe in taking a long-term perspective on investments. As my hon. Friend the Member for Reading East said, pension funds very much need a firm steer from the Government on where policy is heading. My hon. Friend the Member for Sheffield, Hallam talked about the lack of investment in green infrastructure, whether it be transport or home insulation—she mentioned many things. That is because, again, the market does not have confidence that that is where it should put its money. I hope that can be rectified.

I was interested to hear what the hon. Member for Rother Valley (Alexander Stafford) said about the APPG report that is due out tomorrow. I was not aware that that work was in progress, and will certainly be reading it. It is sad that we lag so far behind the EU on green taxonomy. Anything that we can do to root out greenwashing would be appreciated across the board.

As the indefatigable hon. Member for Strangford (Jim Shannon) said, we very much agree on the nature side of things; we agree on quite a few things, perhaps surprisingly. He talked about the Amazon, as did the right hon. Member for Epsom and Ewell (Chris Grayling), who I know is doing good work with the APPG on global deforestation. It is crucial that UK financial institutions are not contributing to that by financing such activities in the Amazon and other places around the globe, and we should definitely seek to stamp that out in supply chains.

The hon. Member for Strangford also talked about EV charging points, a subject that is dear to my heart. Most people who own EVs know the pain of trying to charge at a public charging point, particularly if they have to venture into rural areas. Reliability used to be the issue, but now it is that everybody else wants to charge at the same time. I had to head down to Somerset at the weekend for work reasons, and I was in that situation. It is said that in England, we are never more than 20 miles from a charging point, which is not necessarily okay because we might get there and find we cannot use it and then have to drive another 20 miles. In Northern Ireland, it is 50 miles. We will inevitably get private sector investment where there is quicker market return—in other words, where there are more people to use the charging points and where there is that critical mass. The Government need to do more to pump-prime the market in rural areas and ensure that the public infrastructure is there. That can be done with the help of private finance, but the Government need to step in.

The contribution that the City makes to the UK economy cannot be overstated. It represents 8.3% of all economic output. It is one of our most successful exports and has been so for centuries; it has been at the heart of our economic life. Some people think there is a disconnect between what they call the real economy and the City, but allowing the City to thrive will deliver the tax receipts we need to repair our public services, to support people through the cost of living crisis, and to spearhead and finance economic growth.

Labour is committed to supporting the City to retain its competitiveness on the world stage. We support the principle of a new secondary statutory objective for regulators that prioritises both nature targets and long-term growth, but that in itself is not enough. We need to do more to harness the power of the City to drive growth in the real economy, and that means putting the right incentives in place for financial services to provide capital, credit, insurance and other services to firms in every sector and every region and nation of the UK.

Of course, sustainable growth in the 21st century means green growth. Climate change is the defining social challenge of our times, and we have seen this year what happens when we are overly reliant on fossil fuels and foreign dictators for our energy needs. Globally, the risks associated with climate change from the ever increasing frequency and severity of extreme weather events will require insurance and reinsurance, as well as sustained investment in climate adaptation.

Labour does not see the transition to a green economy as a risk. We see it as an opportunity for both the City and the wider economy to reverse over a decade of stagnant growth and to create hundreds of thousands of green jobs. The financial services industry will have a key role to play. As my hon. Friend the Member for Sheffield, Hallam explained, UK public financial institutions such as the UK Infrastructure Bank must be aligned with predetermined sustainability aims and objectives.

There are numerous examples of the financial sector already supporting green innovation in British industries, yet too often businesses—especially SMEs—struggle to access the green capital they need. That goes back to what I was saying about the lack of market confidence to invest in the green transition. Leaving aside the political and economic instability of the past year, there have been specific moves by the Government that have undercut market confidence. In 2013, for example, the Government cut energy efficiency programmes, which saw home insulation rates fall by 92% in that year alone.

[Matt Rodda]

My hon. Friend is making an excellent speech. I just want to draw out some detail in relation to that final point from my constituency. It is a tragedy that the Government have made that mistake, because there are many people—often older people—living in terraced houses who do not have adequate home insulation. They have been failed by the Government, and that is a real tragedy.

[Kerry McCarthy]

Yes, and if the Government had kept that home insulation programme, they would now be having to spend a lot less money on bringing down energy bills, because people would be saving hundreds of pounds a year by having warmer homes.

