Working People’s Finances: Government Policy
Patricia Gibson Excerpts(2 years, 7 months ago)
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Patricia Gibson (North Ayrshire and Arran) (SNP)
There is no doubt that we are facing a cost of living crisis, with universal credit to be cut by £20 a week, negatively impacting 10,406 of my constituents and 400,000 people across Scotland; with a national insurance hike hitting those on the lowest incomes; with energy prices expected to soar by at least £139 for millions of households; with 16,500 jobs in Scotland still on furlough—that is 5% of all those who were furloughed; with exports from the UK falling by a staggering €16 billion, down 17.1% in the first seven months of this year; and with the ending of free movement disrupting supply chains and leading to empty supermarket shelves and higher prices. I could go on, but it really does feel like the end of days.
I would like to take this opportunity to pay tribute to the Ardrossan, Largs and other food banks in my constituency and to all the voluntary organisations that are supporting those in North Ayrshire and Arran who are in financial distress and who will fall into financial distress as a result of the universal credit cut. Apparently, though, it seems that none of the soaring prices and empty supermarket shelves are a consequence of Brexit. No, they are a consequence of covid, or the problem is global, or it is the bogeyman! It is the fault of anything or anyone except the rabid Brexiteers on the Tory Benches.
Of course there are global issues at play, but to suggest that the disruption to our economy is nothing to do with Brexit is complete nonsense. We have a shortage of HGV drivers, food packers and staff in food processing plants, and it is time that that was faced up to. I was told yesterday by the Secretary of State for Business that there was no point in talking about the consequences of Brexit, as that would be re-fighting the battles of five years ago. That might explain why we are being told that Brexit has nothing to do with our empty supermarket shelves, which incidentally no country in the EU is experiencing. Global factors apparently affect the UK uniquely.
We can all understand the scepticism with which the Business Secretary’s words were met yesterday when he said there will be no energy shortage this winter. The truth is that we cannot believe a word this Government say. This is the Government who told us there would be no food shortages, no price rises and no fall in exports. The sunlit uplands that they presented as their vision of Brexit have become the nightmare about which we warned.
The harsh and cruel reality is that food prices are up, energy prices are up, inflation is up, pensioner poverty is up, child poverty is up and taxes are up, regressive as they are, and the Tory response to this cost of living crisis is to cut universal credit. Today’s debate is about poverty, which prevents people from reaching their potential and prevents children from achieving their best in school. It robs people of their good mental health and of their physical health. It is corrosive, it grinds people down and, ultimately, it kills them. I remember when this Government used to pretend to care about the just about managing, but now they seem to care for the just about managing just as much as they care for those who live in deep poverty.
Today we hear that the National Audit Office has discovered that the Department for Work and Pensions underpaid 134,000 pensioners by a total of more than £1 billion in state pension, and of course women are disproportionately affected. With the energy price cap rise, it will be a cold winter for many of my constituents in North Ayrshire and Arran, but it has been wilfully and deliberately made colder by this Government’s £1,040 a year cut to universal credit. Shame on them. Their callous disregard for poverty shows with crystal clarity that the Conservative party is not fit to govern.
It would be laughable if it were not so serious. This bumbling Prime Minister pledged to restore trust in our institutions and in how our democracy operates. That is big talk from a Prime Minister who breaks pledges with ease, who is struggling to keep the lights on and who has insisted, despite the evidence to the contrary, that child poverty is falling. That view is brought to us by the same Prime Minister who said Brexit would lower energy prices.
I remember when, in 2012, the right hon. Member for Mid Bedfordshire (Ms Dorries) dismissed the then Prime Minister, David Cameron, and the then Chancellor, George Osborne, as “two arrogant posh boys” with
“no passion to want to understand the lives of others.”
I ask anyone sitting on the Conservative Benches if they would care to tell me what has changed. If it was true of the Prime Minister and the Chancellor then, by God how much truer is it now? I wonder what Conservative Members think of that.
The Prime Minister said today—this will put the fear of God into the House—that it will not be a tough winter. Let us hope he is right about something for once in his life, because we know that for too many in our constituencies it will indeed be a tough winter. This Government are not fit to govern and their so-called global Britain is not just an illusion but a laughing stock. It is a hallow phrase that means nothing to those who are struggling, and it is why so many of us in Scotland are sick to the back teeth of this cruel, nonsensical incompetence. We can and will take our future into our own hands and build a fairer, more equal, more compassionate society in an independent Scotland. We can then start to see what levelling up really looks like, instead of the shoddy window dressing we see before us.