There was a series of sudden changes to low-carbon energy policy in 2015 that undermined investment confidence. The moratorium on new onshore wind programmes in 2015 effectively destroyed the market. In the same year, the Government slashed solar subsidies, causing a huge crash in private investment. We are still not quite sure where the Government are on onshore wind or, indeed, on solar. There is the move to reclassify grade 3b agricultural land, bringing that out of solar use. As we have heard, the Prime Minister has not been able to give an answer, and at Business, Energy and Industrial Strategy questions yesterday, the Business Secretary was not able to give a clear line on onshore wind. I know that a vote will happen soon if a consensus is not found, but the market wants confidence. It wants to know whether it is time to invest in things such as onshore wind. That does not mean just a temporary lifting of the ban, subject to local consent; people need a long-term vision to be able to do this.

The Prime Minister did not inspire confidence in his initial approach to going to COP27; he was eventually dragged there. On the issue of international climate finance, there was the groundbreaking announcement of a loss and damage fund to assist developing countries, in response to the damage that they have incurred through climate change. There was a call for financial institutions to raise the ambition, to change the models and to create new financial instruments to increase access to finance. We ought to be at the heart of that global transfer of funds from developed countries that have polluted to countries that need support. Yesterday, I was with representatives of the overseas territories who are really struggling to get finance just to switch from fossil fuels to renewable energy production in what are very small territories. We ought to be looking to support that through finance from the City of London.

The Government promised radical action on a green transition, and we were promised that the UK would become the world’s first net zero financial centre. Instead, as we have heard, we are falling behind global competitors. A recent report from the think-tank New Financial revealed that in both share and penetration of green finance in capital markets, the UK is a long way behind the EU. It found that green finance penetration in the UK is at half the EU level and roughly where the EU was four years ago.

I will say this very briefly, particularly because we are expecting the Division bell to go. Labour has given clarity through its green prosperity plan: £28 billion a year until 2030 for green investment. It is that sort of certainty that the Government need to adopt.

Finance Bill

Matt Rodda Excerpts

Committee stage
Wednesday 30th November 2022 Commons Chamber

[Victoria Atkins]

We acknowledge that there may be people who receive very small amounts of capital gains—through historic investments in shares, for example—but for some there is also an element of risk taking, perhaps when they are starting their own businesses. We want to reflect that, but we are mindful of the need for a closer relationship between the two systems, which is why we have tried to achieve a fair balance between those who earn their incomes through paid employment or self-employment and those who obtain theirs through dividends and capital gains.

Clause 9 maintains the current levels of inheritance tax thresholds for two years longer than previously planned, until 2028. Despite these changes, qualifying estates will still be able to pass on up to half a million pounds tax free, and the estates of surviving spouses and civil partners will still be able to pass on up to £1 million tax free. More than 93% of estates will continue to have no tax inheritance liability in each of the next five years; only 6% are expected to have a liability in 2022-23, and it will still only be 6.6% in 2027-28.

Let me now turn to the clauses relating to the taxation of electric vehicles. The transition to EVs continues apace, with new electric car registrations increasing by 76% between 2020 and 2021. Given the OBR’s forecast that 50% of all new vehicles will be electric by 2025, it is right that we seek to bring those vehicles into the motoring tax system.

[Matt Rodda (Reading East) (Lab)]

Can the Minister update the Committee on what research is being carried out by her colleagues in Government on the future impact of this measure? There has been a healthy take-up of electric vehicles so far, but she has not mentioned the future.

[Victoria Atkins]

I shall come to that in a moment, but we have been committed since 2020 to supporting the transition to electric vehicles; in fact, we have committed ourselves to £2.5 billion of support. We are giving the industry certainty about the scale of its ambitions through the zero-emission vehicle mandate. We will continue to incentivise low-emission vehicles through the company car tax, to which I am about to refer. We already publish data on air pollution, electric charging infrastructure and vehicle registrations by fuel type. That information will be available for the House to scrutinise—and, indeed, available to anyone who is interested—over the coming years.

Clause 10 will equalise the vehicle excise duty treatment of electric, petrol and diesel vehicles from April 2025, applying to both new and existing electric vehicles. The VED system will continue to support the transition to electric vehicles through favourable first-year VED rates for the lowest-emission vehicles, and owners of new zero-emission cars registered on or after 1 April 2025 will be liable to the lowest first-year VED rate, which is currently £10 a year. From the second year of registration onwards they will move to the standard rate, which is currently £165 a year. The expensive car supplement exemption for electric vehicles is also due to end in 2025. Eligible new vehicles, which are currently those with a list price exceeding £40,000, will therefore also be liable for the supplement. Those changes will raise more than £1.5 billion a year by 2028.

However, we continue to provide, and want to provide, appropriate incentives for the transition to electric cars. Clause 11—here I come to the point raised by the hon. Member for Reading East (Matt Rodda)—therefore makes changes to secure long-term certainty on company car tax rates, which have been effective in incentivising the take-up of low and zero-emission vehicles. According to figures from the British Vehicle Rental and Leasing Association, about 60% of electric vehicles on UK roads are company-registered. We have tried to ensure that that continues by increasing the appropriate rates up to 2028, and in a modest fashion. These rates are used for the purpose of calculating the taxable benefit of a company car, and we are setting them out now to provide certainty about the tax incentives available for the transition to electric vehicles. This measure supports the continued take-up of lower-emission vehicles and, therefore, our broader commitments on climate change and air quality.