Oral Answers to Questions
Patricia Gibson Excerpts(2 years, 7 months ago)
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Alan Brown (Kilmarnock and Loudoun) (SNP)
Patricia Gibson (North Ayrshire and Arran) (SNP)
The Chief Secretary to the Treasury (Steve Barclay)
Her Majesty’s Treasury analysis published alongside Budget ’21 has shown that policy interventions in response to covid-19 have, on average, supported the poorest working households most as a proportion of pre-pandemic income.
Steve Barclay
Well, I think we should look at what my right hon. Friend the Chancellor has done. I touched a moment ago on how the covid measures have protected the poorest working households the most. Alongside that, the Budget measures on tax, welfare and spending decisions made since 2019 have, on average, benefited all households this year, with the poorest gaining the most as a percentage of net income. That is the approach that my right hon. Friend the Chancellor has taken and it is one that the Scottish Government should follow.
Patricia Gibson
According to Save the Children, more than 3 million children living in low-income households across the United Kingdom are likely to be affected by the £20 universal credit cut, with half of claimants saying that they will face significant financial impacts as a result and one in seven worrying about affording food. The Joseph Rowntree Foundation says that the cut will push 500,000 people below the poverty line. Will the Minister explain how this squares with the Government’s so-called levelling-up agenda?
Steve Barclay
A key way to tackle poverty is to get people into work and then skill them up in their jobs. That is what we have set out through the plan for jobs, and that plan is working. Ultimately, if that is the priority of the Scottish Government, why are they not using the powers they have to prioritise it?
Covid-19: Household Debt
Patricia Gibson Excerpts(2 years, 9 months ago)
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Patricia Gibson (North Ayrshire and Arran) (SNP)
Like so many, I begin by paying tribute to the hon. Member for Makerfield (Yvonne Fovargue) for securing this important debate. We can all agree that with many households having suffered a prolonged fall in income as a result of the pandemic and with unemployment rising, the problem of household debt is increasingly worrying, with 14 million people having undergone an income shock over the course of the pandemic.
We have heard much today about the charity StepChange, which I am sure we all want to pay tribute to. That charity has found that 4.3 million people are now behind on basic bills such as rent, fuel or council tax, with 2.8 million people now borrowing simply to make ends meet, accessing high-cost credit that means they are more likely to be locked into a cycle of debt in the longer term. Indeed, 2.4 million people are facing long-term debt problems, which inevitably means that increasing numbers of people will face the threat of eviction and homelessness down the line.
One of the great injustices that people face in every constituency across the UK is having to pay more for their essentials, and we have heard much today about the poverty premium. The cost of accessing credit can be considerable for some people in our communities, trapping them in high-interest debts that so many of them will find difficult to manage and almost impossible to escape. As we work to emerge from this health pandemic, it is very important that inclusion is baked into all essential services, so that the pricing of all products and services is fair to all users. When necessary and appropriate, the Government should regulate the market to make sure that that happens. The poverty premium is simply an unacceptable burden on those who are already struggling. The capping of interest rates is a very interesting idea, and I hope that the Minister will look carefully at it.
As we all look forward to a return to some kind of normality, those who have fallen into covid-related rent arrears face the very real prospect of losing their homes, and some are already facing eviction notices. With household debt linked to covid soaring to crisis levels, the chief executive of the debt charity StepChange has urged the Government to bring forward a long-term vision for those financially affected by the pandemic, to avoid the danger of lasting economic and social damage that will deepen inequality and act as a drag on any economic recovery. If there is to be the kind of covid recovery that we all want to see, it must be a recovery for all of us. We have a real opportunity to use the experience of this health pandemic to look again at how we do things; how we deal with the glaring inequalities that we all know exist; and how we can be more inclusive.
However, we cannot do that when so many people in my constituency of North Ayrshire and Arran and across the United Kingdom have lost their jobs or suffered an income shock that has driven them into debt—sometimes unmanageable debt—to help pay for essentials, which now threats to overwhelm them. Let us be clear: when people get into debt to pay for essential items, that debt is not born of profligacy, but of poverty. With many navigating the income shock that they have suffered and doing the best that they can—not least the 3 million who have been excluded from all financial support by the Government—this is not the time to pull back on the £20 per week universal credit uplift, nor is it the time to withdraw furlough payments before businesses have had the time to properly scale up their operations post-lockdown, which threatens potentially thousands more jobs.
Creativity and compassion are needed to ultimately address the debt and poverty crisis. In Scotland, the re-elected Scottish Government are using all the powers they have to alleviate poverty, which so often drives people into debt. For example, they have reached an agreement with local authorities to introduce universal free school meals for all primary 4 children, starting in August, as part of a £520 support commitment made to low-income families. A further £100 payment was made to coincide with the start of the summer holidays—which, in Scotland, is at the end of June—in addition to the £100 paid at Easter. A new school clothing grant has been announced to help low-income families with the cost of school uniforms: available each year, it has been increased from £100 to £120 for eligible parents with children in primary school, and to £150 for secondary school pupils.
A new £10 million grant fund has been established to support tenants who have fallen into arrears as a direct result of the pandemic. That is a unique scheme established to address this problem and a doubling of the game-changing Scottish child payment and the extension of free school meals in this Parliament, using every power at our disposal to tackle child poverty, which will disgracefully be undermined by the universal credit cut of £20. It is the kind of creative response that we need in order to help hard-pressed families. As the Scottish Government use all the limited powers that they have to address these issues, how much more could the UK Government do, with their control over a full gamut of powers, to create a more equal and socially just society? If that does not happen, the substantial inequalities that we currently see all around us will become even more marked, making our society less cohesive.
We are sitting, as a society, on a debt time bomb. In every constituency across the UK, people are living with constant worry about debt that they simply cannot see their way clear to paying off, not because they have been profligate or are living an enviable lifestyle, but because they have suffered an income shock through no fault of their own. They still need to feed their children, to consume energy and to pay for essentials. It is important that support is put in place for such people. Alongside this, the current plans to start withdrawing support, such as the universal credit uplift and furlough, are very worrying, as that can only exacerbate the current pressures and hardships that so many people are facing. I therefore urge the Minister to look carefully at all the concerns raised today and to bring forward the measures necessary to mitigate the misery that debt causes to families and, ultimately, wider society. Otherwise, the mantra of “building back better” will be empty and hollow words when so many are left behind.
Covid-19: Government Support
Patricia Gibson Excerpts(2 years, 9 months ago)
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Patricia Gibson (North Ayrshire and Arran) (SNP)
I echo the thanks and appreciation to my hon. Friend the Member for Midlothian (Owen Thompson) for securing this debate and for the comprehensive way in which he set out the challenges faced by too many people. More than 3 million people went to work every day to pay their bills and to look after their families, only to find that when coronavirus took hold, the Government built a lifeboat called furlough—but they were not allowed a place on that lifeboat. In what at times appeared to be an act of random cruelty, they were left without support for themselves or their families.
When those people complained about their concerns, or their elected representatives did so on their behalf, the Government simply responded by pointing out all the support that was available for other people, as though the excluded could be comforted by the fact that their exclusion from support would be made more bearable by knowing that others had received support. I sincerely hope that the Minister does not repeat that bizarre cycle when he gets to his feet.
In fact, the self-employment support scheme failed to help most self-employed workers, with many left out in the cold. As the Government gradually withdraw furlough support—too early in my view and that of many others—it is clear, and has been for some time, that the excluded are to remain so. They have been left to manage as best they can.
On 25 March 2020, the Prime Minister promised to put his
“arms around every single worker”.—[Official Report, 25 March 2020; Vol. 674, c. 334.]
But he did not and he has not, despite all entreaties to do so. Now, we face a summer of redundancies, as furlough has started to be eased back before firms have had the time to scale up. Families will fall further into debt and many will fear losing their homes, while we see the scandal of lucrative covid contracts for pals without formal processes, as well as all the other questionable practices that were set out in the House of Commons in a debate earlier this afternoon.
It makes no economic sense to force people on to benefits rather than support them with assistance that might just enable them to keep their businesses and their jobs up and running, helping them to reach a point where they can again start to generate tax revenues. It is bad enough that millions were excluded from Government support, but if the purpose of furlough was to save jobs, as we were told, removing it before businesses have had time to scale up their operations runs counter to that aim. The Minister should reflect on that. I urge him to urge the Chancellor to tread carefully and realistically when people’s livelihoods are at stake.
The Financial Secretary to the Treasury (Jesse Norman)
It is pleasure to serve under your chairmanship, Mr Mundell. I am grateful to the hon. Member for Midlothian (Owen Thompson) for bringing the debate to Westminster Hall and to colleagues across the House for their comments and remarks.
I have been very struck by the difference in tone among the contributions made. There has been a lot of denunciation, but there has also been a rather fair-minded strand of discussion that acknowledged the extraordinary circumstances in which we as a nation have been placed, and the scale and effectiveness of the Government’s interventions. I particularly thank my hon. Friend the Member for Somerton and Frome (David Warburton), the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) and the hon. Member for Stirling (Alyn Smith) for their fair-minded engagement with the issue.
If I may, I will talk a little about where we are and then come to the questions raised by colleagues. Let me be perfectly clear—it is important, as the hon. Member for Midlothian and others mentioned, for us to be tonally clear—that the Government absolutely understand the depth and difficulty of the situation that people have faced throughout the pandemic. That is why we have tried to support as many people and businesses as we possibly can, and to do so as quickly and as effectively as possible. The hon. Gentleman was highly dismissive of that, but actually, I am pleased to say that other hon. Members were not; they recognised that the Government provided a very wide-ranging package of national financial assistance worth over £350 billion, and that international commentators have recognised that. I think of the International Monetary Fund, which described it as
“one of the best examples of coordinated action globally”.