--- Later in debate ---

[Matt Rodda]

I thank the Minister for her extensive description of the current policy, but it still appears that the Government are not yet planning to assess the likely decline in the take-up of electric vehicles as a result of the tax changes. Will she please write to me to clarify the position?

[Victoria Atkins]

I will happily write to the hon. Gentleman, who I know takes a close interest in this issue, but I must challenge the assumption that the measure will lead to a decline in the take-up of electric vehicles. This is an example of the Government’s boosting interest in electric vehicles at quite a delicate stage in their development. I say that as a proud early adopter of an electric vehicle—and even a few years ago, the number of charging points was far lower than it is now.

Of course there is much more to be done over the coming years, but I think the public will begin to gain even more confidence in the range of electric vehicles, especially as companies are able to improve their range and we build an infrastructure of charging points around the United Kingdom. That in itself will help to encourage take-up, along with, of course, the bold commitment to prohibiting the sale of new petrol and diesel cars in 2030. We wanted very much to encourage this in its early days, but we think we have now reached a stage at which the 7 million or so electric vehicles on the road should be contributing their piece towards keeping the road network in the state that we would expect.

Finance Bill

Matt Rodda Excerpts

2nd reading
Monday 28th November 2022 Commons Chamber

[Clive Efford (Eltham) (Lab)]

I was struck by a quote I read a while back of the head of the Institute for Public Policy Research centre for economic justice, as it sums up the problem we face as a country:

“There is a massive structural flaw in the economy that whatever the economic shock the wealthier get wealthier. If we’re going to get the whole economy into recovery, and leave no one and nowhere behind, we need to change this. Societies that are so unequal are bad for everyone and policymakers need to address this dangerous gap, or risk people losing trust in our economy and democracy.”

At the core of that problem is the way we treat wealth in our taxation system. In an earlier intervention on the Minister I mentioned that the National Audit Office says that the total the Government invested in the economy during covid was £368 billion, which is roughly equivalent to £5,600 per head. Whichever Government had been in office at the time would have done something similar; they would have introduced a furlough scheme and helped businesses. That happened under the last Labour Government when there were crises: we stepped in on foot and mouth and the banking crisis, so forms of assistance were put in place. I therefore accept the assistance that the Government put in place, and I am not arguing about it, but it is ridiculous for the Government to argue that that money was paid and is now in the bank accounts of the people who received money during furlough or of the businesses who received assistance. It was paid to those individuals and businesses and it was used, and it has therefore moved on in the economy. That is £368 billion that has gone into the economy, and my question is: where is it now?

Most analyses of what happened in covid that are worth reading find that the wealthiest did extremely well during covid, so my question to the Government—and I would ask this of any Government—is this: what do we do about that? These people were already wealthy and now they are getting even more wealthy, which will drive the inequality the Government themselves say they want to deal with through levelling up.

[Matt Rodda (Reading East) (Lab)]

My hon. Friend is making an excellent speech. Is he, like me, thinking about all the people who wrongly profited from selling personal protective equipment to the Government and the lack of proper assessment of some of those offers of help and the lack of proper procurement processes being followed? Does he agree that many ordinary members of the public and NHS staff found that quite wrong?

[Clive Efford]

My hon. Friend’s intervention speaks for itself and I absolutely agree; that is an example of where this Government go wrong by treating the wealthy differently from others.

During covid, the number of millionaires and billionaires grew; we have the highest number of billionaires ever in The Times rich list and their combined income during that period grew by one fifth. So we can clearly see that inequality has been turbocharged by the money the Government put into the economy. I do not criticise the Government for putting that money in, but I do ask: where is that money now, where are the people who have benefitted most from it, and should they not, with their broad shoulders, bear more of the burden?

We have consistently had low growth over the last 12 years under Conservative Governments. The Resolution Foundation’s recent report “Stagnation Nation?” found that in each decade from the 1970s real wages rose by an average of 33% until 2007, but that that fell to below zero in the 2010s. So today average household incomes are 16% lower in the UK than in Germany and 9% lower than in France, having been higher than both in 2007. Under the Conservatives there has been a consistent shift of wealth from average household incomes to the wealthiest in the country. The policies they have pursued have been driving inequality, and my point is that until we reform how the taxation system deals with wealth we will not address that growing divide between those at the bottom and those at the top. This Finance Bill completely fails to address that problem.