Those packages and bits of concentrated but wide-ranging support include the coronavirus job retention scheme—CJRS—which has supported 11.5 million jobs since its inception, and the self-employment income support scheme—SEISS—which has so far provided grants to almost 3 million people.
Jesse Norman
I am not giving way; I am sorry. I have no time whatever and I want to respond to all the comments made in the debate.
It is understood that the schemes continue to be the most generous of their kind in the world, and it is recognised by all fair-minded people that as restrictions start to ease, economic activity and demand will pick up. The Government need to tailor support accordingly, and that is why—I refer to the hon. Member for Edmonton (Kate Osamor)—we have announced that the fifth and final SEISS grant will have the value of the grant determined by a turnover test. That is because of the need to target support towards those most affected by the pandemic. I do not think that is a principle that people should wish to contest, given the overall financial impact of the crisis on taxpayers. For that reason, in relation to CJRS, we have also introduced an employer contribution.
Let me focus for a moment on the effects of that set of interventions. In its May forecast, the Bank of England projects the economy to return to its pre-crisis level by the end of the year—significantly earlier than previous forecasts. At the start of the crisis, forecasts suggested that unemployment would reach 12% or more. The numbers are now close to half that, which could mean almost 2 million fewer people losing their job than originally feared. We hope it must be so.
The five SEISS grants combined will have provided individual claimants with support of up to £36,570. That makes clear the scale of the support. I recognise, of course, that some people have not been eligible or not been able to receive support from those schemes. That is why so many other aspects of the interventions, including the support for local authorities, have been put in place.
If I may, let me pick up on some of the points made by colleagues. It was suggested by the hon. Member for Midlothian that the Government were somehow dismissing solutions that have been put in front of us by reputable independent groups for, as he put it, “spurious reasons”. Nothing could be further from the truth. As the hon. Member for Caithness, Sutherland and Easter Ross recognised in another context, we have leant into all those debates.
We carefully scrutinised the TIGS and DISS—target income grant scheme and directors’ income support scheme—proposals. In different meetings, I have met groups including the Federation of Small Businesses, ForgottenLtd, ACCA—Association of Chartered Certified Accountants—the gaps in support group, the Refused Furlough Group, the maternity petition campaign, Forgotten PAYE and a host of others. We will continue to entertain, and we very much welcome, thoughtful interventions designed to help us, recognising the constraints under which we operate.
The trouble, as I think colleagues understand, is that we are caught by the need to put in place schemes that respect fraud and error concerns. Let me remind colleagues, including the hon. Member for Glenrothes (Peter Grant) who raised this, that the very people who would denounce the Government for failing to extend support would themselves be the very ones to denounce the Government if it turned out that the fraud and error incurred by overly expensive support were to lead to a loss of revenue to the taxpayer. People cannot have it both ways. We are trying to bend over backwards to support those groups, and in many respects we are doing so.
Let me pick up a few other words. The hon. Member for Midlothian talked about “straw-manning”, but nothing could be further from the truth. There is no suggestion on my part that any limited company director is a fat cat—absolutely not. We recognise that in many cases those are extremely effective individuals. What we are trying to do is find an effective way to meet all the constraints I have described when supporting the wide range of people who have been affected.
The hon. Gentleman talked about debt management. Let me remind him that we have put in place a pioneering VAT deferral new payment scheme and that HMRC has made it clear that it is trying extremely carefully to manage the impact of different tax schemes and tax reliefs, and the withdrawal of those reliefs, on different groups.
The hon. Gentleman talked about whether the Government will show appreciation for the charities that support people through the crisis. Of course we will. We have expanded support for voluntary and charitable groups with HMRC. We very warmly support and recognise—and, as I said in another context, I work closely with—the Low Incomes Tax Reform Group, specifically trying to support people on low incomes. Of course we are working as hard as we can, and we have been for 15 or more months, to make things work.
Let me pick up a couple of important points made by other colleagues. The hon. Member for Stirling kindly referred to the work that the Government have done. He acknowledged, rightly, that the devolved Administrations and local authorities do have resources in part—they are heavily resourced by UK Government. In many cases, they have the capacity to amplify and extend their resources through local taxation of their own. That flexibility is one that they may wish to use in support of local people. I would support and welcome that as an exercise in devolved responsibility. With that, let me sit down.
Levelling-up Agenda
Patricia Gibson Excerpts(2 years, 10 months ago)
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Patricia Gibson (North Ayrshire and Arran) (SNP)
I thank the hon. Gentleman for Isle of Wight (Bob Seely) for securing this debate. Although the sentiments behind the levelling-up fund are laudable at first glance, it has a profound and far-reaching effect on the devolution settlements and the democratically elected Governments of each of the devolved nations. Alongside the UK shared prosperity fund, which also breaches the devolution settlements and UK Government promises, the way in which the levelling-up fund is to be administered encroaches on devolved areas in unconstitutional and unacceptable ways.
It is all very well for the UK Government to huff and puff and protest that the devolved nations should shut up and be grateful for the boundless munificence of their paternalism, but funding should not be tied to riding a coach and horses through the democratically elected Governments of these nations, and nor should it be designed to undermine the democratically established Parliaments in each of these nations.
For the UK Government to reject that analysis plays to the agenda not of levelling up but of exerting undue power and influence over democratic instructions, the very existence of which is due to democratic support for them. These Parliaments in Wales and Scotland were designed, in part at least, to address the democratic deficit that has existed between those nations and Westminster Governments. How does attempting to circumvent, undermine and emasculate those institutions address that democratic deficit?
Yesterday the Minister for Regional Growth and Local Government gave the game away, because he accepted that there is no formal requirement for local authorities to work with the Scottish Government on devolved policy areas, and that this levelling-up fund is
“about local authorities and communities working directly with the UK Government”.—[Official Report, 14 June 2021; Vol. 697, c. 13.]
Given that this work goes to the heart of devolved powers, that is quite an admission. The idea that each different local authority will submit bids for much-needed funds does not in any way negate the cynicism and political opportunism in the way in which this fund is being distributed, as indicated by my hon. Friend the Member for Kilmarnock and Loudoun (Alan Brown). This is piecemeal stuff, with no strategic thinking whatsoever.
The Scottish Government expected £400 million in consequentials from this fund, but that is now to be decided by the UK Government sitting in Whitehall. How that money will be deployed across local authorities is a nonsense and offensive. There will be no opportunity for a regionalised, Scotland-wide approach. The competitive nature of this process will set authority against authority, while we know that the most effective way of boosting local economies requires collaborative working.
Why does the Minster believe that Ministers and civil servants in Whitehall, with little or no detailed knowledge of Scotland or her local authority areas, are equipped to judge the merits of competing bids? If levelling up was truly the agenda, why would they not build into that process the strategic expertise of the Scottish Government and local MSPs? Funding should be allocated by formula instead of competitive bidding. That would improve transparency and guarantee support for those places most in need, as pointed out by the right hon. Member for Dwyfor Meirionnydd (Liz Saville Roberts), representing Plaid Cymru.
As it stands, bids will be at the mercy of the whims of this Tory Government and which local authorities are able to submit the best bid—not those most in need. Given the towns fund, will the bids be judged according to which are considered to be the best—whatever that means? Who knows? There is every reason to fear that the bids may be subject to the same pork barrel politics that we have seen in all its glory in the towns fund.
Despite the fact that the Tories have a majority on the Public Accounts Committee, it has delivered a damning verdict on the Tory towns fund, saying that the Ministry of Housing, Communities and Local Government has
“not been open about the process it followed and it did not disclose the reasoning for selecting or excluding towns”
for funding. Despite the Government’s refusal even to acknowledge that and other damning verdicts and concerns about the Tory towns fund, we are now expected to believe —and, better still, trust—that the levelling-up fund will be shiny, new and bright and we need not worry about transparency because, as the Minister for Regional Growth and Local Government said in the main Chamber yesterday:
“The answer to that is that it is all published on gov.uk and it has been for months now.”—[Official Report, 14 June 2021; Vol. 697, c. 14.]
I do not know about you, Sir Edward, but if it is published on a website, I am certainly reassured.
The fact is that this Government have shown that they cannot be trusted to deliver this funding in a transparent way and it has been deliberately designed to undermine the devolved Parliaments. The good people of Scotland and Wales are not so easily fooled as the Tory Government seem to think, which is why they reject Tory Governments repeatedly—at every opportunity. Since the Brexit vote took place, this Government have taken to themselves the power to take decisions on spending, economic development, infrastructure, culture, sporting activities, domestic educational and training activities and educational exchanges, and this fund will further allow the UK Government to bypass devolved decision making and override the democratic process for allocating spending in Scotland. That means that more than £100 million a year could be spent in areas that are usually devolved to the Scottish Parliament.
In this Government’s ham-fisted attempt to undermine devolution, they are in fact cementing support for independence in Scotland. If devolution is indeed the opportunity to do things differently, that opportunity is being eroded bit by bit by this Government, who seem desperate to govern devolved areas in Scotland. They could govern those devolved areas if only they could win an election in Scotland, but they have given up on that, and we see now an agenda to undermine the very institution that the people of Scotland will not vote to permit them to control—the Scottish Parliament.
Of course, every local authority will wish to bid for levelling up funding. Why on earth would they not? But the towns fund shows that we are wise to be concerned about the transparency of this process. We know that the real agenda on the devolved nations is cynical, to say the least. Any local authority in Scotland and Wales receiving money from this fund will be expected to doff its cap in gratitude for the munificence and benevolence of the UK Government, but the UK Government need to understand that riding roughshod over our democratic institutions, which have huge support from those living in the devolved nations, cannot be excused by fanfare about funding that is not new. We are not so easily bought, and our democratic institutions, including our Scottish Parliament, cannot be so easily bought. Nor can trust in this Government be bought. Some things, such as democracy and trust, are not commodities; they are values and principles, and this Government would do well to remember that.
Oral Answers to Questions
Patricia Gibson Excerpts(3 years ago)
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John Glen
Yes, I agree with my hon. Friend. On modern slavery, the landmark provision in section 54 of the Modern Slavery Act 2015 includes institutional investors that fall within the scope of the requirement and meet the criteria requiring them to publish an annual statement.
Patricia Gibson (North Ayrshire and Arran) (SNP) [V]
Rishi Sunak
The Prime Minister has appointed Nigel Boardman to conduct an independent review of these various matters. With regard to covid in general, the Prime Minister has also said that at the appropriate time there will be all the necessary lessons to be learned.
Exiting the European Union (Excise)
Patricia Gibson Excerpts(3 years, 2 months ago)
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Patricia Gibson (North Ayrshire and Arran) (SNP) [V]
The decision to scrap tax-free shopping for overseas visitors to the UK is wrongheaded. It will cause significant damage, is completely unnecessary and should be reversed. The abolition of VAT RES has caused the Scottish Chambers of Commerce, the Scottish Retail Consortium and others to express alarm and concern. At a time when businesses are struggling to stay afloat and save jobs, and when airports face unprecedented challenges, to hit duty-free shopping is inexplicable. Duty-free shopping for visitors to the UK pays for wider operations in airports and helps sustain our city centre high streets, which are already under great pressure.
This move contradicts the findings of the Government’s own consultation and is truly bewildering. As the covid pandemic leaves our airports beleaguered, tax-free sales for overseas visitors gives them millions of pounds every year in revenue, allowing re-investment in their businesses, which supports the wider economy. Tax-free retail sales can account for as much as 40% of the revenue in some regional airports, and for Glasgow airport the risk here is a loss of revenue of £8.6 million and an estimated 170 retail jobs. How will that help our airports recover from the damage inflicted on them by covid-19? We already know that due to covid-19 we are expected to lose about 600 routes from airports across the UK, but the biggest impact will be felt by regional airports.
So this move is short-sighted and bewildering, but its consequences will be far reaching. The Scottish Government were not even consulted on this decision, despite the impact it will have on the wider Scottish economy. As we have heard, this change leaves the UK as the only European country not to provide tax-free shopping schemes to encourage tourism, putting Scotland and the rest of the UK at a distinct disadvantage, as we see the EU exploring even now how duty-free shopping can be developed to aid recovery. The Association of International Retail has described this measure as “devastating”, saying that it would lead to the loss of tens of thousands of tourism and retail jobs right across the UK, while the other EU capital cities would be
“rubbing their hands with glee at this self-inflicted wound”.
The chief executive of Mulberry has also warned that this move will have
“a material impact on jobs and manufacturing”.
Despite what we have heard today, the UK Government have already admitted that this move will lead to fewer tourists visiting the UK from overseas. These visitors do not just shop: they eat out; go to museums and the theatre; stay in hotels; and travel across Scotland and the rest of the UK. The risk is not just to retail businesses, although that is significant—the risk is also to major tourist destinations through the knock-on effects on the hospitality industry, suppliers and manufacturers of goods throughout the UK. Have these businesses not suffered enough during these times without the UK Government piling on greater pressure? This measure is economically illiterate at this time, and I urge the Minister to reverse it for the sake of our jobs and the wider economy.
Oral Answers to Questions
Patricia Gibson Excerpts(3 years, 3 months ago)
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Kemi Badenoch
The Government understand that this is a very challenging time for the UK hospitality sector, and we are constantly reviewing the package of covid-19 support. In order to ensure that decisions are made to meet these challenges, we will outline plans for 2021-22 business rates relief early this year, but my hon. Friend should let her constituents know that for existing tax liabilities the VAT deferral new payments scheme will allow businesses with deferred VAT to spread their payments over up to 11 equal payments to 31 March 2022 interest-free.
Patricia Gibson (North Ayrshire and Arran) (SNP)
Rishi Sunak
I am happy to look at the specific question the hon. Lady raises, but she will know that in the last Budget we introduced a manifesto commitment to bring in neonatal leave, which was warmly welcomed and many had campaigned for, and I know will make a difference to families up and down the country.
Future Relationship with the EU
Patricia Gibson Excerpts(3 years, 4 months ago)
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Penny Mordaunt
I can give my hon. Friend that assurance. I thank him for all he has done to champion the interests of his constituents, in particular the fishing industry.
Patricia Gibson (North Ayrshire and Arran) (SNP)
Yesterday the Prime Minister said that Scotland “will benefit” even if the UK crashes out of the EU single market without a trade deal with the EU, despite the fact that no deal will mean higher food prices, additional costs for businesses and job losses. As we stare down the barrel of a no-deal Brexit, can the Minister explain to what extent she believes Brexit is turning into the titanic success that the Prime Minister predicted it would be?
Penny Mordaunt
I say to the hon. Lady, as I have said to her colleagues, that if she does not want that scenario—and I get that impression from the tone of her question—she ought to be helping this Government to secure the deal that would be in the interests of her constituents. I urge her, even at this late hour, to consider that.
Covid-19: Access to and Acceptance of Cash
Patricia Gibson Excerpts(3 years, 4 months ago)
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Patricia Gibson (North Ayrshire and Arran) (SNP)
I am delighted to speak in the debate, and I echo the congratulations that have been offered to the hon. Member for Blackpool North and Cleveleys (Paul Maynard) on securing it, and on his clear exposition of the scope of the challenges that we and our communities face in access to and use of cash.
I want to express my good cheer at the fact that there is such a level of common purpose in the Chamber today. That does not happen as often as we might like, but there is clear agreement here. I want to pick up on something that the hon. Member for Strangford (Jim Shannon) said. He described himself as old school, because he still uses cheques. I cannot speak for anyone else in the Chamber, but I also use them. I can go one better, because recently, having forgotten my cheque book, I had cause to buy that quaint old relic called a postal order, which is very unfashionable. I was quite surprised; I had not bought one for about 35 years, and they look really quite sexy now—far different from how they used to look.
There was a debate similar to this one at the end of May last year, covering many of the same issues; again, that was referred to by the hon. Member for Strangford. All the issues we would expect were debated: how for some of us cash is convenient but for others it is a vital budgeting tool; the level of control that it offers, which digital transactions do not; and the fact that there is a sensible reason why debt charities always advise those living with damaging levels of debt to cut up their cards as a first step to regaining some financial control. Members around the Chamber have repeatedly referred to the way our cash machines are disappearing from our high streets—faster than snow off a dyke. Some businesses do not accept cash payments at all, and some 1.3 million people in the UK do not have a bank account and already suffer financial exclusion. Those problems were highlighted even before covid-19 and the need to factor in the effect of cash not being accepted in the current climate. The same arguments and concerns have rightly been repeated today.
How different the world looks now, only 19 short months after that debate in May last year. Now we are living with covid-19. We live in a world where the cash network has been placed under increasing strain, pushing it ever closer to collapse. Alongside that, as we have heard from many Members today, there is a continuing trend for considerable shrinkage in the availability of free-to-use cash links in communities; 9,500 have been lost since 2017, and it is feared that further losses are on the way. More than a third of bank branches have been lost in less than five years, and we can all guess that there will be further bank closures to come. That is extremely worrying, because for many of our constituents cash is not just the preferred way of payment—although for many that is the case; for many, cash is the only purchasing method at their disposal, as you said, Ms Fovargue.
The hon. Member for Strangford also reminded us that cash is something that we all sometimes need to rely on, whether we like it or not, because of technical glitches with card machines, and even some high-profile IT glitches in the banking world. I thank the hon. Gentleman for reminding us of that.
The Chancellor committed to introducing legislation to protect access to cash in March 2020; however, the pandemic has dramatically shortened the timeframe needed for intervention, and unless it is introduced urgently the ability to get access to cash and spend it could be permanently lost to many consumers, causing significant harm and financial exclusion.
The speed of the stampede away from cash and towards digital payments is fine for some people, and good luck to them. However, the price of that speed is that many are left behind. The consumer body Which?—many have referred to its excellent work on the matter—revealed that 85% of us would find it difficult to live our lives without the ability to withdraw cash. That makes the 23% rise in pay-to-use cash machines, particularly concentrated in socially deprived areas, all the more worrying. I share the concerns highlighted by the hon. Member for Luton North (Sarah Owen).
This speeding towards digital payments, which were taking hold before covid, has accelerated at an astonishing rate in the current climate, and that has quickened the decline of our high street cash machines and bank branches. The loss of bank branches has affected my constituency of North Ayrshire and Arran. I believe it is one of the worst hit in the UK when we consider the distance to the next bank, although I take on board the challenges that the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) talked about in his rural constituency. These matters have been repeatedly raised in the Commons by me and other Members. I echo the hon. Gentleman’s comments about the pressing need for banking hubs. It is really important that they are expedited in all our communities that have suffered.
[Rushanara Ali in the Chair]
Covid has made the situation of our cash infrastructure all the more perilous. As we have heard, many retailers are simply refusing to accept cash. During the global pandemic, when there is already no end of serious matters to contend with, too many of our constituents have to contend with their lives being made unnecessarily difficult because they cannot pay for the goods and services they need with cash, as the right hon. Member for Dumfriesshire, Clydesdale and Tweeddale (David Mundell) set out.
Research by Which? showed that in May, one in 10 people had been unable to pay for items with cash during lockdown because they were refused by the retailer. Of that number, 26% were unable to purchase the items that they needed as they had no alternative to cash. In October, Which? found that four out of 10 of those who responded to its survey left a shop empty handed when they tried to pay for groceries with cash. The right hon. Gentleman also highlighted that. As we have heard, action on access to cash is utterly meaningless if the widespread acceptance of cash is lost in our shops. We urgently need the Financial Conduct Authority to publish a UK-wide tracker of levels of cash acceptance.
I echo the calls for the Minister to set out what interventions his Government will take to ensure that people, especially those who rely on cash, can continue to use it to pay for essential goods and services. There is currently an absence of legislation to protect such access to cash. Alongside that, we need an impact assessment of the effect of cash refusal on consumers, to consider the relationship between the acceptance of cash and consumer access to it.
The genuine fear that we have heard today is that cash payment options have been fatally and profoundly—but, I hope, not irreversibly—affected to the point where the post-covid use of cash in our society is on its death bed. I suppose we are here today to see whether it can be resuscitated. The UK Government have a duty to ensure that access to cash does not disappear, for the sake of our rural and socioeconomically challenged communities, which particularly rely on that medium.
Following the UK Government’s legislative proposals to protect access to cash, the proposal to give the Financial Conduct Authority the responsibility for overseeing access to cash is to be welcomed. Alongside that, it is important that the Financial Conduct Authority is given proper teeth. It needs comprehensive powers to ensure strategic and comprehensive regulation.
It seems clear that expediting those proposals has become ever more urgent, given that the diminishing of the cash infrastructure has been accelerated in recent months. The Financial Conduct Authority should be given a statutory duty to protect our cash infrastructure. It should be responsible for monitoring and reporting on levels of cash access, as well as designing and implementing a framework funded by the industry by which a minimum level of access to cash can be maintained. Our cash infrastructure will not be sustainable without that level of intervention from the Government. We can already see it crumbling before our eyes at a shocking rate, as every single participant in the debate has mentioned.
In addition, the Government should set out a clear timetable—others have also called for this—for introducing a Bill to Parliament as soon as possible. That should include the detail, scope and contents of the proposed legislation, with a clear exposition of how it will build on and complement current work being done to protect consumers’ ability to access cash. I know that Conservative Governments are often reluctant to have such direct intervention on such matters, but when direct intervention is required, the Government must be brave enough to make that intervention.
Jesse Norman
The Government absolutely recognise—I am not going to comment on the shape of what is to come, because I do not think that would be appropriate—the concern about free access to cash. As the hon. Lady will know, a lot of work has been done on trying to preserve inclusivity in the face of markets and pandemic-induced change that may be prejudicing that access.
Jesse Norman
I really do not have much time, and I want to respond to the comments and to give my hon. Friend the Member for Blackpool North and Cleveleys the chance to wind up, so let me press on with a couple of key things.
It is worth mentioning that the industry is already taking action to support cashback. Mastercard and Visa have already announced incentives, and of course we have the community access to cash pilots.
The set of authorities that govern this area has been raised. It is important to say that the Government’s view is that the FCA may well be best positioned to take on the function of co-ordinating in an overall responsible way, while we also intend for the PSR and the Bank of England to continue their existing functions. As colleagues will know, the FCA already has a statutory objective to secure an appropriate degree of protection for consumers and existing regulatory relationships with industry.
My hon. Friend asked about wholesale cash distribution. As I think he knows, there was a previous consultation paper by the Bank of England on the future of the wholesale cash distribution model, which set out a high-level road map. A lot of work is being done between the Treasury and the Bank to address those issues.
The hon. Member for Makerfield will be aware that there are existing policies within the LINK ATM network, in particular, to protect the distribution of free cash through ATMs. The Treasury is supporting the Bank of England in trying to enable a sustainable model—sustainability is important—to permit effective wholesale cash distribution.
I ought to sit down now. I thank colleagues very much indeed for their interesting and constructive contributions to the debate.